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  84R12811 EES-F
 
  By: Capriglione H.B. No. 3824
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the regulation of certain short-term consumer loans;
  imposing an assessment and fees; adding provisions subject to a
  criminal penalty; requiring an occupational license.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Subtitle B, Title 4, Finance Code, is amended by
  adding Chapter 354 to read as follows:
  CHAPTER 354.  SHORT-TERM LOANS
  SUBCHAPTER A. GENERAL PROVISIONS; APPLICABILITY OF CHAPTER
         Sec. 354.001.  DEFINITIONS. In this chapter:
               (1)  "Authorized lender" means a person licensed under
  this chapter, a bank, or a savings association, notwithstanding
  Section 341.001.
               (2)  "License holder" means a person who holds a
  license issued under this chapter.
               (3)  "Motor vehicle title loan" means a loan in which an
  unencumbered motor vehicle is given as security for the loan and in
  which the lender accepts multiple installments and charges a
  monitoring fee in connection with each installment. The term does
  not include a retail installment transaction under Chapter 348 or
  another loan made to finance the purchase of a motor vehicle.
               (4)  "Regular transaction" means a loan:
                     (A)  that is payable in installments that are
  consecutive, monthly or biweekly, and substantially equal in
  amount; and
                     (B)  the first scheduled installment of which is
  due within one month and 15 days after the date of the loan.
         Sec. 354.002.  INTEREST COMPUTATION METHOD. (a) The
  scheduled installment earnings method is a method to compute an
  interest charge by applying a daily rate to the unpaid balance of
  the principal amount as if each payment will be made on its
  scheduled installment date. A payment received before or after the
  due date does not affect the amount of the scheduled principal
  reduction.
         (b)  For the purposes of Subsection (a), the daily rate is
  1/365th of the equivalent contract rate.
         (c)  Interest under the scheduled installment earnings
  method may not be compounded.
         (d)  Loans under this chapter must use the scheduled
  installment earnings method to compute interest.
         Sec. 354.003.  APPLICABILITY OF CHAPTER. A loan is subject
  to this chapter if the loan:
               (1)  provides for an effective rate of interest above
  10 percent a year;
               (2)  is extended primarily for personal, family, or
  household use;
               (3)  is made by a person engaged in the business of
  making, arranging, or negotiating those types of loans; and
               (4)  is either:
                     (A)  a multi-installment short-term loan secured
  by a motor vehicle that includes a recurring monitoring fee; or
                     (B)  a multi-installment unsecured short-term
  loan that includes a recurring customary fee.
         Sec. 354.004.  ATTEMPT TO EVADE LAW. A person who is a party
  to a loan subject to this chapter may not evade the application of
  this chapter or a rule adopted under this chapter by use of any
  device, subterfuge, or pretense.
  SUBCHAPTER B. AUTHORIZED ACTIVITIES; LICENSE
         Sec. 354.051.  LICENSE REQUIRED. (a)  A person must hold a
  license issued under this chapter to:
               (1)  engage in the business of making, transacting, or
  negotiating loans subject to this chapter; or
               (2)  contract for, charge, or receive, directly or
  indirectly, in connection with a loan subject to this chapter, a
  charge, including interest, compensation, consideration, or
  another expense, authorized under this chapter that in the
  aggregate exceeds the charges authorized under other law, including
  Subtitle A of this title and Chapter 342.
         (b)  A person may not use any device, subterfuge, or pretense
  to evade the application of this section.
         (c)  A person is not required to obtain a license under
  Subsection (a) if the person is a bank, savings bank, or savings and
  loan association organized under the laws of the United States or
  under the laws of the institution's state of domicile.
         Sec. 354.052.  ISSUANCE OF MORE THAN ONE LICENSE FOR A
  PERSON. (a) The commissioner may issue more than one license to a
  person in compliance with this chapter for each license.
         (b)  A person who is required to hold a license under this
  chapter must hold a separate license for each office at which loans
  are made, negotiated, serviced, held, or collected under this
  chapter.
         (c)  A license is not required under this chapter for a place
  of business:
               (1)  devoted to accounting or other recordkeeping; and
               (2)  at which loans are not made, negotiated, serviced,
  held, or collected under this chapter.
  SUBCHAPTER C.  APPLICATION FOR AND ISSUANCE OF LICENSE
         Sec. 354.101.  APPLICATION FOR LICENSE. (a) An application
  for a license under this chapter must:
               (1)  be under oath;
               (2)  give the approximate location from which the
  business is to be conducted;
               (3)  identify the business's principal parties in
  interest; and
               (4)  contain other relevant information that the
  commissioner requires.
