84R664 ATP-F
	By: Ellis	S.B. No. 92

	A BILL TO BE ENTITLED
	AN ACT
	relating to regulation of certain credit services organizations and
	to certain extensions of consumer credit the organizations obtain
	for a consumer or assist a consumer in obtaining.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  Subchapter A, Chapter 393, Finance Code, is
	amended by adding Section 393.004 to read as follows:
	Sec. 393.004.  EFFECT ON MUNICIPAL ORDINANCES. (a) In this
	section, "credit access business" has the meaning assigned by
	Section 393.601.
	(b)  This chapter does not preempt a municipal ordinance
	regulating a credit access business or an extension of consumer
	credit that a credit access business obtains for a consumer or
	assists a consumer in obtaining.
	(c)  If a municipal ordinance described by Subsection (b)
	conflicts with a provision of this chapter regulating a credit
	access business or an extension of consumer credit described by
	Subsection (b), the more stringent regulation controls to the
	extent of the conflict.
	SECTION 2.  Section 393.203, Finance Code, is amended to
	read as follows:
	Sec. 393.203.  ISSUANCE OF CONTRACT AND OTHER DOCUMENTS.
	(a) A credit services organization shall give to the consumer, when
	the document is signed, a copy of the completed contract and any
	other document the organization requires the consumer to sign.
	(b)  The contract and other documents provided by a credit
	access business, as defined by Section 393.221, to a consumer under
	this section in relation to an extension of consumer credit must be:
	(1)  provided before signing wholly written in the
	language in which the contract is negotiated; and
	(2)  read before signing in their entirety in the
	language in which the contract is negotiated to any consumer who
	cannot read.
	SECTION 3.  Section 393.223, Finance Code, is amended by
	amending Subsection (a) and adding Subsection (b-1) to read as
	follows:
	(a)  Before performing services described by Section
	393.602(a) [393.221(1)], a credit access business must provide to a
	consumer a written disclosure adopted by rule of the Finance
	Commission of Texas [that discloses the following] in a form
	prescribed by the commission that:
	(1)  discloses the interest, fees, and annual
	percentage rates, as applicable, to be charged on a deferred
	presentment transaction or on a motor vehicle title loan, as
	applicable, in comparison to interest, fees, and annual percentage
	rates to be charged on other alternative forms of consumer debt;
	(2)  discloses the amount of accumulated fees a
	consumer would incur by renewing or refinancing a deferred
	presentment transaction or motor vehicle title loan that remains
	outstanding for a period of two weeks, one month, two months, and
	three months; [and]
	(3)  provides information regarding the typical
	pattern of repayment of deferred presentment transactions and motor
	vehicle title loans; and
	(4)  references nonprofit agencies that provide
	financial education and training or cash assistance to borrowers.
	(b-1)  The disclosure and notice required by this section
	must be:
	(1)  available in English and Spanish at each location
	at which the credit access business performs services described by
	Section 393.602(a); and
	(2)  provided to a consumer wholly written, and read in
	their entirety at the time provided to any consumer who cannot read,
	in the language in which the contract is negotiated.
	SECTION 4.  Subchapter D, Chapter 393, Finance Code, is
	amended by adding Sections 393.308 and 393.309 to read as follows:
	Sec. 393.308.  RESTRICTIONS ON AMOUNT ADVANCED UNDER CERTAIN
	EXTENSIONS OF CONSUMER CREDIT. (a) In this section, "deferred
	presentment transaction" and "motor vehicle title loan" have the
	meanings assigned by Section 393.601.
	(b)  A credit services organization may not obtain for a
	consumer or assist a consumer in obtaining an extension of consumer
	credit in the form of a deferred presentment transaction if the
	amount of cash advanced exceeds 20 percent of the borrower's gross
	monthly income.
	(c)  A credit services organization may not obtain for a
	consumer or assist a consumer in obtaining an extension of consumer
	credit in the form of a motor vehicle title loan if the amount of
	cash advanced exceeds the lesser of:
	(1)  three percent of the borrower's gross annual
	income; or
	(2)  70 percent of the retail value of the motor
	vehicle.
	(d)  A credit services organization shall use a consumer's
	paycheck or other documentation establishing income to determine a
	consumer's income for purposes of this section.
	Sec. 393.309.  REPAYMENT OF CERTAIN EXTENSIONS OF CONSUMER
	CREDIT. (a) In this section, "deferred presentment transaction"
	and "motor vehicle title loan" have the meanings assigned by
	Section 393.221.
	(b)  An extension of consumer credit in the form of a
	deferred presentment transaction or motor vehicle title loan that a
	credit services organization obtains for a consumer or assists a
	consumer in obtaining may not be payable in more than four
	installments. Proceeds from each installment must be used to repay
	at least 25 percent of the principal amount of the debt. An
	extension of consumer credit described by this subsection that
	provides for repayment in installments may not be refinanced or
	renewed.
