By: Gutierrez H.B. No. 1935
73R6198 LJR-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the authority of the consumer credit commissioner and
1-3 to the regulation of certain consumer credit practices; providing
1-4 penalties.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Article 2.02A, Title 79, Revised Statutes
1-7 (Article 5069-2.02A, Vernon's Texas Civil Statutes), is amended by
1-8 adding Sections (12) and (13) to read as follows:
1-9 (12)(a) In addition to the authority given to the Consumer
1-10 Credit Commissioner under this subtitle and in addition to the
1-11 penalties provided by Chapter 8 of this subtitle that may be
1-12 enforced by the Consumer Credit Commissioner, the Consumer Credit
1-13 Commissioner may assess an administrative penalty against a person
1-14 who wilfully and knowingly violates this subtitle, rules adopted by
1-15 the Finance Commission, or Chapter 9 or 15 of this title. The
1-16 penalty may not exceed $1,000 per violation. Each day a violation
1-17 continues or occurs may be considered a separate violation for
1-18 purposes of penalty assessments. The aggregate amount of penalties
1-19 that may be assessed against a person during one calendar year
1-20 under this subsection may not exceed:
1-21 (i) $5,000 per business location for violations
1-22 an element of which occurred at that business location; or
1-23 (ii) $50,000 if violations have been found at 11
1-24 or more business locations.
2-1 (b) In determining the amount of an administrative
2-2 penalty, the Consumer Credit Commissioner shall consider:
2-3 (i) the seriousness of the violations, including
2-4 the nature, circumstances, extent, and gravity of the prohibited
2-5 acts;
2-6 (ii) the extent of actual or potential harm to
2-7 consumers;
2-8 (iii) the history of violations, if any, during
2-9 the preceding four years;
2-10 (iv) the amount necessary to deter future
2-11 violations;
2-12 (v) efforts to correct the violations; and
2-13 (vi) any other matter that justice may require.
2-14 (c) If, after investigation of a possible violation
2-15 and the facts relating to that possible violation, the Consumer
2-16 Credit Commissioner determines that a violation has occurred, the
2-17 commissioner shall issue a preliminary report that states:
2-18 (i) the facts on which the determination is
2-19 based;
2-20 (ii) that an administrative penalty is to be
2-21 imposed; and
2-22 (iii) the amount to be assessed.
2-23 (d) Not later than the 10th day after the date on
2-24 which the Consumer Credit Commissioner issues the preliminary
2-25 report, the Consumer Credit Commissioner shall send a copy of the
2-26 report to the person charged with the violation, together with a
2-27 statement of the right of the person to a hearing relating to the
3-1 alleged violation and the amount of the penalty.
3-2 (e) Not later than the 20th day after the date on
3-3 which the report is sent, the person charged may either make a
3-4 written request for a hearing or may remit the amount of the
3-5 administrative penalty to the Consumer Credit Commissioner.
3-6 Failure to either request a hearing or remit the amount of the
3-7 administrative penalty within the time provided by this subsection
3-8 results in a waiver of a right to a hearing under this section.
3-9 (f) If the person charged with a violation accepts the
3-10 determination of the Consumer Credit Commissioner, the Consumer
3-11 Credit Commissioner shall issue an order approving the
3-12 determination and ordering the payment of the recommended penalty.
3-13 (g) If the person charged requests a hearing, the
3-14 hearing shall be conducted in the manner provided for a contested
3-15 case hearing under the Administrative Procedure and Texas Register
3-16 Act (Article 6252-13a, Vernon's Texas Civil Statutes) and its
3-17 subsequent amendments. If it is determined after hearing that the
3-18 person has committed the alleged violation, the Consumer Credit
3-19 Commissioner shall give written notice to the person of the
3-20 findings established by the hearing and the amount of the penalty
3-21 and shall enter an order requiring the person to pay the penalty.
3-22 (h) Within 30 days after the date the Consumer Credit
3-23 Commissioner's notice is received, the person charged with the
3-24 violation shall:
3-25 (i) pay the amount of the penalty;
3-26 (ii) pay the amount of the penalty and file a
3-27 petition for judicial review contesting the fact of the violation,
4-1 the amount of the penalty, or both the fact of the violation and
4-2 the amount; or
4-3 (iii) without paying the amount of the penalty,
4-4 file a petition for judicial review contesting the fact of the
4-5 penalty, the amount of the penalty, or both the fact of the penalty
4-6 and the amount.
4-7 (i) Within the 30-day period, a person who acts under
4-8 Subsection (h)(iii) of this section may:
4-9 (i) stay enforcement of the penalty by:
4-10 (A) paying the amount of the penalty to
4-11 the court for placement in an escrow account; or
4-12 (B) giving to the court a supersedeas bond
4-13 that is in a form approved by the court for the amount of the
4-14 penalty and that is effective until all judicial review of the
4-15 order is final; or
4-16 (ii) request the court to stay enforcement of
4-17 the penalty by:
4-18 (A) filing with the court a sworn
4-19 affidavit of the person stating that the person is financially
4-20 unable to pay the amount of the penalty and is financially unable
4-21 to give the supersedeas bond; and
4-22 (B) delivering a copy of the affidavit to
4-23 the Consumer Credit Commissioner.
