Proposed Change to Florida
Consumer Collections Practices Act

As the annual legislative session in Florida begins, there comes with it a host of new hot button issues and legislative bills. One bill that has been introduced seeks to make a change to the Florida Consumer Collections Practices Act (FCCPA).

One function of a Credit Union is the collection of debts owed to the Credit Union. As part of that function, people have become familiar with the Federal Fair Debt Collections Practices Act (FDCPA), a federal law that places restrictions on debt collectors and debt collection activities. Generally speaking, a Credit Union and its employees do not meet the definition of a debt collector under the FDCPA and are therefore not subject to its rules. However, they do meet the definition of a debt collector under the FCCPA and are thus subject to its provisions and, more importantly, its prohibited practices, found in Section 559.72, Florida Statues. One of those prohibitions deals with when you may contact a debtor, by prohibiting any contact between the hours of 9:00 p.m. to 8:00 a.m. in the time zone of the debtor, unless you have the prior consent of the debtor. The issue of contact in the form of e-mails was recently addressed in Quinn-Davis v. TrueAccord Corp, 23-cv-23590, 2024 WL 4851344 (S.D.F.L. November 20, 2024).

In Quinn-Davis, the debt collector sent an e-mail to the debtor at 8:23 p.m. It was received in the debtor’s e-mail inbox at 10:14 p.m. but was not opened by the debtor until 11:44 a.m. The debtor sought to bring a class action lawsuit against the debt collector alleging that the e-mail violated the FCCPA in that it was sent between the hours of 9:00 p.m. to 8:00 a.m. in the time zone of the debtor. To prevail under this claim, the debtor must show (1) debtor was the object of a collection activity arising from a consumer debt, (2) the debt collector is a “person” under the FCCPA, and (3) whether the debt collector engaged in an act or omission prohibited by the FCCPA. The Court found “communicate with” is “the conveying of information regarding a debt directly or indirectly to any person through any medium.” In this case, the debt collector only communicated with the debtor when they opened the e-mail from the debt collector and not when the e-mail was sent or received.

In response to the holding in Quinn-Davis, Senate Bill 232 and House Bill 147 were filed that seeks to make permanent, statewide changes to the current prohibition on any contact between the hours of 9:00 p.m. to 8:00 a.m. in the time zone of the debtor. While the holding in Quinn-Davis is not binding on Florida state courts, it does provide some guidance on how courts may interpret this issue. If passed, the bills will revise Section 559.72(17), Florida Statutes, by specifying that a consumer debt collector may not communicate with a debtor by telephone call between the hours of 9 p.m. and 8 a.m. If passed and signed into law by the Governor, it will take effect July 1, 2025, and will eliminate any litigation and prohibitions on non-telephone communications between 9 p.m. and 8 a.m.

We will continue to monitor this possible change in the law. We will also monitor if it in fact becomes a law.

If you have any questions related to the FCCPA or any aspects of collections, please do not hesitate to contact one of the attorneys at Sorenson Van Leuven for legal advice.

Are You Using this Tool to
Recover Collateral?

We continue to see situations where our clients cannot locate a motor vehicle or boat that is under lien to the Credit Union. Under Florida law, one of the available tools is the ability to place a hold or a stop on a motor vehicle registration or vessel registration. This right exists under Section 320.1316, Florida Statutes. The Department of Highway Safety and Motor Vehicles (DHSMV) has a procedure for demanding the surrender of a motor vehicle or a vessel. This procedure, if followed, will prevent a registered owner of a vehicle or vessel from being able to renew their registration or obtain a replacement license plate.

This procedure is available when the loan secured by the vehicle or vessel is in default (note the loan must be in default, as defined by the terms in the loan documents). For a lienholder to add a stop or hold on a vehicle or vessel registration, two steps must be completed. First, a lienholder must complete a Notice to Surrender Motor Vehicle/Vessel, HSMV Form 82192, and mail it to the registered owner(s). This form alerts the registered owner that the vehicle must be immediately surrendered and allows the lienholder to specify an address and time for the surrender. We suggest that you serve this notice via certified mail, return receipt requested. You should retain a copy of this letter and the return receipt for your records. A copy of this form can be found on the DMV’s website at the following link:  https://www.flhsmv.gov/pdf/forms/82192.pdf.

Second, if the registered owner fails to surrender the vehicle, the lienholder must complete HSMV Form 82191. A copy of the form may be found here:  https://www.flhsmv.gov/pdf/forms/82191.pdf. When you go to the tag office, be prepared to pay any applicable fees and provide them with a copy of the Form 82192 sent to the registered owner, along with copies of the proof of mailing the form.

A registered owner may dispute the Surrender Notice and Registration Stop by filing a court action, pursuant to Section 320.1316, Florida Statutes. If the registered owner files a legal challenge and loses, the lender is entitled to recover attorney’s fees and court costs. If the registered owner files a legal challenge and wins, the registered owner is entitled to recover attorney’s fees and court costs, as to the lender.

