Texas 2013 - 83rd Regular

Texas Senate Bill SB1247 Compare Versions

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1	1	By: Carona S.B. No. 1247
2	2	(In the Senate - Filed March 6, 2013; March 13, 2013, read
3	3	first time and referred to Committee on Business and Commerce;
4	4	April 8, 2013, reported adversely, with favorable Committee
5	5	Substitute by the following vote: Yeas 5, Nays 3; April 8, 2013,
6	6	sent to printer.)
7	7	COMMITTEE SUBSTITUTE FOR S.B. No. 1247 By: Carona
8	8
9	9
10	10	A BILL TO BE ENTITLED
11	11	AN ACT
12	12	relating to credit services organizations and extensions of
13	13	consumer credit facilitated by credit services organizations;
14	14	providing a civil penalty.
15	15	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
16	16	SECTION 1. Subsection (a), Section 392.301, Finance Code,
17	17	is amended to read as follows:
18	18	(a) In debt collection, a debt collector may not use
19	19	threats, coercion, or attempts to coerce that employ any of the
20	20	following practices:
21	21	(1) using or threatening to use violence or other
22	22	criminal means to cause harm to a person or property of a person;
23	23	(2) accusing falsely or threatening to accuse falsely
24	24	a person of fraud or any other crime;
25	25	(3) representing or threatening to represent to any
26	26	person other than the consumer that a consumer is wilfully refusing
27	27	to pay a nondisputed consumer debt when the debt is in dispute and
28	28	the consumer has notified in writing the debt collector of the
29	29	dispute;
30	30	(4) threatening to sell or assign to another the
31	31	obligation of the consumer and falsely representing that the result
32	32	of the sale or assignment would be that the consumer would lose a
33	33	defense to the consumer debt or would be subject to illegal
34	34	collection attempts;
35	35	(5) threatening that the debtor will be arrested for
36	36	nonpayment of a consumer debt without proper court proceedings;
37	37	(6) threatening to file a charge, complaint, or
38	38	criminal action against a debtor when the debtor has not violated a
39	39	criminal law;
40	40	(7) threatening that nonpayment of a consumer debt
41	41	will result in the seizure, repossession, or sale of the person's
42	42	property without proper court proceedings;
43	43	(8) referencing a certification signed by the consumer
44	44	as required by Section 393.630(b) or any penalties associated with
45	45	a violation of that section; or
46	46	(9) [(8)] threatening to take an action prohibited by
47	47	law.
48	48	SECTION 2. Section 393.001, Finance Code, is amended by
49	49	amending Subdivisions (1) and (3) and adding Subdivisions (1-a),
50	50	(2-a), (3-a), (4-a), (5), (6), (7), (8), (9), (10), (11), (12), and
51	51	(13) to read as follows:
52	52	(1) "Commissioner" means the consumer credit
53	53	commissioner.
54	54	(1-a) "Consumer" means an individual who is solicited
55	55	to purchase or who purchases the services of a credit services
56	56	organization.
57	57	(2-a) "Credit access business" means a credit services
58	58	organization that obtains for a consumer or assists a consumer in
59	59	obtaining an extension of consumer credit.
60	60	(3) "Credit services organization" means a person who
61	61	provides, or represents that the person can or will provide, for the
62	62	payment of valuable consideration any of the following services
63	63	with respect to the extension of consumer credit by others:
64	64	(A) improving a consumer's credit history or
65	65	rating;
66	66	(B) obtaining an extension of consumer credit for
67	67	a consumer in the form of a single-payment deferred presentment
68	68	transaction, a multiple-payment deferred presentment transaction,
69	69	a single-payment motor vehicle title loan, or a multiple-payment
70	70	motor vehicle title loan; or
71	71	(C) providing advice or assistance to a consumer
72	72	with regard to Paragraph (A) or (B).
73	73	(3-a) "Deferred presentment transaction" means a
74	74	single-payment or multiple-payment transaction defined as a
75	75	deferred presentment transaction by Section 341.001 in connection
76	76	with which the consumer is not required to provide real or personal
77	77	property as security.
78	78	(4-a) "Finance commission" means the Finance
79	79	Commission of Texas.
80	80	(5) "Military borrower" includes a "covered member" or
81	81	a "dependent" of a covered member, as those terms are defined by 10
82	82	U.S.C. Section 987 or a successor statute.
83	83	(6) "Motor vehicle title loan" means a single-payment
84	84	or multiple-payment loan in which an unencumbered motor vehicle is
85	85	given as the only security for the loan, except as provided by
86	86	Section 393.629(c). The term does not include a retail installment
87	87	transaction under Chapter 348 or another loan made to finance the
88	88	purchase of a motor vehicle.
89	89	(7) "Multiple-payment deferred presentment
90	90	transaction" means a deferred presentment transaction that is not a
91	91	single-payment deferred presentment transaction.
92	92	(8) "Multiple-payment motor vehicle title loan" means
93	93	a motor vehicle title loan that is not a single-payment motor
94	94	vehicle title loan.
95	95	(9) "Office" means the Office of Consumer Credit
96	96	Commissioner.
97	97	(10) "Refinance" means a rollover, renewal, or other
98	98	type of transaction in which all or a portion of the principal,
99	99	fees, or interest due under an outstanding extension of consumer
100	100	credit becomes due on a later date. The term does not include an
101	101	extended payment plan described by Section 393.638. The term
102	102	includes a new extension of consumer credit that:
103	103	(A) consists of debt arising from principal,
104	104	fees, or interest that was not paid in full under an outstanding or
105	105	previous extension of consumer credit; or
106	106	(B) is made on or before the fifth day after the
107	107	date a previous extension of consumer credit that a credit access
108	108	business obtained for a consumer or assisted a consumer in
109	109	obtaining was paid in full.
