Texas Senate Bill SB397

Texas 2013 - 83rd Regular

Caption

Relating to the statute of limitations for an action on a credit card account.

Impact

The proposed bill introduces a specific timeframe for initiating legal actions related to credit card accounts, which could simplify the legal landscape for both creditors and consumers. By limiting the statute of limitations, it encourages timely debt recovery actions, potentially reducing the number of outstanding debts that linger indefinitely. This change may lead to a more efficient collection process, benefitting creditors while still upholding consumer rights by providing a defined period within which debts can be pursued legally.

Summary

SB397 addresses the statute of limitations for actions concerning credit card accounts in Texas. Specifically, it amends the Civil Practice and Remedies Code, establishing that a lawsuit for a credit card account must be initiated no later than four years after the cause of action accrues. The bill clarifies that the cause of action arises on the date the account is charged off. This change is intended to streamline the process for creditors seeking recovery while providing greater clarity for consumers regarding their obligations under credit agreements.

Contention

While the bill is likely to benefit certain financial institutions by encouraging debt recovery, there may be concerns among consumer advocacy groups regarding its impact on consumers. Critics could argue that the amended statute of limitations may unfairly pressure consumers into resolving debts more urgently, potentially leading to financial strain. Additionally, there is a broader debate regarding consumer rights and protections in relation to credit card debt, particularly in the context of mounting economic challenges faced by many households.