SB 392, titled the “Default Interest Transparency Act,” would add new notice, receipt, and accounting requirements for lenders of money in Florida when borrowers make payments or default on loans. The bill amends existing law to require lenders or their representatives to provide dated receipts for payments, and it creates a new section requiring written notice within 45 days after a default if the default can trigger additional interest on unpaid principal. That notice must go to the borrower and all obligors, by mail and email if available, and must explain the default, the interest rate being charged, and the amount of interest accruing daily, monthly, and annually.
The bill also limits how far back default or delinquency interest may be charged in arrears, generally barring retroactive charges beyond 45 days before the required notice is given, except in maturity-default situations. After the initial notice, lenders would have to send monthly statements showing payments received, how payments were allocated, the unpaid balance, and the current and accruing interest rates. The bill excludes consumer loans governed by chapters 520 and 560, and it imposes a penalty by forfeiting the right to charge additional interest above the nondefault rate during any period of noncompliance.
SB 392 further amends mortgage assignment law by requiring the assignor of a mortgage loan to provide, within 10 business days of request, a loan history statement showing payments and outstanding balances, with the first copy free of charge. It also requires the assignee of a mortgage loan to notify the borrower and obligor of changes to outstanding balances and to explain the default basis, calculation method, and itemized amounts claimed due, no later than 30 days after assignment and with the first statement or notice sent.
The bill’s overall impact would be to increase disclosure and documentation obligations for lenders, mortgage assignors, and assignees, while giving borrowers and obligors more timely information about defaults, interest accrual, and loan balances. It would also create a retroactive, remedial framework applying to covered loans executed before, on, or after the effective date, which could affect existing loan portfolios and servicing practices.
There is no recorded committee transcript or vote history in the provided materials, so the available context does not show detailed debate. The bill’s final status indicates it died in the Senate Banking and Insurance committee, suggesting it did not advance despite its consumer-transparency focus. Based on the text, likely points of contention would include the compliance burden on lenders, the retroactive application to existing loans, and the limits on charging default interest versus the borrower-protection goal of clearer notice and accounting.
SB 392 would amend sections 687.08 and 701.01, Florida Statutes, and create new section 687.085 to regulate lender disclosures after payment and default events. It would require dated receipts, mandatory default notices, monthly statements, loan-history statements upon request, and detailed assignment-related notices, while restricting retroactive default interest and penalizing noncompliance by suspending the ability to charge additional interest above the nondefault rate during the violation period. The bill would apply broadly to covered loans in Florida, including retroactively to loans executed before the effective date, except for certain consumer loans governed by chapters 520 and 560.
The bill appears to have been framed as a borrower-transparency and consumer-protection measure, with its title and provisions emphasizing clearer notice, accounting, and limits on surprise default interest. However, it did not advance out of the Senate Banking and Insurance committee, indicating limited legislative support or unresolved concerns. With no transcripts or votes provided, the public record here suggests a neutral-to-supportive policy rationale but insufficient momentum for enactment.
The main likely points of contention are the bill’s compliance costs and operational requirements for lenders, especially the need to send timely notices, maintain detailed payment histories, and issue monthly statements after default. Another likely issue is the bill’s retroactive application to existing loans and its restriction on charging default interest before notice, which could be viewed by lenders as interfering with contract terms and servicing practices. Supporters would likely emphasize borrower protection, transparency, and preventing unexpected interest accrual, while opponents would likely focus on administrative burden and reduced flexibility in enforcing loan defaults.