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       Florida Senate - 2010                                     SB 706
       By Senator Fasano
       11-00582B-10                                           2010706__
    1                        A bill to be entitled                      
    2         An act relating to debt negotiation services; amending
    3         s. 817.801, F.S.; providing additional definitions
    4         relating to debt negotiation services; amending s.
    5         817.802, F.S., conforming a cross-reference; amending
    6         s. 817.803, F.S.; providing that an attorney providing
    7         legal representation is exempt from debt negotiation
    8         organization requirements; creating s. 817.8071, F.S.;
    9         specifying acts prohibited by a debt negotiation
   10         organization; creating s. 817.8072, F.S.; providing
   11         insurance requirements for a debt negotiation
   12         organization; creating s. 817.8073, F.S.; providing
   13         requirements for debt negotiation service contracts;
   14         providing an effective date.
   16  Be It Enacted by the Legislature of the State of Florida:
   18         Section 1. Section 817.801, Florida Statutes, is amended to
   19  read:
   20         817.801 Definitions.—As used in this part:
   21         (1) “Concession” means assent to repayment of an unsecured
   22  debt for terms more favorable to a debtor then the terms of the
   23  original contract between the debtor and a creditor.
   24         (2)(1) “Credit counseling agency” means any organization,
   25  other than a debt negotiation organization, providing debt
   26  management services or credit counseling services.
   27         (3)(2) “Credit counseling services” means confidential
   28  money management, debt reduction, and financial educational
   29  services provided to a debtor by a credit counseling agency.
   30         (4)(3) “Creditor contribution” means a any sum that a
   31  creditor agrees to contribute to a credit counseling agency,
   32  whether directly or by setoff against amounts otherwise payable
   33  to the creditor on behalf of debtors.
   34         (5)(4) “Debt management services” means services provided
   35  to a debtor by a credit counseling agency organization for a fee
   36  to:
   37         (a) Effect the adjustment, compromise, or discharge of any
   38  unsecured account, note, or other indebtedness of the debtor; or
   39         (b) Receive from the debtor and disburse to a creditor any
   40  money or other thing of value.
   41         (6) “Debt negotiation organization” means any person
   42  providing debt negotiation services in accordance with s.
   43  817.8071.
   44         (7) “Debt negotiation services” means intermediary services
   45  provided for a fee by a debt negotiation organization between a
   46  debtor and one or more of the debtor’s creditors for the purpose
   47  of obtaining concessions, but without the paid intermediary
   48  holding or disbursing funds to the individual creditors.
   49         (8) “Debt principal” means the total amount of original
   50  debt, including unpaid interest and fees, owed by the debtor as
   51  of the date of initial enrollment in a debt negotiation
   52  organization’s plan.
   53         (9)(5) “Person” means an any individual, corporation,
   54  partnership, trust, association, or other legal entity, but does
   55  not include a governmental organization or subdivision thereof.
   56         (10) “Plan” means a program or strategy in which a debt
   57  negotiation organization furnishes debt negotiation services to
   58  a debtor in contemplation that during the course of the plan the
   59  debtor’s creditors will settle debts for less than the full
   60  amount of the debts owed.
   61         Section 2. Subsection (1) of section 817.802, Florida
   62  Statutes, is amended to read:
   63         817.802 Unlawful fees and costs.—
   64         (1) It is unlawful for any person, while engaging in debt
   65  management services or credit counseling services, to charge or
   66  accept from a debtor residing in this state, directly or
   67  indirectly, a fee or contribution greater than $50 for the
   68  initial setup or initial consultation. Subsequently, the person
   69  may not charge or accept a fee or contribution from a debtor
   70  residing in this state greater than $120 per year for additional
   71  consultations or, alternatively, if debt management services as
   72  defined in s. 817.801(4)(b) are provided, the person may charge
   73  the greater of 7.5 percent of the amount paid monthly by the
   74  debtor to the person or $35 per month.
   75         Section 3. Section 817.803, Florida Statutes, is amended to
   76  read:
   77         817.803 Exceptions.—Nothing in This part does not apply
   78  applies to:
   79         (1) A person licensed to practice law in this state who is
   80  providing legal representation to a client with respect to Any
   81  debt management, or credit counseling, or debt negotiation
   82  services. provided in the practice of law in this state;
   83         (2) A Any person who engages in debt adjustment to adjust
   84  the indebtedness owed to such person.; or
   85         (3) The following entities or their subsidiaries:
   86         (a) The Federal National Mortgage Association.;
   87         (b) The Federal Home Loan Mortgage Corporation.;
   88         (c) The Florida Housing Finance Corporation., a public
   89  corporation created in s. 420.504;
   90         (d) A bank, bank holding company, trust company, savings
   91  and loan association, credit union, credit card bank, or savings
   92  bank that is regulated and supervised by the Office of the
   93  Comptroller of the Currency, the Office of Thrift Supervision,
   94  the Federal Reserve, the Federal Deposit Insurance Corporation,
   95  the National Credit Union Administration, the Office of
   96  Financial Regulation of the Department of Financial Services, or
   97  any state banking regulator.;
   98         (e) A consumer reporting agency as defined in the Federal
   99  Fair Credit Reporting Act, 15 U.S.C. ss. 1681-1681y, as it
  100  existed on April 5, 2004.; or
  101         (f) Any subsidiary or affiliate of a bank holding company,
  102  its employees and its exclusive agents acting under written
  103  agreement.
