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A BILL TO BE ENTITLED
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AN ACT
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relating to credit card marketing activities at postsecondary |
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educational institutions; providing a civil penalty. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Chapter 35, Business & Commerce Code, is amended |
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by adding Subchapter L to read as follows: |
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SUBCHAPTER L. CREDIT CARD MARKETING AT POSTSECONDARY EDUCATIONAL |
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INSTITUTIONS |
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Sec. 35.131. DEFINITIONS. In this subchapter: |
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(1) "Campus credit card marketing activity": |
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(A) means any activity: |
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(i) conducted by an agent or employee of a |
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credit card issuer on the campus of a postsecondary educational |
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institution; and |
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(ii) designed to encourage and enable |
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students to apply for a credit card; and |
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(B) includes the act of placing on the campus a |
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display or poster together with a form that can be returned to the |
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credit card issuer as a credit card application, even if an employee |
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or agent of the credit card issuer is not present at the display. |
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(2) "Credit card" means a card or device issued under |
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an agreement by which the issuer gives to a cardholder the right to |
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obtain credit from the issuer or another person. |
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(3) "Credit card issuer" means a lender, including a |
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financial institution, or a merchant that receives applications and |
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issues credit cards to individuals. |
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(4) "Governing board" means the body charged with |
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policy direction of any postsecondary educational institution, |
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including a board of directors, a board of regents, a board of |
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trustees, and an independent school district board that is charged |
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with policy direction of a public junior college. |
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(5) "Postsecondary educational institution" means: |
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(A) an institution of higher education as defined |
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by Section 61.003, Education Code; |
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(B) a private or independent institution of |
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higher education as defined by Section 61.003, Education Code; or |
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(C) a private postsecondary educational |
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institution as defined by Section 61.302, Education Code. |
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Sec. 35.132. CAMPUS CREDIT CARD MARKETING ACTIVITY OUTSIDE |
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DESIGNATED LOCATION OR TIME PROHIBITED. (a) A credit card issuer |
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may not engage in campus credit card marketing activities: |
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(1) outside of a campus location designated by the |
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governing board of the postsecondary educational institution for |
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that purpose in accordance with Subsection (b); or |
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(2) at a time other than a time designated by the |
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governing board in accordance with Subsection (b). |
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(b) The governing board of a postsecondary educational |
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institution may designate: |
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(1) one or more locations on campus where a credit card |
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issuer may engage in campus credit card marketing activities; and |
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(2) one or more times during which a credit card issuer |
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may engage in campus credit card marketing activities. |
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Sec. 35.133. CREDIT CARD ISSUER TO DEVELOP FINANCIAL |
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EDUCATIONAL MATERIAL. A credit card issuer who conducts campus |
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credit card marketing activities shall develop financial |
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educational material in consultation with or subject to approval by |
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the postsecondary educational institution. The financial |
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educational material must include a clear and practical explanation |
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of: |
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(1) effective money management skills, including how |
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to develop and maintain a budget; |
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(2) key financial terms and phrases related to credit |
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cards and personal debt management; |
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(3) credit educational materials and programs offered |
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by the credit card issuer that are available to student cardholders |
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after they have opened an account; |
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(4) resources to assist students in understanding |
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credit reports and credit scores and the consequences of |
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irresponsible credit card use; and |
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(5) the importance of responsible credit practices, |
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including timely paying the minimum amount due each month and |
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reducing costs by paying as much of the balance as possible. |
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Sec. 35.134. CREDIT CARD ISSUER TO PROVIDE FINANCIAL |
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EDUCATIONAL MATERIAL. A credit card issuer that conducts campus |
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credit card marketing activities shall: |
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(1) during the time that the credit card issuer |
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conducts the credit card marketing activity on the campus, make |
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available to students, on the campus, financial educational |
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material developed under Section 35.133; |
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(2) make financial educational material similar to |
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material developed under Section 35.133 available on the Internet; |
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and |
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(3) provide to a student to whom a credit card is |
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issued, at the time the credit card is provided to the student, |
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financial educational material developed under Section 35.133. |
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Sec. 35.135. RESTRICTION ON GIFTS OR INCENTIVES FOR |
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COMPLETING CREDIT CARD APPLICATION. A credit card issuer may not |
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offer a gift or other incentive in exchange for the completion of a |
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credit card application as part of a campus credit card marketing |
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activity unless the credit card issuer, at the time the credit card |
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issuer provides a credit card application to an individual, |
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provides financial educational material developed under Section |
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35.133 to the individual. |
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Sec. 35.136. CREDIT CARD AND DEBT EDUCATION AT NEW STUDENT |
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ORIENTATION. The governing board of a postsecondary educational |
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institution shall adopt a policy requiring a credit card and debt |
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education and counseling session to be included in any orientation |
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program for new students. The postsecondary educational |
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institution shall use existing educational materials prepared by |
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nonprofit entities for purposes of the credit card and debt |
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education and counseling session. |
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Sec. 35.137. CIVIL PENALTY. A person who intentionally |
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violates this subchapter is liable to the state for a civil penalty |
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in an amount not to exceed $2,500 for each violation. The attorney |
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general or the prosecuting attorney in the county in which the |
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violation occurs may bring suit to recover the civil penalty |
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imposed under this section. |
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SECTION 2. This Act takes effect September 1, 2007. |