Bill Text: TX HB786 | 2013-2014 | 83rd Legislature | Introduced
Bill Title: Relating to extensions of consumer credit a credit services organization obtains for a consumer or assists a consumer in obtaining.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2013-03-04 - Left pending in committee [HB786 Detail]
Download: Texas-2013-HB786-Introduced.html
83R3158 CLG-F | ||
By: Rodriguez of Travis | H.B. No. 786 |
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relating to extensions of consumer credit a credit services | ||
organization obtains for a consumer or assists a consumer in | ||
obtaining. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Section 393.001, Finance Code, is amended by | ||
amending Subdivision (3) and adding Subdivisions (3-a) and (5) to | ||
read as follows: | ||
(3) "Credit services organization" means a person who | ||
provides, or represents that the person 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; | ||
(B) obtaining an extension of consumer credit for | ||
a consumer in the form of a deferred presentment transaction or | ||
motor vehicle title loan; or | ||
(C) providing advice or assistance to a consumer | ||
with regard to Paragraph (A) or (B). | ||
(3-a) "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. | ||
(5) "Motor vehicle 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. | ||
SECTION 2. Subchapter D, Chapter 393, Finance Code, is | ||
amended by adding Section 393.308 to read as follows: | ||
Sec. 393.308. PROHIBITION ON OBTAINING CERTAIN LOANS OR | ||
EXTENSIONS OF CREDIT. A credit services organization may not: | ||
(1) obtain for a consumer or assist a consumer in | ||
obtaining a loan or other extension of credit that is not in the | ||
form of a deferred presentment transaction or motor vehicle title | ||
loan; or | ||
(2) charge or receive from a consumer a fee or other | ||
valuable consideration in connection with a loan or other extension | ||
of credit that is not a deferred presentment transaction or motor | ||
vehicle title loan. | ||
SECTION 3. Section 393.201(c), Finance Code, is amended to | ||
read as follows: | ||
(c) A contract with a credit access business, as defined by | ||
Section 393.601, [ |
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Subsection (b) and Section 393.302: | ||
(1) contain a statement that there is no prepayment | ||
penalty; | ||
(2) contain a statement that a credit access business | ||
must comply with Chapter 392 and the federal Fair Debt Collection | ||
Practices Act (15 U.S.C. Section 1692 et seq.) with respect to an | ||
extension of consumer credit [ |
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(3) contain a statement that a person may not threaten | ||
or pursue criminal charges against a consumer related to a check or | ||
other debit authorization provided by the consumer as security for | ||
a transaction in the absence of forgery, fraud, theft, or other | ||
criminal conduct; | ||
(4) contain a statement that a credit access business | ||
must comply, to the extent applicable, with 10 U.S.C. Section 987 | ||
and any regulations adopted under that law with respect to an | ||
extension of consumer credit [ |
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(5) disclose to the consumer: | ||
(A) the lender from whom the extension of | ||
consumer credit is obtained; | ||
(B) the interest paid or to be paid to the lender; | ||
and | ||
(C) the specific fees that will be paid to the | ||
credit access business for the business's services; and | ||
(6) contain the name and address of the Office of | ||
Consumer Credit Commissioner and the telephone number of the | ||
office's consumer helpline. | ||
SECTION 4. Section 393.221, Finance Code, is amended to | ||
read as follows: | ||
Sec. 393.221. DEFINITION [ |
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subchapter, "credit access business" [ |
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organization that obtains for a consumer or assists a consumer in | ||
obtaining an extension of consumer credit [ |
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SECTION 5. Section 393.601(2), Finance Code, is amended to | ||
read as follows: | ||
(2) "Credit access business" means a credit services | ||
organization that obtains for a consumer or assists a consumer in | ||
obtaining an extension of consumer credit [ |
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SECTION 6. Sections 393.602(a) and (b), Finance Code, are | ||
amended to read as follows: | ||
(a) This subchapter applies only to a credit services | ||
organization that obtains for a consumer or assists a consumer in | ||
obtaining an extension of consumer credit [ |
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(b) A credit access business may assess fees as agreed to | ||
between the parties for [ |
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extension of consumer credit for a consumer or assist a consumer in | ||
obtaining an extension of consumer credit [ |
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biweekly, monthly, or on another periodic basis. A credit access | ||
business is permitted to charge amounts allowed by other laws, as | ||
applicable. A fee may not be charged unless it is disclosed. | ||
SECTION 7. Section 393.603, Finance Code, is amended to | ||
read as follows: | ||
Sec. 393.603. LICENSE REQUIRED. A credit services | ||
organization must obtain a license under this subchapter for each | ||
location at which the organization operates as a credit access | ||
business in performing services described by Section 393.001(3)(B) | ||
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SECTION 8. Section 393.604(a), Finance Code, is amended to | ||
