June 03, 2020
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CS/CS/HB 311

1
A bill to be entitled
2An act relating to debt relief services; providing a
3directive to the Division of Statutory Revision; creating
4s. 559.101, F.S.; providing a short title; transferring,
5renumbering, and amending s. 817.801, F.S.; revising
6definitions relating to debt relief services; creating s.
7559.103, F.S.; providing the powers of the Office of
8Financial Regulation; creating s. 559.104, F.S.;
9authorizing the Financial Services Commission to adopt
10rules; transferring, renumbering, and amending s. 817.803,
11F.S.; revising provisions relating to who is not subject
12to the Debt Relief Services Act; providing an exception
13for attorneys representing clients; creating s. 559.106,
14F.S.; requiring debt relief organizations to be registered
15with the office; providing a registration fee; requiring
16background screening of applicants and control persons;
17providing grounds for registration issuance or denial;
18requiring annual renewal; creating s. 559.107, F.S.;
19requiring registration renewal; transferring, renumbering,
20and amending s. 817.804, F.S.; requiring a debt relief
21organization to obtain a surety bond and to provide proof
22of such bond to the office; creating s. 559.109, F.S.;
23requiring a debt relief organization to maintain records;
24creating s. 559.111, F.S.; requiring a debt relief
25organization to prepare a financial analysis for the
26debtor; providing for service contracts; requiring certain
27provisions to be included in such contracts; requiring the
28debt relief organization to provide the debtor with copies
29of all signed documents; transferring, renumbering, and
30amending s. 817.805, F.S.; conforming terms to changes
31made by the act; transferring, renumbering, and amending
32s. 817.802, F.S.; prohibiting a debt relief organization
33from engaging in certain additional specified acts;
34deleting a provision that allows the organization to
35collect a fee for insufficient fund transactions; creating
36s. 559.114, F.S.; providing for debtor complaints to the
37office; providing procedures and office duties, including
38administrative penalties; creating s. 559.115, F.S.;
39providing for the issuance of subpoenas by the office;
40creating s. 559.116, F.S.; authorizing the office to issue
41cease and desist orders; transferring, renumbering, and
42amending s. 817.806, F.S.; conforming terms to changes
43made by the act; providing administrative penalties;
44specifying violations that result in criminal penalties;
45repealing ss. 559.10, 559.11, 559.12, and 559.13, F.S.,
46relating to obsolete provisions concerning budget
47planning; amending s. 516.07, F.S.; conforming a cross-
48reference; providing an appropriation and authorizing
49additional positions; providing effective dates.
50
51Be It Enacted by the Legislature of the State of Florida:
52
53     Section 1.  The Division of Statutory Revision is directed
54to redesignate the title of part II of chapter 559, Florida
55Statutes, consisting of ss. 559.101-559.117, as "Debt Relief
56Services."
57     Section 2.  Section 559.101, Florida Statutes, is created
58to read:
59     559.101  Short title.-This part may be cited as the "Debt
60Relief Services Act."
61     Section 3.  Section 817.801, Florida Statutes, is
62transferred, renumbered as 559.102, Florida Statutes, and
63amended to read:
64     559.102 817.801  Definitions.-As used in this part:
65     (1)  "Commission" means the Financial Services Commission.
66     (2)  "Control person" means an individual, partnership,
67corporation, trust, or other organization that possesses the
68power, directly or indirectly, to direct the management or
69policies of a company, whether through ownership of securities,
70by contract, or otherwise. The term includes, but is not limited
71to:
72     (a)  A company's executive officers, including the
73president, chief executive officer, chief financial officer,
74chief operations officer, chief legal officer, chief compliance
75officer, director, or other individuals having similar status or
76functions.
77     (b)  For a corporation, each shareholder who, directly or
78indirectly, owns 10 percent or more, or who has the power to
79vote 10 percent or more, of a class of voting securities, unless
80the applicant is a publicly traded company.
81     (c)  For a partnership, all general partners and limited or
82special partners who have contributed 10 percent or more, or who
83have the right to receive upon dissolution 10 percent or more,
84of the partnership's capital.
85     (d)  For a trust, each trustee.
86     (e)  For a limited liability company, all managing members
87and those members who have contributed 10 percent or more, or
88who have the right to receive upon dissolution 10 percent or
89more, of the partnership's capital.
90     (3)(2)  "Credit counseling services" means confidential
91money management, debt reduction, financial analysis, and
92financial educational services provided to a debtor. The term
93does not include foreclosure-related rescue services.
