HB 67

1
A bill to be entitled
2An act relating to credit counseling services;
3amending s. 817.801, F.S.; defining terms; revising
4definitions; amending s. 817.802, F.S.; conforming a
5cross-reference; creating s. 817.8035, F.S.; requiring
6that debt management and credit counseling services be
7provided pursuant to a debt settlement plan; requiring
8a credit counseling agency to make certain disclosures
9to the debtor before a debtor consents to payment;
10prohibiting a credit counseling agency from making
11certain misrepresentations to a debtor; providing
12certain conditions that a credit counseling agency
13must meet before receiving payment; providing that a
14debtor may withdraw any account funds placed with a
15credit counseling agency at any time without penalty;
16amending s. 817.805, F.S.; authorizing a credit
17counseling agency to hold funds in order to allow the
18funds to accumulate; providing an effective date.
19
20Be It Enacted by the Legislature of the State of Florida:
21
22     Section 1.  Section 817.801, Florida Statutes, is amended
23to read:
24     817.801  Definitions.-As used in this part:
25     (1)  "Credit counseling agency" means any organization
26providing debt management services, debt settlement services, or
27credit counseling services for compensation.
28     (2)  "Credit counseling services" means confidential money
29management, debt reduction, and financial educational services.
30     (3)  "Creditor contribution" means any sum that a creditor
31agrees to contribute to a credit counseling agency, whether
32directly or by setoff against amounts otherwise payable to the
33creditor on behalf of debtors.
34     (4)  "Debt management plan" means a written agreement or
35contract between a credit counseling agency and a debtor whereby
36the credit counseling agency, in return for a direct or indirect
37payment by the debtor of fees not exceeding those in s. 817.802,
38will provide credit counseling services or debt management
39services that contemplate that creditors will reduce finance
40charges or fees for late payment, default, or delinquency.
41     (5)(4)  "Debt management services" means services provided
42to a debtor by a credit counseling organization for a fee to:
43     (a)  Effect the adjustment, compromise, reduction of
44interest rate or fees, modification of terms, or negotiation or
45discharge of any unsecured account, note, or other indebtedness
46of the debtor; or
47     (b)  Receive from the debtor and disburse to a creditor any
48money or other thing of value with the expectation that the
49debtor will repay the entire principal amount owed to the
50creditor.
51     (6)  "Debt settlement plan" means a written agreement or
52contract between a credit counseling agency and a debtor whereby
53the credit counseling agency, in return for payment by the
54debtor, will provide debt settlement services that contemplate
55that creditors will settle debts for less than the principal
56amount of the debt.
57     (7)  "Debt settlement services" means services provided to
58a debtor with the expectation of obtaining the creditor's
59agreement to accept less than the principal amount of debt in
60full satisfaction of the debt.
61     (8)(5)  "Person" means any individual, corporation,
62partnership, trust, association, or other legal entity.
63     Section 2.  Subsection (1) of section 817.802, Florida
64Statutes, is amended to read:
65     817.802  Unlawful fees and costs.-
66     (1)  It is unlawful for any person, while engaging in debt
67management services or credit counseling services, to charge or
68accept from a debtor residing in this state, directly or
69indirectly, a fee or contribution greater than $50 for the
70initial setup or initial consultation. Subsequently, the person
71may not charge or accept a fee or contribution from a debtor
72residing in this state greater than $120 per year for additional
73consultations or, alternatively, if debt management services as
74defined in s. 817.801(5)(b) 817.801(4)(b) are provided, the
75person may charge the greater of 7.5 percent of the amount paid
76monthly by the debtor to the person or $35 per month.
77     Section 3.  Section 817.8035, Florida Statutes, is created
78to read:
79     817.8035  Debt settlement plans; disclosures to debtor;
80payments; refunds.-
81     (1)  Debt settlement services or credit counseling services
82provided to a debtor residing in this state may be provided only
83pursuant to a debt settlement plan that complies with this part.
84     (2)  Before a debtor consents to payment for debt
85settlement services, the credit counseling agency must disclose
86truthfully, in a clear and conspicuous manner, all of the
87following material information:
88     (a)  The amount of time necessary to achieve the
89represented results and, to the extent that the debt settlement
90service may include a settlement offer to any of the debtor's
91creditors or debt collectors, the anticipated time by which the
92credit counseling agency will make a bona fide settlement offer
93to each of them.
94     (b)  To the extent that the debt settlement service may
95include a settlement offer to any of the debtor's creditors or
96debt collectors, the amount of money or the percentage of each
97outstanding debt that the debtor must accumulate before the
98credit counseling agency will make a bona fide settlement offer
99to each of them.
