HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: CS/CS/HB 1267 Consumer Finance Loans
SPONSOR(S): Commerce Committee, Insurance & Banking Subcommittee, Fernandez-Barquin
TIED BILLS: IDEN./SIM. BILLS: SB 580
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Insurance & Banking Subcommittee 14 Y, 0 N, As CS Fletcher Lloyd
2) State Administration & Technology 11 Y, 3 N Perez Topp
Appropriations Subcommittee
3) Commerce Committee 18 Y, 0 N, As CS Fletcher Hamon
SUMMARY ANALYSIS
The Florida Consumer Finance Act, ch. 516, F.S. (Act), prohibits businesses from making consumer finance
loans unless first authorized to do so under the Act. Under the Act, licensed lenders are allowed to make
secured or unsecured loans up to $25,000 with a tiered interest rate structure, such that the maximum annual
interest rate allowed on each tier decreases as principal amount increases:
30% per annum, computed on the first $3,000 of the principal amount;
24% per annum on that part of the principal amount exceeding $3,000 and up to $4,000; and
18% per annum on that part of the principal amount exceeding $4,000 and up to $25,000.
The Act requires that, at the time of applying for a license, the applicant pay to the office a nonrefundable
biennial license fee of $625. Other than applications to renew or reactivate a license, applicants must also pay
a nonrefundable investigation fee of $200.
Additionally, the Act prohibits licensees from applying delinquency charges until a borrower has been in default
for 10 days.
The bill:
Provides a definition for the term “branch;”
Prohibits the operation of a branch that makes consumer finance loans without first obtaining a license;
Requires an application fee of $625 to be paid to the Office of Financial Regulation (OFR) for each
branch application filed;
Increases the maximum interest rate for a consumer finance loan to 36% and removes the tiered-
interest structure altogether;
Changes the 10-day rule for a licensee applying delinquency charges to 12 days;
Requires licensees that provide assistance programs during a disaster to report to OFR details of such
assistance programs; and
Requires licensees to annually submit to OFR reports of certain information, which OFR may publish in
a report after anonymizing and consolidating the data for all licensees.
The bill has a negative, likely insignificant, fiscal impact on state government, no impact on local government,
and an indeterminate fiscal impact on the private sector.
The bill provides an effective date of July 1, 2023.
FULL ANALYSIS
This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives .
STORAGE NAME: h1267e.COM
DATE: 4/19/2023
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Background
The Florida Office of Financial Regulation (OFR) is responsible for all activities of the Financial Services
Commission (Commission) relating to the regulation of banks, credit unions, other financial institutions,
finance companies, and the securities industry.1 OFR’s Division of Consumer Finance (Division) licenses
and regulates non-depository financial service industries and individuals, and conducts examinations and
complaint investigations for licensed entities to determine compliance with Florida law. 2
The Florida Consumer Finance Act, ch. 516, F.S. (Act), prohibits individuals and entities from engaging in
the business of making consumer finance loans unless first authorized to do so under the Act. 3 A consumer
finance loan is defined as “a loan of money, credit, goods, or choses in action, including, except as
otherwise specifically indicated, provision of a line of credit, in an amount or to a value of $25,000 or less
for which the lender charges, contracts for, collects, or receives interest at a rate greater than 18 percent
per annum.”4
Currently, the Act provides that, at the time of applying for a license, the applicant shall pay to OFR a
nonrefundable biennial license fee of $625. Applications, except for applications to renew or reactivate a
license, must also be accompanied by a nonrefundable investigation fee of $200.
The Act also prohibits licensees from applying delinquency charges until a borrower has been in default for
10 days.
Licensed lenders are allowed to make secured or unsecured loans up to $25,000 with a tiered interest rate
structure, such that the maximum annual interest rate allowed on each tier decreases as principal amounts
increase:
30% per annum, computed on the first $3,000 of the principal amount;
24% per annum on that part of the principal amount exceeding $3,000 and up to $4,000; and
18% per annum on that part of the principal amount exceeding $4,000 and up to $25,000.
Effect of the Bill
General
The bill provides a definition for the term “branch,” namely, “any location, other than a licensee’s principal
place of business, at which a licensee operates or conducts business … or which the licensee owns or
controls for the purposes of conducting business….”
