Florida Senate - 2010                             CS for SB 1702
       By the Committees on Banking and Insurance; and Banking and
       597-03112B-10                                         20101702c1
    1                        A bill to be entitled                      
    2         An act relating to debt relief services; providing a
    3         directive to the Division of Statutory Revision;
    4         creating s. 559.101, F.S.; providing a short title;
    5         transferring, renumbering, reordering, and amending s.
    6         817.801, F.S.; revising definitions relating to debt
    7         relief services; creating s. 559.103, F.S.; providing
    8         the powers of the Office of Financial Regulation;
    9         creating s. 559.104, F.S.; authorizing the Financial
   10         Services Commission to adopt rules; transferring,
   11         renumbering, and amending s. 817.803, F.S.; revising
   12         provisions relating to who is not subject to the Debt
   13         Relief Services Act; providing an exception for
   14         attorneys representing clients; creating s. 559.106,
   15         F.S.; requiring debt relief organizations to be
   16         registered with the office; providing a registration
   17         fee; requiring background screening of applicants and
   18         control persons; providing grounds for registration
   19         issuance or denial; requiring annual renewal; creating
   20         s. 559.107, F.S.; requiring registration renewal;
   21         transferring, renumbering, and amending s. 817.804,
   22         F.S.; requiring a debt relief organization to obtain a
   23         surety bond and to provide proof of such bond to the
   24         office; creating s. 559.109, F.S.; requiring a debt
   25         relief organization to maintain records; creating s.
   26         559.111, F.S.; requiring a debt relief organization to
   27         prepare a financial analysis for the debtor; providing
   28         for service contracts; requiring certain provisions to
   29         be included in such contracts; requiring the debt
   30         relief organization to provide the debtor with copies
   31         of all signed documents; transferring, renumbering,
   32         and amending s. 817.805, F.S.; conforming terms to
   33         changes made by the act; transferring, renumbering,
   34         and amending s. 817.802, F.S.; prohibiting a debt
   35         relief organization from engaging in certain
   36         additional specified acts; deleting a provision that
   37         allows the organization to collect a fee for
   38         insufficient fund transactions; creating s. 559.114,
   39         F.S.; providing for debtor complaints to the office;
   40         providing procedures and office duties; creating s.
   41         559.115, F.S.; providing for the issuance of subpoenas
   42         by the office; creating s. 559.116, F.S.; authorizing
   43         the office to issue cease and desist orders;
   44         transferring, renumbering, and amending s. 817.806,
   45         F.S.; conforming terms to changes made by the act;
   46         providing administrative penalties; specifying
   47         violations that result in criminal penalties;
   48         repealing 559.10, 559.11, 559.12, and 559.13, F.S.,
   49         relating to obsolete provisions concerning budget
   50         planning; amending s. 516.07, F.S.; conforming a
   51         cross-reference; providing an effective date.
   53  Be It Enacted by the Legislature of the State of Florida:
   55         Section 1. The Division of Statutory Revision is requested
   56  to rename part II of chapter 559, Florida Statutes, consisting
   57  of ss. 559.101-559.117, as “Debt Relief Services.”
   58         Section 2. Section 559.101, Florida Statutes, is created to
   59  read:
   60         559.101Short title.—This part may be cited as the “Debt
   61  Relief Services Act.”
   62         Section 3. Section 817.801, Florida Statutes, is
   63  transferred, renumbered as 559.102, Florida Statutes, reordered,
   64  and amended to read:
   65         559.102 817.801 Definitions.—As used in this part:
   66         (1) “Commission” means the Financial Services Commission.
   67         (2) “Control person” means an individual, partnership,
   68  corporation, trust, or other organization that possesses the
   69  power, directly or indirectly, to direct the management or
   70  policies of a company, whether through ownership of securities,
   71  by contract, or otherwise. The term includes, but is not limited
   72  to:
   73         (a) A company’s executive officers, including the
   74  president, chief executive officer, chief financial officer,
   75  chief operations officer, chief legal officer, chief compliance
   76  officer, director, or other individuals having similar status or
   77  functions.
   78         (b) For a corporation, each shareholder who, directly or
   79  indirectly, owns 10 percent or more, or who has the power to
   80  vote 10 percent or more, of a class of voting securities, unless
   81  the applicant is a publicly traded company.
   82         (c) For a partnership, all general partners and limited or
   83  special partners who have contributed 10 percent or more, or who
   84  have the right to receive upon dissolution 10 percent or more,
   85  of the partnership’s capital.
   86         (d) For a trust, each trustee.