110	110	(11) "Service" means an act, conduct, or activity that
111	111	is performed or to be performed for a consumer's benefit or that
112	112	involves assisting a consumer in obtaining an extension of consumer
113	113	credit, including:
114	114	(A) negotiating or closing a loan or other
115	115	extension of consumer credit;
116	116	(B) issuing a guaranty, letter of credit, or
117	117	other credit enhancement; and
118	118	(C) servicing an extension of consumer credit.
119	119	(12) "Single-payment deferred presentment
120	120	transaction" means a deferred presentment transaction for which the
121	121	entire cash advance, interest, and fees are required under the
122	122	terms of the transaction to be payable in a single payment.
123	123	(13) "Single-payment motor vehicle title loan" means a
124	124	motor vehicle title loan for which the entire principal, interest,
125	125	and fees are required under the terms of the loan to be payable in a
126	126	single payment.
127	127	SECTION 3. Section 393.201, Finance Code, is amended by
128	128	amending Subsections (b) and (c) and adding Subsection (d) to read
129	129	as follows:
130	130	(b) In addition to the notice required by Section 393.202,
131	131	the contract must:
132	132	(1) contain the payment terms, including the total
133	133	payments to be made by the consumer, whether to the organization or
134	134	to another person;
135	135	(2) fully describe the services the organization shall
136	136	[is to] perform for the consumer, including each guarantee and each
137	137	promise of a full or partial refund and the estimated period for
138	138	performing and completing all of the services, not to exceed 180
139	139	days, unless otherwise permitted under this chapter;
140	140	(3) contain the address of the organization's
141	141	principal place of business; and
142	142	(4) contain the name and address of the organization's
143	143	agent in this state authorized to receive service of process.
144	144	(c) A contract with a credit access business[, as defined by
145	145	Section 393.601,] for the performance of services [described by
146	146	Section 393.602(a)] must, in addition to the requirements of
147	147	Subsection (b) and Section 393.302:
148	148	(1) contain a statement that there is no prepayment
149	149	penalty;
150	150	(2) contain a statement that a credit access business
151	151	must comply with Chapter 392 and the federal Fair Debt Collection
152	152	Practices Act (15 U.S.C. Section 1692 et seq.) with respect to an
153	153	extension of consumer credit [described by Section 393.602(a)];
154	154	(3) contain a statement that a person may not threaten
155	155	or pursue criminal charges against a consumer related to a check or
156	156	other debit authorization provided by the consumer as security for
157	157	a transaction in the absence of forgery, fraud, theft, or other
158	158	criminal conduct;
159	159	(4) contain a statement that a credit access business
160	160	must comply, to the extent applicable, with 10 U.S.C. Section 987
161	161	and any regulations adopted under that law with respect to an
162	162	extension of consumer credit [described by Section 393.602(a)];
163	163	(5) disclose to the consumer:
164	164	(A) the lender from whom the extension of
165	165	consumer credit is obtained;
166	166	(B) the interest paid or to be paid to the lender;
167	167	and
168	168	(C) the specific fees that will be paid to the
169	169	credit access business for the business's services and to any third
170	170	party; [and]
171	171	(6) contain the name and address of the office, the
172	172	office's website address, [Office of Consumer Credit Commissioner]
173	173	and the telephone number of the office's consumer helpline; and
174	174	(7) use model contract clauses adopted by rule of the
175	175	finance commission.
176	176	(d) The finance commission shall adopt rules to implement
177	177	this section.
178	178	SECTION 4. Section 393.222, Finance Code, is amended by
179	179	adding Subsection (a-1) to read as follows:
180	180	(a-1) A credit access business shall post, in the same
181	181	manner as a notice required under Subsection (a), and provide as a
182	182	separate document to a consumer, a notice prescribed by the finance
183	183	commission regarding the availability of extended payment plans
184	184	that describes the basic features of the plans.
185	185	SECTION 5. Subsection (a), Section 393.223, Finance Code,
186	186	is amended to read as follows:
187	187	(a) Before performing services described by Section
188	188	393.001(2-a) [393.221(1)], a credit access business must provide to
189	189	a consumer a disclosure adopted by rule of the finance commission
190	190	[Finance Commission of Texas] that discloses the following in a
191	191	form prescribed by the commission:
192	192	(1) the interest, fees, and annual percentage rates,
193	193	as applicable, to be charged on a deferred presentment transaction
194	194	or on a motor vehicle title loan, as applicable, in comparison to
195	195	interest, fees, and annual percentage rates to be charged on other
196	196	alternative forms of consumer debt;
197	197	(2) the amount of accumulated fees a consumer would
198	198	incur by renewing or refinancing a deferred presentment transaction
199	199	or motor vehicle title loan that remains outstanding for a period of
200	200	two weeks, one month, two months, and three months; [and]
201	201	(3) information regarding the typical pattern of
202	202	repayment of deferred presentment transactions and motor vehicle
203	203	title loans; and
204	204	(4) the name of the credit access business and any
205	205	unique number assigned to the license issued to the business under
206	206	Subchapter G.
207	207	SECTION 6. Subchapter D, Chapter 393, Finance Code, is
208	208	amended by adding Section 393.308 to read as follows:
209	209	Sec. 393.308. PROHIBITION ON OBTAINING CERTAIN LOANS OR
210	210	EXTENSIONS OF CREDIT. (a) A credit services organization may not
211	211	obtain for a consumer or assist a consumer in obtaining an extension
212	212	of consumer credit in any form other than in the form of a
213	213	single-payment deferred presentment transaction, a
214	214	multiple-payment deferred presentment transaction, a
215	215	single-payment motor vehicle title loan, or a multiple-payment
216	216	motor vehicle title loan.
217	217	(b) A credit services organization may obtain for a consumer
218	218	or assist a consumer in obtaining a loan or other extension of
219	219	consumer credit only if the loan or extension of consumer credit is
220	220	in the form of a deferred presentment transaction or motor vehicle
221	221	title loan described by Subsection (a) made by a third-party lender
222	222	that is unaffiliated with the credit services organization and does
223	223	not have any ownership, directors, officers, members, or employees
224	224	in common with the credit services organization.