4-24 (j) The Consumer Credit Commissioner may file, with
4-25 the court within five days after the date the copy of the affidavit
4-26 under Subsection (i) of this section is received, a contest to the
4-27 affidavit. The court shall hold a hearing on the facts alleged in
5-1 the affidavit as soon as practicable. The person who files an
5-2 affidavit has the burden of proving that the person is financially
5-3 unable to pay the amount of the penalty and to give a supersedeas
5-4 bond.
5-5 (k) If the person does not pay the amount of the
5-6 penalty and the enforcement of the penalty is not stayed, the
5-7 Consumer Credit Commissioner may refer the matter to the attorney
5-8 general for enforcement.
5-9 (l) Judicial review of the order of the Consumer
5-10 Credit Commissioner:
5-11 (i) is instituted by filing a petition as
5-12 provided by Section 19, Administrative Procedure and Texas Register
5-13 Act (Article 6252-13a, Vernon's Texas Civil Statutes), and its
5-14 subsequent amendments; and
5-15 (ii) is under the substantial evidence rule.
5-16 (m) If the person paid the amount of the penalty and
5-17 if that amount is reduced or not assessed by the court, the court
5-18 shall order that the appropriate amount plus accrued interest be
5-19 remitted to the person. The rate of the interest is the rate
5-20 charged on loans to depository institutions by the New York Federal
5-21 Reserve Bank, and the interest shall be paid for the period
5-22 beginning on the date the penalty is paid and ending on the date
5-23 the penalty is remitted. If the person gave a supersedeas bond,
5-24 the court shall order the release of the bond:
5-25 (i) immediately, if the penalty is not assessed
5-26 by the court; or
5-27 (ii) on payment of the penalty in the amount
6-1 determined by the court.
6-2 (n) A penalty collected under this section shall be
6-3 deposited to the credit of the Office of the Consumer Credit
6-4 Commissioner expense fund. The administrative penalty authorized
6-5 by this section is in addition to any other civil, administrative,
6-6 or criminal penalty provided by law.
6-7 (13)(a) Except for a judgment or the negotiated settlement
6-8 of a claim or action threatened or asserted by or on behalf of the
6-9 Office of Consumer Credit Commissioner, the Consumer Credit
6-10 Commissioner may not accept or use money offered by an individual,
6-11 firm, partnership, corporation, or association:
6-12 (i) for investigating or prosecuting a matter;
6-13 or
6-14 (ii) if the individual, firm, partnership,
6-15 corporation, or association is affiliated with any industry under
6-16 the regulatory jurisdiction of the Office of Consumer Credit
6-17 Commissioner.
6-18 (b) This section does not prohibit the Consumer Credit
6-19 Commissioner from receiving and using money from persons under the
6-20 jurisdiction of the Consumer Credit Commissioner if expressly
6-21 authorized by law.
6-22 (c) The Consumer Credit Commissioner may accept money,
6-23 gifts, and grants on behalf of the state for purposes related to
6-24 duties performed by the Consumer Credit Commissioner or for
6-25 consumer credit educational opportunities, unless the acceptance is
6-26 prohibited under law, including Subsection (a) of this section.
6-27 Money received under this subsection shall be deposited in the
7-1 general revenue fund to the credit of an account established for
7-2 the receipt of those funds and may be appropriated only for the
7-3 purposes for which the money was given.
7-4 SECTION 2. Section (7), Article 2.03, Title 79, Revised
7-5 Statutes (Article 5069-2.03, Vernon's Texas Civil Statutes), is
7-6 amended to read as follows:
7-7 (7) Whenever the Consumer Credit Commissioner has reasonable
7-8 cause to believe that any person is violating any provisions of the
7-9 statutes to which this Article applies he may in addition to all
7-10 actions provided for, and without prejudice thereto, enter an order
7-11 requiring such person to desist or to refrain from such violation.
7-12 A person may appeal such an order to the Finance Commission. The
7-13 appeal must be made in accordance with the Administrative Procedure
7-14 and Texas Register Act (Article 6252-13a, Vernon's Texas Civil
7-15 Statutes) and its subsequent amendments <rules adopted by the
7-16 Finance Commission for that purpose>. In addition to the order,
7-17 the Commissioner may bring an action in any district court of this
7-18 State having jurisdiction and venue, on the relation of the
7-19 Attorney General at the request of the Commissioner, to enjoin such
7-20 person from engaging in or continuing such violation or from doing
7-21 any act or acts in furtherance thereof. In any such action, an
7-22 order or judgment may be entered awarding such preliminary or final
7-23 injunction as may be deemed proper. In addition to all other means
7-24 provided by law for the enforcement of a restraining order or
7-25 injunction, the court in which such action is brought shall have
7-26 power and jurisdiction to impound, and to appoint a receiver for,
7-27 the property and business of the defendant, including books,
8-1 papers, documents, and records pertaining thereto or so much
8-2 thereof as the court may deem reasonably necessary to prevent
8-3 violations through or by means of the use of said property and
8-4 business. Such receiver, when appointed and qualified, shall have
8-5 such powers and duties as he would have under Chapter 64, Civil
8-6 Practice and Remedies Code.