         (b)  On the filing of one or more license applications, the
  applicant shall pay to the commissioner an investigation fee of
  $200. Except for good cause as determined by the finance
  commission, a separate investigation fee is not required for
  multiple license applications.
         (c)  On the filing of each license application, the applicant
  shall pay to the commissioner for the license's year of issuance a
  license fee in an amount determined as provided by Section 14.107.
         Sec. 354.102.  INVESTIGATION OF APPLICATION. On the filing
  of an application and, if required, a bond, and on payment of the
  required fees, the commissioner shall conduct an investigation to
  determine whether to issue the license.
         Sec. 354.103.  APPROVAL OR DENIAL OF APPLICATION. (a) The
  commissioner shall approve the application and issue to the
  applicant a license to make loans under this chapter if the
  commissioner finds that:
               (1)  the financial responsibility, experience,
  character, and general fitness of the applicant are sufficient to:
                     (A)  command the confidence of the public; and
                     (B)  warrant the belief that the business will be
  operated lawfully and fairly, within the purposes of this chapter;
  and
               (2)  the applicant has net assets of at least $25,000
  available for the operation of the business or is able to post a
  surety bond that provides the same protection as the net assets
  described in this subdivision.
         (b)  If the commissioner does not find the eligibility
  requirements of Subsection (a) have been met, the commissioner
  shall notify the applicant.
         (c)  If an applicant requests a hearing on the application
  not later than the 30th day after the date of notification under
  Subsection (b), the applicant is entitled to a hearing not later
  than the 60th day after the date of the request.
         (d)  The commissioner shall approve or deny the application
  not later than the 60th day after the date of the filing of a
  completed application with payment of the required fees, or if a
  hearing is held, after the date of the completion of the hearing on
  the application. The commissioner and the applicant may agree to a
  later date in writing.
         Sec. 354.104.  DISPOSITION OF FEES ON DENIAL OF APPLICATION.
  If the commissioner denies the application, the commissioner shall
  retain the investigation fee and shall return to the applicant the
  license fee submitted with the application.
  SUBCHAPTER D. LICENSE
         Sec. 354.151.  NAME AND PLACE ON LICENSE. (a) A license
  must state:
               (1)  the name of the license holder; and
               (2)  the address of the office from which the business
  is to be conducted.
         (b)  A license holder may not conduct business under this
  chapter under a name or at a place of business in this state other
  than the name or office stated on the license.
         Sec. 354.152.  LICENSE DISPLAY. A license holder shall
  display a copy of its license at the place of business stated on the
  license.
         Sec. 354.153.  MINIMUM ASSETS OR BOND FOR LICENSE. (a)  
  Except as provided by Subsection (b), a license holder shall
  maintain net assets used or readily available for use in conducting
  the business of the offices for which licenses are held under this
  chapter in an amount that is not less than the lesser of:
               (1)  $25,000 for each office; or
               (2)  $2,500,000 in the aggregate.
         (b)  A license holder is not required to maintain the net
  assets described by Subsection (a) if, with the approval of the
  commissioner, the license holder posts a surety bond that provides
  the same protection as the net assets.
         Sec. 354.154.  ANNUAL LICENSE FEE. Not later than December
  1, a license holder shall pay to the commissioner for each license
  held an annual fee for the year beginning the next January 1, in an
  amount determined as provided by Section 14.107.
         Sec. 354.155.  EXPIRATION OF LICENSE ON FAILURE TO PAY
  ANNUAL FEE. If the annual fee for a license is not paid before the
  16th day after the date on which a written notice of delinquency of
  payment has been given to the license holder, the license expires on
  the later of:
               (1)  the 16th day after the date the notice is given; or
               (2)  December 31 of the last year for which an annual
  fee was paid.
         Sec. 354.156.  LICENSE SUSPENSION OR REVOCATION. After
  notice and a hearing the commissioner may suspend or revoke a
  license if the commissioner finds that:
               (1)  the license holder failed to pay the annual
  license fee, an examination fee, an investigation fee, or another
  charge imposed by the commissioner under this chapter;
               (2)  the license holder, knowingly or without the
  exercise of due care, violated this chapter or a rule adopted or
  order issued under this chapter; or
               (3)  a fact or condition exists that, if it had existed
  or had been known to exist at the time of the original application
  for the license, clearly would have justified the commissioner's
  denial of the application.
         Sec. 354.157.  CORPORATE CHARTER FORFEITURE. (a) A license
  holder that violates this chapter is subject to revocation of the
  holder's license and, if the license holder is a corporation,
  forfeiture of its charter.
         (b)  When the attorney general is notified of a violation of
  this chapter and revocation of a license, the attorney general
  shall file suit in a district court in Travis County, if the license
  holder is a corporation, for forfeiture of the license holder's
  charter.