225	225	(c) A credit services organization may not charge or receive
226	226	from a consumer a fee or other valuable consideration in connection
227	227	with a loan or other extension of consumer credit that is not a
228	228	deferred presentment transaction or motor vehicle title loan
229	229	described by Subsection (b).
230	230	(d) The finance commission may adopt rules to implement this
231	231	section.
232	232	SECTION 7. Section 393.602, Finance Code, is amended by
233	233	amending Subsections (a) and (b) and adding Subsection (b-1) to
234	234	read as follows:
235	235	(a) This subchapter applies only to a credit services
236	236	organization that obtains for a consumer or assists a consumer in
237	237	obtaining an extension of consumer credit [in the form of:
238	238	[(1) a deferred presentment transaction; or
239	239	[(2) a motor vehicle title loan].
240	240	(b) A credit access business may assess fees as agreed to
241	241	between the parties for [its] services performed to obtain an
242	242	extension of consumer credit for a consumer or assist a consumer in
243	243	obtaining an extension of consumer credit in the form of a deferred
244	244	presentment transaction or motor vehicle title loan or a refinance
245	245	of such an extension of consumer credit [as agreed to between the
246	246	parties]. A credit access business fee may be calculated daily,
247	247	biweekly, monthly, or on another periodic basis. A credit access
248	248	business is permitted to charge amounts allowed by other laws, as
249	249	applicable. A fee may not be charged unless it is disclosed.
250	250	(b-1) Notwithstanding Subsection (a) or (b), a credit
251	251	services organization that is not obtaining for a consumer or
252	252	assisting a consumer in obtaining an extension of consumer credit
253	253	may also charge or receive from a consumer a fee or other valuable
254	254	consideration in connection with advice, assistance, or other
255	255	services that the credit services organization provides to improve
256	256	a consumer's credit history or rating.
257	257	SECTION 8. Subsection (a), Section 393.604, Finance Code,
258	258	is amended to read as follows:
259	259	(a) An application for a license under this subchapter must:
260	260	(1) be under oath;
261	261	(2) give the approximate location from which the
262	262	business is to be conducted;
263	263	(3) identify the business's principal parties in
264	264	interest;
265	265	(4) contain the name, physical address, and telephone
266	266	number of all third-party lender organizations:
267	267	(A) with which the business contracts to provide
268	268	services; [described by Section 393.602(a)] or
269	269	(B) from which the business arranges extensions
270	270	of consumer credit [described by Section 393.602(a)]; and
271	271	(5) contain other relevant information that the
272	272	commissioner requires for the findings required under Section
273	273	393.607.
274	274	SECTION 9. Subsections (a) and (b), Section 393.622,
275	275	Finance Code, are amended to read as follows:
276	276	(a) The finance commission may:
277	277	(1) adopt rules necessary to enforce and administer
278	278	this subchapter;
279	279	(2) adopt rules with respect to reports of summary
280	280	business information required to be submitted [the quarterly
281	281	reporting] by a licensed credit access business under Section
282	282	393.627 [licensed under this subchapter of summary business
283	283	information relating to extensions of consumer credit described by
284	284	Section 393.602(a)]; [and]
285	285	(3) adopt rules with respect to periodic examination
286	286	by the office relating to extensions of consumer credit the
287	287	business obtained for a consumer or assisted a consumer in
288	288	obtaining [described by Section 393.602(a)], including rules
289	289	related to charges for defraying the reasonable cost of conducting
290	290	the examinations; and
291	291	(4) adopt rules identifying extensions of consumer
292	292	credit that are refinances.
293	293	(b) The finance commission may adopt rules under this
294	294	section to allow the commissioner to review, as part of a periodic
295	295	examination, any relevant contracts between the credit access
296	296	business and the third-party lender organizations with which the
297	297	credit access business contracts to provide services [described by
298	298	Section 393.602(a)] or from which the business arranges extensions
299	299	of consumer credit [described by Section 393.602(a)]. A contract
300	300	or information obtained by the commissioner under this section is
301	301	considered proprietary and confidential to the respective parties
302	302	to the contract, and is not subject to disclosure under Chapter 552,
303	303	Government Code.
304	304	SECTION 10. Subchapter G, Chapter 393, Finance Code, is
305	305	amended by adding Section 393.6221 to read as follows:
306	306	Sec. 393.6221. EXAMINATION OR INVESTIGATION BY
307	307	COMMISSIONER; OATHS. During an examination or an investigation,
308	308	the commissioner or the commissioner's representative may
309	309	administer oaths and examine a person under oath on a subject
310	310	pertinent to a matter that the commissioner is authorized or
311	311	required to consider, investigate, or secure information about
312	312	under this chapter.
313	313	SECTION 11. Section 393.625, Finance Code, is amended to
314	314	read as follows:
315	315	Sec. 393.625. MILITARY BORROWERS. (a) An extension of
316	316	consumer credit [described by Section 393.602(a)] that is obtained
317	317	by a credit access business for a military borrower [member of the
318	318	United States military or a dependent of a member of the United
319	319	States military] or that the business assisted a military borrower
320	320	[that person] in obtaining must comply with 10 U.S.C. Section 987
321	321	and any regulations adopted under that law, to the extent
322	322	applicable.
323	323	(b) The term of an extension of consumer credit, including
324	324	all renewals and refinances, obtained for a military borrower by a
325	325	credit access business or that a credit access business assists a
326	326	military borrower in obtaining may not exceed:
327	327	(1) 90 days, if the debt is a deferred presentment
328	328	transaction; or
329	329	(2) 180 days, if the debt is a motor vehicle title
330	330	loan.
