Texas 2019 - 86th Regular

Texas Senate Bill SB1761 Compare Versions

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1	1	86R9729 GRM-D
2	2	By: West S.B. No. 1761
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to credit services organizations and extensions of
8	8	consumer credit facilitated by credit services organizations;
9	9	providing civil and administrative penalties.
10	10	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
11	11	SECTION 1. Section 392.301(a), Finance Code, is amended to
12	12	read as follows:
13	13	(a) In debt collection, a debt collector may not use
14	14	threats, coercion, or attempts to coerce that employ any of the
15	15	following practices:
16	16	(1) using or threatening to use violence or other
17	17	criminal means to cause harm to a person or property of a person;
18	18	(2) accusing falsely or threatening to accuse falsely
19	19	a person of fraud or any other crime;
20	20	(3) representing or threatening to represent to any
21	21	person other than the consumer that a consumer is wilfully refusing
22	22	to pay a nondisputed consumer debt when the debt is in dispute and
23	23	the consumer has notified in writing the debt collector of the
24	24	dispute;
25	25	(4) threatening to sell or assign to another the
26	26	obligation of the consumer and falsely representing that the result
27	27	of the sale or assignment would be that the consumer would lose a
28	28	defense to the consumer debt or would be subject to illegal
29	29	collection attempts;
30	30	(5) threatening that the debtor will be arrested for
31	31	nonpayment of a consumer debt without proper court proceedings;
32	32	(6) threatening to file a charge, complaint, or
33	33	criminal action against a debtor when the debtor has not violated a
34	34	criminal law;
35	35	(7) threatening that nonpayment of a consumer debt
36	36	will result in the seizure, repossession, or sale of the person's
37	37	property without proper court proceedings;
38	38	(8) referencing a certification signed by the consumer
39	39	as required by Section 393.630(b) or any penalties associated with
40	40	a violation of that section; or
41	41	(9) [(8)] threatening to take an action prohibited by
42	42	law.
43	43	SECTION 2. Section 393.001, Finance Code, is amended by
44	44	amending Subdivisions (1) and (3) and adding Subdivisions (1-a),
45	45	(2-a), (3-a), (4-a), (5), (6), (7), (8), (9), (10), (11), (12), and
46	46	(13) to read as follows:
47	47	(1) "Commissioner" means the consumer credit
48	48	commissioner.
49	49	(1-a) "Consumer" means an individual who is solicited
50	50	to purchase or who purchases the services of a credit services
51	51	organization.
52	52	(2-a) "Credit access business" means a credit services
53	53	organization that obtains for a consumer or assists a consumer in
54	54	obtaining an extension of consumer credit.
55	55	(3) "Credit services organization" means a person who
56	56	provides, or represents that the person can or will provide, for the
57	57	payment of valuable consideration any of the following services
58	58	with respect to the extension of consumer credit by others:
59	59	(A) improving a consumer's credit history or
60	60	rating;
61	61	(B) obtaining an extension of consumer credit for
62	62	a consumer in the form of a single-payment deferred presentment
63	63	transaction, a multiple-payment deferred presentment transaction,
64	64	a single-payment motor vehicle title loan, or a multiple-payment
65	65	motor vehicle title loan; or
66	66	(C) providing advice or assistance to a consumer
67	67	with regard to Paragraph (A) or (B).
68	68	(3-a) "Deferred presentment transaction" means a
69	69	single-payment or multiple-payment transaction defined as a
70	70	deferred presentment transaction by Section 341.001 in connection
71	71	with which the consumer is not required to provide real or personal
72	72	property as security.
73	73	(4-a) "Finance commission" means the Finance
74	74	Commission of Texas.
75	75	(5) "Military borrower" includes a "covered member" or
76	76	a "dependent" of a covered member, as those terms are defined by 10
77	77	U.S.C. Section 987 or a successor statute.
78	78	(6) "Motor vehicle title loan" means a single-payment
79	79	or multiple-payment loan in which an unencumbered motor vehicle is
80	80	given as the only security for the loan. The term does not include a
81	81	retail installment transaction under Chapter 348 or another loan
82	82	made to finance the purchase of a motor vehicle.
83	83	(7) "Multiple-payment deferred presentment
84	84	transaction" means a deferred presentment transaction that is not a
85	85	single-payment deferred presentment transaction.
86	86	(8) "Multiple-payment motor vehicle title loan" means
87	87	a motor vehicle title loan that is not a single-payment motor
88	88	vehicle title loan.
89	89	(9) "Office" means the Office of Consumer Credit
90	90	Commissioner.
91	91	(10) "Refinance" means a rollover, renewal, or other
92	92	type of transaction in which all or a portion of the principal,
93	93	fees, or interest due under an outstanding extension of consumer
94	94	credit becomes due on a later date. The term does not include an
95	95	extended payment plan described by Section 393.636. The term
96	96	includes a new extension of consumer credit that:
97	97	(A) consists of debt arising from principal,
98	98	fees, or interest that was not paid in full under an outstanding or
99	99	previous extension of consumer credit; or
100	100	(B) is made on or before the seventh day after the
101	101	date a previous extension of consumer credit that a credit access
102	102	business obtained for a consumer or assisted a consumer in
103	103	obtaining was paid in full.
