Bill Text: TX HB3275 | 2023-2024 | 88th Legislature | Comm Sub
Bill Title: Relating to the regulation of consumer credit transactions and the regulatory authority of the consumer credit commissioner; changing a fee.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2023-04-25 - Comm. report sent to Local & Consent Calendar [HB3275 Detail]
Download: Texas-2023-HB3275-Comm_Sub.html
88R12092 JES-F | ||
By: Lambert | H.B. No. 3275 |
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relating to the regulation of consumer credit transactions and the | ||
regulatory authority of the consumer credit commissioner; changing | ||
a fee. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Section 393.628, Finance Code, is transferred to | ||
Subchapter C, Chapter 14, Finance Code, redesignated as Section | ||
14.113, Finance Code, and amended to read as follows: | ||
Sec. 14.113 [ |
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ENDOWMENT. (a) As part of the licensing fee and procedures | ||
described under Subchapter G, Chapter 393 [ |
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credit access business or [ |
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business license shall pay to the commissioner an annual assessment | ||
to improve consumer credit, financial education, and | ||
asset-building opportunities in this state. The annual assessment | ||
may not exceed $200 for each license as specified by the finance | ||
commission. | ||
(b) The commissioner shall remit to the comptroller amounts | ||
received under Subsection (a) for deposit in an interest-bearing | ||
deposit account in the Texas Treasury Safekeeping Trust Company. | ||
Money in the account may be spent by the finance commission only for | ||
the purposes provided by this section. Amounts in the account may | ||
be invested and reinvested under the prudent person standard | ||
described by Section 11b, Article VII, Texas Constitution [ |
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and the interest from those investments shall be deposited to the | ||
credit of the account. | ||
(b-1) The expenses of managing the investments may be paid | ||
from the deposit account described by Subsection (b). | ||
(c) The Texas Financial Education Endowment shall be | ||
administered by the finance commission to support statewide | ||
financial education and consumer credit building activities and | ||
programs, including: | ||
(1) production and dissemination of approved | ||
financial education materials at licensed locations; | ||
(2) advertising, marketing, and public awareness | ||
campaigns to improve the credit profiles and credit scores of | ||
consumers in this state; | ||
(3) school and youth-based financial literacy and | ||
capability; | ||
(4) credit building and credit repair; | ||
(5) financial coaching and consumer counseling; | ||
(6) bank account enrollment and incentives for | ||
personal savings; and | ||
(7) other consumer financial education and | ||
asset-building initiatives as considered appropriate by the | ||
finance commission. | ||
(d) In implementing this section, the finance commission | ||
may make grants and may solicit gifts, grants, and donations for | ||
this purpose. | ||
(e) The finance commission may partner with other state | ||
agencies and entities to implement this section. | ||
(f) The finance commission shall adopt rules to administer | ||
this section. | ||
SECTION 2. Section 14.209(a), Finance Code, is amended to | ||
read as follows: | ||
(a) In addition to other remedies for the enforcement of a | ||
restraining order or injunction, the court in which an action is | ||
brought under Section 14.208(c) [ |
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a receiver for the defendant's property and business, including a | ||
document relating to the property or business, as the court | ||
considers reasonably necessary to prevent a violation through use | ||
of the property and business. | ||
SECTION 3. Section 156.554(b), Finance Code, is amended to | ||
read as follows: | ||
(b) The commissioner: | ||
(1) may provide grants in an aggregate amount of not | ||
more than $100,000 each year to an auxiliary mortgage loan activity | ||
company or another nonprofit organization for the purposes of: | ||
(A) providing to consumers financial education | ||
relating to mortgage loans; and | ||
(B) providing to other nonprofit organizations | ||
training in order for those organizations to provide to consumers | ||
financial education relating to mortgage loans; | ||
(2) shall make disbursements from the fund to pay | ||
claims made under Section 156.555 that meet the requirements for | ||
payment under that section; and | ||
(3) may make disbursements from the fund to provide | ||
support for statewide financial education, activities, and | ||
programs specifically related to mortgage loans for consumers, | ||
including activities and programs described by Section 14.113(c) | ||
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SECTION 4. Section 180.002(5), Finance Code, is amended to | ||
read as follows: | ||
(5) "Dwelling" has the meaning assigned by Section | ||
103(w) [ |
