By: Harris of Dallas S.B. No. 1133
A BILL TO BE ENTITLED
AN ACT
1-1 relating to the authority of the Consumer Credit Commissioner and
1-2 to the regulation of certain consumer credit practices; providing
1-3 penalties.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Article 2.02A, Title 79, Revised Statutes
1-6 (Article 5069-2.02A, Vernon's Texas Civil Statutes), is amended by
1-7 adding Section (12) to read as follows:
1-8 (12)(a) The Consumer Credit Commissioner may not accept or
1-9 use money offered by an individual, firm, partnership, corporation,
1-10 or association either (i) for investigating or prosecuting a
1-11 matter, or (ii) if such individual, firm, partnership, corporation,
1-12 or association is affiliated with any industry under the regulatory
1-13 jurisdiction of the Finance Commission, except in the context of a
1-14 judgment or the negotiated settlement of a claim or action
1-15 threatened or asserted by or on behalf of the Office of Consumer
1-16 Credit Commissioner. The Consumer Credit Commissioner is not
1-17 hereby prohibited from receiving and using money from persons under
1-18 the jurisdiction of the commissioner when expressly authorized by
1-19 law or rule.
1-20 (b) The Consumer Credit Commissioner may accept money,
1-21 gifts, and grants on behalf of the state for purposes related to
1-22 duties performed by the commissioner or for consumer credit
1-23 educational opportunities, unless the acceptance is prohibited
2-1 under Subsection (a) of this section or other law. Money received
2-2 under this subsection shall be deposited in the state treasury to
2-3 the credit of an account established in the general revenue fund
2-4 for the receipt of those funds and may be appropriated only for the
2-5 purposes for which the money was given. Acceptance and use of
2-6 money herein is subject to approval of the Finance Commission.
2-7 SECTION 2. Section (7), Article 2.03, Title 79, Revised
2-8 Statutes (Article 5069-2.03, Vernon's Texas Civil Statutes), is
2-9 amended to read as follows:
2-10 (7) Whenever the Consumer Credit Commissioner has reasonable
2-11 cause to believe that any person is violating any provisions of the
2-12 statutes to which this Article applies he may in addition to all
2-13 actions provided for, and without prejudice thereto, enter an order
2-14 requiring such person to desist or to refrain from such violation.
2-15 A person may appeal such an order to the Finance Commission. The
2-16 appeal must be made in accordance with the Administrative Procedure
2-17 and Texas Register Act (Article 6252-13a, Vernon's Texas Civil
2-18 Statutes) and its subsequent amendments <rules adopted by the
2-19 Finance Commission for that purpose>. In addition to the order,
2-20 the Commissioner may bring an action in any district court of this
2-21 State having jurisdiction and venue, on the relation of the
2-22 Attorney General at the request of the Commissioner, to enjoin such
2-23 person from engaging in or continuing such violation or from doing
2-24 any act or acts in furtherance thereof. In any such action, an
2-25 order or judgment may be entered awarding such preliminary or final
3-1 injunction as may be deemed proper. In addition to all other means
3-2 provided by law for the enforcement of a restraining order or
3-3 injunction, the court in which such action is brought shall have
3-4 power and jurisdiction to impound, and to appoint a receiver for,
3-5 the property and business of the defendant, including books,
3-6 papers, documents, and records pertaining thereto or so much
3-7 thereof as the court may deem reasonably necessary to prevent
3-8 violations through or by means of the use of said property and
3-9 business. Such receiver, when appointed and qualified, shall have
3-10 such powers and duties as he would have under Chapter 64, Civil
3-11 Practice and Remedies Code.
3-12 SECTION 3. Chapter 2, Title 79, Revised Statutes (Article
3-13 5069-2.01 et seq., Vernon's Texas Civil Statutes), is amended by
3-14 adding Article 2.03A to read as follows:
3-15 Art. 2.03A. ADMINISTRATIVE PENALTY; RESTITUTION ORDER.
3-16 (a) The Consumer Credit Commissioner may assess an administrative
3-17 penalty against a person who knowingly and wilfully violates or
3-18 causes a violation of this Subtitle, Chapter 9 or 15 of this Title,
3-19 or a rule adopted under this Subtitle or Chapter 9 or 15 of this
3-20 Title. The Consumer Credit Commissioner may order a person who
3-21 violates or causes a violation of this Subtitle, Chapter 9 or 15 of
3-22 this Title, or a rule adopted under this Subtitle or Chapter 9 or
3-23 15 of this Title to make restitution to an identifiable person
3-24 injured by the violation.