   87         (e) For a limited liability company, all managing members
   88  and those members who have contributed 10 percent or more, or
   89  who have the right to receive upon dissolution 10 percent or
   90  more, of the partnership’s capital.
   91         (6)(1) “Debt relief organization Credit counseling agency”
   92  means a person offering to provide or any organization providing
   93  debt management services, debt settlement services, or credit
   94  counseling services for compensation.
   95         (3)(2) “Credit counseling services” means confidential
   96  money management, debt reduction, financial analysis, and
   97  financial educational services provided to a debtor. The term
   98  does not include foreclosure-related rescue services.
   99         (4)(3) “Creditor contribution” means any sum that a
  100  creditor agrees to contribute to a debt relief organization
  101  credit counseling agency, whether directly or by setoff against
  102  amounts otherwise payable to the creditor on behalf of debtors.
  103         (5)(4) “Debt management services” means services, other
  104  than foreclosure-related rescue services, provided to a debtor
  105  by a debt relief credit counseling organization for a fee to:
  106         (a) Effect the adjustment, compromise, interest rate
  107  reduction, modification of terms, negotiation, or discharge of
  108  any unsecured account, note, or other indebtedness of the
  109  debtor; or
  110         (b) Receive funds periodically from the debtor and disburse
  111  to a creditor any money or other thing of value with the
  112  expectation that the debtor will repay the creditor the entire
  113  principal owed.
  114         (7) “Debt settlement services” means services, other than
  115  foreclosure-related rescue services, provided to a debtor with
  116  the expectation of obtaining the creditor’s agreement to accept
  117  less than the principal amount of a debt in full satisfaction of
  118  the debt.
  119         (8) “Debtor” means an individual who obtains credit, seeks
  120  a credit agreement with a creditor, or owes money to a creditor.
  121         (9) “Enrolled debt” means the amount of debt at the time
  122  the contract for debt management services is entered but does
  123  not include any increases in the amount of debt or additional
  124  fees or penalties applied to the debt after services included in
  125  the contract are initiated.
  126         (10) “Financial analysis” means the review of an
  127  individual’s budget, income, expenses, and debt by the debt
  128  relief organization in order to determine the individual’s
  129  suitability for additional credit counseling, debt management,
  130  or debt settlement services provided by the organization.
  131         (11)“Financial audit report” means a report prepared in
  132  connection with a financial audit that is conducted in
  133  accordance with generally accepted auditing standards,
  134  prescribed by the American Institute of Certified Public
  135  Accountants, by a certified public accountant licensed to do
  136  business in the United States, which includes:
  137         (a)Financial statements, including notes related to the
  138  financial statements and required supplementary information,
  139  prepared in conformity with United States generally accepted
  140  accounting principles.
  141         (b)An expression of opinion regarding whether the
  142  financial statements are presented in conformity with United
  143  States generally accepted accounting principles, or an assertion
  144  that such an opinion cannot be expressed and the reasons.
  145         (12)“Office” means the Office of Financial Regulation of
  146  the Financial Services Commission.
  147         (13)(5) “Person” has the same meaning as in s. 1.01 means
  148  any individual, corporation, partnership, trust, association, or
  149  other legal entity.
  150         (14) “Service contract” means the agreement for services
  151  between a debt relief organization and a debtor.
  152         Section 4. Section 559.103, Florida Statutes, is created to
  153  read:
  154         559.103Powers and duties of the Office of Financial
  155  Regulation; fees.
  156         (1)The office is responsible for the administration and
  157  enforcement of this part.
  158         (2) The office may conduct an investigation of any person
  159  if the office has reason to believe, upon complaint or
  160  otherwise, that any violation of this part may have been
  161  committed or is about to be committed.
  162         (3)All fees, charges, and fines collected pursuant to this
  163  part shall be deposited in the State Treasury to the credit of
  164  the Regulatory Trust Fund under the office.
  165         Section 5. Section 559.104, Florida Statutes, is created to
  166  read:
  167         559.104Rules.—The commission may adopt rules to administer
  168  this part, including rules that:
  169         (1) Require electronic submission of any forms, documents,
  170  or fees required under this part.
  171         (2)Establish time periods during which an applicant for
  172  registration is barred from registration or a registered debt
  173  relief organization is barred from renewal due to prior criminal
  174  convictions of, or guilty or nolo contendere pleas by, any of
  175  the applicant’s or registrant’s control persons, regardless of
  176  adjudication.
