87R14335 MWC-F
By: Shine H.B. No. 4266
A BILL TO BE ENTITLED
AN ACT
relating to credit repair services performed by a credit services
organization.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 394, Finance Code, is amended by adding
Subchapter D to read as follows:
SUBCHAPTER D. CREDIT REPAIR ORGANIZATIONS
Sec. 394.301. DEFINITION. In this subchapter, "credit
repair organization" means a credit services organization that
provides, or represents that the organization can or will provide,
for the payment of valuable consideration, any of the following
services with respect to the extension of consumer credit by
others:
(1) improving a consumer's credit history or rating;
or
(2) providing advice or assistance to a consumer with
regard to Subdivision (1).
Sec. 394.302. DISCLOSURE STATEMENT. In addition to
complying with the requirements of Section 393.105, before
executing a contract with a consumer, or receiving valuable
consideration from a consumer, a credit repair organization shall
provide the consumer with a document containing:
(1) a list of the inaccurate or obsolete adverse
information appearing on the consumer's credit report which the
credit repair organization will seek to delete or modify;
(2) the basis for the deletion or modification of the
adverse information;
(3) a description of each modification sought; and
(4) the anticipated payment required by the consumer
to achieve each account deletion or modification, if applicable.
Sec. 394.303. COMMUNICATIONS WITH CONSUMER REPORTING
AGENCY OR DATA FURNISHER. (a) A credit repair organization or a
representative of the organization may not:
(1) communicate with a consumer reporting agency,
creditor, debt collector, or debt buyer about a consumer without
the written authorization of the consumer; or
(2) communicate with a consumer reporting agency,
creditor, debt collector, or debt buyer by impersonating a consumer
and failing to identify as a credit repair organization if the
credit repair organization initiates the communication.
(b) A credit repair organization or a representative of the
organization shall provide with the first written communication to
a consumer reporting agency or data furnisher sufficient
information to investigate a dispute of an item related to an
extension of consumer credit that is in the creditor's, debt
collector's, debt buyer's, or consumer reporting agency's files,
including any relevant information and copies of documents
concerning the disputed item.
Sec. 394.304. REMOVAL OF ACCURATE INFORMATION PROHIBITED.
In addition to the prohibitions under Section 393.304, a credit
repair organization or a representative of the organization may not
seek to remove, or advise a consumer to remove or seek to remove,
adverse information from the consumer's credit report that is known
to the credit repair organization, or that by the exercise of
reasonable care should be known to the credit repair organization,
to be accurate.
Sec. 394.305. ITEMIZED STATEMENT REQUIRED; PERFORMANCE OF
AGREED SERVICES. (a) A credit repair organization or a
representative of the organization shall provide an itemized
monthly statement to the consumer showing each service performed
for the consumer under the contract, including:
(1) each communication and credit check made on behalf
of the consumer; and
(2) the date of each service performed.
(b) A credit repair organization or a representative of the
organization must perform the agreed services not later than the
180th day after the date the consumer signs the contract for those
services.
Sec. 394.306. RESTRICTIONS ON CERTAIN COMMUNICATIONS. A
credit repair organization or a representative of the organization
may not:
(1) send a communication, directly or indirectly, to a
person on behalf of a consumer without disclosing the sender's
identity, street address, telephone number, and facsimile number,
and, if applicable, the name and street address of any parent
organization of the sender;
(2) send a written communication on behalf of a
consumer to a person other than the consumer without providing a
copy of the communication to the consumer not later than the fifth
day after the date the communication is sent; or
(3) send a written communication that contains
personal information of a consumer without redacting the consumer's
personal information to include only:
(A) the last four digits of the consumer's social
security number, taxpayer identification number, or state
identification number;
(B) the last four digits of the consumer's
financial account number, credit card number, or debit card number;
or
(C) the month and year of the consumer's date of
birth, unless otherwise required by law.
Sec. 394.307. DAMAGES. (a) In addition to any damages
awarded under Section 393.503, a consumer injured by a credit
repair organization that violates this subchapter is entitled to
recover exemplary damages.
(b) In addition to an award under Subsection (a), a consumer
who prevails in an action under this subchapter may recover
exemplary damages in an amount of not less than $100 or more than
$1,000 in accordance with Chapter 41, Civil Practice and Remedies
Code.
SECTION 2. Sections 394.302 and 394.305, Finance Code, as
added by this Act, apply only to a contract entered into on or after
the effective date of this Act. A contract entered into before the
effective date of this Act is governed by the law in effect on the
date the contract was entered into, and the former law is continued
in effect for that purpose.
SECTION 3. This Act takes effect September 1, 2021.