Texas Senate Bill SB244

Texas 2009 - 81st Regular

• Filed: 11/10/08

Caption

Relating to restrictions on the authority of certain persons to act as or on behalf of, or associate with, a lender.

Impact

This bill is designed to amend existing finance code provisions, particularly concerning deferred presentment transactions. One of the primary intentions is to ensure that consumers engaging in these transactions are protected from deceptive practices that may arise through obscure or fraudulent financial arrangements. The new restrictions directly address previous loopholes that may have allowed credit services organizations to act improperly by acting on behalf of lenders while retaining some financial interest in the loans which could have led to adverse consumer outcomes.

Summary

SB244 seeks to introduce significant restrictions on the authority of certain entities and individuals in relation to lending practices. The bill emphasizes preventing conflicts of interest in credit services, specifically focusing on organizations involved in assisting consumers to obtain credit. By prohibiting credit services organizations from acting as lenders or having any relationship with lenders, the legislation aims to provide clearer boundaries and safeguard consumer interests against potential exploitation found in the lending industry.

Contention

Notable points of contention surrounding SB244 revolve around the complexities of its enforcement and the resulting impact on consumer access to credit. Critics may argue that such stringent regulations could hinder legitimate credit services organizations from performing their duties effectively, thereby limiting options for consumers seeking credit. Advocates for the bill, however, assert that these restrictions are necessary to eliminate predatory lending practices and maintain the integrity of the financial assistance market. The balance between regulation and access is a critical concern that stakeholders are likely to debate following the bill's introduction.