81R6286 CLG-D
By: Shapleigh S.B. No. 676
A BILL TO BE ENTITLED
AN ACT
relating to credit card marketing activities at postsecondary
educational institutions.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Sections 35.132(a) and (b), Business & Commerce
Code, as added by Chapter 130 (H.B. 85), Acts of the 80th
Legislature, Regular Session, 2007, are amended to read as follows:
(a) A credit card issuer may not engage in campus credit
card marketing activities:
(1) outside of a campus location designated [by the
governing board of the postsecondary educational institution] for
that purpose in accordance with this section [Subsection (b)]; or
(2) at a time other than a time designated for that
purpose [by the governing board] in accordance with this section
[Subsection (b)].
(b) The governing board of a postsecondary educational
institution, with the approval of the institution's student
government, if one exists, may designate:
(1) one or more locations on campus where a credit card
issuer may engage in campus credit card marketing activities; and
(2) one or more times during which a credit card issuer
may engage in campus credit card marketing activities.
SECTION 2. Subchapter L, Chapter 35, Business & Commerce
Code, as added by Chapter 130 (H.B. 85), Acts of the 80th
Legislature, Regular Session, 2007, is amended by adding Sections
35.1325 and 35.1326 to read as follows:
Sec. 35.1325. ANNUAL REPORT OF ISSUER'S GIFTS TO
INSTITUTION. (a) Not later than March 1 of each year, a credit card
issuer that, during the preceding five years, has conducted credit
card marketing activities on the campus of a postsecondary
educational institution shall submit to the student government, if
any, of the institution a report that discloses the amount and
purpose of any gift, grant, or other donation given by the issuer
during the preceding calendar year to a program or office of the
institution, including any donations given to the institution's
athletics department or to support the institution's athletics
programs.
(b) A postsecondary educational institution, at the request
of the institution's student government, shall publish reports
submitted under Subsection (a) on the institution's Internet
website.
Sec. 35.1326. DISCLOSURE REGARDING CREDIT CARD TERMS. (a)
A credit card issuer shall disclose to the financial aid office of
each postsecondary educational institution on whose campus the
issuer conducts credit card marketing activities information about
each type of credit card marketed by the issuer to students on
campus. The disclosure must include:
(1) the credit card's:
(A) finance charge, stated as an annual
percentage rate, for:
(i) purchases;
(ii) cash advances;
(iii) balance transfers; and
(iv) overdue balances;
(B) grace period from finance charges for
purchases if:
(i) the cardholder carries over a balance
from the previous billing statement; and
(ii) the cardholder pays the balance in
full within the period specified by the billing statement;
(C) grace period from finance charges for cash
advances;
(D) credit limit; and
(E) minimum finance charge, if there is no grace
period from finance charges for purchases;
(2) a statement of whether:
(A) the credit card has a fixed, variable, or
tiered annual percentage rate for finance charges on an unpaid
balance that is not delinquent, and, if the card has a variable
annual percentage rate, the issuer shall also provide information
about the card's variable rate index and spread; and
(B) the credit card's finance charge on an unpaid
balance that is not delinquent is calculated:
(i) using one or two billing cycles;
(ii) to include new purchases; and
(iii) using an average, adjusted, or
previous balance method;
(3) a brief description of cardholder incentives and
rewards for using the credit card, including cash back rewards,
points reward systems, and discounts on goods and services; and
(4) a brief description of other credit card features
and benefits, including car rental insurance and travel insurance.
(b) Credit card information required under Subsection (a)
shall be furnished by the credit card issuer in an electronic table
format that is easy to read and understand.
(c) The financial aid office of a postsecondary educational
institution shall compile credit card information submitted to the
office under Subsection (a) and maintain the information in an
electronic spreadsheet format that:
(1) allows students to compare the terms, features,
and costs of all credit cards marketed to students on campus; and
(2) makes information readily available for purposes
of Subsections (e) and (f).