	(c)  An extension of consumer credit in the form of a
	deferred presentment transaction or motor vehicle title loan that a
	credit services organization obtains for a consumer or assists a
	consumer in obtaining and that provides for a single lump-sum
	payment may not be refinanced or renewed more than three times.
	Proceeds from each refinancing or renewal must be used to repay at
	least 25 percent of the principal amount of the original debt.
	(d)  For purposes of this section, an extension of consumer
	credit in the form of a deferred presentment transaction or motor
	vehicle title loan that is made to a consumer on or before the
	seventh day after the date the consumer has paid a previous
	extension of consumer credit made by the same person is considered a
	refinance or renewal of the previous debt.
	SECTION 5.  Section 393.501, Finance Code, is amended by
	adding Subsection (c) to read as follows:
	(c)  Each day of a continuing violation of a provision of
	Subchapter C-1 or G constitutes a separate offense.
	SECTION 6.  Section 393.604(a), Finance Code, is amended to
	read as follows:
	(a)  An application for a license under this subchapter must:
	(1)  be under oath;
	(2)  contain the applicant's name and the street
	address, mailing address, facsimile number, and telephone number of
	the applicant at the location for which the license is sought;
	(3)  give the approximate location from which the
	business is to be conducted;
	(4) [(3)]  identify the business's principal parties in
	interest;
	(5) [(4)]  contain the name, physical address, and
	telephone number of all third-party lender organizations with which
	the business contracts to provide services described by Section
	393.602(a) or from which the business arranges extensions of
	consumer credit described by Section 393.602(a); and
	(6) [(5)]  contain other relevant information that the
	commissioner requires for the findings required under Section
	393.607.
	SECTION 7.  Section 393.620, Finance Code, is amended to
	read as follows:
	Sec. 393.620.  TRANSFER OR ASSIGNMENT OF LICENSE PROHIBITED.
	A license may not be transferred or assigned [only with the approval
	of the commissioner].
	SECTION 8.  Subchapter G, Chapter 393, Finance Code, is
	amended by adding Section 393.629 to read as follows:
	Sec. 393.629.  MAINTENANCE OF RECORDS. (a) A credit access
	business shall maintain a complete set of records of all extensions
	of consumer credit obtained for consumers by the business or that
	the business assisted consumers in obtaining. The record
	pertaining to each extension of consumer credit must be retained
	until the third anniversary of the date the extension of consumer
	credit was obtained and must include:
	(1)  the name and address of the consumer;
	(2)  the principal amount of the cash advance or loan;
	(3)  the length of the original term of the extension of
	consumer credit, the number of installments or renewals, and the
	length of the term of any renewal or refinance;
	(4)  the fees charged by the credit access business for
	obtaining for a consumer or assisting the consumer in obtaining the
	extension of consumer credit; and
	(5)  the documentation used to establish a consumer's
	income under Section 393.308.
	(b)  A credit access business shall retain a copy of each
	written agreement between the business and a consumer pertaining to
	an extension of consumer credit, including any agreement regarding
	refinancing or renewing an extension of consumer credit, until the
	third anniversary of the date on which the agreement was entered
	into.
	(c)  A credit access business shall retain a copy of each
	report filed under Section 393.627 until the third anniversary of
	the date on which the report was filed.
	(d)  A record described by this section must be available for
	inspection on request by the office during the normal business
	hours of the credit access business.
	SECTION 9.  The changes in law made by this Act apply only to
	an extension of consumer credit made on or after the effective date
	of this Act. An extension of consumer credit made before the
	effective date of this Act is governed by the law in effect on the
	date the extension of consumer credit was made, and the former law
	is continued in effect for that purpose.
	SECTION 10.  (a)  The change in law made by this Act to
	Section 393.223, Finance Code, applies only to a disclosure or
	notice provided by a credit access business on or after January 1,
	2016. A disclosure or notice provided by a credit access business
	before January 1, 2016, is governed by Section 393.223, Finance
	Code, as that section existed immediately before the effective date
	of this Act, and that law is continued in effect for that purpose.
	(b)  The Finance Commission of Texas shall adopt rules
	prescribing forms under Section 393.223(a), Finance Code, as
	amended by this Act, not later than November 1, 2015.
	SECTION 11.  Section 393.629, Finance Code, as added by this
	Act, applies only to a record created on or after the effective date
	of this Act. A record created before the effective date of this Act
	is governed by the law in effect when the record was created, and
	the former law is continued in effect for that purpose.
	SECTION 12.  This Act takes effect September 1, 2015.