1-1 By: Armbrister S.B. No. 1181
1-2 (In the Senate - Filed March 9, 1995; March 15, 1995, read
1-3 first time and referred to Committee on Economic Development;
1-4 April 6, 1995, reported adversely, with favorable Committee
1-5 Substitute by the following vote: Yeas 9, Nays 0; April 6, 1995,
1-6 sent to printer.)
1-7 COMMITTEE SUBSTITUTE FOR S.B. No. 1181 By: Madla
1-8 A BILL TO BE ENTITLED
1-9 AN ACT
1-10 relating to credit services organizations.
1-11 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-12 SECTION 1. Section 18.03, Business & Commerce Code, is
1-13 amended to read as follows:
1-14 Sec. 18.03. Prohibited Conduct. A credit services
1-15 organization, a salesperson, agent, or representative of a credit
1-16 services organization, or an independent contractor who sells or
1-17 attempts to sell the services of a credit services organization may
1-18 not:
1-19 (1) charge a buyer or receive from a buyer money or
1-20 other valuable consideration before completing performance of all
1-21 services the credit services organization has agreed to perform for
1-22 the buyer, unless the credit services organization has obtained in
1-23 accordance with Section 18.04 of this code a surety bond for each
1-24 of its locations, in the amount required by Section 18.04(e) issued
1-25 by a surety company authorized to do business in this state or
1-26 established and maintained a surety account for each of its
1-27 locations at a federally insured bank or savings and loan
1-28 association located in this state in which the amount required by
1-29 Section 18.04(e) is held in trust as required by Section 18.04(c);
1-30 (2) charge a buyer or receive from a buyer money or
1-31 other valuable consideration solely for referral of the buyer to a
1-32 retail seller who will or may extend credit to the buyer if the
1-33 credit that is or will be extended to the buyer is substantially
1-34 the same as that available to the general public;
1-35 (3) make or use a false or misleading representation
1-36 in the offer or sale of the services of a credit services
1-37 organization, including:
1-38 (A) guaranteeing to "erase bad credit" or words
1-39 to that effect unless the representation clearly discloses that
1-40 this can be done only if the credit history is inaccurate or
1-41 obsolete; and
1-42 (B) guaranteeing an extension of credit
1-43 regardless of the person's previous credit problem or credit
1-44 history unless the representation clearly discloses the eligibility
1-45 requirements for obtaining an extension of credit;
1-46 (4) engage, directly or indirectly, in a fraudulent or
1-47 deceptive act, practice, or course of business in connection with
1-48 the offer or sale of the services of a credit services
1-49 organization;
1-50 (5) make, or advise a buyer to make, a statement with
1-51 respect to a buyer's credit worthiness, credit standing, or credit
1-52 capacity that is false or misleading or that should be known by the
1-53 exercise of reasonable care to be false or misleading, to a
1-54 consumer reporting agency or to a person who has extended credit to
1-55 a buyer or to whom a buyer is applying for an extension of credit;
1-56 or
1-57 (6) advertise or cause to be advertised, in any manner
1-58 whatsoever, the services of a credit services organization without
1-59 filing a registration statement with the secretary of state, unless
1-60 otherwise provided by this chapter.
1-61 SECTION 2. Subsections (e) and (f), Section 18.05, Business
1-62 & Commerce Code, are amended to read as follows:
1-63 (e) A certificate of registration issued under this chapter
1-64 is valid for one year from the date of issuance. A registered
1-65 credit services organization may renew the registration by filing a
1-66 renewal application in the form prescribed by the secretary of
1-67 state, accompanied by the renewal fee.
1-68 (f) The secretary of state may charge each credit services
2-1 organization that files a registration statement or a renewal
2-2 statement with the secretary of state a reasonable fee not to
2-3 exceed $100 to cover the cost of filing. The secretary of state
2-4 may not require a credit services organization to provide
2-5 information other than that provided in the registration statement.
2-6 (g) <(f)> The bond or surety account shall be maintained
2-7 until two years after the date that the credit services
2-8 organization ceases operations.
2-9 SECTION 3. This Act takes effect September 1, 1995.
2-10 SECTION 4. The importance of this legislation and the
2-11 crowded condition of the calendars in both houses create an
2-12 emergency and an imperative public necessity that the
2-13 constitutional rule requiring bills to be read on three several
2-14 days in each house be suspended, and this rule is hereby suspended.
2-15 * * * * *