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1602(w) [ |
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SECTION 5. Section 303.015(c), Finance Code, is amended to | ||
read as follows: | ||
(c) A variable rate agreement for credit extended primarily | ||
for personal, family, or household use must include the disclosures | ||
identified for variable rate contracts required by regulations | ||
issued by the Federal Reserve Board and the Consumer Financial | ||
Protection Bureau under the Truth in Lending Act (15 U.S.C. Section | ||
1601 et seq.), as amended, except that if that Act does not apply | ||
because of the amount of the transaction, the following disclosure | ||
must be included in a size equal to at least 10-point type that is | ||
boldface, capitalized, underlined, or otherwise set out from | ||
surrounding material so as to be conspicuous: | ||
"NOTICE TO CONSUMER: UNDER TEXAS LAW, IF YOU CONSENT TO THIS | ||
AGREEMENT, YOU MAY BE SUBJECT TO A FUTURE RATE AS HIGH AS 24 PERCENT | ||
PER YEAR." | ||
SECTION 6. Section 303.402(a), Finance Code, is amended to | ||
read as follows: | ||
(a) A person who contracts for, charges, or receives under a | ||
contract subject to Chapter 342, 345, 346, 347, 348, or 353, | ||
including a contract for an open-end account, a rate or amount of | ||
interest or time price differential that exceeds the maximum | ||
applicable rate or amount authorized by the applicable chapter or | ||
this chapter is subject to a penalty for that violation determined | ||
under Chapter 349. | ||
SECTION 7. Sections 308.002(c) and (e), Finance Code, are | ||
amended to read as follows: | ||
(c) In interpreting this section, an administrative agency | ||
or a court shall be guided by the applicable advertising provisions | ||
of: | ||
(1) Part C of the Truth in Lending Act [ |
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(2) Regulation Z (12 C.F.R. Parts 226 and 1026) [ |
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Reserve System and the Consumer Financial Protection Bureau; and | ||
(3) the Official Staff Commentary and other | ||
interpretations of that statute and regulation by the Board of | ||
Governors of the Federal Reserve System, the Consumer Financial | ||
Protection Bureau, and the staff of those agencies [ |
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(e) A creditor who complies with the Truth in Lending Act | ||
(15 U.S.C. Section 1601 et seq.) and [ |
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(12 C.F.R. Parts [ |
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transaction is considered to have fully complied with this section. | ||
SECTION 8. Section 341.301(a), Finance Code, is amended to | ||
read as follows: | ||
(a) In each advertisement that purports to offer credit | ||
regulated by this subtitle, Subtitle C, or Chapter 394, the | ||
advertiser shall disclose the legal or registered name of the | ||
advertiser and: | ||
(1) shall disclose the street address of the | ||
advertiser's place of business unless the advertisement: | ||
(A) is located on the premises of the | ||
advertiser's place of business; or | ||
(B) is broadcast by radio or television; or | ||
(2) if the advertisement is broadcast by radio or | ||
television, shall: | ||
(A) disclose the telephone number of the | ||
advertiser; and | ||
(B) comply with the applicable disclosure | ||
requirements of Regulation Z (12 C.F.R. Parts 226 and 1026) [ |
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SECTION 9. Section 341.401(b), Finance Code, is amended to | ||
read as follows: | ||
(b) In interpreting this section, a court or administrative | ||
agency shall be guided by the Equal Credit Opportunity Act (15 | ||
U.S.C. Section 1691 et seq.) and regulations under and | ||
interpretations of that Act by the Federal Reserve Board and the | ||
Consumer Financial Protection Bureau to the extent that Act and | ||
those regulations and interpretations can be made applicable to | ||
conduct prohibited by this section. | ||
SECTION 10. Section 341.402(b), Finance Code, is amended to | ||
read as follows: | ||
(b) The liability of a person under this section is instead | ||
of and not in addition to that person's liability under the Equal | ||
Credit Opportunity [ |
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Act (15 U.S.C. Section 1691 et seq.). If the same act or omission | ||
violates Section 341.401 and applicable federal law, the person | ||
aggrieved by that conduct may bring a legal action to recover | ||
monetary damages either under this section or under that federal | ||
law, but not both. | ||
SECTION 11. Section 341.502(a-1), Finance Code, is amended | ||
to read as follows: | ||
(a-1) If the terms of the agreement for a loan under | ||
Subsection (a) were negotiated in Spanish, a copy of a summary of | ||
those terms and other pertinent information shall be provided to | ||
the debtor in Spanish in a form identical to disclosures required | ||
for a closed-end transaction under 12 C.F.R. Section 1026.18 | ||
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SECTION 12. Section 341.602(f), Finance Code, is amended to | ||
read as follows: | ||