8-7 SECTION 3. Article 2.06, Title 79, Revised Statutes (Article
8-8 5069-2.06, Vernon's Texas Civil Statutes), is amended to read as
8-9 follows:
8-10 Art. 2.06. ADVERTISING. (1) No person shall advertise or
8-11 cause to be advertised, in any manner whatsoever, any false,
8-12 misleading or deceptive statement or representation with regard to
8-13 the rates, terms or conditions of any loan or credit transaction
8-14 regulated by the statutes listed by Section (1), Article 2.02A of
8-15 this title <Subtitle Two>. If rates or charges are stated in
8-16 advertising they shall be stated fully and clearly.
8-17 (2) A person may not advertise or otherwise perform any act
8-18 or offer any service that would cause another to believe that the
8-19 person is offering to make, arrange, or negotiate a loan or credit
8-20 sale that is subject to the statutes listed by Section (1), Article
8-21 2.02A, of this title unless the person is authorized to perform
8-22 that act or offer that service as:
8-23 (a) a credit service organization under Chapter 18,
8-24 Business & Commerce Code;
8-25 (b) a pawnbroker under the Texas Pawnshop Act (Article
8-26 5069-51.01 et seq., Vernon's Texas Civil Statutes); or
8-27 (c) an authorized lender or a registered creditor
9-1 under this subtitle.
9-2 (3) A person commits an offense if the person violates
9-3 Section (2) of this article. An offense under this section is a
9-4 Class A misdemeanor.
9-5 (4) A person who violates Section (2) of this article also
9-6 is subject to the penalties provided under Chapter 8 of this title
9-7 and to any civil penalties that the Consumer Credit Commissioner
9-8 may assess.
9-9 (5) In each advertisement that purports to offer credit
9-10 subject to the statutes listed by Section (1), Article 2.02A, of
9-11 this title, the advertiser shall disclose the legal or properly
9-12 registered name of the advertiser and the physical address of the
9-13 advertiser's place of business unless the advertisement is located
9-14 on the premises of the advertiser's place of business. This
9-15 section does not apply to a federally insured depository
9-16 institution or to a person engaged in interstate commerce who
9-17 advertises under a generally recognized trade name, abbreviated
9-18 form of a trade name, or logo.
9-19 SECTION 4. Article 2.07, Title 79, Revised Statutes (Article
9-20 5069-2.07, Vernon's Texas Civil Statutes), is amended to read as
9-21 follows:
9-22 Art. 2.07. CREDIT AND LOANS TO INDIVIDUALS. No authorized
9-23 lender <licensee> under Chapter 3 of this Title or other person
9-24 involved in transactions subject to this Title may deny an
9-25 individual who has the capacity to contract credit or loans in his
9-26 or her name, or restrict or limit the credit or loan granted
9-27 <solely> on the basis of sex, race, color, religion, <or> national
10-1 origin, marital status, or age, or because all or a part of the
10-2 individual's income derives from a public assistance program, or
10-3 the individual has in good faith exercised any right under the
10-4 federal Consumer Credit Protection Act (15 U.S.C. Section 1601 et
10-5 seq.; 18 U.S.C. Section 891 et seq.). In interpreting this
10-6 section, the courts and administrative agencies shall be guided by
10-7 the federal Equal Credit Opportunity Act and regulations
10-8 thereunder and interpretations thereof by the Federal Reserve Board
10-9 to the extent that that Act and those regulations and
10-10 interpretations pertain to conduct prohibited by this section.
10-11 SECTION 5. Chapter 2, Title 79, Revised Statutes (Article
10-12 5069-2.01 et seq., Vernon's Texas Civil Statutes), is amended by
10-13 adding Articles 2.09, 2.10, and 2.11 to read as follows:
10-14 Art. 2.09. ORAL REPRESENTATIONS. A lender, retail seller,
10-15 or creditor conducting business under this subtitle, Chapter 15 of
10-16 this title, or the Texas Pawnshop Act (Article 5069-51.01 et seq.,
10-17 Vernon's Texas Civil Statutes), or such a person's agents or
10-18 employees, may not make an oral representation to a prospective
10-19 borrower or buyer that is at variance with or in any way
10-20 contradicts the contents of any written loan note or agreement,
10-21 pawn ticket, retail installment contract, or retail charge
10-22 agreement that is executed or delivered by a party to evidence the
10-23 loan or credit sale.
