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.
   1-12        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.
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