3-25 (b) The amount of the penalty may not exceed $1,000 for each
4-1 day of violation and for each act of violation. The aggregate
4-2 amount of penalties that may be assessed against a person during
4-3 one calendar year under this Article may not exceed $5,000 for each
4-4 business location at which an element of a violation occurred and
4-5 may not exceed $50,000 if the person committed violations at 11 or
4-6 more business locations.
4-7 (c) In determining the amount of a penalty, the Consumer
4-8 Credit Commissioner shall consider:
4-9 (1) the seriousness of the violation, including the
4-10 nature, circumstances, extent, and gravity of the prohibited act;
4-11 (2) the extent of actual or potential harm to a third
4-12 party;
4-13 (3) the history of violations during the preceding
4-14 four years;
4-15 (4) the amount necessary to deter future violations;
4-16 (5) efforts to correct the violation; and
4-17 (6) any other matter that justice may require.
4-18 (d) If the Consumer Credit Commissioner determines that a
4-19 violation has occurred the commissioner may issue a report that
4-20 states the facts on which the determination is based and the
4-21 commissioner's recommendation on the imposition of a penalty,
4-22 including a recommendation on the amount of the penalty.
4-23 (e) Within 14 days after the date the report is issued, the
4-24 Consumer Credit Commissioner shall give written notice of the
4-25 report to the person. The notice may be given by certified mail.
5-1 The notice must include a brief summary of the alleged violation
5-2 and a statement of the amount of the recommended penalty and must
5-3 inform the person that the person has a right to a hearing on the
5-4 occurrence of the violation, the amount of the penalty, or both the
5-5 occurrence of the violation and the amount of the penalty.
5-6 (f) Within 20 days after the date the person received the
5-7 notice, the person in writing may accept the determination and
5-8 recommended penalty of the Consumer Credit Commissioner or may make
5-9 a written request for a hearing on the occurrence of the violation,
5-10 the amount of the penalty, or both the occurrence of the violation
5-11 and the amount of the penalty.
5-12 (g) If the person accepts the determination and recommended
5-13 penalty of the Consumer Credit Commissioner, the commissioner by
5-14 order shall approve the determination and impose the recommended
5-15 penalty.
5-16 (h) If the person requests a hearing or fails to respond
5-17 timely to the notice, the Consumer Credit Commissioner shall set a
5-18 hearing and give notice of the hearing to the person. The hearing
5-19 shall be held by an administrative law judge of the State Office of
5-20 Administrative Hearings. The administrative law judge shall make
5-21 findings of fact and conclusions of law and promptly issue a
5-22 proposal of decision about the occurrence of the violation and the
5-23 amount of a proposed penalty. Based on the findings of fact,
5-24 conclusions of law, and proposal for a decision, the commissioner
5-25 by order may find that a violation has occurred and impose a
6-1 penalty or may find that no violation occurred.
6-2 (i) The notice of the Consumer Credit Commissioner's order
6-3 given to the person under the Administrative Procedure and Texas
6-4 Register Act (Article 6252-13a, Vernon's Texas Civil Statutes) and
6-5 its subsequent amendments must include a statement of the right of
6-6 the person to judicial review of the order.
6-7 (j) Within 30 days after the date the Consumer Credit
6-8 Commissioner's order is final as provided by Section 16(c),
6-9 Administrative Procedure and Texas Register Act (Article 6252-13a,
6-10 Vernon's Texas Civil Statutes), the person shall:
6-11 (1) pay the amount of the penalty;
6-12 (2) pay the amount of the penalty and file a petition
6-13 for judicial review contesting the occurrence of the violation, the
6-14 amount of the penalty, or both the occurrence of the violation and
6-15 the amount of the penalty; or
6-16 (3) without paying the amount of the penalty, file a
6-17 petition for judicial review contesting the occurrence of the
6-18 violation, the amount of the penalty, or both the occurrence of the
6-19 violation and the amount of the penalty.
6-20 (k) Within the 30-day period, a person who acts under
6-21 Subsection (j)(3) of this Section may:
6-22 (1) stay enforcement of the penalty by:
6-23 (A) paying the amount of the penalty to the
6-24 court for placement in an escrow account; or
6-25 (B) giving to the court a supersedeas bond
7-1 approved by the court in the amount of the penalty, effective until
7-2 all judicial review of the Consumer Credit Commissioner's order is
7-3 final; or
7-4 (2) request the court to stay enforcement of the
7-5 penalty by:
7-6 (A) filing with the court a sworn affidavit of
7-7 the person stating that the person is financially unable to pay the
7-8 amount of the penalty and is financially unable to give the
7-9 supersedeas bond; and
7-10 (B) giving a copy of the affidavit to the
7-11 commissioner by certified mail.