100     (c)  To the extent that any aspect of the debt settlement
101service relies upon or results in the debtor's failure to make
102timely payments to creditors or debt collectors, that the use of
103the debt settlement service will likely adversely affect the
104debtor's creditworthiness, may result in the debtor being
105subject to collection actions or sued by creditors or debt
106collectors, and may increase the amount of money the debtor owes
107due to the accrual of fees and interest.
108     (d)  To the extent that the credit counseling agency
109requests or requires the debtor to place funds in an account at
110an insured financial institution, that the debtor owns the funds
111held in the account, the debtor may withdraw such funds from the
112debt settlement service at any time without penalty, and, if the
113debtor requests to withdraw such funds, the debtor must receive
114all funds in the account, other than funds earned by the credit
115counseling agency, within 7 business days after the debtor's
116request.
117     (3)  The credit counseling agency shall provide the debtor
118with a copy of the disclosures required under subsection (2)
119within 7 days after the debtor consents to pay the credit
120counseling agency for debt settlement services.
121     (4)  A credit counseling agency may not misrepresent,
122directly or by implication, any material aspect of any debt
123management service, including, but not limited to, the amount of
124money or the percentage of the debt amount which a debtor may
125save by using such service; the amount of time necessary to
126achieve the represented results; the amount of money or the
127percentage of each outstanding debt the debtor must accumulate
128before the credit counseling agency will initiate attempts or
129make a bona fide offer to negotiate, settle, or modify the terms
130of the debtor's debt with the debtor's creditors or debt
131collectors; the effect of the service on a debtor's
132creditworthiness; the effect of the service on the collection
133efforts of the debtor's creditors or debt collectors; the
134percentage or number of debtors who attain the represented
135results; and whether a debt settlement service is offered or
136provided by a nonprofit entity.
137     (5)  A credit counseling agency may not receive payment of
138any fee or consideration for any debt settlement service until:
139     (a)  The credit counseling agency has renegotiated,
140settled, reduced, or otherwise altered the terms of at least one
141debt pursuant to a debt settlement plan;
142     (b)  The debtor has made at least one payment pursuant to
143that debt settlement plan; and
144     (c)  The fee or consideration for settling each individual
145debt enrolled in a debt settlement plan:
146     1.  Bears the same proportional relationship to the total
147fee for settling the entire debt balance as the individual debt
148amount bears to the entire debt amount. The individual debt
149amount and the entire debt amount are those owed at the time the
150debtor enrolled in the debt management service; or
151     2.  Is a percentage of the amount saved as a result of the
152settlement. The percentage charged may not change from one
153individual debt to another and may not exceed 30 percent of the
154amount saved. The amount saved is the difference between the
155amount owed at the time the debtor enrolled in the debt
156settlement service and the amount actually paid to satisfy the
157debt.
158     (6)  This section does not prohibit a credit counseling
159agency from requesting or requiring the debtor to place funds in
160an account to be used for the credit counseling agency's fees
161and for payments to creditors or debt collectors in connection
162with a renegotiation, settlement, reduction, or other alteration
163of the terms of payment or other terms of a debt if:
164     (a)  The funds are held in an account at an insured
165financial institution;
166     (b)  The debtor owns the funds held in the account and is
167paid accrued interest on the account, if any;
168     (c)  The entity administering the account, if the credit
169counseling agency does not administer the account, is not owned
170or controlled by, or in any way affiliated with, the credit
171counseling agency; and
172     (d)  The entity administering the account does not give or
173accept any money or other compensation in exchange for referrals
174of business by the credit counseling agency.
175     (7)  The debtor may withdraw from the debt settlement
176service at any time without penalty, and must receive all funds
177held in the account, other than funds earned by the credit
178counseling agency in compliance with this part, within 7
179business days after the debtor's request.
180     Section 4.  Section 817.805, Florida Statutes, is amended
181to read:
182     817.805  Disbursement of funds.-Any person engaged in debt
183management, debt settlement, or credit counseling services shall
184disburse to the appropriate creditors all funds received from a
185debtor, less any fees permitted by s. 817.802 and any creditor
186contributions, within 30 days after receipt of such funds,
187unless the reasonable payment of one or more of the debtor's
188obligations requires that the funds be held for a longer period
189in order to accumulate. However, a creditor contribution may not
190reduce any sums to be credited to the account of a debtor making
191a payment to the credit counseling agency for further payment to
192the creditor. Further, any person engaged in such services shall
193maintain a separate trust account for the receipt of any funds
194from debtors and the disbursement of such funds on behalf of
195such debtors.
196     Section 5.  This act shall take effect October 1, 2012.


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