May 26, 2019
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       Florida Senate - 2010         (Proposed Committee Bill) SPB 7054
       
       
       
       FOR CONSIDERATION By the Committee on Banking and Insurance
       
       
       
       
       597-01474C-10                                         20107054__
    1                        A bill to be entitled                      
    2         An act relating to consumer credit protection;
    3         amending s. 559.565, F.S.; expanding the authority of
    4         the Attorney General to take action against out-of
    5         state consumer debt collectors; creating s. 559.786,
    6         F.S.; providing that a violation of provisions
    7         relating to consumer debt collectors is a violation of
    8         the Florida Deceptive and Unfair Trade Practices Act;
    9         amending s. 817.801, F.S.; revising definitions;
   10         defining the terms “debtor” and “financial audit
   11         report”; amending s. 817.802, F.S.; prohibiting a
   12         credit counseling organization from engaging in
   13         certain additional specified acts; deleting a
   14         provision that allows the organization to collect a
   15         fee for insufficient fund transactions; amending s.
   16         817.803, F.S.; revising provisions relating to an
   17         exception provided to attorneys providing
   18         representation to clients; amending s. 817.804, F.S.;
   19         requiring a credit counseling organization to obtain a
   20         surety bond; creating s. 817.8045, F.S.; providing for
   21         service contracts; requiring certain provisions to be
   22         included in such contracts; requiring the credit
   23         counseling organization to provide the debtor with
   24         copies of all signed documents; amending ss. 817.805
   25         and 817.806, F.S.; conforming terms to changes made by
   26         the act; providing an effective date.
   27  
   28  Be It Enacted by the Legislature of the State of Florida:
   29  
   30         Section 1. Subsection (3) of section 559.565, Florida
   31  Statutes, is amended to read:
   32         559.565 Enforcement action against out-of-state consumer
   33  debt collector.—The remedies of this section are cumulative to
   34  other sanctions and enforcement provisions of this part for any
   35  violation by an out-of-state consumer debt collector, as defined
   36  in s. 559.55(8).
   37         (3) In order to effectuate the provisions of this section
   38  and enforce the requirements of this part as it relates to out
   39  of-state consumer debt collectors, the Attorney General is
   40  expressly authorized to initiate such action on behalf of the
   41  state as he or she deems appropriate in any state court or
   42  federal district court, as appropriate, including injunctive
   43  relief on behalf of consumers of competent jurisdiction.
   44         Section 2. Section 559.786, Florida Statutes, is created to
   45  read:
   46         559.786Deceptive and unfair trade practices.—A violation
   47  of this part is a violation of the Florida Deceptive and Unfair
   48  Trade Practices Act. In addition to any remedies provided under
   49  this part, violations of this part are subject to the penalties
   50  and remedies provided under part II of chapter 501.
   51         Section 3. Section 817.801, Florida Statutes, is amended to
   52  read:
   53         817.801 Definitions.—As used in this part:
   54         (1) “Credit counseling organization agency” means a person
   55  any organization providing debt management services or credit
   56  counseling services.
   57         (2) “Credit counseling services” means confidential money
   58  management, debt reduction, and financial educational services.
   59  The term does not include foreclosure-related rescue services.
   60         (3) “Creditor contribution” means any sum that a creditor
   61  agrees to contribute to a credit counseling organization agency,
   62  whether directly or by setoff against amounts otherwise payable
   63  to the creditor on behalf of debtors.
   64         (4) “Debt management services” means services provided to a
   65  debtor by a credit counseling organization for a fee to:
   66         (a) Effect the adjustment, compromise, or discharge of any
   67  unsecured account, note, or other indebtedness of the debtor; or
   68         (b) Receive from the debtor and disburse to a creditor any
   69  money or other thing of value.
   70         (5) “Debtor” means an individual who obtains credit, seeks
   71  a credit agreement with a creditor, or owes money to a creditor.
   72         (6)“Financial audit report” means a report prepared in
   73  connection with a financial audit that is conducted in
   74  accordance with generally accepted auditing standards prescribed
   75  by the American Institute of Certified Public Accountants by a
   76  certified public accountant licensed to do business in the
   77  United States, and which includes:
   78         (a)Financial statements, including notes related to the
   79  financial statements and required supplementary information,
   80  prepared in conformity with United States generally accepted
   81  accounting principles.
   82         (b)An expression of opinion regarding whether the
   83  financial statements are presented in conformity with United
   84  States generally accepted accounting principles, or an assertion
   85  that such an opinion cannot be expressed and the reasons.
   86         (7)(5) “Person” has the same meaning as in s. 1.01 means
   87  any individual, corporation, partnership, trust, association, or
   88  other legal entity.
   89         Section 4. Section 817.802, Florida Statutes, is amended to
   90  read:
   91         817.802 Prohibited acts Unlawful fees and costs.—A credit
