The Florida Legislative Session concluded its regular order this evening but extended Regular Session through Sunday to vote on the state budget and complete a tax cut package. All other legislation has been complete. In the coming weeks, we will have a more thorough legislative report for you on all bills that passed and failed that directly and indirectly impact the industry. Here are the high priority issues.
Mortgage Broker Exemption for Securities Dealers- PASSED
In 2017 the FSDA voted to advocate for passage of legislation that would exempt securities professionals from having to obtain a separate mortgage brokers license in order to have a general conversation about a mortgage or refer a client to a mortgage broker. Last session, legislation passed to remedy this issue but was combined with another mortgage bill regulating private lenders and vetoed by Governor Rick Scott. This year, the mortgage broker exemption- House Bill 193 by Representative Rick Stark (D-Weston) and Senate Bill 314 by Senator Dennis Baxley (R-Ocala) were stand-alone bills that passed the Legislature unanimously in both chambers. Given the feedback the industry has received from the Governor’s Office, he is expected to sign the legislation. The bill goes into effect July 1, 2018. Attached is the legislation.
Vulnerable Investor Legislation-FAILED
After several years of working within the industry to build consensus around a bill to codify the FINRA rule on giving firms tools to pause transactions they believe exploit their customers, bills were filed in the House and Senate in 2018 to address the problem. Senate Bill 662 by Senator Stargel (R-Lakeland) and House Bill 681 by Representative Byron Donalds (R-Naples) moved through the legislative process with a bit of give and take – and some compromise. The House bill (also attached) passed the full House in late February, while simultaneously the Senate bill moved along. Both bills passed almost unanimously out of several different committees but not without many tremendous amounts of work with the industry, the OFR, the Elder Law Section of the Bar legislative staff and members. In the end, the bill that passed the House and was poised to pass the Senate was generally a compromise, reflecting our attempts to resolve concerns with the bill as they arose in committee from experienced legislators.
However, Monday of this week, the Governor’s Office called the bill sponsors and us to deliver the news that the Governor opposed the bill and requested the Senate sponsor not push the bill the final week of Legislative Session. According to his staff, the Governor was uncomfortable with the entire concept of government “reaching in” and halting transactions and giving advisors power to hold transactions, even if they were suspected of financial fraud. The Governor’s opposition came late in the process, and after their office had spent weeks on the Parkland shooting. Although we tried on numerous occasions, and CEOS and executive level people weighed in with the Governor asking him to recede from his position, the Governor didn’t waiver from his initial opposition to “the concept” contained within the bill. The bill did not pass the Senate and thus died. Although we felt this may be a multi-year effort from the time the bill was filed, it seemed we had a high probability of getting this bill passed in the first year. Unfortunately, that did not happen, and we will need to gear up for 2019. Individual board members with the FSDA, FSI, and SIFMA who helped craft the initial legislation and amendments/negotiations for this bill deserve our gratitude. While this bill did not cross the finish line, most of the outstanding issues with various stakeholders were resolved and converted into a legislative product we believed was going to be signed into law. We anticipate a successful 2018 as we will need to gear up in the fall once again. The house sponsor has agreed to sponsor the bill again in 2019 and looks forward to working with the industry on securing the support of the Legislature and the Governor.
FINANCIAL LITERACY - FAILED
House Bill 323 by Representative Fitzenhagen and Senate Bill 88 by Senator Dorothy Hukill both provided mandatory 3 hours of coursework in financial literacy at Florida High Schools. Today, on the last day of Session, the House and Senate got into a standoff over whether the course should be a mandatory course required for students to graduate. The House preferred a softer approach that had no requirements but gave school districts the option, while the Senate pushed a mandated course that students must take to graduate. Neither side budged or compromised and both efforts failed late in the evening. The Senate sponsor already vowed to bring the issue back again in 2019.
Again, a more thorough report on all bills monitored and lobbied by the FSDA will be sent in the coming weeks, but these were the big-ticket items for 2018.
Sean C. Stafford
SVP and Director, MWC
McGuireWoods Consulting LLC
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