Texas Senate Bill SB1949

Texas 2019 - 86th Regular

Caption

Relating to the applicability of laws of this state to certain consumer financial transactions.

Impact

The modifications introduced by SB1949 significantly affect the regulatory landscape of consumer financial transactions in Texas. By clarifying the applicability of laws with respect to loans and financial products offered primarily for personal or household use, the bill enhances consumer protection. It mandates that out-of-state lenders comply with Texas regulations when offering loans to Texas residents, thereby potentially impacting the way lenders operate and how consumers navigate these financial services. Such changes aim to protect consumers from predatory lending practices by ensuring that state laws will be enforceable in any transactions made within its borders.

Summary

SB1949 relates to the applicability of Texas laws concerning certain consumer financial transactions. The bill amends several sections of the Finance Code to ensure that consumer loans and financial agreements extend jurisdictionally to individuals located in Texas at the time those agreements are entered into. Various types of loans, such as personal loans, retail installment transactions, and property tax loans are addressed, specifying that such loans are subject to Texas laws when they are made to individuals in the state. This update aims to establish clearer legal expectations for lenders operating within Texas and for consumers engaging in financial transactions.

Sentiment

The sentiment surrounding SB1949 appears largely supportive, especially among consumer advocates and regulatory bodies that emphasize the need for consumer protections in financial transactions. However, some concerns have been raised by lenders, particularly regarding the operational challenges that may arise from complying with Texas laws when engaging with customers located in Texas but based elsewhere. This ongoing tension between consumer protection and lender convenience indicates that while the bill is generally seen as a step forward for consumer rights, it may lead to operational hurdles for some financial service providers.

Contention

Notable points of contention include the potential for increased regulatory burdens on lenders as they will need to ensure compliance with Texas financial laws for applicable transactions. Critics argue this might deter out-of-state lenders from offering services in Texas, leading to fewer options for consumers. Supporters counter that it is necessary to enforce state laws effectively to protect residents from potentially harmful lending practices. Overall, the willingness of lenders to adjust their operations in response to this legislation remains an area of concern that could influence market dynamics.