Texas Senate Bill SB1761

Texas 2019 - 86th Regular

Caption

Relating to credit services organizations and extensions of consumer credit facilitated by credit services organizations; providing civil and administrative penalties.

Impact

This legislation intends to provide clearer guidance on acceptable practices for credit access businesses, thereby aiming to reduce potential exploitation of consumers. The bill introduces strict limits on the duration and terms of loans, such as prohibiting the refinancing of certain loans more than three times and capping the term of various credit extensions to moderate lengths. Additionally, it mandates that certain protective measures be in place for military borrowers, aligning state regulations with federal laws to ensure they are treated fairly in credit transactions.

Summary

SB1761 is a significant legislative effort aimed at regulating credit services organizations and the extensions of consumer credit they facilitate. The bill proposes a series of modifications to the Finance Code, particularly affecting the practices of credit access businesses. One of the key provisions is the establishment of greater transparency regarding the terms and costs associated with extensions of consumer credit, including specific requirements for disclosures to be provided to consumers.

Contention

SB1761 has generated discussions about its potential impact on both consumers and businesses within Texas. Supporters argue that the bill is crucial for protecting vulnerable consumers from predatory lending practices and excessive debt cycles. However, critics argue that the regulatory constraints could stifle the ability of credit access businesses to operate efficiently and serve the needs of higher-risk borrowers. This discussion underscores a broader debate about balancing consumer protection with the need for access to credit in underserved markets.