Bill Text: FL S1006 | 2014 | Regular Session | Comm Sub
Bill Title: Consumer Collection Practices
Spectrum: Bipartisan Bill
Status: (Introduced - Dead) 2014-04-25 - Laid on Table, companion bill(s) passed, see CS/CS/HB 413 (Ch. 2014-116), CS/CS/HB 415 (Ch. 2014-117) [S1006 Detail]
Download: Florida-2014-S1006-Comm_Sub.html
Florida Senate - 2014 CS for SB 1006 By the Committee on Criminal Justice; and Senator Hays 591-03105-14 20141006c1 1 A bill to be entitled 2 An act relating to consumer collection practices; 3 amending s. 559.55, F.S.; defining terms; amending s. 4 559.553, F.S.; removing provisions relating to the 5 revocation or suspension of a professional license 6 which allow the Office of Financial Regulation to 7 reject an applicant for registration; conforming a 8 cross-reference to changes made by the act; creating 9 s. 559.554, F.S.; providing for the powers and duties 10 of the Financial Services Commission and the Office of 11 Financial Regulation; creating s. 559.5541, F.S.; 12 authorizing the office to conduct examinations and 13 investigations; amending s. 559.555, F.S.; revising 14 requirements for registration as a consumer collection 15 agency; specifying a registration fee; creating s. 16 559.5551, F.S.; requiring registrants to report, 17 within a specified time period, a conviction of, or 18 plea of nolo contendere to, a crime or an 19 administrative enforcement action; requiring 20 registrants to report, within a specified time period, 21 a change in a control person or the form of the 22 organization, or any other change in the information 23 supplied in the initial application; amending s. 24 559.565, F.S.; conforming a cross-reference to changes 25 made by the act; amending s. 559.730, F.S.; revising 26 the administrative remedies and penalties available to 27 the office; requiring the commission to adopt 28 guidelines to impose administrative penalties; 29 providing an effective date. 30 31 Be It Enacted by the Legislature of the State of Florida: 32 33 Section 1. Section 559.55, Florida Statutes, is reordered 34 and amended to read: 35 559.55 Definitions.—The following terms shall, unless the 36 context otherwise indicates, have the following meanings for the 37 purpose of this part: 38 (1) “Commission” means the Financial Services Commission. 39 (6)(1)“Debt” or “consumer debt” means any obligation or 40 alleged obligation of a consumer to pay money arising out of a 41 transaction in which the money, property, insurance, or services 42 thatwhichare the subject of the transaction are primarily for 43 personal, family, or household purposes, whether or not such 44 obligation has been reduced to judgment. 45 (8)(2)“Debtor” or “consumer” means any natural person 46 obligated or allegedly obligated to pay any debt. 47 (4) “Control person” means an individual, partnership, 48 corporation, trust, or organization that possesses the power, 49 directly or indirectly, to direct the management or policies of 50 a company, whether through ownership of securities, by contract, 51 or otherwise. The term includes, but is not limited to: 52 (a) A company’s executive officers, including the 53 president, chief executive officer, chief financial officer, 54 chief operations officer, chief legal officer, chief compliance 55 officer, director, and other individuals having similar status 56 or functions. 57 (b) For a corporation, a shareholder who, directly or 58 indirectly, owns 10 percent or more or that has the power to 59 vote 10 percent or more, of a class of voting securities unless 60 the applicant is a publicly traded company. 61 (c) For a partnership, all general partners and limited or 62 special partners who have contributed 10 percent or more or that 63 have the right to receive, upon dissolution, 10 percent or more 64 of the partnership’s capital. 65 (d) For a trust, each trustee. 66 (e) For a limited liability company, all elected managers 67 and those members who have contributed 10 percent or more or 68 that have the right to receive, upon dissolution, 10 percent or 69 more of the partnership’s capital. 70 (5)(3)“Creditor” means aanyperson who offers or extends 71 credit creating a debt or to whom a debt is owed. The term, but72 does not include aanyperson to the extent that they receive an 73 assignment or transfer of a debt in default solely for the 74 purpose of facilitating collection of such debt for another. 75 (10)(4)“Office” means the Office of Financial Regulation 76 of theFinancial Servicescommission. 77 (2)(5)“Communication” means the conveying of information 78 regarding a debt, directly or indirectly, to aanyperson 79 through any medium. 