By Giddings                                           H.B. No. 1992
       74R5557 LJR-F
                                 A BILL TO BE ENTITLED
    1-1                                AN ACT
    1-2  relating to the authority of the consumer credit commissioner and
    1-3  to the regulation of certain consumer credit practices; providing
    1-4  penalties.
    1-5        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
    1-6        SECTION 1.  Article 2.02A, Title 79, Revised Statutes
    1-7  (Article 5069-2.02A, Vernon's Texas Civil Statutes), is amended by
    1-8  adding Section (12) to read as follows:
    1-9        (12)(a)  The Consumer Credit Commissioner may not accept or
   1-10  use money offered by an individual, firm, partnership, corporation,
   1-11  or association either (i) for investigating or prosecuting a matter
   1-12  or (ii) if that individual, firm, partnership, corporation, or
   1-13  association is affiliated with any industry under the regulatory
   1-14  jurisdiction of the Finance Commission, except in the context of a
   1-15  judgment or the negotiated settlement of a claim or action
   1-16  threatened or asserted by or on behalf of the Office of Consumer
   1-17  Credit Commissioner.  The Consumer Credit Commissioner is not
   1-18  prohibited from receiving and using money from persons under the
   1-19  jurisdiction of the commissioner if expressly authorized by law.
   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 under
   1-24  Subsection (a) of this section or other law.  Money received under
    2-1  this subsection shall be deposited in the general revenue fund to
    2-2  the credit of an account established for the receipt of those funds
    2-3  and may be appropriated only for the purposes for which the money
    2-4  was given.  Acceptance and use of money under this subsection is
    2-5  subject to approval of the Finance Commission.
    2-6        SECTION 2.  Article 2.06, Title 79, Revised Statutes (Article
    2-7  5069-2.06, Vernon's Texas Civil Statutes), is amended to read as
    2-8  follows:
    2-9        Art. 2.06.  ADVERTISING.  (1)  No person shall advertise or
   2-10  cause to be advertised, in any manner whatsoever, any false,
   2-11  misleading or deceptive statement or representation with regard to
   2-12  the rates, terms or conditions of any loan or credit transaction
   2-13  regulated by the statutes listed by Section (1), Article 2.02A of
   2-14  this title <Subtitle Two>.  If rates or charges are stated in
   2-15  advertising they shall be stated fully and clearly.
   2-16        (2)  A person may not advertise or otherwise perform any act
   2-17  or offer any service that would cause another to believe that the
   2-18  person is offering to make, arrange, or negotiate a loan or credit
   2-19  sale that is subject to the statutes listed by Section (1), Article
   2-20  2.02A, of this title unless the person is authorized to perform
   2-21  that act or offer that service as:
   2-22              (a)  a credit service organization under Chapter 18,
   2-23  Business & Commerce Code;
   2-24              (b)  a pawnbroker under the Texas Pawnshop Act (Article
   2-25  5069-51.01 et seq., Vernon's Texas Civil Statutes); or
   2-26              (c)  an authorized lender or a registered creditor
   2-27  under this subtitle.
    3-1        (3)  A person commits an offense if the person violates
    3-2  Section (2) of this article.  An offense under this section is a
    3-3  Class A misdemeanor.
    3-4        (4)  A person who violates Section (2) of this article also
    3-5  is subject to the penalties provided under Chapter 8 of this title
    3-6  and to any civil penalties that the Consumer Credit Commissioner
    3-7  may assess.
    3-8        (5)  In each advertisement that purports to offer credit
    3-9  subject to the statutes listed by Section (1), Article 2.02A, of
   3-10  this title, the advertiser shall disclose the legal or properly
   3-11  registered name of the advertiser and the physical address of the
   3-12  advertiser's place of business unless the advertisement is located
   3-13  on the premises of the advertiser's place of business.  This
   3-14  section does not apply to a federally insured depository
   3-15  institution or to a person engaged in interstate commerce who
   3-16  advertises under a generally recognized trade name, abbreviated
   3-17  form of a trade name, or logo.
