Texas 2009 - 81st Regular

Texas House Bill HB3529 Compare Versions

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

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1	1	81R8436 KFF-D
2	2	By: Davis of Dallas H.B. No. 3529
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the regulation of debt collection agencies and credit
8	8	bureaus.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Chapter 20, Business & Commerce Code, is amended
11	11	by adding Section 20.055 to read as follows:
12	12	Sec. 20.055. NOTIFICATION RELATING TO REPORTING OF ADVERSE
13	13	INFORMATION. Not later than the 10th day after the date adverse
14	14	information is added to a consumer's file, the consumer reporting
15	15	agency shall notify the consumer in writing that the information
16	16	has been added to the consumer's file. The notice must include:
17	17	(1) a brief description of the adverse information;
18	18	(2) the name, address, and telephone number of the
19	19	person who provided the information;
20	20	(3) an explanation regarding the actions a consumer
21	21	may take to dispute the adverse information if the information is
22	22	inaccurate; and
23	23	(4) the information described by Section 20.03(a)(3).
24	24	SECTION 2. Sections 20.06(a), (b), (c), (d), and (e),
25	25	Business & Commerce Code, are amended to read as follows:
26	26	(a) If the completeness or accuracy of information
27	27	contained in a consumer's file is disputed by the consumer and the
28	28	consumer notifies the consumer reporting agency of the dispute, the
29	29	agency shall reinvestigate the disputed information free of charge
30	30	[and record the current status of the disputed information] not
31	31	later than the 30th business day after the date on which the agency
32	32	receives the notice and, pending the results of the
33	33	reinvestigation, promptly delete the disputed information from the
34	34	consumer's file. The consumer reporting agency shall provide the
35	35	consumer with the option of notifying the agency of a dispute
36	36	concerning the consumer's file by speaking directly to a
37	37	representative of the agency during normal business hours.
38	38	(b) Not later than the fifth business day after the date on
39	39	which a consumer reporting agency receives notice of a dispute from
40	40	a consumer in accordance with Subsection (a), the agency shall
41	41	provide notice of the dispute to:
42	42	(1) each person who provided any information related
43	43	to the dispute; and
44	44	(2) each person who requested a copy of the consumer's
45	45	report during the six-month period preceding the date of the
46	46	dispute.
47	47	(c) A consumer reporting agency may terminate a
48	48	reinvestigation of information disputed by a consumer under
49	49	Subsection (a) if the agency reasonably determines that the dispute
50	50	is frivolous or irrelevant. An agency that terminates a
51	51	reinvestigation of disputed information under this subsection
52	52	shall promptly notify the consumer of the termination and the
53	53	reasons for the termination by mail, or if authorized by the
54	54	consumer, by telephone and shall promptly reinsert the information
55	55	into the consumer's file. The presence of contradictory
56	56	information in a consumer's file does not by itself constitute
57	57	reasonable grounds for determining that the dispute is frivolous or
58	58	irrelevant.
59	59	(d) If disputed information is found to be accurate
60	60	[inaccurate or cannot be verified] after a reinvestigation under
61	61	Subsection (a), the consumer reporting agency[, unless otherwise
62	62	directed by the consumer,] shall promptly reinsert [delete] the
63	63	information into [from] the consumer's file[, revise the consumer
64	64	file, and provide the revised consumer report to the consumer and to
65	65	each person who requested the consumer report within the preceding
66	66	six months]. The consumer reporting agency may not report in
67	67	subsequent reports disputed information found, after a
68	68	reinvestigation under Subsection (a), to be [the] inaccurate or
69	69	unverifiable [unverified information in subsequent reports].
70	70	(e) Information deleted under Subsection (a) that is found
71	71	to be inaccurate or unverifiable by the agency's reinvestigation
72	72	under that subsection [(d)] may not be reinserted in the consumer's
73	73	file unless the person who furnishes the information to the
74	74	consumer reporting agency reinvestigates and states in writing or
75	75	by electronic record to the agency that the information is complete
76	76	and accurate.