  177         (a)The rules must provide:
  178         1.Permanent bars for felonies involving money laundering,
  179  breach of trust, dishonesty, embezzlement, fraud, fraudulent
  180  conversion, misappropriation of property, racketeering, or
  181  theft;
  182         2.A 15-year disqualifying period for felonies involving
  183  moral turpitude;
  184         3.A 7-year disqualifying period for all other felonies;
  185  and
  186         4.A 5-year disqualifying period for misdemeanors involving
  187  fraud, dishonesty, or any other act of moral turpitude.
  188         (b)The rules may provide for an additional waiting period
  189  due to dates of imprisonment or community supervision, the
  190  commitment of multiple crimes, and other factors reasonably
  191  related to the applicant’s criminal history.
  192         (c)The rules may provide for mitigating factors for crimes
  193  identified in subparagraph (a)2. However, the mitigation may not
  194  result in a period of disqualification less than 7 years. The
  195  rule may not mitigate the disqualifying periods in subparagraphs
  196  (a)1., (a)3., and (a)4.
  197         (d)An applicant is not eligible for registration until the
  198  expiration of the disqualifying period set by rule.
  199         (e)Section 112.011 is not applicable to eligibility for
  200  registration under this part.
  201         Section 6. Section 817.803, Florida Statutes, is
  202  transferred, renumbered as section 559.105, Florida Statutes,
  203  and amended to read:
  204         559.105 817.803 Exceptions.—Nothing in This part does not
  205  apply applies to:
  206         (1) A person licensed to practice law in this state who is
  207  providing credit counseling, debt management, or debt settlement
  208  services as an ancillary matter to her or his representation of
  209  the debtor as a client. Any Debt management or credit counseling
  210  services provided in the practice of law in this state;
  211         (2) A Any person who engages in credit counseling, debt
  212  management, or debt settlement services adjustment to adjust the
  213  indebtedness owed to such person.; or
  214         (3) The following entities or their subsidiaries:
  215         (a) The Federal National Mortgage Association;
  216         (b) The Federal Home Loan Mortgage Corporation;
  217         (c) The Florida Housing Finance Corporation, a public
  218  corporation created in s. 420.504;
  219         (d) Any financial institution as defined under s.
  220  655.005(1)(h) A bank, bank holding company, trust company,
  221  savings and loan association, credit union, credit card bank, or
  222  savings bank that is regulated and supervised by the Office of
  223  the Comptroller of the Currency, the Office of Thrift
  224  Supervision, the Federal Reserve, the Federal Deposit Insurance
  225  Corporation, the National Credit Union Administration, the
  226  Office of Financial Regulation of the Department of Financial
  227  Services, or any state banking regulator; or
  228         (e) A consumer reporting agency as defined in the Federal
  229  Fair Credit Reporting Act, 15 U.S.C. s. 1681a ss. 1681-1681y, as
  230  it existed on April 5, 2004; or
  231         (f)Any subsidiary or affiliate of a bank holding company,
  232  its employees and its exclusive agents acting under written
  233  agreement.
  234         Section 7. Section 559.106, Florida Statutes, is created to
  235  read:
  236         559.106Registration of debt relief organization.—
  237         (1)Effective April 1, 2011, each person who acts as a debt
  238  relief organization in this state must be registered in
  239  accordance with this section. This applies to debt relief
  240  organizations operating in this state or from another state,
  241  regardless of whether such organization is registered, licensed,
  242  or the equivalent in accordance with the laws of another state.
  243         (2)In order to apply for registration, an applicant must
  244  submit:
  245         (a)A completed registration application form as prescribed
  246  by commission rule which includes the name and principal
  247  business address and e-mail address of the debt relief
  248  organization.
  249         (b)A registration fee of $1,000. The registration fee is
  250  nonrefundable and may not be prorated for a partial year of
  251  registration.
  252         (c)Fingerprints for the applicant and each of the
  253  applicant’s control persons in accordance with rules adopted by
  254  the commission.
  255         1.The fingerprints may be submitted to the office, or a
  256  vendor acting on behalf of the office.
  257         2.The office may contract with a third-party vendor to
  258  provide live-scan fingerprinting in lieu of a paper fingerprint
  259  card.
  260         3.A state criminal history background check must be
  261  conducted through the Department of Law Enforcement, and a
  262  federal criminal history background check must be conducted
  263  through the Federal Bureau of Investigation.
  264         4.All fingerprints submitted to the Department of Law
  265  Enforcement must be submitted electronically and entered into
  266  the statewide automated fingerprint identification system
  267  established in s. 943.05(2)(b) and available for use in
  268  accordance with s. 943.05(2)(g) and (h). The office shall pay an
  269  annual fee to the department to participate in the system and
  270  inform the department of any person whose fingerprints are no
  271  longer required to be retained.
