Florida Banking February/March 2025

GOVERNMENT RELATIONS

FLORIDA’S 2025 LEGISLATIVE SESSION: THE WHEELS ARE ALREADY IN MOTION

BY ANTHONY DIMARCO FBA EXECUTIVE VICE PRESIDENT AND DIRECTOR OF GOVERNMENT AFFAIRS

T wo weeks after the general election, the Florida Legislature met in Organizational Session, where the Senate President and House Speaker were officially elected to their respective posts. All legislators were sworn in and became official for the next two years. Soon thereafter, committee and subcommittee chairs were announced, and committee and subcommittee members were named before the holidays. More importantly, bills were being drafted and filed. We are expecting a flurry of bill filings as we head to the official start of the Session on March 4. The FBA has also been busy leading up to the Session. We’re working on a few proposals and expecting to take a few defensive positions. FBA-Proposed Legislation IOTA One of FBA's top legislative priorities is to reform the Interest on Trust Accounts (IOTA) program. In 2023, the Florida Supreme Court amended the rules of the program at the request of the Florida Bar to require that all lawyers achieve a rate that is “[w] hen the Wall Street Journal Prime Rate (“indexed rate”) is between 325 and 499 basis points (3.25% and 4.99%), the minimum interest rate paid net of all fees and service charges (“yield”) must be no less than 300 basis points (3.00%) below the indexed rate in effect on the first business day of each month. When the indexed rate is 500 basis points (5.00%) or above, the yield must be no less than 40% of the indexed rate in effect on the first business day of each month.” The FBA immediately filed a Motion for Rehearing and several weeks later, the Supreme Court originally granted that motion, requiring the Florida Bar to report on the implementation of the new rule and providing an opportunity for the FBA and other interested parties to file a response to the Bar’s report.

On Aug. 7, 2024, the Court dismissed the Motion for Rehearing, allowing the Bar to continue implementing the new rule. Since the rule change, the Florida Bar has collected almost $300M in revenue, a dramatic increase of which they were only able to spend $34M, forcing them to place $143M in reserves. The Florida Bar's IOTA program helps to fund many of the needs of those who cannot pay for legal representation in our state. The FBA realizes the program's value and does not seek to make this program go away. However, the dramatic rate change has caused many community banks to question whether they will be able to continue to serve their law customers by offering these services. The FBA has been advocating for the Florida Legislature to determine the appropriate rate, quarterly, and for the rate to be announced through Florida's Chief Financial Officer. FBA members believe a fairer rate of 68% of Fed Funds with a comparability standard, is more appropriate and would still provide more than satisfactory funding for the 35 legal aid organizations who benefit from such funding. Fraud The FBA has also begun working on legislation, and other efforts, to curb fraud. The first legislative piece is to criminalize mail theft or possessing a counterfeit mailbox key. We hope this will help stop check theft and washing. We expect more ideas, legislative and communicative, once our Anti-Fraud Task Force is established. Legislation Proposed by Others As of Jan. 13, only 160 bills had been filed, leaving an estimated 1,700 more — plus committee bills and amendments — to be filed. There will be many more bills to review before March. Some of the proposed legislation and ideas include: • Substitute Service of Process in Vulnerable Adult

Government Relations, Continued on page 24

16 — FLORIDA BANKING THE VOICE OF FLORIDA BANKING