1-1 AN ACT
1-2 relating to continuation and functions of the Office of Consumer
1-3 Credit Commissioner and the regulation of certain financial
1-4 businesses; providing a penalty.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Section 14.056, Finance Code, is amended to read
1-7 as follows:
1-8 Sec. 14.056. CONFLICT OF INTEREST. (a) In this section,
1-9 "Texas trade association" means a cooperative and voluntarily
1-10 joined association of business or professional competitors in this
1-11 state designed to assist its members and its industry or profession
1-12 in dealing with mutual business or professional problems and in
1-13 promoting their common interest.
1-14 (b) A person may not be an employee of the office employed
1-15 in a "bona fide executive, administrative, or professional
1-16 capacity," as that phrase is used for purposes of establishing an
1-17 exemption to the overtime provisions of the federal Fair Labor
1-18 Standards Act of 1938 (29 U.S.C. Section 201 et seq.), and its
1-19 subsequent amendments, if:
1-20 (1) the person is an officer, employee, or paid
1-21 consultant of a Texas trade association in an industry regulated by
1-22 the office; or
1-23 (2) the person's spouse is an officer, manager, or
1-24 paid consultant of a Texas trade association in an industry
1-25 regulated by the office.
2-1 (c) A person may not act as the general counsel to the
2-2 office if the person is required to register as a lobbyist under
2-3 Chapter 305, Government Code, because of the person's activities
2-4 for compensation on behalf of a profession related to the operation
2-5 of [The commissioner or an assistant commissioner, examiner, or
2-6 other employee of the office may not be an officer, employee, or
2-7 paid consultant of a trade association in an industry regulated by]
2-8 the office.
2-9 SECTION 2. Section 14.058, Finance Code, is amended to read
2-10 as follows:
2-11 Sec. 14.058. EQUAL EMPLOYMENT OPPORTUNITY. (a) The
2-12 commissioner or the commissioner's designee shall prepare and
2-13 maintain a written policy statement that implements a program of
2-14 equal employment opportunity to ensure that all personnel decisions
2-15 are made without regard to race, color, disability, sex, religion,
2-16 age, or national origin.
2-17 (b) The policy statement must include:
2-18 (1) personnel policies, including policies relating to
2-19 recruitment, evaluation, selection, training, and promotion of
2-20 personnel, that show the intent of the office to avoid the unlawful
2-21 employment practices described by Chapter 21, Labor Code; and
2-22 (2) an analysis of the extent to which the composition
2-23 of the office's personnel is in accordance with state and federal
2-24 law and a description of reasonable methods to achieve compliance
2-25 with state and federal law.
2-26 (c) The policy statement must:
3-1 (1) be updated annually;
3-2 (2) be reviewed by the state Commission on Human
3-3 Rights for compliance with Subsection (b)(1); and
3-4 (3) be filed with the governor's office [plan to
3-5 ensure implementation of a program of equal employment opportunity
3-6 under which all personnel transactions are made without regard to
3-7 race, color, disability, sex, religion, age, or national origin.
3-8 The plan must include:]
3-9 [(1) a comprehensive analysis of the office's
3-10 workforce by race, sex, ethnic origin, class of position, and
3-11 salary or wage;]
3-12 [(2) plans for recruitment, evaluation, selection,
3-13 appointment, training, promotion, and other personnel policies;]
3-14 [(3) steps reasonably designed to overcome any
3-15 identified underutilization of minorities and women in the office's
3-16 workforce; and]
3-17 [(4) objectives and goals, timetables for achieving
3-18 those objectives and goals, and assignment of responsibility for
3-19 their achievement.]
3-20 [(b) The plan must cover an annual period and the
3-21 commissioner shall update it at least annually.]
3-22 [(c) The office shall submit a plan progress report to the
3-23 governor's office not later than the 30th day after November 1 and
3-24 April 1 of each year and shall include in the report steps the
3-25 office has taken during the reporting period to comply with
3-26 requirements of this section].
4-1 SECTION 3. Section 14.062, Finance Code, is amended to read
4-2 as follows:
4-3 Sec. 14.062. CONSUMER INFORMATION AND COMPLAINTS. (a) The
4-4 office shall maintain a file on each written complaint filed with
4-5 the office. The file must include:
4-6 (1) the name of the person who filed the complaint;
4-7 (2) the date the complaint is received by the office;
4-8 (3) the subject matter of the complaint;
4-9 (4) the name of each person contacted in relation to
4-10 the complaint;
4-11 (5) a summary of the results of the review or
4-12 investigation of the complaint; and
4-13 (6) an explanation of the reason the file was closed,
4-14 if the office closed the file without taking action other than to
4-15 investigate the complaint.