  272         5.The costs of fingerprint processing, including the cost
  273  of retaining the fingerprints, shall be borne by the person
  274  subject to the background check.
  275         6.The office is responsible for reviewing the results of
  276  the state and federal criminal history checks and determining
  277  whether the applicant meets registration requirements.
  278         (d) Submit documentation demonstrating that the surety bond
  279  requirements specified in s. 559.108 have been satisfied.
  280         (e)Submit additional information or documentation
  281  requested by the office and required by rule concerning the
  282  applicant or a control person of the applicant. Additional
  283  information may include documentation of pending and prior
  284  disciplinary and criminal history events, including arrest
  285  reports and certified copies of charging documents, plea
  286  agreements, judgments and sentencing documents, documents
  287  relating to pretrial intervention, orders terminating probation
  288  or supervised release, final administrative agency orders, or
  289  other comparable documents that may provide the office with the
  290  appropriate information to determine eligibility for
  291  registration.
  292         (3)An application is considered received for the purposes
  293  of s. 120.60 upon the office’s receipt of the completed
  294  application form, all required documentation, criminal history
  295  information, the application fee, and all applicable
  296  fingerprinting processing fees.
  297         (4)The office shall issue a debt relief organization
  298  registration to each applicant who is not otherwise ineligible
  299  and who meets the requirements of this section. However, it is a
  300  ground for denial of registration if the applicant or one of the
  301  applicant’s control persons:
  302         (a) Has been found guilty of, regardless of adjudication,
  303  or has entered a plea of nolo contendere or guilty to, any
  304  felony, any crime involving racketeering, fraud, theft,
  305  embezzlement, fraudulent conversion, breach of trust,
  306  misappropriation of property, dishonesty, or moral turpitude;
  307         (b)Has committed any violation specified in s. 559.113;
  308         (c) Is the subject of a pending felony criminal prosecution
  309  or a prosecution or an administrative enforcement action, in any
  310  jurisdiction, which involves fraud, racketeering, embezzlement,
  311  fraudulent conversion, misappropriation of property, theft,
  312  dishonesty, breach of trust, or any other act of moral
  313  turpitude;
  314         (d) Pays the office any fee, fine, or other amount with a
  315  check or electronic transmission of funds which fails to clear
  316  the applicant’s financial institution;
  317         (e) Makes a material misstatement on any application,
  318  document, or record required to be submitted under this part or
  319  the rules of the commission; or
  320         (f) Has been the subject of any decision, finding,
  321  injunction, suspension, prohibition, revocation, denial,
  322  judgment, or other adverse action by any state or federal
  323  agency.
  324         (5) A registration issued under this section expires
  325  annually on March 31 unless canceled, suspended, revoked, or
  326  otherwise terminated, and must be renewed as provided under s.
  327  559.5551.
  328         Section 8. Effective April 1, 2011, section 559.107,
  329  Florida Statutes, is created to read:
  330         559.107Registration renewal.—
  331         (1) In order to renew a debt relief organization
  332  registration, a debt relief organization must submit:
  333         (a) A completed registration renewal form as prescribed by
  334  commission rule.
  335         (b) Fingerprints, in accordance with s. 559.106, for any
  336  new control persons who have not been screened.
  337         (c) Any additional information or documentation requested
  338  by the office and required by rule concerning the registrant or
  339  control person of the registrant. Additional information may
  340  include documentation of any pending and prior disciplinary and
  341  criminal history events, including arrest reports and certified
  342  copies of charging documents, plea agreements, judgments and
  343  sentencing documents, documents relating to pretrial
  344  intervention, orders terminating probation or supervised
  345  release, final administrative agency orders, or other comparable
  346  documents that may provide the office with the appropriate
  347  information to determine eligibility for renewal of
  348  registration.
  349         (d) A nonrefundable renewal fee of $750 and nonrefundable
  350  fees to cover the cost of further fingerprint processing and
  351  retention as set forth in commission rule.
  352         (2) The office may not renew a debt relief organization
  353  registration unless the registrant continues to meet the minimum
  354  requirements for initial registration pursuant to s. 559.106 and
  355  adopted rule.
