Bill Text: TX HB2592 | 2011-2012 | 82nd Legislature | Comm Sub

NOTE: There are more recent revisions of this legislation. Read Latest Draft

---

Bill Title: Relating to notice and disclosure requirements for certain credit services organizations regarding charges and consumer borrowing; providing an administrative penalty.

Spectrum: Slight Partisan Bill (Democrat 9-4)

Status: (Passed) 2011-06-17 - Effective on 1/1/12 [HB2592 Detail]

Download: Texas-2011-HB2592-Comm_Sub.html

---

82R20314 CLG-D
By: Truitt H.B. No. 2592
Substitute the following for H.B. No. 2592:
By: Truitt C.S.H.B. No. 2592

A BILL TO BE ENTITLED
AN ACT
relating to notice and disclosure requirements for certain credit
services organizations regarding charges and consumer borrowing.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 393, Finance Code, is amended by adding
Subchapter C-1 to read as follows:
SUBCHAPTER C-1. NOTICE AND DISCLOSURE REQUIREMENTS FOR CERTAIN
CREDIT SERVICES ORGANIZATIONS
Sec. 393.221. DEFINITIONS. In this subchapter:
(1) "Credit access business" means a credit services
organization that obtains for a consumer or assists a consumer in
obtaining an extension of consumer credit in the form of a deferred
presentment transaction or a motor vehicle certificate of title
loan.
(2) "Deferred presentment transaction" has the
meaning assigned by Section 341.001. The term is also referred to
as a payday loan.
(3) "Motor vehicle certificate of title loan" or "auto
title loan" means a loan in which a motor vehicle certificate of
title is given as security for the loan. The term does not include a
retail installment transaction under Chapter 348 or another loan
made to finance the purchase of a motor vehicle.
Sec. 393.222. POSTING OF FEE SCHEDULE; NOTICES. (a) A
credit access business shall post, in a conspicuous location in an
area of the business accessible to consumers:
(1) a schedule of all fees to be charged for services
performed by the credit access business in connection with deferred
presentment transactions and motor vehicle certificate of title
loans, as applicable;
(2) a notice of the name and address of the Office of
Consumer Credit Commissioner and the telephone number of the
office's consumer helpline; and
(3) a notice that reads as follows:
"An advance of money obtained through a payday loan or auto
title loan is not intended to meet long-term financial needs. A
payday loan or auto title loan should only be used to meet
intermediate short-term cash needs. Refinancing the loan rather
than paying the debt in full when due will require the payment of
additional charges."
(b) The Finance Commission of Texas may adopt rules to
implement this section.
Sec. 393.223. CONSUMER TRANSACTION INFORMATION. (a)
Before performing services described by Section 393.221(1), a
credit access business must provide to a consumer a disclosure
adopted by rule of the Finance Commission of Texas that discloses
the following:
(1) the interest, fees, and annual percentage rates,
as applicable, to be charged on a deferred presentment transaction
or on a motor vehicle certificate of title loan, as applicable, in
comparison to:
(A) interest, fees, and annual percentage rates
to be charged on other alternative financial products that a
consumer might consider, such as credit card finance charges or
pawn service charges; and
(B) late charge fees or other typical costs that
a consumer considering a deferred presentment transaction or a
motor vehicle certificate of title loan may otherwise incur in lieu
of the transaction or loan, including a bank overdraft charge or a
late charge on a utility service bill;
(2) a comparison of the amount of accumulated fees a
consumer would incur in obtaining and refinancing a deferred
presentment transaction or motor vehicle certificate of title loan
in various sample amounts that remain outstanding for a period of
two weeks, one month, two months, and three months to the amount of
equivalent fees the consumer would incur in borrowing the same
amounts on a credit card for those same extended periods; and
(3) information regarding the typical pattern of
repayment of deferred presentment transactions and motor vehicle
certificate of title loans.
(b) If a credit access business obtains or assists a
consumer in obtaining a motor vehicle certificate of title loan,
the credit access business shall provide to the consumer a notice
warning the consumer that in the event of default the consumer may
be required to surrender possession of the motor vehicle to the
lender or other person to satisfy the consumer's outstanding
obligations under the loan.
(c) The Finance Commission of Texas shall adopt rules to
implement this section.
SECTION 2. This Act takes effect January 1, 2012.