4-16 (b) The office shall provide to the person filing the
4-17 complaint and to each person who is a subject of the complaint a
4-18 copy of the office's policies and procedures relating to complaint
4-19 investigation and resolution.
4-20 (c) The office, at least quarterly until final disposition
4-21 of the complaint, shall notify the person filing the complaint and
4-22 each person who is a subject of the complaint of the status of the
4-23 investigation [commissioner shall keep an information file about
4-24 each complaint filed with the office relating to a license holder
4-25 or other lender regulated by the office under this chapter or Title
4-26 4 or 5.]
5-1 [(b) At least quarterly until final disposition of any
5-2 written complaint filed with the office relating to a license
5-3 holder or other lender regulated by the office, the commissioner
5-4 shall notify the parties to the complaint of the status of the
5-5 complaint] unless the notice would jeopardize an undercover
5-6 investigation.
5-7 SECTION 4. Section 14.066, Finance Code, is amended to read
5-8 as follows:
5-9 Sec. 14.066. SUNSET PROVISION. The office is subject to
5-10 Chapter 325, Government Code (Texas Sunset Act). Unless continued
5-11 in existence as provided by that chapter, the office is abolished
5-12 September 1, 2013 [2001].
5-13 SECTION 5. Subchapter B, Chapter 14, Finance Code, is
5-14 amended by adding Section 14.067 to read as follows:
5-15 Sec. 14.067. EMPLOYEE INCENTIVE PROGRAM. The commissioner
5-16 or the commissioner's designee shall provide to agency employees
5-17 information and training on the benefits and methods of
5-18 participation in the state employee incentive program.
5-19 SECTION 6. Section 14.106, Finance Code, is amended to read
5-20 as follows:
5-21 Sec. 14.106. INFORMATION [PROCEDURES] REGARDING EMPLOYMENT
5-22 REQUIREMENTS [STANDARDS OF CONDUCT]. The commissioner or the
5-23 commissioner's designee shall provide to agency employees, as often
5-24 as necessary, information regarding the requirements for employment
5-25 under this chapter, including information regarding a person's
5-26 responsibilities under applicable laws relating to standards of
6-1 conduct for state employees [shall develop a procedure to ensure
6-2 that a person holding the position of commissioner and each
6-3 assistant commissioner, examiner, and other employee of the office
6-4 is informed of the standards of conduct required by law for a state
6-5 official or employee].
6-6 SECTION 7. Section 14.107, Finance Code, is amended to read
6-7 as follows:
6-8 Sec. 14.107. FEES. (a) The finance commission
6-9 [commissioner] shall establish reasonable and necessary fees for
6-10 carrying out the commissioner's powers and duties under this
6-11 chapter, Title 4, and Chapters 371, 392, and 394 and under Chapters
6-12 38-41, Business & Commerce Code.
6-13 (b) The finance commission by rule shall set the fees for
6-14 licensing and examination under Chapter 342, 348, or 371 at amounts
6-15 or rates necessary to recover the costs of administering those
6-16 chapters. The rules may provide that the amount of a fee charged
6-17 to a license holder is based on the volume of the license holder's
6-18 regulated business and other key factors. The commissioner may
6-19 provide for collection of a single annual fee from a person
6-20 licensed under Chapter 342, 348, or 371 to include amounts due for
6-21 both licensing and examination.
6-22 SECTION 8. Section 14.302, Finance Code, is amended to read
6-23 as follows:
6-24 Sec. 14.302. Appeal of License Withholding or Revocation.
6-25 An appeal of a decision of the commissioner refusing to grant a
6-26 license to an applicant or revoking the license of a license holder
7-1 shall be under the substantial evidence rule as provided by Chapter
7-2 2001, Government Code [by trial de novo].
7-3 SECTION 9. Section 341.001, Finance Code, is amended to read
7-4 as follows:
7-5 Sec. 341.001. DEFINITIONS. In this subtitle:
7-6 (1) "Authorized lender" means a person who holds a
7-7 license issued under Chapter 342, a bank, or a savings association.
