SB 874 — Consumer Finance Loans

Florida Senate - 2019 CS for CS for SB 874 ByFirst theEngrossed Committees2019874e1 onA Appropriations;bill to be entitled An act relating to consumer finance loans;

and Banking and Insurance;

and Senator Rouson 576-04592-19 2019874c2 A bill to be entitled An act relating to consumer finance loans;

providingdefining definitions;terms;

requiring persons to obtain a program license from the office beforefor makingcertain actions relating to program loans;

providing requirements for program licensees, program loans, loan repayments, loan rescissions, interest rates, program loan refinancing, receipts, disclosures and statements provided by program licensees to borrowers, origination fees, insufficient funds fees, and delinquency charges;

requiringproviding programa licenseesrequirement tofor underwritecredit programreporting; loans;

specifying program loan underwriting requirements for program licensees;

prohibiting certainspecified activities by access partners;

providing that program licensees are responsible for certain acts of their access partners;

authorizingrequiring the office to examine each program licensee,licensee; branch office, and access partner;

authorizing the office to waive branch office examinations under certain circumstances;

6971 Be It Enacted by the Legislature of the State of Florida:

7173 Section 1. Section 516.405, Florida Statutes, is created to read:

516.405 Access to Responsible Credit Pilot Program.— (1) The Access to Responsible Credit Pilot Program is created within the Office of Financial Regulation to allow more Floridians to obtain responsible consumer finance loans in principal amounts of at least $300 but not more than $10,000.$7,500.

(1) “Access partner” means an entity that, at theone entity’sor more physical business locationlocations owned or throughrented onlineby access,the cellularentity, telephone, or other means, performs one or more of the services authorized in s.

(9) “Program loan” means a consumer finance loan with a principal amount of at least $300, but not more than $10,000,$7,500, originated pursuant to ss.

(c) A borrower may not receive a program loan mustfor nota imposeprincipal abalance prepaymentexceeding penalty.$5,000 unless:

1. The borrower has paid in full the outstanding principal, interest, and fees on a previous program loan;

2. The borrower’s credit score increased from the time of application for the borrower’s first consummated program loan;

and 3. The borrower was never delinquent for more than 7 days on a previous program loan.

(d) A program loan may not impose a prepayment penalty.

(d) A(e) A program loan must include a borrower’s right to rescind the program loan by notifying the program licensee of the borrower’s intent to rescind the program loan and returning the principal advanced by the end of the business day after the day the program loan is consummated.

(e) Notwithstanding(f) Notwithstanding s.

and 24 percent on that portion of the unpaid principal balance exceeding $4,000 and up to and including $10,000.$7,500.

(f) If(g) If two or more interest rates are applied to the principal amount of a program loan, the program licensee may charge, contract for, and receive interest at that single annual percentage rate that, if applied according to the actuarial method to each of the scheduled periodic balances of principal, would produce at maturity the same total amount of interest as would result from the application of the two or more rates otherwise permitted, based upon the assumption that all payments are made as agreed.

(g) The(h) The program licensee shall reduce the interest rates specified in paragraph (e)(f) on each subsequent program loan to the same borrower by a minimum of 1 percent, up to a maximum of 6 percent, if all of the following conditions are met:

(h) The(i) The program licensee may not induce or permit any person to become obligated to the program licensee, directly or contingently, or both, under more than one program loan at the same time with the program licensee.

(i) The(j) The program licensee may not refinance a program loan unless all of the following conditions are met at the time the borrower submits an application to refinance:

(j) In(k) In lieu of the provisions of s.

516.031(3)(a)9., contract for and receive a delinquency charge of up to $15 in a calendar month for oneeach orpayment more payments that are in default for at least 107 days if the charge is agreed upon, in writing, between the program licensee and the borrower before it is imposed.

388Delinquency Thecharges program licensee, or any wholly owned subsidiary of the program licensee, may notbe sellimposed oras assignfollows: an unpaid debt to an independent third party for collection purposes unless the debt has been delinquent for at least 30 days.

1. For payments due monthly, the delinquency charge for a payment in default may not exceed $15.

2. For payments due semimonthly, the delinquency charge for a payment in default may not exceed $7.50.

3. For payments due every 2 weeks, the delinquency charge for a payment in default may not exceed $7.50 if two payments are due within the same calendar month, and may not exceed $5 if three payments are due within the same calendar month.

407 The program licensee, or any wholly owned subsidiary of the program licensee, may not sell or assign an unpaid debt to an independent third party for collection purposes unless the debt has been delinquent for at least 30 days.

An access partner may perform one or more of the following services from its physical business location for the program licensee:

516.43(1)(j)516.43(1)(k) at the time that the payment is made by the borrower.

(e) Require(e) Except afor borrowerthe topurpose payof anyassisting feesa orborrower chargesin toobtaining thea accessrefinance partnerprogram orloan, tooffer anyinformation otherpertaining personto ina connectionprospective withborrower ato any program loanlicensee otherif thanthe thoseprospective permittedborrower underhas ss.an outstanding program loan.

516.405(f) Charge 516.46.a borrower any fee for a program loan.