Texas House Bill HB4073

Texas 2015 - 84th Regular

Caption

Relating to the acceptance of certain documentation from consumers by certain credit services organizations and the reporting requirements for those organizations; adding a provision subject to a criminal penalty.

Impact

The implementation of HB 4073 will directly influence how credit services organizations operate, particularly concerning their obligations to collect and verify information from consumers. By detailing what documentation is required, the bill seeks to enhance consumer protection and promote more responsible lending practices. Additionally, it mandates that credit access businesses provide comprehensive information regarding fees and terms associated with payday and auto title loans, thereby facilitating transparency for consumers seeking these financial products.

Summary

House Bill 4073 is a legislative proposal focusing on the regulations surrounding credit access businesses in Texas. It aims to amend the Finance Code to clarify the documentation requirements that these businesses must adhere to when processing consumer credit applications. Notably, the bill introduces the definition of 'proof of income' and stipulates that certain types of benefits, particularly those under the Social Security Act, cannot be accepted as proof of income for credit approvals, although exceptions are made for military borrowers. These changes are intended to ensure that credit access businesses are responsible for verifying consumer income more rigorously.

Contention

Concerns have been raised regarding the potential impacts of these regulations. Some stakeholders argue that by limiting the types of income documentation that can be accepted, the bill could restrict access to credit for certain vulnerable populations who rely on government benefits as a significant part of their income. Additionally, the stated aim of combating predatory lending practices may be met with skepticism from critics who believe that such regulations may not sufficiently address the overarching issues within the credit access marketplace, such as high-interest rates and lack of consumer education.