H.B. No. 1344

	AN ACT
	relating to the regulation of refund anticipation loans; providing
	an administrative penalty.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  Subtitle B, Title 4, Finance Code, is amended by
	adding Chapter 351 to read as follows:
	CHAPTER 351. TAX REFUND ANTICIPATION LOANS
	Sec. 351.001.  DEFINITIONS. In this chapter:
	(1)  "Borrower" means an individual who receives the
	proceeds of a refund anticipation loan.
	(2)  "Facilitator" means a person who processes,
	receives, or accepts for delivery an application for a refund
	anticipation loan, delivers a check in payment of refund
	anticipation loan proceeds, or in any other manner acts to allow the
	making of a refund anticipation loan.
	(3)  "Lender" means a person who extends credit to a
	borrower in the form of a refund anticipation loan.
	(4)  "Refund anticipation loan" means a loan borrowed
	by a taxpayer based on the taxpayer's anticipated federal income
	tax refund.
	(5)  "Refund anticipation loan fee" means a fee imposed
	or other consideration required by the facilitator or the lender
	for a refund anticipation loan. The term does not include a fee
	usually imposed or other consideration usually required by the
	facilitator in the ordinary course of business for services not
	related to the making of loans, including a fee imposed for tax
	return preparation or for the electronic filing of a tax return.
	Sec. 351.002.  RESTRICTION ON ACTING AS FACILITATOR. (a) A
	person may not, individually or in conjunction or cooperation with
	another person, act as a facilitator unless the person is:
	(1)  engaged in the business of preparing tax returns,
	or employed by a person engaged in the business of preparing tax
	returns;
	(2)  primarily involved in financial services or tax
	preparations;
	(3)  authorized by the Internal Revenue Service as an
	e-file provider; and
	(4)  registered with the commissioner as a facilitator
	under Section 351.003.
	(b)  This section does not apply to:
	(1)  a bank, thrift, savings association, industrial
	bank, or credit union operating under the laws of the United States
	or this state;
	(2)  an affiliate that is a servicer of a person
	described by Subdivision (1) operating under the name of that
	person; or
	(3)  any person who acts solely as an intermediary and
	does not interact directly with a taxpayer in the making of the
	refund anticipation loan.
	Sec. 351.003.  REGISTRATION OF FACILITATORS. (a) To
	register as a facilitator, a person must provide to the
	commissioner, on or before December 31 preceding each calendar year
	in which the person seeks to act as a facilitator:
	(1)  a list of each location in this state at which
	e-file providers authorized by the Internal Revenue Service file
	tax returns on behalf of borrowers for whom the facilitator acts to
	allow the making of a refund anticipation loan; and
	(2)  a processing fee for each location included on the
	list furnished under Subdivision (1).
	(b)  The commissioner shall prescribe the processing fee in
	an amount necessary to cover the costs of administering this
	section.
	(c)  After the December 31 deadline, a facilitator may amend
	the registration required under Subsection (a) to reflect any
	change in the information provided by the registration.
	(d)  The commissioner shall make available to the public a
	list of facilitators registered under this section.
	(e)  The commissioner may prescribe the registration form.
	Sec. 351.004.  DISCLOSURE REQUIREMENTS. (a) A facilitator
	to which Section 351.002 applies shall discuss with and clearly
	disclose to a borrower, after the borrower's tax return has been
	prepared and before the loan is closed:
	(1)  the refund anticipation loan fee schedule;
	(2)  a written statement disclosing:
	(A)  that a refund anticipation loan is a loan and
	is not the borrower's actual income tax refund;
	(B)  that the taxpayer may file an income tax
	return electronically without applying for a refund anticipation
	loan;
	(C)  that the borrower is responsible for
	repayment of the loan and related fees if the tax refund is not paid
	or is insufficient to repay the loan;
	(D)  any fee that will be charged if the loan is
	not approved;
	(E)  the average time, as published by the
	Internal Revenue Service, within which a taxpayer can expect to
	receive a refund for an income tax return filed:
	(i)  electronically, and the refund is:
	(a)  deposited directly into the
	taxpayer's bank account; or
	(b)  mailed to the taxpayer; and
	(ii)  by mail, and the refund is:
	(a)  deposited directly into the
	taxpayer's financial institution account; or
	(b)  mailed to the taxpayer;
	(F)  that the Internal Revenue Service does not
	guarantee:
	(i)  payment of the full amount of the
	anticipated refund; or
	(ii)  a specific date on which it will mail a
	refund or deposit the refund into a taxpayer's financial
	institution account; and
	(G)  the estimated time within which the proceeds
	of the refund anticipation loan will be paid to the borrower if the
	loan is approved; and
	(3)  the following information, specific to the
	borrower:
	(A)  the estimated total fees for the loan; and
	(B)  the estimated annual percentage rate for the
	loan, calculated using the guidelines established under the Truth
	in Lending Act (15 U.S.C. Section 1601 et seq.).
