83R3158 CLG-F
 
  By: Rodriguez of Travis H.B. No. 786
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to extensions of consumer credit a credit services
  organization obtains for a consumer or assists a consumer in
  obtaining.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 393.001, Finance Code, is amended by
  amending Subdivision (3) and adding Subdivisions (3-a) and (5) to
  read as follows:
               (3)  "Credit services organization" means a person who
  provides, or represents that the person can or will provide, for the
  payment of valuable consideration any of the following services
  with respect to the extension of consumer credit by others:
                     (A)  improving a consumer's credit history or
  rating;
                     (B)  obtaining an extension of consumer credit for
  a consumer in the form of a deferred presentment transaction or
  motor vehicle title loan; or
                     (C)  providing advice or assistance to a consumer
  with regard to Paragraph (A) or (B).
               (3-a)  "Deferred presentment transaction" has the
  meaning assigned by Section 341.001.  For purposes of this chapter,
  this definition does not preclude repayment in more than one
  installment.
               (5)  "Motor vehicle title loan" means a loan in which an
  unencumbered motor vehicle is given as security for the loan.  The
  term does not include a retail installment transaction under
  Chapter 348 or another loan made to finance the purchase of a motor
  vehicle.
         SECTION 2.  Subchapter D, Chapter 393, Finance Code, is
  amended by adding Section 393.308 to read as follows:
         Sec. 393.308.  PROHIBITION ON OBTAINING CERTAIN LOANS OR
  EXTENSIONS OF CREDIT. A credit services organization may not:
               (1)  obtain for a consumer or assist a consumer in
  obtaining a loan or other extension of credit that is not in the
  form of a deferred presentment transaction or motor vehicle title
  loan; or
               (2)  charge or receive from a consumer a fee or other
  valuable consideration in connection with a loan or other extension
  of credit that is not a deferred presentment transaction or motor
  vehicle title loan.
         SECTION 3.  Section 393.201(c), Finance Code, is amended to
  read as follows:
         (c)  A contract with a credit access business, as defined by
  Section 393.601, [for the performance of services described by
  Section 393.602(a)] must, in addition to the requirements of
  Subsection (b) and Section 393.302:
               (1)  contain a statement that there is no prepayment
  penalty;
               (2)  contain a statement that a credit access business
  must comply with Chapter 392 and the federal Fair Debt Collection
  Practices Act (15 U.S.C. Section 1692 et seq.) with respect to an
  extension of consumer credit [described by Section 393.602(a)];
               (3)  contain a statement that a person may not threaten
  or pursue criminal charges against a consumer related to a check or
  other debit authorization provided by the consumer as security for
  a transaction in the absence of forgery, fraud, theft, or other
  criminal conduct;
               (4)  contain a statement that a credit access business
  must comply, to the extent applicable, with 10 U.S.C. Section 987
  and any regulations adopted under that law with respect to an
  extension of consumer credit [described by Section 393.602(a)];
               (5)  disclose to the consumer:
                     (A)  the lender from whom the extension of
  consumer credit is obtained;
                     (B)  the interest paid or to be paid to the lender;
  and
                     (C)  the specific fees that will be paid to the
  credit access business for the business's services; and
               (6)  contain the name and address of the Office of
  Consumer Credit Commissioner and the telephone number of the
  office's consumer helpline.
         SECTION 4.  Section 393.221, Finance Code, is amended to
  read as follows:
         Sec. 393.221.  DEFINITION [DEFINITIONS].  In this
  subchapter, "credit access business" [:
               [(1)  "Credit access business"] means a credit services
  organization that obtains for a consumer or assists a consumer in
  obtaining an extension of consumer credit [in the form of a deferred
  presentment transaction or a motor vehicle title loan].
               [(2)     "Deferred presentment transaction" has the
  meaning assigned by Section 341.001.     For purposes of this chapter,
  this definition does not preclude repayment in more than one
  installment.     The term is also referred to as a payday loan.
               [(3)     "Motor vehicle title loan" or "auto title loan"
  means a loan in which an unencumbered motor vehicle is given as
  security for the loan.     The term does not include a retail
  installment transaction under Chapter 348 or another loan made to
  finance the purchase of a motor vehicle.]
         SECTION 5.  Section 393.601(2), Finance Code, is amended to
  read as follows:
               (2)  "Credit access business" means a credit services
  organization that obtains for a consumer or assists a consumer in
  obtaining an extension of consumer credit [in the form of a deferred
  presentment transaction or a motor vehicle title loan].
         SECTION 6.  Sections 393.602(a) and (b), Finance Code, are
  amended to read as follows:
         (a)  This subchapter applies only to a credit services
  organization that obtains for a consumer or assists a consumer in
  obtaining an extension of consumer credit [in the form of:
               [(1)  a deferred presentment transaction; or
               [(2)  a motor vehicle title loan].
         (b)  A credit access business may assess fees as agreed to
  between the parties for [its] services performed to obtain an
  extension of consumer credit for a consumer or assist a consumer in
  obtaining an extension of consumer credit [as agreed to between the
  parties].  A credit access business fee may be calculated daily,
  biweekly, monthly, or on another periodic basis. A credit access
  business is permitted to charge amounts allowed by other laws, as
  applicable.  A fee may not be charged unless it is disclosed.
