Texas House Bill HB874

Texas 2019 - 86th Regular

Caption

Relating to the threat or pursuit of criminal charges against a consumer in association with certain extensions of consumer credit.

Impact

The introduction of HB874 is expected to provide a clearer framework within the Texas Finance Code on how credit services organizations can pursue collections without resorting to criminal complaints. By mandating a degree of verifiable evidence before any legal threats are made, the bill aims to enhance consumer protections and mitigate the financial distress individuals may encounter when dealing with credit-related issues. This aligns with a growing trend towards consumer financial protections aimed at curbing aggressive collection tactics that can lead to unnecessary legal complications for consumers.

Summary

House Bill 874 aims to regulate the practices of credit services organizations concerning the threat or pursuit of criminal charges against consumers related to extensions of credit. The bill specifically prohibits these organizations from filing or threatening to file a criminal complaint unless they possess sufficient extrinsic evidence that the consumer committed an offense specified under the Penal Code. This measure seeks to protect consumers from undue harassment and wrongful criminal accusations in financial transactions, particularly in instances of returned payments or insufficient funds.

Contention

Notable points of contention surround the balance between protecting consumers and ensuring that credit services organizations can effectively manage delinquent accounts. Critics may argue that the bill could lead to challenges in the enforcement of legitimate claims against consumers who fail to meet their credit obligations. Additionally, there may be concerns about the implications for debt recovery processes and how these changes could affect the overall financial landscape, including increased costs for credit providers as they navigate the new requirements to establish evidence before taking legal actions.