1-1 By: Madla S.B. No. 870
1-2 (In the Senate - Filed March 2, 1995; March 6, 1995, read
1-3 first time and referred to Committee on Economic Development;
1-4 April 12, 1995, reported adversely, with favorable Committee
1-5 Substitute by the following vote: Yeas 6, Nays 0; April 12, 1995,
1-6 sent to printer.)
1-7 COMMITTEE SUBSTITUTE FOR S.B. No. 870 By: Madla
1-8 A BILL TO BE ENTITLED
1-9 AN ACT
1-10 relating to the authority of the consumer credit commissioner and
1-11 to the regulation of certain consumer credit practices; providing
1-12 penalties.
1-13 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-14 SECTION 1. Article 2.02A, Title 79, Revised Statutes
1-15 (Article 5069-2.02A, Vernon's Texas Civil Statutes), is amended by
1-16 adding Section (12) to read as follows:
1-17 (12)(a) The Consumer Credit Commissioner may not accept or
1-18 use money offered by an individual, firm, partnership, corporation,
1-19 or association either (i) for investigating or prosecuting a matter
1-20 or (ii) if that individual, firm, partnership, corporation, or
1-21 association is affiliated with any industry under the regulatory
1-22 jurisdiction of the Finance Commission.
1-23 (b) The Consumer Credit Commissioner may accept money,
1-24 gifts, and grants on behalf of the state for purposes related to
1-25 consumer credit educational opportunities or to assist local
1-26 governments in the exercise of their police power unless the
1-27 acceptance is prohibited under Subsection (a) of this section or
1-28 other law. Money received under this subsection shall be deposited
1-29 in the general revenue fund to the credit of an account established
1-30 for the receipt of those funds and may be appropriated only for the
1-31 purposes for which the money was given. Acceptance and use of
1-32 money under this subsection is subject to approval of the Finance
1-33 Commission.
1-34 (c) Notwithstanding Subsection (a), the Consumer Credit
1-35 Commissioner is not prohibited from receiving and using money from
1-36 persons under the jurisdiction of the commissioner if expressly
1-37 authorized by law.
1-38 SECTION 2. Article 2.06, Title 79, Revised Statutes (Article
1-39 5069-2.06, Vernon's Texas Civil Statutes), is amended to read as
1-40 follows:
1-41 Art. 2.06. ADVERTISING. (1) No person shall advertise or
1-42 cause to be advertised, in any manner whatsoever, any false,
1-43 misleading or deceptive statement or representation with regard to
1-44 the rates, terms or conditions of any loan or credit transaction
1-45 regulated by the statutes listed by Section (1), Article 2.02A of
1-46 this title <Subtitle Two>. If rates or charges are stated in
1-47 advertising they shall be stated fully and clearly.
1-48 (2) A person may not advertise or otherwise perform any act
1-49 or offer any service that would cause another to believe that the
1-50 person is offering to make, arrange, or negotiate a loan that is
1-51 subject to the statutes listed by Section (1), Article 2.02A, of
1-52 this title unless the person is authorized to perform that act or
1-53 offer that service as:
1-54 (a) a credit service organization under Chapter 18,
1-55 Business & Commerce Code;
1-56 (b) a pawnbroker under the Texas Pawnshop Act (Article
1-57 5069-51.01 et seq., Vernon's Texas Civil Statutes); or
1-58 (c) an authorized lender under this subtitle.
1-59 (3) A person commits an offense if the person violates
1-60 Section (2) of this article. An offense under this section is a
1-61 Class A misdemeanor.
1-62 (4) A person who violates Section (2) of this article also
1-63 is subject to the penalties provided under Chapter 8 of this title
1-64 and to any civil penalties that the Consumer Credit Commissioner
1-65 may assess.
1-66 (5) In each advertisement that purports to offer credit
1-67 subject to the statutes listed by Section (1), Article 2.02A, of
1-68 this title, the advertiser shall disclose the legal or properly
2-1 registered name of the advertiser and the physical address of the
2-2 advertiser's place of business unless the advertisement is located
2-3 on the premises of the advertiser's place of business. This
2-4 section does not apply to a federally insured depository
2-5 institution or to a person engaged in interstate commerce who
2-6 advertises under a generally recognized trade name, abbreviated
2-7 form of a trade name, or logo.
2-8 SECTION 3. Article 2.07, Title 79, Revised Statutes (Article
2-9 5069-2.07, Vernon's Texas Civil Statutes), is amended to read as
2-10 follows:
2-11 Art. 2.07. CREDIT AND LOANS TO INDIVIDUALS. No authorized
2-12 lender <licensee> under Chapter 3 of this Title or other person
2-13 involved in transactions subject to this Title may deny an
2-14 individual who has the capacity to contract credit or loans in his
2-15 or her name, or restrict or limit the credit or loan granted
2-16 <solely> on the basis of sex, race, color, religion, <or> national
2-17 origin, marital status, or age or because all or part of the
2-18 individual's income derives from a public assistance program or the
2-19 individual has in good faith exercised any right under the Consumer
2-20 Credit Protection Act (15 U.S.C. Section 1601 et seq.; 18 U.S.C.
2-21 Section 891 et seq.). In interpreting this section, the courts and
2-22 administrative agencies shall be guided by the federal Equal Credit
2-23 Opportunity Act and regulations thereunder and interpretations
2-24 thereof by the Federal Reserve Board to the extent that that Act
2-25 and those regulations and interpretations pertain to conduct
2-26 prohibited by this section.
2-27 SECTION 4. Section (a), Article 8.06, Title 79, Revised
2-28 Statutes (Article 5069-8.06, Vernon's Texas Civil Statutes), is
2-29 amended to read as follows:
2-30 (a) Any person who violates the terms of Article 2.07 of
2-31 this Title is liable to the aggrieved individual for the actual
2-32 damages caused by the denial, punitive damages not to exceed
2-33 $10,000 in an action brought by the aggrieved individual <or for
2-34 $50.00, whichever is greater>, and court costs. The liability of
2-35 any person under this Article for a violation of Article 2.07 of
2-36 this Title is in lieu of and not in addition to that person's
2-37 liability under Title VII of the Consumer Credit Protection Act (15
2-38 U.S.C. Section 1691 et seq.). If the same act or omission
2-39 constitutes a violation of Article 2.07 of this Title and of
2-40 applicable federal law, the person aggrieved by that conduct may
2-41 bring a legal action to recover monetary damages either under this
2-42 Article or under that federal law, but not both.
2-43 SECTION 5. This Act applies only to acts done and
2-44 transactions entered into on or after the effective date of this
2-45 Act. Acts done and transactions entered into before the effective
2-46 date of this Act are governed by the law in effect immediately
2-47 before this Act takes effect, and that law continues in effect for
2-48 that purpose.
2-49 SECTION 6. This Act takes effect September 1, 1995.
2-50 SECTION 7. The importance of this legislation and the
2-51 crowded condition of the calendars in both houses create an
2-52 emergency and an imperative public necessity that the
2-53 constitutional rule requiring bills to be read on three several
2-54 days in each house be suspended, and this rule is hereby suspended.
2-55 * * * * *