(f) The commissioner shall remit to the comptroller amounts | ||
received under Section 341.603(a) for deposit in an | ||
interest-bearing deposit account in the Texas Treasury Safekeeping | ||
Trust Company. Amounts in the fund may be invested and reinvested | ||
under the prudent person standard described by Section 11b, Article | ||
VII, Texas Constitution [ |
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investments shall be deposited to the credit of the fund. An | ||
investment may not be made under this subsection if the investment | ||
will impair the necessary liquidity required to satisfy payment of | ||
claims [ |
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SECTION 13. Section 342.160, Finance Code, is amended to | ||
read as follows: | ||
Sec. 342.160. SURRENDER OF LICENSE. A license holder may | ||
surrender a license issued under this chapter by complying with the | ||
commissioner's written instructions relating to license surrender | ||
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SECTION 14. Section 342.556(a), Finance Code, is amended to | ||
read as follows: | ||
(a) An authorized lender shall maintain on file with the | ||
commissioner the name and address of [ |
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service [ |
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SECTION 15. Section 343.201, Finance Code, is amended to | ||
read as follows: | ||
Sec. 343.201. DEFINITIONS. In this subchapter: | ||
(1) "High-cost home loan" means a loan that: | ||
(A) is made to one or more individuals for | ||
personal, family, or household purposes; | ||
(B) is secured in whole or part by: | ||
(i) a manufactured home, as defined by | ||
Section 347.002, used or to be used as the borrower's principal | ||
residence; or | ||
(ii) real property improved by a dwelling | ||
designed for occupancy by four or fewer families and used or to be | ||
used as the borrower's principal residence; | ||
(C) has a principal amount equal to or less than | ||
one-half of the maximum conventional loan amount for first | ||
mortgages as established and adjusted by the Federal National | ||
Mortgage Association; | ||
(D) is not: | ||
(i) a reverse mortgage; or | ||
(ii) an open-end account, as defined by | ||
Section 301.002; and | ||
(E) is a credit transaction described by 12 | ||
C.F.R. Section 1026.32 [ |
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includes a residential mortgage transaction, as defined by 12 | ||
C.F.R. Section 1026.2 [ |
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is $20,000 or more and: | ||
(i) the annual percentage rate exceeds the | ||
rate indicated in 12 C.F.R. Section 1026.32(a)(1)(i) | ||
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(ii) the total points and fees payable by | ||
the consumer at or before loan closing will exceed the amount | ||
indicated in 12 C.F.R. Section 1026.32(a)(1)(ii) | ||
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(2) "Points and fees" has the meaning assigned by 12 | ||
C.F.R. Section 1026.32(b) [ |
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SECTION 16. Section 345.106, Finance Code, is amended to | ||
read as follows: | ||
Sec. 345.106. PROCESSING FEE FOR RETURNED CHECK. A retail | ||
charge agreement may provide that the holder of the agreement may: | ||
(1) charge the retail buyer, on return of a dishonored | ||
check given in payment under the agreement, a reasonable processing | ||
fee that does not exceed the amount prescribed by Section 3.506, | ||
Business & Commerce Code [ |
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(2) add the fee to the unpaid balance under the | ||
agreement. | ||
SECTION 17. Section 345.351(a), Finance Code, is amended to | ||
read as follows: | ||
(a) A holder who is not an authorized lender under Chapter | ||
342 or a credit union shall: | ||
(1) register with the Office of Consumer Credit | ||
Commissioner; and | ||
(2) pay a fee in an amount determined under Section | ||
14.107 [ |
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transaction is originated, serviced, or collected. | ||
SECTION 18. Section 347.451(a), Finance Code, is amended to | ||
read as follows: | ||
(a) A creditor who is not an authorized lender under Chapter | ||
342 or a credit union shall: | ||
(1) register with the Office of Consumer Credit | ||
Commissioner; and | ||
(2) pay a fee in an amount determined under Section | ||
14.107 [ |
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originated, serviced, or collected. | ||
SECTION 19. Section 348.009(a), Finance Code, is amended to | ||
read as follows: | ||
(a) The disclosure requirements of Regulation Z (12 C.F.R. | ||
Parts 226 and 1026) [ |
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under the Truth in Lending Act (15 U.S.C. Section 1601 et seq.) and | ||
specifically 12 C.F.R. Sections [ |
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1026.18(f), regarding variable rate disclosures, apply according | ||
to their terms to retail installment transactions. | ||
SECTION 20. Section 348.404(d), Finance Code, is amended to | ||
read as follows: | ||
(d) A retail seller may include money advanced under | ||
