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
 
 
  By: Truitt, et al. (Senate Sponsor - Carona) H.B. No. 2592
         (In the Senate - Received from the House May 13, 2011;
  May 13, 2011, read first time and referred to Committee on Business
  and Commerce; May 19, 2011, reported adversely, with favorable
  Committee Substitute by the following vote:  Yeas 8, Nays 0;
  May 19, 2011, sent to printer.)
 
  COMMITTEE SUBSTITUTE FOR H.B. No. 2592 By:  Carona
 
 
A BILL TO BE ENTITLED
 
AN ACT
 
  relating to notice and disclosure requirements for certain credit
  services organizations regarding charges and consumer borrowing;
  providing an administrative penalty.
         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 title loan.
               (2)  "Deferred presentment transaction" has the
  meaning assigned by Section 341.001. For purposes of this chapter,
  this definition does not preclude repayment in more than one
  installment.  The term is also referred to as a payday loan.
               (3)  "Motor vehicle title loan" or "auto title loan"
  means a loan in which an unencumbered motor vehicle 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 and on any Internet
  website, including a social media site, maintained by the credit
  access business:
               (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 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 immediate
  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 in a form prescribed by the commission:
               (1)  the interest, fees, and annual percentage rates,
  as applicable, to be charged on a deferred presentment transaction
  or on a motor vehicle title loan, as applicable, in comparison to
  interest, fees, and annual percentage rates to be charged on other
  alternative forms of consumer debt;
               (2)  the amount of accumulated fees a consumer would
  incur by renewing or refinancing a deferred presentment transaction
  or motor vehicle title loan that remains outstanding for a period of
  two weeks, one month, two months, and three months; and
               (3)  information regarding the typical pattern of
  repayment of deferred presentment transactions and motor vehicle
  title loans.
         (b)  If a credit access business obtains or assists a
  consumer in obtaining a motor vehicle 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.
         Sec. 393.224.  ADMINISTRATIVE PENALTY. The consumer credit
  commissioner, in accordance with rules adopted by the Finance
  Commission of Texas, may assess an administrative penalty against a
  credit access business that knowingly and wilfully violates this
  subchapter or a rule adopted under this subchapter in the manner
  provided by Subchapter F, Chapter 14.
         SECTION 2.  Notwithstanding Section 393.223(a), Finance
  Code, as added by this Act, a credit access business is not required
  to comply with that section until the Finance Commission of Texas
  prescribes the form required by that section.
         SECTION 3.  This Act takes effect January 1, 2012.
 
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