CS/CS/CS/HB 311 - Debt Settlement Services

• Creates the "Debt Settlement Services Act" establishing registration and regulation of debt settlement organizations by the Office of Financial Regulation, effective April 1, 2011, with a $1,000 registration fee and $750 annual renewal fee.

• Requires debt settlement organizations to obtain a surety bond ($50,000-$1 million) and insurance coverage for employee dishonesty, depositor's forgery, and computer fraud, with background screening of applicants and control persons.

• Prohibits debt settlement organizations from charging fees exceeding 40% of realized savings (maximum 20% of enrolled debt) and limits initial setup fees to $50; mandates 5-business-day cancellation rights and written financial analysis before service contracts.

• Establishes penalties including administrative fines up to $25,000 per violation and criminal penalties (third-degree felony) for providing services without registration or through fraud or misrepresentation.

• Exempts attorneys licensed in Florida, financial institutions, mortgage associations, and credit reporting agencies from debt settlement organization regulations.