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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. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Sections 35.132(a) and (b), Business & Commerce |
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Code, as added by Chapter 130 (H.B. 85), Acts of the 80th |
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Legislature, Regular Session, 2007, are amended to read as follows: |
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(a) A credit card issuer may not engage in campus credit |
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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 this section [Subsection (b)]; or |
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(2) at a time other than a time designated for that |
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purpose [by the governing board] in accordance with this section |
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[Subsection (b)]. |
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(b) The governing board of a postsecondary educational |
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institution, with the approval of the institution's student |
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government, if one exists, 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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SECTION 2. Subchapter L, Chapter 35, Business & Commerce |
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Code, as added by Chapter 130 (H.B. 85), Acts of the 80th |
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Legislature, Regular Session, 2007, is amended by adding Sections |
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35.1325 and 35.1326 to read as follows: |
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Sec. 35.1325. ANNUAL REPORT OF ISSUER'S GIFTS TO |
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INSTITUTION. (a) Not later than March 1 of each year, a credit card |
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issuer that, during the preceding five years, has conducted credit |
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card marketing activities on the campus of a postsecondary |
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educational institution shall submit to the student government, if |
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any, of the institution a report that discloses the amount and |
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purpose of any gift, grant, or other donation given by the issuer |
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during the preceding calendar year to a program or office of the |
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institution, including any donations given to the institution's |
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athletics department or to support the institution's athletics |
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|
programs. |
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(b) A postsecondary educational institution, at the request |
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of the institution's student government, shall publish reports |
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submitted under Subsection (a) on the institution's Internet |
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website. |
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Sec. 35.1326. DISCLOSURE REGARDING CREDIT CARD TERMS. (a) |
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A credit card issuer shall disclose to the financial aid office of |
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each postsecondary educational institution on whose campus the |
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issuer conducts credit card marketing activities information about |
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each type of credit card marketed by the issuer to students on |
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campus. The disclosure must include: |
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(1) the credit card's: |
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(A) finance charge, stated as an annual |
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percentage rate, for: |
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(i) purchases; |
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(ii) cash advances; |
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(iii) balance transfers; and |
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(iv) overdue balances; |
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(B) grace period from finance charges for |
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purchases if: |
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(i) the cardholder carries over a balance |
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from the previous billing statement; and |
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(ii) the cardholder pays the balance in |
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full within the period specified by the billing statement; |
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(C) grace period from finance charges for cash |
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advances; |
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(D) credit limit; and |
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(E) minimum finance charge, if there is no grace |
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period from finance charges for purchases; |
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(2) a statement of whether: |
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(A) the credit card has a fixed, variable, or |
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tiered annual percentage rate for finance charges on an unpaid |
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balance that is not delinquent, and, if the card has a variable |
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annual percentage rate, the issuer shall also provide information |
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about the card's variable rate index and spread; and |
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(B) the credit card's finance charge on an unpaid |
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balance that is not delinquent is calculated: |
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(i) using one or two billing cycles; |
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(ii) to include new purchases; and |
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|
(iii) using an average, adjusted, or |
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|