10-24 Art. 2.10. CERTAIN SALES OF PERSONAL PROPERTY. (1) Except
10-25 as provided by Section (3) of this article, any sale or purported
10-26 sale of personal property by a consumer is considered to be a loan
10-27 if the buyer of the property agrees to lease the property to the
11-1 consumer at lease payments that in the aggregate equal or exceed
11-2 the price paid by the buyer or agrees to resell the property to the
11-3 consumer for an amount that equals or exceeds the price paid by the
11-4 buyer. A transaction for the sale-leaseback of personal property
11-5 in which a security deposit check equal to or exceeding the
11-6 purchase price of the property is to be deposited if the consumer
11-7 fails to exercise a purchase option or to pay rent is considered to
11-8 be a loan. All payments made or agreed to be made by the consumer
11-9 to the buyer in excess of the price paid by the buyer are
11-10 considered to be interest subject to this subtitle.
11-11 (2) A buyer's taking title to personal property or taking
11-12 any security interest or lien in personal property in connection
11-13 with a transaction described by this article is a deceptive trade
11-14 practice under Subchapter E, Chapter 17, Business & Commerce Code,
11-15 and the taking of title is void and no security interest or lien
11-16 attaches as a result of the purported sale.
11-17 (3) This article applies to a sale or purported sale of
11-18 personal property used by a consumer primarily for personal,
11-19 family, or household purposes. This article does not apply to a
11-20 sale or purported sale of personal property used by a consumer
11-21 primarily for business, commercial, investment, agricultural, or
11-22 similar purposes.
11-23 Art. 2.11. DEPOSIT OF CERTAIN NEGOTIABLE INSTRUMENTS. (1)
11-24 A person engaged in the business of cashing checks, negotiable
11-25 orders of withdrawal, or similar negotiable instruments who charges
11-26 another person a fee or other compensation that exceeds 50 cents
11-27 for cashing such an instrument shall deposit that instrument with a
12-1 depository institution for collection not later than the next
12-2 banking day after the date the check, negotiable order of
12-3 withdrawal, or similar instrument is cashed. The person may not
12-4 cash a check, negotiable order of withdrawal, or other similar
12-5 negotiable instrument that is not dated or that bears a date later
12-6 than the date received.
12-7 (2) Except as provided by Section (3) of this article, if
12-8 the check, negotiable order of withdrawal, or other similar
12-9 negotiable instrument cashed is not deposited for immediate
12-10 collection by the end of the next banking day after the date
12-11 cashed, the cashing transaction is considered to be a loan of money
12-12 subject to this subtitle and any fee or other compensation
12-13 contracted for, charged, or received is considered interest.
12-14 (3) Section (2) of this article does not apply to a
12-15 transaction if the person cashing the instrument demonstrates that:
12-16 (a) the deposit was delayed for not more than one
12-17 additional banking day due to unforeseeable and unavoidable cause;
12-18 or
12-19 (b) there was no agreement or understanding to delay
12-20 deposit of the instrument and that the fee is comparable to fees
12-21 charged by other persons in the community for typical cashing
12-22 services that do not involve delayed deposits.
12-23 (4) A transaction considered to be a loan of money under
12-24 Section (2) of this article is subject to penalties for usury under
12-25 Chapter 8 of this title if the fee or other compensation exceeds
12-26 the interest rate authorized by Article 1.02 of this title.
12-27 (5) A person who is engaged in the business of cashing
13-1 personal checks, negotiable orders of withdrawal, or similar
13-2 negotiable instruments and who charges another person a fee or
13-3 other compensation that exceeds 50 cents for cashing such an
13-4 instrument shall post a notice of a size that is not less than 10
13-5 inches by 20 inches. The form of the notice shall be prescribed by
13-6 the Consumer Credit Commissioner and must include the Consumer
13-7 Credit Commissioner's address and telephone number. The notice
13-8 must be posted prominently at each entrance to the person's place
13-9 of business or at each window, counter, or other place where
13-10 checks, negotiable orders of withdrawal, or similar negotiable
13-11 instruments are cashed. The notice must state:
13-12 "NOTICE--TEXAS LAW REQUIRES US TO DEPOSIT YOUR CHECK
13-13 DURING THE NEXT DAY OUR BANK IS OPEN FOR BUSINESS. DO
13-14 NOT ASK OR EXPECT US TO HOLD YOUR CHECK. FOR MORE
13-15 INFORMATION ABOUT THIS LAW CONTACT: OFFICE OF TEXAS
13-16 CONSUMER CREDIT COMMISSIONER."
13-17 As an alternative, a check casher may satisfy the notice
13-18 requirement if the person immediately presents the required notice
13-19 on a legibly printed form to any person who makes an inquiry about
13-20 possible delayed deposit of the check the person seeks to cash.
13-21 The printed form must be not less than five inches by eight inches
13-22 and shall be prescribed by the Consumer Credit Commissioner.
