Item O4
BOARD OF COUNTY COMMISSIONERS
AGENDA ITEM SUMMARY
Meeting Date:
February 1 6, 2000
Division:
County Attorney
AGENDA ITEM WORDING:
Approval to advertise an ordinance regulating motor vehicle title loan transactions and
establishing a maximum interest rgte, violations and penalties, licensure provisions.
ITEM BACKGROUND:
Title loans were legalized in 1995 as an enterprise subject to the power of local governments
to enact more restrictive ordinances to protect their constituents. Title loan dealers make 30-
day extensions of credit on titles to automobiles that are fully paid off, charging 22% interest
per month. The title loans are made to persons, disproportionately with little income, who
are in desperate situations and, but for the title loans, would otherwise find better
alternatives for meeting their income needs. To date, 28 Florida counties have enacted
ordinances which place reasonable regulation on title loans and limit finance charges on
title loans to no more than 30% per year.
PREVIOUS RELEVANT BOCC ACTION:
STAFF RECOMMENDATION:
Approval to advertise for public hearing on March 15, 2000 at 3 PM in Marathon.
TOTAL COST: Unknown.
BUDGETED: Yes_ No_
Cost to County:
APPROVED BY:
County Attorney X OMB/Purchasing
DIVISION DIRECTO~
DOCUMENTATION: Incloded X
Risk Management
To Follow
Not required
AGENDA ITEM #
1.04
Commissioner Nora Williams
ORDINANCE NO. 2000
AN ORDINANCE OF THE BOARD OF COUNTY COMMISSIONERS OF MONROE
COUNTY, flORIDA. REGULATING MOTOR VEHICLE TITlE LOAN TRANSACTIONS:
PROVIDING FOR MOTOR VEHICLE TiTlE LOAN TRANSACTIONS; PROVIDING
DEFINITIONS; PROVIDING FOR MAXIMUM INTEREST RATE; PROVIDING FOR
TRANSACTION SATISFACTION AND DEFAULT; PROVIDING FOR LICENSES; PROVIDING
FOR VIOLATIONS AND PENALTIES; PROVIDING FOR ADDITIONAL REMEDY TO
BORROWER; PROVIDING FOR PRIVATE RIGHT OF ACTION; PROVIDING FOR
TRANSITION PERIOD FOR REG,VLATlONS, RESTRICTIONS, AND LICENSURE PROVISIONS;
PROVIDING FOR PENALTIES; PROVIDING FOR SEVERABILITY; PROVIDING FOR THE
REPEAL OF ALL ORDINANCES INCONSISTENT HEREWITH; PROVIDING FOR
INCORPORATION INTO THE MONROE COUNTY CODE OF ORDINANCES; AND
PROVIDING AN EFFECTIVE DATE
WHEREAS, Section 538.17. Florida Statutes permits political subdivisions of the State of Florida
to enact laws more restrictive than the provisions of Chapter 538. Part 1, Florida Statutes; and
WHEREAS, the County Commissioners find that consumers in Monroe County are in need of
greater consumer protection for motor vehicle title loan transactions than are provided in Chapter
538, Part 1. Florida Statutes; now. therefore
BE IT ORDAINED BY THE BOARD OF COUNTY COMMISSIONERS OF MONROE COUNTY. FLORIDA:
Secflon1. Secflon
addition of the following:
of the Monroe County Code is hereby amended by the
MOTOR VEHICLE TiTlE LOANS
(A) Definitions.
11 ) Secondhand dealer has the same meaning as used in Section 538.03( 1 H a). Florida
Statutes. as it may be amended from time to time.
(2) Tifle Loan means a loan of money secured by bailment of a certificate of title to a
motor vehicle.
(3) Tifle Loan Agreement means a written agreement whereby the title loan lender
agrees to make a loan of a specific sum of money to the owner of a motor vehicle. and the
owner of the motor vehicle agrees to give the title loan lender a security interest in a motor
vehicle certificate of title owned by the borrower and encumbered only by a title loan
agreement.
(4) Tifle Loan Lender means any person who is engaged in the business of_ making title
loans or engaging in title loan agreements with an owner of a motor vehicle. which includes. -
but is not limited to. secondhand dealers. as defined in Chapter 538. Florida Statutes. as may
be amended.
