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HB 7087--Financial services.

The bill authorizes the sale of optional guaranteed asset protection (GAP) products by motor vehicle installment sellers, sales finance companies, retail lessors and their assignees, and establishes requirements for the sale of such products. The seller of GAP coverage may not require its purchase as a condition for making a loan. In order to offer a GAP product, the seller of the GAP product must comply with specified statutory consumer protection requirements. It refines "debt cancellation product," specifies that such products may be sold by financial institutions and their subsidiaries and other business entities authorized by law, and states that it is not insurance for purposes of the Florida Insurance Code. Financial institutions are required to manage risks associated with debt cancellation products prudently, and to establish and maintain effective risk management and control programs regarding such products. Insurance purchased by a creditor for debt cancellation products is defined as a form of casualty insurance. The bill increases the maximum delinquency charge from $10 to $25 for a default of payment pursuant to a revolving account provision in a retail installment contract. It eliminates the $50,000 limit on insurance that may be procured on the life of a debtor under a debtor group contract, or pursuant to a credit life insurance policy. Instead, the limit is the amount of the person's indebtedness to the creditor. The bill also allows the term of credit disability insurance to extend for the term of the indebtedness, rather than the current 10-year time limitation. The bill specifies that a deposit or account made in the name of two persons who are husband and wife is considered a tenancy by the entirety unless otherwise specified in writing. It provides that an agreement to operate or share an ATM may not "prohibit, limit, or restrict" the right of the owner or operator to charge an access fee or surcharge not otherwise prohibited under state or federal law to a customer conducting a transaction using an account from a financial institution that is located outside of the United States. The bill also provides that nothing in the act is intended to restrict the owner or operator from entering into agreements regarding access free fee arrangements. The bill requires an owner or operator of an ATM to disclose such fees or surcharges in compliance with federal Regulation E,1 addressing electronic fund transfers, which was issued by the Board of governors of the Federal Reserve System, pursuant to the federal Electronic Fund Transfer Act. The bill allows state-funded endowments that are funded by a general appropriation act prior to 1990 to maintain funds in state or federal financial institutions. It raises the minimum capitalization for a proposed bank to $8 million and deletes the differing capitalization for banks in a metropolitan area and those in other counties. The bill also raises the minimum total capital accounts at opening for a trust company from $2 million to $3 million and sets differing capitalization standards for banks owned by a single-bank holding company and banks owned by multibank holding companies. It eliminates the need for a bank or trust company to obtain approval from the Office of Financial Regulation (OFR) in order to increase its capital. However, a state bank or trust company must notify the OFR in writing 15 days before increasing its capital stock. The bill deletes the prohibition against a bank or trust company issuing capital stock with over a $100 par value. It states a financial institution may not issue or sell stock of the same class which creates different rights, options, warrants, or benefits among the purchasers or stockholders of that class of stock. However, the financial institution may create uniform restrictions on the transfer of stock as permitted in [section] 607.0627. The bill clarifies who can assert dissenter's rights pursuant to the approval of the sale of stock by a state bank or trust company. The fair value of the shares of stock will be determined using the procedures in [section] 607.1326, and [section] 607.1331, rather than by a panel of three appraisers. The new procedure would be the same as is applied to corporations. If approved by the governor, these provisions take effect October 1, 2007.
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Title Annotation:Business Law
Publication:Florida Bar News
Geographic Code:1U5FL
Date:Jul 1, 2007
Previous Article:CS/CS/CS/SB 1638--Gift certificates and similar credit items.
Next Article:SB 562--Ownership or transfer of securities.

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