Texas 2021 - 87th Regular

Texas House Bill HB4266 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1		-	87R16481 MWC-F
2		-	By: Shine, Button H.B. No. 4266
3		-	Substitute the following for H.B. No. 4266:
4		-	By: Parker C.S.H.B. No. 4266
	1	+	87R14335 MWC-F
	2	+	By: Shine H.B. No. 4266
5	3
6	4
7	5		A BILL TO BE ENTITLED
8	6		AN ACT
9		-	relating to credit repair services performed by credit ~~repair~~
10		-	~~organizations~~.
	7	+	relating to credit repair services performed by a credit services
	8	+	organization.
11	9		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
12	10		SECTION 1. Chapter 394, Finance Code, is amended by adding
13	11		Subchapter D to read as follows:
14	12		SUBCHAPTER D. CREDIT REPAIR ORGANIZATIONS
15		-	Sec. 394.301. DEFINITIONS. In this subchapter:
16		-	(1) "Commissioner" means the consumer credit
17		-	commissioner.
18		-	(2) "Credit repair organization" means an
19		-	organization that provides, or represents that the organization can
20		-	or will provide, for the payment of valuable consideration, any of
21		-	the following services with respect to the extension of consumer
22		-	credit by others:
23		-	(A) improving a consumer's credit history or
24		-	rating; or
25		-	(B) providing advice or assistance to a consumer
26		-	with regard to Paragraph (A).
27		-	(3) "Finance commission" means the Finance Commission
28		-	of Texas.
29		-	Sec. 394.302. DISCLOSURE STATEMENT. Before executing a
30		-	contract with a consumer, or receiving valuable consideration from
31		-	a consumer, a credit repair organization shall provide the consumer
32		-	with a document containing:
	13	+	Sec. 394.301. DEFINITION. In this subchapter, "credit
	14	+	repair organization" means a credit services organization that
	15	+	provides, or represents that the organization can or will provide,
	16	+	for the payment of valuable consideration, any of the following
	17	+	services with respect to the extension of consumer credit by
	18	+	others:
	19	+	(1) improving a consumer's credit history or rating;
	20	+	or
	21	+	(2) providing advice or assistance to a consumer with
	22	+	regard to Subdivision (1).
	23	+	Sec. 394.302. DISCLOSURE STATEMENT. In addition to
	24	+	complying with the requirements of Section 393.105, before
	25	+	executing a contract with a consumer, or receiving valuable
	26	+	consideration from a consumer, a credit repair organization shall
	27	+	provide the consumer with a document containing:
33	28		(1) a list of the inaccurate or obsolete adverse
34	29		information appearing on the consumer's credit report which the
35	30		credit repair organization will seek to delete or modify;
36	31		(2) the basis for the deletion or modification of the
37	32		adverse information;
38	33		(3) a description of each modification sought; and
39	34		(4) the anticipated payment required by the consumer
40	35		to achieve each account deletion or modification, if applicable.
41	36		Sec. 394.303. COMMUNICATIONS WITH CONSUMER REPORTING
42	37		AGENCY OR DATA FURNISHER. (a) A credit repair organization or a
43	38		representative of the organization may not:
44	39		(1) communicate with a consumer reporting agency,
45	40		creditor, debt collector, or debt buyer about a consumer without
46	41		the written authorization of the consumer; or
47	42		(2) communicate with a consumer reporting agency,
48	43		creditor, debt collector, or debt buyer by impersonating a consumer
49	44		and failing to identify as a credit repair organization if the
50	45		credit repair organization initiates the communication.
51	46		(b) A credit repair organization or a representative of the
52	47		organization shall provide with the first written communication to
53	48		a consumer reporting agency or data furnisher sufficient
54	49		information to investigate a dispute of an item related to an
55	50		extension of consumer credit that is in the creditor's, debt
56	51		collector's, debt buyer's, or consumer reporting agency's files,
57	52		including any relevant information and copies of documents
58	53		concerning the disputed item.
59	54		Sec. 394.304. REMOVAL OF ACCURATE INFORMATION PROHIBITED.
60		-	A credit repair organization or a representative of the
61		-	organization may not seek to remove, or advise a consumer to remove
62		-	or seek to remove, adverse information from the consumer's credit
63		-	report that is known to the credit repair organization, or that by
64		-	the exercise of reasonable care should be known to the credit repair
65		-	organization, to be accurate.
	55	+	In addition to the prohibitions under Section 393.304, a credit
	56	+	repair organization or a representative of the organization may not
	57	+	seek to remove, or advise a consumer to remove or seek to remove,
	58	+	adverse information from the consumer's credit report that is known
	59	+	to the credit repair organization, or that by the exercise of
	60	+	reasonable care should be known to the credit repair organization,
	61	+	to be accurate.
66	62		Sec. 394.305. ITEMIZED STATEMENT REQUIRED; PERFORMANCE OF
67	63		AGREED SERVICES. (a) A credit repair organization or a
68	64		representative of the organization shall provide an itemized
69	65		monthly statement to the consumer showing each service performed
70	66		for the consumer under the contract, including:
71	67		(1) each communication and credit check made on behalf
72	68		of the consumer; and
73	69		(2) the date of each service performed.
