Texas 2009 - 81st Regular

Texas House Bill HB2408 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	81R1037 CLG-F
2	2	By: Farias H.B. No. 2408
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the extension of consumer credit to certain members of
8	8	the Texas National Guard and armed forces of the United States and
9	9	their dependents; providing a penalty.
10	10	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
11	11	SECTION 1. Subtitle B, Title 4, Finance Code, is amended by
12	12	adding Chapter 353 to read as follows:
13	13	CHAPTER 353. EXTENSION OF CONSUMER CREDIT TO SERVICEMEMBERS OR
14	14	THEIR DEPENDENTS
15	15	Sec. 353.001. DEFINITIONS. In this chapter:
16	16	(1) "Creditor" means a person who:
17	17	(A) is engaged in the business of extending
18	18	consumer credit; or
19	19	(B) transacts, negotiates, or services an
20	20	extension of consumer credit.
21	21	(2) "Dependent," with respect to a servicemember,
22	22	means the servicemember's spouse or dependent child.
23	23	(3) "Dependent child" means a person who is unmarried
24	24	and who:
25	25	(A) is under 18 years of age;
26	26	(B) before the person's 18th birthday, became
27	27	permanently incapable of self-support; or
28	28	(C) is under 23 years of age and is pursuing a
29	29	course of instruction at an approved educational institution.
30	30	(4) "Extension of consumer credit" means the right to
31	31	defer payment of debt offered or granted primarily for personal,
32	32	family, or household purposes or to incur the debt and defer its
33	33	payment.
34	34	(5) "Servicemember" means a member of the United
35	35	States armed forces or a member of the Texas National Guard called
36	36	to federal active duty.
37	37	Sec. 353.002. INAPPLICABILITY OF CHAPTER. This chapter
38	38	does not apply to:
39	39	(1) an insured depository institution, as that term is
40	40	defined by Section 3, Federal Deposit Insurance Act (12 U.S.C.
41	41	Section 1813); or
42	42	(2) an insured credit union, as that term is defined by
43	43	Section 101, Federal Credit Union Act (12 U.S.C. Section 1752).
44	44	Sec. 353.003. INTEREST. (a) In this section, "interest"
45	45	includes a service charge, renewal charge, fee, and any other
46	46	charge, except a charge for bona fide insurance, with respect to the
47	47	extension of consumer credit.
48	48	(b) A creditor who extends consumer credit to a
49	49	servicemember or a servicemember's dependent may not, with respect
50	50	to the transaction, require the servicemember or dependent to pay
51	51	interest that is:
52	52	(1) not agreed to by the parties under the terms of the
53	53	agreement or promissory note; or
54	54	(2) specifically prohibited by this chapter or other
55	55	law.
56	56	Sec. 353.004. MAXIMUM ANNUAL PERCENTAGE RATE. A creditor
57	57	may not impose an annual percentage rate that exceeds 36 percent
58	58	with respect to an extension of consumer credit to a servicemember
59	59	or a servicemember's dependent.
60	60	Sec. 353.005. INFORMATION REQUIRED. (a) Before finalizing
61	61	an extension of consumer credit to a servicemember or a
62	62	servicemember's dependent, a creditor must provide the
63	63	servicemember or dependent with the following written information:
64	64	(1) a statement of the annual percentage rate
65	65	applicable to the extension of credit;
66	66	(2) all disclosures required to be made under the
67	67	Truth in Lending Act (15 U.S.C. Section 1601 et seq.); and
68	68	(3) a clear description of the payment obligations of
69	69	the servicemember or dependent.
70	70	(b) Before finalizing an extension of consumer credit, a
71	71	creditor must provide a written form, to be signed by the
72	72	individual, stating whether or not the individual who is the
73	73	subject of the extension of credit is a servicemember, a
74	74	servicemember's spouse, or a servicemember's dependent child.
75	75	Sec. 353.006. RENEWAL, REFINANCING, OR CONSOLIDATION OF
76	76	CREDIT. A creditor may not renew, repay, or refinance consumer
77	77	credit extended to a servicemember or a servicemember's dependent,
78	78	or consolidate any part of the proceeds of the extension of credit
79	79	with proceeds from any other extension of credit to that person by
80	80	the creditor, unless the creditor:
81	81	(1) executes new loan documentation that is signed by
82	82	the servicemember or dependent; and
83	83	(2) provides the information required by Section
84	84	353.005(a).
85	85	Sec. 353.007. CRIMINAL PENALTY. A creditor who knowingly
86	86	violates this chapter commits an offense. An offense under this
87	87	section is a Class A misdemeanor.
88	88	Sec. 353.008. REMEDIES AND ADDITIONAL PENALTIES. (a) The
89	89	remedies and rights available under this chapter are in addition to
90	90	and do not preclude any remedy otherwise available under law to a
91	91	servicemember or a servicemember's dependents, including any award
92	92	for consequential or punitive damages.
93	93	(b) On violation of this chapter, a creditor is subject to
94	94	all remedies and penalties authorized by Chapter 14.
95	95	SECTION 2. Chapter 353, Finance Code, as added by this Act,
96	96	applies only to an extension of consumer credit made on or after the
97	97	effective date of this Act. An extension of consumer credit made
98	98	before the effective date of this Act is governed by the law in
99	99	effect on the date the extension of consumer credit was made, and
100	100	the former law is continued in effect for that purpose.
101	101	SECTION 3. This Act takes effect September 1, 2009.