March 2nd and March 10th, the Florida House and Senate introduced parallel bills to amend the Florida Commercial Collection Practices Act and the Florida Consumer Collection Practices Act. See 2004 Fla. H.B. 1371; 2004 Fla. S.B. 2430. If enacted, the amended statutes would, among other things, give the Office of Financial Regulation new enforcement and supervisory powers over commercial and consumer collection agencies and increase the penalties that may be imposed for statutory violations. Increased civil penalties would include injunctive relief, revocation or suspension of registrations and imposition of administrative fines of up to $1,000 per violation. Furthermore, a violation of the federal Fair Debt Collection Practices Act now would be deemed a violation of the Florida Consumer Collection Practices Act and a violation of the Florida Consumer Collection Practices Act would be deemed a violation of the Florida Deceptive and Unfair Trade Practices Act, thus subjecting violators of these statutes to additional penalties. In terms of criminal penalties, violations of certain provisions of the Florida Consumer Collection Practices Act now would be considered felonies, rather than misdemeanors, and new misdemeanor penalties would be imposed for certain statutory violations. In addition to being subject to these increased penalties, registrants also would be required to comply with a number of new administrative requirements, such as new recordkeeping and surety bond requirements. These bills would effect significant changes in a populous state and so merit attention

    Mike Tomkies and Chuck Gall


    The Federal Reserve Board (FRB) issued final revisions to Regulation Z and the official staff commentary on March 26, 2004. Most notable is the absence of any new or revised “clear and conspicuous” standard for providing disclosures under Regulation Z.

    The FRB determined in proposed rules published on December 10, 2003 that the standard in Regulation P (i.e., that a disclosure is “reasonably understandable and designed to call attention to the nature and significance of the information” in the disclosure) is “articulate[d] with greater precision” than the standards set forth in the other regulations, including Regulation Z. The FRB proposed adding the Regulation P definition of “clear and conspicuous” to several other regulations (Regulation B, Regulation E, Regulation M, Regulation Z and Regulation DD) to provide consistent guidance among the regulations.

    While the FRBs proposal may have been intended to articulate a more precise standard, most of the 150 comment letters received by the FRB were from creditors strongly opposed to the FRBs proposal, who asserted that “the revisions would establish more burdensome standards that would be costly to implement and expose them to litigation.” Thus, while continuing to review the issues regarding the “clear and conspicuous” standard, the FRB explicitly did not adopt in final form the proposed revisions to the standard contained in the proposed rules. The previously proposed revisions to regulations other than Regulation Z were not addressed.

    The FRB also requested information in the proposed rule regarding the nature of debt cancellation and debt suspension products and comment on the FRBs guidance. The FRB reported in the final rule that the comments it received “generally confirmed that [debt cancellation and debt suspension] products are being made available by an increasing number of creditors in connection with many types of credit, on a wide and growing variety of terms.” In addition, most commenters argued that creditors should be permitted to use the same procedures used by credit card issuers when notifying consumers of a change in credit insurance provider under Section 226.9(f) when converting credit insurance to a debt cancellation or debt suspension product. Because the proposed rule merely requested comment, the final rule did not address debt cancellation or debt suspension products.

    In addition, the proposed rule to Regulation Z provided that an interpretive rule of construction would be added to Regulation Z to clarify that the word “amount” represents a numerical amount and does not allow a narrative description of the “amount.” The proposed rule was adopted with a revision for clarity that provides that the numerical amount required to be disclosed must be expressed as a dollar amount unless the text of the regulation or commentary indicates otherwise.

    Finally, with regard to certain home-secured loans, the FRBadopted with revisions the proposed rule that addressed situations where a creditor fails to provide the required rescission form or to designate an address for sending the rescission notification. The final rule provides that where the creditor fails to provide the consumer an address for sending the notification of rescission, the consumers delivery of notification to the person or address to which the consumer has been directed to send payments constitutes delivery to the creditor or assignee.

    The final rule is effective April 1, 2004 and compliance is mandatory beginning October 1, 2004.

    Judy Scheiderer and Deborah Freye