         Sec. 354.158.  LICENSE SUSPENSION OR REVOCATION FILED WITH
  PUBLIC RECORDS. The decision of the commissioner on the suspension
  or revocation of a license and the evidence considered by the
  commissioner in making the decision shall be filed in the public
  records of the commissioner.
         Sec. 354.159.  REINSTATEMENT OF SUSPENDED LICENSE; ISSUANCE
  OF NEW LICENSE AFTER REVOCATION. The commissioner may reinstate a
  suspended license or issue a new license on application to a person
  whose license has been revoked if at the time of the reinstatement
  or issuance no fact or condition exists that clearly would have
  justified the commissioner's denial of an original application for
  the license.
         Sec. 354.160.  SURRENDER OF LICENSE. (a)  A license holder
  may surrender a license issued under this chapter by delivering to
  the commissioner:
               (1)  the license; and
               (2)  a written notice of the license's surrender.
         (b)  If an enforcement action has been initiated against a
  license holder, the license may be surrendered only with the
  written authorization of the general counsel of the finance
  commission.
         Sec. 354.161.  EFFECT OF LICENSE SUSPENSION, REVOCATION, OR
  SURRENDER. (a) The suspension, revocation, or surrender of a
  license issued under this chapter does not affect the obligation of
  a contract between the license holder and a borrower entered into
  before the suspension, revocation, or surrender.
         (b)  Surrender of a license does not affect the license
  holder's civil or criminal liability for an act committed before
  surrender.
         Sec. 354.162.  MOVING AN OFFICE. A license holder shall give
  written notice to the commissioner before the 30th day preceding
  the date the license holder moves an office from the location
  provided on the license.  The commissioner shall amend a license
  holder's license accordingly.
         Sec. 354.163.  TRANSFER OR ASSIGNMENT OF LICENSE. A license
  may be transferred or assigned only with the approval of the
  commissioner.  The commissioner shall approve or deny a transfer or
  assignment of a license not later than the 60th day after the date
  of the filing of a completed application for the transfer or
  assignment with payment of the required fees, or if a hearing is
  held, after the date of the completion of the hearing on the
  application. The commissioner and the applicant may agree to a
  later date in writing.
  SUBCHAPTER E.  INTEREST CHARGES ON SECURED LOANS
         Sec. 354.201.  MAXIMUM INTEREST CHARGE. (a) A loan contract
  for a regular transaction that is secured by a lien on a motor
  vehicle may provide for an interest charge on the cash advance that
  does not exceed 12 percent a year if the term of the loan does not
  exceed one year.
         (b)  A loan contract under this subchapter may provide for
  automatic debits to the borrower's bank account in compliance with
  state and federal law, including the Electronic Fund Transfer Act
  (15 U.S.C. Section 1693 et seq.) and 12 C.F.R. Part 1005 (Regulation
  E).
         Sec. 354.202.  MONITORING FEE. (a)  A loan contract under
  this subchapter may provide for a monitoring fee to defray the
  ordinary costs of operating, administering, and terminating a loan,
  including costs associated with:
               (1)  maintaining loan information;
               (2)  offering electronic and telephone access to loan
  records;
               (3)  processing payments;
               (4)  responding to borrower inquiries;
               (5)  providing periodic billing statements;
               (6)  inspecting and verifying the collateral and
  establishing, perfecting, and releasing the security interest; and
               (7)  verifying of insurance, registration, and annual
  vehicle inspection requirements of the collateral.
         (b)  The monitoring fee may not be considered interest for
  any purpose of law, must be agreed on by the parties, and may not
  exceed a daily rate of seven-tenths of one percent of the original
  principal balance of the loan. 
         (c)  The total number and total amount of monitoring fees
  must be disclosed in the loan contract.
         (d)  The monitoring fee is not interest and the authorized
  lender may not charge interest on the monitoring fee.
         (e)  An authorized lender may not charge a monitoring fee if
  the motor vehicle is repossessed or the balance of the account is
  accelerated, unless the loan is reinstated.
         Sec. 354.203.  REFUND. (a) If a loan under this subchapter
  is prepaid in full, including payment in cash or by a new loan or
  renewal of the loan, the authorized lender earns interest for the
  period beginning on the date of the loan and ending on the date of
  the prepayment or demand.
         (b)  If prepayment in full or demand for payment in full
  occurs during an installment period, the authorized lender may
  retain, in addition to interest that accrued during any elapsed
  installment periods, an amount computed by:
               (1)  multiplying the simple annual interest rate under
  the contract by the unpaid principal balance of the loan determined
  according to the schedule of payments to be outstanding on the
  preceding installment due date;
               (2)  dividing 365 into the product obtained under
  Subdivision (1); and
               (3)  multiplying the number of days in the period
  beginning on the day after the installment due date and ending on
  the date of the prepayment or demand, as appropriate, by the result
  obtained under Subdivision (2).
