BILL ANALYSIS


                                                     C.S.S.B. 870
                                                        By: Madla
                                             Economic Development
                                                         04-12-95
                                   Committee Report (Substituted)
BACKGROUND

The Texas Legislature has directed the Office of Consumer Credit
Commissioner to educate consumers in the use of credit.  The office
is funded by fees paid by regulated agencies, but the appropriation
authority has not been sufficient to adequately address consumer
credit education.  Some of the funds are available from private
foundations, but the office has been unable to apply for the grants
because current law does not grant the office any express authority
to receive the grants.

PURPOSE

As proposed, C.S.S.B. 870 authorizes the Consumer Credit
Commissioner to accept money, gifts, or grants in the context of a
judgment or settlement of a claim or for the purpose of consumer
education.  The bill prohibits a person not registered as a
pawnbroker, a lender, or a creditor from advertising those
services, and provides that offenses may be prosecuted under
applicable state or federal law, but not both.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not grant any
additional rulemaking authority to a state officer, institution, or
agency.

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Article 5069-2.02A, V.T.C.S., by adding Section
(12), as follows:

     (12)(a) Prohibits the Consumer Credit Commissioner
     (commissioner) from accepting or using money offered by an
     individual, firm, partnership, corporation, or association
     (entity) for investigating or prosecuting a matter or if that
     entity is affiliated with an industry under the regulatory
     jurisdiction of the Finance Commission.
     
     (b) Authorizes the commissioner to accept money, gifts, or
       grants on behalf of the state for consumer credit
       educational opportunities or to assist local governments in
       the exercise of police power unless prohibited under
       Subsection (a) or other law.  Requires money received to be
       deposited in an account of the general revenue fund
       established to receive those funds and to be appropriated
       only for the purpose for which the money was given. 
       Subjects acceptance and use of money under this subsection
       to the approval of the Finance Commission.
       
       (c) Provides that the commissioner is not prohibited from
       receiving and using money from persons under the
       jurisdiction of the commissioner if expressly authorized by
       law, notwithstanding Subsection (a).
       
       SECTION 2.   Amends Article 5069-2.06, V.T.C.S., as follows:

     Art.  2.06.  ADVERTISING.  (1) Makes a conforming change.
     
     (2) Prohibits a person from advertising, offering, or
       otherwise performing any act or service that would cause
       another to believe that the person is offering to make,
       arrange, or negotiate a loan that is subject to Article
       2.02A(1) of this code unless the person is authorized to
       offer that service as a credit service organization,
       pawnbroker, or authorized lender.
       
       (3) Provides that a person commits a Class A misdemeanor if
       the person violates Section (2) of this article.
       
       (4) Subjects a person who violates Section (2) to the
       penalties provided under Chapter 8 of this title and to any
       civil penalties the commissioner may assess.
       
       (5) Requires the advertiser to disclose the legal name and
       physical address of the advertiser's place of business
       unless the advertisement is located on the premises of the
       advertiser's place of business.  Provides that this section
       does not apply to a federally insured depository or a person
       engaged in interstate commerce who advertises under a
       generally recognized trade name, abbreviated form of trade
       name, or logo.
       
       SECTION 3.   Amends Article 5069-2.07, V.T.C.S., as follows:

     Art.  2.07.  CREDIT AND LOANS TO INDIVIDUALS.  Prohibits an
     authorized lender or other persons involved in transactions
     from denying an individual who has the capacity to contract
     credit loans or limit the credit or loan granted based on
     personal characteristics including marital status and age, or
     if the individual's income derives from a public assistance
     program or the individual has exercised any right under the
     Consumer Credit Protection Act.
     
     SECTION 4.     Amends Section (a), Article 5069-8.06, V.T.C.S., as
follows:

     (a) Provides that a person who violates Article 2.07 of this
     title is liable to the aggrieved individual for the actual
     damages caused by denial, punitive damages not to exceed
     $10,000 in an action brought by the aggrieved individual, and
     court costs.  Provides that the liability of any person for a
     violation of Article 2.07 of this title is in lieu of and not
     in addition to that person's liability under Title VII of the
     Consumer Credit Protection Act.  Authorizes the person
     aggrieved by a violation of Article 2.07 and federal law to
     bring action to recover monetary damages either under this
     Article or federal law, but not both.
     
     SECTION 5.     Makes application of this Act prospective.

SECTION 6. Effective date: September 1, 1995.

SECTION 7. Emergency clause.