7-12 (l) If the Consumer Credit Commissioner receives a copy of
7-13 an affidavit under Subsection (k)(2) of this Section the
7-14 commissioner may file with the court within five days after the
7-15 date the copy is received a contest to the affidavit. The court
7-16 shall hold a hearing on the facts alleged in the affidavit as soon
7-17 as practicable and shall stay the enforcement of the penalty on
7-18 finding that the alleged facts are true. The person who files an
7-19 affidavit has the burden of proving that the person is financially
7-20 unable to pay the amount of the penalty and to give a supersedeas
7-21 bond.
7-22 (m) If the person does not pay the amount of the penalty and
7-23 the enforcement of the penalty is not stayed, the Consumer Credit
7-24 Commissioner may refer the matter to the attorney general for
7-25 collection of the amount of the penalty.
8-1 (n) Judicial review of the order of the Consumer Credit
8-2 Commissioner:
8-3 (1) is instituted by filing a petition as provided by
8-4 Section 19, Administrative Procedure and Texas Register Act
8-5 (Article 6252-13a, Vernon's Texas Civil Statutes), and its
8-6 subsequent amendments; and
8-7 (2) is under the substantial evidence rule.
8-8 (o) If the court sustains the occurrence of the violation,
8-9 the court may uphold or reduce the amount of the penalty and order
8-10 the person to pay the full or reduced amount of the penalty. If
8-11 the court does not sustain the occurrence of the violation, the
8-12 court shall order that no penalty is owed.
8-13 (p) When the judgment of the court becomes final, the court
8-14 shall proceed under this Subsection. If the person paid the amount
8-15 of the penalty and if that amount is reduced or is not upheld by
8-16 the court, the court shall order that the appropriate amount plus
8-17 accrued interest be remitted to the person. The rate of the
8-18 interest is the rate charged on loans to depository institutions by
8-19 the New York Federal Reserve Bank, and the interest shall be paid
8-20 for the period beginning on the date the penalty was paid and
8-21 ending on the date the penalty is remitted. If the person gave a
8-22 supersedeas bond and the amount of the penalty is not upheld by the
8-23 court, the court shall order the release of the bond. If the
8-24 person gave a supersedeas bond and the amount of the penalty is
8-25 reduced, the court shall order the release of the bond after the
9-1 person pays the amount.
9-2 (q) In addition to the administrative penalty or restitution
9-3 amount, the court may authorize the Consumer Credit Commissioner to
9-4 recover from a person who pays an administrative penalty or
9-5 restitution amount, or both, under this Article reasonable expenses
9-6 incurred in obtaining the ordered amount, including investigation
9-7 costs, witness fees, and deposition expenses.
9-8 (r) A penalty collected under this Article shall be remitted
9-9 to the comptroller for deposit in the general revenue fund.
9-10 (s) All proceedings under this Section are subject to the
9-11 Administrative Procedure and Texas Register Act (Article 6252-13a,
9-12 Vernon's Texas Civil Statutes) and its subsequent amendments.
9-13 (t) An administrative penalty or restitution order
9-14 authorized by this Article is in addition to any other enforcement
9-15 authority provided by law.
9-16 SECTION 4. Article 2.06, Title 79, Revised Statutes (Article
9-17 5069-2.06, Vernon's Texas Civil Statutes), is amended to read as
9-18 follows:
9-19 Art. 2.06. Advertising. (1) No person shall advertise or
9-20 cause to be advertised, in any manner whatsoever, any false,
9-21 misleading or deceptive statement or representation with regard to
9-22 the rates, terms or conditions of any loan or credit transaction
9-23 regulated by the statutes listed by Section (1), Article 2.02A of
9-24 this Title <Subtitle Two>. If rates or charges are stated in
9-25 advertising they shall be stated fully and clearly.
10-1 (2) A person may not advertise or otherwise perform any act
10-2 or offer any service that would cause another to believe that the
10-3 person is offering to make, arrange, or negotiate a loan or credit
10-4 sale that is subject to the statutes listed by Section (1), Article
10-5 2.02A of this Title unless the person is authorized to perform that
10-6 act or offer that service as:
10-7 (a) a credit services organization under Chapter 18,
10-8 Business & Commerce Code;
10-9 (b) a pawnbroker under the Texas Pawnshop Act (Article
10-10 5069-51.01 et seq., Vernon's Texas Civil Statutes); or
10-11 (c) an authorized lender or a registered creditor
10-12 under this Subtitle.
10-13 (3) A person commits an offense if the person violates
10-14 Section (2) of this Article. An offense under this Section is a
10-15 Class A misdemeanor.