104	104	(11) "Service" means an act, conduct, or activity that
105	105	is performed or to be performed for a consumer's benefit or that
106	106	involves assisting a consumer in obtaining an extension of consumer
107	107	credit, including:
108	108	(A) negotiating or closing a loan or other
109	109	extension of consumer credit;
110	110	(B) issuing a guaranty, letter of credit, or
111	111	other credit enhancement; and
112	112	(C) servicing an extension of consumer credit.
113	113	(12) "Single-payment deferred presentment
114	114	transaction" means a deferred presentment transaction for which the
115	115	entire cash advance, interest, and fees are required under the
116	116	terms of the transaction to be payable in a single payment.
117	117	(13) "Single-payment motor vehicle title loan" means a
118	118	motor vehicle title loan for which the entire principal, interest,
119	119	and fees are required under the terms of the loan to be payable in a
120	120	single payment.
121	121	SECTION 3. Section 393.201, Finance Code, is amended by
122	122	amending Subsections (b) and (c) and adding Subsection (d) to read
123	123	as follows:
124	124	(b) In addition to the notice required by Section 393.202,
125	125	the contract must:
126	126	(1) contain the payment terms, including the total
127	127	payments to be made by the consumer, whether to the organization or
128	128	to another person;
129	129	(2) fully describe the services the organization shall
130	130	[is to] perform for the consumer or on behalf of a third party,
131	131	including each guarantee and each promise of a full or partial
132	132	refund and the estimated period for performing and completing all
133	133	of the services, not to exceed 180 days or the period permitted
134	134	under an extended payment plan authorized by Subchapter G;
135	135	(3) contain the address of the organization's
136	136	principal place of business; and
137	137	(4) contain the name and address of the organization's
138	138	agent in this state authorized to receive service of process.
139	139	(c) A contract with a credit access business[, as defined by
140	140	Section 393.601,] for the performance of services [described by
141	141	Section 393.602(a)] must, in addition to the requirements of
142	142	Subsection (b) and Section 393.302:
143	143	(1) contain a statement that there is no prepayment
144	144	penalty;
145	145	(2) contain a statement that a credit access business
146	146	must comply with Chapter 392 and the federal Fair Debt Collection
147	147	Practices Act (15 U.S.C. Section 1692 et seq.) with respect to an
148	148	extension of consumer credit [described by Section 393.602(a)];
149	149	(3) contain a statement that a person may not threaten
150	150	or pursue criminal charges against a consumer related to a check or
151	151	other debit authorization provided by the consumer as security for
152	152	a transaction in the absence of forgery, fraud, theft, or other
153	153	criminal conduct;
154	154	(4) contain a statement that a credit access business
155	155	must comply, to the extent applicable, with 10 U.S.C. Section 987
156	156	and any regulations adopted under that law with respect to an
157	157	extension of consumer credit [described by Section 393.602(a)];
158	158	(5) disclose to the consumer:
159	159	(A) the lender from whom the extension of
160	160	consumer credit is obtained;
161	161	(B) the interest paid or to be paid to the lender;
162	162	and
163	163	(C) the specific fees that will be paid to the
164	164	credit access business for the business's services and to any third
165	165	party; [and]
166	166	(6) contain the name and address of the office, the
167	167	office's website address, [Office of Consumer Credit Commissioner]
168	168	and the telephone number of the office's consumer helpline; and
169	169	(7) use model contract clauses adopted by rule of the
170	170	finance commission.
171	171	(d) The finance commission shall adopt rules to implement
172	172	this section.
173	173	SECTION 4. Section 393.203, Finance Code, is amended to
174	174	read as follows:
175	175	Sec. 393.203. ISSUANCE OF CONTRACT AND OTHER DOCUMENTS.
176	176	(a) A credit services organization shall give to the consumer, when
177	177	the document is signed, a copy of the completed contract and any
178	178	other document the organization requires the consumer to sign.
179	179	(b) The contract and other documents provided by a credit
180	180	access business to a consumer under this section in relation to an
181	181	extension of consumer credit must be:
182	182	(1) provided, before signing, wholly written in both
183	183	English and Spanish;
184	184	(2) written in plain language designed to be easily
185	185	understood by the average consumer; and
186	186	(3) printed in an easily readable font and type size.
187	187	(c) The finance commission shall adopt rules to implement
188	188	this section.
