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.