I. MOTOR VEHICLE TiTlE LOAN TRANSACTIONS. A secondhand dealer registered under
Chapter 538. Part \~Fla... S. tat.. may engage in motor vehicle tifle loan transactions. as that term is
used in Chapter 53 ._. l.:.Flr' Stat.. if the following conditions are met:
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IA) the secondhand dealer maintains physical possession of the motor vehicle certificate
of title throughout the term of the loan; and
IB) the borrower maintains possession of, or control over. the motor vehicle throughout
the term of the loan; and
(C) the borrower is not required to pay rent or any other charge for the use of the motor
vehicle; and
ID) the secondhand dealer delivers to the borrower, at the time a loan is made, a
statement showing the loan amount. origination date, maturity date, finance charges, a
description of the security. tt:\.e name and address of the borrower and the secondhand
dealer, the rate of interest expressed in terms of Annual Percentage Rate, the total number of
Payments required. and the total amount required to be paid over the life of the loan. In the
event the borrower has a right to renew the loan. the secondhand dealer must deliver a
statement with the information required herein for each renewal; and
(E) the title loan agreement contains the following statement printed in not less than 14
point type:
11) Your vehicle has been pledged as security for this loan and if you do not repay
this loan in full. including the finance charge. YOU WILL LOSE YOUR VEHICLE.
(2) You are encouraged to repay this loan at the end of the 30 day period. The
lender is not required to extend or renew your loan. It is important that you plan your
finances so that you can repay this loan as soon as possible.
(3) THIS lOAN HAS A VERY HIGH INTEREST RATE. DO NOT COMPLETE THIS LOAN
TRANSACTION IF YOU HAVE THE ABILITY TO BORROW FROM ANOTHER SOURCE AT A
RATE LOWER THAN TWO AND ONE-HALF PERCENT (2-1/2%) PER MONTH OR AN ANNUAL
PERCENTAGE RATE OF THIRTY PERCENT (30%).
(4) The borrower represents and warrants that the motor vehicle and the
certificate of title is not stolen, it has no liens or encumbrances against it. the borrower
has the right to enter into this transaction. and the borrower will not attempt to sell the
motor vehicle or apply for a duplicate title while the title loan agreement is in effect.
and that doing so will be a violation of law.
15) If you are a member of the Armed Forces of the United States of America, you
may be eligible for financial assistance. You are urged to explore these options with a
representative of your commanding officer.
(6) Immediately above the signature of the borrower the statement that "I, the
borrower declare that the information I have provided is true and correct and I have
read and understand the foregoing document."
(7) A blank line for the signature of the borrower.
IF) The secondhand dealer must display. in a prominent place in the title loan premises.
for customer viewing, a sign no smaller than three feet by five feet 13' x 5') with the following
message written in letters no less than two inches 12") high:
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"IF YOU RECEIVE A TITLE LOAN, YOUR VEHICLE WILL BE PLEDGED AS SECURITY FOR THE LOAN. IF
YOU DO NOT REPAY THIS LOAN IN FULL. INCLUDING ALL FINANCE CHARGES, YOU WILL LOSE
YOUR VEHICLE.
THIS LOAN HAS A VERY HIGH INTEREST RATE. DO NOT COMPLETE THIS LOAN TRANSACTION IF
YOU HAVE THE ABILITY TO BORROW FROM ANOTHER SOURCE AT A RATE LOWER THAN TWO AND
ONE-HALF PERCENT (2-1/2%) PER MONTH OR AN ANNUAL PERCENTAGE RATE OF THIRTY
PERCENT (30%).
MEMBERS OF THE UNITED STATES ARMED SERVICES MAY BE ELIGIBLE FOR FINANCIAL ASSISTANCE
AND YOU ARE URGED TO EXPLORE ALL OPTIONS WITH A REPRESENTATIVE OF THEIR
COMMANDING OFFICER.
"
II. MAXIMUM INTEREST RATE. A title loan lender who engages in title loan transactions may not
exceed the following interest rates:
(A) A title loan lender may charge a maximum interest rate of two and one-half percent
(2-1/2%1 per thirty (30) day period the title loan agreement remains outstanding and
unsatisfied provided. however. that said maximum interest rate shall not exceed a maximum
annual interest rate of thirty percent (30%). In determining compliance with the maximum
interest and finance charges. the computation must be simple interest and not add-on
interest or any other interest computation.