80 (7)(6)“Debt collector” means aanyperson who uses anany81 instrumentality of commerce within this state, whether initiated 82 from within or outside this state, in any business the principal 83 purpose of which is the collection of debts, or who regularly 84 collects or attempts to collect, directly or indirectly, debts 85 owed or due or asserted to be owed or due another. The term 86 “debt collector” includes aanycreditor who, in the process of 87 collecting her or his own debts, uses aanyname other than her 88 or his own which would indicate that a third person is 89 collecting or attempting to collect such debts. The term does 90 not include: 91 (a) AnAnyofficer or employee of a creditor while, in the 92 name of the creditor, collecting debts for such creditor; 93 (b) AAnyperson while acting as a debt collector for 94 another person, both of whom are related by common ownership or 95 affiliated by corporate control, if the person acting as a debt 96 collector for persons to whom it is so related or affiliated and 97 if the principal business of such persons is not the collection 98 of debts; 99 (c) AnAnyofficer or employee of any federal, state, or 100 local governmental body to the extent that collecting or 101 attempting to collect any debt is in the performance of her or 102 his official duties; 103 (d) AAnyperson while serving or attempting to serve legal 104 process on anotherany otherperson in connection with the 105 judicial enforcement of aanydebt; 106 (e) AAnynot-for-profit organization which, at the request 107 of consumers, performs bona fide consumer credit counseling and 108 assists consumers in the liquidation of their debts by receiving 109 payments from such consumers and distributing such amounts to 110 creditors; or 111 (f) AAnyperson collecting or attempting to collect any 112 debt owed or due or asserted to be owed or due another to the 113 extent that such activity is incidental to a bona fide fiduciary 114 obligation or a bona fide escrow arrangement; concerns a debt 115 which was originated by such person; concerns a debt which was 116 not in default at the time it was obtained by such person; or 117 concerns a debt obtained by such person as a secured party in a 118 commercial credit transaction involving the creditor. 119 (3)(7)“Consumer collection agency” means aanydebt 120 collector or business entity engaged in the business of 121 soliciting consumer debts for collection or of collecting 122 consumer debts, which debt collector or business is not 123 expressly exempted as specified in s. 559.553(3)setforth in s.124559.553(4). 125 (11)(8)“Out-of-state consumer debt collector” means aany126 person whose business activities in this state involve both 127 collecting or attempting to collect consumer debt from debtors 128 located in this state by means of interstate communication 129 originating from outside this state and soliciting consumer debt 130 accounts for collection from creditors who have a business 131 presence in this state. For purposes of this subsection, a 132 creditor has a business presence in this state if either the 133 creditor or an affiliate or subsidiary of the creditor has an 134 office in this state. 135 (9) “Federal Fair Debt Collection Practices Act” or 136 “Federal Act” means the federal legislation regulating fair debt 137 collection practices, as specifiedset forthin Pub. L. No. 95 138 109, as amended and published in 15 U.S.C. ss. 1692 et seq. 139 Section 2. Section 559.553, Florida Statutes, is amended to 140 read: 141 559.553 Registration of consumer collection agencies 142 required; exemptions.— 143 (1) AAfter January 1, 1994, noperson may notshallengage 144 in business in this state as a consumer collection agency or 145 continue to do business in this state as a consumer collection 146 agency without first registering in accordance with this part, 147 and thereafter maintaining a valid registration. 148 (2) Each consumer collection agency doing business in this 149 state shall register with the office and renew such registration 150 annually as set forth in s. 559.555. 151(3) A prospective registrant shall be entitled to be152registered when registration information is complete on its face153and the applicable registration fee has been paid; however, the154office may reject a registration submitted by a prospective155registrant if the registrant or any principal of the registrant156previously has held any professional license or state157registration which was the subject of any suspension or158revocation which has not been explained by the prospective159registrant to the satisfaction of the office either in the160registration information submitted initially or upon the161subsequent written request of the office. In the event that an162attempted registration is rejected by the office the prospective163registrant shall be informed of the basis for rejection.164 (3)(4)This section doesshallnot apply to: 165 (a) AnAnyoriginal creditor. 