By Woolley H.B. No. 2105
75R7342 LJR-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the regulation of credit service organizations.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Section 18.03, Business & Commerce Code, is
1-5 amended to read as follows:
1-6 Sec. 18.03. PROHIBITED CONDUCT. A credit services
1-7 organization, a salesperson, agent, or representative of a credit
1-8 services organization, or an independent contractor who sells or
1-9 attempts to sell the services of a credit services organization may
1-10 not:
1-11 (1) charge a buyer or receive from a buyer money or
1-12 other valuable consideration before completing performance of all
1-13 services the credit services organization has agreed to perform for
1-14 the buyer, unless the credit services organization has obtained in
1-15 accordance with Section 18.04 of this code a surety bond for each
1-16 of its locations in the amount required by Section 18.04(e) issued
1-17 by a surety company authorized to do business in this state or
1-18 established and maintained a surety account for each of its
1-19 locations at a federally insured bank or savings and loan
1-20 association located in this state in which the amount required by
1-21 Section 18.04(e) is held in trust as required by Section 18.04(c);
1-22 (2) charge a buyer or receive from a buyer money or
1-23 other valuable consideration solely for referral of the buyer to a
1-24 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
2-26 whatsoever, the services of a credit services organization without
2-27 filing a registration statement with the secretary of state, unless
3-1 otherwise provided by this chapter.
3-2 SECTION 2. Section 18.05, Business & Commerce Code, is
3-3 amended by amending and redesignating Subsections (e) and (f) as
3-4 Subsections (f) and (g) and adding a new Subsection (e) to read as
3-5 follows:
3-6 (e) A certificate of registration issued under this chapter
3-7 is valid for one year after its date of issuance. A registered
3-8 credit services organization may renew its registration by filing
3-9 an application for renewal in the form prescribed by the secretary
3-10 of 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 application 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. (a) Notwithstanding Section 18.05, Business &
3-21 Commerce Code, as amended by this Act, a registration statement
3-22 under Chapter 18, Business & Commerce Code, that is in effect on
3-23 the effective date of this Act is valid until September 1, 1998.
3-24 (b) The secretary of state may provide that registration
3-25 statements that are renewed on September 1, 1998, expire on
3-26 different dates during the year. If the secretary of state changes
3-27 an expiration date, the secretary of state shall prorate the
4-1 registration fee payable on or before September 1 so that the
4-2 registrant is required to pay only that portion of the fee that is
4-3 allocable to the number of months during which the registration is
4-4 valid. The total renewal registration fee is payable when the
4-5 registration is renewed on the new expiration date.
4-6 SECTION 4. This Act takes effect September 1, 1997.
4-7 SECTION 5. The importance of this legislation and the
4-8 crowded condition of the calendars in both houses create an
4-9 emergency and an imperative public necessity that the
4-10 constitutional rule requiring bills to be read on three several
4-11 days in each house be suspended, and this rule is hereby suspended.