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Senate Bill 141 |
Senate Author: Eltife et al. |
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Effective: 9-1-11 |
House Sponsor: Anchia |
Senate Bill 141 amends provisions of the Finance Code relating to debt management services and the regulation of debt management service providers. Current law authorizes the consumer credit commissioner to suspend or revoke a provider's registration if the commissioner finds that the provider has failed to disburse money to creditors on behalf of a consumer within a reasonable time. The bill clarifies that such authority applies only if the provider has received money from or on behalf of the consumer for disbursement to a creditor under a debt management plan that provides for regular periodic payments to creditors in full repayment of the principal amount of the debts. The bill sets the amount of bond that a provider must file with an initial or renewal registration application at $50,000 if the provider does not receive and hold money paid by or on behalf of a consumer for disbursement to the consumer's creditors.
Current law prohibits a provider from enrolling a consumer in a debt management plan unless, in addition to certain other conditions, the provider has a reasonable expectation that each of the consumer's creditors listed as a participating creditor in the plan will accept payment of the consumer's debts as provided in the initial plan and the provider has prepared, for all creditors identified either by the consumer or through additional investigation, a list of the creditors that the provider reasonably expects to participate in the plan. Senate Bill 141 makes those conditions of enrollment applicable only if the proposed debt management plan does not provide for a reduction of principal as a concession. The bill also makes the requirement for each debt services agreement to list each participating creditor to which payments will be made, the amount owed to each creditor, and the schedule of payments the consumer must make applicable only if the proposed plan does not provide for a reduction of principal as a concession.
Senate Bill 141 requires a provider, if the provider or a consumer cancels a debt management service agreement, to return to the consumer immediately any money held in trust by the provider for the consumer's benefit and 65 percent of any portion of the account set-up fee received by the provider that has not been credited against settlement fees. The bill establishes restrictions on the imposition of fees or other charges by a debt management service provider, sets caps on the amount of the permitted fees based on the services provided under the type of debt management plan in which a consumer may be enrolled, and requires the finance commissioner to compute and publish the dollar amounts of permitted fees or other charges by debt service management providers in amounts different from the amounts of fees or other charges specified in statute to reflect inflation. The bill requires the commissioner to adopt a base year, to adjust the dollar amounts each year if the change from the base year in the index used to measure inflation is at least 10 percent, and to notify registered providers of any change in dollar amounts made to reflect inflation and make that information available to the public.