166 (b) AAnymember of The Florida Bar. 167 (c) AAnyfinancial institution authorized to do business 168 in this state and any wholly owned subsidiary and affiliate 169 thereof. 170 (d) AAnylicensed real estate broker. 171 (e) AnAnyinsurance company authorized to do business in 172 this state. 173 (f) AAnyconsumer finance company and any wholly owned 174 subsidiary and affiliate thereof. 175 (g) AAnyperson licensed pursuant to chapter 520. 176 (h) AnAnyout-of-state consumer debt collector who does 177 not solicit consumer debt accounts for collection from credit 178 grantors who have a business presence in this state. 179 (i) AnAnyFDIC-insured institution or subsidiary or 180 affiliate thereof. 181 (4)(5)AnAnyout-of-state consumer debt collector as 182 defined in s. 559.55(11)s. 559.55(8)who is not exempt from 183 registration by application of subsection (3)(4)and who fails 184 to register in accordance with this part shall be subject to an 185 enforcement action by the state as specified in s. 559.565. 186 Section 3. Section 559.554, Florida Statutes, is created to 187 read: 188 559.554 Powers and duties of the commission and office.— 189 (1) The office is responsible for the administration and 190 enforcement of this part. 191 (2) The commission may adopt rules to administer this part, 192 including rules: 193 (a) Requiring electronic submission of forms, documents, 194 and fees required by this part. 195 (b) Establishing time periods during which a consumer 196 collection agency is barred from registration due to prior 197 criminal convictions of, or guilty or nolo contendere pleas by, 198 an applicant’s control persons, regardless of adjudication. 199 1. The rules must provide: 200 a. A 15-year disqualifying period for felonies involving 201 fraud, dishonesty, breach of trust, money laundering, or other 202 acts of moral turpitude. 203 b. A 7-year disqualifying period for felonies not specified 204 in sub-subparagraph a. 205 c. A 5-year disqualifying period for misdemeanors involving 206 fraud, dishonesty, or other acts of moral turpitude. 207 2. The rules must provide for an additional waiting period 208 due to dates of imprisonment or community supervision, the 209 commitment of multiple crimes, and other factors reasonably 210 related to the applicant’s criminal history. 211 3. The rules must provide for mitigating factors for crimes 212 identified in sub-subparagraphs 1.a.-c. 213 4. An applicant is not eligible for registration until 214 expiration of the disqualifying period set by rule. 215 5. Section 112.011 does not apply to eligibility for 216 registration under this part. 217 (3) All fees, charges, and fines collected pursuant to this 218 part shall be deposited into the Regulatory Trust Fund of the 219 office. 220 Section 4. Section 559.5541, Florida Statutes, is created 221 to read: 222 559.5541 Examinations and investigations.— 223 (1) Notwithstanding s. 559.725(4), the office may, without 224 advance notice, conduct examinations and investigations, within 225 or outside this state, to determine whether a person has 226 violated this part or related rules. For purposes of this 227 section, the office may examine the books, accounts, records, 228 and other documents or matters of any person subject to this 229 part. The office may compel the production of all relevant 230 books, records, and other documents and materials relative to an 231 examination or investigation. Examinations may not be made more 232 often than once during a 48-month period unless the office has 233 reason to believe a person has violated or will violate this 234 part or related rules. 235 (2) In order to reduce the burden on persons subject to 236 this part, the office may conduct a joint or concurrent 237 examination with a state or federal regulatory agency and may 238 furnish a copy of all examinations to an appropriate regulator 239 if the regulator agrees to abide by the confidentiality 240 provisions in chapter 119 and this part. The office may also 241 accept an examination from any appropriate regulator. 242 Section 5. Section 559.555, Florida Statutes, is amended to 243 read: 244 559.555 Registration of consumer collection agencies; 245 procedure.