74	70		(b) A credit repair organization or a representative of the
75	71		organization must perform the agreed services not later than the
76	72		180th day after the date the consumer signs the contract for those
77	73		services.
78	74		Sec. 394.306. RESTRICTIONS ON CERTAIN COMMUNICATIONS. A
79	75		credit repair organization or a representative of the organization
80	76		may not:
81	77		(1) send a communication, directly or indirectly, to a
82	78		person on behalf of a consumer without disclosing the sender's
83	79		identity, street address, telephone number, and facsimile number,
84	80		and, if applicable, the name and street address of any parent
85	81		organization of the sender;
86	82		(2) send a written communication on behalf of a
87	83		consumer to a person other than the consumer without providing a
88	84		copy of the communication to the consumer not later than the fifth
89	85		day after the date the communication is sent; or
90	86		(3) send a written communication that contains
91	87		personal information of a consumer without redacting the consumer's
92	88		personal information to include only:
93	89		(A) the last four digits of the consumer's social
94	90		security number, taxpayer identification number, or state
95	91		identification number;
96	92		(B) the last four digits of the consumer's
97	93		financial account number, credit card number, or debit card number;
98	94		or
99	95		(C) the month and year of the consumer's date of
100	96		birth, unless otherwise required by law.
101		-	Sec. 394.307. DAMAGES. (a) A consumer injured by a
102		-	violation of this subchapter is entitled to recover:
103		-	(1) actual damages;
104		-	(2) injunctive and equitable relief; and
105		-	(3) the costs of the action, including reasonable
106		-	attorney's fees.
	97	+	Sec. 394.307. DAMAGES. (a) In addition to any damages
	98	+	awarded under Section 393.503, a consumer injured by a credit
	99	+	repair organization that violates this subchapter is entitled to
	100	+	recover exemplary damages.
107	101		(b) In addition to an award under Subsection (a), a consumer
108	102		who prevails in an action under this subchapter may recover
109	103		exemplary damages in an amount of not less than $100 or more than
110	104		$1,000 in accordance with Chapter 41, Civil Practice and Remedies
111	105		Code.
112		-	Sec. 394.308. DUTIES AND REMEDIES ADDITIONAL TO OTHER LAW.
113		-	(a) The duties and responsibilities of a credit repair
114		-	organization under this subchapter are in addition to and not in
115		-	replacement of the duties and responsibilities of a credit repair
116		-	organization under other laws of this state.
117		-	(b) Remedies and damages afforded under this subchapter to
118		-	consumers who are injured by a violation of this subchapter are in
119		-	addition to and not in replacement of remedies and damages afforded
120		-	under other laws of this state to those consumers.
121		-	Sec. 394.309. RULES; ADDITIONAL ENFORCEMENT POWERS. (a)
122		-	The finance commission may adopt rules to carry out this
123		-	subchapter.
124		-	(b) The commissioner may:
125		-	(1) investigate the activities of a person subject to
126		-	this subchapter to determine compliance with this subchapter,
127		-	including examination of the books, accounts, and records of a
128		-	credit repair organization; and
129		-	(2) require or permit a person to file a statement
130		-	under oath and otherwise subject to the penalties of perjury as to
131		-	all the facts and circumstances of the matter to be investigated.
132		-	(c) Failure to comply with an investigation under
133		-	Subsection (b) is grounds for issuance of a cease and desist order.
134		-	(d) The commissioner may receive and act on complaints, take
135		-	action to obtain voluntary compliance with this subchapter, and
136		-	refer cases to the attorney general for prosecution.
137		-	(e) The commissioner may enforce this subchapter and rules
138		-	adopted under this subchapter by:
139		-	(1) ordering the violator to cease and desist from the
140		-	violation and any similar violations;
141		-	(2) ordering the violator to take affirmative action
142		-	to correct the violation, including the restitution of money or
143		-	property to a person aggrieved by the violation; or
144		-	(3) imposing an administrative penalty not to exceed
145		-	$1,000 for each violation.
146		-	(f) In determining the amount of an administrative penalty
147		-	to be imposed under this section, the commissioner shall consider:
148		-	(1) the seriousness of the violation;
149		-	(2) the good faith of the violator;
150		-	(3) the violator's history of previous violations;
151		-	(4) the deleterious effect of the violation on the
152		-	public;
153		-	(5) the assets of the violator; and
154		-	(6) any other factors the commissioner considers
155		-	relevant.
156		-	(g) The commissioner, on relation of the attorney general at
157		-	the request of the commissioner, may bring an action in district
158		-	court to enjoin a person from engaging in an act or continuing a
159		-	course of action that violates this subchapter. The court may order
160		-	a preliminary or final injunction.
161	106		SECTION 2. Sections 394.302 and 394.305, Finance Code, as
162	107		added by this Act, apply only to a contract entered into on or after
163	108		the effective date of this Act. A contract entered into before the
164	109		effective date of this Act is governed by the law in effect on the
165	110		date the contract was entered into, and the former law is continued
166	111		in effect for that purpose.
167	112		SECTION 3. This Act takes effect September 1, 2021.