10-16 (4) A person who violates Section (2) of this Article also
10-17 is subject to the penalties provided by Chapter 8 of this Title and
10-18 to any civil penalties that the Consumer Credit Commissioner may
10-19 assess.
10-20 (5) In each advertisement that purports to offer credit
10-21 subject to the statutes listed by Section (1), Article 2.02A of
10-22 this Title, the advertiser shall disclose the legal or properly
10-23 registered name of the advertiser and the physical address of the
10-24 advertiser's place of business unless the advertisement is located
10-25 on the premises of the advertiser's place of business. This
11-1 Section does not apply to a federally insured depository
11-2 institution or to a person engaged in interstate commerce who
11-3 advertises under a generally recognized trade name, abbreviated
11-4 form of a trade name, or logo.
11-5 SECTION 5. Article 2.07, Title 79, Revised Statutes (Article
11-6 5069-2.07, Vernon's Texas Civil Statutes), is amended to read as
11-7 follows:
11-8 Art. 2.07. Credit and loans to individuals. No authorized
11-9 lender <licensee> under Chapter 3 of this Title or other person
11-10 involved in transactions subject to this Title may deny an
11-11 individual who has the capacity to contract credit or loans in his
11-12 or her name, or restrict or limit the credit or loan granted
11-13 <solely> on the basis of sex, race, color, religion, <or> national
11-14 origin, marital status, or age or because all or part of the
11-15 individual's income derives from a public assistance program or the
11-16 individual has in good faith exercised any right under the Consumer
11-17 Credit Protection Act (15 U.S.C. Section 1601 et seq.; 18 U.S.C.
11-18 Section 891 et seq.). In interpreting this section, the courts and
11-19 administrative agencies shall be guided by the federal Equal Credit
11-20 Opportunity Act and regulations thereunder and interpretations
11-21 thereof by the Federal Reserve Board to the extent that that Act
11-22 and those regulations and interpretations pertain to conduct
11-23 prohibited by this section.
11-24 SECTION 6. Subsections (a), (b), and (e), Article 6.01,
11-25 Title 79, Revised Statutes (Article 5069-6.01, Vernon's Texas Civil
12-1 Statutes), are amended to read as follows:
12-2 (a) "Goods" means all tangible personal property when
12-3 purchased primarily for personal, family or household use and not
12-4 for commercial or business use, including such property which is
12-5 furnished or used at the time of sale or subsequently, in the
12-6 modernization, rehabilitation, repair, alteration, improvement or
12-7 construction of real property so as to become a part thereof
12-8 whether or not severable therefrom. The term also includes, but is
12-9 not limited to, a structure, except a mobile home, to be used as a
12-10 residence, any boat, boat-trailer, motor scooter, motor-assisted
12-11 bicycle, motorcycle, trailer designed or intended to be pulled by,
12-12 or to transport, a motor scooter, motor-assisted bicycle,
12-13 motorcycle or all-terrain vehicle, recreational vehicles commonly
12-14 known as travel trailers designed for temporary living
12-15 accommodations, camper-type trailer, horse trailer, any vehicle
12-16 propelled or drawn exclusively by muscular power, and merchandise
12-17 certificates or coupons, issued by a retail seller, not redeemable
12-18 in cash and to be used in their face amount in lieu of cash, in
12-19 exchange for goods or services sold by such seller.
12-20 The term does not include (i) money, things in action or
12-21 intangible personal property, other than merchandise certificates
12-22 or coupons as herein described; or (ii) any automobile, mobile
12-23 home, truck, trailer, other than a trailer expressly included in
12-24 the term, semi-trailer, truck tractor or bus designed and used
12-25 primarily to transport persons or property on a public highway; or
13-1 (iii) any vehicle designed to run only on rails or tracks or in the
13-2 air, as defined in Chapter 7 of this Subtitle; or (iv) any goods
13-3 which are authorized to be and are included in a contract subject
13-4 to Chapter 7 of this Subtitle.
13-5 (b) "Services" means work, labor, or services of any kind
13-6 when purchased primarily for personal, family or household use and
13-7 not for commercial or business use, and includes a maintenance or
13-8 service contract or agreement or warranty, but does not include
13-9 (i) the services, other than medical and dental services or
13-10 prearranged or prepaid funeral benefits regulated by Chapter 512,
13-11 Acts of the 54th Legislature, 1955 (Article 548b, Vernon's Texas
13-12 Civil Statutes), of a professional person licensed by the State
13-13 except when those services are rendered in connection with the
13-14 purchase of goods; or (ii) services for which the cost is by law
13-15 fixed or approved by, or filed with or subject to approval or
13-16 disapproval by the United States or the State of Texas, or any
13-17 agency, instrumentality or subdivision thereof; or
13-18 (iii) educational services provided by an accredited college or
13-19 university or a primary or secondary school providing education
13-20 required by the State of Texas or services of a kindergarten or
13-21 nursery school; (iv) any services which are authorized to be and
13-22 are included in a contract subject to Chapter 7 of this Subtitle;
13-23 or (v) any <medical or> legal services.
