July 12, 2020
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_h0471__
HB 471

1
A bill to be entitled
2An act relating to debt negotiation services; amending s.
3817.801, F.S.; providing additional definitions relating
4to debt negotiation services; amending s. 817.802, F.S.,
5conforming a cross-reference; amending s. 817.803, F.S.;
6providing that an attorney providing legal representation
7is exempt from debt negotiation organization requirements;
8creating s. 817.8071, F.S.; prohibiting certain acts by a
9debt negotiation organization; providing penalties;
10creating s. 817.8072, F.S.; providing insurance
11requirements for a debt negotiation organization; creating
12s. 817.8073, F.S.; providing requirements for debt
13negotiation service contracts; providing an effective
14date.
15
16Be It Enacted by the Legislature of the State of Florida:
17
18     Section 1.  Section 817.801, Florida Statutes, is amended
19to read:
20     817.801  Definitions.-As used in this part:
21     (1)  "Concession" means assent to repayment of an unsecured
22debt for terms more favorable to a debtor than the terms of the
23original contract between the debtor and a creditor.
24     (2)(1)  "Credit counseling agency" means any organization,
25other than a debt negotiation organization, providing debt
26management services or credit counseling services.
27     (3)(2)  "Credit counseling services" means confidential
28money management, debt reduction, and financial educational
29services provided to a debtor by a credit counseling agency.
30     (4)(3)  "Creditor contribution" means a any sum that a
31creditor agrees to contribute to a credit counseling agency,
32whether directly or by setoff against amounts otherwise payable
33to the creditor on behalf of debtors.
34     (5)(4)  "Debt management services" means services provided
35to a debtor by a credit counseling agency organization for a fee
36to:
37     (a)  Effect the adjustment, compromise, or discharge of any
38unsecured account, note, or other indebtedness of the debtor; or
39     (b)  Receive from the debtor and disburse to a creditor any
40money or other thing of value.
41     (6)  "Debt negotiation organization" means any person
42providing debt negotiation services in accordance with s.
43817.8071.
44     (7)  "Debt negotiation services" means intermediary
45services provided for a fee by a debt negotiation organization
46between a debtor and one or more of the debtor's creditors for
47the purpose of obtaining concessions, but without the paid
48intermediary holding or disbursing funds to the individual
49creditors.
50     (8)  "Debt principal" means the total amount of original
51debt, including unpaid interest and fees, owed by the debtor as
52of the date of initial enrollment in a debt negotiation
53organization's plan.
54     (9)(5)  "Person" means an any individual, corporation,
55partnership, trust, association, or other legal entity, but does
56not include a governmental organization or subdivision thereof.
57     (10)  "Plan" means a program or strategy in which a debt
58negotiation organization furnishes debt negotiation services to
59a debtor in contemplation that during the course of the plan the
60debtor's creditors will settle debts for less than the full
61amount of the debts owed.
62     Section 2.  Subsection (1) of section 817.802, Florida
63Statutes, is amended to read:
64     817.802  Unlawful fees and costs.-
65     (1)  It is unlawful for any person, while engaging in debt
66management services or credit counseling services, to charge or
67accept from a debtor residing in this state, directly or
68indirectly, a fee or contribution greater than $50 for the
69initial setup or initial consultation. Subsequently, the person
70may not charge or accept a fee or contribution from a debtor
71residing in this state greater than $120 per year for additional
72consultations or, alternatively, if debt management services as
73defined in s. 817.801(4)(b) are provided, the person may charge
74the greater of 7.5 percent of the amount paid monthly by the
75debtor to the person or $35 per month.
76     Section 3.  Section 817.803, Florida Statutes, is amended
77to read:
78     817.803  Exceptions.-Nothing in This part does not apply
79applies to:
80     (1)  A person licensed to practice law in this state who is
81providing legal representation to a client with respect to Any
82debt management, or credit counseling, or debt negotiation
83services. provided in the practice of law in this state;
84     (2)  A Any person who engages in debt adjustment to adjust
85the indebtedness owed to such person.; or
86     (3)  The following entities or their subsidiaries:
87     (a)  The Federal National Mortgage Association.;
88     (b)  The Federal Home Loan Mortgage Corporation.;
89     (c)  The Florida Housing Finance Corporation., a public
90corporation created in s. 420.504;
91     (d)  A bank, bank holding company, trust company, savings
92and loan association, credit union, credit card bank, or savings
93bank that is regulated and supervised by the Office of the
94Comptroller of the Currency, the Office of Thrift Supervision,
95the Federal Reserve, the Federal Deposit Insurance Corporation,
96the National Credit Union Administration, the Office of
97Financial Regulation of the Department of Financial Services, or
98any state banking regulator.;
99     (e)  A consumer reporting agency as defined in the Federal
100Fair Credit Reporting Act, 15 U.S.C. ss. 1681-1681y, as it
101existed on April 5, 2004.; or
102     (f)  Any subsidiary or affiliate of a bank holding company,
103its employees and its exclusive agents acting under written
104agreement.