   3-18        SECTION 3.  Article 2.07, Title 79, Revised Statutes (Article
   3-19  5069-2.07, Vernon's Texas Civil Statutes), is amended to read as
   3-20  follows:
   3-21        Art. 2.07.  CREDIT AND LOANS TO INDIVIDUALS.  No authorized
   3-22  lender <licensee> under Chapter 3 of this Title or other person
   3-23  involved in transactions subject to this Title may deny an
   3-24  individual who has the capacity to contract credit or loans in his
   3-25  or her name, or restrict or limit the credit or loan granted
   3-26  <solely> on the basis of sex, race, color, religion, <or> national
   3-27  origin, marital status, or age or because all or part of the
    4-1  individual's income derives from a public assistance program or the
    4-2  individual has in good faith exercised any right under the Consumer
    4-3  Credit Protection Act (15 U.S.C. Section 1601 et seq.; 18 U.S.C.
    4-4  Section 891 et seq.).  In interpreting this section, the courts and
    4-5  administrative agencies shall be guided by the federal Equal Credit
    4-6  Opportunity Act  and regulations thereunder and interpretations
    4-7  thereof by the Federal Reserve Board to the extent that Act and
    4-8  those regulations and interpretations pertain to conduct prohibited
    4-9  by this section.
   4-10        SECTION 4.  Section (a), Article 8.06, Title 79, Revised
   4-11  Statutes (Article 5069-8.06, Vernon's Texas Civil Statutes), is
   4-12  amended to read as follows:
   4-13        (a)  Any person who violates the terms of Article 2.07 of
   4-14  this Title is liable to the aggrieved individual for the actual
   4-15  damages caused by the denial, punitive damages not to exceed
   4-16  $10,000 in an action brought by the aggrieved individual <or for
   4-17  $50.00, whichever is greater>, and court costs.  The liability of
   4-18  any person under this Article for a violation of Article 2.07 of
   4-19  this Title is in lieu of and not in addition to that person's
   4-20  liability under Title VII of the Consumer Credit Protection Act (15
   4-21  U.S.C.  Section 1601 et seq.).  If the same act or omission
   4-22  constitutes a violation of Article 2.07 of this Title and of
   4-23  applicable federal law, the person aggrieved by that conduct may
   4-24  bring a legal action to recover monetary damages either under this
   4-25  Article or under that federal law, but not both.
   4-26        SECTION 5.  This Act applies only to acts done and
   4-27  transactions entered into on or after the effective date of this
    5-1  Act.  Acts done and transactions entered into before the effective
    5-2  date of this Act are governed by the law in effect immediately
    5-3  before this Act takes effect, and that law continues in effect for
    5-4  that purpose.
    5-5        SECTION 6.  This Act takes effect September 1, 1995.
    5-6        SECTION 7.  The importance of this legislation and the
    5-7  crowded condition of the calendars in both houses create an
    5-8  emergency and an imperative public necessity that the
    5-9  constitutional rule requiring bills to be read on three several
   5-10  days in each house be suspended, and this rule is hereby suspended.
   5-11                       COMMITTEE AMENDMENT NO. 1
   5-12        Amend H.B. No. 1992 on page 3, by striking lines 1-17, and
   5-13  substituting the following:
   5-14              (3)  A person commits an offense if the person violates
   5-15  Section (2) of this article.  An offense under this section is a
   5-16  Class C misdemeanor, except if it is shown on trial of a person
   5-17  that the person has previously been convicted of an offense under
   5-18  this section, the offense is a Class A misdemeanor.
   5-19              (4)  A person who violates Section (2) of this article
   5-20  may be prosecuted under Section (3) of this article or may be
   5-21  subject to the penalties provided under Chapter 8 of this title and
   5-22  any civil penalties that the Consumer Credit Commissioner may
   5-23  assess, but is not subject to both prosecution under Section (3)
   5-24  and the penalties.
   5-25              (5)  In each advertisement that purports to offer
   5-26  credit subject to the statutes listed by Section (1), Article
   5-27  2.02A, of this title, the advertiser shall disclose the legal or
    6-1  properly registered name of the advertiser and the physical address
    6-2  of the advertiser's place of business unless the advertisement is
    6-3  located on the premises of the advertiser's place of business or
    6-4  the advertisement is broadcast by radio or television.  If the
    6-5  advertisement is broadcast by radio or television, the advertiser
    6-6  shall disclose the legal or properly registered name and the
    6-7  telephone number of the advertiser and shall comply with the
    6-8  applicable disclosure requirements of Regulation Z (12 C.F.R.
    6-9  226.1 et seq.).  This section does not apply to a federally insured
   6-10  depository institution or to a person engaged in interstate
   6-11  commerce who advertises under a generally recognized trade name,
   6-12  abbreviated form of a trade name, or logo.
   6-13                                                               Elkins