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A BILL TO BE ENTITLED
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AN ACT
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relating to certain requirements regarding loan and sales finance |
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transactions. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 303.203(a), Finance Code, is amended to |
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read as follows: |
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(a) A lender may, at the time or after a loan is made, offer |
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to sell to the borrower and finance in a [the] loan contract subject |
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to this subtitle a charge for an automobile club membership. |
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SECTION 2. Section 342.004(b), Finance Code, is amended to |
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read as follows: |
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(b) A loan providing for [a rate of] interest that is 10 |
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percent a year or less is not subject to this chapter. |
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SECTION 3. Section 342.005, Finance Code, is amended to |
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read as follows: |
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Sec. 342.005. APPLICABILITY OF CHAPTER. Except as provided |
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by Sections 302.001(d) and 342.004(c), a loan is subject to this |
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chapter notwithstanding any other law if the loan: |
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(1) provides for interest in excess of 10 percent a |
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year; |
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(2) is extended primarily for personal, family, or |
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household use; |
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(3) is made by a person engaged in the business of |
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making, arranging, or negotiating those types of loans; [and] |
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(4) either: |
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(A) is not secured by a lien on real property; or |
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(B) is described by Section 342.001(4), 342.301, |
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or 342.456 and is predominantly payable in monthly installments; |
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and |
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(5) is entered into by a resident who is located in |
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this state when the resident becomes obligated under the loan, |
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regardless of whether the lender is located in this state. |
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SECTION 4. Subchapter A, Chapter 342, Finance Code, is |
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amended by adding Section 342.010 to read as follows: |
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Sec. 342.010. FEDERAL DISCLOSURE REQUIREMENTS APPLICABLE. |
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(a) The disclosure requirements of 12 C.F.R. Section 226.18(f) and |
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the other disclosure requirements of 12 C.F.R. Part 226 (Regulation |
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Z) adopted under the Truth in Lending Act (15 U.S.C. Section 1601 et |
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seq.) apply according to their terms to contracts subject to this |
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chapter. |
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(b) If a disclosure requirement of this chapter is |
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inconsistent with or conflicts with a disclosure requirement of |
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federal law, including a regulation or official interpretation of |
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law, the federal law controls and the inconsistent or conflicting |
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disclosure required by this chapter need not be given. |
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SECTION 5. Subchapter C, Chapter 342, Finance Code, is |
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amended by adding Section 342.106 to read as follows: |
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Sec. 342.106. PARTICIPATION IN MULTISTATE LICENSING |
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SYSTEM. The commissioner may participate in a multistate licensing |
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system for applicable license holders. The finance commission |
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shall adopt rules regarding participation in the system to address |
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data security, privacy, and fees. Any information that is |
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confidential pursuant to this chapter or other law retains its |
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confidentiality in the multistate database as if it were held by the |
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Office of Consumer Credit Commissioner. |
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SECTION 6. Section 345.055(d), Finance Code, is amended to |
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read as follows: |
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(d) For the purpose of a computation under this section, 16 |
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[15] or more days of a month may be considered a full month. |
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SECTION 7. Section 345.157(a), Finance Code, is amended to |
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read as follows: |
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(a) A retail charge agreement [that implements the market
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competitive rate ceiling] may provide for the payment of: |
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(1) a delinquency charge on each installment that is |
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in default for a period that is longer than 21 days; |
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(2) an attorney's reasonable fee if the agreement is |
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referred for collection to an attorney who is not a salaried |
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employee of the holder; and |
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(3) court costs and disbursements. |
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SECTION 8. Subchapter E, Chapter 345, Finance Code, is |
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amended by adding Section 345.2011 to read as follows: |
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Sec. 345.2011. AGREEMENTS REGARDING DEBT SUSPENSION AND |
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DEBT CANCELLATION. (a) In connection with a retail installment |
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transaction, a retail seller may offer to the retail buyer a debt |
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suspension agreement or debt cancellation agreement under similar |
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terms and conditions as such an agreement may be offered by a bank |
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or savings association. |
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(b) A retail seller may not require that a retail buyer |
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accept or provide an agreement or contract under Subsection (a). |
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(c) In addition to other disclosures required by state or |
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federal law and before offering an agreement or contract authorized |
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by this section, the retail seller shall provide to the retail buyer |
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a notice separate from the retail charge agreement documents |
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stating that the retail buyer is not required to accept or provide |
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the agreement or contract to enter a retail installment sale. |
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(d) The amount charged for a product authorized by |
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Subsection (a) must be reasonable. |
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SECTION 9. Section 345.211, Finance Code, is amended to |
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read as follows: |
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Sec. 345.211. GAIN OR ADVANTAGE FROM INSURANCE NOT |
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ADDITIONAL CHARGE. Any gain or advantage to the holder or the |
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holder's employee, officer, director, agent, general agent, |
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affiliate, or associate from insurance or from another agreement or |
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contract permitted under this subchapter or the provision or sale |
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of insurance or another agreement or contract permitted under this |
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subchapter is not an additional charge or additional time price |
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differential in connection with a retail installment contract or |
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retail sales agreement made under this chapter except as |
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specifically provided by this chapter. |
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SECTION 10. Subchapter B, Chapter 348, Finance Code, is |
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amended by adding Section 348.1075 to read as follows: |
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Sec. 348.1075. EXPEDITED PAYMENT SERVICE. (a) In this |
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section, "expedited payment service" means a service that allows |
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payment on an expedited basis by electronic funds transfer from a |
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person's deposit account. Payments made by electronic funds |
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transfers authorized in advance to recur at substantially regular |
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intervals are not considered made using an expedited payment |
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service. |
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(b) A holder may collect from the retail buyer an amount for |
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each payment made to the holder using an expedited payment service |
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only if: |
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(1) the use of the expedited payment service is |
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authorized by the buyer; |
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(2) the amount does not exceed $10 for each payment |
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arranged through expedited payment service; and |
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(3) the buyer may use another reasonable method to |
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make payments, including through standard mail service, without |
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charge for the use of that method. |
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SECTION 11. Sections 345.157(d), (e), and (f), Finance |
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Code, are repealed. |
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SECTION 12. This Act takes effect September 1, 2007. |