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A BILL TO BE ENTITLED
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AN ACT
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relating to the regulation of consumer debt management services. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subsection (c), Section 394.204, Finance Code, |
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is amended to read as follows: |
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(c) An application for an initial registration must be in a |
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form prescribed by the commissioner and accompanied by: |
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(1) the appropriate fees set by the finance commission |
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in an amount necessary to recover the costs of administering this |
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subchapter; |
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(2) the surety bond or insurance required by Section |
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394.206; |
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(3) the applicant's name, the applicant's principal |
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business address and telephone number, all other business addresses |
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of the applicant in this state, and the applicant's electronic mail |
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address and Internet website address; |
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(4) all names under which the applicant conducts |
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business; |
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(5) the address of each location in this state at which |
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the applicant will provide debt management services, or if the |
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applicant will have no such location, a statement to that effect; |
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(6) the name and home address of each officer and |
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director of the applicant and each person that holds at least a 10 |
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percent ownership interest in the applicant; |
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(7) if the applicant is a nonprofit or tax exempt |
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organization, a detailed description of the ownership interest of |
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each officer, director, agent, or employee of the applicant, and |
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any member of the immediate family of an officer, director, agent, |
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or employee of the applicant, in a for-profit affiliate or |
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subsidiary of the applicant or in any other for-profit business |
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entity that provides services to the applicant or to a consumer in |
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relation to the applicant's debt management business; and |
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(8) [(4)] any other information that the commissioner |
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requires. |
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SECTION 2. Subsection (b), Section 394.205, Finance Code, |
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is amended to read as follows: |
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(b) Each provider shall file a report with the commissioner |
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at each renewal of the provider's registration. The report must at |
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a minimum disclose in detail and under appropriate headings: |
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(1) the assets and liabilities of the provider at the |
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beginning and end of the period, if the provider is a nonprofit or |
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tax exempt organization; |
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(2) the total number of debt management plans the |
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provider has initiated on behalf of consumers in this state during |
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that year; and |
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(3) records of total and average fees charged to |
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consumers, including all voluntary contributions received from |
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consumers. |
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SECTION 3. Subsections (a) and (d), Section 394.208, |
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Finance Code, are amended to read as follows: |
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(a) A provider may not enroll a consumer in a debt |
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management plan unless,[:
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[(1) the provider is a nonprofit organization exempt
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from taxation under Section 501(c)(3), Internal Revenue Code of
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1986; and
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[(2)] through the services of a counselor certified by |
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an independent accreditation organization, the provider has: |
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(1) [(A)] provided the consumer individualized |
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counseling and educational information that at a minimum addresses |
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the topics of managing household finances, managing credit and |
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debt, and budgeting; |
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(2) [(B)] prepared an individualized financial |
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analysis and an initial debt management plan for the consumer's |
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debts with specific recommendations regarding actions the consumer |
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should take; |
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(3) [(C)] determined that the consumer has a |
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reasonable ability to make payments under the proposed debt |
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management plan based on the information provided by the consumer; |
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(4) [(D)] a reasonable expectation, provided that the |
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consumer has provided accurate information to the provider, that |
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each creditor of the consumer listed as a participating creditor in |
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the plan will accept payment of the consumer's debts as provided in |
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the initial plan; |
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(5) [(E)] prepared, for all creditors identified by |
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the consumer or identified through additional investigation by the |
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provider, a list, which must be provided to the consumer in a form |
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the consumer may keep, of the creditors that the provider |
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reasonably expects to participate in the plan; and |
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(6) [(F)] provided a written document to the consumer |
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in a form the consumer may keep that clearly and conspicuously |
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contains the following statements: |
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(A) [(i)] that debt management services are not |
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suitable for all consumers and that consumers may request |
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information about other ways, including bankruptcy, to deal with |
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indebtedness; |
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(B) [(ii)] that if the provider is a nonprofit or |
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tax-exempt organization the provider cannot require donations or |
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contributions; and |
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(C) if applicable, [(iii)] that some of the |
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provider's funding comes from contributions from creditors who |
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participate in debt management plans, except that a provider may |
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substitute for "some" the actual percentage of creditor |
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contributions it received during the most recent reporting period. |
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(d) A provider may provide the information required by |
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Subsections (a)(2), (5), and (6) [(a)(2)(B), (E), and (F)] through |
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its Internet website if the provider: |
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(1) has complied with the federal Electronic |
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Signatures in Global and National Commerce Act (15 U.S.C. Section |
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7001 et seq.); |
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(2) informs the consumer that, on electronic, |
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telephonic, or written request the provider will make available to |
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the consumer a paper copy or copies; and |
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(3) discloses on its Internet website: |
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(A) the provider's name and each name under which |
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it does business; |
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(B) the provider's principal business address |
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and telephone number; and |
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(C) the names of the provider's principal |
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officers. |
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SECTION 4. Section 394.210, Finance Code, is amended by |
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adding Subsection (f) to read as follows: |
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(f) The finance commission may establish maximum fair and |
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reasonable fees under this section. |
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SECTION 5. This Act takes effect September 1, 2007. |