The bill clarifies a person must not engage in the business of making consumer finance loans or operate a
branch of such business unless first authorized to do so under the Act. The bill requires an application fee
of $625 be paid to OFR for each branch application filed, which is in addition to the $625 application fee for
the branch’s principal place of business. The bill provides that applications for a license for the principal
place of business be accompanied by a nonrefundable investigation fee of $200.
Maximum Rate Increase; Delinquency Charges
The bill increases the maximum interest rate a licensee may charge for a loan from 30% to 36% and
removes the tiered interest rate structure altogether. The bill also changes the 10-day rule for delinquency
1 S. 20.121(3)(a)2., F.S. See also Florida Office of Financial Regulation, Agency Analysis of 2023 House Bill 1267, p. 1
(Mar. 10, 2023).
2 Florida Office of Financial Regulation, Division of Consumer Finance,
https://flofr.gov/sitePages/DivisionOfConsumerFinance.htm (last visited Mar. 13, 2023).
3 S. 516.02(1), F.S.
4 S. 516.01(2), F.S.
STORAGE NAME: h1267e.COM PAGE: 2
DATE: 4/19/2023
charges to 12 days, such that, licensees may not charge delinquency charges until the borrower has been
in default for 12 days rather than 10 days.
Disaster Relief and Suspension of Penalties
The bill provides that in the event of a Federal Emergency Management Agency (FEMA) response to a
Presidential Disaster Declaration in Florida, if a licensee offers any assistance program to borrowers
impacted by the disaster, the licensee must send to OFR a written notice within 10 days after the licensee’s
establishment of the assistance program. The notice must include, at a minimum, the following:
The licensed locations impacted by the disaster, including the physical addresses, if applicable;
The telephone number, e-mail address, or other contact information for the licensee;
A brief description of the assistance programs available to borrowers in the impacted areas; and
The start date and, if known, the end date of the assistance program.
The bill provides that assistance programs may include, but are not limited to, deferments, forbearance,
waiver of late fees, payment modification, or changing payment due dates.
Similarly, in the event of a FEMA response to a Presidential Disaster Declaration in Florida, the bill requires
a licensee operating in a county designated in the disaster declaration to suspend, for a period of 90 days
after the date of the initial declaration, all of the following:
Application of delinquency charges;
Repossessions of collateral pledged to loans made under the Act; and
Filing of lawsuits for collection of amounts owed for loans made under the Act.
Annual Reports
The bill requires a licensee, by March 15, 2024, and annually thereafter, to file a report with OFR, in a form
and manner prescribed by commission rule, using aggregated and anonymized data without reference to
any borrower’s nonpublic personal information. The bill requires the report to include the following
information for the preceding calendar year:
The number of licenses under the Act held by the licensee as of December 31st of the preceding
calendar year;
The number of loan originations by the licensee from all licenses held under the Act during the
preceding calendar year;
The total number and dollar amount of loans outstanding with the licensee from all licenses held
under the Act as of December 31st of the preceding calendar year;
The total number of unsecured loans as of December 31st of the preceding calendar year;
The total number of loans separated by principal amount in the following ranges as of December
31st of the preceding calendar year:
o From $0 to $5,000
o From $5,001 to $10,000
o From $10,001 to $15,000
o From $15,001 to $20,000
o From $20,001 to $25,000;
The total number and dollar amount of loans charged off as of December 31st of the preceding
calendar year; and
The total number and dollar amount of loans with delinquency status listed as:
o Current or less than 30 days past due.
o From 30 to 59 days past due.
o From 60 to 89 days past due.
o At least 90 days past due.
The bill requires a licensee claiming that information contained in the report contains a trade secret to
submit to OFR an accompanying affidavit designating the information claimed to be a trade secret. The bill
allows OFR to publish a report of the information submitted if all the data published in the report are
anonymized aggregate data from all licensees.
STORAGE NAME: h1267e.COM PAGE: 3
DATE: 4/19/2023
B. SECTION DIRECTORY:
Section 1. Amends s. 516.01, F.S., relating to definitions.
Section 2. Amends s. 516.02, F.S., relating to loans; lines of credit; rates of interest; license.
Section 3. Amends s. 516.03, F.S., relating to application for license; fees; etc.
