Florida SB 146, a bill that would add a “Predatory loan prevention” section to the Florida Consumer Finance Act has been introduced in the Florida Senate, seeking to curb bank-model lending programs and codify a “true lender” analysis with language similar to legislation enacted in Minnesota and other states within the past three years. The Florida bill closely tracks the Minnesota law’s language, including a general “anti-evasion” provision and a mandate that if a consumer loan’s rate exceeds Florida’s consumer usury limit, a person is deemed to be a lender if any of the following applies:

(a)  The person holds, acquires, or maintains, directly or indirectly, the predominant economic interest, risk, or reward in the loan.

(b)  The person:

    1. Markets, solicits, brokers, arranges, facilitates, or services loans; and

    2. Holds or has the right, requirement, or first right of refusal to acquire the loans, a share of receivables, or another direct or indirect interest in the loans or loan program.

(c)  The totality of the circumstances indicates that the person is the lender and that the transaction is structured to evade the requirements of this chapter. Circumstances that weigh in favor of a person being a lender subject to this section include, without limitation, whether the person:

    1. Indemnifies, insures, or protects an exempt entity from any costs or risks related to the loan;

    2. Predominantly designs, controls, or operates the loan program;

    3. Holds the trademark or intellectual property rights in the brand, underwriting system, or other core aspects of the loan program; or

    4. Purports to act as an agent or a service provider or in another capacity for an exempt entity while acting directly as a lender in other states.

Florida SB 146 was filed in the Florida Senate on October 9, 2023, and referred to committees on October 17, 2023.

Given similar activity in other states in recent years, we are not surprised to see this latest initiative in Florida. On November 30, 2023, Ballard Spahr will host a webinar exploring these and other threats to the scope of federal preemption for national and state banks, and their non-bank partners.