331	331	SECTION 12. Section 393.626, Finance Code, is amended to
332	332	read as follows:
333	333	Sec. 393.626. DEBT COLLECTION PRACTICES. A violation of
334	334	Chapter 392 by a credit access business with respect to obtaining
335	335	for a consumer or assisting a consumer in obtaining an extension of
336	336	consumer credit [described by Section 393.602(a)] constitutes a
337	337	violation of this subchapter.
338	338	SECTION 13. Section 393.627, Finance Code, is amended to
339	339	read as follows:
340	340	Sec. 393.627. REPORTS [QUARTERLY REPORT] TO COMMISSIONER.
341	341	(a) A credit access business shall file [a] quarterly and annual
342	342	reports [report] with the commissioner on forms [a form] prescribed
343	343	by the commissioner that provide [provides] the following
344	344	information relating to extensions of consumer credit [described by
345	345	Section 393.602(a)] during the preceding quarter or year, as
346	346	applicable:
347	347	(1) the number of consumers for whom the business
348	348	obtained or assisted in obtaining those extensions of consumer
349	349	credit;
350	350	(2) the number of those extensions of consumer credit
351	351	obtained by the business or that the business assisted consumers in
352	352	obtaining;
353	353	(3) the number of refinancing transactions of the
354	354	extensions of consumer credit described by Subdivision (2);
355	355	(4) the number of consumers refinancing the extensions
356	356	of consumer credit described by Subdivision (2);
357	357	(5) the number of consumers refinancing more than once
358	358	the extensions of consumer credit described by Subdivision (2);
359	359	(6) the average amount of the extensions of consumer
360	360	credit described by Subdivision (2);
361	361	(7) the total amount of fees charged by the business
362	362	for the activities described by Subdivision (1);
363	363	(8) the number of vehicles surrendered or repossessed
364	364	under the terms of an extension of consumer credit in the form of a
365	365	motor vehicle title loan obtained by the business or that the
366	366	business assisted a consumer in obtaining;
367	367	(9) the number of extended payment plans offered by
368	368	the credit access business and entered into by consumers, for each
369	369	product [the mean, median, and mode of the number of extensions of
370	370	consumer credit obtained by consumers as a result of entering into
371	371	the extensions of consumer credit described by Subdivision (2)];
372	372	and
373	373	(10) any related information the commissioner
374	374	determines necessary.
375	375	(b) All information submitted by a credit access business to
376	376	the commissioner for inclusion in a report under this section is
377	377	confidential.
378	378	(c) The commissioner shall publish a statewide consolidated
379	379	analysis and recapitulation of reports filed under this section.
380	380	The commissioner may also publish a consolidated analysis and
381	381	recapitulation of the reports that provides an analysis of the 15
382	382	largest metropolitan statistical areas and the five largest
383	383	counties of this state.
384	384	SECTION 14. Subchapter G, Chapter 393, Finance Code, is
385	385	amended by adding Sections 393.629 through 393.640 to read as
386	386	follows:
387	387	Sec. 393.629. GENERAL LIMITATIONS ON EXTENSIONS OF CONSUMER
388	388	CREDIT; LANGUAGE REQUIREMENTS; PAYMENT METHOD. (a) The
389	389	provisions of this chapter applicable to a credit access business
390	390	apply to any consumer physically located in this state at the time
391	391	the extension of consumer credit is made, regardless of whether the
392	392	extension of consumer credit was made in person in this state.
393	393	(b) The finance commission by rule shall adopt Spanish
394	394	versions of the model contract clauses and all notices that a credit
395	395	access business is required to give to a consumer under this
396	396	chapter. A credit access business shall provide to the consumer a
397	397	contract that uses the adopted Spanish clauses and notices to the
398	398	consumer if in the process of obtaining an extension of consumer
399	399	credit the consumer requests that the documents be provided in
400	400	Spanish or if the contract is negotiated in Spanish. The executed
401	401	contract and any other binding and controlling document between the
402	402	credit access business and the consumer must be written in English.
403	403	(c) A credit access business shall accept a payment made in
404	404	cash or by electronic transfer, cashier's check, teller's check, or
405	405	money order offered by the consumer or another party, to retire or
406	406	otherwise pay down debt incurred under an extension of consumer
407	407	credit that a credit access business obtained for a consumer or
408	408	assisted a consumer in obtaining under this chapter. For a motor
409	409	vehicle title loan, a consumer may also grant a security interest in
410	410	an authorized debit of a bank account.
411	411	Sec. 393.630. LIMITATION ON OUTSTANDING DEBT. (a) At any
412	412	one time, a consumer may have only one outstanding debt from a
413	413	deferred presentment transaction that a credit access business
414	414	obtained for the consumer or assisted the consumer in obtaining and
415	415	one outstanding debt from a motor vehicle title loan that a credit
416	416	access business obtained for the consumer or assisted the consumer
417	417	in obtaining.
418	418	(b) To obtain an extension of consumer credit in the form of
419	419	a deferred presentment transaction facilitated through the
420	420	services of a credit access business, a consumer must sign a written
421	421	certification on a form adopted by finance commission rule stating
422	422	that the consumer has no other outstanding debt from an extension of
423	423	consumer credit in the form of a deferred presentment transaction.
424	424	(c) A credit access business may not obtain for a consumer or
425	425	assist a consumer in obtaining an extension of consumer credit in
426	426	the form of a deferred presentment transaction if the consumer
427	427	fails to provide the written certification required by Subsection
428	428	(b) or if the business has evidence in its possession indicating
429	429	that the consumer has an outstanding extension of consumer credit
430	430	in the form of a deferred presentment transaction that the credit
431	431	access business previously obtained for the consumer or assisted
432	432	the consumer in obtaining. This subsection does not prohibit a
433	433	credit access business from advancing additional funds under a
434	434	refinance otherwise permitted under this chapter.
435	435	(d) A credit access business that violates this section is
436	436	subject to a civil penalty in an amount not to exceed $1,000 for
437	437	each violation.
