85S11044 EES-F
By: Collier H.B. No. 291
A BILL TO BE ENTITLED
AN ACT
relating to the collection of consumer debt by debt buyers.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. This Act shall be known as the Fair Consumer Debt
Collection Act.
SECTION 2. Subchapter D, Chapter 392, Finance Code, is
amended by adding Section 392.307 to read as follows:
Sec. 392.307. COLLECTION OF CERTAIN DEBT BY DEBT BUYERS.
(a) In this section:
(1) "Charged-off debt" means a consumer debt that a
creditor has determined to be a loss or expense to the creditor
instead of an asset.
(2) "Debt buyer" means a person who purchases or
otherwise acquires a consumer debt from a creditor or other
subsequent owner of the consumer debt, regardless of whether the
person collects the consumer debt, hires a third party to collect
the consumer debt, or hires an attorney for collection litigation
in connection with the consumer debt. The term does not include:
(A) a person who acquires a charged-off debt
incidental to the purchase of a portfolio that predominantly
consists of consumer debt that has not been charged off; or
(B) a check services company that acquires the
right to collect on a paper or electronic negotiable instrument,
including an Automated Clearing House (ACH) authorization to debit
an account that has not been processed.
(3) "Statute of limitations" means a law in this state
that prescribes the period during which a person may bring a cause
of action.
(b) Unless otherwise expressly provided, this section
prevails to the extent of any conflict between this section and any
other law of this state.
(c) A debt buyer may not, directly or indirectly, commence
an action against or initiate arbitration with a consumer to
collect a consumer debt later than the earlier of:
(1) the fourth anniversary of the date of the
consumer's last activity on the consumer debt; or
(2) the expiration date of any applicable statute of
limitations.
(d) A cause of action against a consumer for collection of a
consumer debt that is barred under Subsection (c) may not be revived
by a payment of the consumer debt, an oral or written reaffirmation
of the consumer debt, or any other activity on the consumer debt.
(e) If a debt buyer is engaged in debt collection for a
consumer debt for which a cause of action is barred under Subsection
(c), the debt buyer, or a debt collector acting on behalf of the
debt buyer, shall provide the following notice in the initial
written communication with the consumer relating to debt
collection:
(1) if the reporting period for including the consumer
debt in a consumer report prepared by a consumer reporting agency
has not expired under Section 605, Fair Credit Reporting Act (15
U.S.C. Section 1681c), and the debt buyer furnishes to consumer
reporting agencies information regarding the consumer debt, "THE
LAW LIMITS HOW LONG YOU CAN BE SUED ON A DEBT. BECAUSE OF THE AGE OF
YOUR DEBT, WE WILL NOT SUE YOU FOR IT. IF YOU DO NOT PAY THE DEBT,
[INSERT NAME OF DEBT BUYER] MAY CONTINUE TO REPORT IT TO THE CREDIT
REPORTING AGENCIES AS UNPAID FOR AS LONG AS THE LAW PERMITS THIS
REPORTING. THIS NOTICE IS REQUIRED BY LAW.";
(2) if the reporting period for including the consumer
debt in a consumer report prepared by a consumer reporting agency
has not expired under Section 605, Fair Credit Reporting Act (15
U.S.C. Section 1681c), but the debt buyer does not furnish to
consumer reporting agencies information regarding the consumer
debt, "THE LAW LIMITS HOW LONG YOU CAN BE SUED ON A DEBT. BECAUSE OF
THE AGE OF YOUR DEBT, WE WILL NOT SUE YOU FOR IT. THIS NOTICE IS
REQUIRED BY LAW."; or
(3) if the reporting period for including the consumer
debt in a consumer report prepared by a consumer reporting agency
has expired under Section 605, Fair Credit Reporting Act (15 U.S.C.
Section 1681c), "THE LAW LIMITS HOW LONG YOU CAN BE SUED ON A DEBT.
BECAUSE OF THE AGE OF YOUR DEBT, WE WILL NOT SUE YOU FOR IT, AND WE
WILL NOT REPORT IT TO ANY CREDIT REPORTING AGENCY. THIS NOTICE IS
REQUIRED BY LAW."
(f) A notice required under Subsection (e) must be in at
least 12-point type that is boldfaced, capitalized, or underlined
or otherwise conspicuously set out from the surrounding written
material.
SECTION 3. Section 392.402, Finance Code, is amended by
adding Subsection (d) to read as follows:
(d) This section does not apply to a violation of Section
392.307.
SECTION 4. Section 392.404(a), Finance Code, is amended to
read as follows:
(a) A violation of this chapter is a deceptive trade
practice under Subchapter E, Chapter 17, Business & Commerce Code,
and is actionable under that subchapter. This subsection does not
apply to a violation of Section 392.307.
SECTION 5. The changes in law made by this Act apply only to
an action of a debt buyer to collect a consumer debt if the action
occurs on or after the effective date of this Act. An action of a
debt buyer to collect a consumer debt that occurs before the
effective date of this Act is governed by the law in effect
immediately before that date, and the former law is continued in
effect for that purpose.
SECTION 6. This Act takes effect December 1, 2017.