82R13500 ATP-D
By: Truitt H.B. No. 2594
A BILL TO BE ENTITLED
AN ACT
relating to the registration and regulation of credit services
organizations that obtain for consumers certain extensions of
credit; providing a penalty.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 14.101, Finance Code, is amended to read
as follows:
Sec. 14.101. GENERAL DUTIES OF COMMISSIONER. The
commissioner shall enforce this chapter, Subtitles B and C of Title
4, Subchapter B-1 of Chapter 393, and Chapter 394 in person or
through an assistant commissioner, examiner, or other employee of
the office.
SECTION 2. Section 14.107(a), Finance Code, is amended to
read as follows:
(a) The finance commission shall establish reasonable and
necessary fees for carrying out the commissioner's powers and
duties under this chapter, Title 4, Subchapter B-1 of Chapter 393,
and Chapters 371, 392, and 394 and under Chapters 51, 302, 601, and
621, Business & Commerce Code.
SECTION 3. Section 14.201, Finance Code, is amended to read
as follows:
Sec. 14.201. INVESTIGATION AND ENFORCEMENT AUTHORITY.
Investigative and enforcement authority under this subchapter
applies only to this chapter, Subtitles B and C of Title 4,
Subchapter B-1 of Chapter 393, and Chapter 394.
SECTION 4. Section 14.2015(a), Finance Code, is amended to
read as follows:
(a) Except as provided by Subsection (b), information or
material obtained or compiled by the commissioner in relation to an
examination by the commissioner or the commissioner's
representative of a license holder or registrant under Subtitle B
or C, Title 4, Subchapter B-1 of Chapter 393, or Chapter 394 is
confidential and may not be disclosed by the commissioner or an
officer or employee of the Office of Consumer Credit Commissioner,
including:
(1) information obtained from a license holder or
registrant under Subtitle B or C, Title 4, Subchapter B-1 of Chapter
393, or Chapter 394;
(2) work performed by the commissioner or the
commissioner's representative on information obtained from a
license holder or registrant for the purposes of an examination
conducted under Subtitle B or C, Title 4, Subchapter B-1 of Chapter
393, or Chapter 394;
(3) a report on an examination of a license holder or
registrant conducted under Subtitle B or C, Title 4, Subchapter B-1
of Chapter 393, or Chapter 394; and
(4) any written communications between the license
holder or registrant, as applicable, and the commissioner or the
commissioner's representative relating to or referencing an
examination conducted under Subtitle B or C, Title 4, Subchapter
B-1 of Chapter 393, or Chapter 394.
SECTION 5. Section 14.251, Finance Code, is amended to read
as follows:
Sec. 14.251. ASSESSMENT OF PENALTY; RESTITUTION ORDER.
(a) The commissioner may assess an administrative penalty against
a person who knowingly and wilfully violates or causes a violation
of this chapter, Subchapter B-1 of Chapter 393, Chapter 394, or
Subtitle B, Title 4, or a rule adopted under this chapter,
Subchapter B-1 of Chapter 393, Chapter 394, or Subtitle B, Title 4.
(b) The commissioner may order a person who violates or
causes a violation of this chapter, Subchapter B-1 of Chapter 393,
Chapter 394, or Subtitle B, Title 4, or a rule adopted under this
chapter, Subchapter B-1 of Chapter 393, Chapter 394, or Subtitle B,
Title 4, to make restitution to an identifiable person injured by
the violation.
SECTION 6. Section 14.261(a), Finance Code, is amended to
read as follows:
(a) In administering this chapter, the commissioner may
accept assurance of voluntary compliance from a person who is
engaging in or has engaged in an act or practice in violation of:
(1) this chapter or a rule adopted under this chapter;
(2) Subchapter B-1 of Chapter 393 or Chapter 394; or
(3) Subtitle B, Title 4, or a rule adopted under
Subtitle B, Title 4.
SECTION 7. Section 14.262, Finance Code, is amended to read
as follows:
Sec. 14.262. EFFECT OF ASSURANCE. (a) An assurance of
voluntary compliance is not an admission of a violation of:
(1) this chapter or a rule adopted under this chapter;
(2) Subchapter B-1 of Chapter 393 or Chapter 394; or
(3) Subtitle B, Title 4, or a rule adopted under
Subtitle B, Title 4.
(b) Unless an assurance of voluntary compliance is
rescinded by agreement or voided by a court for good cause, a
subsequent failure to comply with the assurance is prima facie
evidence of a violation of:
(1) this chapter or a rule adopted under this chapter;
(2) Subchapter B-1 of Chapter 393 or Chapter 394; or
(3) Subtitle B, Title 4, or a rule adopted under
Subtitle B, Title 4.
SECTION 8. Section 393.001, Finance Code, is amended by
adding Subdivision (5) to read as follows:
(5) "Commissioner" means the consumer credit
commissioner.
SECTION 9. Chapter 393, Finance Code, is amended by adding
Subchapter B-1 to read as follows:
SUBCHAPTER B-1. REGISTRATION WITH CONSUMER CREDIT COMMISSIONER AND
REPORTING REQUIRED FOR CREDIT SERVICES ORGANIZATIONS OBTAINING
CERTAIN EXTENSIONS OF CONSUMER CREDIT
Sec. 393.131. APPLICABILITY. This subchapter applies only
to a credit services organization that obtains, facilitates, or
otherwise assists in obtaining for a consumer:
(1) an extension of consumer credit, other than a
purchase money security interest loan, in which a motor vehicle
certificate of title is given by the consumer as security for the
debt; or
(2) an extension of consumer credit in the form of a
deferred presentment transaction, as that term is defined by
Section 341.001.