previous balance method; |
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(3) a brief description of cardholder incentives and |
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|
rewards for using the credit card, including cash back rewards, |
|
|
points reward systems, and discounts on goods and services; and |
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(4) a brief description of other credit card features |
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and benefits, including car rental insurance and travel insurance. |
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(b) Credit card information required under Subsection (a) |
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shall be furnished by the credit card issuer in an electronic table |
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format that is easy to read and understand. |
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(c) The financial aid office of a postsecondary educational |
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|
institution shall compile credit card information submitted to the |
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|
office under Subsection (a) and maintain the information in an |
|
|
electronic spreadsheet format that: |
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|
(1) allows students to compare the terms, features, |
|
|
and costs of all credit cards marketed to students on campus; and |
|
|
(2) makes information readily available for purposes |
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|
of Subsections (e) and (f). |
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(d) Not later than July 1 of each year, the financial aid |
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|
office shall prepare a credit card information pamphlet using the |
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|
information maintained under Subsection (c). |
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|
(e) The postsecondary educational institution shall |
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prominently post credit card information maintained under |
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|
Subsection (c) at all times on the institution's Internet website |
|
|
for viewing and downloading by students and the public. |
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|
(f) The financial aid office and the office of student |
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|
affairs or other similar office providing services to students of |
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|
the institution shall make available to students, on request, the |
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|
credit card information pamphlet and other credit card information |
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|
maintained under Subsection (c). |
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SECTION 3. Sections 35.136 and 35.137, Business & Commerce |
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Code, as added by Chapter 130 (H.B. 85), Acts of the 80th |
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|
Legislature, Regular Session, 2007, are amended to read as follows: |
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|
Sec. 35.136. CREDIT CARD AND DEBT INFORMATION [EDUCATION] |
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AT NEW STUDENT ORIENTATION. (a) The governing board of a |
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|
postsecondary educational institution that has designated a |
|
|
location for campus credit card marketing activities under Section |
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35.132 [35.132(b)] shall also adopt a policy requiring a credit |
|
|
card and debt education and counseling session to be included in any |
|
|
orientation program for new students. The postsecondary |
|
|
educational institution may use existing educational materials |
|
|
prepared by nonprofit entities for purposes of the credit card and |
|
|
debt education and counseling session. |
|
|
(b) If a postsecondary educational institution holds an |
|
|
orientation program for new students, the institution's financial |
|
|
aid office shall distribute the information pamphlet required by |
|
|
Section 35.1326(d) to students at the credit card and debt |
|
|
education and counseling program session. |
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Sec. 35.137. CIVIL PENALTY; INJUNCTION. (a) A person who |
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intentionally violates this subchapter is liable to the state for a |
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civil penalty in an amount not to exceed $2,500 for each violation. |
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(b) The attorney general or the prosecuting attorney in the |
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|
county in which the violation occurs may bring suit: |
|
|
(1) to recover the civil penalty imposed under this |
|
|
section; and |
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|
(2) for injunctive relief to compel a credit card |
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|
issuer to file an annual report required under Section 35.1325 and a |
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|
disclosure of credit card terms required under Section 35.1326. |
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SECTION 4. Sections 761.051(a) and (b), Business & Commerce |
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Code, as effective September 1, 2009, are amended to read as |
|
|
follows: |
|
|
(a) A credit card issuer may not engage in campus credit |
|
|
card marketing activities: |
|
|
(1) outside of a campus location designated [by the
|
|
|
governing board of the postsecondary educational institution] for |
|
|
that purpose in accordance with this section [Subsection (b)]; or |
|
|
(2) at a time other than a time designated for that |
|
|
purpose [by the governing board] in accordance with this section |
|
|
[Subsection (b)]. |
|
|
(b) The governing board of a postsecondary educational |
|
|
institution, with the approval of the institution's student |
|
|
government, if one exists, may designate: |
|
|
(1) one or more locations on campus where a credit card |
|
|
issuer may engage in campus credit card marketing activities; and |
|
|
(2) one or more times during which a credit card issuer |
|
|
may engage in campus credit card marketing activities. |
|
|
SECTION 5. Chapter 761, Business & Commerce Code, as |
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effective September 1, 2009, is amended by adding Subchapter B-1 to |
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read as follows: |
