82R4904 KFF-D
	By: Davis of Dallas	H.B. No. 3529

	A BILL TO BE ENTITLED
	AN ACT
	relating to the regulation of debt collection agencies and credit
	bureaus.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  Chapter 20, Business & Commerce Code, is amended
	by adding Section 20.055 to read as follows:
	Sec. 20.055.  NOTIFICATION RELATING TO REPORTING OF ADVERSE
	INFORMATION. Not later than the 10th day after the date adverse
	information is added to a consumer's file, the consumer reporting
	agency shall notify the consumer in writing that the information
	has been added to the consumer's file. The notice must include:
	(1)  a brief description of the adverse information;
	(2)  the name, address, and telephone number of the
	person who provided the information;
	(3)  an explanation regarding the actions a consumer
	may take to dispute the adverse information if the information is
	inaccurate; and
	(4)  the information described by Section 20.03(a)(3).
	SECTION 2.  Sections 20.06(a), (b), (c), (d), and (e),
	Business & Commerce Code, are amended to read as follows:
	(a)  If the completeness or accuracy of information
	contained in a consumer's file is disputed by the consumer and the
	consumer notifies the consumer reporting agency of the dispute, the
	agency shall reinvestigate the disputed information free of charge
	[and record the current status of the disputed information] not
	later than the 30th business day after the date on which the agency
	receives the notice and, pending the results of the
	reinvestigation, promptly delete the disputed information from the
	consumer's file. The consumer reporting agency shall provide the
	consumer with the option of notifying the agency of a dispute
	concerning the consumer's file by speaking directly to a
	representative of the agency during normal business hours.
	(b)  Not later than the fifth business day after the date on
	which a consumer reporting agency receives notice of a dispute from
	a consumer in accordance with Subsection (a), the agency shall
	provide notice of the dispute to:
	(1)  each person who provided any information related
	to the dispute; and
	(2)  each person who requested a copy of the consumer's
	report during the six-month period preceding the date of the
	dispute.
	(c)  A consumer reporting agency may terminate a
	reinvestigation of information disputed by a consumer under
	Subsection (a) if the agency reasonably determines that the dispute
	is frivolous or irrelevant. An agency that terminates a
	reinvestigation of disputed information under this subsection
	shall promptly notify the consumer of the termination and the
	reasons for the termination by mail, or if authorized by the
	consumer, by telephone and shall promptly reinsert the information
	into the consumer's file. The presence of contradictory
	information in a consumer's file does not by itself constitute
	reasonable grounds for determining that the dispute is frivolous or
	irrelevant.
	(d)  If disputed information is found to be accurate
	[inaccurate or cannot be verified] after a reinvestigation under
	Subsection (a), the consumer reporting agency[, unless otherwise
	directed by the consumer,] shall promptly reinsert [delete] the
	information into [from] the consumer's file[, revise the consumer
	file, and provide the revised consumer report to the consumer and to
	each person who requested the consumer report within the preceding
	six months]. The consumer reporting agency may not report in
	subsequent reports disputed information found, after a
	reinvestigation under Subsection (a), to be [the] inaccurate or
	unverifiable [unverified information in subsequent reports].
	(e)  Information deleted under Subsection (a) that is found
	to be inaccurate or unverifiable by the agency's reinvestigation
	under that subsection [(d)] may not be reinserted in the consumer's
	file unless the person who furnishes the information to the
	consumer reporting agency reinvestigates and states in writing or
	by electronic record to the agency that the information is complete
	and accurate.
	SECTION 3.  Sections 392.101(a) and (c), Finance Code, are
	amended to read as follows:
	(a)  A third-party debt collector or credit bureau may not
	engage in debt collection unless the third-party debt collector or
	credit bureau has obtained a surety bond issued by a surety company
	authorized to do business in this state as prescribed by this
	section. A copy of the bond for a credit bureau must be filed with
	the secretary of state. A copy of the bond for a third-party debt
	collector must be filed with the Texas Department of Licensing and
	Regulation.
	(c)  The bond must be in the amount of $50,000 [$10,000].
