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House Bill 1347: Changes for Florida Consumer Finance Loans

Attention Florida borrowers and lenders! House Bill 1347, a new law impacting consumer finance loans, has arrived. This bill amends the Florida Consumer Finance Act, which regulates small loan amounts with higher interest rates. Essentially, it sets the rules of the game for these loans in the state. Whether you're looking for a loan to cover an unexpected expense or offer these types of loans, understanding these changes is crucial.


What is House Bill 1347?


This new bill amends the Florida Consumer Finance Act, which regulates small loan amounts with higher interest rates. It essentially sets the ground rules for these loans in the state. For more information, check out the video below.


What is the Florida Consumer Finance Act (FCFA)?


The FCFA protects borrowers and ensures fair lending practices for a specific type of loan: consumer finance loans. These are typically smaller loans, ranging from a few hundred to several thousand dollars, with higher interest rates than traditional bank loans. They can be a helpful tool for people who need quick access to cash but may not qualify for a traditional loan due to factors like credit score or employment history.


Critical Changes for Lenders: Increased Opportunity and Responsibility


  • Licensing Requirement: House Bill 1347 introduces a mandatory licensing requirement for any Florida branch offering consumer finance loans. This ensures lenders meet specific qualifications and operate according to state regulations. If you're a lender, obtaining the proper license is essential to avoid legal issues and continue operating in the state.


  • Increased Interest Rate Caps: One of the most significant changes for lenders is the increase in maximum allowable interest rates on consumer finance loans. This potentially opens doors for lenders by making these loans more profitable. However, it's important to remember that with increased profitability comes increased responsibility. Lenders must ensure transparency about interest rates and fees, adhere to fair lending practices, and comply with all the provisions outlined in House Bill 1347.



Breaking Down the New Interest Rate Structure: Impact on Borrowers and Lenders


The previous tiered interest rate structure had lower maximums. House Bill 1347 raises these caps, potentially increasing the profitability of these loans for lenders. Here's a simplified breakdown:


Florida consumer finance loan percentage changes

What This Means for Borrowers: Borrow Smart, Shop Around


With these increased maximums, you may now have access to more loan options as a borrower. However, it's crucial to be responsible. 


  • Shop around and compare rates: Don't settle for the first offer you receive. With potentially more lenders in the market due to the increased caps, you might find a better deal by comparing rates and terms from different lenders.


  • Understand the actual cost of the loan:  Factor in not just the interest rate but also any origination fees or other charges associated with the loan. This will give you a clearer picture of the total cost of borrowing.


  • Borrow only what you can afford to repay:  Consumer finance loans come with high interest rates, so it's essential only to borrow what you can realistically repay within the loan term. Missing payments can damage your credit score and lead to additional fees.


See my feature in The Penny Hoarder: How to Get an 800 Credit Score


HB 1347: Florida Consumer Finance Loans


Moving Forward


House Bill 1347 brings significant changes to Florida's consumer finance landscape. Borrowers, be aware of the new interest rates and shop around for the best options. Lenders, ensure you have the proper licensing to operate.


Do you have any questions about House Bill 1347 or consumer finance loans in Florida? 


Leave a comment below or schedule a time with us, and we'll do our best to answer them! We're also happy to create a future blog post on how to shop around for the best loan options—let us know in the comments if you'd be interested!

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