By: Dutton H.B. No. 5621
A BILL TO BE ENTITLED
AN ACT
Relating to the jurisdiction of district and county attorneys to
prosecute certain consumer protection violations.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 17.48, Business & Commerce Code, is
amended by adding the following:
(a) An act to which this section applies is subject to
action by a district or county attorney under Sections 17.58,
17.60, 17.61, and 17.62 to the same extent as the act is subject to
action by the consumer protection division under those sections.
(b) If a district or county attorney, under the authority of
this section, accepts assurance of voluntary compliance under
Section 17.58, the district or county attorney must file the
assurance of voluntary compliance in the district court in the
county in which the alleged violator resides or does business.
(c) If a district or county attorney, under the authority of
this section, executes and serves a civil investigative demand and
files a petition described in Section 17.61(g), the petition must
be filed in the district court in the county where the parties
reside.
(ad) It is the duty of the district and county attorneys to
lend to the consumer protection division any assistance requested
in the commencement and prosecutions of actions under this
subchapter.
(be) A district or county attorney, with prior written
notice to the consumer protection division, may institute and
prosecute actions under Section 17.47 to the same extent and in the
same manner as the consumer protection division so long as the
consumer protection division does not intend to institute or
prosecute an action with respect to that matter. A district or
county attorney may institute a suit described by this section on or
after the 90th day after the date the consumer protection division
receives written notice unless before the 90th day after the date
the notice is received the attorney general responds that it is
actively investigating or litigating at least one of the alleged
violations set forth in the notice. The consumer protection
division shall notify the district or county attorney it no longer
intends to actively investigate or litigate an alleged violation
within a reasonable time of such determination. On request, the
consumer protection division shall assist the district or county
attorney in any action taken under this subchapter. If an action is
prosecuted by a district or county attorney alone, he shall make a
full report to the consumer protection division including the final
disposition of the matter. No district or county attorney may bring
an action under this section against any licensed insurer or
licensed insurance agent transacting business under the authority
and jurisdiction of the State Board of Insurance unless first
requested in writing to do so by the State Board of Insurance, the
commissioner of insurance, or the consumer protection division
pursuant to a request by the State Board of Insurance or
commissioner of insurance.
(f) In an action prosecuted by a district or county attorney
under this subchapter for a violation of Section 17.46(b)(28),
three-fourths of any civil penalty awarded by a court must be paid
to the county where the court is located.
(g) A district or county attorney is not required to obtain
the permission of the consumer protection division to prosecute an
action under this subchapter for a violation of Section
17.46(b)(28), if the district or county attorney provides prior
written notice to the divisionas required by Subsection (b).
SECTION 2. Section 17.61, Business & Commerce Code is
amended to read as follows.
(a) Whenever the consumer protection division believes that
any person may be in possession, custody, or control of the original
copy of any documentary material relevant to the subject matter of
an investigation of a possible violation of this subchapter, an
authorized agent of the division may execute in writing and serve on
the person a civil investigative demand requiring the person to
produce the documentary material and permit inspection and copying.
(b) Each demand shall:
(1) state the statute and section under which the
alleged violation is being investigated, and the general subject
matter of the investigation;
(2) describe the class or classes of documentary
material to be produced with reasonable specificity so as to fairly
indicate the material demanded;
(3) prescribe a return date within which the
documentary material is to be produced; and
(4) identify the persons authorized by the consumer
protection division to whom the documentary material is to be made
available for inspection and copying.
(c) A civil investigative demand may contain a requirement
or disclosure of documentary material which would be discoverable
under the Texas Rules of Civil Procedure.
(d) Service of any demand may be made by:
(1) delivering a duly executed copy of the demand to
the person to be served or to a partner or to any officer or agent
authorized by appointment or by law to receive service of process on
behalf of that person;
(2) delivering a duly executed copy of the demand to
the principal place of business in the state of the person to be
served;
(3) mailing by registered mail or certified mail a
duly executed copy of the demand addressed to the person to be
served at the principal place of business in this state, or if the
person has no place of business in this state, to his principal
office or place of business.
(e) Documentary material demanded pursuant to this section
shall be produced for inspection and copying during normal business
hours at the principal office or place of business of the person
served, or at other times and places as may be agreed on by the
person served and the consumer protection division.
(f) No documentary material produced pursuant to a demand
under this section, unless otherwise ordered by a court for good
cause shown, shall be produced for inspection or copying by, nor
shall its contents be disclosed to any person other than the
authorized employee of the office of the attorney general or
district or county attorney without the consent of the person who
produced the material. The office of the attorney general or
district or county attorney shall prescribe reasonable terms and
conditions allowing the documentary material to be available for
inspection and copying by the person who produced the material or
any duly authorized representative of that person. The office of
the attorney general or district or county attorney may use the
documentary material or copies of it as it determines necessary in
the enforcement of this subchapter, including presentation before
any court. Any material which contains trade secrets shall not be
presented except with the approval of the court in which the action
is pending after adequate notice to the person furnishing the
material.
(g) At any time before the return date specified in the
demand, or within 20 days after the demand has been served,
whichever period is shorter, a petition to extend the return date
for, or to modify or set aside the demand, stating good cause, may
be filed in the district court in the county where the parties
reside, or a district court of Travis County.
(h) A person on whom a demand is served under this section
shall comply with the terms of the demand unless otherwise provided
by a court order.