77	77	SECTION 3. Sections 392.101(a) and (c), Finance Code, are
78	78	amended to read as follows:
79	79	(a) A third-party debt collector or credit bureau may not
80	80	engage in debt collection unless the third-party debt collector or
81	81	credit bureau has obtained a surety bond issued by a surety company
82	82	authorized to do business in this state as prescribed by this
83	83	section. A copy of the bond for a credit bureau must be filed with
84	84	the secretary of state. A copy of the bond for a third-party debt
85	85	collector must be filed with the Texas Department of Licensing and
86	86	Regulation.
87	87	(c) The bond must be in the amount of $500,000 [$10,000].
88	88	SECTION 4. Section 392.202, Finance Code, is amended by
89	89	amending Subsections (a), (c), and (d) and adding Subsection (a-1)
90	90	to read as follows:
91	91	(a) An individual who disputes the accuracy of an item that
92	92	is in a third-party debt collector's or credit bureau's file on the
93	93	individual and that relates to a debt being collected by the
94	94	third-party debt collector may notify in writing the third-party
95	95	debt collector of the inaccuracy. The third-party debt collector
96	96	shall:
97	97	(1) make a written record of the dispute;
98	98	(2) notify each credit bureau, if any, to which the
99	99	collector has reported the item that the individual disputes the
100	100	accuracy of the item;
101	101	(3) initiate an investigation of the dispute described
102	102	by Subsections (b)-(e), if the collector reports information
103	103	related to the dispute to a credit bureau; and
104	104	(4) [. If the third-party debt collector does not
105	105	report information related to the dispute to a credit bureau, the
106	106	third-party debt collector shall] cease collection efforts until an
107	107	investigation of the dispute described by Subsections (b)-(e)
108	108	determines the accurate amount of the debt, if any.
109	109	(a-1) [If the third-party debt collector reports
110	110	information related to the dispute to a credit bureau, the
111	111	reporting third-party debt collector shall initiate an
112	112	investigation of the dispute described by Subsections (b)-(e) and
113	113	shall cease collection efforts until the investigation determines
114	114	the accurate amount of the debt, if any.] This section does not
115	115	affect the application of Chapter 20, Business & Commerce Code, to a
116	116	third-party debt collector subject to that chapter.
117	117	(c) If the third-party debt collector admits that the item
118	118	is inaccurate under Subsection (b), the third-party debt collector
119	119	shall:
120	120	(1) not later than the fifth business day after the
121	121	date of the admission:
122	122	(A)[,] correct the item in the relevant file; and
123	123	(B) notify any credit bureau informed of the
124	124	dispute under Subsection (a) that the item is inaccurate; and
125	125	(2) immediately cease collection efforts related to
126	126	the portion of the debt that was found to be inaccurate and on
127	127	correction of the item send, to each person who has previously
128	128	received a report from the third-party debt collector containing
129	129	the inaccurate information, notice of the inaccuracy and a copy of
130	130	an accurate report.
131	131	(d) If the third-party debt collector states that there has
132	132	not been sufficient time to complete an investigation, the
133	133	third-party debt collector shall immediately:
134	134	(1) change the item in the relevant file as requested
135	135	by the individual;
136	136	(2) notify any credit bureau informed of the dispute
137	137	under Subsection (a) that the third-party debt collector has not
138	138	completed an investigation;
139	139	(3) [(2)] send to each person who previously received
140	140	the report containing the information a notice that is equivalent
141	141	to a notice under Subsection (c) and a copy of the changed report;
142	142	and
143	143	(4) [(3)] cease collection efforts.
144	144	SECTION 5. Sections 392.403(a), (b), and (e), Finance Code,
145	145	are amended to read as follows:
146	146	(a) A person may sue for:
147	147	(1) injunctive relief to prevent or restrain a
148	148	violation of this chapter; [and]
149	149	(2) subject to Subsection (e), damages in an amount
150	150	equal to the greater of:
151	151	(A) actual damages sustained as a result of a
152	152	violation of this chapter; or
153	153	(B) $1,000 or, if the person is 65 years of age or
154	154	older, $5,000 for each violation of the same nature; or
155	155	(3) both injunctive relief and damages.
156	156	(b) A person who successfully maintains an action under
157	157	Subsection (a) is entitled to attorney's fees reasonably related to
158	158	the amount of work performed and costs, including court costs.