438	438	Sec. 393.631. LIMITATIONS RELATING TO MOTOR VEHICLE
439	439	SECURING DEBT. (a) The proceeds of the sale of a repossessed motor
440	440	vehicle that secured a motor vehicle title loan shall satisfy all
441	441	outstanding and unpaid indebtedness under that extension of
442	442	consumer credit, and the consumer is not liable for any deficiency
443	443	resulting from the sale unless the consumer has committed fraud or
444	444	has committed a wilful act of misconduct that damages or impairs the
445	445	value of the motor vehicle.
446	446	(b) Any fee charged to a consumer for the repossession of a
447	447	motor vehicle given as security for a motor vehicle title loan must
448	448	be reasonable and may not exceed the amount actually paid by the
449	449	credit access business or the lender to a third party for the
450	450	repossession.
451	451	(c) A repossession under this chapter must comply with
452	452	Chapter 9, Business & Commerce Code, except as otherwise provided
453	453	by this section.
454	454	Sec. 393.632. ESTABLISHMENT OF INCOME OR VALUE; REFERENCE
455	455	AMOUNT. (a) A credit access business must require documentation
456	456	to establish a consumer's income for purposes of this subchapter.
457	457	Acceptable forms of documentation include paper, facsimile, or
458	458	electronic copies of:
459	459	(1) a payroll document;
460	460	(2) a paycheck;
461	461	(3) a bank statement;
462	462	(4) a report from a nationally or regionally
463	463	recognized credit and data reporting company;
464	464	(5) Internal Revenue Service Form W-2 from the
465	465	preceding year;
466	466	(6) the income tax return from the preceding tax year;
467	467	(7) a signed letter from the consumer's employer at the
468	468	time the extension of consumer credit is sought;
469	469	(8) an executed certification on a form adopted by
470	470	finance commission rule that attests to the consumer's monthly or
471	471	annual income; or
472	472	(9) any other document approved by finance commission
473	473	rule.
474	474	(b) A credit access business shall retain a copy of the
475	475	documentation used to establish a consumer's income under
476	476	Subsection (a) according to the business's standard records
477	477	retention policy and any applicable rule or regulation establishing
478	478	a record retention period.
479	479	(c) A credit access business that relies in good faith on a
480	480	document presented by the consumer under Subsection (a) to
481	481	establish a consumer's income has complied with this section to the
482	482	extent the income established under that document meets the
483	483	applicable requirements under this chapter.
484	484	(d) A credit access business that obtains for a consumer or
485	485	assists a consumer in obtaining an extension of consumer credit
486	486	through the Internet or other electronic means may rely on
487	487	nationally or regionally recognized database reporting systems and
488	488	may maintain a record of the database reporting system results used
489	489	to comply with Subsections (a) and (b).
490	490	(e) To establish the retail value of a motor vehicle for
491	491	purposes of this subchapter, a credit access business must:
492	492	(1) rely on a nationally or regionally recognized
493	493	vehicle appraisal guide or agree in good faith with the consumer to
494	494	the vehicle's retail value; and
495	495	(2) record the recognized or agreed-on value.
496	496	(f) For purposes of this chapter, $28,000 is the initial
497	497	reference amount with respect to a consumer's income, and the
498	498	commissioner shall adjust this amount annually in accordance with
499	499	the Consumer Price Index.
500	500	Sec. 393.633. LOCAL ORDINANCES PREEMPTED. (a) Except as
501	501	provided by Subsection (b), a local ordinance, order, or rule
502	502	regulating a credit access business or an extension of consumer
503	503	credit that a credit access business obtains for a consumer or
504	504	assists a consumer in obtaining is preempted by this chapter.
505	505	(b) Nothing in this section affects the validity of a zoning
506	506	ordinance adopted under Chapter 211, Local Government Code.
507	507	Sec. 393.634. SINGLE-PAYMENT DEFERRED PRESENTMENT
508	508	TRANSACTION. (a) The amount advanced to a consumer under an
509	509	extension of consumer credit in the form of a single-payment
510	510	deferred presentment transaction that a credit access business
511	511	obtains for a consumer or assists a consumer in obtaining,
512	512	excluding fees, may not exceed:
513	513	(1) 25 percent of the consumer's gross monthly income,
514	514	if the consumer's gross annual income is less than the reference
515	515	amount; or
516	516	(2) 35 percent of the consumer's gross monthly income,
517	517	if the consumer is not described by Subdivision (1) and is not a
518	518	military borrower to whom a different limit applies under federal
519	519	law.
520	520	(b) The term of an original or refinanced extension of
521	521	consumer credit in the form of a single-payment deferred
522	522	presentment transaction that a credit access business obtains for a
523	523	consumer or assists a consumer in obtaining may not be less than 10
524	524	days or longer than 35 days.
525	525	(c) An extension of consumer credit in the form of a
526	526	single-payment deferred presentment transaction that a credit
527	527	access business obtains for a consumer or assists a consumer in
528	528	obtaining may not be refinanced more than four times.
529	529	(d) If a consumer who has not entered into an extended
530	530	payment plan with the credit access business in the preceding 12
531	531	months refinances a single-payment deferred presentment
532	532	transaction for the fourth time:
533	533	(1) the credit access business must offer at least one
534	534	extended payment plan to the consumer before initiating any debt
535	535	collection activities;
536	536	(2) the consumer may request, prior to the offer
537	537	required by Subdivision (1) being made, an extended payment plan at
538	538	any time on or after the date the consumer refinances the deferred
539	539	presentment transaction for the fourth time and on or before the
540	540	fifth day after the date on which the fourth refinance must be
541	541	repaid in full;
542	542	(3) to comply with the requirement of Subdivision (1),
543	543	the credit access business shall send a written notice to the
544	544	consumer disclosing the following:
545	545	(A) the amount due under the current terms of the
546	546	extension of consumer credit if the consumer declines an extended
547	547	payment plan;
548	548	(B) the amounts due on each of the installment
549	549	dates of an extended payment plan; and
550	550	(C) the date by which the consumer must accept
551	551	the extended payment plan in writing, which date shall be at least
552	552	five days after the date of such notice;
553	553	(4) the credit access business may not initiate debt
554	554	collection activities unless:
555	555	(A) the consumer fails to accept the extended
556	556	payment plan in writing on or before the deadline contained in the
557	557	notice required by Subdivision (3);
558	558	(B) the consumer declines the extended payment
559	559	plan; or
560	560	(C) the consumer fails to make a payment required
561	561	by an extended payment plan that the consumer accepted; and
562	562	(5) if the consumer declines an extended payment plan
563	563	that a credit access business is required to offer under
564	564	Subdivision (1), the consumer must sign an extended payment plan
565	565	waiver on a form prescribed by the finance commission.