Subsection (b) in the retail installment contract only if it is | ||
included as an itemized charge and may disclose money advanced | ||
under Subsection (b) in any manner permitted by Regulation Z (12 | ||
C.F.R. Parts 226 and 1026) [ |
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adopted under the Truth in Lending Act (15 U.S.C. Section 1601 et | ||
seq.). Section 349.003 does not apply to this subsection. This | ||
subsection does not create a private right of action. The | ||
commissioner has exclusive jurisdiction to enforce this | ||
subsection. | ||
SECTION 21. Section 348.510, Finance Code, is amended to | ||
read as follows: | ||
Sec. 348.510. SURRENDER OF LICENSE. A license holder may | ||
surrender a license issued under this chapter by complying with the | ||
commissioner's written instructions relating to license surrender | ||
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SECTION 22. Section 351.0022, Finance Code, is amended to | ||
read as follows: | ||
Sec. 351.0022. WAIVER PROHIBITED. Except as specifically | ||
permitted by this chapter or Chapter 32, Tax Code, a property owner | ||
may not waive or limit a requirement imposed on a property tax | ||
lender by this chapter or Chapter 32, Tax Code. | ||
SECTION 23. Section 351.160, Finance Code, is amended to | ||
read as follows: | ||
Sec. 351.160. SURRENDER OF LICENSE. A license holder may | ||
surrender a license issued under this chapter by complying with the | ||
commissioner's written instructions relating to license surrender | ||
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SECTION 24. Section 352.006(b), Finance Code, is amended to | ||
read as follows: | ||
(b) If the commissioner proposes to revoke a registration, | ||
the facilitator is entitled to notice and an opportunity for a | ||
hearing before the commissioner or a hearings officer, who shall | ||
propose a decision to the commissioner. The commissioner or | ||
hearings officer shall prescribe the time and place of the hearing | ||
if the facilitator makes a written request for a hearing not later | ||
than the 30th day after the date on which the order of revocation is | ||
served [ |
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2001, Government Code. | ||
SECTION 25. Section 353.510, Finance Code, is amended to | ||
read as follows: | ||
Sec. 353.510. SURRENDER OF LICENSE. A license holder may | ||
surrender a license issued under this chapter by complying with the | ||
commissioner's written instructions relating to license surrender | ||
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SECTION 26. Section 371.073(a), Finance Code, is amended to | ||
read as follows: | ||
(a) A pawnbroker shall maintain on file with the | ||
commissioner the name and address of [ |
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service of [ |
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SECTION 27. Section 371.157, Finance Code, is amended to | ||
read as follows: | ||
Sec. 371.157. PAWN TICKET. A pawnbroker, at the time a pawn | ||
transaction is entered, shall deliver to the pledgor a pawn ticket | ||
or other memorandum that clearly shows: | ||
(1) the name and address of the pawnshop; | ||
(2) the pledgor's name, address, and physical | ||
description and a driver's license number, military identification | ||
number, identification certificate number, or other official | ||
number that can identify the pledgor; | ||
(3) the date of the transaction; | ||
(4) an identification and description of the pledged | ||
goods, including serial numbers if reasonably available; | ||
(5) the amount of cash advanced or credit extended to | ||
the pledgor, designated as "Amount Financed"; | ||
(6) the amount of the pawn service charge, designated | ||
as "Finance Charge"; | ||
(7) the total amount, consisting of the amount | ||
financed plus the finance charge, that must be paid to redeem the | ||
pledged goods on the maturity date, designated as "Total of | ||
Payments"; | ||
(8) the "Annual Percentage Rate," computed according | ||
to Regulation Z (12 C.F.R. Part 1026) adopted [ |
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by the Consumer Financial Protection Bureau [ |
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under the Truth in Lending Act (15 U.S.C. Section 1601 et seq.), as | ||
amended; | ||
(9) the maturity date of the pawn transaction; and | ||
(10) a statement that: | ||
(A) the pledgor is not obligated to redeem the | ||
pledged goods; and | ||
(B) the pledged goods may be forfeited to the | ||
pawnbroker on the 31st day after the maturity date. | ||
SECTION 28. Section 371.255, Finance Code, is amended to | ||
read as follows: | ||
Sec. 371.255. REVOCATION OR SUSPENSION OF PAWNSHOP EMPLOYEE | ||
LICENSE. After notice and opportunity for a hearing, the | ||
commissioner may revoke or suspend a pawnshop employee license if | ||
the commissioner finds that: | ||
(1) the license holder knowingly or recklessly | ||
violated this chapter or a rule adopted or order issued under this | ||
chapter; | ||
(2) a fact or condition exists that, if it had existed | ||
or had been known to exist at the time of the original license | ||