13-24 (e) "Retail installment transaction" means any transaction
13-25 in which a retail buyer purchases goods or services from a retail
14-1 seller pursuant to a retail installment contract or retail charge
14-2 agreement, as defined in this Article, which provides for a time
14-3 price differential, as defined in this Article, and under which the
14-4 buyer agrees to pay the unpaid balance in one or more installments,
14-5 together with a time price differential. The term includes
14-6 transactions made pursuant to a retail credit card arrangement as
14-7 defined in this Article. This term also includes the sale of
14-8 prearranged or prepaid funeral benefits regulated by Chapter 512,
14-9 Acts of the 54th Legislature, 1955 (Article 548b, Vernon's Texas
14-10 Civil Statutes).
14-11 SECTION 7. Sections (2) and (3), Article 6.02, Title 79,
14-12 Revised Statutes (Article 5069-6.02, Vernon's Texas Civil
14-13 Statutes), are amended to read as follows:
14-14 (2) The printed or typed portion of the contract, other than
14-15 instructions for completion, shall be in a size equal to at least
14-16 eight-point type. The contract shall be designated "Retail
14-17 Installment Contract" and shall contain substantially the following
14-18 notice printed or typed in a size equal to at least ten-point
14-19 <bold> type that is boldface, capitalized, underlined, or otherwise
14-20 set out from surrounding written material so as to be conspicuous:
14-21 "NOTICE TO THE BUYER. DO NOT SIGN THIS CONTRACT BEFORE
14-22 YOU READ IT OR IF IT CONTAINS BLANK SPACES. YOU ARE
14-23 ENTITLED TO A COPY OF THE CONTRACT YOU SIGN. UNDER THE
14-24 LAW YOU HAVE THE RIGHT TO PAY OFF IN ADVANCE THE FULL
14-25 AMOUNT DUE AND UNDER CERTAIN CONDITIONS MAY OBTAIN A
15-1 PARTIAL REFUND OF THE FINANCE CHARGE. KEEP THIS
15-2 CONTRACT TO PROTECT YOUR LEGAL RIGHTS."
15-3 (3) The retail seller shall deliver to the retail buyer, or
15-4 mail to him at his address shown on the retail installment
15-5 contract, a copy of the contract as accepted by the seller. Until
15-6 the seller does so, a buyer, who has not received delivery of the
15-7 goods or been furnished or rendered the services, shall have the
15-8 right to rescind the contract and to receive a refund of all
15-9 payments made and return of all goods traded in to the seller on
15-10 account of or in contemplation of the contract, or if such goods
15-11 cannot be returned, the trade-in allowance thereof. Any
15-12 acknowledgement by the buyer of delivery of a copy of the contract
15-13 shall be in a size equal to at least ten-point <bold> type that is
15-14 boldface, capitalized, underlined, or otherwise set out from
15-15 surrounding written material so as to be conspicuous and, if
15-16 contained in the contract, shall appear directly above the buyer's
15-17 signature.
15-18 SECTION 8. Section (1), Article 6.03, Title 79, Revised
15-19 Statutes (Article 5069-6.03, Vernon's Texas Civil Statutes), is
15-20 amended to read as follows:
15-21 (1) A retail charge agreement may be established by a seller
15-22 or credit card issuer upon the request of a buyer or prospective
15-23 buyer. The retail charge agreement shall be in writing and signed
15-24 by the buyer. A copy of such agreement executed on or after the
15-25 effective date of this Chapter shall be delivered or mailed to the
16-1 buyer prior to the date on which the first payment is due
16-2 thereunder. Any acknowledgment by the buyer of delivery of a copy
16-3 of the agreement contained in the body thereof shall be in a size
16-4 equal to at least ten-point <bold> type that is boldface,
16-5 capitalized, underlined, or otherwise set out from surrounding
16-6 written material so as to be conspicuous and shall appear directly
16-7 above the buyer's signature. No agreement executed on or after the
16-8 effective date of this Chapter shall be signed by the buyer when it
16-9 contains blank spaces to be filled in after it has been signed.
