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 20, 2022. The legislation permits a Financial Technology Sandbox licensee/applicant ....

 

DEPARTMENT OF FINANCIAL SERVICES

Finance

RULE NOS.:RULE TITLES:

69V-559.1012Adoption of Forms

69V-559.300Net Worth and Bond, and Liquid Assets

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 20, 2022. The legislation permits a Financial Technology Sandbox licensee/applicant offering a financial product or service related to a consumer finance loan 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. The amendments will incorporate new forms, revise old forms, and correct grammatical errors.

SUMMARY: The amended rules will conform to and implement the provisions of Chapter No. 2022-130, Laws of Florida, related to conditions of licensure by revising rule text, revising and re-incorporating certain existing forms, and by incorporating new forms. In addition, the amendments will correct grammatical errors.

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: 559.952(5), 559.952(8), 559.952(11)(a)

LAW IMPLEMENTED: 559.952(4), 559.952(4)(a), 559.952(5), 559.952(7)(a), 559.952(7)(b),559.952(8), 559.952(9), 559.952(11)(a)

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-559.1012 Adoption of Forms.

(1) The following forms are incorporated by reference and adopted by this rule for the purposes of Rules 69V-559.1000-.800, F.A.C.:

(a) Application for Licensure as a Financial Technology Sandbox Innovator, Form OFR-559-FTS-001, effective XX-XXXX 01/2021, and available at http://www.flrules.org/Gateway/reference.asp?No=Ref-XXXX http://www.flrules.org/Gateway/reference.asp?No=Ref-12627.

(b) through (d) No change.

(e) Financial Technology Sandbox Innovator (Money Services Business) Pledge Agreement, Form OFR-559-FTS-005, effective XX-XXXX 01/2021, and available at http://www.flrules.org/Gateway/reference.asp?No=Ref-XXXX http://www.flrules.org/Gateway/reference.asp?No=Ref-12585.

(f) Financial Technology Sandbox Innovator (Money Services Business) Surety Bond, Form OFR-559-FTS-006, effective XX-XXXX 01/2021, and available at http://www.flrules.org/Gateway/reference.asp?No=Ref-XXXX http://www.flrules.org/Gateway/reference.asp?No=Ref-12586.

(g) No change.

(h) Financial Technology Sandbox Innovator (Consumer Finance) Surety Bond, Form OFR-559-FTS-009, effective XX-XXXX, and available at http://www.flrules.org/Gateway/reference.asp?No=Ref-XXXX.

(i) Financial Technology Sandbox Innovator (Consumer Finance) Pledge Agreement, Form OFR-559-FTS-010, effective XX-XXXX, and available at http://www.flrules.org/Gateway/reference.asp?No=Ref-XXXX.

(2) No change.

Rulemaking Authority 559.952(5), 559.952(8), 559.952(11)(a) FS. Law Implemented 559.952(4)(a), 559.952(5), 559.952(7)(a), 559.952(7)(b),559.952(8), 559.952(9), 559.952(11)(a) FS. History–New 1-18-21, Amended __________.

 

69V-559.300 Net Worth, and Bond, and Liquid Assets.

(1) A licensee offering products or services under cChapter 560, F.S., must maintain a minimum net worth at all times. The minimum net worth amount is determined based on the maximum number of consumers as authorized by the Office to receive the innovative financial product or service. See table below to determine the minimum amount of net worth:

Total Number of Consumers Required Amount of Net Worth

0 ‒ 7,500 $25,000

7,501 ‒ 15,000$50,000

15,001 ‒ 20,000$75,000

20,001 ‒ 25,000$100,000

(2) A licensee offering products or services under cChapter 560, F.S., must maintain a surety bond or alternative security device at all times. Only alternative security devices allowed in Section 560.209, F.S., may be substituted for a surety bond. See table below to determine the minimum amount of surety bond or alternative security device:

Total Number of Consumers Required Minimum Amount

0 ‒ 7,500 $75,000

7,501 ‒ 15,000$150,000

15,001 ‒ 20,000$200,000

20,001 ‒ 25,000$250,000

(3) A licensee offering products or services under chapter 516, F.S., must provide evidence from an insured financial institution that the liquid assets in the amount of $25,000 are on deposit with the institution and held solely for the purpose of licensure. In lieu of liquid assets, one of the following alternative collateral devices may be submitted with the application:

(a) A certificate of deposit pledged to the Office in the amount of $25,000 for this location. 

The certificate of deposit must be deposited in a financial institution as defined in s. 655.005(1)(i), Florida Statutes. An original of Form OFR-559-FTS-010, incorporated by reference in Rule 69V-559.1012, F.A.C., must be submitted to the Office with the application.

(b) An irrevocable letter of credit in the amount of $25,000 for this location.  The

irrevocable letter of credit must be issued by a financial institution as defined in s. 655.005(1)(i), Florida Statutes.

(c) A surety bond in the amount of at least $25,000. A consumer finance company with at

least one currently licensed location must provide to the Office a rider or surety bond in an amount of at least $5,000 for each additional license. However, the aggregate amount of the surety bond required for a consumer finance company with multiple licenses may not exceed $100,000.  The surety bond or rider must be issued by a bonding company or insurance company authorized to do business in this state. An original of Form OFR-559-FTS-009, incorporated by reference in Rule 69V-559.1012, F.A.C., must be submitted with the application.

Rulemaking Authority 559.952(11)(a) FS. Law Implemented 559.952(4), 559.952(9), 559.952(11)(a) FS. History–New 1-18-21, 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