   92  counseling organization may not:
   93         (1) It is unlawful for any person, while engaging in debt
   94  management services or credit counseling services, to Charge or
   95  accept from a debtor residing in this state, directly or
   96  indirectly, any payment for services before the execution of a
   97  written service contract, or charge or accept from a debtor a
   98  fee or contribution greater than $50 for the initial setup or
   99  initial consultation. Subsequently, the organization person may
  100  not charge or accept a fee or contribution from a debtor
  101  residing in this state greater than $120 per year for additional
  102  consultations; however or, alternatively, if debt management
  103  services as defined in s. 817.801(4)(b) are provided, the
  104  organization person may charge the greater of 7.5 percent of the
  105  amount paid monthly by the debtor to the organization person or
  106  $35 per month, whichever is greater.
  107         (2)Advise any debtor, directly or indirectly, not to
  108  contact or communicate with his or her creditors before or
  109  during the service contract period.
  110         (3)Make or use any false or misleading representations or
  111  omit any material fact in the offer or sale of services offered,
  112  or engage, directly or indirectly, in any fraudulent, false,
  113  misleading, unconscionable, unfair, or deceptive act or practice
  114  in connection with the offer or sale of any of the services of a
  115  credit counseling organization.
  116         (4)Provide services to a debtor without executing a
  117  service contract that complies with s. 817.8045.
  118         (5)Fail to provide copies of all service contracts and
  119  other documents the debtor is required to sign as provided under
  120  s. 817.8045.
  121         (6)Fail to perform any of the terms, conditions, and
  122  obligations provided in the service contract with the debtor.
  123         (7)Fail to obtain an annual financial audit report and
  124  surety bond.
  125         (2)This section does not prohibit any person, while
  126  engaging in debt management or credit counseling services, from
  127  imposing upon and receiving from a debtor a reasonable and
  128  separate charge or fee for insufficient funds transactions.
  129         Section 5. Section 817.803, Florida Statutes, is amended to
  130  read:
  131         817.803 Exceptions.—Nothing in This part does not apply
  132  applies to:
  133         (1) A person licensed to practice law in this state who is
  134  providing legal representation to a client with respect to
  135  credit counseling services or debt management and who does not
  136  engage in the business of providing credit counseling or debt
  137  management services on a continuing basis. Any Debt management
  138  or credit counseling services provided in the practice of law in
  139  this state;
  140         (2) A Any person who engages in debt adjustment to adjust
  141  the indebtedness owed to such person.; or
  142         (3) The following entities or their subsidiaries:
  143         (a) The Federal National Mortgage Association;
  144         (b) The Federal Home Loan Mortgage Corporation;
  145         (c) The Florida Housing Finance Corporation, a public
  146  corporation created in s. 420.504;
  147         (d) A bank, bank holding company, trust company, savings
  148  and loan association, credit union, credit card bank, or savings
  149  bank that is regulated and supervised by the Office of the
  150  Comptroller of the Currency, the Office of Thrift Supervision,
  151  the Federal Reserve, the Federal Deposit Insurance Corporation,
  152  the National Credit Union Administration, the Office of
  153  Financial Regulation of the Department of Financial Services, or
  154  any state banking regulator;
  155         (e) A consumer reporting agency as defined in the Federal
  156  Fair Credit Reporting Act, 15 U.S.C. s. 1681a ss. 1681-1681y, as
  157  it existed on April 5, 2004; or
  158         (f) Any subsidiary or affiliate of a bank holding company,
  159  its employees and its exclusive agents acting under written
  160  agreement.
  161         Section 6. Section 817.804, Florida Statutes, is amended to
  162  read:
  163         817.804 Financial requirements; disclosure and financial
  164  reporting.—
  165         (1) A credit counseling organization must Any person
  166  engaged in debt management services or credit counseling
  167  services shall:
  168         (a) Obtain from a licensed certified public accountant an
  169  annual financial audit report in accordance with generally
  170  accepted auditing standards that includes shall include all of
  171  the organization’s accounts of such person in which the funds of
  172  debtors are deposited and from which payments are made to
  173  creditors on behalf of debtors.
  174         (b) Obtain and maintain at all times insurance coverage for
  175  employee dishonesty, depositor’s forgery, and computer fraud.
  176  The insurance coverage must be in an amount not less than the
  177  greater of $100,000 or 10 percent of the monthly average of the
  178  aggregate amount of all deposits made by debtors to the
  179  organization for distribution to creditors with such person by
  180  all debtors for the 6 months immediately preceding the date of
  181  initial application for or renewal of the insurance. The
  182  deductible on such coverage may shall not exceed 10 percent of
  183  the face amount of the policy coverage.
  184         (c)Obtain and maintain a surety bond from a surety company
  185  authorized to do business in this state. The amount of the bond
  186  shall be specified by rule, but must be at least $50,000 but not
  187  more than $2 million. The rule must provide allowances for
  188  business volume. The bond shall be in favor of the state for the