Please do not hesitate to contact our office, should you have any questions regarding this procedure.

Staff Spotlight on Jada Graham

Jada was born and raised in Orange Park, Florida, which is a town outside of Jacksonville. She came to Tallahassee to attend college at Florida State University. She graduated in May 2024 with two bachelor’s degrees – one in Political Science and the other in International Affairs. While attending FSU, she was apart of an organization called “Black Female Future Attorneys,” an organization that provides many networking opportunities to connect with local attorneys in Tallahassee. This group is what solidified Jada’s pursuit of law.

In October 2024, Jada joined our team at SVL. She is one of our legal assistants in the collections department. She said her favorite part about working here is how personable everyone is. Plus, she mentions the little gestures here and there that we offer to show how appreciated the staff is! Jada, we are happy to have you here!

While out of the office, Jada spends time with her friends and family and always loves having something to do. A fun fact about Jada – she is a twin! Her twin brother, Jared, has been her best friend since day one. She is also a big foodie and loves trying new restaurants in the local Tallahassee area. In her downtime at home, she loves binge-watching shows and listening to music. Jada is also a huge football fan, and her favorite team is the Dallas Cowboys (her dad is from Texas, so she had no choice in who her favorite team was going to be), but she does root for her home team, the Jacksonville Jaguars, as long as they aren’t playing the Cowboys!

Jada, thank you for all you do for SVL!

Staff Spotlight on Angela Hoss

Angela was born and raised in Tallahassee. She joined the Sorenson Van Leuven team in August 2024 and has learned various duties while at the firm. Currently, Angela is recording final judgments, filing judgment lien certificates, and learning the post-judgment process to assist our Credit Union clients in their recovery.

Away from the office, Angela enjoys volunteering at a local cat rescue. She spends most of her Saturdays at the rescue helping cats get adopted. She has been volunteering at this facility for the last three years. Angela feels that volunteering with such a good team at the rescue is what pushed her to look for a good work environment. Even though she had no intentions working in the legal field, she loves that she is a good fit at the office, and she enjoys her friendly team of co-workers.

Angela also likes baking and music, specifically singing. Her favorite things to bake are cookies, cake, brownies, and cheesecakes. She loves finding an occasion where she can contribute and make something! Her singing is a hobby that she has always enjoyed. Her favorite movies as a child were musicals, and she took choir throughout most of her school years.

Angela, you have learned so much at the firm in such a short time and we are grateful to have you as a part of our team!

Day of Celebration

On January 9, 2025, we had our first ever Day of Celebration! At the event, we celebrated the wins and accomplishments of 2024. It was held at the University Center Club at Doak Campbell Stadium. We had a catered firm-wide lunch with games and prizes following. Our remote employees joined us via Zoom, which was a great addition! We look forward to 2025 and what is ahead for SVL.

New Changes to the Florida
Rules of Civil Procedure Take Effect
on January 1, 2025

The Florida Supreme Court has made numerous changes to the Rules of Civil Procedure for Court cases that will go into effect on January 1, 2025. Most of the changes are designed to streamline civil case administration, better ensure timely judicial decisions, and generally improve efficiency in civil litigation. The amendments will impact a variety of areas, ranging from pretrial procedure, discovery and motion practice, trial, and judicial case management. This article will focus on the rule changes most likely to impact the typical types of Credit Union cases.

Changes to Judicial Case Management 

The revisions to Rule 1.200 (Case Management; Pretrial Procedure) effectively overhaul case management procedures. Courts will now assign all civil cases to one of three tracks within 120 days of being filed. The three tracks are “general,” “streamlined,” and “complex” (governed by Rule 1.201). The chief judge of each judicial circuit is required to enter a standing order addressing specific case management requirements. The three tracks will not be based upon the dollar value of the case but rather based upon the amount of judicial attention needed and can take into account the local needs, resources, and automation. I anticipate that the majority of typical Credit Union cases will be designated as “streamlined” because this track is intended for cases with limited discovery needs, well-established legal issues, and an anticipated trial length of no more than three (3) days. That being said, Courts are now required to issue a case management order that specifies the projected trial period and setting deadlines for various stages of the litigation (i.e., service, resolution of motions, and mediation). The new rule will strictly enforce established deadlines and expressly disfavors continuances.

Mandatory Initial Disclosures

Under the amended Rule 1.280(a), parties must now provide initial disclosures within sixty (60) days of filing a complaint, bringing Florida’s rules more in line with the Federal Rules of Civil Procedure. These disclosures must include information such as (1) the names and contact details of individuals likely to have discoverable information; (2) a description of documents and tangible things that may be used to support claims or defenses; (3) a computation of damages; and (4) any insurance agreements that may satisfy all or part of a judgment. Additionally, there is also an ongoing duty to supplement these disclosures as new information emerges. Rule 1.280(f) imposes a duty on parties to promptly supplement or correct their disclosures or discovery responses if they learn that the information provided is incomplete or incorrect.

