By: Madla S.B. No. 871
A BILL TO BE ENTITLED
AN ACT
1-1 relating to the appeal of orders of and civil penalties assessed by
1-2 the Consumer Credit Commissioner.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Section (7), Article 2.03, Title 79, Revised
1-5 Statutes (Article 5069-2.03, Vernon's Texas Civil Statutes), is
1-6 amended to read as follows:
1-7 (7) Whenever the Consumer Credit Commissioner has reasonable
1-8 cause to believe that any person is violating any provisions of the
1-9 statutes to which this Article applies he may in addition to all
1-10 actions provided for, and without prejudice thereto, enter an order
1-11 requiring such person to desist or to refrain from such violation.
1-12 A person may appeal such an order to the Finance Commission. The
1-13 appeal must be made in accordance with Chapter 2001, Government
1-14 Code (Administrative Procedure Act) <rules adopted by the Finance
1-15 Commission for that purpose>. In addition to the order, the
1-16 Commissioner may bring an action in any district court of this
1-17 State having jurisdiction and venue, on the relation of the
1-18 Attorney General at the request of the Commissioner, to enjoin such
1-19 person from engaging in or continuing such violation or from doing
1-20 any act or acts in furtherance thereof. In any such action, an
1-21 order or judgment may be entered awarding such preliminary or final
1-22 injunction as may be deemed proper. In addition to all other means
1-23 provided by law for the enforcement of a restraining order or
1-24 injunction, the court in which such action is brought shall have
2-1 power and jurisdiction to impound, and to appoint a receiver for,
2-2 the property and business of the defendant, including books,
2-3 papers, documents, and records pertaining thereto or so much
2-4 thereof as the court may deem reasonably necessary to prevent
2-5 violations through or by means of the use of said property and
2-6 business. Such receiver, when appointed and qualified, shall have
2-7 such powers and duties as he would have under Chapter 64, Civil
2-8 Practice and Remedies Code.
2-9 SECTION 2. Title 79, Revised Statutes (Article 5069-1.01 et
2-10 seq., Vernon's Texas Civil Statutes), is amended by adding Article
2-11 2.03A to read as follows:
2-12 Art. 2.03A. ADMINISTRATIVE PENALTY; RESTITUTION ORDER.
2-13 (a) The Consumer Credit Commissioner may assess an administrative
2-14 penalty against a person who knowingly and wilfully violates or
2-15 causes a violation of this subtitle, Chapter 9 or 15 of this title,
2-16 or a rule adopted under this subtitle or Chapter 9 or 15 of this
2-17 title. The Commissioner may order a person who violates or causes
2-18 a violation of this subtitle, Chapter 9 or 15 of this title, or a
2-19 rule adopted under this subtitle or Chapter 9 or 15 of this title
2-20 to make restitution to an identifiable person injured by the
2-21 violation.
2-22 (b) The amount of an administrative penalty may not exceed
2-23 $1,000 for each day of violation and for each act of violation.
2-24 The aggregate amount of penalties that may be assessed against a
2-25 person during one calendar year under this article may not exceed
2-26 $5,000 for each business location at which an element of a
2-27 violation occurred and may not exceed $50,000 if the person
3-1 committed violations at 11 or more business locations.
3-2 (c) In determining the amount of an administrative penalty,
3-3 the Commissioner shall consider:
3-4 (1) the seriousness of the violation, including the
3-5 nature, circumstances, extent, and gravity of the prohibited act;
3-6 (2) the extent of actual or potential harm to a third
3-7 party;
3-8 (3) the history of violations;
3-9 (4) the amount necessary to deter future violations;
3-10 (5) efforts to correct the violation; and
3-11 (6) any other matter that justice may require.
3-12 (d) If the Commissioner determines that a violation
3-13 occurred, the Commissioner may issue a report that states the facts
3-14 on which the determination is based and the Commissioner's
3-15 recommendation on imposition of a penalty, including a
3-16 recommendation on the amount of the penalty.
3-17 (e) Not later than the 14th day after the date on which a
3-18 report is issued, the Commissioner shall give written notice of the
3-19 report to the person charged with committing or causing the
3-20 violation. The notice shall be given by certified mail. The
3-21 notice must include a brief summary of the alleged violation and a
3-22 statement of the amount of the recommended penalty and must inform
3-23 the person that the person has a right to a hearing on the
3-24 occurrence of the violation, the amount of the penalty, or both the
3-25 occurrence of the violation and the amount of the penalty.