94     (4)(3)  "Creditor contribution" means any sum that a
95creditor agrees to contribute to a debt relief organization
96credit counseling agency, whether directly or by setoff against
97amounts otherwise payable to the creditor on behalf of debtors.
98     (5)(4)  "Debt management services" means services, other
99than foreclosure-related rescue services, provided to a debtor
100by a debt relief credit counseling organization for a fee to:
101     (a)  Effect the adjustment, compromise, interest rate
102reduction, modification of terms, negotiation, or discharge of
103any unsecured account, note, or other indebtedness of the
104debtor; or
105     (b)  Receive funds periodically from the debtor and
106disburse to a creditor any money or other thing of value with
107the expectation that the debtor will repay the creditor the
108entire principal owed.
109     (6)(1)  "Debt relief organization Credit counseling agency"
110means a person offering to provide or any organization providing
111debt management services, debt settlement services, or credit
112counseling services for compensation.
113     (7)  "Debt settlement services" means services, other than
114foreclosure-related rescue services, provided to a debtor with
115the expectation of obtaining the creditor's agreement to accept
116less than the principal amount of a debt in full satisfaction of
117the debt.
118     (8)  "Debtor" means an individual who obtains credit, seeks
119a credit agreement with a creditor, or owes money to a creditor.
120     (9)  "Enrolled debt" means the amount of debt at the time
121the contract for debt management services is entered but does
122not include any increases in the amount of debt or additional
123fees or penalties applied to the debt after services included in
124the contract are initiated.
125     (10)  "Financial analysis" means the review of an
126individual's budget, income, expenses, and debt by the debt
127relief organization in order to determine the individual's
128suitability for additional credit counseling, debt management,
129or debt settlement services provided by the organization.
130     (11)  "Financial audit report" means a report prepared in
131connection with a financial audit that is conducted in
132accordance with generally accepted auditing standards prescribed
133by the American Institute of Certified Public Accountants by a
134certified public accountant licensed to do business in the
135United States, which includes:
136     (a)  Financial statements, including notes related to the
137financial statements and required supplementary information,
138prepared in conformity with United States generally accepted
139accounting principles.
140     (b)  An expression of opinion whether the financial
141statements are presented in conformity with United States
142generally accepted accounting principles, or an assertion that
143such an opinion cannot be expressed and the reasons for such
144assertion.
145     (12)  "Office" means the Office of Financial Regulation of
146the Financial Services Commission.
147     (13)(5)  "Person" has the same meaning as in s. 1.01 means
148any individual, corporation, partnership, trust, association, or
149other legal entity.
150     (14)  "Service contract" means the agreement for services
151between a debt relief organization and a debtor.
152     Section 4.  Section 559.103, Florida Statutes, is created
153to read:
154     559.103  Powers and duties of the Office of Financial
155Regulation; fees.-
156     (1)  The office is responsible for the administration and
157enforcement of this part.
158     (2)  The office may conduct an investigation of any person
159if the office has reason to believe, upon complaint or
160otherwise, that any violation of this part may have been
161committed or is about to be committed.
162     (3)  All fees, charges, and fines collected pursuant to
163this part shall be deposited in the State Treasury to the credit
164of the Regulatory Trust Fund under the office.
165     Section 5.  Section 559.104, Florida Statutes, is created
166to read:
167     559.104  Rules.-The commission may adopt rules to
168administer this part, including rules that:
169     (1)  Require electronic submission of any forms, documents,
170or fees required under this part.
171     (2)  Establish time periods during which an applicant for
172registration is barred from registration or a registered debt
173relief organization is barred from renewal due to prior criminal
174convictions of, or guilty or nolo contendere pleas by, any of
175the applicant's or registrant's control persons, regardless of
176adjudication.
177     (a)  The rules must provide:
178     1.  Permanent bars for felonies involving money laundering,
179breach of trust, dishonesty, embezzlement, fraud, fraudulent
180conversion, misappropriation of property, racketeering, or
181theft;
182     2.  A 15-year disqualifying period for felonies involving
183moral turpitude;
184     3.  A 7-year disqualifying period for all other felonies;
185and
186     4.  A 5-year disqualifying period for misdemeanors
187involving fraud, dishonesty, or any other act of moral
188turpitude.
189     (b)  The rules may provide for an additional waiting period
190due to dates of imprisonment or community supervision, the
191commitment of multiple crimes, and other factors reasonably
192related to the applicant's criminal history.