         (c)  An authorized lender may not earn interest on any
  addition to principal added to the loan after the date of the loan
  contract, including the monitoring fee.
         (d)  An authorized lender is prohibited from using any other
  refunding method for a loan subject to this subchapter.
  SUBCHAPTER F.  INTEREST CHARGES ON UNSECURED LOANS
         Sec. 354.251.  MAXIMUM INTEREST CHARGE. (a)  A loan contract
  for an unsecured regular transaction may provide for an interest
  charge on the cash advance that does not exceed 12 percent a year if
  the term of the loan does not exceed six months.
         (b)  A loan contract under this subchapter may provide for
  automatic debits to the borrower's bank account in compliance with
  state and federal law, including the Electronic Fund Transfer Act
  (15 U.S.C. Section 1693 et seq.) and 12 C.F.R. Part 1005 (Regulation
  E).
         Sec. 354.252.  CUSTOMARY FEE.  (a)  A loan contract under
  this subchapter may provide for a customary fee to defray the
  ordinary costs of operating, administering, and terminating a loan,
  including costs associated with:
               (1)  maintaining loan information;
               (2)  offering electronic and telephone access to loan
  records;
               (3)  processing payments;
               (4)  responding to borrower inquiries;
               (5)  providing periodic billing statements; and
               (6)  verifying of continued employment.
         (b)  The customary fee may not be considered interest for any
  purpose of law, must be agreed on by the parties, and may not exceed
  a daily rate of 1.4 percent of the original principal balance of the
  loan.
         (c)  The total number and total amount of customary fees must
  be disclosed in the loan contract.
         (d)  The customary fee is not interest and the authorized
  lender may not charge interest on the customary fee.
         (e)  An authorized lender may not charge a customary fee if
  the balance of the account is accelerated, unless the loan is
  reinstated.
         Sec. 354.253.  REFUND. (a) If a loan under this subchapter
  is prepaid in full, including payment in cash or by a new loan or
  renewal of the loan, the authorized lender earns interest for the
  period beginning on the date of the loan and ending on the date of
  the prepayment or demand.
         (b)  If prepayment in full or demand for payment in full
  occurs during an installment period, the authorized lender may
  retain, in addition to interest that accrued during any elapsed
  installment periods, an amount computed by:
               (1)  multiplying the simple annual interest rate under
  the contract by the unpaid principal balance of the loan determined
  according to the schedule of payments to be outstanding on the
  preceding installment due date;
               (2)  dividing 365 into the product obtained under
  Subdivision (1); and
               (3)  multiplying the number of days in the period
  beginning on the day after the installment due date and ending on
  the date of the prepayment or demand, as appropriate, by the result
  obtained under Subdivision (2).
         (c)  An authorized lender may not earn interest on any
  addition to principal added to the loan after the date of the loan
  contract, including the customary fee.
         (d)  An authorized lender is prohibited from using any other
  refunding method for a loan subject to this subchapter.
  SUBCHAPTER G.  INSURANCE
         Sec. 354.301.  REQUIRED PROPERTY INSURANCE. (a)  On a loan
  secured by a motor vehicle that is subject to this chapter, an
  authorized lender may require a borrower to insure the motor
  vehicle offered as security for the loan.
         (b)  The insurance coverage and the premiums or charges for
  the coverage must bear a reasonable relationship to:
               (1)  the amount, term, and conditions of the loan;
               (2)  the value of the collateral; and
               (3)  the existing hazards or risk of loss, damage, or
  destruction.
         (c)  The insurance may not:
               (1)  cover unusual or exceptional risks; or
               (2)  provide coverage not ordinarily included in
  policies issued to the public.
         (d)  An authorized lender may not require the purchase of
  duplicate insurance if the authorized lender has knowledge that the
  borrower:
               (1)  has valid and collectible insurance covering the
  motor vehicle; and
               (2)  has provided a loss payable endorsement sufficient
  to protect the authorized lender.
         Sec. 354.302.  AGENT OR BROKER PROHIBITED. An authorized
  lender may not by any direct or indirect method require the purchase
  of insurance from an agent or broker designated by the authorized
  lender. An authorized lender or an agent of an authorized lender
  may not sell or contract to sell to a borrower any insurance in
  connection with a loan. An authorized lender may not own or
  partially own an insurance company or an insurance agency that
  provides insurance products in connection with a loan subject to
  this chapter.
