Texas 2009 - 81st Regular

Texas Senate Bill SB189 Compare Versions

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1	1	By: Shapleigh, Davis S.B. No. 189
2	2
3	3
4	4	A BILL TO BE ENTITLED
5	5	AN ACT
6	6	relating to the extension of consumer credit to certain members of
7	7	the Texas National Guard and armed forces of the United States and
8	8	their dependents; providing a penalty.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Subtitle B, Title 4, Finance Code, is amended by
11	11	adding Chapter 353 to read as follows:
12	12	CHAPTER 353. EXTENSION OF CONSUMER CREDIT TO SERVICEMEMBERS OR
13	13	THEIR DEPENDENTS
14	14	Sec. 353.001. DEFINITIONS. In this chapter:
15	15	(1) "Creditor" means a person who:
16	16	(A) is engaged in the business of extending
17	17	consumer credit; or
18	18	(B) transacts, negotiates, or services an
19	19	extension of consumer credit.
20	20	(2) "Dependent," with respect to a servicemember,
21	21	means the servicemember's spouse or dependent child.
22	22	(3) "Dependent child" means a person who is unmarried
23	23	and who:
24	24	(A) is under 18 years of age;
25	25	(B) before the person's 18th birthday, became
26	26	permanently incapable of self-support; or
27	27	(C) is under 23 years of age and is pursuing a
28	28	course of instruction at an approved educational institution.
29	29	(4) "Extension of consumer credit" means the right to
30	30	defer payment of debt offered or granted primarily for personal,
31	31	family, or household purposes or to incur the debt and defer its
32	32	payment.
33	33	(5) "Servicemember" means a member of the United
34	34	States armed forces or a member of the Texas National Guard called
35	35	to federal active duty.
36	36	Sec. 353.002. INAPPLICABILITY OF CHAPTER. This chapter
37	37	does not apply to:
38	38	(1) an insured depository institution, as that term is
39	39	defined by Section 3, Federal Deposit Insurance Act (12 U.S.C.
40	40	Section 1813); or
41	41	(2) an insured credit union, as that term is defined by
42	42	Section 101, Federal Credit Union Act (12 U.S.C. Section 1752).
43	43	Sec. 353.003. INTEREST. (a) In this section, "interest"
44	44	includes a service charge, renewal charge, fee, and any other
45	45	charge, except a charge for bona fide insurance, with respect to the
46	46	extension of consumer credit.
47	47	(b) A creditor who extends consumer credit to a
48	48	servicemember or a servicemember's dependent may not, with respect
49	49	to the transaction, require the servicemember or dependent to pay
50	50	interest that is:
51	51	(1) not agreed to by the parties under the terms of the
52	52	agreement or promissory note; or
53	53	(2) specifically prohibited by this chapter or other
54	54	law.
55	55	Sec. 353.004. MAXIMUM ANNUAL PERCENTAGE RATE. A creditor
56	56	may not impose an annual percentage rate that exceeds 36 percent
57	57	with respect to an extension of consumer credit to a servicemember
58	58	or a servicemember's dependent.
59	59	Sec. 353.005. INFORMATION REQUIRED. (a) Before
60	60	finalizing an extension of consumer credit to a servicemember or a
61	61	servicemember's dependent, a creditor must provide the
62	62	servicemember or dependent with the following written information:
63	63	(1) a statement of the annual percentage rate
64	64	applicable to the extension of credit;
65	65	(2) all disclosures required to be made under the
66	66	Truth in Lending Act (15 U.S.C. Section 1601 et seq.); and
67	67	(3) a clear description of the payment obligations of
68	68	the servicemember or dependent.
69	69	(b) Before finalizing an extension of consumer credit, a
70	70	creditor must provide a written form, to be signed by the
71	71	individual, stating whether or not the individual who is the
72	72	subject of the extension of credit is a servicemember, a
73	73	servicemember's spouse, or a servicemember's dependent child.
74	74	Sec. 353.006. RENEWAL, REFINANCING, OR CONSOLIDATION OF
75	75	CREDIT. A creditor may not renew, repay, or refinance consumer
76	76	credit extended to a servicemember or a servicemember's dependent,
77	77	or consolidate any part of the proceeds of the extension of credit
78	78	with proceeds from any other extension of credit to that person by
79	79	the creditor, unless the creditor:
80	80	(1) executes new loan documentation that is signed by
81	81	the servicemember or dependent; and
82	82	(2) provides the information required by Section
83	83	353.005(a).
84	84	Sec. 353.007. CRIMINAL PENALTY. A creditor who knowingly
85	85	violates this chapter commits an offense. An offense under this
86	86	section is a Class A misdemeanor.
87	87	Sec. 353.008. REMEDIES AND ADDITIONAL PENALTIES. (a) The
88	88	remedies and rights available under this chapter are in addition to
89	89	and do not preclude any remedy otherwise available under law to a
90	90	servicemember or a servicemember's dependents, including any award
91	91	for consequential or punitive damages.
92	92	(b) On violation of this chapter, a creditor is subject to
93	93	all remedies and penalties authorized by Chapter 14.
94	94	SECTION 2. Chapter 353, Finance Code, as added by this Act,
95	95	applies only to an extension of consumer credit made on or after the
96	96	effective date of this Act. An extension of consumer credit made
97	97	before the effective date of this Act is governed by the law in
98	98	effect on the date the extension of consumer credit was made, and
99	99	the former law is continued in effect for that purpose.
100	100	SECTION 3. This Act takes effect September 1, 2009.