566	566	(e) An extended payment plan required to be offered under
567	567	Subsection (d) must comply with Section 393.638.
568	568	(f) A credit access business may offer a consumer an
569	569	extended payment plan that provides the consumer with additional
570	570	time to repay the debts obtained through a single-payment deferred
571	571	presentment transaction, either before or after the consumer
572	572	refinances the single-payment deferred presentment transaction for
573	573	the fourth time, more than once in a 12-month period so long as the
574	574	credit access business does not assess additional fees under the
575	575	extended payment plan and the credit access business fully
576	576	describes the terms of the extended payment plan, including all due
577	577	dates and the amount due on each due date, to the consumer before
578	578	the consumer enters into the extended payment plan. An extended
579	579	payment plan offered under this subsection is not required to
580	580	comply with Section 393.638.
581	581	Sec. 393.635. MULTIPLE-PAYMENT DEFERRED PRESENTMENT
582	582	TRANSACTION. (a) The sum of all fees, principal, interest, and
583	583	other amounts due under any scheduled payment of an extension of
584	584	consumer credit in the form of a multiple-payment deferred
585	585	presentment transaction that a credit access business obtains for a
586	586	consumer or assists a consumer in obtaining may not exceed:
587	587	(1) 10 percent of the consumer's gross monthly income,
588	588	if the consumer's gross annual income is less than the reference
589	589	amount; or
590	590	(2) 15 percent of the consumer's gross monthly income,
591	591	if the consumer is not described by Subdivision (1) and is not a
592	592	military borrower to whom a different limit applies under federal
593	593	law.
594	594	(b) An extension of consumer credit in the form of a
595	595	multiple-payment deferred presentment transaction that a credit
596	596	access business obtains for a consumer or assists a consumer in
597	597	obtaining may not be payable by the consumer in more than 12
598	598	installments or have an original term of more than 180 days, and the
599	599	loan agreement must specify the number, date, and total amount due
600	600	with regard to each installment.
601	601	(c) An original or refinanced extension of consumer credit
602	602	in the form of a multiple-payment deferred presentment transaction
603	603	that a credit access business obtains for a consumer or assists a
604	604	consumer in obtaining must be payable on a fully amortizing,
605	605	declining-principal-balance basis with substantially equal
606	606	payments. If a credit access business precomputes its fees under a
607	607	multiple-payment deferred presentment transaction and a consumer
608	608	prepays in full the extension of consumer credit in that form, the
609	609	credit access business shall refund any unearned fees to the
610	610	consumer.
611	611	(d) The first installment of an extension of consumer credit
612	612	in the form of a multiple-payment deferred presentment transaction
613	613	that a credit access business obtains for a consumer or assists a
614	614	consumer in obtaining may not be due before the 10th day after the
615	615	date the consumer enters into the loan agreement. An installment
616	616	may not be due before the 14th day or after the 31st day after the
617	617	date a previous installment is due.
618	618	(e) An extension of consumer credit in the form of a
619	619	multiple-payment deferred presentment transaction that a credit
620	620	access business obtains for a consumer or assists a consumer in
621	621	obtaining may be refinanced only one time, and the combined terms of
622	622	the original extension of consumer credit and the refinanced
623	623	extension of consumer credit may not exceed 365 days or include more
624	624	than 24 installments.
625	625	(f) Notwithstanding Subsection (e), a credit access
626	626	business may offer a consumer an extended payment plan in which the
627	627	extension of consumer credit is extended beyond 365 days if the
628	628	extended payment plan complies with Section 393.638 and if the
629	629	credit access business fully describes the terms of the extended
630	630	payment plan, including all due dates and the amount due on each due
631	631	date, to the consumer before the consumer enters into the extended
632	632	repayment plan.
633	633	Sec. 393.636. SINGLE-PAYMENT MOTOR VEHICLE TITLE LOAN.
634	634	(a) The amount advanced to a consumer under an extension of
635	635	consumer credit in the form of a single-payment motor vehicle title
636	636	loan that a credit access business obtains for a consumer or assists
637	637	a consumer in obtaining, excluding fees, may not exceed the lesser
638	638	of:
639	639	(1) six percent of the consumer's gross annual income,
640	640	if the consumer's gross annual income is less than the reference
641	641	amount;
642	642	(2) eight percent of the consumer's gross annual
643	643	income, if the consumer is not described by Subdivision (1) and is
644	644	not a military borrower to whom a different limit applies under
645	645	federal law; or
646	646	(3) 70 percent of the retail value of the motor vehicle
647	647	securing the debt.
648	648	(b) The term of an original or refinanced extension of
649	649	consumer credit in the form of a single-payment motor vehicle title
650	650	loan that a credit access business obtains for a consumer or assists
651	651	a consumer in obtaining may not be less than 30 days or longer than
652	652	60 days.
653	653	(c) An extension of consumer credit in the form of a
654	654	single-payment motor vehicle title loan that a credit access
655	655	business obtains for a consumer or assists a consumer in obtaining
656	656	may not be refinanced more than six times.
