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A BILL TO BE ENTITLED
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AN ACT
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relating to the registration and regulation of credit services |
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organizations that obtain for consumers certain extensions of |
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credit; providing a penalty. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 14.101, Finance Code, is amended to read |
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as follows: |
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Sec. 14.101. GENERAL DUTIES OF COMMISSIONER. The |
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commissioner shall enforce this chapter, Subtitles B and C of Title |
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4, Subchapter B-1 of Chapter 393, and Chapter 394 in person or |
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through an assistant commissioner, examiner, or other employee of |
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the office. |
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SECTION 2. Section 14.107(a), Finance Code, is amended to |
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read as follows: |
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(a) The finance commission shall establish reasonable and |
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necessary fees for carrying out the commissioner's powers and |
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duties under this chapter, Title 4, Subchapter B-1 of Chapter 393, |
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and Chapters 371, 392, and 394 and under Chapters 51, 302, 601, and |
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621, Business & Commerce Code. |
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SECTION 3. Section 14.201, Finance Code, is amended to read |
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as follows: |
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Sec. 14.201. INVESTIGATION AND ENFORCEMENT AUTHORITY. |
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Investigative and enforcement authority under this subchapter |
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applies only to this chapter, Subtitles B and C of Title 4, |
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Subchapter B-1 of Chapter 393, and Chapter 394. |
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SECTION 4. Section 14.2015(a), Finance Code, is amended to |
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read as follows: |
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(a) Except as provided by Subsection (b), information or |
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material obtained or compiled by the commissioner in relation to an |
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examination by the commissioner or the commissioner's |
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representative of a license holder or registrant under Subtitle B |
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or C, Title 4, Subchapter B-1 of Chapter 393, or Chapter 394 is |
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confidential and may not be disclosed by the commissioner or an |
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officer or employee of the Office of Consumer Credit Commissioner, |
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including: |
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(1) information obtained from a license holder or |
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registrant under Subtitle B or C, Title 4, Subchapter B-1 of Chapter |
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393, or Chapter 394; |
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(2) work performed by the commissioner or the |
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commissioner's representative on information obtained from a |
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license holder or registrant for the purposes of an examination |
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conducted under Subtitle B or C, Title 4, Subchapter B-1 of Chapter |
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393, or Chapter 394; |
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(3) a report on an examination of a license holder or |
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registrant conducted under Subtitle B or C, Title 4, Subchapter B-1 |
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of Chapter 393, or Chapter 394; and |
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(4) any written communications between the license |
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holder or registrant, as applicable, and the commissioner or the |
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commissioner's representative relating to or referencing an |
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examination conducted under Subtitle B or C, Title 4, Subchapter |
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B-1 of Chapter 393, or Chapter 394. |
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SECTION 5. Section 14.251, Finance Code, is amended to read |
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as follows: |
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Sec. 14.251. ASSESSMENT OF PENALTY; RESTITUTION ORDER. |
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(a) The commissioner may assess an administrative penalty against |
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a person who knowingly and wilfully violates or causes a violation |
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of this chapter, Subchapter B-1 of Chapter 393, Chapter 394, or |
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Subtitle B, Title 4, or a rule adopted under this chapter, |
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Subchapter B-1 of Chapter 393, Chapter 394, or Subtitle B, Title 4. |
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(b) The commissioner may order a person who violates or |
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causes a violation of this chapter, Subchapter B-1 of Chapter 393, |
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Chapter 394, or Subtitle B, Title 4, or a rule adopted under this |
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chapter, Subchapter B-1 of Chapter 393, Chapter 394, or Subtitle B, |
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Title 4, to make restitution to an identifiable person injured by |
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the violation. |
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SECTION 6. Section 14.261(a), Finance Code, is amended to |
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read as follows: |
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(a) In administering this chapter, the commissioner may |
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accept assurance of voluntary compliance from a person who is |
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engaging in or has engaged in an act or practice in violation of: |
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(1) this chapter or a rule adopted under this chapter; |
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(2) Subchapter B-1 of Chapter 393 or Chapter 394; or |
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(3) Subtitle B, Title 4, or a rule adopted under |
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Subtitle B, Title 4. |
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SECTION 7. Section 14.262, Finance Code, is amended to read |
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as follows: |
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Sec. 14.262. EFFECT OF ASSURANCE. (a) An assurance of |
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voluntary compliance is not an admission of a violation of: |
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(1) this chapter or a rule adopted under this chapter; |
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(2) Subchapter B-1 of Chapter 393 or Chapter 394; or |
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(3) Subtitle B, Title 4, or a rule adopted under |
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Subtitle B, Title 4. |
