Dear FIBA Member,
On Feb. 15, 2024, the Florida House of Representatives unanimously passed (118 YEAS / 0 NAYS) an amended version of Florida House Bill 585 (“HB 585”). As you know from our previous alerts and programs, the original version of HB 585 would have required financial institutions including Florida-chartered banks, trust companies, credit unions, international bank agencies, international branches of foreign banks and qualified public depositories or QPDs (collectively, “Financial Institutions”) to file “termination-of-access” reports (each a “Report”) with the Florida Office of Financial Regulation (OFR), when terminating, suspending, or taking any “similar action restricting” a customer’s (or credit union member’s) account access, unless such action was a result of:
(i) the customer or member initiating the change;
(ii) a lack of activity in the account; or
(iii) the account being presumed unclaimed, pursuant to Florida unclaimed property laws.
Following receipt of the Report, the OFR would have 90 days to investigate if the action “was taken in bad faith as substantiated by competent and substantial evidence that was known or should have been known to the [F]inancial [I]nstitution at the time” of the action. A report reflecting the OFR’s findings would then be sent to the Attorney General, the Chief Financial Officer, and the customer with a full finding of the investigation.
AMENDED HB 585
The amended version of HB 585 (“Amended Bill”) removes the requirement that a Financial Institution automatically file a Report each time it terminates access to an account and replaces it with a customer complaint process. The Amended Bill provides that a customer who reasonably believes that a Financial Institution has terminated or restricted access to the customer’s account in “bad faith” may within 30 calendar days file a complaint with the OFR. Within 30 days of receiving such complaint the OFR must notify the Financial Institution, which then has 30 days to file a Report with the OFR. Once the Report is received the OFR must investigate to determine if the action was taken in “bad faith.” If the OFR determines the action was taken in “bad faith,” the OFR must then notify, and provide a copy of the findings, to the Attorney General, the Florida CFO and the customer. The rest of the Amended Bill remains essentially unchanged from the original version, including the creation of a private right of action that will permit the customer to sue the Financial Institution within 12 months of the finding by the OFR of “bad faith.” The term “bad faith” remains undefined in the Amended Bill and there is lack of clarity as to what factors the OFR should consider when making a determination of “bad faith.”
HB 585, even as amended, creates serious concerns for Financial Institutions as it would result in significantly increased costs, regulatory burden and risk of frivolous litigation. It would directly impact a Financial institution’s decision-making process for closing accounts and amount to an unnecessary and unwarranted overreach and intrusion by the State into the business affairs and activities of Financial Institutions.
You can view a copy of the Amended Bill using this link: https://www.flsenate.gov/Session/Bill/2024/585/BillText/c2/PDF
FIBA’s Advocacy Efforts
We are coordinating a visit to Tallahassee to meet with President Kathleen Passidomo (R-Naples) and other members of the Florida Senate to discuss our objections to the Amended Bill and its unintended consequences. We will update our members as this further develops.