— 246 (1) AAnyperson who actsrequired to registeras a 247 consumer collection agency must be registered in accordance with 248 this section.shall furnish to the office the registration fee249and information as follows:250 (2) In order to apply for a consumer collection agency 251 registration, an applicant must: 252 (a) Submit a completed application form as prescribed by 253 rule of the commission. 254 (b) Submit a nonrefundable application fee of $200. 255 Application fees may not be prorated for partial years of 256 registration. 257 (c) Submit fingerprints for each of the applicant’s control 258 persons in accordance with rules adopted by the commission. 259 1. The fingerprints may be submitted through a third-party 260 vendor authorized by the Department of Law Enforcement to 261 provide live-scan fingerprinting. 262 2. A state criminal history background check must be 263 conducted through the Department of Law Enforcement, and a 264 national criminal history background check must be conducted 265 through the Federal Bureau of Investigation. 266 3. All fingerprints submitted to the Department of Law 267 Enforcement must be submitted electronically and entered into 268 the statewide automated biometric identification system 269 established in s. 943.05(2)(b) and available for use in 270 accordance with s. 943.05(2)(g) and (h). The office shall pay an 271 annual fee to the Department of Law Enforcement to participate 272 in the system and inform the Department of Law Enforcement of 273 any person whose fingerprints are no longer required to be 274 retained. 275 4. The costs of fingerprint processing, including the cost 276 of retaining the fingerprints, shall be borne by the person 277 subject to the background check. 278 5. The office is responsible for reviewing the results of 279 the state and national criminal history background checks and 280 determining whether the applicant meets registration 281 requirements. 282 (3) The office shall issue a consumer collection agency 283 registration to each person who is not otherwise ineligible and 284 who meets the requirements of this section. However, it is a 285 ground for denial of registration if the applicant or one of the 286 applicant’s control persons has committed any violation 287 specified in this part, or is the subject of a pending felony 288 criminal prosecution or a prosecution or an administrative 289 enforcement action, in any jurisdiction, which involves fraud, 290 dishonesty, breach of trust, money laundering, or any other act 291 of moral turpitude. 292 (4) A registration issued under this part is not 293 transferable or assignable. 294 (5) A consumer collection agency shall report, on a form 295 prescribed by rule of the commission, any change in the 296 information contained in an initial application form, or an 297 amendment thereto, within 30 days after the change is effective. 298(1) The registrant shall pay to the office a registration299fee in the amount of $200. All amounts collected shall be300deposited by the office to the credit of the Regulatory Trust301Fund of the office.302(2) Each registrant shall provide to the office the303business name or trade name, the current mailing address, the304current business location which constitutes its principal place305of business, and the full name of each individual who is a306principal of the registrant. “Principal of a registrant” means307the registrant’s owners if a partnership or sole proprietorship,308corporate officers, corporate directors other than directors of309a not-for-profit corporation organized pursuant to chapter 617310and Florida resident agent if a corporate registrant. The311registration information shall include a statement clearly312identifying and explaining any occasion on which any313professional license or state registration held by the314registrant, by any principal of the registrant, or by any315business entity in which any principal of the registrant was the316owner of 10 percent or more of such business, was the subject of317any suspension or revocation.318 (6)(3)Renewal of registration shall be made between 319 October 1 and December 31 of each year. There shall be no 320 proration of the fee for any registration. In order to renew a 321 consumer collection agency registration, a registrant must 322 submit a nonrefundable renewal fee equal to the registration fee 323 and a nonrefundable fee to cover the costs of further 324 fingerprint processing and retention as set forth by commission 325 rule. 326 (7) A consumer collection agency registrant whose initial 327 registration is approved and issued by the office pursuant to 328 this section before October 1, 2014, who seeks renewal of the 329 registration must submit fingerprints for each control person 330 for live-scan processing pursuant to paragraph (2)(c). Such 331 fingerprints must be submitted before renewing a registration 332 that is scheduled to expire December 31, 2014. 