	(b)  A refund anticipation loan fee schedule required by
	Subsection (a)(1) must be a listing or table of refund anticipation
	loan fees charged by the lender for refund anticipation loan
	amounts. The schedule shall:
	(1)  list separately each fee imposed related to the
	making of a refund anticipation loan;
	(2)  list the total amount of fees imposed related to
	the making of a refund anticipation loan; and
	(3)  include, for each stated loan amount, the
	estimated annual percentage rate for the loan, calculated using the
	guidelines established under the Truth in Lending Act (15 U.S.C.
	Section 1601 et seq.).
	(c)  A facilitator who advertises or markets refund
	anticipation loans in Spanish shall offer any borrower the option
	of receiving a Spanish-language printed disclosure and loan
	contract. A facilitator who negotiates a loan with a borrower in
	Spanish shall offer that borrower the option of receiving a
	Spanish-language printed disclosure and loan contract.
	Sec. 351.005.  INVESTIGATION BY COMMISSIONER. The
	commissioner shall:
	(1)  monitor the operations of a facilitator to ensure
	compliance with this chapter; and
	(2)  receive and investigate complaints against a
	facilitator or a person acting as a facilitator.
	Sec. 351.006.  REVOCATION OF REGISTRATION. (a) The
	commissioner may revoke the registration of a facilitator if the
	commissioner concludes that the facilitator has violated this
	chapter. The commissioner shall recite the basis of the decision in
	an order revoking the registration.
	(b)  If the commissioner proposes to revoke a registration,
	the facilitator is entitled to a hearing before the commissioner or
	a hearings officer, who shall propose a decision to the
	commissioner. The commissioner or hearings officer shall prescribe
	the time and place of the hearing. The hearing is governed by
	Chapter 2001, Government Code.
	(c)  A facilitator aggrieved by a ruling, order, or decision
	of the commissioner is entitled to appeal to a district court in the
	county in which the hearing was held. An appeal under this
	subsection is governed by Chapter 2001, Government Code.
	Sec. 351.007.  ADMINISTRATIVE PENALTY. The commissioner may
	assess an administrative penalty of $500 against a person for each
	knowing and wilful violation of this chapter.
	Sec. 351.008.  PREEMPTION OF LOCAL ORDINANCE. This chapter
	preempts a local ordinance or rule regulating refund anticipation
	loans.
	SECTION 2.  (a) Except as provided by Subsection (b) of this
	section, this Act takes effect September 1, 2007.
	(b)  The requirement under Section 351.002(a), Finance Code,
	as added by this Act, that a person who facilitates refund
	anticipation loans be registered under Section 351.003, Finance
	Code, as added by this Act, takes effect January 1, 2008.
	____________________________________________________________
	President of the SenateSpeaker of the House
	I certify that H.B. No. 1344 was passed by the House on April
	12, 2007, by the following vote:  Yeas 140, Nays 1, 2 present, not
	voting; and that the House concurred in Senate amendments to H.B.
	No. 1344 on May 7, 2007, by the following vote:  Yeas 142, Nays 0, 2
	present, not voting.
	______________________________
	Chief Clerk of the House
	I certify that H.B. No. 1344 was passed by the Senate, with
	I certify that H.B. No. 1344 was passed by the Senate, with
	amendments, on May 2, 2007, by the following vote:  Yeas 30, Nays 0.
	______________________________
	Secretary of the Senate
	APPROVED: __________________
	APPROVED: __________________
	Date
	__________________
	Governor