Changes to Conferral Requirement

Under Rule 1.202, parties are required to confer before filing non-dispositive motions (typically related to discovery or amending pleadings), promoting collaboration and the resolution of disputes without judicial intervention. Notably, parties are not required to confer on motions for summary judgment, nor those seeking injunctive relief. The duty is imposed upon the moving party to ensure a meet and confer occurs prior to the filing of the motion. The movant is also required to file a Certificate of Conferral with the motion, addressing the date and means of the conference and whether there was an agreement as to the relief sought and the efforts made to obtain such an agreement.

Exemptions to Conferral requirement are as follows: movant or nonmovant is an unrepresented party (pro se); motion to extend time for service of process; default; summary judgment; writ of possession; dismiss for failure to state claim or dismiss for failure to prosecute.

Changes to Summary Judgment

Further reform includes Rule 1.510, which clarifies the timing for filing and responding to motions for summary judgment. Responses must now be filed within sixty (60) days of the motion’s service, rather than the hearing date, ensuring parties have sufficient time to prepare.

Conclusion

The new changes to Florida’s Rules of Civil Procedure should improve the efficiency and transparency of civil litigation by introducing stricter case management practices, improving discovery, and limiting delays by both Judges and lawyers. Please do not hesitate to contact a lawyer at SVL with any questions.
These changes took effect July 1, 2023. 

Enforcing Matured Mortgage Loan

In my twenty-eight years of practicing law, I have found that clients and lawyers are often confused about when a mortgage is no longer enforceable. In Florida, a recent court case highlights the issues and the law when it comes to enforcing a mortgage loan that has matured.

On December 11, 2024, the Third District Court of Appeal issued its opinion in the case of Quintana v. Rodriquez Family Investment Partnership, LLLP. The primary facts surrounding this legal dispute involved a mortgage entered into by Mr. and Ms. Quintana on April 10, 2009, to secure the payment of a promissory note held by the Rodriquez Family Investment Partnership (RFIP). The mortgage specified a maturity date of April 10, 2012. On September 3, 2009, the parties entered into a mortgage modification to secure additional funds owed to RFIP. The mortgage modification did not modify the maturity date. The borrowers continued to pay the mortgage until August 24, 2016.

In 2018, RFIP filed suit against Ms. Quintana, as she was the only living borrower at that time. The suit sought to foreclose the mortgage. In response to the lawsuit, Ms. Quintana raised the defense that the complaint was untimely under Section 95.281, Florida Statutes.

Section 95.281 provides that the lien of a mortgage terminates after the expiration of the following time periods: (1) if the maturity date is notated on the mortgage, then five (5) years after the date of maturity; or (2) if the maturity date is not notated on the mortgage, it is twenty (20) years from the date of the mortgage. The issue in this case is whether the post-maturity payments made by Ms. Quintana extended or tolled the period in Section 95.281. The trial court granted summary judgment in favor of RFIP, and Ms. Quintana appealed that order.

On appeal, the court held that Section 95.281, Florida Statutes, is a statute of repose and not a statute of limitation. A statute of repose differs from a statute of limitation in that it prevents the cause of action from arising after its time limit. On the other hand, a statute of limitation provides a time limit for filing suit after the accrual of a cause of action.

The court found that the only way to extend the time limit in Section 95.281 is for the parties to execute an extension agreement, as provided in subsection 2 of the statute. The fact that the borrower continued to make payments beyond maturity does not extend the time period within which a party must seek to enforce its lien on the mortgaged property.

Why is this case critical? Often, Credit Unions have mortgage loans on their books where the mortgage has matured, but there is still a balance due and owing, and the borrower continues to make monthly payments. Typically, this happens when the borrower has been granted skip-payments, extensions, or had forced placed taxes or insurance added to the loan.  The Credit Union’s core system may not recognize the loan has matured, and it continues to treat the loan as ongoing, showing the next monthly due date owed. If the Credit Union is not careful, it could find itself in this situation, with an expired mortgage more than five years past maturity with no rights to foreclose on the property.

Should you have questions about mortgage maturity dates, statute of limitations, or statute of repose on mortgage loans, please do not hesitate to contact a lawyer at SVL.

Staff Spotlight on Ana Barba

Ana was born and raised in Tepatitlán de Morelos, Jalisco, a small town about fifty miles away from Guadalajara. She describes Tepatitlán de Morelos, Jalisco, as a very quiet place with old traditions, making it a very cozy city. Ana studied both Plastic Arts and Humanities in college.

In August of this year, Ana joined our SVL Team. The legal field was not actually in her field of vision for a career; however, she has found that working at the firm has been a very enriching experience. Ana has enjoyed learning many new things and likes that she is challenged every single day. Currently, she is assisting in our collections department but has also prepared demand letters for our Credit Union clients, as well as set up files in our bankruptcy department. Ana, you are an amazing asset to our team.