16-10 The buyer's acknowledgment, conforming to the requirements of this
16-11 section, of delivery of a copy of an agreement, shall be
16-12 presumptive proof, in any action or proceeding, of such delivery
16-13 and that the agreement, when signed, did not contain any blank
16-14 spaces as herein provided. If no copy of the agreement is retained
16-15 by the seller, a notation in his permanent record showing that such
16-16 agreement was mailed and the date of mailing shall serve as
16-17 presumptive proof of such mailing. Any such agreement shall
16-18 contain substantially the following notice printed or typed in a
16-19 size equal to at least ten-point <bold> type that is boldface,
16-20 capitalized, underlined, or otherwise set out from surrounding
16-21 written material so as to be conspicuous:
16-22 "NOTICE TO THE BUYER--DO NOT SIGN THIS AGREEMENT BEFORE
16-23 YOU READ IT OR IF IT CONTAINS BLANK SPACES. YOU ARE
16-24 ENTITLED TO A COPY OF THE AGREEMENT YOU SIGN. KEEP
16-25 THIS AGREEMENT TO PROTECT YOUR LEGAL RIGHTS."
17-1 SECTION 9. Chapter 6, Title 79, Revised Statutes (Article
17-2 5069-6.01 et seq., Vernon's Texas Civil Statutes), is amended by
17-3 adding Article 6.12 to read as follows:
17-4 Art. 6.12. RATES FOR MEDICAL AND DENTAL SERVICES OR
17-5 PREARRANGED OR PREPAID FUNERAL BENEFITS. Medical and dental
17-6 services or prearranged or prepaid funeral services regulated by
17-7 Chapter 512, Acts of the 54th Legislature, 1955 (Article 548b,
17-8 Vernon's Texas Civil Statutes), may be financed only at rates
17-9 authorized by Article 1.04 of this Title.
17-10 SECTION 10. Section (1), Article 6.06, Title 79, Revised
17-11 Statutes (Article 5069-6.06, Vernon's Texas Civil Statutes), is
17-12 amended to read as follows:
17-13 (1) A seller who has entered into a retail installment
17-14 transaction to perform services or install goods for the
17-15 modernization, rehabilitation, repair, alteration, improvement or
17-16 construction of improvements on real property shall obtain a
17-17 certificate of completion or certificate of satisfaction
17-18 (hereinafter designated "certificate") signed by the buyer, when
17-19 all such goods and/or services purchased under a retail installment
17-20 contract have been performed or installed as required by such
17-21 contract; and may obtain such a certificate whether or not any
17-22 guarantee or warranty of the goods or services remains in force.
17-23 Such certificate shall be a separate writing and shall have the
17-24 following notation at the top thereof in at least ten-point <bold>
17-25 type that is boldface, capitalized, underlined, or otherwise set
18-1 out from surrounding written material so as to be conspicuous:
18-2 WARNING TO BUYER--DO NOT SIGN THIS CERTIFICATE UNTIL
18-3 ALL SERVICES HAVE BEEN SATISFACTORILY PERFORMED AND
18-4 MATERIALS SUPPLIED OR GOODS RECEIVED AND FOUND
18-5 SATISFACTORY.
18-6 SECTION 11. Article 6.07, Title 79, Revised Statutes
18-7 (Article 5069-6.07, Vernon's Texas Civil Statutes), is amended to
18-8 read as follows:
18-9 Art. 6.07. ASSIGNMENT AND NEGOTIATION. Notwithstanding the
18-10 provisions of any other law, a person may purchase or acquire or
18-11 agree to purchase or acquire any retail installment contract or
18-12 retail charge agreement or any outstanding balance under either
18-13 from another person on such terms and conditions and for such price
18-14 as may be mutually agreed upon. Notice to the buyer of the
18-15 assignment or negotiation and any requirement that the seller be
18-16 deprived of dominion over payments upon a retail installment
18-17 contract or retail charge agreement, or over the goods if returned
18-18 to or repossessed by the seller, is not necessary to the validity
18-19 of a written assignment or negotiation of the retail installment
18-20 contract or retail charge agreement or any outstanding balance
18-21 under either, as against creditors, subsequent purchasers, pledges,
18-22 mortgagees and lien claimants of the seller. Unless the buyer has
18-23 notice of the assignment or negotiation of his retail installment
18-24 contract, retail charge agreement or any outstanding balance under
18-25 either, payment therefor made by the buyer to the holder last known
19-1 to him shall be binding upon all subsequent holders. No right of
19-2 action or defense of a buyer arising out of a retail installment
19-3 transaction which would be cut off by negotiation, shall be cut off
19-4 by negotiation of the retail installment contract or retail charge
19-5 agreement to any third party unless such holder acquires the
19-6 contract relying in good faith upon a certificate of completion or
19-7 certificate of satisfaction, if required by the provisions of
19-8 Article 6.06; and such holder gives notice of the negotiation to
19-9 the buyer as provided in this Article, and within thirty days of
19-10 the mailing of such notice receives no written notice from the
19-11 buyer of any facts giving rise to any claim or defense of the
19-12 buyer. Such notice of negotiation shall be in writing addressed to
19-13 the buyer at the address shown on the contract and shall: identify
19-14 the contract; state the names and addresses of the seller and
19-15 buyer; describe the goods or services; state the time balance and a
19-16 description of the payment schedule. The notice of negotiation
19-17 shall contain the following warning to the buyer in at least
19-18 ten-point <bold face> type that is boldface, capitalized,
19-19 underlined, or otherwise set out from surrounding written material
19-20 so as to be conspicuous:
19-21 ARE THE TERMS OF THE CONTRACT DESCRIBED ABOVE CORRECT
19-22 AND ARE YOU SATISFIED WITH THE GOODS OR SERVICES
19-23 FURNISHED? IF NOT, YOU SHOULD NOTIFY US GIVING DETAILS
19-24 WITHIN 30 DAYS FROM THE DATE THE ABOVE NOTICE WAS
19-25 MAILED.
