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A BILL TO BE ENTITLED
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AN ACT
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relating to verification by a credit services organization of a |
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consumer's ability to repay an extension of consumer credit. |
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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. ENSURING ABILITY TO REPAY EXTENSION OF |
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CONSUMER CREDIT. (a) A credit services organization may not obtain |
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for a consumer or assist a consumer in obtaining, including by |
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providing advice, an extension of consumer credit unless the credit |
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services organization finds, using independently verifiable |
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documentation of income and obligations, that the consumer can |
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reasonably: |
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(1) repay in cash, in accordance with the time and |
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schedule of payments established by contract and applicable law, |
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the extension of consumer credit and all associated fees and costs; |
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and |
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(2) pay due payments on all known obligations of the |
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consumer concurrently. |
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(b) The credit services organization must retain all |
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documentation used under Subsection (a) to establish the ability of |
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the consumer to repay an extension of consumer credit. |
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SECTION 2. The changes in law made by this Act apply only to |
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an extension of consumer credit made on or after the effective date |
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of this Act. An extension of consumer credit made before the |
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effective date of this Act is governed by the law in effect on the |
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date the extension of consumer credit was made, and the former law |
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is continued in effect for that purpose. For purposes of this |
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section, a refinance or renewal of an extension of consumer credit |
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is considered made on the date the extension of consumer credit |
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being refinanced or renewed was made. |
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SECTION 3. This Act takes effect September 1, 2019. |