Sec. 393.132. REGISTRATION WITH CONSUMER CREDIT
COMMISSIONER. (a) Before conducting business in this state, a
credit services organization shall file with the commissioner an
application for a registration under this chapter that:
(1) is accompanied by the fee required by Section
393.135;
(2) contains the name and address of:
(A) the organization; and
(B) each person who directly or indirectly owns
or controls at least 10 percent of the outstanding shares of stock
in the organization; and
(3) fully discloses any litigation or unresolved
complaint relating to the operation of the organization filed with
a governmental authority of this state or contains a notarized
statement that there has been no litigation or unresolved complaint
of that type.
(b) The credit services organization shall keep a copy of
the registration application in its files.
(c) The commissioner may require a credit services
organization to provide information in addition to the information
contained in the registration application as the commissioner
determines necessary.
(d) A registration issued under this subchapter expires on
the first anniversary of its date of issuance and must be renewed
annually. A registered credit services organization may renew a
registration by filing a renewal application, in the form
prescribed by the commissioner, and paying the renewal fee.
(e) Unless the commissioner notifies an applicant that a
longer period is necessary, the commissioner shall approve or deny
an initial registration not later than the 60th day after the date
on which the completed application, including all required
information and payments, is filed. The commissioner shall inform
the applicant in writing of the reason for denial.
(f) A credit services organization may renew a registration
by paying the appropriate fee and completing all required
documents.
(g) The Finance Commission of Texas by rule may establish
procedures to facilitate the registration and collection of fees
under this section.
(h) The commissioner may refuse an initial application if
the application contains errors or incomplete information. An
application is incomplete if it does not include all of the
information required by this section and the commissioner as
provided by this section.
(i) The commissioner may deny an initial application if:
(1) the applicant or any principal of the applicant
has been convicted of a crime or found civilly liable for an offense
involving moral turpitude, including forgery, embezzlement,
obtaining money under false pretenses, larceny, extortion,
conspiracy to defraud, or any other similar offense or violation;
(2) the registration of the applicant or any principal
of the applicant has been revoked or suspended in this state or
another state, unless the applicant provides information that the
commissioner finds sufficient to show that the grounds for the
previous revocation or suspension no longer exist and any problem
cited in the previous revocation has been corrected; or
(3) the commissioner, based on specific evidence,
finds that the applicant does not warrant the belief that the
business will be operated lawfully and fairly and within the
provisions and purposes of this chapter.
(j) On written request, the applicant is entitled to a
hearing, pursuant to Chapter 2001, Government Code, on the question
of the applicant's qualifications for initial registration if the
commissioner has notified the applicant in writing that the initial
application has been denied. A request for a hearing may not be
made after the 30th day after the date the commissioner mails a
notice to the applicant stating that the application has been
denied and stating the reasons for the denial.
(k) In addition to the power to refuse an initial
application as specified in this section, the commissioner may
suspend or revoke a credit services organization's registration
after notice and hearing if the commissioner finds that any of the
following conditions are met:
(1) a fact or condition exists that if it had existed
when the organization applied for registration would have been
grounds for denying registration;
(2) a fact or condition exists that the commissioner
was not aware of when the organization applied for registration and
would have been grounds for denying registration;
(3) the organization violates this chapter, a rule
adopted under this chapter, or an order of the commissioner under
this chapter;
(4) the organization fails to respond within a
reasonable time and in an appropriate manner to communications from
the commissioner; or
(5) the organization fails to warrant the belief that
the business will be operated lawfully and fairly and within the
provisions and purposes of this chapter.
(l) The commissioner shall maintain a list of registered
credit services organizations under this subchapter and make the
list available to interested persons and to the public.
Sec. 393.133. UPDATE OF REGISTRATION INFORMATION. A credit
services organization shall update information provided in a
registration application or renewal not later than the 90th day
after the date on which the information changes.
Sec. 393.134. INSPECTION OF REGISTRATION APPLICATION. A
credit services organization shall allow a consumer to inspect the
registration application on request.
Sec. 393.135. FILING FEE. The commissioner may charge a
credit services organization a reasonable fee to cover the cost of
filing a registration application or renewal application and
administering this subchapter, in an amount determined by the
Finance Commission of Texas.
Sec. 393.136. ADVERTISING OR PROVIDING SERVICES WITHOUT
REGISTRATION PROHIBITED. A credit services organization or a
representative of the organization may not provide or advertise the
services of the organization if the organization is not registered
under this subchapter.
Sec. 393.137. ANNUAL REPORT TO COMMISSIONER. A credit
services organization shall file an annual report with the
commissioner on a form prescribed by the commissioner that states
for the preceding calendar year the following information with
respect to each type of the extensions of consumer credit described
by Section 393.131 that the organization obtains, facilitates, or
otherwise assists in obtaining:
(1) the number of consumers for which the extensions
of credit were obtained or facilitated;
(2) the number of extensions of credit obtained or
facilitated;
(3) the number of renewals of the extensions of
credit;
(4) the number of consumers renewing the extensions of
credit;
(5) the number of consumers making multiple renewals
of extensions of credit;
(6) the average amount of the extensions of credit;
and
(7) any related information the commissioner
determines necessary.
SECTION 10. (a) Except as provided by Subsection (b) of
this section, this Act takes effect September 1, 2011.
(b) Section 14.251, Finance Code, as amended by this Act,
and Section 393.132, Finance Code, as added by this Act, take effect
January 1, 2012.