| |
| |
|
|
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. |