105     Section 4.  Section 817.8071, Florida Statutes, is created
106to read:
107     817.8071  Debt negotiation organization; prohibited acts.-
108     (1)  A debt negotiation organization may not:
109     (a)  Directly or indirectly impose a fee or other charge on
110a debtor or receive money from, or on behalf of, a debtor for
111debt negotiation services except as provided under this section.
112     (b)  Impose charges or receive payment for debt negotiation
113services before the debt negotiation organization and the debtor
114have signed a service contract that complies with s. 817.8073.
115     (c)  Make or use any false or misleading representations or
116omit any material fact in the offer or sale of debt negotiation
117services offered, or engage, directly or indirectly, in any
118fraudulent, false, misleading, unconscionable, unfair, or
119deceptive act or practice in connection with the offer or sale
120of any of such services.
121     (d)  Provide services to a debtor without executing a
122service contract that complies with s. 817.8073.
123     (e)  Fail to provide to the debtor copies of all service
124contracts and other documents that the debtor is required to
125sign.
126     (f)  Fail to obtain insurance coverage or fail to make such
127coverage information available for public inspection.
128     (2)  If a debtor assents to a plan that contemplates that a
129creditor will settle a debt for less than the principal amount
130of the debt, the debt negotiation organization may charge as the
131total amount of settlement fees only an amount that does not
132exceed one-half of the difference between the debt principal and
133the concession agreed upon with the debtor's creditor on a
134specific account. A debt negotiation organization may not
135collect any fees other than settlement fees and may collect
136settlement fees only after a settlement of an account with the
137debtor's creditor is agreed upon and documentation memorializing
138such settlement is executed.
139     Section 5.  Section 817.8072, Florida Statutes, is created
140to read:
141     817.8072  Insurance requirements for debt negotiation
142services.-
143     (1)  A debt negotiation organization must obtain and
144maintain insurance coverage of at least $100,000 at all times
145for employee dishonesty, depositor's forgery, and computer
146fraud. The deductible on such coverage may not exceed 10 percent
147of the face amount of the policy coverage.
148     (2)  Upon written request, a debt negotiation organization
149must provide a copy of the insurance coverage required under
150this section to any individual requesting a copy for a charge
151that does not exceed the cost of copying.
152     Section 6.  Section 817.8073, Florida Statutes, is created
153to read:
154     817.8073  Debt negotiation service contract.-
155     (1)  The service contract between the debt negotiation
156organization and the debtor must be signed and dated by the
157debtor and include all of the following:
158     (a)  A full and detailed description of the debt
159negotiation services to be performed for the debtor by the
160organization and the estimated date or length of time for
161performing the services.
162     (b)  All terms and conditions of payment, including the
163estimated total of all payments to be made by the debtor.
164     (c)  The organization's principal business address and the
165name and address of its registered agent authorized to receive
166service of process in this state.
167     (d)  A clear and conspicuous statement, in boldface type in
168the immediate proximity to the space reserved for the debtor's
169signature, which states: "You, the debtor, may cancel this
170service contract at any time before midnight of the 5th business
171day after the date of signing this contract. [See the attached
172Notice of Right to Cancel for further explanation of this
173right.]"
174     (e)  A Notice of Right to Cancel, which must be
175substantially in the following form:
176
177
NOTICE OF RIGHT TO CANCEL
178
179     YOU MAY CANCEL A CONTRACT FOR DEBT NEGOTIATION SERVICES
180WITHIN 5 BUSINESS DAYS AFTER THE DATE THE CONTRACT IS SIGNED BY
181YOU WITHOUT INCURRING A PENALTY OR OBLIGATION. TO CANCEL THIS
182CONTRACT, MAIL OR DELIVER A SIGNED AND DATED COPY OF THIS
183CANCELLATION NOTICE OR ANY OTHER WRITTEN NOTICE CLEARLY
184INDICATING YOUR DESIRE TO CANCEL YOUR CONTRACT.
185
186     TO:...(name of debt negotiation organization)...
187     AT:...(address of debt negotiation organization)...
188
189     BY SIGNING AND DATING THIS NOTICE, I HEREBY CANCEL MY
190SERVICE CONTRACT, EXECUTED ON:...(date service contract
191signed)...
192
193     ...(Signature of Debtor)...
194     ...(Date Cancellation Signed)...
195     ...(Address of Debtor)...
196     ...(Phone Number of Debtor)...
197
198     (2)  At the time the documents are signed, the debt
199negotiation organization must provide the debtor with a copy of
200the completed service contract and all other documents that the
201organization requires the debtor to sign.
202     Section 7.  This act shall take effect July 1, 2010.


CODING: Words stricken are deletions; words underlined are additions.
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