7-8 (2) "Bank" means a person:
7-9 (A) organized as a state bank under Subtitle A,
7-10 Title 3, or under similar laws of another state if the deposits of
7-11 a bank from another state are insured by the Federal Deposit
7-12 Insurance Corporation; or
7-13 (B) organized as a national bank under 12 U.S.C.
7-14 Section 21 et seq., as subsequently amended.
7-15 (3) "Cash advance" means the total of the amount of
7-16 cash or its equivalent that the borrower receives and the amount
7-17 that is paid at the borrower's direction or request, on the
7-18 borrower's behalf, or for the borrower's benefit.
7-19 (4) "Commissioner" means the consumer credit
7-20 commissioner.
7-21 (5) "Credit union" means a person:
7-22 (A) doing business under Subtitle D, Title 3; or
7-23 (B) organized under the Federal Credit Union Act
7-24 (12 U.S.C. Section 1751 et seq.), as subsequently amended.
7-25 (6) "Deferred presentment transaction" means a
7-26 transaction in which:
8-1 (A) a cash advance in whole or part is made in
8-2 exchange for a personal check or authorization to debit a deposit
8-3 account;
8-4 (B) the amount of the check or authorized debit
8-5 equals the amount of the advance plus a fee; and
8-6 (C) the person making the advance agrees that
8-7 the check will not be cashed or deposited or the authorized debit
8-8 will not be made until a designated future date.
8-9 (7) "Finance commission" means the Finance Commission
8-10 of Texas or a subcommittee created by rule of the Finance
8-11 Commission of Texas.
8-12 (8) [(7)] "Interest" has the meaning assigned by
8-13 Section 301.002 [301.001].
8-14 (9) "Loan" has the meaning assigned by Section 301.002
8-15 and includes a sale-leaseback transaction and a deferred
8-16 presentment transaction.
8-17 (10) "Sale-leaseback transaction" means a transaction
8-18 in which a person sells personal property used primarily for
8-19 personal, family, or household use and the buyer of the property
8-20 agrees to lease the property back to the seller. In a
8-21 sale-leaseback transaction:
8-22 (A) the buyer is a creditor and the seller is an
8-23 obligor;
8-24 (B) an agreement to defer payment of a debt and
8-25 an obligation to pay the debt are established; and
8-26 (C) any amount received by the buyer in excess
9-1 of the price paid for the property by the buyer is interest subject
9-2 to this subtitle.
9-3 (11) [(8)] "Savings association" means a person:
9-4 (A) organized as a state savings and loan
9-5 association or savings bank under Subtitle B or C, Title 3, or
9-6 under similar laws of another state if the deposits of the savings
9-7 association from another state are insured by the Federal Deposit
9-8 Insurance Corporation; or
9-9 (B) organized as a federal savings and loan
9-10 association or savings bank under the Home Owners' Loan Act (12
9-11 U.S.C. Section 1461 et seq.), as subsequently amended.
9-12 SECTION 10. Section 341.403, Finance Code, is amended by
9-13 adding Subsections (c) and (d) to read as follows:
9-14 (c) The finance commission may not adopt rules restricting
9-15 advertising or competitive bidding by a license holder regulated by
9-16 the Office of Consumer Credit Commissioner except to prohibit
9-17 false, misleading, or deceptive practices.
9-18 (d) In its rules to prohibit false, misleading, or deceptive
9-19 practices, the finance commission may not include a rule that:
9-20 (1) restricts the use of any medium for advertising;
9-21 (2) restricts the use of a license holder's personal
9-22 appearance or voice in an advertisement;
9-23 (3) relates to the size or duration of an
9-24 advertisement by the license holder; or
9-25 (4) restricts the license holder's advertisement under
9-26 a trade name, unless the trade name is deceptive.
10-1 SECTION 11. Chapter 341, Finance Code, is amended by adding
10-2 Subchapter F to read as follows:
10-3 SUBCHAPTER F. LICENSING AND REGULATION IN GENERAL
10-4 Sec. 341.501. STAGGERED RENEWAL. The finance commission by
10-5 rule may adopt a system under which licenses under this subtitle
10-6 expire on various dates during the year. For the year in which the
10-7 license expiration date is changed, the Office of Consumer Credit
10-8 Commissioner shall prorate license fees on a monthly basis so that
10-9 each license holder pays only that portion of the license fee that
10-10 is allocable to the number of months during which the license is
10-11 valid. On renewal of the license on the new expiration date, the
10-12 total license renewal fee is payable.