In her spare time away from the office, Ana loves to ride her bike and spend time with her dog, a ten-year-old Husky named Wilson. He keeps her busy with his nonstop energy! She also enjoys cooking. Her favorite is making cold dishes like ceviche and tuna salad. Ana is also an avid reader of fantasy novels, as well as mystery and horror books. One additional fun fact about Ana is she spent a couple of semesters learning French while in college and is currently retaking lessons on her own to learn even more. Ana, your drive is contagious and we love having you as a part of our team!

Staff Spotlight on Felisha Richardson

Felisa was born and raised in Tallahassee, Florida, and obtained her Associate’s degree from Tallahassee State College, followed by a Bachelor’s degree in Criminology, with a minor in Physiology and Law, from Florida State University. While growing up, Felisa was involved in cheerleading, playing volleyball, and attending church events.

Felisa joined the SVL team in July of this year and is our newest Collections Legal Assistant. She likes that Sorenson Van Leuven has a family dynamic. She says “it sounds cliché, but it’s very comfortable here. When I started, I knew this is where I wanted to be simply by the laughs I heard and by the interactions I watched.” Felisa, we are so glad you are here and love how you describe SVL!

While out of the office, Felisa enjoys spending time with her friends and family, watching movies, and having her “relaxation time.” She also loves to sing, get pampered at the hair/nail salon, and likes to aggravate her parents by making them do TikTok videos with her. That would be fun to watch!

We appreciate you, Felisa, and are grateful for you and your dedication to our firm.

Holiday Party

On Saturday, December 14, 2024, the SVL Team gathered at Jim and Michelle Sorenson’s home to celebrate the holiday season. Staff, spouses, and friends had a great time spreading Christmas cheer with snacks, drinks, and games. We are thankful that we have such a great work family to spend these special times with. Thank you to Jim and Michelle for hosting!

Legislative Update

On May 5, 2023, the Florida Legislature concluded another legislative session. During this most recent session, it passed several laws that have an impact on financial institutions and credit unions. We want to take this time to make you aware of these changes and how they may impact your credit union.

Payoff Letters

One bill that was passed during the latest session makes changes to Section 701.041, Florida Statutes, and payoff letters. Pursuant to these changes, a payoff letter must be provided in writing within ten (10) days of receipt of a written request. This is a change from the previous requirement of fourteen (14) days. The changes also address requests from third parties. If a request is made by someone other than the borrower, such as a title company, the request must include a copy of the instrument showing their entitlement to the payoff letter. Upon receipt of the request, the credit union must make the borrower aware of the third party’s request for a payoff letter.  

The changes also provide clarification on how requests must be both received and sent. Regarding requests for a payoff, they must be sent to the credit union by first-class mail, postage prepaid, common carrier service, or by e-mail, facsimile, or other electronic means at an address made available by the credit union. The request is considered received five (5) business days after it is deposited in the mail, provided it is sent by first-class mail; the day it is delivered by common carrier; or the day it is sent, if sent by e-mail, facsimile, or other electronic means. If the delivery date falls on a non-business day, it will revert to the next business day. These dates are important, as they will determine the ten-day window for responding to the request. The payoff letter must be sent to the requesting party in the manner requested in the written request for a payoff.

The legislative change also addresses what information must be provided in the letter. Under the changes, the payoff letter must provide an itemization of the amounts owed on the loan, as well as the daily interest, per diem, and a good through date for the payoff. Under the previous law, the credit union was only required to provide the total unpaid balance. The change also addresses the accuracy of the letters. Unless the mortgage is subject to a current foreclosure or bankruptcy, the credit union cannot reserve the right to change, condition, or disclaim the information provided in the payoff letter. Any attempt to do so will be void and unenforceable. Therefore, it is important that accurate information be provided in the payoff letter. The statute does provide an exception if the payoff letter contains a mistake. If there is a mistake, a corrected payoff letter must be received by the requesting party by 3:00 P.M. in their time zone at least one (1) business day before a payment is issued in reliance of the original payoff letter. If these conditions are not met, the credit union must honor the original payoff letter. 

These changes take effect October 1, 2023. 

Satisfaction of Mortgage and Judgement Lines

Not only does Section 701.041, Florida Statutes, address payoff letters, it also addresses satisfaction of mortgage and judgment liens. Whenever payment is made in full on a mortgage or a judgment lien, the credit union, its servicer, or lawyer of a judgment lien, must record a satisfaction within sixty (60) days. It is important that you record the satisfaction within sixty days, because failure to do so can entitle the borrower or judgment debtor to an award of reasonable attorney’s fees.

These changes take effect October 1, 2023.