193     (c)  The rules may provide for mitigating factors for
194crimes identified in subparagraph (a)2. However, the mitigation
195may not result in a period of disqualification less than 7
196years. The rule may not mitigate the disqualifying periods in
197subparagraphs (a)1., (a)3., and (a)4.
198     (d)  An applicant is not eligible for registration until
199the expiration of the disqualifying period set by rule.
200     (e)  Section 112.011 is not applicable to eligibility for
201registration under this part.
202     Section 6.  Section 817.803, Florida Statutes, is
203transferred, renumbered as section 559.105, Florida Statutes,
204and amended to read:
205     559.105 817.803  Exceptions.-Nothing in This part does not
206apply applies to:
207     (1)  A person licensed to practice law in this state who is
208providing credit counseling, debt management, or debt settlement
209services as an ancillary matter to her or his representation of
210the debtor as a client. Any Debt management or credit counseling
211services provided in the practice of law in this state;
212     (2)  A Any person who engages in credit counseling, debt
213management, or debt settlement services adjustment to adjust the
214indebtedness owed to such person.; or
215     (3)  The following entities or their subsidiaries:
216     (a)  The Federal National Mortgage Association;
217     (b)  The Federal Home Loan Mortgage Corporation;
218     (c)  The Florida Housing Finance Corporation, a public
219corporation created in s. 420.504;
220     (d)  Any financial institution as defined under s.
221655.005(1)(h) A bank, bank holding company, trust company,
222savings and loan association, credit union, credit card bank, or
223savings bank that is regulated and supervised by the Office of
224the Comptroller of the Currency, the Office of Thrift
225Supervision, the Federal Reserve, the Federal Deposit Insurance
226Corporation, the National Credit Union Administration, the
227Office of Financial Regulation of the Department of Financial
228Services, or any state banking regulator; or
229     (e)  A consumer reporting agency as defined in the Federal
230Fair Credit Reporting Act, 15 U.S.C. s. 1681a ss. 1681-1681y, as
231it existed on April 5, 2004; or
232     (f)  Any subsidiary or affiliate of a bank holding company,
233its employees and its exclusive agents acting under written
234agreement.
235     Section 7.  Section 559.106, Florida Statutes, is created
236to read:
237     559.106  Registration of debt relief organization.-
238     (1)  Effective April 1, 2011, each person who acts as a
239debt relief organization in this state must be registered in
240accordance with this section. This applies to debt relief
241organizations operating in this state or from another state,
242regardless of whether such organization is registered, licensed,
243or the equivalent in accordance with the laws of another state.
244     (2)  In order to apply for registration, an applicant must
245submit:
246     (a)  A completed registration application form as
247prescribed by commission rule which includes the name and
248principal business address and e-mail address of the debt relief
249organization.
250     (b)  A registration fee of $1,000. The registration fee is
251nonrefundable and may not be prorated for a partial year of
252registration.
253     (c)  Fingerprints for the applicant and each of the
254applicant's control persons in accordance with rules adopted by
255the commission.
256     1.  The fingerprints may be submitted to the office or a
257vendor acting on behalf of the office.
258     2.  The office may contract with a third-party vendor to
259provide live-scan fingerprinting in lieu of a paper fingerprint
260card.
261     3.  A state criminal history background check must be
262conducted through the Department of Law Enforcement, and a
263federal criminal history background check must be conducted
264through the Federal Bureau of Investigation.
265     4.  All fingerprints submitted to the Department of Law
266Enforcement must be submitted electronically and entered into
267the statewide automated fingerprint identification system
268established in s. 943.05(2)(b) and available for use in
269accordance with s. 943.05(2)(g) and (h). The office shall pay an
270annual fee to the department to participate in the system and
271inform the department of any person whose fingerprints are no
272longer required to be retained.
273     5.  The costs of fingerprint processing, including the cost
274of retaining the fingerprints, shall be borne by the person
275subject to the background check.
276     6.  The office is responsible for reviewing the results of
277the state and federal criminal history checks and determining
278whether the applicant meets registration requirements.
279     (d)  Submit documentation demonstrating that the surety
280bond requirements specified in s. 559.108 have been satisfied.
281     (e)  Submit additional information or documentation
282requested by the office and required by rule concerning the
283applicant or a control person of the applicant. Additional
284information may include documentation of pending and prior
285disciplinary and criminal history events, including arrest
286reports and certified copies of charging documents, plea
287agreements, judgments and sentencing documents, documents
288relating to pretrial intervention, orders terminating probation
289or supervised release, final administrative agency orders, or
290other comparable documents that may provide the office with the
291appropriate information to determine eligibility for
292registration.
