Bill Text: TX SB927 | 2013-2014 | 83rd Legislature | Introduced
Bill Title: Relating to the regulation of and disclosures regarding consumer lawsuit lending transactions.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2013-03-12 - Referred to State Affairs [SB927 Detail]
Download: Texas-2013-SB927-Introduced.html
83R6409 ATP/AJA-F | ||
By: Huffman | S.B. No. 927 |
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relating to the regulation of and disclosures regarding consumer | ||
lawsuit lending transactions. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Chapter 30, Civil Practice and Remedies Code, is | ||
amended by adding Section 30.022 to read as follows: | ||
Sec. 30.022. DISCLOSURE OF CONSUMER LAWSUIT LENDING | ||
TRANSACTION. (a) In this section, "consumer lawsuit lender" and | ||
"consumer lawsuit lending transaction" have the meanings assigned | ||
by Section 301.003, Finance Code. | ||
(b) In any civil action with respect to which money has been | ||
or will be provided to or on behalf of a plaintiff by a consumer | ||
lawsuit lender in a consumer lawsuit lending transaction: | ||
(1) the plaintiff must produce to the opposing party, | ||
without awaiting a discovery request, all documents that the | ||
plaintiff or the plaintiff's representative provided to the | ||
consumer lawsuit lender; and | ||
(2) the plaintiff must file with the court and serve on | ||
the opposing party a copy of any agreement between the plaintiff and | ||
a consumer lawsuit lender. | ||
(c) If the consumer lawsuit lending agreement is executed | ||
before the plaintiff's original petition is served, the agreement | ||
shall be: | ||
(1) filed with the court: | ||
(A) promptly on execution of the agreement; or | ||
(B) together with the filing of the plaintiff's | ||
original petition, if the plaintiff's original petition has not | ||
been filed with the court at the time of the agreement's execution; | ||
and | ||
(2) served with the plaintiff's original petition as | ||
provided by the Texas Rules of Civil Procedure. | ||
(d) If the consumer lawsuit lending agreement is executed | ||
after the plaintiff's original petition is served, the agreement | ||
shall be filed with the court and served on the opposing party as | ||
provided by the Texas Rules of Civil Procedure not later than the | ||
10th day after the date the agreement is executed. | ||
SECTION 2. Subchapter D, Chapter 154, Civil Practice and | ||
Remedies Code, is amended by adding Section 154.074 to read as | ||
follows: | ||
Sec. 154.074. DISCLOSURE OF CONSUMER LAWSUIT LENDING | ||
TRANSACTION. (a) In this section, "consumer lawsuit lender" and | ||
"consumer lawsuit lending transaction" have the meanings assigned | ||
by Section 301.003, Finance Code. | ||
(b) In any dispute with respect to which money has been or | ||
will be provided to or on behalf of a complaining party by a | ||
consumer lawsuit lender in a consumer lawsuit lending transaction, | ||
the complaining party must produce to the opposing party, without | ||
awaiting a request in the nature of a discovery request, all | ||
documents that the complaining party or the complaining party's | ||
representative provided to the consumer lawsuit lender. | ||
SECTION 3. Chapter 301, Finance Code, is amended by adding | ||
Section 301.003 to read as follows: | ||
Sec. 301.003. CONSUMER LAWSUIT LENDING TRANSACTION. (a) In | ||
this subtitle, the following definitions apply in the context of a | ||
consumer lawsuit lending transaction: | ||
(1) "Consumer" means an individual who is or may | ||
become a complaining party in a dispute and to whom or on behalf of | ||
whom money is provided in a consumer lawsuit lending transaction. | ||
(2) "Consumer lawsuit lender" means a person who | ||
provides money to or on behalf of a consumer in a consumer lawsuit | ||
lending transaction. The term does not include an attorney who, at | ||
the time money is provided to or on behalf of a consumer in a | ||
consumer lawsuit lending transaction, has an attorney-client | ||
relationship with the consumer concerning the consumer's dispute. | ||
(3) "Consumer lawsuit lending transaction" means a | ||
transaction in which: | ||
(A) money is provided to or on behalf of a | ||
consumer by a consumer lawsuit lender for a purpose other than | ||
prosecuting the consumer's dispute; and | ||
(B) the repayment of the money is conditioned on | ||
and to be received from the consumer's proceeds of the dispute, | ||
whether the proceeds are by judgment, settlement, or otherwise. | ||
(4) "Creditor" includes a consumer lawsuit lender. | ||
(5) "Dispute" includes: | ||
(A) a civil action; | ||
(B) an alternative dispute resolution | ||
proceeding; or | ||
(C) an administrative proceeding before an | ||
agency of this state. | ||
(6) "Interest" includes the amounts payable in a | ||