Section 4. Amends s. 516.031, F.S., relating to finance charge; maximum rates.
Section 5. Amends 516.15, F.S., relating to duties of licensee.
Section 6. Creates s. 516.151, F.S., relating to suspension of penalties and remedial measures
after disaster declaration.
Section 7. Creates s. 516.331, F.S., relating to annual reports by licensees.
Section 8. Provides an effective date of July 1, 2023.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
OFR estimates its revenues may decrease by as much as $5,000 per fiscal year if it no longer
receives the background investigation fee of $200 required for each additional location once
replaced by a branch office license requirement.5 OFR considers this to be a negligible amount
which would not impact its operations.6 Additionally, according to OFR, the reduction in staff time no
longer needed to review a full license application for each additional location when replaced with a
branch office license would likely offset any loss in revenues. 7
2. Expenditures:
None.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
None.
2. Expenditures:
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
5 Florida Office of Financial Regulation, Agency Analysis of 2023 HB 1267, p. 5 (Mar. 10, 2023).
6 Id.
7 Id.
STORAGE NAME: h1267e.COM PAGE: 4
DATE: 4/19/2023
The bill has an indeterminate fiscal impact on the private sector.8 Applicants will no longer be required
to pay a $200 background investigation fee for each additional location with the implementation of a
branch office license.9 This may save applicants up to $5,000 per fiscal year in reduced fees. 10
D. FISCAL COMMENTS:
The bill proposes to create a branch license in lieu of a full license for each additional location of a
licensee.11 The branch licenses will not include the $200 background investigation fee and thus result in
a fee reduction.12
Additionally, the bill would require OFR to make technology changes to its internal licensing system to
create a branch office license and annual reporting functionality. 13 The cost of these changes would be
negligible and could be covered within OFR’s existing budget.14
III. COMMENTS
A. CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
Not applicable. This bill does not appear to require counties or municipalities to spend funds or take
action requiring the expenditures of funds; reduce the authority that counties or municipalities have
to raise revenues in the aggregate; or reduce the percentage of state tax shared with counties or
municipalities.
2. Other:
Article VII, sec. 19(e), of the Florida Constitution requires any bill that imposes, authorizes, or raises
a state tax or fee must be contained in a separate bill that contains no other subject. Current law
requires each location of a consumer finance company to pay a $625 application fee and a $200
investigation fee. The bill requires the designation of a principal location. The principal location and
each branch location will be subject to the current application fee, but only the principal location will
be subject to the investigation fee. Arguably, this is merely a change in status of a location from an
applicant location to an applicant principal location; retaining the same fee for that application. Also,
other applicant locations will become applicant branch locations; also retaining the same fee. There
is no case law to guide this analysis. It is unclear whether a fee bill is required.
B. RULE-MAKING AUTHORITY:
The bill creates a new section of statute that will require a licensee to file an annual report with OFR “in
a form and manner prescribed by commission rule.” This section will require rulemaking. Rule 69V-
160.111, F.A.C., which adopts Disciplinary Guidelines for Consumer Finance Companies, will also
require an update.
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
8 Id.
9 Id.
10 Id.
11 Id. at 5.
12 Id.
13 Id. at 6.
14 Id. at 6.
STORAGE NAME: h1267e.COM PAGE: 5
DATE: 4/19/2023
IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES
On March 27, 2023, the Insurance & Banking Subcommittee considered the bill, adopted one amendment,
and reported the bill favorably as a committee substitute. The amendment requires that licensees submit
the total number and dollar amount of loans with delinquency status, categorized by amount of days past
due, in addition to the other annual reporting requirements proposed by the bill.
On April 17, 2023, the Commerce Committee considered the bill, adopted one amendment, and reported
the bill favorably as a committee substitute. The amendment made non-substantive changes to conform
the bill with its Senate counterpart.
The analysis is drafted to the committee substitute as passed by the Commerce Committee.
STORAGE NAME: h1267e.COM PAGE: 6
DATE: 4/19/2023
Statutes affected: H 1267 Filed: 516.01, 516.03
H 1267 c1: 516.01, 516.03
H 1267 c2: 516.01, 516.02, 516.03
H 1267 er: 516.01, 516.02, 516.03