Collateral Protection Insurance (CPI)

The Legislature also enacted regulations for Collateral Protection Insurance. Under the new statute, Section 627.9901, Florida Statutes, regulations are provided for insurers as it relates to CPI. Under this new law, a CPI policy cannot be applied any earlier than the date of lapse of coverage and must terminate when the borrower obtains acceptable insurance coverage, the mortgage is no longer a lien on the property, or a date specified in the policy or by the lender. If CPI is added, an individual policy or a certificate of insurance must be mailed by first-class mail to the borrower at their last known address. Any policy coverage must be based on the replacement cost value of the property. The Statute provides a basis for determining what the value may be and is set forth in Section 627.9905, Florida Statutes. In the event of any loss, any insurance proceeds that exceed the unpaid principal balance must be paid to the borrower.

This law took effect July 1, 2023.

Fraud

The Florida Legislature also passed a series of laws to combat real property fraud in Florida. 

Witnesses to a Recorded Instrument

Another change is to witnesses to recorded instruments. Under Section 695.26(1)(c), Florida Statutes, any witness to a recorded instrument must include their post office address beneath their signature. This is in addition to requiring that the witness’s name appear legibly under their signature. 

This change takes effect January 1, 2024.  

Quitclaim Deeds

The Legislature also addressed what it felt were inconsistencies in quitclaim deeds. A quitclaim deed is a legal instrument in Florida that transfers title to real property. Unlike a warranty deed or special warranty deed, a quitclaim deed does not include any warranties by the grantor as to the marketability of title or even its ownership interest. These are commonly used for conveyances amongst family or divorcing spouses, as well as deeds in lieu of foreclosure. The Legislature, in its desire to create uniformity, created a form quitclaim deed that is found in Section 689.025, Florida Statues. The notable change is that it requires the parcel identification number or a blank box for this formation to be included. 

These changes took effect July 1, 2023. 

Lee County Pilot Program

The Legislature created the Title Fraud Prevention Through Identify Verification Pilot Program in Lee County, Florida. Under the Pilot Program, the Lee County Clerk of Court will require the production of a government issued photo identification document from the person that is presenting a document for recording that acts as a conveyance of real property. If the recording is done in person, the Clerk will record their name and address, along with the book and page of the document being recorded. This information will be kept confidential. If the recording request is made by electronic means, the Clerk will retain a copy of the government issued photo identification document. If proper identification is not provided, the Clerk can refuse to record any document that conveys title to real property. 

This Pilot Program will continue until July 1, 2025. By no later than December 31, 2025, the Clerk must present a report regarding the Program to the Governor, Speaker, and President of the Senate. 

Statewide Notification Service

Under a new law, the Clerk of Court in every county in Florida must create and operate a free recording notification service. Under this service, the owner of real property can opt-in to receive electronic notification anytime a document is recorded that encumbers or conveys real property that they own. The notification will be sent within twenty-four (24) hours of the document being recorded. 

Mandatory compliance by the Clerks of Court is required by July 1, 2024. 

If you have any questions about these recently enacted laws and how they may impact your credit union, please do not hesitate to contact one of the lawyers at SVL for legal advice.     

What is an Interpleader and How is it Used to Protect the Credit Union in Account Disputes?

Interpleader – this type of action has come up a lot lately, and I wanted to address what it is, how it is used, and what a Credit Union may expect from such an action.  

In Florida, an Interpleader “is an equitable proceeding,” governed by Florida Rule of Civil Procedure 1.240, which enables a third party, who faces liability as a result of conflicting claims to an asset, but that has no interest in that asset, to commence an action against the competing claimants and to compel them to litigate the matter among themselves in order to determine who is entitled to the assets. The rule states as follows:

Persons having claims against the plaintiff may be joined as defendants and required to interplead when their claims are such that the plaintiff is or may be exposed to double or multiple liability. It is not ground for objection to the joinder that the claim of the several claimants or the titles on which their claims depend do not have a common origin or are not identical but are adverse to and independent of one another, or that the plaintiff avers that the plaintiff is not liable in whole or in part to any or all of the claimants. A defendant exposed to similar liability may obtain such interpleader by way of crossclaim or counterclaim. The provisions of this rule supplement and do not in any way limit the joinder of parties otherwise permitted. Fla. R. Civ. P. 1.240.

Traditionally, and in most instances, interpleader actions involve escrow agents in real estate transactions or entitlement to insurance proceeds. However, as to Credit Unions, the most common actions involve a dispute as to ownership of funds in an account following the death of the owner, a dispute following a divorce, or a final draw in a construction contract. As I am sure you are aware, it is not uncommon for a Credit Union holding money to be placed in a situation where multiple parties claim entitlement to the funds being held. While in many, if not most, of these situations, it is clear who is entitled to the funds, occasionally due to a timing issue or other intervening issues, it is not clear who is entitled to the funds. Given the competing claims to the funds, a Credit Union can wait for the parties to resolve their dispute or file an interpleader action, asking a Court to decide who should get the funds being held. In the absence of an interpleader action, a Credit Union must either give the asset or property to one of the parties claiming ownership or face a lawsuit for wrongfully giving the funds to the other claimant. An interpleader action, therefore, enables a Credit Union to turn the disputed funds over to the registry of the Court while the claimants litigate it. It is designed to eliminate multiple lawsuits over the same funds and to protect the interpleading party (here, the Credit Union) from actual or potential liability.