189	189	SECTION 5. Section 393.223(a), Finance Code, is amended to
190	190	read as follows:
191	191	(a) Before performing services described by Section
192	192	393.001(2-a) [393.221(1)], a credit access business must provide to
193	193	a consumer a disclosure adopted by rule of the finance commission
194	194	[Finance Commission of Texas] that discloses the following in a
195	195	form prescribed by the commission:
196	196	(1) the interest, fees, and annual percentage rates,
197	197	as applicable, to be charged on a deferred presentment transaction
198	198	or on a motor vehicle title loan, as applicable, in comparison to
199	199	interest, fees, and annual percentage rates to be charged on other
200	200	alternative forms of consumer debt;
201	201	(2) the amount of accumulated fees a consumer would
202	202	incur by renewing or refinancing a deferred presentment transaction
203	203	or motor vehicle title loan that remains outstanding for a period of
204	204	two weeks, one month, two months, and three months; and
205	205	(3) information regarding the typical pattern of
206	206	repayment of deferred presentment transactions and motor vehicle
207	207	title loans.
208	208	SECTION 6. Subchapter D, Chapter 393, Finance Code, is
209	209	amended by adding Section 393.308 to read as follows:
210	210	Sec. 393.308. EVASION OF MUNICIPAL ORDINANCE PROHIBITED.
211	211	(a) A credit access business that is subject to the regulation of a
212	212	municipal ordinance may not, to evade the municipal ordinance:
213	213	(1) require, as a condition of obtaining for a
214	214	consumer or assisting a consumer in obtaining an extension of
215	215	consumer credit in the form of a deferred presentment transaction
216	216	or motor vehicle title loan or a renewal, rollover, or refinance of
217	217	such an extension of consumer credit, that any part of the
218	218	transaction occur in a location outside the municipality; or
219	219	(2) transfer the business's obligations and rights
220	220	under a contract to obtain for a consumer or assist a consumer in
221	221	obtaining an extension of consumer credit in the form of a deferred
222	222	presentment transaction or motor vehicle title loan or a renewal,
223	223	rollover, or refinance of such an extension of consumer credit to a
224	224	branch of the business or another business located outside the
225	225	municipality.
226	226	(b) For purposes of Subsection (a), "renewal," "rollover,"
227	227	or "refinance" have any meanings assigned to those terms by the
228	228	municipal ordinance.
229	229	(c) If a credit access business violates Subsection (a), the
230	230	contract between the business and the consumer for the performance
231	231	of services to which the violation relates is void and
232	232	unenforceable, including any requirement under the contract that
233	233	the consumer pay fees or other consideration.
234	234	SECTION 7. Sections 393.602(a) and (b), Finance Code, are
235	235	amended to read as follows:
236	236	(a) This subchapter applies only to a credit services
237	237	organization that, with respect to a consumer who is a resident of
238	238	this state or is located in this state at the time of the
239	239	transaction, obtains for a consumer or assists a consumer in
240	240	obtaining an extension of consumer credit [in the form of:
241	241	[(1) a deferred presentment transaction; or
242	242	[(2) a motor vehicle title loan].
243	243	(b) A credit access business may assess fees as agreed to
244	244	between the parties for [its] services performed to obtain an
245	245	extension of consumer credit for a consumer or assist a consumer in
246	246	obtaining an extension of consumer credit in the form of a deferred
247	247	presentment transaction or motor vehicle title loan or a refinance
248	248	of such an extension of consumer credit [as agreed to between the
249	249	parties]. A credit access business fee may be calculated daily,
250	250	biweekly, monthly, or on another periodic basis. A credit access
251	251	business is permitted to charge amounts allowed by other laws, as
252	252	applicable. A fee may not be charged unless it is disclosed.
253	253	SECTION 8. Section 393.604(a), Finance Code, is amended to
254	254	read as follows:
255	255	(a) An application for a license under this subchapter must:
256	256	(1) be under oath;
257	257	(2) give the approximate location from which the
258	258	business is to be conducted;
259	259	(3) identify the business's principal parties in
260	260	interest;
261	261	(4) contain the name, physical address, and telephone
262	262	number of all third-party lender organizations:
263	263	(A) with which the business contracts to provide
264	264	services; [described by Section 393.602(a)] or
265	265	(B) from which the business arranges extensions
266	266	of consumer credit [described by Section 393.602(a)]; [and]
267	267	(5) include a copy of each agreement between the
268	268	business and a third-party lender organization:
269	269	(A) with which the business contracts to provide
270	270	services; or
271	271	(B) from which the business arranges extensions
272	272	of consumer credit; and
273	273	(6) contain other relevant information that the
274	274	commissioner requires for the findings required under Section
275	275	393.607.
276	276	SECTION 9. Sections 393.622(a) and (b), Finance Code, are
277	277	amended to read as follows:
278	278	(a) The finance commission may:
279	279	(1) adopt rules necessary to enforce and administer
280	280	this subchapter;
281	281	(2) adopt rules with respect to the quarterly
282	282	reporting by a licensed credit access business under Section
283	283	393.627 [licensed under this subchapter of summary business
284	284	information relating to extensions of consumer credit described by
285	285	Section 393.602(a)]; and
286	286	(3) adopt rules with respect to periodic examination
287	287	by the office relating to extensions of consumer credit the
288	288	business obtained for a consumer or assisted a consumer in
289	289	obtaining [described by Section 393.602(a)], including rules
290	290	related to charges for defraying the reasonable cost of conducting
291	291	the examinations.
