Texas House Bill HB190

Texas 2019 - 86th Regular

Caption

Relating to verification by a credit services organization of a consumer's ability to repay an extension of consumer credit.

Impact

If enacted, HB 190 will amend the Finance Code of Texas by adding specific regulations that credit services organizations must follow before assisting consumers in acquiring credit. These regulations are intended to create a safer lending environment where consumers are less likely to be placed in precarious financial situations due to unverified credit extensions. The bill's effective date is set for September 1, 2019, meaning that any credit extensions made after this date would be subject to the new verification requirements.

Summary

House Bill 190 aims to enhance the responsibilities of credit services organizations regarding consumer credit extensions. The bill mandates that these organizations verify a consumer's ability to repay any extension of credit by obtaining independently verifiable documentation of the consumer's income and obligations. This provision seeks to ensure that consumers do not take on credit they cannot afford, potentially reducing financial strain and the risk of over-indebtedness among borrowers.

Contention

While supporters argue that this bill is a necessary step to protect consumers from excessive debt, the measure may face opposition from credit services organizations. Critics of such regulations often claim that stringent verification requirements can restrict access to credit for individuals who may benefit from it, particularly those with non-traditional income sources or those who are attempting to rebuild their credit histories. Thus, the bill could spark discussions about the balance between protecting consumers and ensuring access to necessary financial services.