13-23 SECTION 6. Subsections (a) and (b), Article 6.01, Title 79,
13-24 Revised Statutes (Article 5069-6.01, Vernon's Texas Civil
13-25 Statutes), are amended to read as follows:
13-26 (a) "Goods" means all tangible personal property when
13-27 purchased primarily for personal, family or household use and not
14-1 for commercial or business use, including such property which is
14-2 furnished or used at the time of sale or subsequently, in the
14-3 modernization, rehabilitation, repair, alteration, improvement or
14-4 construction of real property so as to become a part thereof
14-5 whether or not severable therefrom. The term also includes, but is
14-6 not limited to, a structure, except a mobile home, to be used as a
14-7 residence, any boat, boat-trailer, motor scooter, motor-assisted
14-8 bicycle, motorcycle, trailer designed or intended to be pulled by,
14-9 or to transport, a motor scooter, motor-assisted bicycle,
14-10 motorcycle or all-terrain vehicle, recreational vehicles commonly
14-11 known as travel trailers designed for temporary living
14-12 accommodations, camper-type trailer, horse trailer, any vehicle
14-13 propelled or drawn exclusively by muscular power, and merchandise
14-14 certificates or coupons, issued by a retail seller, not redeemable
14-15 in cash and to be used in their face amount in lieu of cash, in
14-16 exchange for goods or services sold by such seller.
14-17 The term does not include (i) money, things in action or
14-18 intangible personal property, other than merchandise certificates
14-19 or coupons as herein described; or (ii) any automobile, mobile
14-20 home, truck, trailer, other than a trailer expressly included in
14-21 the term semi-trailer, truck tractor or bus designed and used
14-22 primarily to transport persons or property on a public highway; or
14-23 (iii) any vehicle designed to run only on rails or tracks or in the
14-24 air, as defined in Chapter 7 of this Subtitle; or (iv) any goods
14-25 which are authorized to be and are included in a contract subject
14-26 to Chapter 7 of this Subtitle.
14-27 (b) "Services" means work, labor, or services of any
15-1 kind when purchased primarily for personal, family or household use
15-2 and not for commercial or business use, and includes a maintenance
15-3 or service contract or agreement or warranty, but does not include
15-4 (i) the services, other than medical and dental services, of a
15-5 professional person licensed by the State except when those
15-6 services are rendered in connection with the purchase of goods; or
15-7 (ii) services for which the cost is by law fixed or approved by, or
15-8 filed with or subject to approval or disapproval by the United
15-9 States or the State of Texas, or any agency, instrumentality or
15-10 subdivision thereof; or (iii) educational services provided by an
15-11 accredited college or university or a primary or secondary school
15-12 providing education required by the State of Texas or services of a
15-13 kindergarten or nursery school; (iv) any services which are
15-14 authorized to be and are included in a contract subject to Chapter
15-15 7 of this Subtitle; or (v) any <medical or> legal services.
15-16 SECTION 7. Sections (2) and (3), Article 6.02, Title 79,
15-17 Revised Statutes (Article 5069-6.02, Vernon's Texas Civil
15-18 Statutes), are amended to read as follows:
15-19 (2) The printed or typed portion of the contract, other than
15-20 instructions for completion, shall be in a size equal to at least
15-21 eight-point type. The contract shall be designated "Retail
15-22 Installment Contract" and shall contain substantially the following
15-23 notice printed or typed in a size equal to at least ten-point
15-24 <bold> type that is boldfaced, capitalized, underlined, or
15-25 otherwise set out from surrounding written material so as to be
15-26 conspicuous:
15-27 "NOTICE TO THE BUYER. DO NOT SIGN THIS CONTRACT BEFORE
16-1 YOU READ IT OR IF IT CONTAINS BLANK SPACES. YOU ARE
16-2 ENTITLED TO A COPY OF THE CONTRACT YOU SIGN. UNDER THE
16-3 LAW YOU HAVE THE RIGHT TO PAY OFF IN ADVANCE THE FULL
16-4 AMOUNT DUE AND UNDER CERTAIN CONDITIONS MAY OBTAIN A
16-5 PARTIAL REFUND OF THE FINANCE CHARGE. KEEP THIS
16-6 CONTRACT TO PROTECT YOUR LEGAL RIGHTS."
16-7 (3) The retail seller shall deliver to the retail buyer, or
16-8 mail to him at his address shown on the retail installment
16-9 contract, a copy of the contract as accepted by the seller. Until
16-10 the seller does so, a buyer, who has not received delivery of the
16-11 goods or been furnished or rendered the services, shall have the
16-12 right to rescind the contract and to receive a refund of all
16-13 payments made and return of all goods traded in to the seller on
16-14 account of or in contemplation of the contract, or if such goods
16-15 cannot be returned, the trade-in allowance thereof. Any
16-16 acknowledgement by the buyer of delivery of a copy of the contract
16-17 shall be in a size equal to at least ten-point <bold> type that is
16-18 boldfaced, capitalized, underlined, or otherwise set out from
16-19 surrounding written material so as to be conspicuous and, if
16-20 contained in the contract, shall appear directly above the buyer's
16-21 signature.