292	292	(b) The finance commission may adopt rules under this
293	293	section to allow the commissioner to review, as part of a periodic
294	294	examination, any relevant contracts between the credit access
295	295	business and the third-party lender organizations with which the
296	296	credit access business contracts to provide services [described by
297	297	Section 393.602(a)] or from which the business arranges extensions
298	298	of consumer credit [described by Section 393.602(a)]. A contract
299	299	or information obtained by the commissioner under this section is
300	300	considered proprietary and confidential to the respective parties
301	301	to the contract, and is not subject to disclosure under Chapter 552,
302	302	Government Code.
303	303	SECTION 10. Section 393.625, Finance Code, is amended to
304	304	read as follows:
305	305	Sec. 393.625. MILITARY BORROWERS. (a) An extension of
306	306	consumer credit [described by Section 393.602(a)] that is obtained
307	307	by a credit access business for a military borrower [member of the
308	308	United States military or a dependent of a member of the United
309	309	States military] or that the business assisted a military borrower
310	310	[that person] in obtaining must comply with 10 U.S.C. Section 987
311	311	and any regulations adopted under that law, to the extent
312	312	applicable.
313	313	(b) The term of an extension of consumer credit, including
314	314	all renewals and refinances, obtained for a military borrower by a
315	315	credit access business or that a credit access business assists a
316	316	military borrower in obtaining may not exceed:
317	317	(1) 90 days, if the debt is a deferred presentment
318	318	transaction or single-payment motor vehicle title loan; or
319	319	(2) 180 days, if the debt is a multiple-payment motor
320	320	vehicle title loan.
321	321	(c) The finance commission shall adopt a disclosure
322	322	relating to the provisions of state and federal law applicable to a
323	323	military borrower who obtains an extension of consumer credit from
324	324	or with the assistance of a credit access business. A credit access
325	325	business shall provide this disclosure to military borrowers for
326	326	whom the credit access business seeks to obtain an extension of
327	327	consumer credit.
328	328	(d) Notwithstanding Section 14.252, the commissioner may
329	329	assess an administrative penalty in an amount not to exceed $5,000
330	330	for each violation against a credit access business that violates
331	331	this section, regardless of whether the violation is knowing or
332	332	wilful.
333	333	SECTION 11. Section 393.626, Finance Code, is amended to
334	334	read as follows:
335	335	Sec. 393.626. DEBT COLLECTION PRACTICES. A violation of
336	336	Chapter 392 by a credit access business with respect to obtaining
337	337	for a consumer or assisting a consumer in obtaining an extension of
338	338	consumer credit [described by Section 393.602(a)] constitutes a
339	339	violation of this subchapter.
340	340	SECTION 12. Section 393.627, Finance Code, is amended to
341	341	read as follows:
342	342	Sec. 393.627. QUARTERLY REPORT TO COMMISSIONER. A credit
343	343	access business shall file a quarterly report with the commissioner
344	344	on a form prescribed by the commissioner that provides the
345	345	following information relating to extensions of consumer credit
346	346	[described by Section 393.602(a)] during the preceding quarter:
347	347	(1) the number of consumers for whom the business
348	348	obtained or assisted in obtaining those extensions of consumer
349	349	credit;
350	350	(2) the number of those extensions of consumer credit
351	351	obtained by the business or that the business assisted consumers in
352	352	obtaining;
353	353	(3) the number of refinancing transactions of the
354	354	extensions of consumer credit described by Subdivision (2);
355	355	(4) the number of consumers refinancing the extensions
356	356	of consumer credit described by Subdivision (2);
357	357	(5) the number of consumers refinancing more than once
358	358	the extensions of consumer credit described by Subdivision (2);
359	359	(6) the average amount of the extensions of consumer
360	360	credit described by Subdivision (2);
361	361	(7) the total amount of fees charged by the business
362	362	for the activities described by Subdivision (1);
363	363	(8) the number of vehicles surrendered or repossessed
364	364	under the terms of an extension of consumer credit in the form of a
365	365	motor vehicle title loan obtained by the business or that the
366	366	business assisted a consumer in obtaining;
367	367	(9) the mean, median, and mode of the number of
368	368	extensions of consumer credit obtained by consumers as a result of
369	369	entering into the extensions of consumer credit described by
370	370	Subdivision (2); and
371	371	(10) any related information the commissioner
372	372	determines necessary.
373	373	SECTION 13. Subchapter G, Chapter 393, Finance Code, is
374	374	amended by adding Sections 393.629 through 393.638 to read as
375	375	follows:
376	376	Sec. 393.629. GENERAL LIMITATIONS ON EXTENSIONS OF CONSUMER
377	377	CREDIT; PAYMENT METHOD. (a) The provisions of this chapter
378	378	applicable to a credit access business apply to any consumer
379	379	physically located in this state at the time the extension of
380	380	consumer credit is made, regardless of whether the extension of
381	381	consumer credit was made in person in this state.