333 Section 6. Section 559.5551, Florida Statutes, is created 334 to read: 335 559.5551 Requirements of registrants.—A registrant under 336 this part shall report to the office in a manner prescribed by 337 rule of the commission: 338 (1) A conviction of, or plea of nolo contendere to, 339 regardless of adjudication, a crime or administrative violation 340 that involves fraud, dishonesty, breach of trust, money 341 laundering, or any other act of moral turpitude, in any 342 jurisdiction, by the registrant or any control person within 30 343 days after the date of conviction, entry of a plea of nolo 344 contendere, or final administrative action. 345 (2) A conviction of, or plea of nolo contendere to, 346 regardless of adjudication, a felony committed by the registrant 347 or any control person within 30 days after the date of 348 conviction or the date the plea of nolo contendere is entered. 349 (3) A change to the information contained in an initial 350 application form or an amendment to the application within 30 351 days after the change is effective. 352 (4) An addition or subtraction of a control person or a 353 change in the form of business organization. A control person 354 added by a registrant is subject to this part and must submit 355 fingerprints in accordance with s. 559.555 and the rules of the 356 commission. The office may bring an administrative action in 357 accordance with s. 559.730 to enforce this part if the added 358 control person fails to meet registration requirements or comply 359 with any other provision of this part. 360 Section 7. Section 559.565, Florida Statutes, is amended to 361 read: 362 559.565 Enforcement action against out-of-state consumer 363 debt collector.— The remedies of this section are cumulative to 364 other sanctions and enforcement provisions of this part for any 365 violation by an out-of-state consumer debt collector, as defined 366 in s. 559.55(11)s. 559.55(8). 367 (1) An out-of-state consumer debt collector who collects or 368 attempts to collect consumer debts in this state without first 369 registering in accordance with this part is subject to an 370 administrative fine of up to $10,000 together with reasonable 371 attorney fees and court costs in any successful action by the 372 state to collect such fines. 373 (2) AAnyperson, whether or not exempt from registration 374 under this part, who violates s. 559.72 is subject to sanctions 375 the same as any other consumer debt collector, including 376 imposition of an administrative fine. The registration of a duly 377 registered out-of-state consumer debt collector is subject to 378 revocation or suspension in the same manner as the registration 379 of any other registrant under this part. 380 (3) In order to effectuate this section and enforce the 381 requirements of this part as it relates to out-of-state consumer 382 debt collectors, the Attorney General is expressly authorized to 383 initiate such action on behalf of the state as he or she deems 384 appropriate in any state or federal court of competent 385 jurisdiction. 386 Section 8. Section 559.730, Florida Statutes, is amended to 387 read: 388 559.730 Grounds for disciplinary action; administrative 389 remedies.— 390 (1) Each of the following acts constitutes a ground for 391 which the disciplinary actions specified in subsection (2) may 392 be taken against a person registered or required to be 393 registered under this part: 394 (a) Failure to disburse funds in accordance with 395 agreements. 396 (b) Fraud, misrepresentation, deceit, negligence, or 397 incompetence in a collection transaction. 398 (c) Commission of fraud, misrepresentation, concealment, or 399 dishonest dealing by trick, scheme, or device; culpable 400 negligence; breach of trust in a business transaction in any 401 state, nation, or territory; or aiding, assisting, or conspiring 402 with another person engaged in such misconduct and in 403 furtherance thereof. 404 (d) Being convicted of, or entering a plea of guilty or 405 nolo contendere to, regardless of adjudication, a felony or 406 crime involving fraud, dishonesty, breach of trust, money 407 laundering, or act of moral turpitude. 408 (e) Having a final judgment entered against the registrant 409 in a civil action upon grounds of fraud, embezzlement, 410 misrepresentation, or deceit. 