By Giddings H.B. No. 562
76R3686 DWS-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to certain transactions subject to regulation as loans.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Subchapter A, Chapter 342, Finance Code, is
1-5 amended by adding Sections 342.007 and 342.008 to read as follows:
1-6 Sec. 342.007. DELAYED DEPOSIT OF CERTAIN INSTRUMENTS. (a)
1-7 In this section, "check" includes a negotiable order of withdrawal
1-8 or share draft.
1-9 (b) A transaction is a loan subject to this subtitle if the
1-10 transaction involves:
1-11 (1) a cash advance made in exchange for a check; and
1-12 (2) an agreement to delay or defer deposit or
1-13 negotiation of the check for a fixed period.
1-14 (c) A charge or other amount received by the person making a
1-15 cash advance in a transaction described by Subsection (b), other
1-16 than repayment of the amount of the cash advance, is interest
1-17 subject to this subtitle.
1-18 (d) A person may not avoid the application of this section
1-19 by any subterfuge or device, including a claim or contract
1-20 providing that a transaction described by Subsection (b) is a
1-21 retail sale or involves a service fee. This section does not apply
1-22 to a bona fide retail sale of merchandise that does not involve a
1-23 cash advance and an agreement to delay or defer deposit or
1-24 negotiation of a check.
2-1 Sec. 342.008. CERTAIN SALES OF PERSONAL PROPERTY. (a) A
2-2 sale or purported sale of personal property used primarily for
2-3 personal, family, or household use is a loan subject to this
2-4 subtitle if:
2-5 (1) the buyer agrees to lease the property back to the
2-6 seller for lease payments that in the aggregate equal or exceed the
2-7 price paid for the property by the buyer;
2-8 (2) the buyer agrees to resell the property to the
2-9 seller for an amount that equals or exceeds the price paid for the
2-10 property by the buyer; or
2-11 (3) the seller gives the buyer a check, negotiable
2-12 order of withdrawal, or share draft for an amount that equals or
2-13 exceeds the price paid for the property by the buyer and agrees
2-14 that the instrument may be deposited or negotiated if the seller
2-15 does not exercise a purchase option or make lease payments.
2-16 (b) If, in a transaction described by Subsection (a), the
2-17 total amount received by the buyer exceeds the price paid for the
2-18 property by the buyer, the excess amount is interest subject to
2-19 this subtitle.
2-20 (c) The purported taking of title to or a security interest
2-21 or other lien in property by a buyer in connection with a
2-22 transaction described by Subsection (a) is a deceptive trade
2-23 practice under Subchapter E, Chapter 17, Business & Commerce Code.
2-24 Title to the property is not transferred and the security interest
2-25 or other lien does not attach.
2-26 (d) This section does not apply to a sale or purported sale
2-27 of personal property used for business, commercial, investment,
3-1 agricultural, or similar purposes.
3-2 SECTION 2. Subchapter D, Chapter 392, Finance Code, is
3-3 amended by adding Section 392.307 to read as follows:
3-4 Sec. 392.307. THREATENING OR PURSUING ACTION TO COLLECT
3-5 CERTAIN CHECKS. (a) In this section, "check" includes a
3-6 negotiable order of withdrawal or share draft.
3-7 (b) A person may not file or threaten to file a charge,
3-8 complaint, or a criminal prosecution under Section 31.03, 31.04, or
3-9 32.41, Penal Code, based on nonpayment of a check if:
3-10 (1) the person from whom collection is sought gave the
3-11 check in exchange for a cash advance; and
3-12 (2) the person making the advance did not, before the
3-13 fourth business day after the date that the person received the
3-14 check, deposit the check in a financial institution or present the
3-15 check for payment.
3-16 SECTION 3. This Act takes effect September 1, 1999.
3-17 SECTION 4. The importance of this legislation and the
3-18 crowded condition of the calendars in both houses create an
3-19 emergency and an imperative public necessity that the
3-20 constitutional rule requiring bills to be read on three several
3-21 days in each house be suspended, and this rule is hereby suspended.