The purpose and effect is to amend existing rules to conform to and implement Chapter No. 2022-130, Laws of Florida, which was signed into law on May 23, 2022 and permits a consumer finance company applicant/licensee to ....

 

DEPARTMENT OF FINANCIAL SERVICES

Finance

RULE NOS.:RULE TITLES:

69V-160.030Application Procedure for Consumer Finance License

69V-160.111Disciplinary Guidelines

PURPOSE AND EFFECT: The purpose and effect is to amend existing rules to conform to and implement Chapter No. 2022-130, Laws of Florida, which was signed into law on May 23, 2022 and permits a consumer finance company applicant/licensee to meet certain conditions of licensure by providing documentation of a surety bond, certificate of deposit or letter of credit in lieu of evidence of $25,000 in liquid assets. In addition, the amendments will remove the disciplinary guidelines as found in rule text and transfer the disciplinary guidelines provisions to a form incorporated by rule, change application withdrawal procedures, narrow the scope of material changes to pending applications, revise mitigating and aggravating factors considered in the determination of penalties, and incorporate forms.

SUMMARY: The amended rules will conform to and implement Chapter No. 2022-130, Laws of Florida, incorporate forms, change the procedure related to the withdrawal of a pending application, narrow the scope of material changes to pending applications, revise mitigating and aggravating factors considered in the determination of penalties; and remove penalty provisions found in the rule text and place the revised penalty provisions in the Disciplinary Guidelines for Consumer Finance Companies form (Form OFR-516-04).

SUMMARY OF STATEMENT OF ESTIMATED REGULATORY COSTS AND LEGISLATIVE RATIFICATION:

The Agency has determined that this will not have an adverse impact on small business or likely increase directly or indirectly regulatory costs in excess of $200,000 in the aggregate within one year after the implementation of the rule. A SERC has not been prepared by the Agency.

The Agency has determined that the proposed rule is not expected to require legislative ratification based on the statement of estimated regulatory costs or if no SERC is required, the information expressly relied upon and described herein: The Agency expressly relies on an analysis of potential impact conducted by persons with subject matter knowledge of this rule.

Any person who wishes to provide information regarding a statement of estimated regulatory costs, or provide a proposal for a lower cost regulatory alternative must do so in writing within 21 days of this notice.

RULEMAKING AUTHORITY: 516.03(1), 516.05(10), 516.22(1), 516.23(3)

LAW IMPLEMENTED: 516.03(1), 516.05, 516.05(1), 516.02, 516.031, 516.035, 516.05, 516.07, 516.08, 516.12, 516.15, 516.16, 516.17, 516.21, 516.31, 516.35, 516.36

IF REQUESTED WITHIN 21 DAYS OF THE DATE OF THIS NOTICE, A HEARING WILL BE SCHEDULED AND ANNOUNCED IN THE FAR.

THE PERSON TO BE CONTACTED REGARDING THE PROPOSED RULE IS: Sheila Harley, Office of General Counsel, [phone], [e-mail]

 

THE FULL TEXT OF THE PROPOSED RULE IS:

 

69V-160.030 Application Procedure for Consumer Finance License.

(1) Each person desiring to apply for licensure as a consumer finance company shall submit the following to the Office of Financial Regulation:

(a) A completed Application for Consumer Finance License, Form OFR-516-01, revised 12/20/2007, which is hereby incorporated by reference in Rule 69V-160.039, F.A.C., and available on the Office’s website at www.flofr.gov and by mail from the Office of Financial Regulation, 200 East Gaines Street, Tallahassee, Florida 32399-0376;

(b) through (c) No change.

(d) Evidence that the applicant has liquid assets of at least $25,000.00 for the operation of the consumer finance company. For the purposes of this rule “Evidence” means documentation from a an insured financial institution, as defined in s. 655.005(1)(i), F.S., that the liquid assets are on deposit with the institution. In lieu of providing evidence of liquid assets of at least $25,000.00, the applicant may provide any one of the documents listed in Section 516.05(10), F.S. 

(2) through (3) No change.

(4) Amendments to Pending Applications. If the information contained in any application form for licensure as a consumer finance company, or in any amendment thereto, becomes inaccurate for any reason, the applicant shall file an amendment correcting such information within thirty (30) days after the change on Form OFR-516-01, Application for Consumer Finance License. An applicant may amend the application as to those factors generally within the control or selection of the applicant once, as a matter of course, at any time within thirty (30) days after receipt of the application by the Office of Financial Regulation. Otherwise, the application may be amended only with prior written permission from the Office of Financial Regulation. Requests to make changes that are material to the application shall be deemed by the Office of Financial Regulation to be grounds for denial, and a new application, accompanied by the appropriate filing fees, shall be required. Material changes include:

(a) No change.