16-22 SECTION 8. Section (1), Article 6.03, Title 79, Revised
16-23 Statutes (Article 5069-6.03, Vernon's Texas Civil Statutes), is
16-24 amended to read as follows:
16-25 (1) A retail charge agreement may be established by a seller
16-26 or credit card issuer upon the request of a buyer or prospective
16-27 buyer. The retail charge agreement shall be in writing and signed
17-1 by the buyer. A copy of such agreement executed on or after the
17-2 effective date of this Chapter shall be delivered or mailed to the
17-3 buyer prior to the date on which the first payment is due
17-4 thereunder. Any acknowledgment by the buyer of delivery of a copy
17-5 of the agreement contained in the body thereof shall be in a size
17-6 equal to at least ten-point <bold> type that is boldfaced,
17-7 capitalized, underlined, or otherwise set out from surrounding
17-8 written material so as to be conspicuous and shall appear directly
17-9 above the buyer's signature. No agreement executed on or after the
17-10 effective date of this Chapter shall be signed by the buyer when it
17-11 contains blank spaces to be filled in after it has been signed.
17-12 The buyer's acknowledgment, conforming to the requirements of this
17-13 section, of delivery of a copy of an agreement, shall be
17-14 presumptive proof, in any action or proceeding, of such delivery
17-15 and that the agreement, when signed, did not contain any blank
17-16 spaces as herein provided. If no copy of the agreement is retained
17-17 by the seller, a notation in his permanent record showing that such
17-18 agreement was mailed and the date of mailing shall serve as
17-19 presumptive proof of such mailing. Any such agreement shall
17-20 contain substantially the following notice printed or typed in a
17-21 size equal to at least ten-point <bold> type that is boldfaced,
17-22 capitalized, underlined, or otherwise set out from surrounding
17-23 written material so as to be conspicuous:
17-24 "NOTICE TO THE BUYER--DO NOT SIGN THIS AGREEMENT BEFORE
17-25 YOU READ IT OR IF IT CONTAINS BLANK SPACES. YOU ARE
17-26 ENTITLED TO A COPY OF THE AGREEMENT YOU SIGN. KEEP
17-27 THIS AGREEMENT TO PROTECT YOUR LEGAL RIGHTS."
18-1 SECTION 9. Chapter 6, Title 79, Revised Statutes (Article
18-2 5069-6.01 et seq., Vernon's Texas Civil Statutes), is amended by
18-3 adding Article 6.12 to read as follows:
18-4 Art. 6.12. RATES FOR MEDICAL AND DENTAL SERVICES. Medical
18-5 or dental services may be financed at rates authorized by Article
18-6 1.04 of this title.
18-7 SECTION 10. Section (1), Article 6.06, Title 79, Revised
18-8 Statutes (Article 5069-6.06, Vernon's Texas Civil Statutes), is
18-9 amended to read as follows:
18-10 (1) A seller who has entered into a retail installment
18-11 transaction to perform services or install goods for the
18-12 modernization, rehabilitation, repair, alteration, improvement or
18-13 construction of improvements on real property shall obtain a
18-14 certificate of completion or certificate of satisfaction
18-15 (hereinafter designated "certificate") signed by the buyer, when
18-16 all such goods and/or services purchased under a retail installment
18-17 contract have been performed or installed as required by such
18-18 contract; and may obtain such a certificate whether or not any
18-19 guarantee or warranty of the goods or services remains in force.
18-20 Such certificate shall be a separate writing and shall have the
18-21 following notation at the top thereof in at least ten-point <bold>
18-22 type that is boldfaced, capitalized, underlined, or otherwise set
18-23 out from surrounding written material so as to be conspicuous:
18-24 WARNING TO BUYER--DO NOT SIGN THIS CERTIFICATE UNTIL
18-25 ALL SERVICES HAVE BEEN SATISFACTORILY PERFORMED AND
18-26 MATERIALS SUPPLIED OR GOODS RECEIVED AND FOUND
18-27 SATISFACTORY.