293     (3)  An application is considered received for the purposes
294of s. 120.60 upon the office's receipt of the completed
295application form, all required documentation, criminal history
296information, the application fee, and all applicable
297fingerprinting processing fees.
298     (4)  The office shall issue a debt relief organization
299registration to each applicant who is not otherwise ineligible
300and who meets the requirements of this section. However, it is a
301ground for denial of registration if the applicant or one of the
302applicant's control persons:
303     (a)  Has been found guilty of, regardless of adjudication,
304or has entered a plea of nolo contendere or guilty to, any
305felony, any crime involving racketeering, fraud, theft,
306embezzlement, fraudulent conversion, breach of trust,
307misappropriation of property, dishonesty, or moral turpitude;
308     (b)  Has committed any violation specified in s. 559.113;
309     (c)  Is the subject of a pending felony criminal
310prosecution or a prosecution or an administrative enforcement
311action, in any jurisdiction, which involves fraud, racketeering,
312embezzlement, fraudulent conversion, misappropriation of
313property, theft, dishonesty, breach of trust, or any other act
314of moral turpitude;
315     (d)  Pays the office any fee, fine, or other amount with a
316check or electronic transmission of funds which fails to clear
317the applicant's financial institution;
318     (e)  Makes a material misstatement on any application,
319document, or record required to be submitted under this part or
320the rules of the commission; or
321     (f)  Has been the subject of any decision, finding,
322injunction, suspension, prohibition, revocation, denial,
323judgment, or other adverse action by any state or federal
324agency.
325     (5)  A registration issued under this section expires
326annually on March 31, unless canceled, suspended, revoked, or
327otherwise terminated, and must be renewed as provided under s.
328559.107.
329     Section 8.  Effective April 1, 2011, section 559.107,
330Florida Statutes, is created to read:
331     559.107  Registration renewal.-
332     (1)  In order to renew a debt relief organization
333registration, a debt relief organization must submit:
334     (a)  A completed registration renewal form as prescribed by
335commission rule.
336     (b)  Fingerprints, in accordance with s. 559.106, for any
337new control persons who have not been screened.
338     (c)  Any additional information or documentation requested
339by the office and required by rule concerning the registrant or
340control person of the registrant. Additional information may
341include documentation of any pending and prior disciplinary and
342criminal history events, including arrest reports and certified
343copies of charging documents, plea agreements, judgments and
344sentencing documents, documents relating to pretrial
345intervention, orders terminating probation or supervised
346release, final administrative agency orders, or other comparable
347documents that may provide the office with the appropriate
348information to determine eligibility for renewal of
349registration.
350     (d)  A nonrefundable renewal fee of $750 and nonrefundable
351fees to cover the cost of further fingerprint processing and
352retention as set forth in commission rule.
353     (2)  The office may not renew a debt relief organization
354registration unless the registrant continues to meet the minimum
355requirements for initial registration pursuant to s. 559.106 and
356adopted rule.
357     Section 9.  Section 817.804, Florida Statutes, is
358transferred, renumbered as section 559.108, Florida Statutes,
359and amended to read:
360     559.108 817.804  Financial requirements; surety bond;
361disclosure and financial reporting.-
362     (1)  A debt relief organization must Any person engaged in
363debt management services or credit counseling services shall:
364     (a)  Obtain from a licensed certified public accountant an
365annual independent financial audit report in accordance with
366generally accepted auditing standards that includes shall
367include all accounts of such person in which the funds of
368debtors are deposited and from which payments are made to
369creditors on behalf of debtors. A debt relief organization must
370submit a copy of the report to the office within 120 days after
371the end of the registrant's fiscal year. The commission may
372establish by rule the manner for filing a financial audit
373report.
374     (b)  Obtain and maintain at all times insurance coverage
375for employee dishonesty, depositor's forgery, and computer
376fraud. The insurance coverage must be in an amount not less than
377the greater of $100,000 or 10 percent of the monthly average of
378the aggregate amount of all deposits made by debtors to the
379organization for distribution to creditors with such person by
380all debtors for the 6 months immediately preceding the date of
381initial application for or renewal of the insurance. The
382deductible on such coverage may shall not exceed 10 percent of
383the face amount of the policy coverage.