(d) Not later than July 1 of each year, the financial aid
office shall prepare a credit card information pamphlet using the
information maintained under Subsection (c).
(e) The postsecondary educational institution shall
prominently post credit card information maintained under
Subsection (c) at all times on the institution's Internet website
for viewing and downloading by students and the public.
(f) The financial aid office and the office of student
affairs or other similar office providing services to students of
the institution shall make available to students, on request, the
credit card information pamphlet and other credit card information
maintained under Subsection (c).
SECTION 3. Sections 35.136 and 35.137, Business & Commerce
Code, as added by Chapter 130 (H.B. 85), Acts of the 80th
Legislature, Regular Session, 2007, are amended to read as follows:
Sec. 35.136. CREDIT CARD AND DEBT INFORMATION [EDUCATION]
AT NEW STUDENT ORIENTATION. (a) The governing board of a
postsecondary educational institution that has designated a
location for campus credit card marketing activities under Section
35.132 [35.132(b)] shall also adopt a policy requiring a credit
card and debt education and counseling session to be included in any
orientation program for new students. The postsecondary
educational institution may use existing educational materials
prepared by nonprofit entities for purposes of the credit card and
debt education and counseling session.
(b) If a postsecondary educational institution holds an
orientation program for new students, the institution's financial
aid office shall distribute the information pamphlet required by
Section 35.1326(d) to students at the credit card and debt
education and counseling program session.
Sec. 35.137. CIVIL PENALTY; INJUNCTION. (a) A person who
intentionally violates this subchapter is liable to the state for a
civil penalty in an amount not to exceed $2,500 for each violation.
(b) The attorney general or the prosecuting attorney in the
county in which the violation occurs may bring suit:
(1) to recover the civil penalty imposed under this
section; and
(2) for injunctive relief to compel a credit card
issuer to file an annual report required under Section 35.1325 and a
disclosure of credit card terms required under Section 35.1326.
SECTION 4. Sections 761.051(a) and (b), Business & Commerce
Code, as effective September 1, 2009, are amended to read as
follows:
(a) A credit card issuer may not engage in campus credit
card marketing activities:
(1) outside of a campus location designated [by the
governing board of the postsecondary educational institution] for
that purpose in accordance with this section [Subsection (b)]; or
(2) at a time other than a time designated for that
purpose [by the governing board] in accordance with this section
[Subsection (b)].
(b) The governing board of a postsecondary educational
institution, with the approval of the institution's student
government, if one exists, may designate:
(1) one or more locations on campus where a credit card
issuer may engage in campus credit card marketing activities; and
(2) one or more times during which a credit card issuer
may engage in campus credit card marketing activities.
SECTION 5. Chapter 761, Business & Commerce Code, as
effective September 1, 2009, is amended by adding Subchapter B-1 to
read as follows:
SUBCHAPTER B-1. REQUIRED DISCLOSURES
Sec. 761.071. ANNUAL REPORT OF ISSUER'S GIFTS TO
INSTITUTION. (a) Not later than March 1 of each year, a credit card
issuer that, during the preceding five years, has conducted credit
card marketing activities on the campus of a postsecondary
educational institution shall submit to the student government, if
any, of the institution a report that discloses the amount and
purpose of any gift, grant, or other donation given by the issuer
during the preceding calendar year to a program or office of the
institution, including any donations given to the institution's
athletics department or to support the institution's athletics
programs.
(b) A postsecondary educational institution, at the request
of the institution's student government, shall publish reports
submitted under Subsection (a) on the institution's Internet
website.