(B) The annual percentage rate that may be charged in a motor vehicle title loan may
equal. but not exceed. the annual percentage rate that must be computed and disclosed as
required by the Federal Truth in Lending Act and Regulation Z of the Board of Govemors of
the Federal Reserve System. When the period for which the charge is computed is more or
less than one month. the maximum rate for the period must be computed on a basis of less
than one month. the maximum rate for the period must be computed on a basis of 1/30 the
applicable monthly interest rate. multiplied by the number of days of the period.
(C) Any transaction involving a borrower's delivery of a motor vehicle certificate of title in
exchange for the advancement of funds on the condition that the borrower shall or may
redeem or repurchase the certificate of title upon the payment of a sum of money. whether
the transaction be characterized as a "buy-sell agreement." "sale-leaseback agreement." or
otherwise. shall be deemed a violation of this ordinance if such sum exceeds the amount that
a title loan lender may collect in a title loan agreement under this ordinance or if the terms of
the transaction otherwise conflict with the permitted terms and conditions of a title loan
agreement under this ordinance.
(D) No charges. including interest. in excess of the combined total of all charges
permitted by this section shall be allowed. Notwithstanding the foregoing, a title loan lender
may charge a one-time fee equivalent to the amount actually paid by the title loan lender
to record a lien securing the title loan lender's interest in the motor vehicle certificate of title
owned by the borrower.
III. TRANSACTION SATISFACTION AND DEFAULT.
(A) When the title loan has been paid in full. the title loan lender must deliver to the
borrower a certificate of title clear of all encumbrances placed upon the title by the title loan
lender within 30 days of such payment in full.
(B) A title loan lender who engages in title loan transactions may take possession of the
motor vehicle upon the borrowers default under the title loan agreement. Unless the
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borrower voluntarily surrenders the motor vehicle, the title loan lender may only take
possession of a motor vehicle through an agent licensed by the State of Florida to repossess
motor vehicles.
(C) A title loan lender who takes possession of a motor vehicle pursuant to this section
shall comply with the applicable requirements of Chapter 679. Part V. Florida Statutes.
(D) Disposition of the collateral or motor vehicle may be by a public or private
proceeding and may be made by way of one or more contracts. Sale or other disposition
may be as a unit or in parts and at any time and place and on any terms, but every aspect
of the disposition including the method, manner, time. place and terms including surplus of
the debt must be commercial.l~ reasonable.
IV. LICENSES.
IA) No title loan lender may engage in business as a title loan lender three months after
the effective date of this ordinance unless the title loan lender has a valid license issued by
Monroe County. A separate license will be required for each physical location of title loan
business. The Monroe County Planning Department shall issue more than one license to an
applicant if that applicant complies with the requirements of this Part for each license.
(B) An application for a license pursuant to this Part must be submitted to the Director of
Planning on such form as the Planning Department may prescribe. If the Planning
Department determines that an application should be granted. it shall issue the license for a
period not to exceed two years. A non-refundable application and license fee not
exceeding $500.00 shall accompany an initial application for each title loan location.
Ic) The Planning Department shall charge a biennial renewal fee of $500.00. A license
that is not renewed at the end of each two-year period shall automatically become inactive.
An inactive license may be reactivated within 90 days after the date it became inactive
upon a submission of a completed reactivation form and payment of a reactivation fee not
exceeding $200.00 and a biennial license fee of $500.00. No inactive license may be
reactivated after 90 days.
ID) Each license must specify the location for which it is issued and must be conspicuously
displayed at that location. When a licensee wishes to move a title loan office to another
location the licensee shall give 30 days prior written notice to the Planning Department by
certified or registered mail. return receipt requested. and the Planning Department shall then
amend the license accordingly. A license issued pursuant to this Part is not transferable or
assignable.
IE) Books, accounts and records; maintenance and examinations by the Planning
Department.
11 ) Each licensee shall maintain, at the principal place of business designated on
the license, all books. accounts, records, and documents necessary to determine the.
licensee's compliance with this Part.
(2) The Planning Department may authorize maintenance of records at a location
other than a principal place of business. The Planning Department may require books
and records to be produced and available at a reasonable and convenient location
within Monroe County.
