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A BILL TO BE ENTITLED
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AN ACT
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relating to the marketing of credit cards to students at a |
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postsecondary institution and to certain young persons; providing |
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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 |
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INSTITUTIONS AND TO CERTAIN YOUNG PERSONS |
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Sec. 35.131. DEFINITIONS. In this subchapter: |
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(1) "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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(2) "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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(3) "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. PROHIBITED PRACTICES. (a) A credit card |
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issuer that mails an unsolicited application for a credit card to a |
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person who is at least 18 years of age and not more than 23 years of |
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age may not include in the mailing: |
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(1) a sample credit card; |
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(2) the word "pre-approved"; |
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(3) a blank check; or |
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(4) an offer of a gift or other incentive in exchange |
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for the completion of the credit card application. |
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(b) A credit card issuer that conducts activities on the |
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campus of a postsecondary educational institution that are designed |
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to encourage students to apply for a credit card may not as part of |
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those activities provide to a student: |
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(1) a sample credit card; |
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(2) a document containing the word "pre-approved"; |
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(3) a blank check; or |
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(4) an offer of a gift or other incentive in exchange |
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for the completion of a credit card application. |
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Sec. 35.133. DISCLOSURE REQUIRED. A credit card issuer |
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that mails an unsolicited application for a credit card to a person |
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who is at least 18 years of age and not more than 23 years of age or |
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that provides an application to a student on the campus of a |
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postsecondary educational institution shall also provide, in a |
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table format that is easy to read and understand, information about |
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the credit card's: |
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(1) annual percentage rate; |
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(2) variable rate index and spread; |
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(3) annual membership fee; |
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(4) grace period for purchases; |
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(5) cash advance fee; |
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(6) transaction fee; |
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(7) late fee; and |
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(8) overlimit fee. |
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Sec. 35.134. CIVIL PENALTY. A person who violates this |
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subchapter is liable to the state for a civil penalty in an amount |
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not to exceed $1,000 for each violation. The attorney general may |
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bring suit to recover the civil penalty imposed under this section. |
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SECTION 2. This Act takes effect September 1, 2007. |