10-13 Sec. 341.502. FORM OF LOAN CONTRACT. (a) A contract for a
10-14 loan under Chapter 342, a retail installment transaction under
10-15 Chapter 348, or a home equity loan regulated by the Office of
10-16 Consumer Credit Commissioner, whether in English or Spanish, must
10-17 be written in plain language designed to be easily understood by
10-18 the average consumer. The contract must be printed in an easily
10-19 readable font and type size.
10-20 (b) The finance commission shall adopt rules governing the
10-21 form of contracts to which this section applies. The rules must
10-22 include model contracts complying with the rules and this section.
10-23 (c) A person governed by this section is not required to use
10-24 a model contract. The person, however, may not use a contract
10-25 other than a model contract unless the person has submitted the
10-26 contract to the commissioner. The commissioner shall issue an
11-1 order disapproving the contract if the commissioner determines that
11-2 the contract does not comply with this section or rules adopted
11-3 under this section.
11-4 (d) The person may begin using a contract submitted under
11-5 Subsection (c) on the date it is submitted for review. If the
11-6 commissioner issues an order disapproving the contract, the person
11-7 may not use the contract after the order takes effect.
11-8 (e) A person may not represent that the commissioner's
11-9 failure to disapprove a contract constitutes an approval of the
11-10 contract by the commissioner, the Office of Consumer Credit
11-11 Commissioner, or the finance commission.
11-12 SECTION 12. Section 342.005, Finance Code, is amended to
11-13 read as follows:
11-14 Sec. 342.005. Applicability of Chapter. A loan is subject
11-15 to this chapter if the loan:
11-16 (1) provides for interest in excess of 10 percent a
11-17 year;
11-18 (2) is extended primarily for personal, family, or
11-19 household use;
11-20 (3) is made by a person engaged in the business of
11-21 making, arranging, or negotiating those types of loans; and
11-22 (4) either:
11-23 (A) is not secured by a lien on real property;
11-24 or
11-25 (B) is described by Section 342.001(4)
11-26 [342.001(3)], 342.301, or 342.456 and is predominantly payable in
12-1 monthly installments.
12-2 SECTION 13. Subchapter A, Chapter 342, Finance Code, is
12-3 amended by adding Sections 342.007, 342.008, and 342.009 to read as
12-4 follows:
12-5 Sec. 342.007. DEFERRED PRESENTMENT TRANSACTION. The finance
12-6 commission shall adopt rules providing for the regulation of
12-7 deferred presentment transactions.
12-8 Sec. 342.008. ATTEMPT TO EVADE LAW. A person who is a party
12-9 to a deferred presentment transaction may not evade the application
12-10 of this subtitle or a rule adopted under this subchapter by use of
12-11 any device, subterfuge, or pretense. Characterization of a
12-12 required fee as a purchase of a good or service in connection with
12-13 a deferred presentment transaction is a device, subterfuge, or
12-14 pretense for the purposes of this section.
12-15 Sec. 342.009. RETURN OF PROPERTY IN SALE-LEASEBACK
12-16 TRANSACTION. The seller in a sale-leaseback agreement may
12-17 terminate the agreement at any time by returning the property to
12-18 the buyer in substantially the same condition as when the agreement
12-19 was entered, less reasonable wear. On return of the property the
12-20 seller is liable only for rental and other allowed charges under
12-21 the agreement accruing before the date of the return.
12-22 SECTION 14. Subsection (c), Section 342.101, Finance Code,
12-23 is amended to read as follows:
12-24 (c) On the filing of each license application, the applicant
12-25 shall pay to the commissioner for the license's year of issuance a
12-26 license fee in an amount determined as provided by Section 14.107
13-1 [of:]
13-2 [(1) $100 if the license is granted not later than
13-3 June 30; or]
13-4 [(2) $50 if the license is granted after June 30].
13-5 SECTION 15. Section 342.154, Finance Code, is amended to
13-6 read as follows:
13-7 Sec. 342.154. ANNUAL LICENSE FEE. [(a)] Not later than
13-8 December 1, a license holder shall pay to the commissioner for each
13-9 license held an annual fee for the year beginning the next January
13-10 1, in an amount determined as provided by Section 14.107.
13-11 [(b) The annual fee for a license under this chapter is $200
13-12 except that if, on September 30 preceding the date on which the
13-13 annual fee is due, the gross unpaid balance of loans regulated
13-14 under this chapter in the office for which the license is issued is
13-15 $100,000 or less, the annual fee is $100.]
