81R10808 DAK-D

By: Farias H.B. No. 3049

A BILL TO BE ENTITLED

AN ACT

relating to the establishment of the consumer credit education grant program.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 393.104, Finance Code, is amended to read as follows:

Sec. 393.104. FEES [FILING FEE]. (a) The secretary of state may charge a credit services organization a reasonable fee to cover the cost of filing a registration statement or renewal application in an amount not to exceed $100.

(b) In addition to the fee under Subsection (a), the secretary of state shall charge a credit services organization a fee of $100 to be deposited to the credit of the consumer credit education grant fund established under Subchapter C-1, Chapter 14.

SECTION 2. Chapter 14, Finance Code, is amended by adding Subchapter C-1 to read as follows:

SUBCHAPTER C-1. CONSUMER CREDIT EDUCATION GRANT PROGRAM

Sec. 14.131. CONSUMER CREDIT EDUCATION GRANT PROGRAM. The office shall establish and administer the consumer credit education grant program to provide grants to eligible nonprofit entities that apply to the office in the manner prescribed by the office. The purpose of the program is to provide grants to enable eligible nonprofit entities to provide financial education and low-cost, small-dollar loans to consumers.

Sec. 14.132. ELIGIBILITY FOR GRANT. To be eligible for a grant under the program established under Section 14.131, a nonprofit entity must:

(1) be performing its activities primarily in this state;

(2) be in good standing under the laws of the state in which the entity was formed or organized, as evidenced by a certificate issued by the secretary of state or the state official having custody of the records pertaining to entities or other organizations formed under the laws of that state; and

(3) maintain or plan to establish a loan program that the office certifies contains the following components:

(A) an automatic savings feature;

(B) access to financial education;

(C) loan amounts up to $1,000;

(D) affordable pricing, including an annual percentage rate of 36 percent or less and fees;

(E) minimal, if any, charges, including an annual fee, membership fee, advance fee, or prepayment penalty; and

(F) for repayment:

(i) a 90-day or longer term;

(ii) multiple installments with payment periods extending beyond 31 days; and

(iii) no balloon payment.

Sec. 14.133. LIMIT ON AMOUNT OF GRANT. The office may not award a grant under this subchapter that is greater than an amount equal to 10 percent of the amount of the consumer credit education grant fund.

Sec. 14.134. RULES. The finance commission shall adopt rules as necessary for the administration of this subchapter.

Sec. 14.135. CONSUMER CREDIT EDUCATION GRANT FUND. (a) The consumer credit education grant fund is a dedicated account in the general revenue fund.

(b) The following amounts shall be deposited in the fund:

(1) the fee collected under Section 393.104;

(2) interest earned on the investment of money in the fund; and

(3) gifts, grants, and other donations received for the grant program established under Section 14.131.

(c) The fund may be used only to award grants to eligible entities as provided by this subchapter and to cover the costs of administering the grant program.

SECTION 3. As soon as practicable after the effective date of this Act, the Finance Commission of Texas shall adopt rules for the administration of the consumer credit education grant program under Subchapter C-1, Chapter 14, Finance Code, as added by this Act.

SECTION 4. Section 393.104(b), Finance Code, as added by this Act, applies only to a registration statement filed or renewed on or after the effective date of this Act.

SECTION 5. This Act takes effect September 1, 2009.