411 (f) Being the subject of a decision, finding, injunction, 412 suspension, prohibition, revocation, denial, judgment, or 413 administrative order by a court of competent jurisdiction or an 414 administrative law judge, or by a state or federal agency, 415 involving a violation of a federal or state law relating to debt 416 collection or a rule or regulation adopted under such law. 417 (g) Having a license or registration, or the equivalent, to 418 practice a profession or occupation denied, suspended, or 419 revoked, or otherwise acted against, including the denial of a 420 registration or license by a registration or licensing authority 421 of this state or another state, territory, or country. 422 (h) Acting as a consumer collection agency without a 423 current registration issued under this part. 424 (i) A material misstatement or omission of fact on an 425 initial or amended registration application. 426 (j) Payment to the office for a registration or permit with 427 a check or electronic transmission of funds, which is dishonored 428 by the applicant’s or registrant’s financial institution. 429 (k) Failure to comply with, or a violation of, any 430 provision of this part, or any rule or order made or issued 431 pursuant to this part. 432 (l) Failure to maintain, preserve, and keep available for 433 examination all books, accounts, or other documents required by 434 this part and the rules of the commission. 435 (m) Refusal to permit an investigation or examination of 436 books and records, or refusal to comply with an office subpoena 437 or subpoena duces tecum. 438 (n) Failure to timely pay a fee, charge, or fine imposed or 439 assessed pursuant to this part and the rules of the commission. 440 (2) If the office finds a person in violation of any act 441 specified in this section, it may enter an order imposing one or 442 more of the following penalties: 443 (a) Issuance of a reprimand. 444 (b) Suspension of a registration, subject to reinstatement 445 upon satisfying all reasonable conditions imposed by the office. 446 (c) Revocation of a registration. 447 (d) Denial of a registration. 448 (e) Imposition of a fine of up to $10,000 for each count or 449 separate offense. 450 (f) An administrative fine of up to $1,000 per day for each 451 day that a person engages as a consumer collection agency 452 without a valid registration issued under this part. 453(1) The office may impose an administrative fine against,454or revoke or suspend the registration of, a registrant under455this part who has committed a violation of s. 559.72. Final456action to fine, suspend, or revoke the registration of a457registrant is subject to review in accordance with chapter 120.458 (3)(2)The office may impose suspension rather than 459 revocation of a registration if circumstances warrant that one 460 or the other should be imposed and the registrant demonstrates 461 that the registrant has taken affirmative steps that can be 462 expected to effectively eliminate the violations and that the 463 registrant’s registration has never been previously suspended. 464 (4) A consumer collection agency is subject to the 465 disciplinary actions specified in subsection (2) for a violation 466 of subsection (1) by a control person of the consumer collection 467 agency. 468 (5) Pursuant to s. 120.60(6), the office may summarily 469 suspend the registration of a consumer collection agency if the 470 office has reason to believe that a registrant poses an 471 immediate, serious danger to the public’s health, safety, or 472 welfare. The arrest of the registrant, or the consumer 473 collection agency’s control person, for any felony or any crime 474 involving fraud, dishonesty, breach of trust, money laundering, 475 or any other act of moral turpitude is deemed sufficient to 476 constitute an immediate danger to the public’s health, safety, 477 or welfare. Any proceeding for the summary suspension of a 478 registration must be conducted by the commissioner of the 479 office, or designee, who shall issue the final summary order. 480 (6) The office may deny a request to terminate a 481 registration or withdraw a registration application if the 482 office believes that an act that would be a ground for 483 registration denial, suspension, restriction, or revocation 484 under this part has been committed. 485 (7)(3)In addition to, or in lieu of suspension or486revocation of a registration, the office may impose an487administrative fine of up to $10,000 per violation against a488registrant for violations of s. 559.72.TheFinancial Services489 commission shall adopt rules establishing guidelines for 490 imposing administrative penalties. 491 (8)(4)This part does not preclude any person from pursuing 492 remedies available under the Federal Fair Debt Collection 493 Practices Act for any violation of such act. 494 Section 9. This act shall take effect October 1, 2014.