1-1 By: Harris of Tarrant S.B. No. 400
1-2 (In the Senate - Filed February 18, 1993; February 22, 1993,
1-3 read first time and referred to Committee on Economic Development;
1-4 March 23, 1993, reported adversely, with favorable Committee
1-5 Substitute by the following vote: Yeas 9, Nays 0; March 23, 1993,
1-6 sent to printer.)
1-7 COMMITTEE VOTE
1-8 Yea Nay PNV Absent
1-9 Parker x
1-10 Lucio x
1-11 Ellis x
1-12 Haley x
1-13 Harris of Dallas x
1-14 Harris of Tarrant x
1-15 Leedom x
1-16 Madla x
1-17 Rosson x
1-18 Shapiro x
1-19 Wentworth x
1-20 COMMITTEE SUBSTITUTE FOR S.B. No. 400 By: Harris of Tarrant
1-21 A BILL TO BE ENTITLED
1-22 AN ACT
1-23 relating to the regulation of debt collectors.
1-24 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-25 SECTION 1. Chapter 547, Acts of the 63rd Legislature,
1-26 Regular Session, 1973 (Article 5069-11.01 et seq.), is amended by
1-27 adding Section 7A to read as follows:
1-28 Sec. 7A. CORRECTION OF THIRD-PARTY DEBT COLLECTOR'S FILES;
1-29 BOND REQUIREMENT. (a) If an individual disputes the accuracy of
1-30 an item in a third-party debt collector's file on the individual,
1-31 the individual may give notice of the inaccuracy in writing to the
1-32 third-party debt collector. The third-party debt collector shall
1-33 provide forms for the notice and shall assist an individual in
1-34 preparing the notice when requested.
1-35 (b) Within 15 days after the date on which a notice of
1-36 inaccuracy is received, the third-party debt collector shall send a
1-37 written statement to the individual in which the third-party debt
1-38 collector shall deny the inaccuracy, admit the inaccuracy, or state
1-39 that it has not had sufficient time to complete its investigation.
1-40 (c) If the third-party debt collector admits that the item
1-41 is inaccurate, it shall immediately correct the item in its file
1-42 and shall immediately send to each person who has previously
1-43 received a report containing the inaccurate information notice of
1-44 the inaccuracy and a copy of the accurate report.
1-45 (d) If the third-party debt collector states that it has not
1-46 had sufficient time to complete its investigation, it shall
1-47 immediately change the item in its file as requested by the
1-48 individual, shall immediately send to each person who previously
1-49 received the report containing the information a notice that is
1-50 equivalent to a notice under Subsection (c) of this section and a
1-51 copy of the changed report, and shall immediately cease collection
1-52 efforts if the item involves a debt. When the third-party debt
1-53 collector completes its investigation and determines whether the
1-54 item is accurate or inaccurate, it shall inform the individual of
1-55 its determination. If the third-party debt collector determines
1-56 that the information was accurate, it may again report that
1-57 information and may resume its collection efforts.
1-58 (e) A third-party debt collector may not engage in debt
1-59 collection unless the person has obtained a surety bond issued by a
1-60 surety company authorized to do business in this state as required
1-61 by this section. A copy of the bond must be filed with the
1-62 secretary of state.
1-63 (f) The surety bond must be in favor of:
1-64 (1) any person who is damaged by a violation of this
1-65 Act; and
1-66 (2) the state, for the benefit of any person who is
1-67 damaged by a violation of this Act.
1-68 (g) A person claiming against the bond for a violation of
2-1 this Act may maintain an action against the third-party debt
2-2 collector and against the surety. The aggregate liability of the
2-3 surety to all persons damaged by a violation of this Act may not
2-4 exceed the amount of the surety bond.
2-5 (h) The bond must be in the amount of $10,000.
2-6 (i) For purposes of this section, "third-party debt
2-7 collector" means a debt collector, as defined by 15 U.S.C. Section
2-8 1692a(6), other than an attorney at law collecting a debt as an
2-9 attorney on behalf of and in the name of a client.
2-10 SECTION 2. This Act takes effect September 1, 1993.
2-11 SECTION 3. The importance of this legislation and the
2-12 crowded condition of the calendars in both houses create an
2-13 emergency and an imperative public necessity that the
2-14 constitutional rule requiring bills to be read on three several
2-15 days in each house be suspended, and this rule is hereby suspended.
2-16 * * * * *
2-17 Austin,
2-18 Texas
2-19 March 23, 1993
2-20 Hon. Bob Bullock
2-21 President of the Senate
2-22 Sir:
2-23 We, your Committee on Economic Development to which was referred
2-24 S.B. No. 400, have had the same under consideration, and I am
2-25 instructed to report it back to the Senate with the recommendation
2-26 that it do not pass, but that the Committee Substitute adopted in
2-27 lieu thereof do pass and be printed.
2-28 Parker,
2-29 Chairman
2-30 * * * * *
2-31 WITNESSES
2-32 FOR AGAINST ON
2-33 ___________________________________________________________________
2-34 Name: Alan R. Davis x
2-35 Representing:
2-36 City: Dallas
2-37 -------------------------------------------------------------------
2-38 Name: Al Endsley x
2-39 Representing: Office of Consumer Credit
2-40 City: Austin
2-41 -------------------------------------------------------------------
2-42 Name: Karen M. Neeley x
2-43 Representing: Independent Bankers of Texas
2-44 City: Austin
2-45 -------------------------------------------------------------------
2-46 Name: James K. Presnal x
2-47 Representing: American Collectors Assn of Tx
2-48 City: Austin
2-49 -------------------------------------------------------------------