  356         Section 9. Section 817.804, Florida Statutes, is
  357  transferred, renumbered as section 559.108, Florida Statutes,
  358  and amended to read:
  359         559.108 817.804Financial requirements; surety bond;
  360  disclosure and financial reporting.—
  361         (1) A debt relief organization must Any person engaged in
  362  debt management services or credit counseling services shall:
  363         (a) Obtain from a licensed certified public accountant an
  364  annual independent financial audit report in accordance with
  365  generally accepted auditing standards that includes shall
  366  include all accounts of such person in which the funds of
  367  debtors are deposited and from which payments are made to
  368  creditors on behalf of debtors. A debt relief organization must
  369  submit a copy of the report to the office within 120 days after
  370  the end of the registrant’s fiscal year. The commission may
  371  establish by rule the manner for filing a financial audit
  372  report.
  373         (b) Obtain and maintain at all times insurance coverage for
  374  employee dishonesty, depositor’s forgery, and computer fraud.
  375  The insurance coverage must be in an amount not less than the
  376  greater of $100,000 or 10 percent of the monthly average of the
  377  aggregate amount of all deposits made by debtors to the
  378  organization for distribution to creditors with such person by
  379  all debtors for the 6 months immediately preceding the date of
  380  initial application for or renewal of the insurance. The
  381  deductible on such coverage may shall not exceed 10 percent of
  382  the face amount of the policy coverage.
  383         (c)Obtain and maintain a surety bond from a surety company
  384  authorized to do business in this state. The amount and form of
  385  the bond shall be specified by rule and must be at least
  386  $100,000 but may not exceed $1 million. The rule must provide
  387  allowances for business volume. The bond shall be in favor of
  388  the state for the use and benefit of any debtor who suffers or
  389  sustains any loss or damage by reason of any violation of this
  390  part. Pursuant to initial registration and renewal, each
  391  applicant shall furnish to the office:
  392         1.The original executed surety bond issued by a surety
  393  company authorized to do business in this state.
  394         2.A statement from the surety company that the premium for
  395  the bond has been paid in full by the applicant.
  396         3.A statement from the surety company that the bond issued
  397  by the surety company meets the requirements of this part. The
  398  liability of the surety company under any bond issued pursuant
  399  to this section may not, in the aggregate, exceed the amount of
  400  the bond regardless of the number or amount of any claims filed
  401  or which might be asserted against the surety on such bond. If
  402  multiple claims are filed which collectively exceed the amount
  403  of the bond, the surety may pay the full amount of the bond to
  404  the office and is not further liable under the bond. The office
  405  shall hold such funds for distribution to claimants and
  406  administratively determine and pay to each claimant a pro rata
  407  share of each valid claim made within 6 months after the date
  408  the first claim is filed against the surety.
  409         (2) A copy of the annual financial audit report and
  410  insurance policies required by this section must shall be
  411  available for public inspection at each branch location of the
  412  organization. Copies shall be provided, upon written request, to
  413  any party requesting a copy for a charge that does not to exceed
  414  the cost of copying the reproduction of documents.
  415         Section 10. Section 559.109, Florida Statutes, is created
  416  to read:
  417         559.109Maintenance of records.—
  418         (1) Each registered debt relief organization shall
  419  maintain, at the principal place of business designated on the
  420  registration, all books, accounts, records, and documents
  421  necessary to determine the registrant’s compliance with this
  422  part.
  423         (2) The office may authorize the maintenance of records at
  424  a location other than a principal place of business. The office
  425  may require books, accounts, and records to be produced and
  426  available at a reasonable and convenient location in this state.
  427         (3) The commission may prescribe by rule the minimum
  428  information to be shown in the books, accounts, records, and
  429  documents of registrants so that such records enable the office
  430  to determine the registrant’s compliance with this part.
  431         (4) All books, accounts, records, documents, and receipts
  432  of any payment transaction must be preserved and kept available
  433  for inspection by the office for at least 5 years after the date
  434  the transaction is completed. The commission may prescribe by
  435  rule requirements for the destruction of books, accounts,
  436  records, and documents retained by the registrant after the
  437  completion of the 5 years.
  438         Section 11. Section 559.111, Florida Statutes, is created
  439  to read:
  440         559.111Financial analysis; service contracts.—
  441         (1) Before a debtor signs a service contract, the debt
  442  relief organization shall prepare, retain a copy of, and provide
  443  to the debtor a written financial analysis specific to the
  444  debtor which includes an evaluation of the debtor’s income,
  445  expenses, and all debts. An additional fee may not be charged
  446  for the financial analysis.
  447         (2) Based on the completed financial analysis, the debt
  448  relief organization shall provide to the debtor, and retain a
  449  copy of, a written determination of the debtor’s suitability for
  450  debt management or debt settlement services and whether the
  451  debtor can reasonably meet the requirements of the service
  452  contract, including the debtor’s ability to save the amount
  453  estimated to be needed to fund the settlement of the debt.
