86R10802 GRM-D
By: Rosenthal H.B. No. 1786
A BILL TO BE ENTITLED
AN ACT
relating to regulation of certain credit services organizations.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 393.221(1), Finance Code, is amended to
read as follows:
(1) "Credit access business" means a credit services
organization that obtains for a consumer or assists a consumer in
obtaining an extension of consumer credit, including an extension
of consumer credit in the form of a deferred presentment
transaction or a motor vehicle title loan.
SECTION 2. Section 393.222(a), Finance Code, is amended to
read as follows:
(a) A credit access business shall post, in a conspicuous
location in an area of the business accessible to consumers and on
any Internet website, including a social media site, maintained by
the credit access business:
(1) a schedule of all fees to be charged for services
performed by the credit access business in connection with the
extension of consumer credit, including deferred presentment
transactions and motor vehicle title loans[, as applicable];
(2) a notice of the name and address of the Office of
Consumer Credit Commissioner and the telephone number of the
office's consumer helpline; and
(3) for an extension of consumer credit in the form of
a deferred presentment transaction or motor vehicle title loan, a
notice that reads as follows:
"An advance of money obtained through a payday loan or auto
title loan is not intended to meet long-term financial needs. A
payday loan or auto title loan should only be used to meet immediate
short-term cash needs. Refinancing the loan rather than paying the
debt in full when due will require the payment of additional
charges."
SECTION 3. Section 393.223(a), Finance Code, is amended to
read as follows:
(a) Before performing services described by Section
393.221(1), a credit access business must provide to a consumer a
disclosure adopted by rule of the Finance Commission of Texas that
discloses the following in a form prescribed by the commission:
(1) the interest, fees, and annual percentage rates,
as applicable, to be charged on the extension of consumer credit
that the credit access business proposes to obtain for the consumer
or assist the consumer in obtaining [a deferred presentment
transaction or on a motor vehicle title loan, as applicable,] in
comparison to interest, fees, and annual percentage rates to be
charged on other alternative forms of consumer debt;
(2) the amount of accumulated fees a consumer would
incur by renewing or refinancing the extension of consumer credit
if it were to remain [a deferred presentment transaction or motor
vehicle title loan that remains] outstanding for a period of two
weeks, one month, two months, and three months; and
(3) information regarding the typical pattern of
repayment of extensions of consumer credit, including deferred
presentment transactions and motor vehicle title loans.
SECTION 4. Section 393.601(2), Finance Code, is amended to
read as follows:
(2) "Credit access business" means a credit services
organization that obtains for a consumer or assists a consumer in
obtaining an extension of consumer credit, including an extension
of consumer credit in the form of a deferred presentment
transaction or a motor vehicle title loan.
SECTION 5. Section 393.602(a), Finance Code, is amended to
read as follows:
(a) This subchapter applies only to a credit services
organization that obtains for a consumer or assists a consumer in
obtaining an extension of consumer credit [in the form of:
[(1) a deferred presentment transaction; or
[(2) a motor vehicle title loan].
SECTION 6. The changes in law made by this Act apply only to
an extension of consumer credit made on or after the effective date
of this Act. An extension of consumer credit made before the
effective date of this Act is governed by the law in effect on the
date the extension of consumer credit was made, and the former law
is continued in effect for that purpose.
SECTION 7. This Act takes effect September 1, 2019.