         SECTION 7.  Section 393.603, Finance Code, is amended to
  read as follows:
         Sec. 393.603.  LICENSE REQUIRED.  A credit services
  organization must obtain a license under this subchapter for each
  location at which the organization operates as a credit access
  business in performing services described by Section 393.001(3)(B)
  [393.602(a)].
         SECTION 8.  Section 393.604(a), Finance Code, is amended to
  read as follows:
         (a)  An application for a license under this subchapter must:
               (1)  be under oath;
               (2)  give the approximate location from which the
  business is to be conducted;
               (3)  identify the business's principal parties in
  interest;
               (4)  contain the name, physical address, and telephone
  number of all third-party lender organizations:
                     (A)  with which the business contracts to provide
  services described by Section 393.001(3)(B); [393.602(a)] or
                     (B)  from which the business arranges extensions
  of consumer credit [described by Section 393.602(a)]; and
               (5)  contain other relevant information that the
  commissioner requires for the findings required under Section
  393.607.
         SECTION 9.  Sections 393.622(a) and (b), Finance Code, are
  amended to read as follows:
         (a)  The finance commission may:
               (1)  adopt rules necessary to enforce and administer
  this subchapter;
               (2)  adopt rules with respect to the quarterly
  reporting by a credit access business licensed under this
  subchapter of summary business information relating to extensions
  of consumer credit the business obtained for a consumer or assisted
  a consumer in obtaining [described by Section 393.602(a)]; and
               (3)  adopt rules with respect to periodic examination
  by the office relating to extensions of consumer credit the
  business obtained for a consumer or assisted a consumer in
  obtaining [described by Section 393.602(a)], including rules
  related to charges for defraying the reasonable cost of conducting
  the examinations.
         (b)  The finance commission may adopt rules under this
  section to allow the commissioner to review, as part of a periodic
  examination, any relevant contracts between the credit access
  business and the third-party lender organizations with which the
  credit access business contracts to provide services described by
  Section 393.001(3)(B) [393.602(a)] or from which the business
  arranges extensions of consumer credit [described by Section
  393.602(a)].  A contract or information obtained by the
  commissioner under this section is considered proprietary and
  confidential to the respective parties to the contract, and is not
  subject to disclosure under Chapter 552, Government Code.
         SECTION 10.  Section 393.625, Finance Code, is amended to
  read as follows:
         Sec. 393.625.  MILITARY BORROWERS.  An extension of
  consumer credit [described by Section 393.602(a)] that is obtained
  by a credit access business for a member of the United States
  military or a dependent of a member of the United States military or
  that the business assisted that person in obtaining must comply
  with 10 U.S.C. Section 987 and any regulations adopted under that
  law, to the extent applicable.
         SECTION 11.  Section 393.626, Finance Code, is amended to
  read as follows:
         Sec. 393.626.  DEBT COLLECTION PRACTICES.  A violation of
  Chapter 392 by a credit access business with respect to obtaining
  for a consumer or assisting a consumer in obtaining an extension of
  consumer credit [described by Section 393.602(a)] constitutes a
  violation of this subchapter.
         SECTION 12.  Section 393.627, Finance Code, is amended to
  read as follows:
         Sec. 393.627.  QUARTERLY REPORT TO COMMISSIONER.  A credit
  access business shall file a quarterly report with the commissioner
  on a form prescribed by the commissioner that provides the
  following information relating to extensions of consumer credit
  [described by Section 393.602(a)] during the preceding quarter:
               (1)  the number of consumers for whom the business
  obtained or assisted in obtaining those extensions of consumer
  credit;
               (2)  the number of those extensions of consumer credit
  obtained by the business or that the business assisted consumers in
  obtaining;
               (3)  the number of refinancing transactions of the
  extensions of consumer credit described by Subdivision (2);
               (4)  the number of consumers refinancing the extensions
  of consumer credit described by Subdivision (2);
               (5)  the number of consumers refinancing more than once
  the extensions of consumer credit described by Subdivision (2);
               (6)  the average amount of the extensions of consumer
  credit described by Subdivision (2);
               (7)  the total amount of fees charged by the business
  for the activities described by Subdivision (1);
               (8)  the number of vehicles surrendered or repossessed
  under the terms of an extension of consumer credit in the form of a
  motor vehicle title loan obtained by the business or that the
  business assisted a consumer in obtaining;
               (9)  the mean, median, and mode of the number of
  extensions of consumer credit obtained by consumers as a result of
  entering into the extensions of consumer credit described by
  Subdivision (2); and
               (10)  any related information the commissioner
  determines necessary.
         SECTION 13.  Sections 393.601(3) and (5), Finance Code, are
  repealed.
         SECTION 14.  Section 393.308, Finance Code, as added by this
  Act, applies only to an extension of credit made on or after the
  effective date of this Act. An extension of credit made before the
  effective date of this Act is governed by the law in effect on the
  date the extension of credit was made, and the former law is
  continued in effect for that purpose.
         SECTION 15.  This Act takes effect September 1, 2013.