657	657	(d) If a consumer who has not entered into an extended
658	658	payment plan with the credit access business in the preceding 12
659	659	months refinances a single-payment motor vehicle title loan for the
660	660	sixth time:
661	661	(1) the credit access business must offer at least one
662	662	extended payment plan to the consumer before initiating any
663	663	activities to repossess the vehicle securing the debt;
664	664	(2) the consumer may request, prior to the offer
665	665	required by Subdivision (1) being made, an extended payment plan at
666	666	any time on or after the date the consumer refinances the motor
667	667	vehicle title loan for the sixth time and on or before the fifth day
668	668	after the date on which the sixth refinance must be repaid in full;
669	669	(3) to comply with the requirement of Subdivision (1),
670	670	the credit access business shall send a written notice to the
671	671	consumer disclosing the following:
672	672	(A) the amount due under the current terms of the
673	673	extension of consumer credit if the consumer declines an extended
674	674	payment plan;
675	675	(B) the amounts due on each of the installment
676	676	dates of an extended payment plan; and
677	677	(C) the date by which the consumer must accept
678	678	the extended payment plan in writing, which date shall be at least
679	679	five days after the date of such notice;
680	680	(4) the credit access business may not repossess the
681	681	vehicle securing the debt unless:
682	682	(A) the consumer fails to accept the extended
683	683	payment plan in writing on or before the deadline contained in the
684	684	notice required by Subdivision (3);
685	685	(B) the consumer declines the extended payment
686	686	plan; or
687	687	(C) the consumer fails to make a payment required
688	688	by an extended payment plan that the consumer accepted; and
689	689	(5) if the consumer declines an extended payment plan
690	690	that a credit access business is required to offer under
691	691	Subdivision (1), the consumer must sign an extended payment plan
692	692	waiver on a form prescribed by the finance commission.
693	693	(e) An extended payment plan required to be offered under
694	694	Subsection (d) must comply with Section 393.638.
695	695	(f) A credit access business may offer a consumer an
696	696	extended payment plan that provides the consumer with additional
697	697	time to repay the debts obtained through a single-payment motor
698	698	vehicle title loan, either before or after the consumer refinances
699	699	the single-payment motor vehicle title loan for the sixth time,
700	700	more than once in a 12-month period so long as the credit access
701	701	business does not assess additional fees under the extended payment
702	702	plan and the credit access business fully describes the terms of the
703	703	extended payment plan, including all due dates and the amount due on
704	704	each due date, to the consumer before the consumer enters into the
705	705	extended payment plan. An extended payment plan offered under this
706	706	subsection is not required to comply with Section 393.638.
707	707	Sec. 393.637. MULTIPLE-PAYMENT MOTOR VEHICLE TITLE LOAN.
708	708	(a) The amount advanced to a consumer under an extension of
709	709	consumer credit in the form of a multiple-payment motor vehicle
710	710	title loan that a credit access business obtains for a consumer or
711	711	assists a consumer in obtaining, excluding fees, may not exceed 70
712	712	percent of the retail value of the motor vehicle securing the debt.
713	713	(b) The sum of all fees, principal, interest, and other
714	714	amounts due under any scheduled payment of an extension of consumer
715	715	credit in the form of a multiple-payment motor vehicle title loan
716	716	that a credit access business obtains for a consumer or assists a
717	717	consumer in obtaining may not exceed:
718	718	(1) 20 percent of the consumer's gross monthly income,
719	719	if the consumer's gross annual income is less than the reference
720	720	amount; or
721	721	(2) 30 percent of the consumer's gross monthly income,
722	722	if the consumer is not described by Subdivision (1) and is not a
723	723	military borrower to whom a different limit applies under federal
724	724	law.
725	725	(c) An extension of consumer credit in the form of a
726	726	multiple-payment motor vehicle title loan that a credit access
727	727	business obtains for a consumer or assists a consumer in obtaining
728	728	must be payable on a fully amortizing, declining-principal-balance
729	729	basis with substantially equal payments. If a credit access
730	730	business precomputes its fees under a multiple-payment motor
731	731	vehicle title loan and a consumer prepays the loan in full, the
732	732	credit access business shall refund any unearned fees to the
733	733	consumer.
734	734	(d) An extension of consumer credit in the form of a
735	735	multiple-payment motor vehicle title loan that a credit access
736	736	business obtains for a consumer or assists a consumer in obtaining
737	737	may not be payable by the consumer in more than 12 installments, and
738	738	the loan agreement must specify the number, date, and total amount
739	739	due with regard to each installment.
740	740	(e) The first installment of an extension of consumer credit
741	741	in the form of a multiple-payment motor vehicle title loan that a
742	742	credit access business obtains for a consumer or assists a consumer
743	743	in obtaining may not be due before the 10th day after the date the
744	744	consumer enters into the loan agreement. A subsequent installment
745	745	may not be due before the 28th day after the date the previous
746	746	installment of the loan is due.
747	747	(f) An extension of consumer credit in the form of a
748	748	multiple-payment motor vehicle title loan that a credit access
749	749	business obtains for a consumer or assists a consumer in obtaining
750	750	may not be refinanced and the loan term may not exceed 365 days,
751	751	except as provided by Subsection (g).
752	752	(g) A credit access business may not initiate any activities
753	753	to repossess the vehicle securing the debt under a multiple-payment
754	754	motor vehicle title loan that a credit access business obtains for a
755	755	consumer or assists a consumer in obtaining before offering the
756	756	consumer at least one extended payment plan. An extended payment
757	757	plan may cause the extension of consumer credit to extend beyond 365
758	758	days so long as the extended payment plan complies with Section
759	759	393.638 and the credit access business fully describes the terms of
760	760	the extended payment plan, including all due dates and the amount
761	761	due on each due date, to the consumer before the consumer enters
762	762	into the extended payment plan.