13-16 SECTION 16. Subsection (b), Section 346.204, Finance Code,
13-17 is amended to read as follows:
13-18 (b) A change made under Subsection (a) that relates to an
13-19 existing or future balance of a revolving credit account and that
13-20 is adverse to the customer may not take effect before the first
13-21 billing cycle that begins after the 90th day after the date of
13-22 written notice of the change to the customer unless the amendment
13-23 is made under Section 303.103 [303.403].
13-24 SECTION 17. Subchapter A, Chapter 348, Finance Code, is
13-25 amended to clarify and confirm existing law by adding Section
13-26 348.012 to read as follows:
14-1 Sec. 348.012. APPLICABILITY OF INSURANCE PREMIUM FINANCING
14-2 PROVISIONS. Chapter 24, Insurance Code, does not apply to a retail
14-3 installment transaction.
14-4 SECTION 18. Chapter 348, Finance Code, is amended by adding
14-5 Subchapter F to read as follows:
14-6 SUBCHAPTER F. LICENSING; ADMINISTRATION OF CHAPTER
14-7 Sec. 348.501. LICENSE REQUIRED. (a) A person may not act
14-8 as a holder under this chapter unless the person:
14-9 (1) is an authorized lender or a credit union; or
14-10 (2) holds a license issued under this chapter.
14-11 (b) A person may not use any device, subterfuge, or pretense
14-12 to evade the application of this section.
14-13 Sec. 348.502. APPLICATION REQUIREMENTS. (a) The
14-14 application for a license under this chapter must:
14-15 (1) be under oath;
14-16 (2) identify the applicant's principal parties in
14-17 interest; and
14-18 (3) contain other relevant information that the
14-19 commissioner requires.
14-20 (b) On the filing of a license application, the applicant
14-21 shall pay to the commissioner:
14-22 (1) an investigation fee not to exceed $200; and
14-23 (2) for the license's year of issuance, a license fee
14-24 in an amount determined as provided by Section 14.107.
14-25 Sec. 348.503. INVESTIGATION OF APPLICATION. On the filing
14-26 of an application and payment of the required fees, the
15-1 commissioner shall conduct an investigation to determine whether to
15-2 issue the license.
15-3 Sec. 348.504. APPROVAL OR DENIAL OF APPLICATION. (a) The
15-4 commissioner shall approve the application and issue to the
15-5 applicant a license under this chapter if the commissioner finds
15-6 that:
15-7 (1) the financial responsibility, experience,
15-8 character, and general fitness of the applicant are sufficient to:
15-9 (A) command the confidence of the public; and
15-10 (B) warrant the belief that the business will be
15-11 operated lawfully and fairly, within the purposes of this chapter;
15-12 and
15-13 (2) the forms and contracts to be used by the
15-14 applicant are appropriate and adequate to protect the interests of
15-15 retail buyers.
15-16 (b) If the commissioner does not find the eligibility
15-17 requirements of Subsection (a), the commissioner shall notify the
15-18 applicant.
15-19 (c) If an applicant requests a hearing on the application
15-20 not later than the 30th day after the date of notification under
15-21 Subsection (b), the applicant is entitled to a hearing not later
15-22 than the 60th day after the date of the request.
15-23 (d) The commissioner shall approve or deny the application
15-24 not later than the 60th day after the date of the filing of a
15-25 completed application with payment of the required fees, or if a
15-26 hearing is held, after the date of the completion of the hearing on
16-1 the application. The commissioner and the applicant may agree to a
16-2 later date in writing.
16-3 Sec. 348.505. DISPOSITION OF FEES ON DENIAL OF APPLICATION.
16-4 If the commissioner denies the application, the commissioner shall
16-5 retain the investigation fee and shall return to the applicant the
16-6 license fee submitted with the application.
16-7 Sec. 348.506. ANNUAL LICENSE FEE. Not later than December
16-8 1, a license holder shall pay to the commissioner for each license
16-9 held an annual fee for the year beginning the next January 1, in an
16-10 amount determined as provided by Section 14.107.
16-11 Sec. 348.507. EXPIRATION OF LICENSE ON FAILURE TO PAY ANNUAL
16-12 FEE. If the annual fee for a license is not paid before the 16th
16-13 day after the date on which the written notice of delinquency of
16-14 payment has been given to the license holder, the license expires
16-15 on the later of:
16-16 (1) that day; or
16-17 (2) December 31 of the last year for which an annual
16-18 fee was paid.
