BILL ANALYSIS



H.B. 1615
By: Carona
03-09-95
Committee Report (Amended)


BACKGROUND

The Consumer Credit Commissioner has authority to assess civil
money penalties under the Texas Pawnshop Act (Article 5069-51.01 et
seq., V.T.C.S.), but no authority to do so under Subtitle II of
Title 79, Revised Statutes.  The Commissioner licenses and
regulates various lenders and creditors under the purview of
Subtitle II.  Currently, the only administrative remedy available
to the Commissioner is suspension and revocation of licenses. 
Oftentimes, a civil money penalty is more appropriate than a
suspension or revocation.  Some lenders have even requested the
opportunity to pay a civil money penalty in lieu of suspension, but
that alternative is not available under current law.

PURPOSE

HB 1615 would enhance the enforcement authority of the Consumer
Credit Commissioner by allowing the Commissioner to assess civil
money penalties under Subtitle II of Title 79.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does grant additional
rulemaking authority to the Consumer Credit Commissioner in Section
2 of this bill.

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Section (7), Article 2.03, Title 79, Revised
Statutes (Article 5069-2.03, V.T.C.S.), by deleting reference to
the Finance Commission and adding reference to Chapter 2001 of the
Government Code in order to provide consistency with the Texas
Administrative Procedures Act.

SECTION 2.  Amends Title 79, Revised Statutes (Article 5069-1.01 et
seq., V.T.C.S.) by adding Article 2.03A which authorizes the
consumer credit commissioner to assess civil money penalties
against a person who knowingly and willfully violates Subtitle II
of Title 79.  The maximum penalties may not exceed $5,000 per each
business location and the aggregate amount of penalties may not
exceed $50,000 for multiple locations.  Procedures are outlined for
determining the amount of the penalty, providing a required written
notice, responding to the written notice, holding a hearing, and
making a ruling.  Procedures for instituting a judicial review of
the order of the commissioner are also specified.  Penalties
collected under this article are required to be deposited to the
general revenue fund.

SECTION 3.  Amends Article 8.03, Title 79, Revised Statutes
(Article 5069-8.03, V.T.C.S.), by adding persons engaging in
business under Chapter 15 to the list of persons that may be
subject to penalties for engaging in business without the benefit
of license.  This Chapter was inadvertently omitted in prior
legislation.

SECTION 4.  Provides that this Act applies only to acts done and
transactions entered into on or after the effective date of this
Act.

SECTION 5.  Effective date:  September 1, 1995.

SECTION 6.  Emergency clause. 

EXPLANATION OF AMENDMENTS

The amendment provides that it is not a violation for a lender
licensed under Chapter 3 to make a Chapter 1 loan in conjunction
with a Credit Service Organization.

SUMMARY OF COMMITTEE ACTION

The committee considered HB 1615 in a public hearing on March 13,
1995.

The following person testified in favor of the bill:
Sam Kelley.

The following person testified neutrally on the bill:
Lesli L. Pettijohn.

The bill was left pending.

The committee considered HB 1615 in a public hearing on April 3,
1995.

The committee considered an amendment to the bill which was adopted
without objection.

The bill was reported favorably as amended with the recommendation
that it do pass and be printed by the following record vote:  7
Ayes, 0 Nays, 2 PNV, 0 Absent.