  454         (3)The service contract between the debt relief
  455  organization and the debtor must be signed and dated by the
  456  debtor and include all of the following:
  457         (a)The following statement in at least 12-point uppercase
  458  type at the top of the service contract:
  471         (b)A full and detailed description of the services to be
  472  performed by the debt relief organization for the debtor,
  473  including the financial analysis determining the suitability of
  474  the debtor for debt management or debt settlement services, all
  475  guarantees and all promises of full or partial refunds, the
  476  estimated date or length of time by which the services are to be
  477  performed, and a copy of the Florida Debt Relief Services Act.
  478         (c)All terms and conditions of payment, including the
  479  anticipated total of all payments to be made by the debtor and
  480  the estimated amount of any payments to be made to the debt
  481  relief organization or to any other person.
  482         (d)The debt relief organization’s principal business
  483  address and the name and address of its agent in the state
  484  authorized to receive service of process.
  485         (e)A clear and conspicuous statement in boldface type, in
  486  immediate proximity to the space reserved for the debtor’s
  487  signature, which states: “You, the debtor, may cancel this
  488  service contract at any time before midnight of the 5th business
  489  day after the date of signing this contract. [See the attached
  490  Notice of Right to Cancel for further explanation of this
  491  right.]”
  492         (f)A Notice of Right to Cancel attached to the contract,
  493  in duplicate and easily detachable, which contains the following
  494  statement in at least 12-point uppercase type:
  496                      NOTICE OF RIGHT TO CANCEL                    
  505         NOTICE.
  512         TO:...(name of debt relief organization)...
  513         AT:...(address)...
  516         SERVICE CONTRACT, EXECUTED ON:...(date service
  517         contract signed)...
  519         ...(Signature of Debtor)...
  520         ...(Date)...
  521         ...(Address)...
  522         ...(Phone Number)...
  524         (4)The debt relief organization must provide the debtor,
  525  at the time the documents are signed, with a copy of the
  526  completed service contract as described in subsection (3) and
  527  all other documents the organization requires the debtor to
  528  sign.
  529         Section 12. Section 817.805, Florida Statutes, is
  530  transferred, renumbered as section 559.112, Florida Statutes,
  531  and amended to read:
  532         559.112 817.805 Disbursement of funds.—A debt relief
  533  organization offering debt management services that include
  534  disbursement to a creditor must Any person engaged in debt
  535  management or credit counseling services shall disburse to the
  536  appropriate creditors all funds received from a debtor, less any
  537  fees permitted by s. 559.113 817.802 and any creditor
  538  contributions, within 30 days after receipt of such funds.
  539  However, a creditor contribution may not reduce any sums to be
  540  credited to the account of a debtor making a payment to the
  541  organization credit counseling agency for further payment to the
  542  creditor. Further, a debt relief organization offering debt
  543  settlement services or debt management services must any person
  544  engaged in such services shall maintain a separate trust account
  545  for the receipt of any funds from debtors and the disbursement
  546  of such funds on behalf of such debtors.
  547         Section 13. Section 817.802, Florida Statutes, is
  548  transferred, renumbered as section 559.113, Florida Statutes,
  549  and amended to read:
  550         559.113 817.802Prohibited acts Unlawful fees and costs.—
  551         (1) A debt relief organization may not, directly or
  552  indirectly, charge or accept from a debtor:
  553         (a)Any payment for services before the execution of a
  554  written service contract. It is unlawful for any person, while
  555  engaging in debt management services or credit counseling
  556  services, to charge or accept from a debtor residing in this
  557  state, directly or indirectly,
  558         (b) A fee or contribution greater than $50 for the initial
  559  setup or initial consultation. Subsequently, the person may not
  560  charge or accept
  561         (c) A fee or contribution from a debtor residing in this
  562  state greater than $120 per year for credit counseling services
  563  provided in addition to the initial consultation under
  564  subsection (2). additional consultations or, alternatively, if
  565         (d) A fee or contribution for debt management services
  566  which exceeds as defined in s. 817.801(4)(b) are provided, the
  567  person may charge the greater of 7.5 percent of the amount paid
  568  monthly by the debtor to the organization for disbursement to a
  569  creditor person or $35 per month, whichever is greater, or 7.5
  570  percent of the enrolled debt.
