Bill Text: TX HB291 | 2017 | 85th Legislature 1st Special Session | Introduced
Bill Title: Relating to the collection of consumer debt by debt buyers.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2017-07-25 - Referred to Investments & Financial Services [HB291 Detail]
Download: Texas-2017-HB291-Introduced.html
85S11044 EES-F | ||
By: Collier | H.B. No. 291 |
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relating to the collection of consumer debt by debt buyers. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. This Act shall be known as the Fair Consumer Debt | ||
Collection Act. | ||
SECTION 2. Subchapter D, Chapter 392, Finance Code, is | ||
amended by adding Section 392.307 to read as follows: | ||
Sec. 392.307. COLLECTION OF CERTAIN DEBT BY DEBT BUYERS. | ||
(a) In this section: | ||
(1) "Charged-off debt" means a consumer debt that a | ||
creditor has determined to be a loss or expense to the creditor | ||
instead of an asset. | ||
(2) "Debt buyer" means a person who purchases or | ||
otherwise acquires a consumer debt from a creditor or other | ||
subsequent owner of the consumer debt, regardless of whether the | ||
person collects the consumer debt, hires a third party to collect | ||
the consumer debt, or hires an attorney for collection litigation | ||
in connection with the consumer debt. The term does not include: | ||
(A) a person who acquires a charged-off debt | ||
incidental to the purchase of a portfolio that predominantly | ||
consists of consumer debt that has not been charged off; or | ||
(B) a check services company that acquires the | ||
right to collect on a paper or electronic negotiable instrument, | ||
including an Automated Clearing House (ACH) authorization to debit | ||
an account that has not been processed. | ||
(3) "Statute of limitations" means a law in this state | ||
that prescribes the period during which a person may bring a cause | ||
of action. | ||
(b) Unless otherwise expressly provided, this section | ||
prevails to the extent of any conflict between this section and any | ||
other law of this state. | ||
(c) A debt buyer may not, directly or indirectly, commence | ||
an action against or initiate arbitration with a consumer to | ||
collect a consumer debt later than the earlier of: | ||
(1) the fourth anniversary of the date of the | ||
consumer's last activity on the consumer debt; or | ||
(2) the expiration date of any applicable statute of | ||
limitations. | ||
(d) A cause of action against a consumer for collection of a | ||
consumer debt that is barred under Subsection (c) may not be revived | ||
by a payment of the consumer debt, an oral or written reaffirmation | ||
of the consumer debt, or any other activity on the consumer debt. | ||
(e) If a debt buyer is engaged in debt collection for a | ||
consumer debt for which a cause of action is barred under Subsection | ||
(c), the debt buyer, or a debt collector acting on behalf of the | ||
debt buyer, shall provide the following notice in the initial | ||
written communication with the consumer relating to debt | ||
collection: | ||
(1) if the reporting period for including the consumer | ||
debt in a consumer report prepared by a consumer reporting agency | ||
has not expired under Section 605, Fair Credit Reporting Act (15 | ||
U.S.C. Section 1681c), and the debt buyer furnishes to consumer | ||
reporting agencies information regarding the consumer debt, "THE | ||
LAW LIMITS HOW LONG YOU CAN BE SUED ON A DEBT. BECAUSE OF THE AGE OF | ||
YOUR DEBT, WE WILL NOT SUE YOU FOR IT. IF YOU DO NOT PAY THE DEBT, | ||
[INSERT NAME OF DEBT BUYER] MAY CONTINUE TO REPORT IT TO THE CREDIT | ||
REPORTING AGENCIES AS UNPAID FOR AS LONG AS THE LAW PERMITS THIS | ||
REPORTING. THIS NOTICE IS REQUIRED BY LAW."; | ||
(2) if the reporting period for including the consumer | ||
debt in a consumer report prepared by a consumer reporting agency | ||
has not expired under Section 605, Fair Credit Reporting Act (15 | ||
U.S.C. Section 1681c), but the debt buyer does not furnish to | ||
consumer reporting agencies information regarding the consumer | ||
debt, "THE LAW LIMITS HOW LONG YOU CAN BE SUED ON A DEBT. BECAUSE OF | ||
THE AGE OF YOUR DEBT, WE WILL NOT SUE YOU FOR IT. THIS NOTICE IS | ||
REQUIRED BY LAW."; or | ||
(3) if the reporting period for including the consumer | ||
debt in a consumer report prepared by a consumer reporting agency | ||
has expired under Section 605, Fair Credit Reporting Act (15 U.S.C. | ||
Section 1681c), "THE LAW LIMITS HOW LONG YOU CAN BE SUED ON A DEBT. | ||
BECAUSE OF THE AGE OF YOUR DEBT, WE WILL NOT SUE YOU FOR IT, AND WE | ||
WILL NOT REPORT IT TO ANY CREDIT REPORTING AGENCY. THIS NOTICE IS | ||
REQUIRED BY LAW." | ||
(f) A notice required under Subsection (e) must be in at | ||
least 12-point type that is boldfaced, capitalized, or underlined | ||
or otherwise conspicuously set out from the surrounding written | ||
material. | ||
SECTION 3. Section 392.402, Finance Code, is amended by | ||
adding Subsection (d) to read as follows: | ||
(d) This section does not apply to a violation of Section | ||
392.307. | ||
SECTION 4. Section 392.404(a), Finance Code, is amended to | ||
read as follows: | ||
(a) A violation of this chapter is a deceptive trade | ||
practice under Subchapter E, Chapter 17, Business & Commerce Code, | ||
and is actionable under that subchapter. This subsection does not | ||
apply to a violation of Section 392.307. | ||
SECTION 5. The changes in law made by this Act apply only to | ||
an action of a debt buyer to collect a consumer debt if the action | ||
occurs on or after the effective date of this Act. An action of a | ||
debt buyer to collect a consumer debt that occurs before the | ||
effective date of this Act is governed by the law in effect | ||
immediately before that date, and the former law is continued in | ||
effect for that purpose. | ||
SECTION 6. This Act takes effect December 1, 2017. |