In Florida, to initiate an interpleader action, a Credit Union must file a complaint, alleging that it is the holder of the assets, has no claim to the assets in dispute, and does not know to which claimant the funds should be delivered, and may be exposed to double or multiple liability. The Court must then decide whether the interpleader is proper. The Court has discretion to allow the interpleader, but it may deny the relief if the Credit Union is guilty of some wrongdoing. If the Court grants the interpleader, the Credit Union is typically directed to deposit the funds in the registry of the Court, discharging the Credit Union from further liability while the claimants are given the right to litigate their claims. As to the court costs and attorney’s fees, these are typically assessed against the funds being held, if the Credit Union has either a contractual right or common law right as a “disinterested party.” The actual timeline for said actions is shorter than most actions, because it typically only involves one hearing on the matter. However, like all actions, the timing is highly dependent on the current status or backlog of matters in the Court in which it is filed.

If you have any questions about interpleader actions or how to initiate one, please do not hesitate to contact one of the lawyers at SVL for legal advice.  

Staff Spotlight on McKinley Hill

McKinley was born in Memphis, Tennessee, and moved at the age of 8 to a small town in Alabama, called Opp. Her family moved to Tallahassee, Florida, when her dad got a football coaching job at North Florida Christian where McKinley attended high school. McKinley is starting Florida State University in the fall as a sophomore due to her 36 dual enrollment credits! She is planning on majoring in social work and then attending law school to become a child advocacy lawyer. McKinley’s family are huge Florida State fans, and she says it was a dream to be accepted and attend FSU for college!

At the office, McKinley is our bankruptcy clerk. She assists the bankruptcy legal assistants with setting up their new files, preparing the Notices of Appearance for the specific cases, and e-filing them on PACER. She is also beginning to prepare reaffirmation agreements for Chapter 7 bankruptcies and proceeding to send those to either the debtor or the debtor’s attorney. We are grateful to have McKinley here with us part-time while she is attending school!

In McKinley’s spare time, away from the office, she likes to stay active. She loves to run, workout, kayak, hike, and find/walk trails around town. She also likes going to the beach with her family and exploring new restaurants and stores in Tallahassee. Thank you McKinley for all you do!

Staff Spotlight on Haley Grant

Haley was born and raised in Tallahassee, Florida. She joined the SVL team in June of this year and is one of our legal assistants in the post-judgment department. Haley assists our Credit Union clients in recovering money once a Final Judgment is entered. 

Away from the office, Haley enjoys spending time with her family, especially her sister-in-law and her niece, who is 16 months old. To Haley, Little Miss is the best entertainment. Haley enjoys watching her experience the world through her eyes. The three of them love watching movies and taking golf cart rides together. Haley has a golden doodle pup named Remi who she loves to spend time with, as well. 

We are happy to have Haley as a part of our team! Thank you for all you do for the firm.

Back to School & Making a Difference

We kicked off the new school year by sponsoring two local children and providing them with all their school supplies. It is always amazing to see our employees come together to make a difference with our gratitude projects. Not only did we donate crayons, notebook paper, erasers, pencils, earphones, backpacks, and other supply needs, but our staff’s monetary contribution also allowed our firm to donate gift cards for the children to shop for new clothes! What a huge way to help those in need. Great job SVL!

On July 26, 2023, the Consumer Financial Protection Bureau (CFPB) issued a new Supervisory Highlights Report (Summer 2023). This report provides insight into recent CFPB examinations, including issues or activities the Bureau seeks to highlight. As the Director stated, “Today’s report furthers our efforts to highlight conduct that violates federal law, including the prohibition on abusive practices in consumer financial services.”

The Summer 2023 Supervisory Highlights Report addresses the following issues: auto origination and servicing, consumer reporting, debt collection, deposits, Fair Lending, information technology, mortgage origination and servicing, payday and small-dollar lending, and remittances. I will highlight the issues that impact a Credit Union’s collection departments. The CFPB’s pronouncements regarding use of a cross-collateral clause in certain situations will be of particular interest.

The CFPB found the following instances of unfair or abusive acts or practices by auto loan services:

• Charging fraudulent interest on inflated loan balances;
• Canceling automatic payments without sufficient notice, leading to unavoidable late fees;
• Engaging in illegal collection practices after repossession.

The illegal collection practices identified by the CFPB involved enforcement of a cross-collateral clause. The CFPB was concerned with servicers who refused to allow the consumer to redeem the vehicle for the auto loan balance. In the identified situation, the servicers required that the borrower pay the full balance of the auto loan and the other cross-collateralized loan. The CFPB stated that using the cross-collateral clause in this manner is unfair and abusive.