         Sec. 354.303.  DECLINATION OF EQUAL INSURANCE COVERAGE
  PROHIBITED. An authorized lender may not decline at any time
  existing insurance coverage providing substantially equal benefits
  that comply with this subchapter.
         Sec. 354.304.  NONFILING INSURANCE. An authorized lender
  may not include in a loan contract a charge for a nonfiling
  insurance premium.
  SUBCHAPTER H. AUTHORIZED LENDER'S DUTIES AND AUTHORITY
         Sec. 354.401.  DELIVERY OF INFORMATION TO BORROWER. (a)
  When a loan is made under this chapter, the authorized lender shall
  deliver to the borrower, or to one borrower if there is more than
  one, a copy of each document signed by the borrower, including the
  note or loan contract, and a written statement in English that
  contains the names and addresses of the borrower and the authorized
  lender.
         (b)  If the note or loan contract shows the information
  required by Subsection (a), the written statement is not required.
         Sec. 354.402.  RECEIPT FOR CASH PAYMENT. An authorized
  lender shall give a receipt to a person making a cash payment on a
  loan.
         Sec. 354.403.  ACCEPTANCE OF PREPAYMENT. At any time during
  regular business hours, the authorized lender shall accept partial
  prepayment or prepayment of a loan in full.  An authorized lender
  shall accept any amount from a borrower in partial prepayment of an
  installment or loan.
         Sec. 354.404.  CANCELLATION OF FUTURE PAYMENTS. A borrower
  is entitled to cancel all payments under a loan contract before the
  fourth business day after the date of the loan contract. In order
  to cancel all payments, the borrower must return the amount of the
  cash advance to the authorized lender or the authorized lender's
  agent with a statement signed by the borrower.
         Sec. 354.405.  ADMINISTRATIVE CHARGE. An authorized lender
  may charge a borrower an administrative charge on a loan under this
  chapter in an amount to be negotiated by the parties but not to
  exceed the lesser of 10 percent of the original principal or $100.
  An administrative charge is considered earned when a loan is made or
  refinanced and is not subject to refund but is not required to be
  repaid if the loan is rescinded. An administrative charge is not
  interest, and an authorized lender may not charge interest on an
  administrative charge.
         Sec. 354.406.  POSTING OF INTEREST RATES AND FEES. An
  authorized lender shall conspicuously post at each office at which
  loans are made, negotiated, serviced, held, or collected under this
  chapter the interest rates charged for those loans and the amount of
  any fees related to the loans, including any monitoring or
  customary fees.
         Sec. 354.407.  FINANCIAL LITERACY FUND. (a) As part of the
  licensing fees and procedures described under this chapter, each
  license holder shall pay to the commissioner an annual assessment
  to improve consumer credit, financial education, and
  asset-building opportunities in this state. The annual assessment
  may not exceed $200 for each license as specified by the finance
  commission.
         (b)  The commissioner shall remit to the comptroller amounts
  received under Subsection (a) for deposit in an interest-bearing
  deposit account in the Texas Treasury Safekeeping Trust Company.
  Money in the account may be spent by the finance commission only for
  the purposes provided by this section. Amounts in the account may
  be invested and reinvested in the same manner as funds of the
  Employees Retirement System of Texas, and the interest from those
  investments and reinvestments shall be deposited to the credit of
  the account.
         (c)  The Financial Literacy Fund shall be administered by the
  finance commission to support statewide financial education and
  consumer credit-building activities and programs, including:
               (1)  production and dissemination of approved
  financial education materials at licensed locations;
               (2)  advertising, marketing, and public awareness
  campaigns to improve the credit profiles and credit scores of
  consumers in this state;
               (3)  school- and youth-based financial literacy and
  capability;
               (4)  credit building and credit repair;
               (5)  financial coaching and consumer counseling;
               (6)  bank account enrollment and incentives for
  personal savings; and
               (7)  other consumer financial education and
  asset-building initiatives as considered appropriate by the
  finance commission.
         (d)  In implementing this section, the finance commission
  may solicit gifts, grants, and donations.
         (e)  The finance commission may partner with other state
  agencies and entities to implement this section.
         (f)  The finance commission shall adopt rules to administer
  this section.
         Sec. 354.408.  DATABASE. The commissioner shall create a
  database for each license holder to use to submit information to the
  commissioner. Each license holder shall provide the commissioner
  with the interest rates and fees that the license holder charges for
  each type of loan under this chapter. Each license holder shall pay
  to the commissioner a fee for the creation and operation of the
  database. License holders shall update information submitted to
  the database at least once every six months. The commissioner shall
  post the database on the commissioner's website for the benefit of
  the public.