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(3) All books. accounts, records. documents and receipts for expenses paid by the
licensee on behalf of the borrower. including each contract signed by the borrower
and expenses incurred by the licensee in the event of foreclosure and f:!>roperty
recovery. will be preserved and kept available for examination by the Planning
Department for two years after the date of original entry.
(4) The Planning Department may prescribe by rule the minimum information to
be shown in the books. accounts. records. and documents of licensees so that such
records will enable the department to determine the licensee's compliance with this
Part.
IF) Each licensee shall designate and maintain an agent in this state for service of
,....
process.
IG) A licensee must apply to the Planning Department for a new license upon a change in
ownership of 25% or more by a natural-person in any title loan location or office. No
application for a license or an application for transfer of an existing license is required for any
change directly, or beneficially. in the ownership of a title loan location if one or more of the
holders of at least 75 percent of the outstanding equity interest in the title loan location or
office before the change in ownership continue to hold at least 75 percent of the
outstanding equity interest in the title loan location or office after the change in ownership.
IH) To be eligible for a title loan lending license. an applicant shall:
(1) Not have been convicted of a felony within the last ten years or be acting in
behalf of a beneficial owner who has been convicted of a felony within the last ten
years.
(2) Not have been convicted, and not acting in behalf of a beneficial owner who
has been convicted. of a crime that the Director of Planning finds directly related to
the duties and responsibilities of a title loan lender within the past ten years.
II) The Planning Department shall determine the form of the license.
IJ) No part of this ordinance may be construed to impair of affect the obligation of any
title loan agreement which was lawfully entered into prior to the effective date of this
ordinance.
IK) Licensees shall report changes in address. location of records, and any change of an
executive officer within 30 days of the change.
V. VIOLATIONS AND PENALTIES.
IA) The following acts are violations of this Part and shall constitute grounds for disciplinary
action:
(1) Failure to comply with any provision of this Part. rule adopted under this Part by
the Planning Department or any written agreement entered into with the Planning
Department.
(2) Fraud. misrepresentation. deceit or gross negligence in any title loan
transaction.
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(3) Fraudulent misrepresentation. circumvention, or concealment of any matter
required to be stated or fumished to a consumer pursuant to this Part.
(4) Willful imposition of illegal charges on any title loan transaction.
(5) False, deceptive, or misleading advertising by a licensee.
(6) Failure to maintain. preserve and keep available for examination, all books.
accounts, or other documents required by this Part. state or federal law. or by any
agreement entered into with the Planning Department.
(7) Aiding, abetting. or conspiring with an individual to circumvent or violate any
of the requirements of't'his Part or state or federal law.
(B) Refusal to permit inspection of books or records in an investigation or
examination by the Planning Department or refusal to comply with a subpoena issued
by the Planning Department or the Monroe County Code Enforcement Department or
Special Master.
(9) Criminal conduct in the course of a licensee's business as a title lender.
(10) Knowingly entering into a title loan agreement with a person under the age of
1B years.
111) Making any agreement requIring or allowing for the Personal liability of a
pledge or the waiver of any of the provisions of this Part.
( 12) Knowingly entering into a title loan agreement with any person who is under
the influence of drugs or alcohol when such condition is visible or apparent. or with
any person using a name other than his own name or the registered name of his
business.
(13) Entering into a title loan agreement in which the amount of money advanced
in consideration for the loan secured by any single certificate of title exceeds one
third of the value of the motor vehicle. The Planning Department shall determine the
method of assessing the value of the pledged property.
(14) Failure to exercise reasonable care in the safekeeping of the certificate of title
or motor vehicle repossessed pursuant to this Part.
(15) Failure to retum the certificate of title or motor vehicle taken into Possession to a
borrower, with any and all of the title lender's liens on the property properly released.
within 30 days of the payment of the full amount due, unless the property has been
seized or impounded by an authorized law enforcement agency. taken into custody
by a court, or otherwise disposed of by court order.
(16) Charging or receiving any finance charge, interest. cost, or fee which is not
permitted by this Part.
11 7) Engaging in business as a title lender without first securing the required license.
liB) Refusing to accept partial repayment of the amount financed when all accrued
finance charges have been paid.
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(19) Charging a prepayment Penalty.
(20) Capitalizing any unpaid finance charge as part of the amount financed in the
renewal of a title loan agreement.
(21) Acting as a title loan lender in the County six months after the effective date of
this ordinance without a current. active license issued by the Planning Department
pursuant to this Part.