	SECTION 4.  Section 392.202, Finance Code, is amended by
	amending Subsections (a), (c), and (d) and adding Subsection (a-1)
	to read as follows:
	(a)  An individual who disputes the accuracy of an item that
	is in a third-party debt collector's or credit bureau's file on the
	individual and that relates to a debt being collected by the
	third-party debt collector may notify in writing the third-party
	debt collector of the inaccuracy. The third-party debt collector
	shall:
	(1)  make a written record of the dispute;
	(2)  notify each credit bureau, if any, to which the
	collector has reported the item that the individual disputes the
	accuracy of the item;
	(3)  initiate an investigation of the dispute described
	by Subsections (b)-(e), if the collector reports information
	related to the dispute to a credit bureau; and
	(4)  [. If the third-party debt collector does not
	report information related to the dispute to a credit bureau, the
	third-party debt collector shall] cease collection efforts until an
	investigation of the dispute described by Subsections (b)-(e)
	determines the accurate amount of the debt, if any.
	(a-1)  [If the third-party debt collector reports
	information related to the dispute to a credit bureau, the
	reporting third-party debt collector shall initiate an
	investigation of the dispute described by Subsections (b)-(e) and
	shall cease collection efforts until the investigation determines
	the accurate amount of the debt, if any.] This section does not
	affect the application of Chapter 20, Business & Commerce Code, to a
	third-party debt collector subject to that chapter.
	(c)  If the third-party debt collector admits that the item
	is inaccurate under Subsection (b), the third-party debt collector
	shall:
	(1)  not later than the fifth business day after the
	date of the admission:
	(A)[,]  correct the item in the relevant file; and
	(B)  notify any credit bureau informed of the
	dispute under Subsection (a) that the item is inaccurate; and
	(2)  immediately cease collection efforts related to
	the portion of the debt that was found to be inaccurate and on
	correction of the item send, to each person who has previously
	received a report from the third-party debt collector containing
	the inaccurate information, notice of the inaccuracy and a copy of
	an accurate report.
	(d)  If the third-party debt collector states that there has
	not been sufficient time to complete an investigation, the
	third-party debt collector shall immediately:
	(1)  change the item in the relevant file as requested
	by the individual;
	(2)  notify any credit bureau informed of the dispute
	under Subsection (a) that the third-party debt collector has not
	completed an investigation;
	(3) [(2)]  send to each person who previously received
	the report containing the information a notice that is equivalent
	to a notice under Subsection (c) and a copy of the changed report;
	and
	(4) [(3)]  cease collection efforts.
	SECTION 5.  Sections 392.403(a), (b), and (e), Finance Code,
	are amended to read as follows:
	(a)  A person may sue for:
	(1)  injunctive relief to prevent or restrain a
	violation of this chapter; [and]
	(2)  subject to Subsection (e), damages in an amount
	equal to the greater of:
	(A)  actual damages sustained as a result of a
	violation of this chapter; or
	(B)  $1,000 or, if the person is 65 years of age or
	older, $5,000 for each violation of the same nature; or
	(3)  both injunctive relief and damages.
	(b)  A person who successfully maintains an action under
	Subsection (a) is entitled to attorney's fees reasonably related to
	the amount of work performed and costs, including court costs.
	(e)  The court may increase an amount of actual damages in an
	action brought under Subsection (a) to an amount not to exceed three
	times the amount of actual damages sustained if the court finds
	that:
	(1)  the violation has occurred with sufficient
	frequency to constitute a pattern or practice; or
	(2)  the debt collector or third-party debt collector
	wilfully and knowingly committed the violation.  [A person who
	successfully maintains an action under this section for violation
	of Section 392.101, 392.202, or 392.301(a)(3) is entitled to not
	less than $100 for each violation of this chapter.]
	SECTION 6.  Chapter 392, Finance Code, is amended by adding
	Subchapter F to read as follows:
	SUBCHAPTER F. LICENSING OF THIRD-PARTY DEBT COLLECTORS
	Sec. 392.501.  DEFINITIONS. In this subchapter:
	(1)  "Commission" means the Texas Commission of
	Licensing and Regulation.
	(2)  "Department" means the Texas Department of
	Licensing and Regulation.
	Sec. 392.502.  LICENSE REQUIRED.  A person may not act as a
	third-party debt collector under this chapter unless the person
	holds a license issued under this subchapter.
	Sec. 392.503.  EXEMPTIONS. This subchapter does not apply
	to:
	(1)  a real estate broker or salesperson licensed under
	Chapter 1101, Occupations Code, who is acting within the course and
	scope of that license;
	(2)  a financial institution, as defined by Section
	201.101; and
	(3)  an insurance company authorized to do business in
	this state.