  571         (e) A fee or contribution for debt settlement services
  572  which exceeds 40 percent of the savings realized which is
  573  defined to be the difference between the amount of enrolled debt
  574  and the amount paid to the creditor in discharge of the enrolled
  575  debt, less any fees collected pursuant to paragraphs (b) and
  576  (c). However, such fees collected for debt settlement services,
  577  in the aggregate, may not exceed 20 percent of the enrolled
  578  debt. For service contracts requiring fees to be paid on a
  579  monthly basis, the payment of such fees must be spread uniformly
  580  over at least 18 months or 50 percent of the term of the
  581  contract, whichever is greater.
  582         (f) A fee or contribution unless the debt management
  583  services or debt settlement services result in a settlement,
  584  discharge, or modification of the debt on terms more favorable
  585  to the debtor than the terms of the original agreement between
  586  the debtor and creditor.
  587         (g) Any fee or contribution for debt management, unless no
  588  other payment has been received, directly or indirectly, from
  589  the debtor for such services. Fees authorized under this
  590  subsection may not be a part of or included in the calculation
  591  of total enrolled debt.
  592         (2)A debt relief organization may not:
  593         (a) Advise any debtor, directly or indirectly, to not
  594  contact or communicate with his or her creditors before or
  595  during the service contract period.
  596         (b)Make or use any false or misleading representations or
  597  omit any material fact in connection with the offer, sale, or
  598  provision of services, or engage, directly or indirectly, in any
  599  fraudulent, false, misleading, unconscionable, unfair, or
  600  deceptive act or practice in connection with the offer or sale
  601  of any of the services of a debt relief organization.
  602         (c)Provide services to a debtor without executing a
  603  service contract that complies with s. 559.111.
  604         (d)Fail to provide copies of the financial analysis, all
  605  service contracts, and any other documents the debtor is
  606  required to sign as provided under s. 559.111.
  607         (e)Fail to perform any of the terms, conditions, and
  608  obligations provided in the service contract with the debtor.
  609         (f) Fail to disclose on any offer or sale of services,
  610  including any Internet website, the debt relief organization’s
  611  name, business address, telephone number, and e-mail address, if
  612  any.
  613         (g) Fail to provide the debtor with a 5-business-day right
  614  of cancellation without the debtor incurring any penalty or
  615  obligation.
  616         (h)Fail to obtain an annual financial audit report and
  617  surety bond.
  618         (i) Fail to submit an annual financial audit report to the
  619  office.
  620         (j) Fail to report on a form prescribed by commission rule
  621  any change to information contained in an initial application
  622  form or any amendment to the application within 30 days after
  623  the change is effective.
  624         (k) Fail to comply with any of the provisions of this part.
  625         (2)This section does not prohibit any person, while
  626  engaging in debt management or credit counseling services, from
  627  imposing upon and receiving from a debtor a reasonable and
  628  separate charge or fee for insufficient funds transactions.
  629         Section 14. Section 559.114, Florida Statutes, is created
  630  to read:
  631         559.114Debtor complaints; administrative duties.—
  632         (1)The office shall receive and maintain records of
  633  correspondence and complaints from debtors concerning any and
  634  all persons who provide credit counseling, debt management, or
  635  debt settlement services, including debt relief organizations.
  636         (2)The office shall inform and furnish relevant
  637  information to the appropriate regulatory body if a debt relief
  638  organization exempt from registration under this part has been
  639  named in consumer complaints alleging violations of this part.
  640         (3)The office shall investigate complaints and record the
  641  resolution of such complaints.
  642         (4)A debt relief organization that provides or attempts to
  643  provide debt management or debt settlement services without
  644  first registering in accordance with this part is subject to a
  645  penalty of up to $25,000 in addition to the other remedies
  646  provided in this part and under part II of chapter 501. The
  647  office shall advise the appropriate state attorney, or the
  648  Attorney General, of any determination by the office of a
  649  violation of this part by any debt relief organization that is
  650  not registered as required by this part. The office shall
  651  furnish the state attorney or Attorney General with the office’s
  652  information concerning the alleged violations of such
  653  requirements. The enforcing authority is entitled to reasonable
  654  attorneys fees and costs in any action brought to enforce this
  655  part against an unregistered debt relief organization.
  656         (5) A registered debt relief organization must provide a
  657  written response to the office within 20 days after receipt of a
  658  written request from the office for information concerning a
  659  consumer complaint. The response must address the issues and
  660  allegations raised in the complaint. The office may impose an
  661  administrative fine of up to $2,500 per request per day upon any
  662  registrant that fails to comply with this subsection.
  663         Section 15. Section 559.115, Florida Statutes, is created
  664  to read:
  665         559.115Subpoenas.—
  666         (1)The office may:
  667         (a)Issue and serve subpoenas and subpoenas duces tecum to
  668  compel the attendance of witnesses and the production of all
  669  books, accounts, records, and other documents and materials
  670  relevant to an investigation conducted by the office. The
  671  office, or its authorized representative, may administer oaths
  672  and affirmations to any person.