application, clearly would have justified refusal to issue the | ||
license; or | ||
(3) the business repute and general fitness of the | ||
license holder do not warrant belief that the license holder will | ||
operate the business lawfully and fairly within the provisions of | ||
this chapter. | ||
SECTION 29. Section 371.257(a), Finance Code, is amended to | ||
read as follows: | ||
(a) The holder of a pawnshop license or a pawnshop employee | ||
license may surrender the license by complying with the | ||
commissioner's written instructions relating to license surrender | ||
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SECTION 30. Section 393.617, Finance Code, is amended to | ||
read as follows: | ||
Sec. 393.617. SURRENDER OF LICENSE. A license holder may | ||
surrender a license issued under this subchapter by complying with | ||
the commissioner's written instructions relating to license | ||
surrender [ |
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SECTION 31. Section 394.2101(a), Finance Code, is amended | ||
to read as follows: | ||
(a) The commissioner shall compute and publish the dollar | ||
amounts of fees or other charges in amounts different from the | ||
amounts of fees or other charges specified in Section 394.210 to | ||
reflect inflation, as measured by the Consumer Price Index for All | ||
Urban Consumers published by the Bureau of Labor Statistics of the | ||
United States Department of Labor or, if that index is not | ||
available, another index adopted by finance commission rule. The | ||
commissioner shall adopt a base year and adjust the dollar amounts, | ||
effective on July 1 of each year, if the change in the index from the | ||
base year, as of December 31 of the preceding year, is at least 10 | ||
percent. The dollar amounts [ |
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Section 394.210 must be rounded to the nearest dollar. | ||
SECTION 32. Section 394.212(a), Finance Code, is amended to | ||
read as follows: | ||
(a) A provider may not: | ||
(1) purchase a debt or obligation of a consumer; | ||
(2) receive or charge a fee in the form of a promissory | ||
note or other negotiable instrument other than a check or a draft; | ||
(3) lend money or provide credit to the consumer; | ||
(4) obtain a mortgage or other security interest in | ||
property owned by a consumer; | ||
(5) engage in business with a for-profit business [ |
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entity described by Section 394.204(c)(7) [ |
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prior consent of the commissioner, except that unless denied, | ||
consent is considered granted 30 days after the date the provider | ||
notifies the commissioner of the intent to engage in business with a | ||
for-profit business entity [ |
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394.204(c)(7) [ |
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(6) offer, pay, or give a gift, bonus, premium, | ||
reward, or other compensation to a person for entering into a debt | ||
management services agreement; | ||
(7) represent that the provider is authorized or | ||
competent to furnish legal advice or perform legal services unless | ||
supervised by an attorney as required by State Bar of Texas rules; | ||
(8) use an unconscionable means to obtain a contract | ||
with a consumer; | ||
(9) engage in an unfair, deceptive, or unconscionable | ||
act or practice in connection with a service provided to a consumer; | ||
or | ||
(10) require or attempt to require payment of an | ||
amount that the provider states, discloses, or advertises to be a | ||
voluntary contribution from the consumer. | ||
SECTION 33. Sections 32.06(d-1) and (f-3), Tax Code, are | ||
amended to read as follows: | ||
(d-1) A right of rescission described by the Truth in | ||
Lending Act (15 U.S.C. Section 1635) and Regulation Z (12 C.F.R. | ||
Section 1026.23) [ |
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under this section of a tax lien on residential property owned and | ||
used by the property owner for personal, family, or household | ||
purposes. | ||
(f-3) Notwithstanding any contractual agreement with the | ||
property owner, the transferee of a tax lien must provide the payoff | ||
information required by this section to the greatest extent | ||
permitted by the Gramm-Leach-Bliley Act (15 U.S.C. Section 6802) | ||
and Regulation P (12 C.F.R. Part 1016) [ |
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requirements of a payoff statement defined by Section 12.017, | ||
Property Code. A transferee may charge a reasonable fee for a | ||
payoff statement that is requested after an initial payoff | ||
statement is provided. However, a transferee is not required to | ||
release payoff information pursuant to a notice under Subsection | ||
(f-1) unless the notice contains the information prescribed by the | ||
Finance Commission of Texas. | ||
SECTION 34. The following provisions of the Finance Code | ||
are repealed: | ||
(1) Section 342.551(c); | ||
(2) Section 342.556(b); | ||
(3) Sections 371.006(b), (c), and (d); and | ||
(4) Section 371.073(b). | ||
SECTION 35. This Act takes effect September 1, 2023. |