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.