Texas Senate Bill SB1001

Texas 2013 - 83rd Regular

Caption

Relating to extensions of consumer credit a credit services organization obtains for a consumer or assists a consumer in obtaining.

Impact

If passed, SB1001 would amend the Finance Code, imposing new requirements on credit access businesses, such as the necessity to file quarterly reports detailing their lending activities. This measure is anticipated to provide regulatory oversight over the fees charged and the manner in which credit is accessed, thereby potentially reducing predatory lending practices that often affect vulnerable populations. Furthermore, it would clarify the boundaries of what constitutes a legal extension of credit, protecting consumers from unscrupulous practices.

Summary

SB1001 aims to regulate the activities of credit services organizations regarding extensions of consumer credit. The bill specifically addresses how these organizations assist consumers in obtaining credit through loans, notably in the form of deferred presentment transactions or motor vehicle title loans. It seeks to ensure that credit access businesses operate under stricter guidelines, thereby enhancing consumer protections while providing clear definitions and limitations on the types of credit that can be accessed and the fees that can be charged for these services. The overall intent is to curb abusive lending practices and ensure transparency in the lending process.

Sentiment

The sentiment surrounding SB1001 appears to be largely supportive from consumer advocacy groups who appreciate the move towards increased regulation and consumer safety. However, there are concerns from some sectors of the credit industry regarding the impending restrictions and reporting requirements. These stakeholders argue that the bill may inadvertently limit access to necessary credit for consumers who rely on these services, thereby creating a potential gap in the market for short-term financial assistance.

Contention

Notable points of contention include the definitions of 'credit services organization' and the types of loans covered under this bill, particularly regarding deferred presentment transactions and motor vehicle title loans. Critics argue that these definitions may limit financial options for consumers who need access to quick loans. Furthermore, the conflict between regulatory compliance and the operational realities of credit access businesses is a critical area of debate, as stakeholders worry about the complexities and costs of compliance that could affect their services.