  104         Section 4. Section 817.8071, Florida Statutes, is created
  105  to read:
  106         817.8071Debt negotiation organization.—
  107         (1) A debt negotiation organization may not:
  108         (a) Directly or indirectly, impose a fee or other charge on
  109  a debtor or receive money from, or on behalf of, a debtor for
  110  debt negotiation services except as provided under this section.
  111         (b) Impose charges or receive payment for debt negotiation
  112  services before the debt negotiation organization and the debtor
  113  have signed a service contract that complies with s. 817.8073.
  114         (c) Make or use any false or misleading representations or
  115  omit any material fact in the offer or sale of debt negotiation
  116  services offered, or engage, directly or indirectly, in any
  117  fraudulent, false, misleading, unconscionable, unfair, or
  118  deceptive act or practice in connection with the offer or sale
  119  of any of such services.
  120         (d) Provide services to a debtor without executing a
  121  service contract that complies with s. 817.8073.
  122         (e) Fail to provide to the debtor copies of all service
  123  contracts and other documents that the debtor is required to
  124  sign.
  125         (f) Fail to obtain insurance coverage or fail to make such
  126  coverage information available for public inspection.
  127         (2)If a debtor assents to a plan that contemplates that a
  128  creditor will settle debt for less than the principal amount of
  129  debt, the debt negotiation organization may charge as the total
  130  amount of settlement fees only an amount that does not exceed
  131  one-half of the difference between the debt principal and the
  132  concession agreed upon with the debtor’s creditor on a specific
  133  account. A debt negotiation organization may not collect any
  134  fees other than settlement fees, and may collect settlement fees
  135  only after a settlement of an account with the debtor’s creditor
  136  has been agreed upon and documentation memorializing such
  137  settlement has been executed.
  138         Section 5. Section 817.8072, Florida Statutes, is created
  139  to read:
  140         817.8072Insurance requirements for debt negotiation
  141  service.—
  142         (1) A debt negotiation organization must obtain and
  143  maintain insurance coverage at all times for employee
  144  dishonesty, depositor’s forgery, and computer fraud in an amount
  145  not less than $100,000. The deductible on such coverage may not
  146  exceed 10 percent of the face amount of the policy coverage.
  147         (2) Upon written request, a debt negotiation organization
  148  must provide a copy of the insurance policies required under
  149  this section to any party requesting a copy for a charge that
  150  does not exceed the cost of copying.
  151         Section 6. Section 817.8073, Florida Statutes, is created
  152  to read:
  153         817.8073Debt negotiation service contract.—
  154         (1) The service contract between the debt negotiation
  155  organization and the debtor must be signed and dated by the
  156  debtor and include all of the following:
  157         (a) A full and detailed description of the debt negotiation
  158  services to be performed for the debtor by the organization, and
  159  the estimated date or length of time for performing the
  160  services.
  161         (b) All terms and conditions of payment, including the
  162  estimated total of all payments to be made by the debtor.
  163         (c) The organization’s principal business address and the
  164  name and address of its agent authorized to receive service of
  165  process in this state.
  166         (d) A clear and conspicuous statement, in boldface type in
  167  the immediate proximity to the space reserved for the debtor’s
  168  signature, which states: “You, the debtor, may cancel this
  169  service contract at any time before midnight of the 5th business
  170  day after the date of signing this contract. [See the attached
  171  Notice of Right to Cancel for further explanation of this
  172  right.]
  173         (e) A Notice of Right to Cancel, which must be
  174  substantially in the following form:
  176                      NOTICE OF RIGHT TO CANCEL                    
  185         TO:...(name of debt negotiation organization)...
  186         AT:...(address of debt negotiation organization)...
  189  SERVICE CONTRACT, EXECUTED ON:...(date service contract
  190  signed)...
  192         ...(Signature of Debtor)...
  193         ...(Date Cancellation Signed)...
  194         ...(Address of Debtor)...
  195         ...(Phone Number of Debtor)...
  196         (2) At the time the documents are signed, the debt
  197  negotiation organization must provide the debtor with a copy of
  198  the completed service contract and all other documents that the
  199  organization requires the debtor to sign.
  200         Section 7. This act shall take effect July 1, 2010.

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