382	382	(b) A credit access business shall accept a payment made in
383	383	cash or by electronic transfer, cashier's check, teller's check, or
384	384	money order offered by the consumer or another party, to retire or
385	385	otherwise pay down debt incurred under an extension of consumer
386	386	credit that a credit access business obtained for a consumer or
387	387	assisted a consumer in obtaining under this chapter. For a motor
388	388	vehicle title loan, a consumer may also grant a security interest in
389	389	an authorized debit of a bank account.
390	390	(c) The term of an extension of consumer credit obtained for
391	391	a consumer by a credit access business or that a credit access
392	392	business assists a consumer in obtaining may not exceed 180 days.
393	393	If a term of less than 180 days for an extension of consumer credit
394	394	is specified under this chapter, the shorter term applies.
395	395	Sec. 393.630. LIMITATION ON OUTSTANDING DEBT. (a) A
396	396	consumer may not have more than two outstanding debts from
397	397	extensions of consumer credit that a credit access business
398	398	obtained for the consumer or assisted the consumer in obtaining.
399	399	(b) To obtain an extension of consumer credit facilitated
400	400	through the services of a credit access business, a consumer must
401	401	sign a written certification stating that the consumer at that time
402	402	has not more than one other outstanding debt from an extension of
403	403	consumer credit that any credit access business obtained for the
404	404	consumer or assisted the consumer in obtaining.
405	405	(c) A credit access business shall in good faith verify that
406	406	a consumer is not falsifying the certification required by
407	407	Subsection (b), to the best knowledge and ability of the person
408	408	acting on behalf of the credit access business for that
409	409	transaction. A person acting on behalf of a credit access business
410	410	has satisfied this requirement if the person considers all
411	411	information that the consumer shares with the person in negotiating
412	412	the transaction and if the person makes a reasonable effort to
413	413	verify the consumer's representations with any records that the
414	414	credit access business typically consults in the normal course of
415	415	its business.
416	416	(d) A credit access business that violates this section is
417	417	subject to a civil penalty in an amount not to exceed $1,000 for
418	418	each violation.
419	419	Sec. 393.631. CERTAIN LOCAL ORDINANCES NOT PREEMPTED. This
420	420	chapter does not preempt a local ordinance regulating a credit
421	421	access business or an extension of consumer credit obtained for a
422	422	consumer by a credit access business or that a credit access
423	423	business assists a consumer in obtaining, if the ordinance is
424	424	compatible with and equal to or more stringent than a requirement
425	425	prescribed by this chapter.
426	426	Sec. 393.632. SINGLE-PAYMENT DEFERRED PRESENTMENT
427	427	TRANSACTION. (a) The term of an original or refinanced extension
428	428	of consumer credit in the form of a single-payment deferred
429	429	presentment transaction that a credit access business obtains for a
430	430	consumer or assists a consumer in obtaining may not be less than 10
431	431	days or longer than 35 days.
432	432	(b) An extension of consumer credit in the form of a
433	433	single-payment deferred presentment transaction that a credit
434	434	access business obtains for a consumer or assists a consumer in
435	435	obtaining may not be refinanced more than three times.
436	436	(c) If a consumer who has not entered into an extended
437	437	payment plan with the credit access business in the preceding 12
438	438	months refinances a single-payment deferred presentment
439	439	transaction for the third time:
440	440	(1) the credit access business must offer at least one
441	441	extended payment plan to the consumer before initiating any debt
442	442	collection activities;
443	443	(2) the consumer may request, prior to the offer
444	444	required by Subdivision (1) being made, an extended payment plan at
445	445	any time on or after the date the consumer refinances the deferred
446	446	presentment transaction for the third time and on or before the
447	447	fifth day after the date on which the third refinance must be repaid
448	448	in full;
449	449	(3) to comply with the requirement of Subdivision (1),
450	450	the credit access business shall send a written notice to the
451	451	consumer disclosing the following:
452	452	(A) the amount due under the current terms of the
453	453	extension of consumer credit if the consumer declines an extended
454	454	payment plan;
455	455	(B) the amounts due on each of the installment
456	456	dates of an extended payment plan; and
457	457	(C) the date by which the consumer must accept
458	458	the extended payment plan in writing, which date shall be at least
459	459	five days after the date of such notice;
460	460	(4) the credit access business may not initiate debt
461	461	collection activities unless:
462	462	(A) the consumer fails to accept the extended
463	463	payment plan in writing on or before the deadline contained in the
464	464	notice required by Subdivision (3);
465	465	(B) the consumer declines the extended payment
466	466	plan; or
467	467	(C) the consumer fails to make a payment required
468	468	by an extended payment plan that the consumer accepted; and
469	469	(5) if the consumer declines an extended payment plan
470	470	that a credit access business is required to offer under
471	471	Subdivision (1), the consumer must sign an extended payment plan
472	472	waiver on a form prescribed by the finance commission.
473	473	(d) An extended payment plan required to be offered under
474	474	Subsection (c) must comply with Section 393.636.