159	159	(e) The court may increase an amount of actual damages in an
160	160	action brought under Subsection (a) to an amount not to exceed three
161	161	times the amount of actual damages sustained if the court finds
162	162	that:
163	163	(1) the violation has occurred with sufficient
164	164	frequency to constitute a pattern or practice; or
165	165	(2) the debt collector or third-party debt collector
166	166	wilfully and knowingly committed the violation. [A person who
167	167	successfully maintains an action under this section for violation
168	168	of Section 392.101, 392.202, or 392.301(a)(3) is entitled to not
169	169	less than $100 for each violation of this chapter.]
170	170	SECTION 6. Chapter 392, Finance Code, is amended by adding
171	171	Subchapter F to read as follows:
172	172	SUBCHAPTER F. LICENSING OF THIRD-PARTY DEBT COLLECTORS
173	173	Sec. 392.501. DEFINITIONS. In this subchapter:
174	174	(1) "Commission" means the Texas Commission of
175	175	Licensing and Regulation.
176	176	(2) "Department" means the Texas Department of
177	177	Licensing and Regulation.
178	178	Sec. 392.502. LICENSE REQUIRED. A person may not act as a
179	179	third-party debt collector under this chapter unless the person
180	180	holds a license issued under this subchapter.
181	181	Sec. 392.503. EXEMPTIONS. This subchapter does not apply
182	182	to:
183	183	(1) a real estate broker or salesperson licensed under
184	184	Chapter 1101, Occupations Code, who is acting within the course and
185	185	scope of that license;
186	186	(2) a financial institution, as defined by Section
187	187	201.101; and
188	188	(3) an insurance company authorized to do business in
189	189	this state.
190	190	Sec. 392.504. APPLICATION REQUIREMENTS. (a) The
191	191	application for a license under this subchapter must:
192	192	(1) be under oath;
193	193	(2) contain the name of the applicant and if the
194	194	applicant is:
195	195	(A) a corporation, a list of the names and
196	196	addresses of its officers and directors;
197	197	(B) a partnership, a list of the names and
198	198	addresses of its partners; or
199	199	(C) a limited liability company, a list of the
200	200	names and addresses of its members and managers;
201	201	(3) contain the street address of the applicant's
202	202	principal place of business;
203	203	(4) contain all names under which the applicant
204	204	engages in debt collection activities;
205	205	(5) contain the names of all persons with which the
206	206	applicant is affiliated, and the principal place of business of
207	207	each affiliate; and
208	208	(6) contain any other relevant information that the
209	209	department determines appropriate.
210	210	(b) On the filing of a license application, the applicant
211	211	shall pay to the commission:
212	212	(1) an investigation fee not to exceed $200; and
213	213	(2) an application fee in an amount determined as
214	214	provided by Section 392.505.
215	215	Sec. 392.505. GENERAL POWERS AND DUTIES OF COMMISSION;
216	216	FEES. The commission shall:
217	217	(1) adopt necessary rules to administer and enforce
218	218	this subchapter; and
219	219	(2) set application, licensing, and renewal fees in an
220	220	amount reasonable and necessary to cover the cost of administering
221	221	and enforcing this subchapter.
222	222	Sec. 392.506. ADMINISTRATION BY DEPARTMENT. (a) The
223	223	department shall administer and enforce this subchapter.
224	224	(b) The department may recommend proposed rules to the
225	225	commission.
226	226	Sec. 392.507. FINANCIAL STATEMENT. (a) An applicant for a
227	227	license under this subchapter must file with the application a
228	228	financial statement that shows the assets and liabilities of the
229	229	applicant.
230	230	(b) The financial statement must be sworn to by the
231	231	applicant if the applicant is an individual or by a partner,
232	232	officer, or manager if the applicant is a partnership, corporation,
233	233	trust, joint-stock company, foundation, or association of
234	234	individuals.
235	235	(c) Information contained in a financial statement filed
236	236	under this section is confidential and not public information but
237	237	is admissible in evidence at a hearing held or an action instituted
238	238	under this chapter.
239	239	Sec. 392.508. INVESTIGATION OF APPLICATION. On the filing
240	240	of an application and payment of the required fees, the department
241	241	shall conduct an investigation to determine whether to issue the
242	242	license.