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SUBCHAPTER B-1. REQUIRED DISCLOSURES |
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Sec. 761.071. ANNUAL REPORT OF ISSUER'S GIFTS TO |
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INSTITUTION. (a) Not later than March 1 of each year, a credit card |
|
|
issuer that, during the preceding five years, has conducted credit |
|
|
card marketing activities on the campus of a postsecondary |
|
|
educational institution shall submit to the student government, if |
|
|
any, of the institution a report that discloses the amount and |
|
|
purpose of any gift, grant, or other donation given by the issuer |
|
|
during the preceding calendar year to a program or office of the |
|
|
institution, including any donations given to the institution's |
|
|
athletics department or to support the institution's athletics |
|
|
programs. |
|
|
(b) A postsecondary educational institution, at the request |
|
|
of the institution's student government, shall publish reports |
|
|
submitted under Subsection (a) on the institution's Internet |
|
|
website. |
|
|
Sec. 761.072. DISCLOSURE REGARDING CREDIT CARD TERMS. (a) |
|
|
A credit card issuer shall disclose to the financial aid office of |
|
|
each postsecondary educational institution on whose campus the |
|
|
issuer conducts credit card marketing activities information about |
|
|
each type of credit card marketed by the issuer to students on |
|
|
campus. The disclosure must include: |
|
|
(1) the credit card's: |
|
|
(A) finance charge, stated as an annual |
|
|
percentage rate, for: |
|
|
(i) purchases; |
|
|
(ii) cash advances; |
|
|
(iii) balance transfers; and |
|
|
(iv) overdue balances; |
|
|
(B) grace period from finance charges for |
|
|
purchases if: |
|
|
(i) the cardholder carries over a balance |
|
|
from the previous billing statement; and |
|
|
(ii) the cardholder pays the balance in |
|
|
full within the period specified by the billing statement; |
|
|
(C) grace period from finance charges for cash |
|
|
advances; |
|
|
(D) credit limit; and |
|
|
(E) minimum finance charge, if there is no grace |
|
|
period from finance charges for purchases; |
|
|
(2) a statement of whether: |
|
|
(A) the credit card has a fixed, variable, or |
|
|
tiered annual percentage rate for finance charges on an unpaid |
|
|
balance that is not delinquent, and, if the card has a variable |
|
|
annual percentage rate, the issuer shall also provide information |
|
|
about the card's variable rate index and spread; and |
|
|
(B) the credit card's finance charge on an unpaid |
|
|
balance that is not delinquent is calculated: |
|
|
(i) using one or two billing cycles; |
|
|
(ii) to include new purchases; and |
|
|
(iii) using an average, adjusted, or |
|
|
previous balance method; |
|
|
(3) a brief description of cardholder incentives and |
|
|
rewards for using the credit card, including cash back rewards, |
|
|
points reward systems, and discounts on goods and services; and |
|
|
(4) a brief description of other credit card features |
|
|
and benefits, including car rental insurance and travel insurance. |
|
|
(b) Credit card information required under Subsection (a) |
|
|
shall be furnished by the credit card issuer in an electronic table |
|
|
format that is easy to read and understand. |
|
|
(c) The financial aid office of a postsecondary educational |
|
|
institution shall compile credit card information submitted to the |
|
|
office under Subsection (a) and maintain the information in an |
|
|
electronic spreadsheet format that: |
|
|
(1) allows students to compare the terms, features, |
|
|
and costs of all credit cards marketed to students on campus; and |
|
|
(2) makes information readily available for purposes |
|
|
of Subsections (e) and (f). |
|
|
(d) Not later than July 1 of each year, the financial aid |
|
|
office shall prepare a credit card information pamphlet using the |
|
|
information maintained under Subsection (c). |
|
|
(e) The postsecondary educational institution shall |
|
|
prominently post credit card information maintained under |
|
|
Subsection (c) at all times on the institution's website for |
|
|
viewing and downloading by students and the public. |
|
|
(f) The financial aid office and the office of student |
|
|
affairs or other similar office providing services to students of |
|
|
the institution shall make available to students, on request, the |
|
|
credit card information pamphlet and other credit card information |
|
|
maintained under Subsection (c). |
|
|
SECTION 6. Sections 761.103 and 761.151, Business & |
|
|
Commerce Code, as effective September 1, 2009, are amended to read |
|
|
as follows: |
|
|
Sec. 761.103. CREDIT CARD AND DEBT INFORMATION [EDUCATION] |
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|
AT NEW STUDENT ORIENTATION. (a) The governing board of a |
|
|
postsecondary educational institution that has designated a |
|
|
location for campus credit card marketing activities under Section |
|
|
761.051 [761.051(b)] shall also adopt a policy requiring a credit |
|
|
card and debt education and counseling session to be included in any |
|
|
orientation program for new students. The postsecondary |
|
|
educational institution may use existing educational materials |
|
|
prepared by nonprofit entities for purposes of the credit card and |
|
|
debt education and counseling session. |
|
|
(b) If a postsecondary educational institution holds an |
|
|
orientation program for new students, the institution's financial |
|
|
aid office shall distribute the information pamphlet required by |
|
|
Section 761.072(d) to students at the credit card and debt |
|
|
education and counseling program session. |
|
|
Sec. 761.151. CIVIL PENALTY; INJUNCTIVE RELIEF. (a) A |
|
|
person who intentionally violates this chapter is liable to the |
|
|
state for a civil penalty in an amount not to exceed $2,500 for each |
|
|
violation. |
|
|
(b) The attorney general or the prosecuting attorney in the |
|
|
county in which the violation occurs may bring suit: |
|
|
(1) to recover the civil penalty imposed under this |
|
|
section; and |
|
|
(2) for injunctive relief to compel a credit card |
|
|
issuer to file an annual report under Section 761.071 and a |
|
|
disclosure of credit card terms required under Section 761.072. |
|
|
SECTION 7. (a) Sections 1, 2, and 3 of this Act take effect |
|
|
only if the Act of the 81st Legislature, Regular Session, 2009, |
|
|
relating to nonsubstantive additions to and corrections in existing |
|
|
codes does not become law. |
|
|
(b) Sections 4, 5, and 6 of this Act take effect only if the |
|
|
Act of the 81st Legislature, Regular Session, 2009, relating to |
|
|
nonsubstantive additions to and corrections in existing codes |
|
|
becomes law. |
|
|
SECTION 8. This Act takes effect September 1, 2009. |