read as follows: | ||
(a) An application for a license under this subchapter must: | ||
(1) be under oath; | ||
(2) give the approximate location from which the | ||
business is to be conducted; | ||
(3) identify the business's principal parties in | ||
interest; | ||
(4) contain the name, physical address, and telephone | ||
number of all third-party lender organizations: | ||
(A) with which the business contracts to provide | ||
services described by Section 393.001(3)(B); [ |
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(B) from which the business arranges extensions | ||
of consumer credit [ |
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(5) contain other relevant information that the | ||
commissioner requires for the findings required under Section | ||
393.607. | ||
SECTION 9. Sections 393.622(a) and (b), Finance Code, are | ||
amended to read as follows: | ||
(a) The finance commission may: | ||
(1) adopt rules necessary to enforce and administer | ||
this subchapter; | ||
(2) adopt rules with respect to the quarterly | ||
reporting by a credit access business licensed under this | ||
subchapter of summary business information relating to extensions | ||
of consumer credit the business obtained for a consumer or assisted | ||
a consumer in obtaining [ |
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(3) adopt rules with respect to periodic examination | ||
by the office relating to extensions of consumer credit the | ||
business obtained for a consumer or assisted a consumer in | ||
obtaining [ |
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related to charges for defraying the reasonable cost of conducting | ||
the examinations. | ||
(b) The finance commission may adopt rules under this | ||
section to allow the commissioner to review, as part of a periodic | ||
examination, any relevant contracts between the credit access | ||
business and the third-party lender organizations with which the | ||
credit access business contracts to provide services described by | ||
Section 393.001(3)(B) [ |
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arranges extensions of consumer credit [ |
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commissioner under this section is considered proprietary and | ||
confidential to the respective parties to the contract, and is not | ||
subject to disclosure under Chapter 552, Government Code. | ||
SECTION 10. Section 393.625, Finance Code, is amended to | ||
read as follows: | ||
Sec. 393.625. MILITARY BORROWERS. An extension of | ||
consumer credit [ |
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by a credit access business for a member of the United States | ||
military or a dependent of a member of the United States military or | ||
that the business assisted that person in obtaining must comply | ||
with 10 U.S.C. Section 987 and any regulations adopted under that | ||
law, to the extent applicable. | ||
SECTION 11. Section 393.626, Finance Code, is amended to | ||
read as follows: | ||
Sec. 393.626. DEBT COLLECTION PRACTICES. A violation of | ||
Chapter 392 by a credit access business with respect to obtaining | ||
for a consumer or assisting a consumer in obtaining an extension of | ||
consumer credit [ |
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violation of this subchapter. | ||
SECTION 12. Section 393.627, Finance Code, is amended to | ||
read as follows: | ||
Sec. 393.627. QUARTERLY REPORT TO COMMISSIONER. A credit | ||
access business shall file a quarterly report with the commissioner | ||
on a form prescribed by the commissioner that provides the | ||
following information relating to extensions of consumer credit | ||
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(1) the number of consumers for whom the business | ||
obtained or assisted in obtaining those extensions of consumer | ||
credit; | ||
(2) the number of those extensions of consumer credit | ||
obtained by the business or that the business assisted consumers in | ||
obtaining; | ||
(3) the number of refinancing transactions of the | ||
extensions of consumer credit described by Subdivision (2); | ||
(4) the number of consumers refinancing the extensions | ||
of consumer credit described by Subdivision (2); | ||
(5) the number of consumers refinancing more than once | ||
the extensions of consumer credit described by Subdivision (2); | ||
(6) the average amount of the extensions of consumer | ||
credit described by Subdivision (2); | ||
(7) the total amount of fees charged by the business | ||
for the activities described by Subdivision (1); | ||
(8) the number of vehicles surrendered or repossessed | ||
under the terms of an extension of consumer credit in the form of a | ||
motor vehicle title loan obtained by the business or that the | ||
business assisted a consumer in obtaining; | ||
(9) the mean, median, and mode of the number of | ||
extensions of consumer credit obtained by consumers as a result of | ||
entering into the extensions of consumer credit described by | ||
Subdivision (2); and | ||
(10) any related information the commissioner | ||
determines necessary. | ||
SECTION 13. Sections 393.601(3) and (5), Finance Code, are | ||
repealed. | ||
SECTION 14. Section 393.308, Finance Code, as added by this | ||
Act, applies only to an extension of credit made on or after the | ||
effective date of this Act. An extension of credit made before the | ||
effective date of this Act is governed by the law in effect on the | ||
date the extension of credit was made, and the former law is | ||
continued in effect for that purpose. | ||
SECTION 15. This Act takes effect September 1, 2013. |