20-1 SECTION 12. Section (b), Article 6.10, Title 79, Revised
20-2 Statutes (Article 5069-6.10, Vernon's Texas Civil Statutes), is
20-3 amended to read as follows:
20-4 (b) Preliminary worksheets that are shown to the buyer in
20-5 which a sale price is computed, an order from the buyer, and the
20-6 retail installment contract must include, in reasonable proximity
20-7 to the place in the worksheet, order, or contract where the
20-8 documentary fee is disclosed, the amount of the fee and the
20-9 following notice in <bold-faced> type that is boldface,
20-10 capitalized, underlined, or otherwise set out from surrounding
20-11 written material so as to be conspicuous:
20-12 "A DOCUMENTARY FEE IS NOT AN OFFICIAL FEE. A
20-13 DOCUMENTARY FEE <AND> IS NOT REQUIRED BY LAW, BUT MAY
20-14 BE CHARGED TO BUYERS <A BUYER> FOR <THE> HANDLING <OF>
20-15 DOCUMENTS AND <THE> PERFORMING <OF> SERVICES RELATING
20-16 <RELATED> TO THE CLOSING OF A SALE. BUYERS <A BUYER>
20-17 MAY AVOID PAYMENT OF THE FEE TO THE SELLER BY HANDLING
20-18 THE <THESE> DOCUMENTS AND PERFORMING THE <THESE>
20-19 SERVICES RELATING TO THE CLOSING OF THE SALE. A
20-20 DOCUMENTARY FEE MAY NOT EXCEED $25. THIS NOTICE IS
20-21 REQUIRED BY LAW."
20-22 SECTION 13. Subsection (d), Article 7.01, Title 79, Revised
20-23 Statutes (Article 5069-7.01, Vernon's Texas Civil Statutes), is
20-24 amended to read as follows:
20-25 (d) "Retail Installment Transaction" or "Transaction" means
21-1 any transaction as a result of which a retail buyer acquires a
21-2 motor vehicle from a retail seller <under a retail installment
21-3 contract for a sum consisting of the cash sale price and other
21-4 charges as limited by this Chapter> and agrees with a retail seller
21-5 to pay part or all of the cash price <such sum> in one or more
21-6 deferred installments. All such transactions shall be under a
21-7 retail installment contract and be subject to the provisions of
21-8 this Chapter. The term shall include every transaction wherein the
21-9 promise or agreement to pay the deferred balance of the cash price
21-10 <such sum> is made by the retail buyer to the retail seller
21-11 notwithstanding the existence or occurrence of any one or more of
21-12 the following events: (i) that the retail seller has arranged or
21-13 arranges to sell, transfer or assign the retail buyer's obligation;
21-14 (ii) that the amount of any <the> charges is determined by
21-15 reference to charts or information furnished by a financing
21-16 institution; (iii) that the forms of instruments used to evidence
21-17 the retail installment transaction are furnished by a financing
21-18 institution; and (iv) that the credit standing of the retail buyer
21-19 is or has been evaluated by a financing institution.
