Enrolled Bill Summary

            Senate Bill 317 amends the Finance Code to continue the Office of Consumer Credit Commissioner until September 1, 2013, and to include across-the-board sunset provisions. The bill deletes provisions that set annual license fees for certain regulated lenders and pawnshops in statute and instead requires the Finance Commission of Texas to set fees for licensing and examination for consumer loan licensees, motor vehicle installment sales licensees, and pawnshops by rule and to include model contracts in rules relating to loan contract and retail installment transaction contracts, which are required to be written in plain language and printed in an easily readable font and type size. A person using a contract other than a model contract must submit that contract to the commissioner for approval. The bill also requires the finance commission to regulate deferred presentment transactions, prohibits a party to such a transaction from attempting to evade regulations by subterfuge or pretense, and authorizes the seller in a sale-leaseback agreement to terminate the agreement at any time by returning the property that is the subject of the agreement. The bill prohibits the buyer in a sale-leaseback transaction who requires the seller to provide a check as security for the transaction from filing or threatening to file a charge, complaint, or criminal prosecution based on nonpayment of the check and provides that violation of this provision is a misdemeanor punishable by a fine of not more than $1,000.

            Senate Bill 317 deletes provisions requiring holders of motor vehicle installment sales contracts to register with the office and requires holders of such contracts who are not authorized lenders or credit unions to be licensed by the office. The bill sets forth the application requirements for and grounds for approval and denial of such a license, as well as for disciplinary actions against license holders; requires the consumer credit commissioner to investigate applicants; provides for an initial investigation fee, an annual license fee, and a fee to cover periodic examination costs and a proportionate share of administration expenses; and authorizes the commissioner and the Texas Department of Transportation to share information relating to license holders.

            Finally, the bill clarifies and conforms provisions relating to insurance premium financing, adjusts certain amounts used in the calculation of ceilings on pawn service charges, reduces the period a pawnbroker is required to hold pledged goods from 60 to 30 days after the maturity date stated in the pawn ticket, authorizes the office to obtain criminal history information relating to applicants for or holders of consumer loan licenses and motor vehicle installment sale licenses, repeals a provision relating to reductions in annual license fees for a pawnshop license application submitted after June 30, and requires the finance commission and the consumer credit commissioner to conduct a study of mortgage lending practices to identify any possible predatory and discriminatory lending patterns or practices.

            Senate Bill 317 takes effect September 1, 2001, except for the repeal of provisions relating to registration of holders of motor vehicle installment sales contracts and provisions relating to licensing of such holders, which take effect September 1, 2002.