  SUBCHAPTER I.  LIMITATIONS ON AUTHORIZED LENDER
         Sec. 354.451.  OBLIGATION UNDER MORE THAN ONE CONTRACT. An
  authorized lender may not induce or permit a person or a husband and
  wife to be directly or indirectly obligated under more than one loan
  contract at any time for the purpose or with the effect of obtaining
  an amount of interest or fees greater than the amount of interest or
  fees otherwise authorized under this chapter.
         Sec. 354.452.  AMOUNT AUTHORIZED. (a) An authorized lender
  may not knowingly directly or indirectly charge, contract for, or
  receive an amount that is not authorized under this chapter in
  connection with a loan to which this chapter applies, including any
  fee, compensation, bonus, commission, brokerage, discount, and
  expense, and any other charge of any nature, whether or not listed
  by this subsection.
         (b)  On a loan subject to this chapter, an authorized lender
  may assess and collect from the borrower an amount incurred by the
  authorized lender for:
               (1)  court costs and attorney's fees assessed by a court
  only if the borrower is found to have committed forgery, fraud, or
  theft in connection with the loan;
               (2)  a fee authorized by law for filing, recording, or
  releasing in a public office a security for a loan; or
               (3)  a fee for recording a lien on or transferring a
  certificate of title to a motor vehicle offered as security for a
  loan made under this chapter.
         (c)  On a loan subject to this chapter an authorized lender
  may assess and collect a fee that does not exceed the amount
  prescribed by Section 3.506, Business & Commerce Code, for the
  return by a depository institution of a dishonored check,
  negotiable order of withdrawal, or share draft offered in full or
  partial payment of a loan.
         Sec. 354.453.  CONFESSION OF JUDGMENT; POWER OF ATTORNEY.
  An authorized lender may not take a confession of judgment or a
  power of attorney authorizing the authorized lender or a third
  person to confess judgment or to appear for a borrower in a judicial
  proceeding.
         Sec. 354.454.  DISCLOSURE OF AMOUNT FINANCED AND SCHEDULE OF
  PAYMENTS. An authorized lender may not take, or require a borrower
  to sign, a promise to pay or loan obligation that does not disclose
  the amount financed and the schedule of payments.
         Sec. 354.455.  INSTRUMENT WITH BLANK PROHIBITED. An
  authorized lender may not take, or require a borrower to sign, an
  instrument in which a blank is left to be filled in after the loan is
  made.
         Sec. 354.456.  WAIVER OF BORROWER'S RIGHT PROHIBITED. A
  borrower may not waive any right accruing to the borrower under this
  chapter.
         Sec. 354.457.  MOTOR VEHICLE LOANS NONRECOURSE. A loan
  secured by a motor vehicle made under this chapter is a nonrecourse
  loan, unless the borrower is proven in court to have committed
  fraud, forgery, or theft in connection with the loan.
         Sec. 354.458.  COMPLIANCE WITH UNIFORM COMMERCIAL CODE. An
  authorized lender must comply with Chapter 9, Business & Commerce
  Code, in the repossession and redemption of a motor vehicle. If the
  borrower fails to redeem a motor vehicle legally repossessed by an
  authorized lender, the authorized lender may accept the motor
  vehicle in full satisfaction of the debt or the authorized lender
  may dispose of the motor vehicle in compliance with Chapter 9.
         Sec. 354.459.  PROHIBITION AGAINST PREPAYMENT PENALTY. A
  borrower may not be required to pay a prepayment penalty in
  connection with a loan subject to this chapter.
         Sec. 354.460.  RESTRICTIONS ON OFF-SITE ADVERTISING. (a) A
  license holder may not advertise a loan subject to this chapter on
  the premises of a nursing facility, assisted living facility, group
  home, intermediate care facility for persons with intellectual or
  developmental disabilities, or other similar facility subject to
  regulation by the Department of Aging and Disability Services.
         (b)  The finance commission may adopt rules to implement this
  section.
         Sec. 354.461.  ANCILLARY PRODUCTS. A borrower may not
  purchase any ancillary product or service in conjunction with a
  loan not specifically authorized by this chapter. An authorized
  lender may not finance the purchase of any ancillary product or
  service in conjunction with a loan.
         Sec. 354.462.  PROHIBITION AGAINST CRIMINAL PROSECUTION. A
  person may not threaten or pursue criminal charges against a person
  who seeks a benefit from an authorized lender for a loan subject to
  this chapter in the absence of forgery, fraud, theft, or other
  criminal conduct.
         Sec. 354.463.  FAIR DEBT COLLECTION. An authorized lender
  must comply with Chapter 392 and the Fair Debt Collection Practices
  Act (15 U.S.C. Section 1692 et seq.).