19-1 SECTION 11. Article 6.07, Title 79, Revised Statutes
19-2 (Article 5069-6.07, Vernon's Texas Civil Statutes), is amended to
19-3 read as follows:
19-4 Art. 6.07. Assignment and negotiation. Notwithstanding the
19-5 provisions of any other law, a person may purchase or acquire or
19-6 agree to purchase or acquire any retail installment contract or
19-7 retail charge agreement or any outstanding balance under either
19-8 from another person on such terms and conditions and for such price
19-9 as may be mutually agreed upon. Notice to the buyer of the
19-10 assignment or negotiation and any requirement that the seller be
19-11 deprived of dominion over payments upon a retail installment
19-12 contract or retail charge agreement, or over the goods if returned
19-13 to or repossessed by the seller, is not necessary to the validity
19-14 of a written assignment or negotiation of the retail installment
19-15 contract or retail charge agreement or any outstanding balance
19-16 under either, as against creditors, subsequent purchasers, pledges,
19-17 mortgagees and lien claimants of the seller. Unless the buyer has
19-18 notice of the assignment or negotiation of his retail installment
19-19 contract, retail charge agreement or any outstanding balance under
19-20 either, payment therefor made by the buyer to the holder last known
19-21 to him shall be binding upon all subsequent holders. No right of
19-22 action or defense of a buyer arising out of a retail installment
19-23 transaction which would be cut off by negotiation, shall be cut off
19-24 by negotiation of the retail installment contract or retail charge
19-25 agreement to any third party unless such holder acquires the
19-26 contract relying in good faith upon a certificate of completion or
19-27 certificate of satisfaction, if required by the provisions of
20-1 Article 6.06; and such holder gives notice of the negotiation to
20-2 the buyer as provided in this Article, and within thirty days of
20-3 the mailing of such notice receives no written notice from the
20-4 buyer of any facts giving rise to any claim or defense of the
20-5 buyer. Such notice of negotiation shall be in writing addressed to
20-6 the buyer at the address shown on the contract and shall: identify
20-7 the contract; state the names and addresses of the seller and
20-8 buyer; describe the goods or services; state the time balance and a
20-9 description of the payment schedule. The notice of negotiation
20-10 shall contain the following warning to the buyer in at least
20-11 ten-point <bold face> type that is boldfaced, capitalized,
20-12 underlined, or otherwise set out from surrounding written material
20-13 so as to be conspicuous:
20-14 ARE THE TERMS OF THE CONTRACT DESCRIBED ABOVE CORRECT
20-15 AND ARE YOU SATISFIED WITH THE GOODS OR SERVICES
20-16 FURNISHED? IF NOT, YOU SHOULD NOTIFY US GIVING DETAILS
20-17 WITHIN 30 DAYS FROM THE DATE THE ABOVE NOTICE WAS
20-18 MAILED.
20-19 SECTION 12. Section (b), Article 6.10, Title 79, Revised
20-20 Statutes (Article 5069-6.10, Vernon's Texas Civil Statutes), is
20-21 amended to read as follows:
20-22 (b) Preliminary worksheets that are shown to the buyer in
20-23 which a sale price is computed, an order from the buyer, and the
20-24 retail installment contract must include, in reasonable proximity
20-25 to the place in the worksheet, order, or contract where the
20-26 documentary fee is disclosed, the amount of the fee and the
20-27 following notice in <bold-faced> type that is boldfaced,
21-1 capitalized, underlined, or otherwise set out from surrounding
21-2 written material so as to be conspicuous:
21-3 "A DOCUMENTARY FEE IS NOT AN OFFICIAL FEE. A
21-4 DOCUMENTARY FEE <AND> IS NOT REQUIRED BY LAW, BUT MAY
21-5 BE CHARGED TO BUYERS <A BUYER> FOR <THE> HANDLING <OF>
21-6 DOCUMENTS AND <THE> PERFORMING <OF> SERVICES RELATING
21-7 <RELATED> TO THE CLOSING OF A SALE. BUYERS <A BUYER>
21-8 MAY AVOID PAYMENT OF THE FEE TO THE SELLER BY HANDLING
21-9 THE <THESE> DOCUMENTS AND PERFORMING THE <THESE>
21-10 SERVICES RELATING TO THE CLOSING OF THE SALE. A
21-11 DOCUMENTARY FEE MAY NOT EXCEED $25. THIS NOTICE IS
21-12 REQUIRED BY LAW."
21-13 SECTION 13. Subsection (d), Article 7.01, Title 79, Revised
21-14 Statutes (Article 5069-7.01, Vernon's Texas Civil Statutes), is
21-15 amended to read as follows:
21-16 (d) "Retail Installment Transaction" or "Transaction"
21-17 means any transaction as a result of which a retail buyer acquires
21-18 a motor vehicle from a retail seller <under a retail installment
21-19 contract for a sum consisting of the cash sale price and other
21-20 charges as limited by this Chapter> and agrees with a retail seller
21-21 to pay part or all of the cash sale price <such sum> in one or more
21-22 deferred installments. All such transactions shall be under a
21-23 retail installment contract and be subject to the provisions of
21-24 this chapter. The term shall include every transaction wherein the
21-25 promise or agreement to pay the deferred balance of the cash sale
21-26 price <such sum> is made by the retail buyer to the retail seller
21-27 notwithstanding the existence or occurrence of any one or more of
22-1 the following events: (i) that the retail seller has arranged or
22-2 arranges to sell, transfer or assign the retail buyer's obligation;
22-3 (ii) that the amount of any <the> charges is determined by
22-4 reference to charts or information furnished by a financing
22-5 institution; (iii) that the forms of instruments used to evidence
22-6 the retail installment transaction are furnished by a financing
22-7 institution; and (iv) that the credit standing of the retail buyer
22-8 is or has been evaluated by a financing institution.
