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