Sec. 761.072. DISCLOSURE REGARDING CREDIT CARD TERMS. (a)
A credit card issuer shall disclose to the financial aid office of
each postsecondary educational institution on whose campus the
issuer conducts credit card marketing activities information about
each type of credit card marketed by the issuer to students on
campus. The disclosure must include:
(1) the credit card's:
(A) finance charge, stated as an annual
percentage rate, for:
(i) purchases;
(ii) cash advances;
(iii) balance transfers; and
(iv) overdue balances;
(B) grace period from finance charges for
purchases if:
(i) the cardholder carries over a balance
from the previous billing statement; and
(ii) the cardholder pays the balance in
full within the period specified by the billing statement;
(C) grace period from finance charges for cash
advances;
(D) credit limit; and
(E) minimum finance charge, if there is no grace
period from finance charges for purchases;
(2) a statement of whether:
(A) the credit card has a fixed, variable, or
tiered annual percentage rate for finance charges on an unpaid
balance that is not delinquent, and, if the card has a variable
annual percentage rate, the issuer shall also provide information
about the card's variable rate index and spread; and
(B) the credit card's finance charge on an unpaid
balance that is not delinquent is calculated:
(i) using one or two billing cycles;
(ii) to include new purchases; and
(iii) using an average, adjusted, or
previous balance method;
(3) a brief description of cardholder incentives and
rewards for using the credit card, including cash back rewards,
points reward systems, and discounts on goods and services; and
(4) a brief description of other credit card features
and benefits, including car rental insurance and travel insurance.
(b) Credit card information required under Subsection (a)
shall be furnished by the credit card issuer in an electronic table
format that is easy to read and understand.
(c) The financial aid office of a postsecondary educational
institution shall compile credit card information submitted to the
office under Subsection (a) and maintain the information in an
electronic spreadsheet format that:
(1) allows students to compare the terms, features,
and costs of all credit cards marketed to students on campus; and
(2) makes information readily available for purposes
of Subsections (e) and (f).
(d) Not later than July 1 of each year, the financial aid
office shall prepare a credit card information pamphlet using the
information maintained under Subsection (c).
(e) The postsecondary educational institution shall
prominently post credit card information maintained under
Subsection (c) at all times on the institution's website for
viewing and downloading by students and the public.
(f) The financial aid office and the office of student
affairs or other similar office providing services to students of
the institution shall make available to students, on request, the
credit card information pamphlet and other credit card information
maintained under Subsection (c).
SECTION 6. Sections 761.103 and 761.151, Business &
Commerce Code, as effective September 1, 2009, are amended to read
as follows:
Sec. 761.103. CREDIT CARD AND DEBT INFORMATION [EDUCATION]
AT NEW STUDENT ORIENTATION. (a) The governing board of a
postsecondary educational institution that has designated a
location for campus credit card marketing activities under Section
761.051 [761.051(b)] shall also adopt a policy requiring a credit
card and debt education and counseling session to be included in any
orientation program for new students. The postsecondary
educational institution may use existing educational materials
prepared by nonprofit entities for purposes of the credit card and
debt education and counseling session.
(b) If a postsecondary educational institution holds an
orientation program for new students, the institution's financial
aid office shall distribute the information pamphlet required by
Section 761.072(d) to students at the credit card and debt
education and counseling program session.
Sec. 761.151. CIVIL PENALTY; INJUNCTIVE RELIEF. (a) A
person who intentionally violates this chapter is liable to the
state for a civil penalty in an amount not to exceed $2,500 for each
violation.
(b) The attorney general or the prosecuting attorney in the
county in which the violation occurs may bring suit:
(1) to recover the civil penalty imposed under this
section; and
(2) for injunctive relief to compel a credit card
issuer to file an annual report under Section 761.071 and a
disclosure of credit card terms required under Section 761.072.
SECTION 7. (a) Sections 1, 2, and 3 of this Act take effect
only if the Act of the 81st Legislature, Regular Session, 2009,
relating to nonsubstantive additions to and corrections in existing
codes does not become law.
(b) Sections 4, 5, and 6 of this Act take effect only if the
Act of the 81st Legislature, Regular Session, 2009, relating to
nonsubstantive additions to and corrections in existing codes
becomes law.
SECTION 8. This Act takes effect September 1, 2009.