384     (c)  Obtain and maintain a surety bond from a surety
385company authorized to do business in this state. The amount and
386form of the bond shall be specified by rule and must be at least
387$100,000 but may not exceed $1 million. The rule must provide
388allowances for business volume. The bond shall be in favor of
389the state for the use and benefit of any debtor who suffers or
390sustains any loss or damage by reason of any violation of this
391part. Pursuant to initial registration and renewal, each
392applicant shall furnish to the office:
393     1.  The original executed surety bond issued by a surety
394company authorized to do business in this state.
395     2.  A statement from the surety company that the premium
396for the bond has been paid in full by the applicant.
397     3.  A statement from the surety company that the bond
398issued by the surety company meets the requirements of this
399part. The liability of the surety company under any bond issued
400pursuant to this section may not, in the aggregate, exceed the
401amount of the bond regardless of the number or amount of any
402claims filed or which might be asserted against the surety on
403such bond. If multiple claims are filed which collectively
404exceed the amount of the bond, the surety may pay the full
405amount of the bond to the office and is not further liable under
406the bond. The office shall hold such funds for distribution to
407claimants and administratively determine and pay to each
408claimant a pro rata share of each valid claim made within 6
409months after the date the first claim is filed against the
410surety.
411     (2)  A copy of the annual financial audit report and
412insurance policies required by this section must shall be
413available for public inspection at each branch location of the
414organization. Copies shall be provided, upon written request, to
415any party requesting a copy for a charge that does not to exceed
416the cost of copying the reproduction of documents.
417     Section 10.  Section 559.109, Florida Statutes, is created
418to read:
419     559.109  Maintenance of records.-
420     (1)  Each registered debt relief organization shall
421maintain, at the principal place of business designated on the
422registration, all books, accounts, records, and documents
423necessary to determine the registrant's compliance with this
424part.
425     (2)  The office may authorize the maintenance of records at
426a location other than a principal place of business. The office
427may require books, accounts, and records to be produced and
428available at a reasonable and convenient location in this state.
429     (3)  The commission may prescribe by rule the minimum
430information to be shown in the books, accounts, records, and
431documents of registrants so that such records enable the office
432to determine the registrant's compliance with this part.
433     (4)  All books, accounts, records, documents, and receipts
434of any payment transaction must be preserved and kept available
435for inspection by the office for at least 5 years after the date
436the transaction is completed. The commission may prescribe by
437rule requirements for the destruction of books, accounts,
438records, and documents retained by the registrant after the
439completion of the required 5-year period.
440     Section 11.  Section 559.111, Florida Statutes, is created
441to read:
442     559.111  Financial analysis; service contracts.-
443     (1)  Before a debtor signs a service contract, the debt
444relief organization shall prepare, retain a copy of, and provide
445to the debtor a written financial analysis specific to the
446debtor which includes an evaluation of the debtor's income,
447expenses, and all debts. An additional fee may not be charged
448for the financial analysis.
449     (2)  Based on the completed financial analysis, the debt
450relief organization shall provide to the debtor, and retain a
451copy of, a written determination of the debtor's suitability for
452debt management or debt settlement services and whether the
453debtor can reasonably meet the requirements of the service
454contract, including the debtor's ability to save the amount
455estimated to be needed to fund the settlement of the debt.
456     (3)  The service contract between the debt relief
457organization and the debtor must be signed and dated by the
458debtor and include all of the following:
459     (a)  The following statement in at least 12-point uppercase
460type at the top of the service contract:
461
462IMPORTANT:  IT IS RECOMMENDED THAT YOU CONTACT YOUR
463CREDITORS BEFORE SIGNING THIS CONTRACT. YOUR CREDITORS
464MAY BE WILLING TO DIRECTLY NEGOTIATE A SETTLEMENT,
465INTEREST RATE REDUCTION, MODIFICATION, PAYMENT PLAN,
466OR RESTRUCTURING OF YOUR DEBT FREE OF CHARGE.
467
468YOUR USE OF DEBT MANAGEMENT OR DEBT SETTLEMENT
469SERVICES MAY RESULT IN LATE FEES, ADDITIONAL DEBTS,
470AND AN ADVERSE CREDIT RATING. YOU SHOULD CONTACT YOUR
471CREDITOR FOR MORE INFORMATION.
472
473     (b)  A full and detailed description of the services to be
474performed by the debt relief organization for the debtor,
475including the financial analysis determining the suitability of
476the debtor for debt management or debt settlement services, all
477guarantees and all promises of full or partial refunds, the
478estimated date or length of time by which the services are to be
479performed, and a copy of the Florida Debt Relief Services Act.
480     (c)  All terms and conditions of payment, including the
481anticipated total of all payments to be made by the debtor and
482the estimated amount of any payments to be made to the debt
483relief organization or to any other person.
