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A BILL TO BE ENTITLED
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AN ACT
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relating to best practices for credit services organizations. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subchapter D, Chapter 393, Finance Code, is |
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amended by adding Section 393.308 to read as follows: |
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Sec. 393.308. BEST PRACTICES. (a) A credit services |
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organization shall implement best practices as provided by this |
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section. |
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(b) To implement best practices, a credit services |
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organization must: |
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(1) fully outline in contracts between the credit |
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services organization and the consumer the terms of the credit |
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services provided by the organization, including the cost of the |
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service expressed as a dollar amount in the finance charge and as a |
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component of the annual percentage rate for any loan that a consumer |
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obtains through the organization's credit services; |
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(2) comply with all applicable laws and rules, |
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including registration with the secretary of state; |
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(3) advertise credit services in a manner that is not |
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false, misleading, or deceptive, and promote only the responsible |
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use of financial products and services; |
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(4) implement procedures to inform consumers of the |
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intended use of their credit service; |
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(5) give consumers the right to rescind, at no cost, |
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credit service transactions on or before the third day after the |
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date of the credit service transaction, as required by Section |
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393.202; |
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(6) collect past due accounts in a professional, fair, |
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and lawful manner, not use unlawful threats or intimidation to |
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collect accounts, and use the collection limitations contained in |
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Chapter 392 and the federal Fair Debt Collection Practices Act (15 |
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U.S.C. Section 1692 et seq.) to guide the credit services |
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organization's practice of collections; |
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(7) not threaten or pursue criminal action against a |
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consumer as a result of the consumer's default on a credit service |
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agreement; |
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(8) participate in self-policing the industry; |
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(9) comply with any federal and state laws on doing |
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business with the military and related covered persons; |
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(10) if offering credit services to consumers in this |
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state through the Internet, comply with this chapter and any other |
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applicable laws and rules applicable to the credit services |
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organization's business; |
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(11) post a copy of the best practices described by |
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this section in all of the credit services organization's business |
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locations in a visible and conspicuous location; |
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(12) implement and maintain complaint handling |
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procedures that include a timely review and response to consumer |
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complaints and concerns, and maintain and post the credit services |
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organization's own toll-free consumer hotline number in each of the |
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organization's business locations; and |
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(13) make available consumer financial literacy |
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materials to consumers in all of the organization's business |
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locations. |
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(c) To implement best practices, in addition to the |
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requirements of Subsection (b), a credit services organization that |
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obtains, facilitates, or assists in obtaining an extension of |
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consumer credit for a consumer in which a motor vehicle certificate |
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of title is given as security for or in connection with the debt |
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must also: |
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(1) inform the consumer in writing that if the |
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consumer pledges a vehicle as collateral, the consumer could lose |
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the vehicle if the transaction is not fully repaid, by: |
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(A) presenting the information in bold, |
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conspicuous type in the loan documents; or |
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(B) requiring the consumer to initial this |
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provision in the loan documents or on a separate notice; |
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(2) use nationally or regionally recognized appraisal |
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standards in valuing a vehicle; |
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(3) when perfecting a security interest in any motor |
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vehicle certificate of title collateral, comply with all laws and |
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rules regarding the pledge of the vehicle as collateral, including: |
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(A) the proper filing of liens with the Texas |
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Department of Motor Vehicles through the appropriate county |
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assessor-collector's office; and |
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(B) the statutory duties in Chapter 9, Business & |
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Commerce Code, regarding the disposition of collateral; |
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(4) inform the consumer in writing that the consumer |
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may get the consumer's vehicle back at any time after repossession |
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and before a sale by paying the amount owed; and |
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(5) comply with the Business & Commerce Code and other |
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applicable law when collecting vehicle-secured accounts. |
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SECTION 2. This Act takes effect September 1, 2011. |