On July 1, amendments to Florida’s Consumer Finance Act took effect. Among other things, the amendments raise the maximum tiered interest rates on consumer finance loans, increase the grace period before late fees can be imposed from 10 to 12 days, require licensees to offer free credit education courses to borrowers at the time a loan is made, provide for the suspension of certain collection activities in the event of a disaster, and require branches of businesses making consumer finance loans to obtain a license.

Highlights of the amendments, include:

  • Interest Rates: The amendments allow licensees to lend any sum of money up to $25,000. The maximum interest rate has been increased to 36% per annum (up from 30%) computed on the first $10,000 of the principal amount; 30% per annum (up from 24%) on amounts exceeding $10,000 up to $20,000; and 24% per annum (up from 18%) on amounts exceeding $20,000 and up to $25,000.
  • Delinquency Charges: The grace period before late fees can be imposed has been increased from 10 to 12 days. Late fees may be imposed if agreed upon in writing between the parties before imposing the charge, subject to the law’s late fee caps.
  • Credit Education: Licensees must offer borrowers a credit education program or seminar at the time a loan is made. The program must be provided at no cost and may cover topics such as establishing a household budget, improving credit scores, and preventing identity theft.
  • Disaster Response: In the event of a Federal Emergency Management Agency response to a Presidential Disaster Declaration in the state, licensees must notify the office within 10 days if they offer any assistance program to borrowers impacted by the disaster. Assistance programs may include deferments, forbearance, waivers of late fees, payment modifications, or changes in payment due dates.
  • Suspension of Penalties: In the event of a federal disaster declaration, licensees operating in affected counties must suspend the application of delinquency charges, repossessions of collateral, and the filing of civil actions for 90 days after the date of the initial declaration.
  • Licensing Requirements: The amendments require that branches of businesses making consumer finance loans must now obtain a license. The application process includes providing detailed information about the applicant and paying a nonrefundable biennial license fee of $625 for the principal place of business and for each branch application filed.
  • Annual Reporting: By March 15, 2025, and each March 15 thereafter, licensees must file an annual report with the office. The report must include aggregated and anonymized data on loan originations, outstanding loans, secured and unsecured loans, charged-off loans, and delinquency status.