484     (d)  The debt relief organization's principal business
485address and the name and address of its agent in the state
486authorized to receive service of process.
487     (e)  A clear and conspicuous statement in boldface type, in
488immediate proximity to the space reserved for the debtor's
489signature, which states: "You, the debtor, may cancel this
490service contract at any time before midnight of the 5th business
491day after the date of signing this contract. (See the attached
492notice of right to cancel for further explanation of this
493right.)"
494     (f)  A notice of right to cancel attached to the contract,
495in duplicate and easily detachable, which contains the following
496statement in at least 12-point uppercase type:
497
498
NOTICE OF RIGHT TO CANCEL
499
500YOU MAY CANCEL ANY CONTRACT FOR CREDIT COUNSELING,
501DEBT MANAGEMENT, OR DEBT SETTLEMENT SERVICES WITHIN 5
502BUSINESS DAYS AFTER THE DATE THE CONTRACT IS SIGNED BY
503YOU WITHOUT INCURRING ANY PENALTY OR OBLIGATION.
504
505YOUR PAYMENT MUST BE RETURNED TO YOU WITHIN 10
506BUSINESS DAYS AFTER RECEIPT OF YOUR CANCELLATION
507NOTICE.
508
509TO CANCEL THIS CONTRACT, YOU MUST MAIL OR DELIVER A
510SIGNED AND DATED COPY OF THIS CANCELLATION NOTICE OR
511ANY OTHER WRITTEN NOTICE CLEARLY INDICATING YOUR
512DESIRE TO CANCEL YOUR CONTRACT.
513
514     TO:  ...(name of debt relief organization)...
515     AT:  ...(address)...
516
517BY SIGNING AND DATING THIS NOTICE, I HEREBY CANCEL MY
518SERVICE CONTRACT, EXECUTED ON:  ...(date service
519contract signed)...
520
521     ...(Signature of Debtor)...
522     ...(Date)...
523     ...(Address)...
524     ...(Phone Number)...
525
526     (4)  The debt relief organization must provide the debtor,
527at the time the documents are signed, with a copy of the
528completed service contract as described in subsection (3) and
529all other documents the organization requires the debtor to
530sign.
531     Section 12.  Section 817.805, Florida Statutes, is
532transferred, renumbered as section 559.112, Florida Statutes,
533and amended to read:
534     559.112 817.805  Disbursement of funds.-A debt relief
535organization offering debt management services that include
536disbursement to a creditor must Any person engaged in debt
537management or credit counseling services shall disburse to the
538appropriate creditors all funds received from a debtor, less any
539fees permitted by s. 559.113 817.802 and any creditor
540contributions, within 30 days after receipt of such funds.
541However, a creditor contribution may not reduce any sums to be
542credited to the account of a debtor making a payment to the
543organization credit counseling agency for further payment to the
544creditor. Further, a debt relief organization offering debt
545settlement services or debt management services must any person
546engaged in such services shall maintain a separate trust account
547for the receipt of any funds from debtors and the disbursement
548of such funds on behalf of such debtors.
549     Section 13.  Section 817.802, Florida Statutes, is
550transferred, renumbered as section 559.113, Florida Statutes,
551and amended to read:
552     559.113 817.802  Prohibited acts Unlawful fees and costs.-
553     (1)  A debt relief organization may not, directly or
554indirectly, charge or accept from a debtor:
555     (a)  Any payment for services before the execution of a
556written service contract. It is unlawful for any person, while
557engaging in debt management services or credit counseling
558services, to charge or accept from a debtor residing in this
559state, directly or indirectly,
560     (b)  A fee or contribution greater than $50 for the initial
561setup or initial consultation. Subsequently, the person may not
562charge or accept
563     (c)  A fee or contribution from a debtor residing in this
564state greater than $120 per year for credit counseling services
565provided in addition to the initial consultation under paragraph
566(b). additional consultations or, alternatively, if
567     (d)  A fee or contribution for debt management services
568which exceeds as defined in s. 817.801(4)(b) are provided, the
569person may charge the greater of 7.5 percent of the amount paid
570monthly by the debtor to the organization for disbursement to a
571creditor person or $35 per month, whichever is greater, or 7.5
572percent of the enrolled debt.