This is the first time the CFPB has addressed the use of a cross-collateral clause. The CFPB did not indicate when and where the use of a cross-collateral clause would be legal. The CFPB did not suggest that a cross-collateral clause is always unfair and abusive. Thus, we conclude that there are situations where the use of a cross-collateral clause is legal. When and where that clause is legal remains to be seen and further guidance from the CFPB is needed.

Regarding consumer credit reporting, the CFPB found that creditors have failed in their duties under the Fair Credit Reporting Act by failing to periodically review and update their policies and procedures regarding credit reporting and credit disputes. The Bureau also found that creditors were failing to conduct a reasonable investigation of direct disputes, failing to notify consumers that a dispute had been determined to be frivolous or irrelevant, and failing to identify the additional information needed to investigate a dispute.

In addition, the CFPB found lenders whose dispute handling process had changed but the policies and procedures had not been changed. This is a reminder to schedule regular reviews of policies and procedures to be sure they reflect current practices and comply with applicable law. For instance, it is time for a re-draft if your policies and procedures do not reflect your current practices.

The additional areas of concern addressed by the CFPB in the Supervisory Highlights included:  concerns about fair lending, involving pricing discrimination and discriminatory lending restrictions; lenders who failed to implement adequate information technology security controls; mortgage origination and mortgage servicing compliance; and failure to comply with the Remittance Rule under Regulation E. A full copy of the Supervisory Highlights can be found here.

Sorenson Van Leuven will continue to monitor CFPB advice and provide additional guidance regarding the use of cross-collateral clauses. If you have further questions or would like us to review your current use of a cross-collateral clause, please do not hesitate to contact one of our lawyers.

-Jim

FinCEN and Beneficial Ownership Information Reporting Requirements

The Financial Crimes Enforcement Network (“FinCEN”) is an agency of the Treasury Department that operates to safeguard the financial system from illicit use and to combat domestic and international money laundering, terrorist financing, and other financial crimes. 

As a part of the Corporate Transparency Act, FinCEN has issued a Final Rule that will take effect on January 1, 2024, which will require certain entities to file reports that identify two categories of individuals: (1) the beneficial owners of the entity and (2) the individuals who have filed an application with specified governmental authorities to create the entity or register it to do business. 

The Final Rule identifies two types of “reporting companies,” domestic and foreign. A domestic reporting company is a corporation, limited liability company, or any entity created by the filing of a document with the secretary of state or any similar office under the law of a state or Indian tribe. 

The Final Rule defines a “beneficial owner,” as anyone who, directly or indirectly, owns or controls at least 25% of the ownership interests of a company registered to do business in the U.S. or someone exercising “substantial control” over such a company. 

The requirement will necessitate the reporting of beneficial ownership information, which includes name, birthdate, and address for each beneficial owner. In addition to these three pieces of information, a unique identifying number from an identification document acceptable to FinCEN will need to be provided, along with an image of that document, for each beneficial owner. 

The intention of this reporting requirement is to prevent criminal actors from using anonymous shell companies and other corporate structures to hide their illicit gains. These criminal actors could include oligarchs, terrorists, drug and/or human traffickers. In support of this effort to stop such illicit actors, Credit Unions and Banks will have to collect beneficial ownership information from the companies they do business with. 

The Final Rule provided a timeline for reporting entities: (1) a reporting entity that was created or registered before January 1, 2024, will have one year (January 1, 2025) to file their initial reports and (2) reporting entities created or registered after January 1, 2024, will have thirty days after creation or registration to file their initial reports. 

To accommodate the beneficial ownership information, FinCEN is developing a Beneficial Ownership Secure System (“BOSS”) to store and secure the data it receives. FinCEN’s current rules state that Credit Unions and other financial institutions may only have limited access to BOSS data. Additionally, and of more concern, Credit Unions and other financial institutions may be liable for civil or criminal penalties if they do not safeguard beneficial ownership information. Sorenson Van Leuven will continue to monitor for more information and guidance regarding potential penalties for failure to comply with the reporting requirements. 

FinCEN is set to provide more guidance in preparation for the January 1, 2024, effective date. Future guidelines will help Credit Unions comply with this new reporting requirement. Furthermore, FinCEN is set to prepare a “Small Entity Compliance Guide” that will help inform small entities required to file reports. 

Sorenson Van Leuven will continue to review the Final Rule and update its clients on any additional guidance provided by FinCEN in preparation of the effective date. If you have any questions or concerns regarding the beneficial ownership information reporting requirement, do not hesitate to reach out to SVL. 

Recent Changes to Service of Process in Florida

In 2022, the Florida Legislature passed S.B. 1062, which made significant changes to the procedures for service of process in the state of Florida. The changes impact service of process on business entities but do not change the procedure for service of process on an individual. S.B. 1062 took effect on January 2, 2023. 

Service of process is the process or procedure by which a party is given notice of a pending lawsuit. Without proper service of process, the lawsuit or legal action cannot proceed forward. If a party files a legal action and cannot complete service of process, the lawsuit will be dismissed.