16-19 Sec. 348.508. LICENSE SUSPENSION OR REVOCATION. After
16-20 notice and a hearing the commissioner may suspend or revoke a
16-21 license if the commissioner finds that:
16-22 (1) the license holder failed to pay the annual
16-23 license fee, an examination fee, an investigation fee, or another
16-24 charge imposed by the commissioner;
16-25 (2) the license holder, knowingly or without the
16-26 exercise of due care, violated this chapter or a rule adopted or
17-1 order issued under this chapter; or
17-2 (3) a fact or condition exists that, if it had existed
17-3 or had been known to exist at the time of the original application
17-4 for the license, clearly would have justified the commissioner's
17-5 denial of the application.
17-6 Sec. 348.509. REINSTATEMENT OF SUSPENDED LICENSE; ISSUANCE
17-7 OF NEW LICENSE AFTER REVOCATION. The commissioner may reinstate a
17-8 suspended license or issue a new license on application to a person
17-9 whose license has been revoked if at the time of the reinstatement
17-10 or issuance no fact or condition exists that clearly would have
17-11 justified the commissioner's denial of an original application for
17-12 the license.
17-13 Sec. 348.510. SURRENDER OF LICENSE. A license holder may
17-14 surrender a license issued under this chapter by delivering to the
17-15 commissioner:
17-16 (1) the license; and
17-17 (2) a written notice of the license's surrender.
17-18 Sec. 348.511. EFFECT OF LICENSE SUSPENSION, REVOCATION, OR
17-19 SURRENDER. (a) The suspension, revocation, or surrender of a
17-20 license issued under this chapter does not affect the obligation of
17-21 a contract between the license holder and a retail buyer entered
17-22 into before the suspension, revocation, or surrender.
17-23 (b) Surrender of a license does not affect the license
17-24 holder's civil or criminal liability for an act committed before
17-25 surrender.
17-26 Sec. 348.512. TRANSFER OR ASSIGNMENT OF LICENSE. A license
18-1 may be transferred or assigned only with the approval of the
18-2 commissioner.
18-3 Sec. 348.513. ADOPTION OF RULES. (a) The finance
18-4 commission may adopt rules to enforce this chapter.
18-5 (b) The commissioner shall recommend proposed rules to the
18-6 finance commission.
18-7 Sec. 348.514. EXAMINATION; ACCESS TO RECORDS. (a) At the
18-8 times the commissioner considers necessary, the commissioner or the
18-9 commissioner's representative shall:
18-10 (1) examine each place of business of each license
18-11 holder; and
18-12 (2) investigate the license holder's transactions and
18-13 records, including books, accounts, papers, and correspondence, to
18-14 the extent the transactions and records pertain to the business
18-15 regulated under this chapter.
18-16 (b) The license holder shall:
18-17 (1) give the commissioner or the commissioner's
18-18 representative free access to the license holder's office, place of
18-19 business, files, safes, and vaults; and
18-20 (2) allow the commissioner or the commissioner's
18-21 representative to make a copy of an item that may be investigated
18-22 under Subsection (a)(2).
18-23 (c) During an examination the commissioner or the
18-24 commissioner's representative may administer oaths and examine any
18-25 person under oath on any subject pertinent to a matter that the
18-26 commissioner is authorized or required to consider, investigate, or
19-1 secure information about under this chapter.
19-2 (d) Information obtained under this section is confidential.
19-3 (e) A license holder's violation of Subsection (b) is a
19-4 ground for the suspension or revocation of the license.
19-5 (f) An examination of a license holder's place of business
19-6 may be made only:
19-7 (1) after advance notice; and
19-8 (2) during normal business hours.
19-9 Sec. 348.515. GENERAL INVESTIGATION. To discover a
19-10 violation of this chapter or to obtain information required under
19-11 this chapter, the commissioner or the commissioner's representative
19-12 may investigate the records, including books, accounts, papers, and
19-13 correspondence, of a person, including a license holder, who the
19-14 commissioner has reasonable cause to believe is violating this
19-15 chapter, regardless of whether the person claims to not be subject
19-16 to this chapter.