573     (e)  A fee or contribution for debt settlement services
574which exceeds 40 percent of the savings realized, which is
575defined to be the difference between the amount of enrolled debt
576and the amount paid to the creditor in discharge of the enrolled
577debt, less any fees collected pursuant to paragraphs (b) and
578(c). However, such fees collected for debt settlement services,
579in the aggregate, may not exceed 20 percent of the enrolled
580debt. For service contracts requiring fees to be paid on a
581monthly basis, the payment of such fees must be spread uniformly
582over at least 18 months or 50 percent of the term of the
583contract, whichever is greater.
584     (f)  A fee or contribution unless the debt management
585services or debt settlement services result in a settlement,
586discharge, or modification of the debt on terms more favorable
587to the debtor than the terms of the original agreement between
588the debtor and creditor.
589     (g)  Any fee or contribution for debt management, unless no
590other payment has been received, directly or indirectly, from
591the debtor for such services. Fees authorized under this
592subsection may not be a part of or included in the calculation
593of total enrolled debt.
594     (2)  A debt relief organization may not:
595     (a)  Advise any debtor, directly or indirectly, against
596contacting or communicating with her or his creditors before or
597during the service contract period.
598     (b)  Make or use any false or misleading representations or
599omit any material fact in connection with the offer, sale, or
600provision of services, or engage, directly or indirectly, in any
601fraudulent, false, misleading, unconscionable, unfair, or
602deceptive act or practice in connection with the offer or sale
603of any of the services of a debt relief organization.
604     (c)  Provide services to a debtor without executing a
605service contract that complies with s. 559.111.
606     (d)  Fail to provide copies of the financial analysis, all
607service contracts, and any other documents the debtor is
608required to sign as provided under s. 559.111.
609     (e)  Fail to perform any of the terms, conditions, and
610obligations provided in the service contract with the debtor.
611     (f)  Fail to disclose on any offer or sale of services,
612including any Internet website, the debt relief organization's
613name, business address, telephone number, and e-mail address, if
614any.
615     (g)  Fail to provide the debtor with a 5-business-day right
616of cancellation without the debtor incurring any penalty or
617obligation.
618     (h)  Fail to obtain an annual financial audit report and
619surety bond.
620     (i)  Fail to submit an annual financial audit report to the
621office.
622     (j)  Fail to report on a form prescribed by commission rule
623any change to information contained in an initial application
624form or any amendment to the application within 30 days after
625the change is effective.
626     (k)  Fail to comply with any of the provisions of this
627part.
628     (2)  This section does not prohibit any person, while
629engaging in debt management or credit counseling services, from
630imposing upon and receiving from a debtor a reasonable and
631separate charge or fee for insufficient funds transactions.
632     Section 14.  Section 559.114, Florida Statutes, is created
633to read:
634     559.114  Debtor complaints; administrative duties.-
635     (1)  The office shall receive and maintain records of
636correspondence and complaints from debtors concerning any person
637who provides credit counseling, debt management, or debt
638settlement services, including any debt relief organization.
639     (2)  The office shall inform and furnish relevant
640information to the appropriate regulatory body if a debt relief
641organization exempt from registration under this part has been
642named in consumer complaints alleging violations of this part.
643     (3)  The office shall investigate complaints and record the
644resolution of such complaints.
645     (4)  A debt relief organization that provides or attempts
646to provide debt management or debt settlement services without
647first registering in accordance with this part is subject to a
648penalty of up to $25,000 in addition to the other remedies
649provided in this part and under part II of chapter 501. The
650office shall advise the appropriate state attorney, or the
651Attorney General, of any determination by the office of a
652violation of this part by any debt relief organization that is
653not registered as required by this part. The office shall
654furnish the state attorney or Attorney General with the office's
655information concerning the alleged violations of such
656requirements. The enforcing authority is entitled to reasonable
657attorney's fees and costs in any action brought to enforce this
658part against an unregistered debt relief organization.
659     (5)  A registered debt relief organization must provide a
660written response to the office within 20 days after receipt of a
661written request from the office for information concerning a
662consumer complaint. The response must address the issues and
663allegations raised in the complaint. The office may impose an
664administrative fine of up to $2,500 per request per day upon any
665registrant that fails to comply with this subsection.
666     Section 15.  Section 559.115, Florida Statutes, is created
667to read:
668     559.115  Subpoenas.-
669     (1)  The office may:
670     (a)  Issue and serve subpoenas and subpoenas duces tecum to
671compel the attendance of witnesses and the production of all
672books, accounts, records, and other documents and materials
673relevant to an investigation conducted by the office. The
674office, or its authorized representative, may administer oaths
675and affirmations to any person.