(22) In any practice or transaction or course of business relating to the making of a
title loan. negotiation, promotion, advertisement or hypothecation of a title loan
transaction. directly o~~ndirectly:
la) Knowingly or willingly employing any devise. scheme or article to defraud,
(b) Engaging in any transaction. practice or course of business which operates
as a fraud upon any person in connection with the purchase or sale of any title
loan;
Ie) Obtaining property by fraud. willful misrepresentation of a future act or
false promise.
(23) In any manner within the jurisdiction of the Planning Department to knowingly
and willfully falsify. conceal or cover up by a trick. scheme or devise a material fact,
make any false or fraudulent statement or misrepresentation. or make or use any false
writing or document knowing the same to contain any false or fraudulent statement or
entry.
(24) Commission of fraud. misrepresentation, concealment, dishonest dealing by
trick. scheme or devise. culpable negligence. or breach of trust in any title loan
transaction in Monroe County; or aiding. assisting. or conspiring with any other person
engaged in any such misconduct and in furtherance thereof.
IBl Upon a finding by the Code Enforcement Special Master that the licensee or
applicant has committed any of the acts set forth in subsection IA) hereof. the Special Master
may enter an order and take one or more of the following actions:
(1) Deny the application for a license pursuant to this ordinance.
(2) Revoke or suspend a license previously granted pursuant to this Part.
(3) Place a licensee or applicant for a license on probation for a period of time
and subject to such conditions as the Planning Department may specify.
(4) Issue a letter of concem or reprimand.
(5) Place permanent restrictions or conditions upon issuance or maintenance of a
license pursuant to this ordinance.
(6) Impose an administrative fine not to exceed $2500 for each violation of this
Part.
(7) The Monroe County Code Enforcement Department shall be entitled to a
reasonable attorney's fee. including appellate fees and costs. in an action
successfully enforcing any fine imposed under this Part.
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Ic) When the Monroe County Code Enforcement Department has reasonable cause to
believe that a licensee is operating in violation of this Part, it may bring a civil action in any
court of competent jurisdiction to enforce or administer this Part including a temporary or
permanent injunction. or appointment of a receiver.
VI. ADDITIONAL REMEDY TO BORROWER, PRIVATE RIGHT OF ACTION. Any borrower injured by a
violation of this Part may bring an action for recovery of damages including twice the interest
previously paid and the forfeiture of all interest charged or contracted to be charged or reserved.
Said borrower may recover reasonable attomey's fees and costs of such action. An award may be
entered for punitive damages. The remedies provided for under this part are in addition to any other
procedures or remedies for any violation provided in any other law or ordinance.
VII. TRANSACTION PERIOD FOR 'REGULATIONS, RESTRICTIONS, AND LICENSURE PROVISIONS.
Each title loan lender operating on the effective date of this ordinance shall have three months from
the effective date of this ordinance to comply with the regulations. restrictions, and licensure
provisions of this part before the Monroe County Code Enforcement Department may initiate any
administrative or civil action. or refer a matter for criminal prosecution.
Section 2. If any section. subsection. sentence. clause or provision of this ordinance is
held invalid. the remainder of this ordinance shall not be affected by such invalidity.
Section 3. All ordinances or parts of ordinances in conflict with this ordinance are hereby
repealed to the extent of said conflict.
Section 4. The provisions of this ordinance shall be included and incorporated in the
Code of Ordinances of the County of Monroe. Florida. as an addition or amendment thereto. and
shall be appropriately renumbered to conform to the uniform numbering system of the Code.
Section 5. This ordinance shall take effect immediately upon receipt of official notice
from the Office of the Secretary of State of the State of Florida that this ordinance has been filed with
said Office.
PASSED AND ADOPTED by the Board of County Commissioners of Monroe County, Florida. at a
regular meeting of said Board held on the _ day of , 2000.
Mayor Shirley Freeman
Commissioner Wilhelmina Harvey
Commissioner George Neugent
Commissioner Mary Kay Reich
Commissioner Nora Williams
(SEAL)
Attest: DANNY L.KOLHAGE, Clerk
BOARD OF COUNTY COMMISSIONERS
OF MONROE COUNTY, FLORIDA
By
By
Deputy Clerk
Mayor/Chairperson
jordvcartitle
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