By Gutierrez H.B. No. 3184
74R9267 CLG-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to credit services organizations.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Section 18.07, Business & Commerce Code, is
1-5 amended by adding Subsection (e) to read as follows:
1-6 (e) Notwithstanding Article 3.15, 4.01, or 5.02, Title 79,
1-7 Revised Statutes (Article 5069-1.01 et seq., Vernon's Texas Civil
1-8 Statutes), a credit services organization may receive, and a buyer
1-9 may pay, compensation for the credit services organization's
1-10 brokering or guaranteeing a loan for the buyer or arranging a loan
1-11 or other extension of credit for the buyer only if no person has an
1-12 ownership interest in or serves as a director or officer of both
1-13 the lender and the credit services organization.
1-14 SECTION 2. Chapter 18, Business & Commerce Code, is amended
1-15 by adding Section 18.16 to read as follows:
1-16 Sec. 18.16. COLLECTION OF CERTAIN LOANS. Notwithstanding
1-17 Article 1.04(n)(1), Title 79, Revised Statutes (Article 5069-1.04,
1-18 Vernon's Texas Civil Statutes), a credit services organization that
1-19 guarantees a loan that is made to a borrower under Chapter 3, 4, or
1-20 5, Title 79, Revised Statutes (Article 5069-1.01 et seq., Vernon's
1-21 Texas Civil Statutes), is entitled to collect from the borrower any
1-22 past due amount of the loan the credit services organization pays
1-23 to the lender in its capacity as guarantor of the loan.
1-24 SECTION 3. Chapter 2, Title 79, Revised Statutes (Article
2-1 5069-2.01 et seq., Vernon's Texas Civil Statutes), is amended by
2-2 adding Article 2.10 to read as follows:
2-3 Art. 2.10. LOANS MADE IN CONJUNCTION WITH CREDIT SERVICES
2-4 ORGANIZATIONS. A lender licensed under Chapter 3 of this title or
2-5 any other lender authorized to make a loan under this title that is
2-6 governed by Chapter 1 of this title and that is arranged, brokered,
2-7 or guaranteed by a credit services organization registered under
2-8 Chapter 18, Business & Commerce Code, is not committing a
2-9 subterfuge for purposes of this title solely because of the credit
2-10 services organization's participation.
2-11 SECTION 4. Sections (7) and (8), Article 3.15, Title 79,
2-12 Revised Statutes (Article 5069-3.15, Vernon's Texas Civil
2-13 Statutes), are amended to read as follows:
2-14 (7) No authorized lender shall induce or permit any
2-15 person, or husband and wife, to be obligated, directly or
2-16 indirectly, under more than one loan contract under this chapter at
2-17 the same time for the purpose, or with the effect, of obtaining a
2-18 higher authorized charge than would otherwise be permitted by this
2-19 chapter; but such limitation shall not apply to the acquisition by
2-20 purchase of bona fide retail installment contracts or revolving
2-21 charge agreements of the borrower incurred for goods, or services,
2-22 to a credit services organization registered under Chapter 18,
2-23 Business & Commerce Code, that guarantees a loan for a person that
2-24 is made under this chapter or Chapter 4 or 5 of this title, or to
2-25 pledged loans made pursuant to Article 3.17, and provided further,
2-26 if an authorized lender purchases all or substantially all the loan
2-27 contracts of another authorized lender hereunder and has at the
3-1 time of purchase loan contracts with one or more of the borrowers
3-2 whose loans are purchased, the purchaser shall be entitled to
3-3 collect principal and authorized charges thereon according to the
3-4 terms of each loan contract.
3-5 (8) In addition to the authorized charges provided in
3-6 this chapter no further or other charge or amount whatsoever shall
3-7 be directly, or indirectly, charged, contracted for, or received.
3-8 This includes (but is not limited by) all charges such as fees,
3-9 compensation, bonuses, commissions, brokerage, discounts, expenses
3-10 and every other charge of any nature whatsoever, whether of the
3-11 types listed herein or not. Without limitation of the foregoing,
3-12 such charges may be any form of costs or compensation whether
3-13 contracted for or not, received by the lender, or any other person,
3-14 in connection with (a) the investigating, arranging, negotiation,
3-15 procuring, guaranteeing, making, servicing, collecting or enforcing
3-16 of a loan; or (b) for the forbearance of money, credit, goods or
3-17 things in action; or (c) for any other service or services
3-18 performed or offered. However, the prohibition set out herein
3-19 shall not apply to amounts actually incurred by an authorized
3-20 lender as court costs; attorney fees assessed by a court; lawful
3-21 fees for filing, recording, or releasing in any public office any
3-22 security for a loan; the reasonable cost actually expended for
3-23 repossessing, storing, preparing for sale, or selling any security;
3-24 <or> fees for noting a lien on or transferring a certificate of
3-25 title to any motor vehicle offered as security for a loan made
3-26 under this Chapter;<, or> premiums or identifiable charge received
3-27 in connection with the sale of insurance authorized under this
4-1 Chapter; or a fee paid to a credit services organization registered
4-2 under Chapter 18, Business & Commerce Code, for procuring,
4-3 arranging, or guaranteeing a loan made under this Chapter if no
4-4 person has an ownership interest in or serves as a director of both
4-5 the lender and the credit services organization.
4-6 SECTION 5. This Act applies only to a loan contract made on
4-7 or after the effective date of this Act. A loan contract made
4-8 before the effective date of this Act is covered by the law in
4-9 effect when the loan contract was made, and the former law is
4-10 continued in effect for that purpose.
4-11 SECTION 6. This Act takes effect September 1, 1995.
4-12 SECTION 7. The importance of this legislation and the
4-13 crowded condition of the calendars in both houses create an
4-14 emergency and an imperative public necessity that the
4-15 constitutional rule requiring bills to be read on three several
4-16 days in each house be suspended, and this rule is hereby suspended.