676     (b)  Seek subpoenas or subpoenas duces tecum from any court
677to command the appearance of witnesses and the production of
678books, accounts, records, and other documents or materials at a
679time and place named in the subpoenas, and an authorized
680representative of the office may serve such subpoenas.
681     (2)  If there is substantial noncompliance with a subpoena
682or subpoena duces tecum issued by the office, the office may
683petition the court in the county where the person subpoenaed
684resides or has her or his principal place of business for an
685order requiring the person to appear, testify, or produce such
686books, accounts, records, and other documents as are specified
687in the subpoena or subpoena duces tecum.
688     (3)  The office is entitled to the summary procedure
689provided in s. 51.011, and the court shall advance such cause on
690its calendar. Attorney's fees and any other costs incurred by
691the office to obtain an order granting, in whole or in part, a
692petition for enforcement of a subpoena or subpoena duces tecum
693shall be taxed against the subpoenaed person, and failure to
694comply with such order is a contempt of court.
695     (4)  To aid in the enforcement of this part, the office may
696require or permit a person to file a statement in writing, under
697oath or otherwise as the office determines, as to all the facts
698and circumstances concerning the matter to be investigated.
699     Section 16.  Section 559.116, Florida Statutes, is created
700to read:
701     559.116  Cease and desist orders.-The office may issue and
702serve upon any person an order to cease and desist and to take
703corrective action if it has reason to believe the person is
704violating, has violated, or is about to violate any provision of
705this part, any rule or order issued under this part, or any
706written agreement between the person and the office. All
707procedural matters relating to issuance and enforcement of such
708order are governed by the Administrative Procedure Act.
709     Section 17.  Section 817.806, Florida Statutes, is
710transferred, renumbered as section 559.117, Florida Statutes,
711and amended to read:
712     559.117 817.806  Violations; penalties.-
713     (1)  Any person who violates any provision of this part
714commits an unfair or deceptive trade practice as defined in part
715II of chapter 501, and. violators are also shall be subject to
716the penalties, and remedies, and enforcement actions provided
717therein. Further, any debtor consumer injured by a violation of
718this part may bring an action for recovery of damages. Judgment
719shall be entered for actual damages, but in no case less than
720the amount paid by the debtor consumer to the debt relief
721organization credit counseling agency, plus reasonable
722attorney's fees and costs.
723     (2)  The office may impose an administrative fine on, or
724revoke or suspend the registration of a registrant who has
725committed a violation of this part. Final action to fine,
726suspend, or revoke the registration of a registrant is subject
727to review in accordance with chapter 120.
728     (a)  The office may impose suspension rather than
729revocation of a registration if circumstances warrant that one
730or the other should be imposed and the registrant demonstrates
731that the registrant has taken affirmative steps that can be
732expected to effectively eliminate the violations and that the
733registrant's registration has never been previously suspended.
734     (b)  In addition to, or in lieu of suspension or revocation
735of a registration, the office may impose an administrative fine
736of up to $25,000 per violation. The office shall adopt rules
737establishing guidelines for imposing administrative penalties.
738     (3)(2)  It is Any person who violates any provision of this
739part commits a felony of the third degree, punishable as
740provided in s. 775.082, or s. 775.083, or s. 775.084 for any
741person to provide debt management or debt settlement services in
742this state without first registering with the office, or to
743register or attempt to register by means of fraud,
744misrepresentation, or concealment.
745     Section 18.  Sections 559.10, 559.11, 559.12, and 559.13,
746Florida Statutes, are repealed.
747     Section 19.  Paragraph (g) of subsection (1) of section
748516.07, Florida Statutes, is amended to read:
749     516.07  Grounds for denial of license or for disciplinary
750action.-
751     (1)  The following acts are violations of this chapter and
752constitute grounds for denial of an application for a license to
753make consumer finance loans and grounds for any of the
754disciplinary actions specified in subsection (2):
755     (g)  Any violation of part III of chapter 817 or part II of
756chapter 559 or of any rule adopted under part II of chapter 559.
757     Section 20.  Effective July 1, 2010, the sums of $261,938
758in recurring funds and $213,767 in nonrecurring funds are
759appropriated from the Regulatory Trust Fund of the Department of
760Financial Services to the Office of Financial Regulation, and
761four full-time equivalent positions with the associated salary
762rate of 187,707 are authorized, for the purpose of administering
763this act during the 2010-2011 fiscal year.
764     Section 21.  Except as otherwise expressly provided in this
765act and except for this section, which shall take effect upon
766this act becoming a law, this act shall take effect January 1,
7672011.


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