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(b) Unless an assurance of voluntary compliance is |
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rescinded by agreement or voided by a court for good cause, a |
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subsequent failure to comply with the assurance is prima facie |
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evidence of a violation of: |
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(1) this chapter or a rule adopted under this chapter; |
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(2) Subchapter B-1 of Chapter 393 or Chapter 394; or |
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(3) Subtitle B, Title 4, or a rule adopted under |
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Subtitle B, Title 4. |
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SECTION 8. Section 393.001, Finance Code, is amended by |
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adding Subdivision (5) to read as follows: |
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(5) "Commissioner" means the consumer credit |
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commissioner. |
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SECTION 9. Chapter 393, Finance Code, is amended by adding |
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Subchapter B-1 to read as follows: |
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SUBCHAPTER B-1. REGISTRATION WITH CONSUMER CREDIT COMMISSIONER AND |
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REPORTING REQUIRED FOR CREDIT SERVICES ORGANIZATIONS OBTAINING |
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CERTAIN EXTENSIONS OF CONSUMER CREDIT |
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Sec. 393.131. APPLICABILITY. This subchapter applies only |
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to a credit services organization that obtains, facilitates, or |
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otherwise assists in obtaining for a consumer: |
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(1) an extension of consumer credit, other than a |
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purchase money security interest loan, in which a motor vehicle |
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certificate of title is given by the consumer as security for the |
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debt; or |
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(2) an extension of consumer credit in the form of a |
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deferred presentment transaction, as that term is defined by |
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Section 341.001. |
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Sec. 393.132. REGISTRATION WITH CONSUMER CREDIT |
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COMMISSIONER. (a) Before conducting business in this state, a |
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credit services organization shall file with the commissioner an |
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application for a registration under this chapter that: |
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(1) is accompanied by the fee required by Section |
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393.135; |
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(2) contains the name and address of: |
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(A) the organization; and |
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(B) each person who directly or indirectly owns |
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or controls at least 10 percent of the outstanding shares of stock |
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in the organization; and |
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(3) fully discloses any litigation or unresolved |
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complaint relating to the operation of the organization filed with |
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a governmental authority of this state or contains a notarized |
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statement that there has been no litigation or unresolved complaint |
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of that type. |
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(b) The credit services organization shall keep a copy of |
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the registration application in its files. |
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(c) The commissioner may require a credit services |
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organization to provide information in addition to the information |
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contained in the registration application as the commissioner |
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determines necessary. |
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(d) A registration issued under this subchapter expires on |
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the first anniversary of its date of issuance and must be renewed |
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annually. A registered credit services organization may renew a |
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registration by filing a renewal application, in the form |
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prescribed by the commissioner, and paying the renewal fee. |
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(e) Unless the commissioner notifies an applicant that a |
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longer period is necessary, the commissioner shall approve or deny |
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an initial registration not later than the 60th day after the date |
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on which the completed application, including all required |
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information and payments, is filed. The commissioner shall inform |
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the applicant in writing of the reason for denial. |
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(f) A credit services organization may renew a registration |
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by paying the appropriate fee and completing all required |
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documents. |
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(g) The Finance Commission of Texas by rule may establish |
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procedures to facilitate the registration and collection of fees |
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under this section. |
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(h) The commissioner may refuse an initial application if |
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the application contains errors or incomplete information. An |
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application is incomplete if it does not include all of the |
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information required by this section and the commissioner as |
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provided by this section. |
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(i) The commissioner may deny an initial application if: |
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(1) the applicant or any principal of the applicant |
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has been convicted of a crime or found civilly liable for an offense |
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involving moral turpitude, including forgery, embezzlement, |
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obtaining money under false pretenses, larceny, extortion, |
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conspiracy to defraud, or any other similar offense or violation; |
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(2) the registration of the applicant or any principal |
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of the applicant has been revoked or suspended in this state or |
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another state, unless the applicant provides information that the |