763	763	(h) If the credit access business is required to offer a
764	764	consumer an extended payment plan under Subsection (g), the credit
765	765	access business shall send a written notice to the consumer
766	766	disclosing the following:
767	767	(1) the amount due under the current terms of the
768	768	extension of consumer credit if the consumer declines an extended
769	769	payment plan;
770	770	(2) the amounts due on each of the installment dates of
771	771	an extended payment plan; and
772	772	(3) the date by which the consumer must accept the
773	773	extended payment plan in writing, which date shall be at least five
774	774	days after the date of such notice.
775	775	(i) The credit access business may not repossess the vehicle
776	776	securing the debt unless:
777	777	(1) the consumer fails to accept the extended payment
778	778	plan in writing on or before the deadline contained in the notice
779	779	required by Subsection (h)(3);
780	780	(2) the consumer declines the extended payment plan;
781	781	or
782	782	(3) the consumer fails to make a payment required by an
783	783	extended payment plan that the consumer accepted.
784	784	(j) If the consumer declines the extended payment plan, the
785	785	consumer must sign an extended payment plan waiver on a form
786	786	prescribed by the finance commission.
787	787	Sec. 393.638. EXTENDED PAYMENT PLAN REQUIREMENTS.
788	788	(a) This section applies to extended payment plans required to be
789	789	offered under Sections 393.634, 393.635, 393.636, and 393.637.
790	790	(b) An extended payment plan must provide for payment in at
791	791	least:
792	792	(1) four substantially equal installments, after
793	793	which the outstanding balance will be paid in full, with respect to
794	794	a single-payment deferred presentment transaction or
795	795	single-payment motor vehicle title loan; or
796	796	(2) two substantially equal installments added to the
797	797	original and refinanced term of the extension of consumer credit,
798	798	after which the outstanding balance, including only the fees that
799	799	would have been due under the original extension of consumer
800	800	credit, will be paid in full, with respect to a multiple-payment
801	801	deferred presentment transaction or multiple-payment motor vehicle
802	802	title loan.
803	803	(c) The period between installment payments on an extended
804	804	payment plan may not be shorter than:
805	805	(1) 10 days, with respect to a single-payment deferred
806	806	presentment transaction; or
807	807	(2) 30 days, with respect to a multiple-payment
808	808	deferred presentment transaction, a single-payment motor vehicle
809	809	title loan, or a multiple-payment motor vehicle title loan.
810	810	(d) The first payment owed under an extended payment plan
811	811	may not be due before the 10th day after the date the consumer
812	812	requests an extended payment plan.
813	813	(e) A credit access business may not assess additional fees
814	814	or assist a consumer in obtaining additional extensions of consumer
815	815	credit if the consumer is paying an extension of credit under an
816	816	extended payment plan.
817	817	(f) A consumer may pay in full a debt subject to an extended
818	818	payment plan at any time without prepayment penalties.
819	819	(g) A person may not engage in debt collection or vehicle
820	820	repossession activities for a debt subject to an extended payment
821	821	plan if the consumer is in compliance with the extended payment
822	822	plan.
823	823	(h) A person may not use a device, subterfuge, or pretense
824	824	to evade the extended payment plan requirements and limitations
825	825	imposed on a credit access business under this subchapter.
826	826	Sec. 393.639. REFINANCES. (a) Any refinance of an
827	827	extension of consumer credit that a credit access business obtains
828	828	for a consumer or assists a consumer in obtaining:
829	829	(1) must be authorized under this subchapter;
830	830	(2) must be in the same form as the original extension
831	831	of consumer credit; and
832	832	(3) must meet all the requirements applicable to the
833	833	original extension of consumer credit, including the duration,
834	834	transaction, and extended payment plan requirements under this
835	835	subchapter, including the applicable income-based or vehicle
836	836	value-based limitations under Section 393.634(a), 393.635(a),
837	837	393.636(a), or 393.637(b), except as otherwise provided by this
838	838	chapter.
839	839	(b) For purposes of this section, a single-payment deferred
840	840	presentment transaction, a multiple-payment deferred presentment
841	841	transaction, a single-payment motor vehicle title loan, and a
842	842	multiple-payment motor vehicle title loan are the different forms
843	843	of extensions of consumer credit that a credit access business may
844	844	obtain for a consumer or assist a consumer in obtaining.
845	845	(c) The terms of a refinanced extension of consumer credit
846	846	may be the same as or different from the terms of the original
847	847	extension of consumer credit.
848	848	(d) A person may not use a device, subterfuge, or pretense
849	849	to evade the refinance requirements and limitations imposed on a
850	850	credit access business under this subchapter.
851	851	Sec. 393.640. RULES. The finance commission shall adopt
852	852	any rules necessary to implement Sections 393.629-393.639.
853	853	SECTION 15. Section 411.095, Government Code, is amended to
854	854	read as follows:
855	855	Sec. 411.095. ACCESS TO CRIMINAL HISTORY RECORD
856	856	INFORMATION: CONSUMER CREDIT COMMISSIONER. The consumer credit
857	857	commissioner is entitled to obtain from the department criminal
858	858	history record information that relates to a person who is an
859	859	applicant for or holder of a license under Chapter 342, 347, 348,
860	860	351, 353, [or] 371, or 393, Finance Code.
861	861	SECTION 16. Sections 393.221 and 393.601, Finance Code, are
862	862	repealed.
863	863	SECTION 17. The changes in law made by this Act apply only
864	864	to an extension of consumer credit made on or after the effective
865	865	date of this Act. An extension of consumer credit made before the
866	866	effective date of this Act is governed by the law in effect on the
867	867	date the extension of consumer credit was made, and the former law
868	868	is continued in effect for that purpose. For purposes of this
869	869	section, a refinance or renewal of an extension of consumer credit
870	870	is considered made on the date the extension of consumer credit
871	871	being refinanced or renewed was made.
872	872	SECTION 18. This Act takes effect September 1, 2013.
873	873	* * * * *