243	243	Sec. 392.509. APPROVAL OR DENIAL OF APPLICATION. (a) The
244	244	department shall approve the application and issue to the applicant
245	245	a license under this subchapter if the department finds that:
246	246	(1) the applicant meets the application requirements
247	247	of Section 392.504;
248	248	(2) the financial responsibility, experience,
249	249	character, and general fitness of the applicant are sufficient to:
250	250	(A) command the confidence of the public; and
251	251	(B) warrant the belief that the business will be
252	252	operated lawfully and fairly, within the purposes of this chapter;
253	253	and
254	254	(3) the applicant has obtained a surety bond as
255	255	required by Section 392.101.
256	256	(b) If the department does not find the eligibility
257	257	requirements of Subsection (a), the department shall notify the
258	258	applicant.
259	259	(c) If an applicant requests a hearing on the application
260	260	not later than the 30th day after the date of notification under
261	261	Subsection (b), the applicant is entitled to a hearing not later
262	262	than the 60th day after the date of the request.
263	263	(d) The department shall approve or deny the application not
264	264	later than the 60th day after the date of the filing of a completed
265	265	application with payment of the required fees, or if a hearing is
266	266	held, after the date of the completion of the hearing on the
267	267	application. The department and the applicant may agree to a later
268	268	date in writing.
269	269	Sec. 392.510. DISPOSITION OF FEES ON DENIAL OF APPLICATION.
270	270	If the department denies the application, the department shall
271	271	retain the investigation fee.
272	272	Sec. 392.511. ANNUAL LICENSE FEE. Not later than December
273	273	1, a license holder shall pay to the department an annual fee for
274	274	the year beginning the next January 1, in an amount determined as
275	275	provided by Section 392.505.
276	276	Sec. 392.512. EXPIRATION OF LICENSE ON FAILURE TO PAY
277	277	ANNUAL FEE. If the annual fee for a license is not paid before the
278	278	16th day after the date on which the written notice of delinquency
279	279	of payment has been given to the license holder, the license expires
280	280	on the later of:
281	281	(1) that day; or
282	282	(2) December 31 of the last year for which an annual
283	283	fee was paid.
284	284	Sec. 392.513. LICENSE SUSPENSION OR REVOCATION. After
285	285	notice and a hearing the department may suspend or revoke a license
286	286	if the department finds that:
287	287	(1) the license holder failed to pay the annual
288	288	license fee, an examination fee, or another fee imposed by the
289	289	department;
290	290	(2) the license holder, knowingly or without the
291	291	exercise of due care, has committed multiple violations of this
292	292	chapter or a rule adopted or order issued under this chapter; or
293	293	(3) a fact or condition exists that, if it had existed
294	294	or had been known to exist at the time of the original application
295	295	for the license, clearly would have justified the department's
296	296	denial of the application.
297	297	Sec. 392.514. REINSTATEMENT OF SUSPENDED LICENSE; ISSUANCE
298	298	OF NEW LICENSE AFTER REVOCATION. The department may reinstate a
299	299	suspended license or issue a new license on application to a person
300	300	whose license has been revoked if at the time of the reinstatement
301	301	or issuance no fact or condition exists that clearly would have
302	302	justified the department's denial of an original application for
303	303	the license.
304	304	Sec. 392.515. SURRENDER OF LICENSE. A license holder may
305	305	surrender a license issued under this subchapter by delivering to
306	306	the department:
307	307	(1) the license; and
308	308	(2) a written notice of the license's surrender.
309	309	Sec. 392.516. TRANSFER OR ASSIGNMENT OF LICENSE PROHIBITED.
310	310	A license may not be transferred or assigned.
311	311	SECTION 7. Section 392.403, Finance Code, as amended by
312	312	this Act, applies only to a cause of action that accrues on or after
313	313	the effective date of this Act. A cause of action that accrues
314	314	before the effective date of this Act is governed by the law as it
315	315	existed immediately before the effective date of this Act, and the
316	316	former law is continued in effect for that purpose.
317	317	SECTION 8. Not later than October 1, 2009, the Texas
318	318	Commission of Licensing and Regulation shall adopt rules required
319	319	by Section 392.505, Finance Code, as added by this Act.
320	320	SECTION 9. A person is not required to obtain a license
321	321	under Subchapter F, Chapter 392, Finance Code, as added by this Act,
322	322	until January 1, 2010.
323	323	SECTION 10. This Act takes effect September 1, 2009.