19-17 Sec. 348.516. PAYMENT OF EXAMINATION COSTS AND
19-18 ADMINISTRATION EXPENSES. A license holder shall pay to the
19-19 commissioner an amount determined as provided by Section 14.107 and
19-20 assessed by the commissioner to cover the direct and indirect costs
19-21 of an examination and a proportionate share of general
19-22 administrative expenses.
19-23 Sec. 348.517. LICENSE HOLDER'S RECORDS. (a) A license
19-24 holder shall maintain a record of each retail installment
19-25 transaction made under this chapter as is necessary to enable the
19-26 commissioner to determine whether the license holder is complying
20-1 with this chapter.
20-2 (b) A license holder shall keep the record until the later
20-3 of:
20-4 (1) the third anniversary of the date the last payment
20-5 was made on the retail installment transaction; or
20-6 (2) the second anniversary of the date on which the
20-7 final entry is made in the record.
20-8 (c) A record described by Subsection (a) must be prepared
20-9 in accordance with accepted accounting practices.
20-10 (d) The commissioner shall accept a license holder's system
20-11 of records if the system discloses the information reasonably
20-12 required under Subsection (a).
20-13 (e) A license holder shall keep each obligation signed by a
20-14 retail buyer at an office in this state designated by the license
20-15 holder unless the obligation is transferred under an agreement that
20-16 gives the commissioner access to the obligation.
20-17 Sec. 348.518. SHARING OF INFORMATION. To ensure consistent
20-18 enforcement of law and minimization of regulatory burdens, the
20-19 commissioner and the Texas Department of Transportation may share
20-20 information, including criminal history information, relating to a
20-21 person licensed under this chapter. Information otherwise
20-22 confidential remains confidential after it is shared under this
20-23 section.
20-24 SECTION 19. Subchapter F, Chapter 349, Finance Code, is
20-25 amended by adding Section 349.503 to read as follows:
20-26 Sec. 349.503. CERTAIN PROCEEDINGS IN CONNECTION WITH
21-1 SALE-LEASEBACK TRANSACTION. (a) If a buyer in a sale-leaseback
21-2 transaction requires the seller to provide a check as security for
21-3 the transaction, the buyer may not file or threaten to file a
21-4 charge, complaint, or criminal prosecution under Section 31.03,
21-5 31.04, or 32.41, Penal Code, based on nonpayment of the check.
21-6 (b) A buyer who violates Subsection (a) commits an offense.
21-7 An offense under this section is a misdemeanor punishable by a fine
21-8 of not more than $1,000.
21-9 SECTION 20. Section 371.055, Finance Code, is amended to
21-10 read as follows:
21-11 Sec. 371.055. FEES; PROOF OF INSURANCE. An applicant must
21-12 submit with the application:
21-13 (1) an investigation fee of:
21-14 (A) $500 if the applicant does not hold a
21-15 license; or
21-16 (B) $250 if the application:
21-17 (i) is for an additional license for a
21-18 separate location; or
21-19 (ii) involves substantially identical
21-20 principals and owners of a licensed pawnshop at a separate
21-21 location;
21-22 (2) an annual fee in an amount determined as provided
21-23 by Section 14.107 [of $100]; and
21-24 (3) proof of general liability and fire insurance in a
21-25 reasonable amount and form required by the commissioner.
21-26 SECTION 21. Subsection (a), Section 371.064, Finance Code,
22-1 is amended to read as follows:
22-2 (a) Not later than December 1, a pawnbroker shall pay to the
22-3 commissioner for each license held an annual fee in an amount
22-4 determined as provided by Section 14.107 [of $125] for the year
22-5 beginning the next January 1.
22-6 SECTION 22. Subsection (c), Section 371.159, Finance Code,
22-7 is amended to read as follows:
22-8 (c) A pawn service charge may not exceed an amount equal to:
22-9 (1) 20 percent of the total amount financed for one
22-10 month if that amount is less than or equal to the amount computed
22-11 under Subchapter C, Chapter 341, using the reference amount of $30;
22-12 (2) 15 percent of the total amount financed for one
22-13 month if that amount is more than the amount computed for
22-14 Subdivision (1) but less than or equal to the amount computed under
22-15 Subchapter C, Chapter 341, using the reference amount of $200
22-16 [$100];
22-17 (3) 2 1/2 percent of the total amount financed for one
22-18 month if that amount is more than the amount computed for
22-19 Subdivision (2) but less than or equal to the amount computed under
22-20 Subchapter C, Chapter 341, using the reference amount of $300; or
22-21 (4) 1 percent of the total amount financed for one
22-22 month if that amount is more than the amount computed for
22-23 Subdivision (3).