475	475	(e) A credit access business may offer a consumer an
476	476	extended payment plan that provides the consumer with additional
477	477	time to repay the debts obtained through a single-payment deferred
478	478	presentment transaction, either before or after the consumer
479	479	refinances the single-payment deferred presentment transaction for
480	480	the third time, more than once in a 12-month period so long as the
481	481	credit access business does not assess additional fees under the
482	482	extended payment plan and the credit access business fully
483	483	describes the terms of the extended payment plan, including all due
484	484	dates and the amount due on each due date, to the consumer before
485	485	the consumer enters into the extended payment plan. An extended
486	486	payment plan offered under this subsection is not required to
487	487	comply with Section 393.636.
488	488	(f) A credit access business shall accept a partial payment
489	489	that complies with Section 393.629(b) paid by a consumer or on
490	490	behalf of a consumer to pay down outstanding principal owed under a
491	491	single-payment deferred presentment transaction that the credit
492	492	access business obtained for the consumer or assisted the consumer
493	493	in obtaining.
494	494	Sec. 393.633. MULTIPLE-PAYMENT DEFERRED PRESENTMENT
495	495	TRANSACTION. (a) An extension of consumer credit in the form of a
496	496	multiple-payment deferred presentment transaction that a credit
497	497	access business obtains for a consumer or assists a consumer in
498	498	obtaining may not be payable by the consumer in more than 12
499	499	installments or have an original term of more than 180 days, and the
500	500	loan agreement must specify the number, date, and total amount due
501	501	with regard to each installment.
502	502	(b) An original or refinanced extension of consumer credit
503	503	in the form of a multiple-payment deferred presentment transaction
504	504	that a credit access business obtains for a consumer or assists a
505	505	consumer in obtaining must be payable on a fully amortizing,
506	506	declining-principal-balance basis with substantially equal
507	507	payments. If a credit access business precomputes its fees under a
508	508	multiple-payment deferred presentment transaction and a consumer
509	509	prepays in full the extension of consumer credit in that form, the
510	510	credit access business shall refund any unearned fees to the
511	511	consumer.
512	512	(c) The first installment of an extension of consumer credit
513	513	in the form of a multiple-payment deferred presentment transaction
514	514	that a credit access business obtains for a consumer or assists a
515	515	consumer in obtaining may not be due before the 10th day after the
516	516	date the consumer enters into the loan agreement. An installment
517	517	may not be due before the 14th day or after the 31st day after the
518	518	date a previous installment is due.
519	519	(d) An extension of consumer credit in the form of a
520	520	multiple-payment deferred presentment transaction that a credit
521	521	access business obtains for a consumer or assists a consumer in
522	522	obtaining may not be refinanced, may not include more than 12
523	523	installments, and may not have a term that exceeds 180 days,
524	524	excluding an extended payment plan offered in compliance with
525	525	Section 393.636.
526	526	(e) A credit access business may offer a consumer an
527	527	extended payment plan if the extended payment plan complies with
528	528	Section 393.636 and if the credit access business fully describes
529	529	the terms of the extended payment plan, including all due dates and
530	530	the amount due on each due date, to the consumer before the consumer
531	531	enters into the extended repayment plan.
532	532	Sec. 393.634. SINGLE-PAYMENT MOTOR VEHICLE TITLE LOAN.
533	533	(a) The term of an original or refinanced extension of consumer
534	534	credit in the form of a single-payment motor vehicle title loan that
535	535	a credit access business obtains for a consumer or assists a
536	536	consumer in obtaining may not be less than 30 days or longer than 35
537	537	days.
538	538	(b) An extension of consumer credit in the form of a
539	539	single-payment motor vehicle title loan that a credit access
540	540	business obtains for a consumer or assists a consumer in obtaining
541	541	may not be refinanced more than three times. The combined terms of
542	542	the original extension of consumer credit and any refinanced
543	543	extensions of consumer credit, excluding an extended payment plan
544	544	offered in compliance with Subsection (e) or Section 393.636, may
545	545	not exceed 90 days. The credit access business shall fully describe
546	546	the terms of an extended payment plan, including all due dates and
547	547	the amount due on each due date, to the consumer before the consumer
548	548	enters into the extended payment plan.
