81R36407 E
  By: Eltife, et al. S.B. No. 2233
  Substitute the following for S.B. No. 2233:
  By:  Anchia C.S.S.B. No. 2233
  relating to the regulation of debt management service providers and
  a study regarding the business of consumer debt settlement.
         SECTION 1.  Section 394.202(6), Finance Code, is amended to
  read as follows:
               (6)  "Debt management service" means service as an
  intermediary between an individual and one or more creditors of the
  individual for the purpose of obtaining concessions. The term does
  not include:
                     (A)  legal services provided in an
  attorney-client relationship by an attorney licensed or otherwise
  authorized to practice law in this state [the receiving of money
  from a consumer for the purpose of distributing that money to or
  among one or more of the creditors of the consumer in full or
  partial payment of the consumer's obligations];
                     (B)  accounting services provided in an
  accountant-client relationship by a certified public accountant
  licensed to provide accounting services in this state [arranging or
  assisting a consumer to arrange for the distribution of one or more
  payments to or among one or more creditors of the consumer in full
  or partial payment of the consumer's obligations]; or
                     (C)  financial planning services provided in a
  financial planner-client relationship by a member of a financial
  planning profession whose members the finance commission by rule
  determines are:
                           (i)  licensed by this state;
                           (ii)  subject to a disciplinary mechanism;
                           (iii)  subject to a code of professional
  responsibility; and
                           (iv)  subject to a continuing education
  requirement [exercising control, directly or indirectly, or
  arranging for the exercise of control over funds of a consumer for
  the purpose of distributing payments to or among one or more
  creditors of the consumer in full or partial payment of the
  consumer's obligations].
         SECTION 2.  Sections 394.203(a) and (c), Finance Code, are
  amended to read as follows:
         (a)  This subchapter does not apply to a provider who
  receives no compensation for debt management services from or on
  behalf of the individuals to whom it provides the services or from
  their creditors [Except as otherwise provided by this subchapter,
  this subchapter applies to a provider regardless of whether the
  provider charges a fee or receives consideration for a service].
         (c)  This subchapter does not apply to:
               (1)  [an attorney licensed to practice in this state,
  unless the attorney holds the attorney's self out to the public as a
  provider or is employed, affiliated with, or otherwise working on
  behalf of a provider;
               [(2)]  a title insurance or abstract company employee
  or agent, or other person legally authorized to engage in escrow
  business in the state, only while engaged in the escrow business;
               (2) [(3)]  a judicial officer or person acting under a
  court order;
               (3) [(4)]  a person who has legal authority under
  federal or state law to act as a representative payee for a
  consumer, only to the extent the person is paying bills or other
  debts on behalf of that consumer;
               (4) [(5)]  a person who pays bills or other debts owed
  by a consumer and on behalf of a consumer, if the money used to make
  the payments belongs exclusively to the consumer and the person
  does not initiate any contact with individual creditors of the
  consumer to compromise a debt, arrange a new payment schedule, or
  otherwise change the terms of the debt; or
               (5) [(6)]  a financial institution, as defined by
  Section 201.101.
         SECTION 3.  Section 394.214, Finance Code, is amended by
  adding Subsection (a-1) to read as follows:
         (a-1)  The finance commission may adopt rules to require
  persons providing debt settlement services to register and to
  provide information to the commissioner regarding consumer
         SECTION 4.  Subchapter C, Chapter 394, Finance Code, is
  amended by adding Section 394.216 to read as follows:
  INDUSTRY. (a) The consumer debt settlement task force is created
  to conduct a study regarding the business of consumer debt
  settlement. The study must examine:
               (1)  the disclosures provided to consumers who enroll
  in debt settlement programs, including disclosures regarding:
                     (A)  consumers' rights and responsibilities under
  those programs, including the benefits of using a savings program
  or other financial planning opportunities;
                     (B)  the amount of the debt or obligation of the
  consumer to be settled under those programs and the fees or other
  charges imposed by persons providing debt settlement services; and
                     (C)  the refund policies of those programs;
               (2)  the effectiveness of debt settlement programs in
  assisting consumers;
               (3)  the cost and availability of debt settlement
               (4)  any information regarding complaints and
  enforcement actions against debt settlement programs; and
               (5)  other appropriate issues.
         (b)  The task force consists of:
               (1)  the attorney general or the attorney general's
               (2)  the consumer credit commissioner or the
  commissioner's designee;
               (3)  a member of the house of representatives appointed
  by the speaker of the house of representatives;
               (4)  a member of the senate appointed by the lieutenant
               (5)  three persons who provide debt settlement
  services, appointed by the attorney general; and
               (6)  three consumer advocates, appointed by the
  attorney general.
         (c)  Not later than December 1, 2010, the task force shall
  submit to the legislature a report on the results of the study
  required under this section.
         (d)  This section expires September 1, 2011.
         SECTION 5.  (a) Except as provided by Subsection (b) of this
  section, this Act takes effect January 1, 2010.
         (b)  Section 4 of this Act takes effect September 1, 2009.