1-1 By: Woolley (Senate Sponsor - Ellis) H.B. No. 2105
1-2 (In the Senate - Received from the House April 11, 1997;
1-3 April 14, 1997, read first time and referred to Committee on
1-4 Economic Development; May 12, 1997, reported favorably by the
1-5 following vote: Yeas 9, Nays 0; May 12, 1997, sent to printer.)
1-6 A BILL TO BE ENTITLED
1-7 AN ACT
1-8 relating to the regulation of credit service organizations.
1-9 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-10 SECTION 1. Section 18.03, Business & Commerce Code, is
1-11 amended to read as follows:
1-12 Sec. 18.03. PROHIBITED CONDUCT. A credit services
1-13 organization, a salesperson, agent, or representative of a credit
1-14 services organization, or an independent contractor who sells or
1-15 attempts to sell the services of a credit services organization may
1-16 not:
1-17 (1) charge a buyer or receive from a buyer money or
1-18 other valuable consideration before completing performance of all
1-19 services the credit services organization has agreed to perform for
1-20 the buyer, unless the credit services organization has obtained in
1-21 accordance with Section 18.04 of this code a surety bond for each
1-22 of its locations in the amount required by Section 18.04(e) issued
1-23 by a surety company authorized to do business in this state or
1-24 established and maintained a surety account for each of its
1-25 locations at a federally insured bank or savings and loan
1-26 association located in this state in which the amount required by
1-27 Section 18.04(e) is held in trust as required by Section 18.04(c);
1-28 (2) charge a buyer or receive from a buyer money or
1-29 other valuable consideration solely for referral of the buyer to a
1-30 retail seller who will or may extend credit to the buyer if the
1-31 credit that is or will be extended to the buyer is substantially
1-32 the same as that available to the general public;
1-33 (3) make or use a false or misleading representation
1-34 in the offer or sale of the services of a credit services
1-35 organization, including:
1-36 (A) guaranteeing to "erase bad credit" or words
1-37 to that effect unless the representation clearly discloses that
1-38 this can be done only if the credit history is inaccurate or
1-39 obsolete; and
1-40 (B) guaranteeing an extension of credit
1-41 regardless of the person's previous credit problem or credit
1-42 history unless the representation clearly discloses the eligibility
1-43 requirements for obtaining an extension of credit;
1-44 (4) engage, directly or indirectly, in a fraudulent or
1-45 deceptive act, practice, or course of business in connection with
1-46 the offer or sale of the services of a credit services
1-47 organization;
1-48 (5) make, or advise a buyer to make, a statement with
1-49 respect to a buyer's credit worthiness, credit standing, or credit
1-50 capacity that is false or misleading or that should be known by the
1-51 exercise of reasonable care to be false or misleading, to a
1-52 consumer reporting agency or to a person who has extended credit to
1-53 a buyer or to whom a buyer is applying for an extension of credit;
1-54 or
1-55 (6) advertise or cause to be advertised, in any manner
1-56 whatsoever, the services of a credit services organization without
1-57 filing a registration statement with the secretary of state, unless
1-58 otherwise provided by this chapter.
1-59 SECTION 2. Section 18.05, Business & Commerce Code, is
1-60 amended by amending and redesignating Subsections (e) and (f) as
1-61 Subsections (f) and (g) and adding a new Subsection (e) to read as
1-62 follows:
1-63 (e) A certificate of registration issued under this chapter
1-64 is valid for one year after its date of issuance. A registered
2-1 credit services organization may renew its registration by filing
2-2 an application for renewal in the form prescribed by the secretary
2-3 of state accompanied by the renewal fee.
2-4 (f) The secretary of state may charge each credit services
2-5 organization that files a registration statement or a renewal
2-6 application with the secretary of state a reasonable fee not to
2-7 exceed $100 to cover the cost of filing. The secretary of state
2-8 may not require a credit services organization to provide
2-9 information other than that provided in the registration statement.
2-10 (g) [(f)] The bond or surety account shall be maintained
2-11 until two years after the date that the credit services
2-12 organization ceases operations.
2-13 SECTION 3. (a) Notwithstanding Section 18.05, Business &
2-14 Commerce Code, as amended by this Act, a registration statement
2-15 under Chapter 18, Business & Commerce Code, that is in effect on
2-16 the effective date of this Act is valid until September 1, 1998.
2-17 (b) The secretary of state may provide that registration
2-18 statements that are renewed on September 1, 1998, expire on
2-19 different dates during the year. If the secretary of state changes
2-20 an expiration date, the secretary of state shall prorate the
2-21 registration fee payable on or before September 1 so that the
2-22 registrant is required to pay only that portion of the fee that is
2-23 allocable to the number of months during which the registration is
2-24 valid. The total renewal registration fee is payable when the
2-25 registration is renewed on the new expiration date.
2-26 SECTION 4. This Act takes effect September 1, 1997.
2-27 SECTION 5. The importance of this legislation and the
2-28 crowded condition of the calendars in both houses create an
2-29 emergency and an imperative public necessity that the
2-30 constitutional rule requiring bills to be read on three several
2-31 days in each house be suspended, and this rule is hereby suspended.
2-32 * * * * *