TALLAHASSEE, Fla. - In May 1999-for the fourth consecutive year-the state legislature adjourned without passing title loan reform legislation (CU Times, May 12). One month into the 2000 session, state legislators are going for a fifth try. Senate Bill 1834c1, creating the `Fair Accountability in Interest Rate Act of 2000" was introduced on the opening day of this year's Florida legislative session (March 7) by state Sens. Jack Latvala (R-19), Kendrick Meek (D-36), Patsy Ann Kurth (D-15) and Burt Saunders (R-25). The measure was referred to the Senate Governmental Oversight and Productivity Committee where on March 15, it was combined with committee substitute bill S. 694, the "Florida Title Loan Act" sponsored by Meek. Among its provisions, S.694 caps interest rates on title loans at 30% per annum on the first $2,000 of the principal amount, 24% per annum on the remainder of the loan exceeding $2,000 and not exceeding $3,000, and 18% per annum on that part of the principal amount exceeding $3,000. The maximum annual percentage rate of interest that can be charged is 12 times the maximum monthly rate, and the maximum monthly rate must be computed based on one-twelfth of the annual rate for each full month. A title loan agreement may be extended for one or more 30-day periods as long as the lender and borrower mutually agree. Each extension of a title loan is considered separate from the previous agreement and the interest rate charged cannot exceed the rate charged in the previous agreement. In addition, S. 694: * Requires title loan lenders to be licensed by the Florida Banking & Finance Department. A separate license must be obtained for each title loan office if the lender operates more than one office. Licenses are valid for a maximum of two years and must be renewed biennially. * Licenses must be conspicuously displayed at the title loan office. * The maturity date of a title loan agreement is 30 days from date of execution. Though S.694 was only a little more than two weeks old when Credit Union Times went to press, Mark Ivester of the Florida Credit Union League said the chances for passage of a title loan act by the state legislature were excellent this year for two reasons. First, the main opponent to previously defeated title loan bills, Sen. W.D. Childers (R-Pensacola) has publicly stated he has no interest in this year's title loan measure. Second, this year's title loan bill not only has the backing of the state Senate - none of the previous bills did - but it also has the support of both the Senate President Toni Jennings (R-9) and the Chairman of the Governmental Oversight and Productivity Committee Latvala. So far, since the state legislature adjourned last May without passing a title loan regulatory act, more than 30 counties throughout Florida have passed their own ordinances capping title loan interest rates. Most of the caps are 30% and a handful are 18%. Ivester stressed that "the league has no position what the maximum interest rate that title loan lenders should be. It would be presumptuous of us to suggest how another business should be regulated. The only thing we do know is that what amounts to 264% annual interest Florida law currently allows is too high. The league's main goal is and always has been to go from there being no regulation, which describes the current status, to where the title loan industry is regulated by the Department of Finance." S. 694 is one of two bills working their way through the Florida legislature. On the House side. Rep. Bill Sublette (R-Orlando)-the sponsor of last year's H.B. 299 that would would have capped title loan interest rates at 30%-has sponsored another bill this year - H.B. 301. At press time, the bill was in the House General Government Appropriations Committee. The House and Senate bills are virtually similar, except that S.694 is paired with another bill sponsored by Sen. Meek-S.B. 2278-pertaining to check cashing businesses. That bill would make it unlawful for a check casher to "charge a customer for holding a cashed check and may not seek criminal prosecution for the failure of a customer to have funds in the customer's checking account to cover the amount of a check on a business day subsequent to the date the check is cashed." Sublette said he hopes Meek's check cashing bill doesn't threaten passage of S.694. If it comes down to sacrificing the check cashing bill for the sake of S. 694, then he will encourage Meek to do that, "but I hope it doesn't come down to that." "There is no doubt we will have a title loan law passed this year by the state legislature," said Ivester. Any time a bill has this kind of backing, it's chances of being passed are better than excellent." Sublette is also hopeful the legislature will pass the measures this year. "Our chances this year are very good, in fact I would be surprised if title loan lending legislation didn't pass this year." -
ekingoff@cutimes.com