22-24 SECTION 23. Section 371.169, Finance Code, is amended to
22-25 read as follows:
22-26 Sec. 371.169. UNREDEEMED PLEDGED GOODS; FORFEITURE. (a) A
23-1 pawnbroker shall hold pledged goods not redeemed by the pledgor on
23-2 or before the maturity date stated in the pawn ticket issued in
23-3 connection with a pawn transaction for at least 30 [60] days after
23-4 that date.
23-5 (b) On or before the 30th [60th] day after the original
23-6 maturity date, the pledgor may redeem the pledged goods by paying:
23-7 (1) the originally agreed redemption price; and
23-8 (2) an additional pawn service charge equal to
23-9 one-thirtieth of the original monthly pawn service charge for each
23-10 day after the original maturity date, including the day on which
23-11 the pledged goods are finally redeemed.
23-12 (c) Pledged goods not redeemed on or before the 30th [60th]
23-13 day after the original maturity date may, at the option of the
23-14 pawnbroker, be forfeited to the pawnbroker.
23-15 SECTION 24. Subsection (a), Section 411.095, Government
23-16 Code, is amended to read as follows:
23-17 (a) The consumer credit commissioner is entitled to obtain
23-18 from the department criminal history record information that
23-19 relates to a person who is[:]
23-20 [(1)] an applicant for or holder of a license under
23-21 Chapter 342, 348, or 371, Finance Code[; or]
23-22 [(2) the holder of a license under that Act].
23-23 SECTION 25. Section 371.065, Finance Code, is repealed.
23-24 SECTION 26. Sections 348.401 and 348.402, Finance Code, are
23-25 repealed.
23-26 SECTION 27. The Finance Commission of Texas and the consumer
24-1 credit commissioner shall conduct a study of mortgage lending
24-2 practices with emphasis on identifying possible predatory and
24-3 discriminatory lending patterns or practices. In conducting the
24-4 study, the agencies shall collect data from entities making
24-5 mortgage loans about mortgage loans using the data formats of the
24-6 Home Mortgage Disclosure Act of 1975 (12 U.S.C. Section 2801 et
24-7 seq.) and other data fields necessary to identify possible
24-8 predatory practices. In conducting the study, the agencies shall
24-9 also study and consider parameters that could be used to
24-10 consistently classify credit risk among mortgage loans for the
24-11 purpose of assessing possible predatory or discriminatory lending
24-12 practices. The agencies shall prepare a report detailing the
24-13 findings and recommendations resulting from the study and deliver
24-14 the report to the lieutenant governor, the speaker of the house of
24-15 representatives, and legislative committees dealing with lending
24-16 entities before December 1, 2002.
24-17 SECTION 28. (a) Except as otherwise provided by this
24-18 section, this Act takes effect September 1, 2001.
24-19 (b) Section 17 of this Act takes effect immediately if this
24-20 Act receives a vote of two-thirds of all the members elected to
24-21 each house, as provided by Section 39, Article III, Texas
24-22 Constitution. If this Act does not receive the vote necessary for
24-23 immediate effect, Section 17 of this Act takes effect September 1,
24-24 2001.
24-25 (c) Section 26 of this Act takes effect September 1, 2002.
24-26 (d) The requirement that a person hold a license under
S.B. No. 317
25-1 Subchapter F, Chapter 348, Finance Code, as added by this Act,
25-2 applies only on and after September 1, 2002.
_______________________________ _______________________________
President of the Senate Speaker of the House
I hereby certify that S.B. No. 317 passed the Senate on
April 10, 2001, by a viva-voce vote; May 25, 2001, Senate refused
to concur in House amendments and requested appointment of
Conference Committee; May 25, 2001, House granted request of the
Senate; May 27, 2001, Senate adopted Conference Committee Report by
the following vote: Yeas 30, Nays 0, one present not voting.
_______________________________
Secretary of the Senate
I hereby certify that S.B. No. 317 passed the House, with
amendments, on May 18, 2001, by a non-record vote; May 25, 2001,
House granted request of the Senate for appointment of Conference
Committee; May 27, 2001, House adopted Conference Committee Report
by a non-record vote.
_______________________________
Chief Clerk of the House
Approved:
_______________________________
Date
_______________________________
Governor