(b) Amendments adversely affecting the $25,000.00 liquid asset, surety bond, certificate of deposit, or letter of credit requirement.

(5) Withdrawal of Application. An applicant may request withdrawal at any time during the pendency of an application by submitting a request to withdraw the application through the REAL System. of an application prior to a determination of the application being made by the Office of Financial Regulation by submitting a written request that the application be withdrawn. Withdrawals will be deemed effective upon receipt by the Office.

(6) through (7) No change.

Rulemaking Authority 516.22(1), 516.23(3), 516.03(1), 516.05(10) FS. Law Implemented 516.03(1), 516.05(1), 516.05, 516.07 FS. History–New 12-18-88, Amended 5-9-90, 10-1-95, 1-5-00, Formerly 3D-160.030, Amended 12-20-07, 1-18-21,___________.

 

69V-160.111 Disciplinary Guidelines.

(1) Pursuant to Ssection 516.07(2), F.S., Disciplinary Guidelines for Consumer Finance Companies, Form OFR-516-04, which is hereby incorporated by reference, effective XX-XXXX, available on the Office’s website at www.flofr.gov and available at www.flrules.org/Gateway/reference.asp?No=Ref-XXXX, are applicable to each ground for disciplinary action that may be imposed by the Office against a person for each act that is a violation of chapter 516, F.S. For the purpose of this rule and the disciplinary guidelines, the term “citation” means: a notice of noncompliance, reprimand, written agreement, or final order docketed by the agency that specifies a violation of chapter 516, F.S., or any rule promulgated under that chapter. listed below is a range of disciplinary guidelines from which disciplinary penalties will be imposed upon any person guilty of violating Chapter 516, F.S. The disciplinary guidelines are based upon a single-act violation of each provision listed. Multiple acts of the violated provisions or a combination of violations may result in a higher penalty than that for a single, isolated violation. For purposes of this rule, the order of penalties, ranging from lowest to highest, is: reprimand, fine, probation, suspension, and revocation. Nothing in this rule shall preclude any discipline imposed upon a person pursuant to a stipulation or settlement agreement, nor shall the ranges of penalties set forth in this rule preclude the Office of Financial Regulation from issuing a letter of guidance when appropriate.

(2)(1) Consistent with the disciplinary guidelines contained in Form OFR-516-04, Disciplinary Guidelines for Consumer Finance Companies, the Office may issue: a notice of noncompliance; a written agreement which includes an adminstrative fine, but not adopted by a final order; orders to reprimand a licensee, orders to place a licensee on probation; orders restricting or applying conditions upon the issuance or maintenance of a license; orders to impose an administrative fine; and/or orders to supend or revoke a license. As provided in section 516.07(2)(c), F.S., the Office of Financial Regulation may, in addition to other disciplinary penalties, place a licensee or applicant for a license on probation. The placement of the licensee on probation shall be for such a period of time and subject to such conditions as the Office of Financial Regulation may specify.

(a) For first citations identified in the disciplinary guidelines as minor violations, the Office shall issue a notice of noncompliance except when the Office identifies aggravating factors that would warrant a more severe penalty.

(b)  For second citations identified in the disciplinary guidelines as minor violations, the Office may issue a written agreement which is not adopted by a final order imposing an administrative fine. Written agreeements may be used only when the violations are limited to minor violations.

(2) The minimum penalty for all below listed sections is a reprimand and/or a fine up to $1,000.00 per act. The maximum penalties are as listed:

(a) Section 516.02(3), F.S.	–	Probation
(b) Section 516.031, F.S.	–	Probation
(c) Section 516.035, F.S.	–	Probation
(d) Section 516.05(3), F.S.	–	Probation
(e) Section 516.05(4), F.S.	–	Probation
(f) Section 516.05(7), F.S.	–	Probation
(g) Section 516.07(1)(a), F.S.	–	Revocation
(h) Section 516.07(1)(b), F.S.	–	Suspension
(i) Section 516.07(1)(d), F.S.	–	Revocation
(j) Section 516.07(1)(e), F.S.	–	Revocation
(k) Section 516.07(1)(f), F.S.	–	Suspension
(l) Section 516.07(1)(g), F.S.	–	Probation
(m) Section 516.07(1)(h), F.S.	–	Revocation
(n) Section 516.07(1)(i), F.S.	–	Revocation
(o) Section 516.08, F.S.	–	Reprimand
(p) Section 516.12, F.S.	–	Revocation
(q) Section 516.15, F.S.	–	Probation
(r) Section 516.16, F.S.	–	Probation
(s) Section 516.17, F.S.	–	Probation
(t) Section 516.21, F.S.	–	Probation
(u) Section 516.31(3), F.S.	–	Probation
(v) Section 516.35, F.S.	–	Probation
(w) Section 516.36, F.S.	–	Probation

(3)(a) In accordance with Section 516.07, F.S., the Office shall consider the following circumstances in determing an appropriate penalty within the range of penalties prescribed in the disciplinary guidelines for each violation. The Office shall also consider the circumstances when determining whether a deviation from the range of penalties in the disciplinary guidelines is warranted: In the presence of aggravating or mitigating circumstances supported by clear and convincing evidence, the Office of Financial Regulation shall be entitled to deviate from the above guidelines in imposing discipline upon a person.

(b) Aggravating or mitigating circumstances may include, but are not limited to, the following:

1. The severity of the act.

2. The degree of harm to the consumer or public.

3. The number of times the acts previously have been committed by the person.

4. The disciplinary history of the person.

5. The status of the person at the time the act was committed.

(a) The following circumstances are considered mitigating factors which will be used to reduce the penalty:

1. The violation rate is less than 5% when compared to the overall sample size reviewed;

2. No prior citation by the Office against the consumer finance company or a control person of the consumer finance company within the past 10 years;

3. The consumer finance company detected and voluntarily instituted corrective action or measures to avoid the recurrence of the violation prior to the detection and intervention by the Office;

4. The violation is attributable to a single person or employee, and the consumer finance company removed or otherwise disciplined the individual prior to detection or intervention by the Office;

5. The consumer finance company provided substantial assistance to the Office in its examination or investigation of the underlying misconduct, or whether the respondent attempted to impede or delay Office’s examination or investigation, to conceal or withhold information from the Office, or to provide incomplete, inaccurate or misleading testimony or documentary information to the Office;

6. The consumer finance company self-reported the violation to the Office prior to examination or discovery by the Office; or

7. Other relevant, case-specific circumstances.

(b) The following circumstances are considered aggravating factors which will be used to increase the penalty:

1. The violation rate is more than 95% when compared to the overall sample size reviewed (sample size must be equal to or greater than 50 transactions and cover a date range of at least 6 months);

2. There is a potential for harm to customers or the public;

3. Prior citations by the Office against the consumer finance company or a control person of the consumer finance company within the past 5 years which contain the same violations;

4. The violation was the result of willful misconduct or recklessness;

5. The consumer finance company or a control person of the consumer finance company attempted to conceal the violation or mislead the Office; or

6. Other relevant, case-specific circumstances.

(4) The list of violations cited in the disciplinary guidelines is intended to be comprehensive, but the omission of a violation from the list does not preclude the Office from taking any action authorized by chapter 516, F.S.

(5) The ranges for administrative fines imposed by the disciplinary guidelines are $100 to $350 for an “A” level fine; $350 ‒ $750 for a “B” level fine; and $750 ‒ $1,000 for a “C” level fine.

(6) The ranges for suspension imposed by the disciplinary guidelines are 3 to 10 days for an “A” level suspension; 11 to 20 days for a “B” level suspension; and 21 to 30 days for a “C” level suspension.

 

Rulemaking Authority 516.23(3) FS. Law Implemented 516.02, 516.031, 516.035, 516.05, 516.07, 516.08, 516.12, 516.15, 516.16, 516.17, 516.21, 516.31, 516.35, 516.36 FS. History–New 3-20-91, Formerly 3D-160.111, Amended_________.

 

NAME OF PERSON ORIGINATING PROPOSED RULE: Gregory C. Oaks

NAME OF AGENCY HEAD WHO APPROVED THE PROPOSED RULE: Financial Services Commission

DATE PROPOSED RULE APPROVED BY AGENCY HEAD: August 23, 2022

DATE NOTICE OF PROPOSED RULE DEVELOPMENT PUBLISHED IN FAR: September 9, 2022