Is postdating a check illegal in florida


04-Oct-2017 13:15

We approve the holding of the Fourth District in Mc Kenzie that the Legislature did not approve or authorize such transactions when it created the Code in 1994 and that these transactions are, in effect, loans subject to Florida's usury laws. The issue before this Court is whether chapter 560, Florida Statutes (Supp.1994), which is titled the “Money Transmitters' Code” (herein referred to as “the Code”), authorized certain financial transactions referred to as deferred presentment transactions.Nor am I persuaded that the passage of the “Deferred Presentment Act” in October 2001 was intended by the legislature to confirm the prior legality of the practice.Indeed, it appears the legislation undertook to regulate and limit these schemes.Most relevant to the instant case is section 560.404(14), which states, “No deferred presentment provider or its affiliate may accept or hold an undated check or a check dated on a date other than the date on which the deferred presentment provider agreed to hold the check and signed the deferred presentment transaction agreement.” Additionally, section 560.404(18) states: No deferred presentment provider or its affiliate may engage in the rollover of any deferred presentment agreement.A deferred presentment provider shall not redeem, extend, or otherwise consolidate a deferred presentment agreement with the proceeds of another deferred presentment transaction made by the same or an affiliated deferred presentment provider.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).

Ace Cash, 827 So.2d at 299 (Griffin, J., dissenting). However, the Fourth District decided that it is inappropriate to use an amendment for this purpose when the amendment was enacted seven years after the original statute.

Clearly, it is because the customer does not have the funds readily available to honor the check.

Thus, there can be no question that what takes place is essentially an advance of money or a short-term loan. The Fourth District certified that its holding was in conflict with the Fifth District's holding in Ace Cash, and this review follows.

Townes of Akerman, Senterfitt, Orlando, FL, and Mitchell Berger of Berger Singerman, Fort Lauderdale, FL, for Petitioner. In a deferred presentment transaction, the customer is advanced money in exchange for a check which the lender agrees not to immediately cash.

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A number of similar transactions subsequently took place, with Betts continuing to replace one check with another check, each time paying a fee, until December 1997 when she redeemed all checks with cash. Following a trial court decision against Betts based on the Fifth District's earlier decision in Ace Cash, the Fourth District reversed and held that the deferred payment transactions between Betts and NCA were essentially loan transactions and were not authorized with the Legislature's enactment of the Money Transmitters' Code in 1994. The Fourth District decided that the short-term loan agreements entered into between Betts and NCA contrasted sharply with the check cashing transactions authorized by the Code: There is no question that what takes place is something more than simple check cashing.In fact, this reading of the plain language of the statute is well articulated in Judge Griffin's dissent in Ace Cash: The fact that Chapter 560, which regulates check cashing operations, does not expressly prohibit rollovers and deferred presentments, does not mean that the usury laws are not violated by such devices.