Bill Text: TX HB4266 | 2021-2022 | 87th Legislature | Comm Sub

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Bill Title: Relating to credit repair services performed by credit repair organizations.

Spectrum: Slight Partisan Bill (Republican 2-1)

Status: (Introduced - Dead) 2021-05-12 - Placed on General State Calendar [HB4266 Detail]

Download: Texas-2021-HB4266-Comm_Sub.html

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87R16481 MWC-F
By: Shine, Button H.B. No. 4266
Substitute the following for H.B. No. 4266:
By: Parker C.S.H.B. No. 4266

A BILL TO BE ENTITLED
AN ACT
relating to credit repair services performed by credit repair
organizations.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 394, Finance Code, is amended by adding
Subchapter D to read as follows:
SUBCHAPTER D. CREDIT REPAIR ORGANIZATIONS
Sec. 394.301. DEFINITIONS. In this subchapter:
(1) "Commissioner" means the consumer credit
commissioner.
(2) "Credit repair organization" means an
organization that provides, or represents that the organization can
or will provide, for the payment of valuable consideration, any of
the following services with respect to the extension of consumer
credit by others:
(A) improving a consumer's credit history or
rating; or
(B) providing advice or assistance to a consumer
with regard to Paragraph (A).
(3) "Finance commission" means the Finance Commission
of Texas.
Sec. 394.302. DISCLOSURE STATEMENT. Before executing a
contract with a consumer, or receiving valuable consideration from
a consumer, a credit repair organization shall provide the consumer
with a document containing:
(1) a list of the inaccurate or obsolete adverse
information appearing on the consumer's credit report which the
credit repair organization will seek to delete or modify;
(2) the basis for the deletion or modification of the
adverse information;
(3) a description of each modification sought; and
(4) the anticipated payment required by the consumer
to achieve each account deletion or modification, if applicable.
Sec. 394.303. COMMUNICATIONS WITH CONSUMER REPORTING
AGENCY OR DATA FURNISHER. (a) A credit repair organization or a
representative of the organization may not:
(1) communicate with a consumer reporting agency,
creditor, debt collector, or debt buyer about a consumer without
the written authorization of the consumer; or
(2) communicate with a consumer reporting agency,
creditor, debt collector, or debt buyer by impersonating a consumer
and failing to identify as a credit repair organization if the
credit repair organization initiates the communication.
(b) A credit repair organization or a representative of the
organization shall provide with the first written communication to
a consumer reporting agency or data furnisher sufficient
information to investigate a dispute of an item related to an
extension of consumer credit that is in the creditor's, debt
collector's, debt buyer's, or consumer reporting agency's files,
including any relevant information and copies of documents
concerning the disputed item.
Sec. 394.304. REMOVAL OF ACCURATE INFORMATION PROHIBITED.
A credit repair organization or a representative of the
organization may not seek to remove, or advise a consumer to remove
or seek to remove, adverse information from the consumer's credit
report that is known to the credit repair organization, or that by
the exercise of reasonable care should be known to the credit repair
organization, to be accurate.
Sec. 394.305. ITEMIZED STATEMENT REQUIRED; PERFORMANCE OF
AGREED SERVICES. (a) A credit repair organization or a
representative of the organization shall provide an itemized
monthly statement to the consumer showing each service performed
for the consumer under the contract, including:
(1) each communication and credit check made on behalf
of the consumer; and
(2) the date of each service performed.
(b) A credit repair organization or a representative of the
organization must perform the agreed services not later than the
180th day after the date the consumer signs the contract for those
services.
Sec. 394.306. RESTRICTIONS ON CERTAIN COMMUNICATIONS. A
credit repair organization or a representative of the organization
may not:
(1) send a communication, directly or indirectly, to a
person on behalf of a consumer without disclosing the sender's
identity, street address, telephone number, and facsimile number,
and, if applicable, the name and street address of any parent
organization of the sender;
(2) send a written communication on behalf of a
consumer to a person other than the consumer without providing a
copy of the communication to the consumer not later than the fifth
day after the date the communication is sent; or
(3) send a written communication that contains
personal information of a consumer without redacting the consumer's
personal information to include only:
(A) the last four digits of the consumer's social
security number, taxpayer identification number, or state
identification number;
(B) the last four digits of the consumer's
financial account number, credit card number, or debit card number;
or
(C) the month and year of the consumer's date of
birth, unless otherwise required by law.
Sec. 394.307. DAMAGES. (a) A consumer injured by a
violation of this subchapter is entitled to recover:
(1) actual damages;
(2) injunctive and equitable relief; and
(3) the costs of the action, including reasonable
attorney's fees.
(b) In addition to an award under Subsection (a), a consumer
who prevails in an action under this subchapter may recover
exemplary damages in an amount of not less than $100 or more than
$1,000 in accordance with Chapter 41, Civil Practice and Remedies
Code.
Sec. 394.308. DUTIES AND REMEDIES ADDITIONAL TO OTHER LAW.
(a) The duties and responsibilities of a credit repair
organization under this subchapter are in addition to and not in
replacement of the duties and responsibilities of a credit repair
organization under other laws of this state.
(b) Remedies and damages afforded under this subchapter to
consumers who are injured by a violation of this subchapter are in
addition to and not in replacement of remedies and damages afforded
under other laws of this state to those consumers.
Sec. 394.309. RULES; ADDITIONAL ENFORCEMENT POWERS. (a)
The finance commission may adopt rules to carry out this
subchapter.
(b) The commissioner may:
(1) investigate the activities of a person subject to
this subchapter to determine compliance with this subchapter,
including examination of the books, accounts, and records of a
credit repair organization; and
(2) require or permit a person to file a statement
under oath and otherwise subject to the penalties of perjury as to
all the facts and circumstances of the matter to be investigated.
(c) Failure to comply with an investigation under
Subsection (b) is grounds for issuance of a cease and desist order.
(d) The commissioner may receive and act on complaints, take
action to obtain voluntary compliance with this subchapter, and
refer cases to the attorney general for prosecution.
(e) The commissioner may enforce this subchapter and rules
adopted under this subchapter by:
(1) ordering the violator to cease and desist from the
violation and any similar violations;
(2) ordering the violator to take affirmative action
to correct the violation, including the restitution of money or
property to a person aggrieved by the violation; or
(3) imposing an administrative penalty not to exceed
$1,000 for each violation.
(f) In determining the amount of an administrative penalty
to be imposed under this section, the commissioner shall consider:
(1) the seriousness of the violation;
(2) the good faith of the violator;
(3) the violator's history of previous violations;
(4) the deleterious effect of the violation on the
public;
(5) the assets of the violator; and
(6) any other factors the commissioner considers
relevant.
(g) The commissioner, on relation of the attorney general at
the request of the commissioner, may bring an action in district
court to enjoin a person from engaging in an act or continuing a
course of action that violates this subchapter. The court may order
a preliminary or final injunction.
SECTION 2. Sections 394.302 and 394.305, Finance Code, as
added by this Act, apply only to a contract entered into on or after
the effective date of this Act. A contract entered into before the
effective date of this Act is governed by the law in effect on the
date the contract was entered into, and the former law is continued
in effect for that purpose.
SECTION 3. This Act takes effect September 1, 2021.