21-20 SECTION 14. Sections (2), (3), and (4), Article 7.02, Title
21-21 79, Revised Statutes (Article 5069-7.02, Vernon's Texas Civil
21-22 Statutes), are amended to read as follows:
21-23 (2) The printed portion of the retail installment contract,
21-24 other than instructions for completion, shall be in a size equal to
21-25 at least eight-point type. Such contract shall contain
22-1 substantially the following notice in a size equal to at least
22-2 ten-point <bold> type that is boldface, capitalized, underlined, or
22-3 otherwise set out from surrounding written material so as to be
22-4 conspicuous:
22-5 "NOTICE TO THE BUYER--DO NOT SIGN THIS CONTRACT BEFORE
22-6 YOU READ IT OR IF IT CONTAINS ANY BLANK SPACES. YOU
22-7 ARE ENTITLED TO A COPY OF THE CONTRACT YOU SIGN. UNDER
22-8 THE LAW YOU HAVE THE RIGHT TO PAY OFF IN ADVANCE THE
22-9 FULL AMOUNT DUE AND UNDER CERTAIN CONDITIONS MAY OBTAIN
22-10 A PARTIAL REFUND OF THE FINANCE CHARGE. KEEP THIS
22-11 CONTRACT TO PROTECT YOUR LEGAL RIGHTS."
22-12 (3) A retail installment contract or separate written
22-13 statement shall also contain, in a size equal to at least ten-point
22-14 <bold> type that is boldface, capitalized, underlined, or otherwise
22-15 set out from surrounding written material so as to be conspicuous,
22-16 a specific statement that liability insurance coverage for bodily
22-17 injury and property damage caused to others is not included, if
22-18 that is the case.
22-19 (4) The seller shall deliver to the buyer, or mail to him at
22-20 his address shown on the retail installment contract, a copy of
22-21 such contract as accepted by the seller. Until the seller does so,
22-22 a buyer who has not received delivery of the motor vehicle shall
22-23 have the right to rescind his contract and to receive a refund of
22-24 all payments made and a return of all goods traded in to the seller
22-25 on account of or in contemplation of such contract, or if the goods
23-1 traded in cannot be returned, the value thereof. Any
23-2 acknowledgement by the buyer of delivery of a copy of the retail
23-3 installment contract shall be in a size equal to at least ten-point
23-4 <bold> type that is boldface, capitalized, underlined, or otherwise
23-5 set out from surrounding written material so as to be conspicuous
23-6 and shall appear directly above the buyer's signature.
23-7 SECTION 15. Article 8.03, Title 79, Revised Statutes
23-8 (Article 5069-8.03, Vernon's Texas Civil Statutes), is amended to
23-9 read as follows:
23-10 Art. 8.03. ENGAGING IN LENDING BUSINESS WITHOUT LICENSE. In
23-11 addition to the foregoing penalties, if applicable, any person
23-12 engaging in any business under the scope of Chapters 3, 4, <or> 5,
23-13 or 15 of this Subtitle without first securing a license provided,
23-14 or without the authorization prescribed, in such Chapter shall be
23-15 guilty of a misdemeanor and upon conviction thereof shall be
23-16 punishable by a fine of not more than One Thousand Dollars, and
23-17 each such loan made without the authority granted by such license
23-18 shall constitute a separate offense punishable hereunder; and in
23-19 addition such person shall forfeit all principal and charges
23-20 contracted for or collected on each such loan, and shall pay
23-21 reasonable attorneys' fees incurred by the obligor.
23-22 SECTION 16. Subsection (a), Article 8.06, Title 79, Revised
23-23 Statutes (Article 5069-8.06, Vernon's Texas Civil Statutes), is
23-24 amended to read as follows:
23-25 (a) Any person who violates the terms of Article 2.07 of
24-1 this Title is liable to the aggrieved individual for the actual
24-2 damages caused by the denial, punitive damages not to exceed
24-3 $10,000 in an action brought by the aggrieved individual <or for
24-4 $50.00, whichever is greater>, and court costs. The liability of
24-5 any person under this Article for a violation of Article 2.07 of
24-6 this Title is in lieu of and not in addition to that person's
24-7 liability under Title VII of the Consumer Credit Protection Act (15
24-8 U.S.C. Section 1601 et seq.). If the same act or omission
24-9 constitutes a violation of Article 2.07 of this Title and of
24-10 applicable federal law, the person aggrieved by that conduct may
24-11 bring a legal action to recover monetary damages either under this
24-12 Article or under that federal law, but not both.
24-13 SECTION 17. This Act applies only to acts done and
24-14 transactions entered into on or after the effective date of this
24-15 Act. Transactions entered into before the effective date of this
24-16 Act are governed by the law in effect immediately before this Act
24-17 takes effect and that law continues in effect for that purpose.
24-18 SECTION 18. This Act takes effect September 1, 1993.
24-19 SECTION 19. The importance of this legislation and the
24-20 crowded condition of the calendars in both houses create an
24-21 emergency and an imperative public necessity that the
24-22 constitutional rule requiring bills to be read on three several
24-23 days in each house be suspended, and this rule is hereby suspended.