  189  use and benefit of any debtor who suffers or sustains any loss
  190  or damage by reason of any violation of this part.
  191         (2) A copy of the annual financial audit report and
  192  insurance policies required by this section must shall be
  193  available for public inspection at each branch location of the
  194  organization. Copies shall be provided, upon written request, to
  195  any party requesting a copy for a charge that does not to exceed
  196  the cost of copying the reproduction of documents.
  197         Section 7. Section 817.8045, Florida Statutes, is created
  198  to read:
  199         817.8045Service contracts.—
  200         (1)The service contract between the credit counseling
  201  organization and the debtor must be signed and dated by the
  202  debtor and include all of the following:
  203         (a)The following statement in at least 12-point uppercase
  204  type at the top of the service contract:
  205  
  206         IMPORTANT:IT IS RECOMMENDED THAT YOU CONTACT YOUR
  207         CREDITORS BEFORE SIGNING THIS CONTRACT. YOUR CREDITORS
  208         MAY BE WILLING TO NEGOTIATE A PAYMENT PLAN OR A
  209         RESTRUCTURING OF YOUR DEBT FREE OF CHARGE.
  210  
  211         YOUR FAILURE TO DIRECTLY CONTACT YOUR CREDITORS MAY
  212         RESULT IN LATE FEES, ADDITIONAL DEBTS, AND AN ADVERSE
  213         CREDIT RATING.
  214  
  215         (b)A full and detailed description of the services to be
  216  performed by the credit counseling organization for the debtor,
  217  including all guarantees and all promises of full or partial
  218  refunds, and the estimated date or length of time by which the
  219  services are to be performed.
  220         (c)All terms and conditions of payment, including the
  221  total of all payments to be made by the debtor and the specific
  222  amount of any payments to be made to the credit counseling
  223  organization or to any other person.
  224         (d)The credit counseling organization’s principal business
  225  address and the name and address of its agent in the state
  226  authorized to receive service of process.
  227         (e)A clear and conspicuous statement in boldface type, in
  228  immediate proximity to the space reserved for the debtor’s
  229  signature, which states: “You, the debtor, may cancel this
  230  service contract at any time before midnight of the 5th business
  231  day after the date of signing this contract. [See the attached
  232  Notice of Right to Cancel for further explanation of this
  233  right.]”
  234         (f)A Notice of Right to Cancel attached to the contract,
  235  in duplicate and easily detachable, which contains the following
  236  statement in at least 12-point uppercase type:
  237  
  238                      NOTICE OF RIGHT TO CANCEL                    
  239  
  240         YOU MAY CANCEL ANY CONTRACT FOR DEBT MANAGEMENT OR
  241         CREDIT COUNSELING SERVICES WITHIN 5 BUSINESS DAYS
  242         AFTER THE DATE THE CONTRACT IS SIGNED BY YOU WITHOUT
  243         INCURRING ANY PENALTY OR OBLIGATION.
  244  
  245         YOUR PAYMENT MUST BE RETURNED TO YOU WITHIN 10
  246         BUSINESS DAYS AFTER RECEIPT OF YOUR CANCELLATION
  247         NOTICE.
  248  
  249         TO CANCEL THIS CONTRACT, MAIL OR DELIVER A SIGNED AND
  250         DATED COPY OF THIS CANCELLATION NOTICE OR ANY OTHER
  251         WRITTEN NOTICE CLEARLY INDICATING YOUR DESIRE TO
  252         CANCEL YOUR CONTRACT.
  253  
  254         TO:...(name of credit counseling organization)...
  255         AT:...(address)...
  256  
  257         BY SIGNING AND DATING THIS NOTICE, I HEREBY CANCEL MY
  258         SERVICE CONTRACT, EXECUTED ON:...(date service
  259         contract signed)...
  260  
  261         ...(Signature of Debtor)...
  262         ...(Date)...
  263         ...(Address)...
  264         ...(Phone Number)...
  265  
  266         (2)The credit counseling organization must provide the
  267  debtor, at the time the documents are signed, with a copy of the
  268  completed service contract and all other documents the
  269  organization requires the debtor to sign.
  270         Section 8. Section 817.805, Florida Statutes, is amended to
  271  read:
  272         817.805 Disbursement of funds.—A credit counseling
  273  organization must Any person engaged in debt management or
  274  credit counseling services shall disburse to the appropriate
  275  creditors all funds received from a debtor, less any fees
  276  permitted by s. 817.802 and any creditor contributions, within
  277  30 days after receipt of such funds. However, a creditor
  278  contribution may not reduce any sums to be credited to the
  279  account of a debtor making a payment to the organization credit
  280  counseling agency for further payment to the creditor. Further,
  281  a credit counseling organization must any person engaged in such
  282  services shall maintain a separate trust account for the receipt
  283  of any funds from debtors and the disbursement of such funds on
  284  behalf of such debtors.
  285         Section 9. Subsection (1) of Section 817.806, Florida
  286  Statutes, is amended to read:
  287         817.806 Violations.—
  288         (1) Any person who violates any provision of this part
  289  commits an unfair or deceptive trade practice as defined in part
  290  II of chapter 501. Violators are shall be subject to the
  291  penalties and remedies provided therein. Further, any debtor
  292  consumer injured by a violation of this part may bring an action
  293  for recovery of damages. Judgment shall be entered for actual
  294  damages, but in no case less than the amount paid by the debtor
  295  consumer to the credit counseling organization agency, plus
  296  reasonable attorney’s fees and costs.
  297         Section 10. This act shall take effect October 1, 2010.

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