Recently, the Governor of Florida signed into law H1347 (the “Act”) which revises current exceptions to the state’s prohibition on usurious contracts for consumer finance loans of $25,000 or less where a lender charges an interest rate of 18 percent or greater per year. Under the Florida Consumer Finance Act, consumer finance loans typically cannot have interest rate exceeding 18 percent per year; however, the state’s Consumer Finance Act allows for an exception to this law. This new Act updates the terms to these exceptions, making the following changes:
- For the first $10,000 of the principal amount, no consumer finance loan can carry an interest rate greater than 36 percent.
- For that part of a principal amount between $10,000 and $20,000, no consumer finance loan can carry an interest rate greater than 30 percent.
- For that part of a principal amount between $20,000 and $25,000, no consumer finance loan can hold an interest rate greater than 25 percent.
The Act also extends the amount of time before a delinquency charge may be imposed from ten days to 12 days in default. The Act also amends a consumer lender’s obligations in the event of a FEMA disaster declaration, including among others, suspending application of delinquency charges, repossession of collateral, and filing civil actions for collections of amounts due on loans. The Act also imposes notice and reporting requirements, including notifying the Office of Financial Regulation (OFR) if any assistance programs are impacted because of the FEMA disaster declaration and providing annual reporting on loans issued during the previous year.