3-26 (f) Not later than the 20th day after the date on which a
3-27 person receives notice under Subsection (e), the person may:
4-1 (1) in writing accept the determination and
4-2 recommended penalty of the Commissioner; or
4-3 (2) make a written request for a hearing on the
4-4 occurrence of the violation, the amount of the penalty, or both the
4-5 occurrence of the violation and the amount of the penalty.
4-6 (g) If the person accepts the determination and recommended
4-7 penalty of the Commissioner, the Commissioner by order shall
4-8 approve the determination and impose the recommended penalty.
4-9 (h) If the person requests a hearing or fails to respond
4-10 timely to the notice, the Commissioner shall set a hearing and give
4-11 notice of the hearing to the person. The notice shall be given by
4-12 certified mail. The hearing shall be held by an administrative law
4-13 judge of the State Office of Administrative Hearings. The
4-14 administrative law judge shall make findings of fact and
4-15 conclusions of law and promptly issue a proposal for a decision
4-16 about the occurrence of the violation and the amount of a proposed
4-17 penalty. Based on the findings of fact, conclusions of law, and
4-18 proposal for a decision, the Commissioner by order may find that a
4-19 violation has occurred and impose a penalty or may find that no
4-20 violation occurred.
4-21 (i) The notice of the Commissioner's order given to the
4-22 person under Chapter 2001, Government Code (Administrative
4-23 Procedure Act), must include a statement of the right of the person
4-24 to judicial review of the order.
4-25 (j) Judicial review of the order of the Commissioner:
4-26 (1) is instituted by filing a petition as provided by
4-27 Subchapter G, Chapter 2001, Government Code; and
5-1 (2) is under the substantial evidence rule.
5-2 (k) If the court sustains the occurrence of the violation,
5-3 the court may uphold or reduce the amount of the penalty and order
5-4 the person to pay the full or reduced amount of the penalty. If
5-5 the court does not sustain the occurrence of the violation, the
5-6 court shall order that no penalty is owed.
5-7 (l) When the judgment of the court becomes final, the court
5-8 shall proceed under this subsection. If the person paid the amount
5-9 of the penalty and if that amount is reduced or is not upheld by
5-10 the court, the court shall order that the appropriate amount plus
5-11 accrued interest be remitted to the person. The rate of the
5-12 interest is the rate authorized by Article 1.05 of this title, and
5-13 the interest shall be paid for the period beginning on the date the
5-14 penalty was paid and ending on the date the penalty is remitted.
5-15 (m) In addition to the administrative penalty or restitution
5-16 amount, the court may authorize the Commissioner to recover from a
5-17 person who pays an administrative penalty or restitution amount, or
5-18 both, under this article reasonable expenses incurred in obtaining
5-19 the ordered amount, including investigation costs, witness fees,
5-20 and deposition expenses.
5-21 (n) A penalty collected under this article shall be
5-22 deposited to the credit of the general revenue fund.
5-23 (o) All proceedings under this section are subject to
5-24 Chapter 2001, Government Code (Administrative Procedure Act).
5-25 (p) An administrative penalty or restitution order
5-26 authorized by this article is in addition to any other enforcement
5-27 authority provided by law.
6-1 SECTION 3. Article 8.03, Title 79, Revised Statutes (Article
6-2 5069-8.03, Vernon's Texas Civil Statutes), is amended to read as
6-3 follows:
6-4 Art. 8.03. ENGAGING IN LENDING BUSINESS WITHOUT LICENSE. In
6-5 addition to the foregoing penalties, if applicable, any person
6-6 engaging in any business under the scope of Chapter <Chapters> 3,
6-7 4, <or> 5, or 15 of this Title <Subtitle> without first securing a
6-8 license provided, or without the authorization prescribed, in such
6-9 Chapter shall be guilty of a misdemeanor and upon conviction
6-10 thereof shall be punishable by a fine of not more than One Thousand
6-11 Dollars, and each such loan made without the authority granted by
6-12 such license shall constitute a separate offense punishable
6-13 hereunder; and in addition such person shall forfeit all principal
6-14 and charges contracted for or collected on each such loan, and
6-15 shall pay reasonable attorneys' fees incurred by the obligor.
6-16 SECTION 4. This Act applies only to acts done and
6-17 transactions entered into on or after the effective date of this
6-18 Act. Acts done and transactions entered into before the effective
6-19 date of this Act are governed by the law in effect immediately
6-20 before this Act takes effect and that law continues in effect for
6-21 that purpose.
6-22 SECTION 5. This Act takes effect September 1, 1995.
6-23 SECTION 6. The importance of this legislation and the
6-24 crowded condition of the calendars in both houses create an
6-25 emergency and an imperative public necessity that the
6-26 constitutional rule requiring bills to be read on three several
6-27 days in each house be suspended, and this rule is hereby suspended.