         Sec. 354.464.  POSTING OF INTEREST AND FEES. An authorized
  lender shall post, in a conspicuous location accessible to
  consumers, in an area of each office where loans are made and on any
  Internet website, including a social media site, maintained by the
  authorized lender:
               (1)  a schedule of all interest rates and fees to be
  charged in connection with a loan made under this chapter; and
               (2)  a notice of the name and address of the Office of
  Consumer Credit Commissioner and the telephone number of the
  office's consumer helpline.
         Sec. 354.465.  DISCLOSURE OF FINANCIAL TERMS IN LOAN. (a)  
  An authorized lender shall provide a separate written disclosure to
  the borrower or borrowers for each loan plainly and conspicuously
  stating the following:
               (1)  the amount of the loan;
               (2)  the interest rate;
               (3)  a description of any fee charged;
               (4)  the amount of the payment;
               (5)  the number of payments; and
               (6)  the total of all of the payments.
         (b)  An authorized lender may require the borrower to sign an
  acknowledgement for the receipt of the financial information.
         (c)  The finance commission by rule shall adopt and the
  commissioner shall provide a standard disclosure form that may be
  used by authorized lenders.
         Sec. 354.466.  ARBITRATION. (a)  An authorized lender may
  not include in a loan agreement a mandatory arbitration clause that
  is oppressive, unfair, unconscionable, or substantially in
  derogation of the rights of consumers.  Any agreement to arbitrate
  disputes must be conspicuous, in type that is boldfaced,
  capitalized, underlined, or otherwise distinguished from
  surrounding written material, if any, provided to the borrower.
  The time and location of any potential hearing must be reasonable
  for the borrower to attend. The method of selecting the arbitrator
  or arbitrators and the rules to be used by the arbitrators must be
  identified in the agreement.
         (b)  The cost of filing, selecting the arbitrator, and the
  first full day of the arbitration must be paid by the authorized
  lender. Additional arbitration expenses after the first day must
  be split between the parties, except that the borrower's total
  liability for the arbitrator's expense may not exceed $200.
         Sec. 354.467.  CREDIT COUNSELORS. An authorized lender
  shall provide each potential borrower a list of credit counselors
  before the potential borrower submits a credit application. The
  list must include counselors who are members of, accredited by, or
  certified by the National Foundation for Consumer Credit, the
  Council on Accreditation, or the United States Department of
  Housing and Urban Development or another organization that the
  authorized lender believes will provide quality service. This
  information must be conspicuous and must be provided separately
  from any other information.
  SUBCHAPTER J.  ADMINISTRATION OF CHAPTER
         Sec. 354.501.  ADOPTION OF RULES. (a) The finance
  commission may adopt rules to enforce this chapter.
         (b)  The commissioner shall recommend proposed rules to the
  finance commission.
         Sec. 354.502.  EXAMINATION; ACCESS TO RECORDS. (a) The
  commissioner or the commissioner's representative shall, at the
  times the commissioner considers necessary:
               (1)  examine each place of business of each license
  holder; and
               (2)  investigate the license holder's transactions,
  including loans, and records, including books, accounts, papers,
  and correspondence, to the extent the transactions and records
  pertain to the business regulated under this chapter.
         (b)  The license holder shall:
               (1)  give the commissioner or the commissioner's
  representative free access to the license holder's office, place of
  business, files, safes, and vaults; and
               (2)  allow the commissioner or the commissioner's
  representative to make a copy of an item that may be investigated
  under Subsection (a)(2).
         (c)  During an examination the commissioner or the
  commissioner's representative may administer oaths and examine any
  person under oath on any subject pertinent to a matter that the
  commissioner is authorized or required to consider, investigate, or
  secure information about under this chapter.
         (d)  Information obtained under this section is
  confidential.
         (e)  A license holder's violation of Subsection (b) is a
  ground for the suspension or revocation of the license holder's
  license.
         Sec. 354.503.  GENERAL INVESTIGATION. (a) To discover a
  violation of this chapter or to obtain information required under
  this chapter, the commissioner or the commissioner's
  representative may investigate the records, including books,
  accounts, papers, and correspondence, of a person, including an
  authorized lender, who the commissioner has reasonable cause to
  believe is violating this chapter, regardless of whether the person
  claims to not be subject to this chapter. The commissioner or the
  commissioner's representative may administer oaths and take sworn
  statements on any subject pertinent to a matter that the
  commissioner is authorized or required to consider, investigate, or
  secure information about under this chapter.
         (b)  For the purposes of this section, a person who
  advertises, solicits, or otherwise represents that the person is
  willing to make a loan secured by a motor vehicle with multiple
  installments and a monitoring fee is presumed to be engaged in
  licensed activity under this chapter.