  673         (b)Seek subpoenas or subpoenas duces tecum from any court
  674  to command the appearance of witnesses and the production of
  675  books, accounts, records, and other documents or materials at a
  676  time and place named in the subpoenas, and an authorized
  677  representative of the office may serve such subpoenas.
  678         (2)If there is substantial noncompliance with a subpoena
  679  or subpoena duces tecum issued by the office, the office may
  680  petition the court in the county where the person subpoenaed
  681  resides or has his or her principal place of business for an
  682  order requiring the person to appear, testify, or produce such
  683  books, accounts, records, and other documents as are specified
  684  in the subpoena or subpoena duces tecum.
  685         (3)The office is entitled to the summary procedure
  686  provided in s. 51.011, and the court shall advance such cause on
  687  its calendar. Attorney’s fees and any other costs incurred by
  688  the office to obtain an order granting, in whole or in part, a
  689  petition for enforcement of a subpoena or subpoena duces tecum
  690  shall be taxed against the subpoenaed person, and failure to
  691  comply with such order is a contempt of court.
  692         (4) To aid in the enforcement of this part, the office may
  693  require or permit a person to file a statement in writing, under
  694  oath or otherwise as the office determines, as to all the facts
  695  and circumstances concerning the matter to be investigated.
  696         Section 16. Section 559.116, Florida Statutes, is created
  697  to read:
  698         559.116Cease and desist orders.—The office may issue and
  699  serve upon any person an order to cease and desist and to take
  700  corrective action if it has reason to believe the person is
  701  violating, has violated, or is about to violate any provision of
  702  this part, any rule or order issued under this part, or any
  703  written agreement between the person and the office. All
  704  procedural matters relating to issuance and enforcement of such
  705  order are governed by the Administrative Procedure Act.
  706         Section 17. Section 817.806, Florida Statutes, is
  707  transferred, renumbered as section 559.117, Florida Statutes,
  708  and amended to read:
  709         559.117 817.806 Violations; penalties.—
  710         (1) Any person who violates any provision of this part
  711  commits an unfair or deceptive trade practice as defined in part
  712  II of chapter 501, and. violators are also shall be subject to
  713  the penalties, and remedies, and enforcement actions provided
  714  therein. Further, any debtor consumer injured by a violation of
  715  this part may bring an action for recovery of damages. Judgment
  716  shall be entered for actual damages, but in no case less than
  717  the amount paid by the debtor consumer to the debt relief
  718  organization credit counseling agency, plus reasonable
  719  attorney’s fees and costs.
  720         (2) The office may impose an administrative fine on, or
  721  revoke or suspend the registration of a registrant who has
  722  committed a violation of this part. Final action to fine,
  723  suspend, or revoke the registration of a registrant is subject
  724  to review in accordance with chapter 120.
  725         (a)The office may impose suspension rather than revocation
  726  of a registration if circumstances warrant that one or the other
  727  should be imposed and the registrant demonstrates that the
  728  registrant has taken affirmative steps that can be expected to
  729  effectively eliminate the violations and that the registrant’s
  730  registration has never been previously suspended.
  731         (b)In addition to, or in lieu of suspension or revocation
  732  of a registration, the office may impose an administrative fine
  733  of up to $25,000 per violation. The office shall adopt rules
  734  establishing guidelines for imposing administrative penalties.
  735         (3)(2)It is Any person who violates any provision of this
  736  part commits a felony of the third degree, punishable as
  737  provided in s. 775.082, or s. 775.083, or s. 775.084 for any
  738  person to provide debt management or debt settlement services in
  739  this state without first registering with the office, or to
  740  register or attempt to register by means of fraud,
  741  misrepresentation, or concealment.
  742         Section 18. Sections 559.10, 559.11, 559.12, and 559.13,
  743  Florida Statutes, are repealed.
  744         Section 19. Paragraph (g) of subsection (1) of section
  745  516.07, Florida Statutes, is amended to read:
  746         516.07 Grounds for denial of license or for disciplinary
  747  action.—
  748         (1) The following acts are violations of this chapter and
  749  constitute grounds for denial of an application for a license to
  750  make consumer finance loans and grounds for any of the
  751  disciplinary actions specified in subsection (2):
  752         (g) Any violation of part III of chapter 817 or part II of
  753  chapter 559 or of any rule adopted under part II of chapter 559.
  754         Section 20. This act shall take effect January 1, 2011.

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