549	549	(c) If a consumer who has not entered into an extended
550	550	payment plan with the credit access business in the preceding 12
551	551	months refinances a single-payment motor vehicle title loan for the
552	552	third time:
553	553	(1) the credit access business must offer at least one
554	554	extended payment plan to the consumer before initiating any
555	555	activities to repossess the vehicle securing the debt;
556	556	(2) the consumer may request, prior to the offer
557	557	required by Subdivision (1) being made, an extended payment plan at
558	558	any time on or after the date the consumer refinances the motor
559	559	vehicle title loan for the third time and on or before the fifth day
560	560	after the date on which the third refinance must be repaid in full;
561	561	(3) to comply with the requirement of Subdivision (1),
562	562	the credit access business shall send a written notice to the
563	563	consumer disclosing the following:
564	564	(A) the amount due under the current terms of the
565	565	extension of consumer credit if the consumer declines an extended
566	566	payment plan;
567	567	(B) the amounts due on each of the installment
568	568	dates of an extended payment plan; and
569	569	(C) the date by which the consumer must accept
570	570	the extended payment plan in writing, which date shall be at least
571	571	five days after the date of such notice;
572	572	(4) the credit access business may not repossess the
573	573	vehicle securing the debt unless:
574	574	(A) the consumer fails to accept the extended
575	575	payment plan in writing on or before the deadline contained in the
576	576	notice required by Subdivision (3);
577	577	(B) the consumer declines the extended payment
578	578	plan; or
579	579	(C) the consumer fails to make a payment required
580	580	by an extended payment plan that the consumer accepted; and
581	581	(5) if the consumer declines an extended payment plan
582	582	that a credit access business is required to offer under
583	583	Subdivision (1), the consumer must sign an extended payment plan
584	584	waiver on a form prescribed by the finance commission.
585	585	(d) An extended payment plan required to be offered under
586	586	Subsection (c) must comply with Section 393.636.
587	587	(e) A credit access business may offer a consumer an
588	588	extended payment plan that provides the consumer with additional
589	589	time to repay the debts obtained through a single-payment motor
590	590	vehicle title loan, either before or after the consumer refinances
591	591	the single-payment motor vehicle title loan for the third time,
592	592	more than once in a 12-month period so long as the credit access
593	593	business does not assess additional fees under the extended payment
594	594	plan and the credit access business fully describes the terms of the
595	595	extended payment plan, including all due dates and the amount due on
596	596	each due date, to the consumer before the consumer enters into the
597	597	extended payment plan. An extended payment plan offered under this
598	598	subsection is not required to comply with Section 393.636.
599	599	(f) A credit access business shall accept a partial payment
600	600	that complies with Section 393.629(b) paid by a consumer or on
601	601	behalf of a consumer to pay down outstanding principal owed under a
602	602	single-payment motor vehicle title loan that the credit access
603	603	business obtained for the consumer or assisted the consumer in
604	604	obtaining.
605	605	Sec. 393.635. MULTIPLE-PAYMENT MOTOR VEHICLE TITLE LOAN.
606	606	(a) An extension of consumer credit in the form of a
607	607	multiple-payment motor vehicle title loan that a credit access
608	608	business obtains for a consumer or assists a consumer in obtaining
609	609	must be payable on a fully amortizing, declining-principal-balance
610	610	basis with substantially equal payments. If a credit access
611	611	business precomputes its fees under a multiple-payment motor
612	612	vehicle title loan and a consumer prepays the loan in full, the
613	613	credit access business shall refund any unearned fees to the
614	614	consumer.
615	615	(b) An extension of consumer credit in the form of a
616	616	multiple-payment motor vehicle title loan that a credit access
617	617	business obtains for a consumer or assists a consumer in obtaining
618	618	may not be payable by the consumer in more than six installments,
619	619	and the loan agreement must specify the number, date, and total
620	620	amount due with regard to each installment.
621	621	(c) The first installment of an extension of consumer credit
622	622	in the form of a multiple-payment motor vehicle title loan that a
623	623	credit access business obtains for a consumer or assists a consumer
624	624	in obtaining may not be due before the 10th day after the date the
625	625	consumer enters into the loan agreement. A subsequent installment
626	626	may not be due before the 28th day after the date the previous
627	627	installment of the loan is due.
628	628	(d) An extension of consumer credit in the form of a
629	629	multiple-payment motor vehicle title loan that a credit access
630	630	business obtains for a consumer or assists a consumer in obtaining
631	631	may not be refinanced and the loan term may not exceed 180 days,
632	632	except as provided by Subsection (e).
633	633	(e) A credit access business may not initiate any activities
634	634	to repossess the vehicle securing the debt under a multiple-payment
635	635	motor vehicle title loan that a credit access business obtains for a
636	636	consumer or assists a consumer in obtaining before offering the
637	637	consumer at least one extended payment plan. An extended payment
638	638	plan may cause the extension of consumer credit to extend beyond 180
639	639	days so long as the extended payment plan complies with Section
640	640	393.636 and the credit access business fully describes the terms of
641	641	the extended payment plan, including all due dates and the amount
642	642	due on each due date, to the consumer before the consumer enters
643	643	into the extended payment plan.
644	644	(f) If the credit access business is required to offer a
645	645	consumer an extended payment plan under Subsection (e), the credit
646	646	access business shall send a written notice to the consumer
647	647	disclosing the following:
648	648	(1) the amount due under the current terms of the
649	649	extension of consumer credit if the consumer declines an extended
650	650	payment plan;
651	651	(2) the amounts due on each of the installment dates of
652	652	an extended payment plan; and
653	653	(3) the date by which the consumer must accept the
654	654	extended payment plan in writing, which date shall be at least five
655	655	days after the date of such notice.
