Bill Text: TX HB2592 | 2011-2012 | 82nd Legislature | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Relating to notice and disclosure requirements for certain credit services organizations regarding charges and consumer borrowing; providing an administrative penalty.

Spectrum: Slight Partisan Bill (Democrat 9-4)

Status: (Passed) 2011-06-17 - Effective on 1/1/12 [HB2592 Detail]

Download: Texas-2011-HB2592-Introduced.html

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82R13649 CLG-D
By: Truitt H.B. No. 2592

A BILL TO BE ENTITLED
AN ACT
relating to notice and disclosure requirements for credit services
organizations regarding charges and consumer borrowing.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 393.001, Finance Code, is amended by
adding Subdivisions (3-a) and (5) to read as follows:
(3-a) "Deferred presentment transaction" has the
meaning assigned by Section 341.001. The term is also referred to
as a payday loan.
(5) "Motor vehicle certificate of title loan" or "auto
title loan" means a loan in which a motor vehicle certificate of
title is given as security for the loan. The term does not include a
retail installment transaction under Chapter 348 or another loan
made to finance the purchase of a motor vehicle.
SECTION 2. The heading to Subchapter B, Chapter 393,
Finance Code, is amended to read as follows:
SUBCHAPTER B. REGISTRATION; [AND] DISCLOSURE STATEMENTS AND OTHER
REQUIREMENTS
SECTION 3. Subchapter B, Chapter 393, Finance Code, is
amended by adding Sections 393.107 and 393.108 to read as follows:
Sec. 393.107. POSTING OF FEE SCHEDULE; NOTICES. (a) A
credit services organization shall post, in a conspicuous location
in an area of the organization accessible to consumers:
(1) a schedule of all fees to be charged for services
performed by the credit services organization, including fees to be
charged in connection with deferred presentment transactions and
motor vehicle certificate of title loans;
(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; and
(3) a notice that reads as follows:
"An advance of money obtained through a payday loan or auto
title loan is not intended to meet long-term financial needs. A
payday loan or auto title loan should only be used to meet
intermediate short-term cash needs. Renewing the loan rather than
paying the debt in full when due will require the payment of
additional charges."
(b) The Finance Commission of Texas may adopt rules to
implement this section.
Sec. 393.108. CONSUMER BORROWING INFORMATION. (a) A
credit services organization shall provide to consumers the
following:
(1) a disclosure of the annual percentage rate of all
interest and fees to be charged on a deferred presentment
transaction and on a motor vehicle certificate of title loan, in
comparison to the annual percentage rate of all interest and fees to
be charged on other similar financial products;
(2) a disclosure of the amount of accumulated fees a
consumer would incur for having a $300 deferred presentment
transaction or a $300 motor vehicle certificate of title loan, by
way of example, outstanding for a period of two weeks, one month,
two months, and three months in comparison to the amount of
equivalent fees incurred for borrowing the same amount on a credit
card for those extended periods; and
(3) information regarding the typical profile of
repayment of deferred presentment transactions and motor vehicle
certificate of title loans.
(b) The Finance Commission of Texas may adopt rules to
implement this section.
SECTION 4. This Act takes effect September 1, 2011.