         (c)  For the purposes of this section, a person who
  advertises, solicits, or otherwise represents that the person is
  willing to make an unsecured loan with multiple installments and
  interest contracted for and calculated in a manner substantially
  similar to Subchapter F is presumed to be engaged in licensed
  activity under this chapter.
         Sec. 354.504.  CERTIFICATE; CERTIFIED DOCUMENT. On
  application by any person and on payment of any associated cost, the
  commissioner shall furnish under the commissioner's seal and signed
  by the commissioner or an assistant of the commissioner:
               (1)  a certificate of good standing; or
               (2)  a certified copy of a license, rule, or order.
         Sec. 354.505.  TRANSCRIPT OF HEARING: PUBLIC. The
  transcript of a hearing held by the commissioner under this chapter
  is a public record.
         Sec. 354.506.  APPOINTMENT OF AGENT. (a) A license holder
  shall maintain on file with the commissioner a written appointment
  of a resident of this state as the license holder's agent for
  service of all judicial or other process or legal notice, unless the
  license holder has appointed an agent under another statute of this
  state.
         (b)  If a license holder does not comply with this section,
  service of all judicial or other process or legal notice may be made
  on the commissioner.
         Sec. 354.507.  PAYMENT OF EXAMINATION COSTS AND
  ADMINISTRATION EXPENSES. A license holder shall pay to the
  commissioner an amount assessed by the commissioner to cover the
  direct and indirect cost of an examination of the license holder
  under Section 354.502 and a proportionate share of general
  administrative expenses.
         Sec. 354.508.  RECORD RETENTION. (a) A license holder shall
  maintain a record of each loan made under this chapter as is
  necessary to enable the commissioner to determine whether the
  license holder is complying with this chapter.
         (b)  A license holder shall maintain and make available in
  this state, or, if the license holder makes, transacts, or
  negotiates loans principally by mail, maintain and make available
  at the license holder's principal place of business, a record of
  each loan made under this chapter until the later of:
               (1)  the fourth anniversary of the date of the loan; or
               (2)  the second anniversary of the date on which the
  final entry is made in the record.
         (c)  A record described by Subsection (a) must be prepared in
  accordance with accepted accounting practices.
         (d)  The commissioner shall accept a license holder's system
  of records if the system discloses the information reasonably
  required under Subsection (a).
         (e)  A license holder shall keep each obligation signed by a
  borrower at an office in this state designated by the license holder
  unless the obligation is transferred under an agreement that gives
  the commissioner access to the obligation.
         Sec. 354.509.  ANNUAL REPORT. (a)  Each year, not later than
  May 1 or a later date set by the commissioner, a license holder
  shall file with the commissioner a report that contains relevant
  information required by the commissioner concerning the license
  holder's business and operations during the preceding calendar year
  for each office of the license holder in this state where business
  is conducted under this chapter.
         (b)  A report under this section must be:
               (1)  under oath; and
               (2)  in the form prescribed by the commissioner.
         (c)  A report and information provided in a report under this
  section are confidential.
         (d)  Annually the commissioner shall prepare and publish a
  consolidated analysis and recapitulation of reports filed under
  this section.
         (e)  The following information must be included in a report
  under this section and stated separately for each quarter:
               (1)  the number of borrowers with whom the license
  holder entered into a loan subject to this chapter;
               (2)  the number of loans made by the license holder;
               (3)  the number of loan refinancing transactions made
  by the license holder;
               (4)  the number of borrowers refinancing loans made by
  the license holder;
               (5)  the number of borrowers refinancing more than one
  loan made by the license holder;
               (6)  the average amount of loans made by the license
  holder;
               (7)  the total amount of fees charged by the license
  holder;
               (8)  the number of vehicles surrendered or repossessed
  under the terms of a loan made by the license holder;
               (9)  the mean, median, and mode of the number of loans
  obtained by each borrower as a result of entering into a loan made
  by the license holder; and
               (10)  any related information the commissioner
  determines necessary.
         (f)  The commissioner will verify information provided in
  the annual report during routine examinations and investigations.
         Sec. 354.510.  CONDUCTING ASSOCIATED BUSINESS. A license
  holder may conduct business under this chapter in an office, office
  suite, room, or place of business in which any other business is
  conducted or in combination with any other business unless the
  commissioner:
               (1)  finds after a hearing that the license holder's
  conducting of the other business in that office, office suite,
  room, or place of business has concealed or perpetrated an evasion
  of this chapter; and
               (2)  orders the license holder in writing to desist
  from that conduct in that office, office suite, room, or place of
  business.
         SECTION 2.  This Act takes effect September 1, 2015.