1-1 By Woolley H.B. No. 2105
1-2 75R7342 LJR-F
1-3 AN ACT
1-4 relating to the regulation of credit service organizations.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Section 18.03, Business & Commerce Code, is
1-7 amended to read as follows:
1-8 Sec. 18.03. PROHIBITED CONDUCT. A credit services
1-9 organization, a salesperson, agent, or representative of a credit
1-10 services organization, or an independent contractor who sells or
1-11 attempts to sell the services of a credit services organization may
1-12 not:
1-13 (1) charge a buyer or receive from a buyer money or
1-14 other valuable consideration before completing performance of all
1-15 services the credit services organization has agreed to perform for
1-16 the buyer, unless the credit services organization has obtained in
1-17 accordance with Section 18.04 of this code a surety bond for each
1-18 of its locations in the amount required by Section 18.04(e) issued
1-19 by a surety company authorized to do business in this state or
1-20 established and maintained a surety account for each of its
1-21 locations at a federally insured bank or savings and loan
1-22 association located in this state in which the amount required by
1-23 Section 18.04(e) is held in trust as required by Section 18.04(c);
1-24 (2) charge a buyer or receive from a buyer money or
1-25 other valuable consideration solely for referral of the buyer to a
1-26 retail seller who will or may extend credit to the buyer if the
1-27 credit that is or will be extended to the buyer is substantially
1-28 the same as that available to the general public;
1-29 (3) make or use a false or misleading representation
1-30 in the offer or sale of the services of a credit services
1-31 organization, including:
1-32 (A) guaranteeing to "erase bad credit" or words
1-33 to that effect unless the representation clearly discloses that
2-1 this can be done only if the credit history is inaccurate or
2-2 obsolete; and
2-3 (B) guaranteeing an extension of credit
2-4 regardless of the person's previous credit problem or credit
2-5 history unless the representation clearly discloses the eligibility
2-6 requirements for obtaining an extension of credit;
2-7 (4) engage, directly or indirectly, in a fraudulent or
2-8 deceptive act, practice, or course of business in connection with
2-9 the offer or sale of the services of a credit services
2-10 organization;
2-11 (5) make, or advise a buyer to make, a statement with
2-12 respect to a buyer's credit worthiness, credit standing, or credit
2-13 capacity that is false or misleading or that should be known by the
2-14 exercise of reasonable care to be false or misleading, to a
2-15 consumer reporting agency or to a person who has extended credit to
2-16 a buyer or to whom a buyer is applying for an extension of credit;
2-17 or
2-18 (6) advertise or cause to be advertised, in any manner
2-19 whatsoever, the services of a credit services organization without
2-20 filing a registration statement with the secretary of state, unless
2-21 otherwise provided by this chapter.
2-22 SECTION 2. Section 18.05, Business & Commerce Code, is
2-23 amended by amending and redesignating Subsections (e) and (f) as
2-24 Subsections (f) and (g) and adding a new Subsection (e) to read as
2-25 follows:
2-26 (e) A certificate of registration issued under this chapter
2-27 is valid for one year after its date of issuance. A registered
2-28 credit services organization may renew its registration by filing
2-29 an application for renewal in the form prescribed by the secretary
2-30 of state accompanied by the renewal fee.
2-31 (f) The secretary of state may charge each credit services
2-32 organization that files a registration statement or a renewal
2-33 application with the secretary of state a reasonable fee not to
2-34 exceed $100 to cover the cost of filing. The secretary of state
3-1 may not require a credit services organization to provide
3-2 information other than that provided in the registration statement.
3-3 (g) [(f)] The bond or surety account shall be maintained
3-4 until two years after the date that the credit services
3-5 organization ceases operations.
3-6 SECTION 3. (a) Notwithstanding Section 18.05, Business &
3-7 Commerce Code, as amended by this Act, a registration statement
3-8 under Chapter 18, Business & Commerce Code, that is in effect on
3-9 the effective date of this Act is valid until September 1, 1998.
3-10 (b) The secretary of state may provide that registration
3-11 statements that are renewed on September 1, 1998, expire on
3-12 different dates during the year. If the secretary of state changes
3-13 an expiration date, the secretary of state shall prorate the
3-14 registration fee payable on or before September 1 so that the
3-15 registrant is required to pay only that portion of the fee that is
3-16 allocable to the number of months during which the registration is
3-17 valid. The total renewal registration fee is payable when the
3-18 registration is renewed on the new expiration date.
3-19 SECTION 4. This Act takes effect September 1, 1997.
3-20 SECTION 5. The importance of this legislation and the
3-21 crowded condition of the calendars in both houses create an
3-22 emergency and an imperative public necessity that the
3-23 constitutional rule requiring bills to be read on three several
3-24 days in each house be suspended, and this rule is hereby suspended.