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commissioner finds sufficient to show that the grounds for the |
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previous revocation or suspension no longer exist and any problem |
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cited in the previous revocation has been corrected; or |
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(3) the commissioner, based on specific evidence, |
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finds that the applicant does not warrant the belief that the |
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business will be operated lawfully and fairly and within the |
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provisions and purposes of this chapter. |
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(j) On written request, the applicant is entitled to a |
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hearing, pursuant to Chapter 2001, Government Code, on the question |
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of the applicant's qualifications for initial registration if the |
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commissioner has notified the applicant in writing that the initial |
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application has been denied. A request for a hearing may not be |
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made after the 30th day after the date the commissioner mails a |
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notice to the applicant stating that the application has been |
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denied and stating the reasons for the denial. |
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(k) In addition to the power to refuse an initial |
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application as specified in this section, the commissioner may |
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suspend or revoke a credit services organization's registration |
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after notice and hearing if the commissioner finds that any of the |
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following conditions are met: |
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(1) a fact or condition exists that if it had existed |
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when the organization applied for registration would have been |
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grounds for denying registration; |
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(2) a fact or condition exists that the commissioner |
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was not aware of when the organization applied for registration and |
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would have been grounds for denying registration; |
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(3) the organization violates this chapter, a rule |
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adopted under this chapter, or an order of the commissioner under |
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this chapter; |
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(4) the organization fails to respond within a |
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reasonable time and in an appropriate manner to communications from |
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the commissioner; or |
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(5) the organization fails to warrant the belief that |
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the business will be operated lawfully and fairly and within the |
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provisions and purposes of this chapter. |
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(l) The commissioner shall maintain a list of registered |
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credit services organizations under this subchapter and make the |
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list available to interested persons and to the public. |
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Sec. 393.133. UPDATE OF REGISTRATION INFORMATION. A credit |
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services organization shall update information provided in a |
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registration application or renewal not later than the 90th day |
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after the date on which the information changes. |
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Sec. 393.134. INSPECTION OF REGISTRATION APPLICATION. A |
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credit services organization shall allow a consumer to inspect the |
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registration application on request. |
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Sec. 393.135. FILING FEE. The commissioner may charge a |
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credit services organization a reasonable fee to cover the cost of |
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filing a registration application or renewal application and |
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administering this subchapter, in an amount determined by the |
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Finance Commission of Texas. |
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Sec. 393.136. ADVERTISING OR PROVIDING SERVICES WITHOUT |
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REGISTRATION PROHIBITED. A credit services organization or a |
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representative of the organization may not provide or advertise the |
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services of the organization if the organization is not registered |
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under this subchapter. |
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Sec. 393.137. ANNUAL REPORT TO COMMISSIONER. A credit |
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services organization shall file an annual report with the |
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commissioner on a form prescribed by the commissioner that states |
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for the preceding calendar year the following information with |
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respect to each type of the extensions of consumer credit described |
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by Section 393.131 that the organization obtains, facilitates, or |
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otherwise assists in obtaining: |
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(1) the number of consumers for which the extensions |
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of credit were obtained or facilitated; |
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(2) the number of extensions of credit obtained or |
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facilitated; |
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(3) the number of renewals of the extensions of |
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credit; |
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(4) the number of consumers renewing the extensions of |
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credit; |
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(5) the number of consumers making multiple renewals |
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of extensions of credit; |
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(6) the average amount of the extensions of credit; |
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and |
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(7) any related information the commissioner |
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determines necessary. |
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SECTION 10. (a) Except as provided by Subsection (b) of |
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this section, this Act takes effect September 1, 2011. |
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(b) Section 14.251, Finance Code, as amended by this Act, |
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and Section 393.132, Finance Code, as added by this Act, take effect |
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January 1, 2012. |