By: Armbrister S.B. No. 1181
A BILL TO BE ENTITLED
AN ACT
1-1 relating to credit services organizations.
1-2 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-3 SECTION 1. Section 18.03, Business & Commerce Code, is
1-4 amended to read as follows:
1-5 Sec. 18.03. Prohibited Conduct. A credit services
1-6 organization, a salesperson, agent, or representative of a credit
1-7 services organization, or an independent contractor who sells or
1-8 attempts to sell the services of a credit services organization may
1-9 not:
1-10 (1) charge a buyer or receive from a buyer money or
1-11 other valuable consideration before completing performance of all
1-12 services the credit services organization has agreed to perform for
1-13 the buyer, unless the credit services organization has obtained in
1-14 accordance with Section 18.04 of this code a surety bond for each
1-15 of its locations, in the amount required by Section 18.04(e) issued
1-16 by a surety company authorized to do business in this state or
1-17 established and maintained a surety account for each of its
1-18 locations at a federally insured bank or savings and loan
1-19 association located in this state in which the amount required by
1-20 Section 18.04(e) is held in trust as required by Section 18.04(c);
1-21 (2) charge a buyer or receive from a buyer money or
1-22 other valuable consideration solely for referral of the buyer to a
1-23 retail seller who will or may extend credit to the buyer if the
2-1 credit that is or will be extended to the buyer is substantially
2-2 the same as that available to the general public;
2-3 (3) make or use a false or misleading representation
2-4 in the offer or sale of the services of a credit services
2-5 organization, including:
2-6 (A) guaranteeing to "erase bad credit" or words
2-7 to that effect unless the representation clearly discloses that
2-8 this can be done only if the credit history is inaccurate or
2-9 obsolete; and
2-10 (B) guaranteeing an extension of credit
2-11 regardless of the person's previous credit problem or credit
2-12 history unless the representation clearly discloses the eligibility
2-13 requirements for obtaining an extension of credit;
2-14 (4) engage, directly or indirectly, in a fraudulent or
2-15 deceptive act, practice, or course of business in connection with
2-16 the offer or sale of the services of a credit services
2-17 organization;
2-18 (5) make, or advise a buyer to make, a statement with
2-19 respect to a buyer's credit worthiness, credit standing, or credit
2-20 capacity that is false or misleading or that should be known by the
2-21 exercise of reasonable care to be false or misleading, to a
2-22 consumer reporting agency or to a person who has extended credit to
2-23 a buyer or to whom a buyer is applying for an extension of credit;
2-24 or
2-25 (6) advertise or cause to be advertised, in any manner
3-1 whatsoever, the services of a credit services organization without
3-2 filing a registration statement with the secretary of state, unless
3-3 otherwise provided by this chapter.
3-4 SECTION 2. Subsections (e) and (f), Section 18.05, Business
3-5 & Commerce Code, are amended to read as follows:
3-6 (e) A certificate of registration issued under this chapter
3-7 is valid for one year from the date of issuance. A registered
3-8 credit services organization may renew the registration by filing a
3-9 renewal application in the form prescribed by the secretary of
3-10 state, accompanied by the renewal fee.
3-11 (f) The secretary of state may charge each credit services
3-12 organization that files a registration statement or a renewal
3-13 statement with the secretary of state a reasonable fee not to
3-14 exceed $100 to cover the cost of filing. The secretary of state
3-15 may not require a credit services organization to provide
3-16 information other than that provided in the registration statement.
3-17 (g) <(f)> The bond or surety account shall be maintained
3-18 until two years after the date that the credit services
3-19 organization ceases operations.
3-20 SECTION 3. This Act takes effect September 1, 1995.
3-21 SECTION 4. The importance of this legislation and the
3-22 crowded condition of the calendars in both houses create an
3-23 emergency and an imperative public necessity that the
3-24 constitutional rule requiring bills to be read on three several
3-25 days in each house be suspended, and this rule is hereby suspended.