The way the statute is structured is to promote service of process first on the business entity’s registered agent (if one exists). A registered agent is a person appointed by the business to accept service of process on behalf of the business entity. In Florida, a registered agent can be a person or business entity. Some business entities, such as corporations, are required to appoint a registered agent. Financial Institutions, including Credit Unions, are not required to appoint a registered agent but can appoint one under Section 655.0201, Florida Statutes.

If service cannot be accomplished on a registered agent, then service of process can be made on the business entity’s representatives (owners or officers). The party seeking to serve process only has to attempt service of process once on the registered agent. After one good faith attempt, the party can proceed to serve the appropriate business entity’s representatives, identified in the statute. For example, when serving process on a corporation, serving the board chair, president, any vice president, secretary, treasurer, or person listed on the corporation’s latest annual report will be sufficient. If attempting to serve a limited liability company, the party can serve the managers, if manager-managed or a member (owner).

As a last resort, service can be had on the Florida Secretary of State or through electronic means. To serve the Florida Secretary of State, service can be accomplished by electronic filing, personal service through process server or sheriff, or through certified mail. The statute also provides an alternative to service on the Florida Secretary of State, which is the ability to serve through other “reasonable means.” This requires that a party file a motion with the Court to establish their right to use the alternative means method. These alternative means can include email or other electronic means. If the court approves the motion, then the party can effectuate service via email or other approved electronic means.  

The changes should make litigation against business entities less expensive, time consuming, and eliminate some of the prior disputes over service of process on a business entity. We do recommend that each Credit Union have a registered agent for service of lawsuits and other legal notices. Should you have questions about this new law or the appointment of a registered agent, please do not hesitate to contact a lawyer at Sorenson Van Leuven Law Firm.   

Staff Spotlight on Jazmin Gallien

Jazmin is originally from Louisiana. She moved to Florida in 2021 after her dad and her twin brother, Jordan, persuaded her to come to the sunshine state! She joined the SVL Team in February of 2023 and she is a legal assistant in our post-judgment department. Jazmin is a mother of three wonderful children, ages 7, 8, and 10. Alijah, 7, her youngest son, loves karate and enjoys lego creating; Ariana, 8, enjoys dancing, being silly, and riding her bike; and Dina, 10, likes swimming, reading, singing, and dancing! 

When Jazmin is away from the office, she enjoys spending time with her boyfriend, going to the beach, and sitting at a local lake here in Tallahassee to watch the wildlife. She also spends much of her time at the park with her kids, nieces, and nephews who keep her busy! One fun fact about Jazmin is that she likes to cook creole/Cajun cuisine – gumbo, jambalaya, and crawfish etouffee. Her favorite thing is to bake. She makes an incredible mud pie and banana pudding. Jazmin would love to own her own café one day. 

Jazmin, thank you for all you do at Sorenson Van Leuven! We look forward to many more years with you.

Staff Spotlight on Magdalene Nwokeji

Magdalene joined the SVL Team in February of this year as our newest bankruptcy legal assistant. Originally from Sarasota, Florida, Magdalene came to Tallahassee for college and stayed here after graduating, seeking a job. After the pandemic, she was interested in the concept of consumer debt and how it related to the financial system. Sorenson Van Leuven caught her eye as she was browsing the internet. She appreciated the personalized and educational touch that the website had compared to other law firms. She applied for the open position we had available and now Magdalene is apart of the Bankruptcy Team, assisting our clients with Ch. 7 and Ch. 13 cases that have been filed by their Credit Union members. 

Away from the office, Magdalene enjoys spending time with friends, reading, and being “in the know” about world and political events. She also likes to dance and listen to music. She loves makeup and all things fashion too! Magdalene also loves cats and considers herself a “cat whisperer.” She doesn’t own any cats, but every cat that she meets loves her (even ones that she’s never met before). There is one cat in particular who visits her house, which she considers to be “unofficially officially” hers now. 

We are thankful to have Magdalene as a part of our Sorenson Van Leuven Team. She is a valuable asset to our firm and we appreciate all that she does!

Out of Office

On Saturday, May 13, SVL hosted a Family Fun Day at a local hangout – District 850. We enjoyed bowling, laser tag, and fun arcade games for the afternoon. It was a fun time away from the office spending time with our co-workers, their spouses, and their children. We are looking forward to the next staff get-together later this year!

2023 CUCP Summit

Our firm sponsored and attended the 2023 Credit Union Collection Professionals (CUCP) Summit in Orlando on May 17-19, 2023. The mission of the CUCP is to develop, educate, promote, and provide a professional support system to all people in the Credit Union movement. Attorney Steve Orsillo from our office spoke on the topic of Negotiation Strategies and was also a part of a panel on Legal Hot Topics. It was a great time networking with some of our current Credit Union clients and also building new relationships too. Thank you CUCP for including us!