(i) Personal service of a similar investigative demand
under this section may be made on any person outside of this state
if the person has engaged in conduct in violation of this
subchapter. Such persons shall be deemed to have submitted
themselves to the jurisdiction of this state within the meaning of
this section.
SECTION 3 Section 59.006 of the Texas Finance Code is
amended to read as follows:
(a) This section provides the exclusive method for
compelled discovery of a record of a financial institution relating
to one or more customers but does not create a right of privacy in a
record. This section does not apply to and does not require or
authorize a financial institution to give a customer notice of:
(1) a demand or inquiry from a state or federal
government agency authorized by law to conduct an examination of
the financial institution;
(2) a record request from a state or federal
government agency or instrumentality under statutory or
administrative authority that provides for, or is accompanied by, a
specific mechanism for discovery and protection of a customer
record of a financial institution, including a record request from
a federal agency subject to the Right to Financial Privacy Act of
1978 (12 U.S.C. Section 3401 et seq.), as amended, or from the
Internal Revenue Service under Section 1205, Internal Revenue Code
of 1986;
(3) a record request from or report to a government
agency arising out of:
(A) the investigation or prosecution of a
criminal offense;
(B) the investigation of alleged abuse, neglect,
or exploitation of an elderly or disabled person in accordance with
Chapter 48, Human Resources Code; or
(C) the assessment for or provision of
guardianship services under Subchapter E, Chapter 161, Human
Resources Code;
(4) a record request in connection with a garnishment
proceeding in which the financial institution is garnishee and the
customer is debtor;
(5) a record request by a duly appointed receiver for
the customer;
(6) an investigative demand or inquiry from a state
legislative investigating committee;
(7) an investigative demand or inquiry from the
attorney general of this state or a district or county attorney as
authorized by law other than the procedural law governing discovery
in civil cases;
(8) the voluntary use or disclosure of a record by a
financial institution subject to other applicable state or federal
law; or
(9) a record request in connection with an
investigation conducted under Section 1054.151, 1054.152, or
1102.001, Estates Code.
(b) A financial institution shall produce a record in
response to a record request only if:
(1) it is served with the record request not later than
the 24th day before the date that compliance with the record request
is required;
(2) before the financial institution complies with the
record request the requesting party pays the financial
institution's reasonable costs of complying with the record
request, including costs of reproduction, postage, research,
delivery, and attorney's fees, or posts a cost bond in an amount
estimated by the financial institution to cover those costs; and
(3) if the customer is not a party to the proceeding in
which the request was issued, the requesting party complies with
Subsections (c) and (d) and:
(A) the financial institution receives the
customer's written consent to release the record after a request
under Subsection (c)(3); or
(B) the tribunal takes further action based on
action initiated by the requesting party under Subsection (d).
(b-1) If the requesting party has not paid a financial
institution's costs or posted a cost bond as required by Subsection
(b)(2), a court may not:
(1) order the financial institution to produce a
record in response to the record request; or
(2) find the financial institution to be in contempt
of court for failing to produce the record.
(c) If the affected customer is not a party to the
proceeding in which the record request was issued, in addition to
serving the financial institution with a record request, the
requesting party shall:
(1) give notice stating the rights of the customer
under Subsection (e) and a copy of the request to each affected
customer in the manner and within the time provided by Rule 21a,
Texas Rules of Civil Procedure;
(2) file a certificate of service indicating that the
customer has been mailed or served with the notice and a copy of the
record request as required by this subsection with the tribunal and
the financial institution; and
(3) request the customer's written consent authorizing
the financial institution to comply with the request.
(d) If the customer that is not a party to the proceeding
does not execute the written consent requested under Subsection
(c)(3) on or before the date that compliance with the request is
required, the requesting party may by written motion seek an in
camera inspection of the requested record as its sole means of
obtaining access to the requested record. In response to a motion
for in camera inspection, the tribunal may inspect the requested
record to determine its relevance to the matter before the
tribunal. The tribunal may order redaction of portions of the
records that the tribunal determines should not be produced and
shall enter a protective order preventing the record that it orders
produced from being:
(1) disclosed to a person who is not a party to the
proceeding before the tribunal; and
(2) used by a person for any purpose other than
resolving the dispute before the tribunal.
(e) A customer that is a party to the proceeding bears the
burden of preventing or limiting the financial institution's
compliance with a record request subject to this section by seeking
an appropriate remedy, including filing a motion to quash the
record request or a motion for a protective order. Any motion filed
shall be served on the financial institution and the requesting
party before the date that compliance with the request is required.
A financial institution is not liable to its customer or another
person for disclosure of a record in compliance with this section.
(f) A financial institution may not be required to produce a
record under this section before the later of:
(1) the 24th day after the date of receipt of the
record request as provided by Subsection (b)(1);
(2) the 15th day after the date of receipt of a
customer consent to disclose a record as provided by Subsection
(b)(3); or
(3) the 15th day after the date a court orders
production of a record after an in camera inspection of a requested
record as provided by Subsection (d).
(g) An order to quash or for protection or other remedy
entered or denied by the tribunal under Subsection (d) or (e) is not
a final order and an interlocutory appeal may not be taken.
SECTION 4. The changes in law made by this Act apply only to
a cause of action that accrues on or after the effective date of
this Act. A cause of action that accrues before the effective date
of this Act is governed by the law as it existed immediately before
the effective date of this Act, and that law is continued in effect
for that purpose.
SECTION 5. This Act takes effect immediately if it receives
a vote of two-thirds of all members eleted to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2025.