consumer lawsuit lending transaction to the consumer lawsuit lender | ||
to the extent that those amounts in the aggregate exceed the amounts | ||
provided by the consumer lawsuit lender to or on behalf of the | ||
consumer in the transaction. | ||
(7) "Loan" includes the provision of money to or on | ||
behalf of the consumer in a consumer lawsuit lending transaction, | ||
without regard to whether there is a circumstance under which the | ||
consumer does not have an obligation to repay to the consumer | ||
lawsuit lender the principal amount provided. | ||
(8) "Obligor" includes the consumer in a consumer | ||
lawsuit lending transaction. | ||
(b) A consumer lawsuit lending transaction and the parties | ||
to the transaction are subject to this subtitle, including Section | ||
303.201, in the same manner as a loan for personal, family, or | ||
household use and the parties to such a loan. | ||
SECTION 4. Subchapter A, Chapter 342, Finance Code, is | ||
amended by adding Section 342.0015 to read as follows: | ||
Sec. 342.0015. DEFINITION OF CONSUMER LAWSUIT LENDING | ||
TRANSACTION AND RELATED TERMS. In this chapter, in the context of a | ||
consumer lawsuit lending transaction, "consumer," "consumer | ||
lawsuit lender," "consumer lawsuit lending transaction," | ||
"creditor," "dispute," "interest," "loan," and "obligor" have the | ||
meanings assigned by Section 301.003. | ||
SECTION 5. Section 342.005, Finance Code, is amended to | ||
read as follows: | ||
Sec. 342.005. APPLICABILITY OF CHAPTER. (a) Except as | ||
provided by Sections 302.001(d) and 342.004(c), a loan is subject | ||
to this chapter if the loan: | ||
(1) provides for interest in excess of 10 percent a | ||
year; | ||
(2) is extended primarily for personal, family, or | ||
household use; | ||
(3) is made by a person engaged in the business of | ||
making, arranging, or negotiating those types of loans; and | ||
(4) either: | ||
(A) is not secured by a lien on real property; or | ||
(B) is described by Section 342.001(4), 342.301, | ||
or 342.456 and is predominantly payable in monthly installments. | ||
(b) The amounts provided by the consumer lawsuit lender to | ||
or on behalf of the consumer in a consumer lawsuit lending | ||
transaction are considered to be amounts extended primarily for | ||
personal, family, or household use. A consumer lawsuit lending | ||
transaction is subject to this chapter if the amounts payable under | ||
the transaction to the consumer lawsuit lender in the aggregate | ||
exceed the amounts provided by the consumer lawsuit lender to or on | ||
behalf of the consumer by an amount that, when aggregated and | ||
amortized using the actuarial method during the term of the loan, | ||
provides for interest in excess of 10 percent a year. | ||
SECTION 6. Section 342.051(a), Finance Code, is amended to | ||
read as follows: | ||
(a) A person must hold a license issued under this chapter | ||
to: | ||
(1) engage in the business of making, transacting, or | ||
negotiating loans subject to this chapter; [ |
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(2) contract for, charge, or receive, directly or | ||
indirectly, in connection with a loan subject to this chapter, a | ||
charge, including interest, compensation, consideration, or | ||
another expense, authorized under this chapter that in the | ||
aggregate exceeds the charges authorized under other law; or | ||
(3) engage in a consumer lawsuit lending transaction | ||
subject to this chapter or Subtitle A. | ||
SECTION 7. (a) Except as otherwise provided by this | ||
section, the changes in law made by this Act apply to and in | ||
connection with a consumer lawsuit lending transaction entered into | ||
on or after the effective date of this Act. A consumer lawsuit | ||
lending transaction entered into before the effective date of this | ||
Act is governed by the law in effect when the transaction was | ||
entered into, and the former law is continued in effect for that | ||
purpose. | ||
(b) Section 30.022, Civil Practice and Remedies Code, as | ||
added by this Act, applies only to an action commenced on or after | ||
the effective date of this Act. | ||
(c) Section 154.074, Civil Practice and Remedies Code, as | ||
added by this Act, applies only to a dispute resolution proceeding | ||
commenced on or after the effective date of this Act. | ||
(d) The licensing requirement of Section 342.051(a), | ||
Finance Code, as amended by this Act, applies only in relation to a | ||
consumer lawsuit lending transaction entered into on or after | ||
January 1, 2014. A consumer lawsuit lending transaction entered | ||
into before January 1, 2014, is governed by the law in effect when | ||
the transaction was entered into, and the former law is continued in | ||
effect for that purpose. | ||
SECTION 8. This Act takes effect September 1, 2013. |