22-9 SECTION 14. Sections (2)-(4), Article 7.02, Title 79,
22-10 Revised Statutes (Article 5069-7.02, Vernon's Texas Civil
22-11 Statutes), are amended to read as follows:
22-12 (2) The printed portion of the retail installment contract,
22-13 other than instructions for completion, shall be in a size equal to
22-14 at least eight-point type. Such contract shall contain
22-15 substantially the following notice in a size equal to at least
22-16 ten-point <bold> type that is boldfaced, capitalized, underlined,
22-17 or otherwise set out from surrounding written material so as to be
22-18 conspicuous:
22-19 "NOTICE TO THE BUYER--DO NOT SIGN THIS CONTRACT BEFORE
22-20 YOU READ IT OR IF IT CONTAINS ANY BLANK SPACES. YOU
22-21 ARE ENTITLED TO A COPY OF THE CONTRACT YOU SIGN. UNDER
22-22 THE LAW YOU HAVE THE RIGHT TO PAY OFF IN ADVANCE THE
22-23 FULL AMOUNT DUE AND UNDER CERTAIN CONDITIONS MAY OBTAIN
22-24 A PARTIAL REFUND OF THE FINANCE CHARGE. KEEP THIS
22-25 CONTRACT TO PROTECT YOUR LEGAL RIGHTS."
22-26 (3) A retail installment contract or separate written
22-27 statement shall also contain, in a size equal to at least ten-point
23-1 <bold> type that is boldfaced, capitalized, underlined, or
23-2 otherwise set out from surrounding written material so as to be
23-3 conspicuous, a specific statement that liability insurance coverage
23-4 for bodily injury and property damage caused to others is not
23-5 included, if that is the case.
23-6 (4) The seller shall deliver to the buyer, or mail to him at
23-7 his address shown on the retail installment contract, a copy of
23-8 such contract as accepted by the seller. Until the seller does so,
23-9 a buyer who has not received delivery of the motor vehicle shall
23-10 have the right to rescind his contract and to receive a refund of
23-11 all payments made and a return of all goods traded in to the seller
23-12 on account of or in contemplation of such contract, or if the goods
23-13 traded in cannot be returned, the value thereof. Any
23-14 acknowledgment by the buyer of delivery of a copy of the retail
23-15 installment contract shall be in a size equal to at least ten-point
23-16 <bold> type that is boldfaced, capitalized, underlined, or
23-17 otherwise set out from surrounding written material so as to be
23-18 conspicuous and shall appear directly above the buyer's signature.
23-19 SECTION 15. Article 8.03, Title 79, Revised Statutes
23-20 (Article 5069-8.03, Vernon's Texas Civil Statutes), is amended to
23-21 read as follows:
23-22 Art. 8.03. Engaging in lending business without license. In
23-23 addition to the foregoing penalties, if applicable, any person
23-24 engaging in any business under the scope of Chapters 3, 4, <or> 5,
23-25 or 15 of this Subtitle without first securing a license provided,
23-26 or without the authorization prescribed, in such Chapter shall be
23-27 guilty of a misdemeanor and upon conviction thereof shall be
24-1 punishable by a fine of not more than One Thousand Dollars, and
24-2 each such loan made without the authority granted by such license
24-3 shall constitute a separate offense punishable hereunder; and in
24-4 addition such person shall forfeit all principal and charges
24-5 contracted for or collected on each such loan, and shall pay
24-6 reasonable attorneys' fees incurred by the obligor.
24-7 SECTION 16. Section (a), Article 8.06, Title 79, Revised
24-8 Statutes (Article 5069-8.06, Vernon's Texas Civil Statutes), is
24-9 amended to read as follows:
24-10 (a) Any person who violates the terms of Article 2.07 of
24-11 this Title is liable to the aggrieved individual for the actual
24-12 damages caused by the denial, punitive damages not to exceed
24-13 $10,000 in an action brought by the aggrieved individual, <or for
24-14 $50.00, whichever is greater,> and court costs. The liability of
24-15 any person under this article for a violation of Article 2.07 of
24-16 this Title is in lieu of and not in addition to that person's
24-17 liability under the federal Consumer Credit Protection Act, Title
24-18 VII (15 U.S.C. Section 1601 et seq.). If the same act or omission
24-19 constitutes a violation of Article 2.07 of this Title and of
24-20 applicable federal law, the person aggrieved by that conduct may
24-21 bring a legal action to recover monetary damages either under this
24-22 article or under that federal law, but not both.
24-23 SECTION 17. This Act applies only to acts done and
24-24 transactions entered into on or after the effective date of this
24-25 Act. Transactions entered into before the effective date of this
24-26 Act are governed by the law in effect immediately before this Act
24-27 takes effect and that law continues in effect for that purpose.
25-1 SECTION 18. This Act takes effect September 1, 1993.
25-2 SECTION 19. The importance of this legislation and the
25-3 crowded condition of the calendars in both houses create an
25-4 emergency and an imperative public necessity that the
25-5 constitutional rule requiring bills to be read on three several
25-6 days in each house be suspended, and this rule is hereby suspended.