656	656	(g) The credit access business may not repossess the vehicle
657	657	securing the debt unless:
658	658	(1) the consumer fails to accept the extended payment
659	659	plan in writing on or before the deadline contained in the notice
660	660	required by Subsection (f)(3);
661	661	(2) the consumer declines the extended payment plan;
662	662	or
663	663	(3) the consumer fails to make a payment required by an
664	664	extended payment plan that the consumer accepted.
665	665	(h) If the consumer declines the extended payment plan, the
666	666	consumer must sign an extended payment plan waiver on a form
667	667	prescribed by the finance commission.
668	668	Sec. 393.636. EXTENDED PAYMENT PLAN REQUIREMENTS.
669	669	(a) This section applies to extended payment plans required to be
670	670	offered under Sections 393.632, 393.633, 393.634, and 393.635.
671	671	(b) An extended payment plan must provide for payment in at
672	672	least:
673	673	(1) four substantially equal installments, after
674	674	which the outstanding balance will be paid in full, with respect to
675	675	a single-payment deferred presentment transaction or
676	676	single-payment motor vehicle title loan; or
677	677	(2) two substantially equal installments added to the
678	678	original and refinanced term of the extension of consumer credit,
679	679	after which the outstanding balance, including only the fees that
680	680	would have been due under the original extension of consumer
681	681	credit, will be paid in full, with respect to a multiple-payment
682	682	deferred presentment transaction or multiple-payment motor vehicle
683	683	title loan.
684	684	(c) The period between installment payments on an extended
685	685	payment plan may not be shorter than:
686	686	(1) 10 days, with respect to a single-payment deferred
687	687	presentment transaction; or
688	688	(2) 30 days, with respect to a multiple-payment
689	689	deferred presentment transaction, a single-payment motor vehicle
690	690	title loan, or a multiple-payment motor vehicle title loan.
691	691	(d) The first payment owed under an extended payment plan
692	692	may not be due before the 10th day after the date the consumer
693	693	requests an extended payment plan.
694	694	(e) A credit access business may not assess additional fees
695	695	or assist a consumer in obtaining additional extensions of consumer
696	696	credit if the consumer is paying an extension of credit under an
697	697	extended payment plan.
698	698	(f) A consumer may pay in full a debt subject to an extended
699	699	payment plan at any time without prepayment penalties.
700	700	(g) A person may not engage in debt collection or vehicle
701	701	repossession activities for a debt subject to an extended payment
702	702	plan if the consumer is in compliance with the extended payment
703	703	plan.
704	704	(h) A person may not use a device, subterfuge, or pretense
705	705	to evade the extended payment plan requirements and limitations
706	706	imposed on a credit access business under this subchapter.
707	707	Sec. 393.637. REFINANCES. (a) Any refinance of an
708	708	extension of consumer credit that a credit access business obtains
709	709	for a consumer or assists a consumer in obtaining:
710	710	(1) must be authorized under this subchapter;
711	711	(2) must be in the same form as the original extension
712	712	of consumer credit; and
713	713	(3) must meet all the requirements applicable to the
714	714	original extension of consumer credit, including the duration,
715	715	transaction, and extended payment plan requirements under this
716	716	subchapter, except as otherwise provided by this chapter.
717	717	(b) For purposes of this section, a single-payment deferred
718	718	presentment transaction, a multiple-payment deferred presentment
719	719	transaction, a single-payment motor vehicle title loan, and a
720	720	multiple-payment motor vehicle title loan are the different forms
721	721	of extensions of consumer credit that a credit access business may
722	722	obtain for a consumer or assist a consumer in obtaining.
723	723	(c) The terms of a refinanced extension of consumer credit
724	724	may be the same as or different from the terms of the original
725	725	extension of consumer credit.
726	726	(d) A person may not use a device, subterfuge, or pretense
727	727	to evade the refinance requirements and limitations imposed on a
728	728	credit access business under this subchapter.
729	729	Sec. 393.638. RULES. The finance commission shall adopt
730	730	any rules necessary to implement Sections 393.629-393.637.
731	731	SECTION 14. Sections 393.221 and 393.601, Finance Code, are
732	732	repealed.
733	733	SECTION 15. The changes in law made by this Act apply only
734	734	to an extension of consumer credit made on or after the effective
735	735	date of this Act. An extension of consumer credit made before the
736	736	effective date of this Act is governed by the law in effect on the
737	737	date the extension of consumer credit was made, and the former law
738	738	is continued in effect for that purpose. For purposes of this
739	739	section, a refinance or renewal of an extension of consumer credit
740	740	is considered made on the date the extension of consumer credit
741	741	being refinanced or renewed was made.
742	742	SECTION 16. Section 393.308, Finance Code, as added by this
743	743	Act, applies only to a contract entered into on or after the
744	744	effective date of this Act. A contract entered into before the
745	745	effective date of this Act is governed by the law in effect when the
746	746	contract was entered into, and the former law is continued in effect
747	747	for that purpose.
748	748	SECTION 17. This Act takes effect September 1, 2019.