In referencing deferred presentment transaction practices, the letter described the limitations on fees that can be charged by check cashers and explicitly referenced Florida's Usury Law in section 687.02, Florida Statutes (1997), stating that “it is illegal to charge a higher rate of interest than 18 percent per annum simple interest. In the absence of statutory authorization for these types of transactions, cashing a check or exchanging currency for a fee outside the scope of Chapter 560, Florida Statutes, would constitute a loan, subject to the usury provisions of Chapter 687, Florida Statutes. Therefore, we conclude the check cashing transaction contemplated by the Code is a straightforward payment of money in exchange for a check and not an authorization to process loans outside Florida's usury laws. Moreover, “rollover” was defined as “the termination or extension of an existing deferred presentment agreement by the payment of any additional fee and the continued holding of the check, or the substitution of a new check drawn by the drawer pursuant to a new deferred presentment agreement.” § 560.402(8).
Any ‘rollover,’ ‘extension’ or ‘renewal’ of a deferred deposit check for an additional fee may constitute interest.” In the final paragraph of the letter, the Department put Advance America on notice that the Department would fully enforce chapter 560 and that Advance America should “refrain from issuing payment instruments [for which it is] not properly licensed.”On May 1, 2000, the Florida Attorney General's Office issued an advisory legal opinion to the Comptroller of Florida in response to the question: “Are so-called ‘payday loans' or like transactions subject to the state laws prohibiting usurious rates of interest? As noted above, the Code was amended by the passage of the Deferred Presentment Act in 2001. Additionally, “termination of an existing deferred presentment agreement” was defined as:[T]he check that is the basis for an agreement is redeemed by the drawer by payment in full in cash, or is deposited and the deferred presentment provider has evidence that such check has cleared.
A “payment instrument” meant “a check, draft, warrant, money order, travelers check or other instrument or payment of money, whether or not negotiable.” § 560.103(14). However, the ALJ concluded that the Department's rule did not authorize deferred deposit transactions or the fees to be charged for such transactions. The order stated that “[t]he Department has no rule, order, or declaratory statement authorizing deferred deposit transactions or repeated, consecutive deferred deposit transactions by a registered check casher.” Id. Moreover, the order stated that “[t]he rule does not establish the fees nor does it authorize ‘rollover transactions' or ‘payday loans.’ ” Id. In 2001, the Legislature amended the Code to expressly permit deferred presentment transactions subject to certain limitations and to prohibit rollover transactions. We further conclude that the Legislature did not authorize deferred presentment transactions such as those involved herein until the passage of the Deferred Presentment Act in 2001. (1993) (“All contracts for the payment of interest upon any loan, advance of money, line of credit, or forbearance to enforce the collection of any debt, or upon any obligation whatever, at a higher rate of interest than the equivalent of 18 percent per annum simple interest are hereby declared usurious.”). (1993) ( “Sections 687.02 and 687.03 shall not be construed to repeal, modify or limit any or either of the special provisions of existing statutory law creating exceptions to the general law governing interest and usury and specifying the interest rates and charges which may be made pursuant to such exceptions․”).
Moreover, “cashing” was defined as “providing currency for payment instruments, except for travelers checks and foreign-drawn payment instruments.” § 560.302(1). Hence, the transactions involved herein are subject to Florida usury laws. Historically, transactions involving the lending of money for a fee or at a particular rate of interest have been governed by Florida's usury laws. However, the Legislature from time to time has carved out exceptions to the usury laws. We find no exception to these laws in the enactment of the Money Transmitters' Code in 1994. The Code defined “check casher” as “a person who, for compensation, sells currency in exchange for payment instruments received, except travelers checks and foreign-drawn payment instruments.” § 560.103(3) (emphasis added).
Subsequently, on September 24, 1997, the Department adopted rules regulating check cashing transactions. On May 5, 1998, the Department sent a letter to Advance America, Cash Advance Centers of Florida, Inc., regarding cashing checks, fees associated with deferred deposit checks, and rollover transactions of deferred deposit checks. The opinion stated:“Payday loans” or like transactions are subject to the state laws prohibiting usurious rates of interest. After a hearing, an Administrative Law Judge (ALJ) upheld the rule, finding it did not enlarge, modify, or contravene the Code and it was a proper exercise of delegated legislative authority. Moreover, the term “cashing” was also defined in the Code as “providing currency for payment instruments, except for travelers checks and foreign-drawn payment instruments.” § 560.302(1).
These rules permitted a check casher to accept a postdated check, and capped the transaction fees for such transactions at ten percent and the verification fees at five dollars. This letter stated that customers cashing checks must receive currency, not another check or other type of payment instrument. A company registered under Chapter 560, Florida Statutes, may cash personal checks for the fees prescribed in that chapter without violating the usury laws only if such transactions are concluded and are not extended, renewed or continued in any manner with the imposition of additional fees.․Thus, to the extent that a transaction comports with the provisions of this act [chapter 560], it would not violate the usury provisions in Chapter 687, Florida Statutes. The Code's language explicitly provides, by the use of “in exchange for” and “for,” that the check for cash transaction would be a contemporaneous one. For example, the statute contemplates that a person may have to pay a fee for an authorized entity to cash a check, and the entity would then give the person money in exchange for the check. In the Deferred Presentment Act, a “deferred presentment transaction” was defined as “providing currency or a payment instrument in exchange for a person's check and agreeing to hold that person's check for a period of time prior to presentment, deposit, or redemption.” § 560.402(6).
A verification of sufficient funds in the drawer's account by the deferred presentment provider shall not be sufficient evidence to deem the existing deferred deposit transaction to be terminated.§ 560.402(10).