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

Texas House Bill 2592 (Prior Session Legislation)

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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