	Sec. 392.504.  APPLICATION REQUIREMENTS.  (a) The
	application for a license under this subchapter must:
	(1)  be under oath;
	(2)  contain the name of the applicant and if the
	applicant is:
	(A)  a corporation, a list of the names and
	addresses of its officers and directors;
	(B)  a partnership, a list of the names and
	addresses of its partners; or
	(C)  a limited liability company, a list of the
	names and addresses of its members and managers;
	(3)  contain the street address of the applicant's
	principal place of business;
	(4)  contain all names under which the applicant
	engages in debt collection activities;
	(5)  contain the names of all persons with which the
	applicant is affiliated, and the principal place of business of
	each affiliate; and
	(6)  contain any other relevant information that the
	department determines appropriate.
	(b)  On the filing of a license application, the applicant
	shall pay to the commission:
	(1)  an investigation fee not to exceed $200; and
	(2)  an application fee in an amount determined as
	provided by Section 392.505.
	Sec. 392.505.  GENERAL POWERS AND DUTIES OF COMMISSION;
	FEES.  The commission shall:
	(1)  adopt necessary rules to administer and enforce
	this subchapter; and
	(2)  set application, licensing, and renewal fees in an
	amount reasonable and necessary to cover the cost of administering
	and enforcing this subchapter.
	Sec. 392.506.  ADMINISTRATION BY DEPARTMENT. (a)  The
	department shall administer and enforce this subchapter.
	(b)  The department may recommend proposed rules to the
	commission.
	Sec. 392.507.  FINANCIAL STATEMENT.  (a)  An applicant for a
	license under this subchapter must file with the application a
	financial statement that shows the assets and liabilities of the
	applicant.
	(b)  The financial statement must be sworn to by the
	applicant if the applicant is an individual or by a partner,
	officer, or manager if the applicant is a partnership, corporation,
	trust, joint-stock company, foundation, or association of
	individuals.
	(c)  Information contained in a financial statement filed
	under this section is confidential and not public information but
	is admissible in evidence at a hearing held or an action instituted
	under this chapter.
	Sec. 392.508.  INVESTIGATION OF APPLICATION. On the filing
	of an application and payment of the required fees, the department
	shall conduct an investigation to determine whether to issue the
	license.
	Sec. 392.509.  APPROVAL OR DENIAL OF APPLICATION.  (a)  The
	department shall approve the application and issue to the applicant
	a license under this subchapter if the department finds that:
	(1)  the applicant meets the application requirements
	of Section 392.504;
	(2)  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
	(3)  the applicant has obtained a surety bond as
	required by Section 392.101.
	(b)  If the department does not find the eligibility
	requirements of Subsection (a), the department 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 department 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 department and the applicant may agree to a later
	date in writing.
	Sec. 392.510.  DISPOSITION OF FEES ON DENIAL OF APPLICATION.
	If the department denies the application, the department shall
	retain the investigation fee.
	Sec. 392.511.  ANNUAL LICENSE FEE.  Not later than December
	1, a license holder shall pay to the department an annual fee for
	the year beginning the next January 1, in an amount determined as
	provided by Section 392.505.
	Sec. 392.512.  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 the written notice of delinquency
	of payment has been given to the license holder, the license expires
	on the later of:
	(1)  that day; or
	(2)  December 31 of the last year for which an annual
	fee was paid.
	Sec. 392.513.  LICENSE SUSPENSION OR REVOCATION.  After
	notice and a hearing the department may suspend or revoke a license
	if the department finds that:
	(1)  the license holder failed to pay the annual
	license fee, an examination fee, or another fee imposed by the
	department;
	(2)  the license holder, knowingly or without the
	exercise of due care, has committed multiple violations of 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 department's
	denial of the application.
	Sec. 392.514.  REINSTATEMENT OF SUSPENDED LICENSE; ISSUANCE
	OF NEW LICENSE AFTER REVOCATION.  The department 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 department's denial of an original application for
	the license.
	Sec. 392.515.  SURRENDER OF LICENSE.  A license holder may
	surrender a license issued under this subchapter by delivering to
	the department:
	(1)  the license; and
	(2)  a written notice of the license's surrender.
	Sec. 392.516.  TRANSFER OR ASSIGNMENT OF LICENSE PROHIBITED.
	A license may not be transferred or assigned.
	SECTION 7.  Section 392.403, Finance Code, as amended by
	this Act, applies only to a cause of action that accrues on or after
	the effective date of this Act.  A cause of action that accrues
	before the effective date of this Act is governed by the law as it
	existed immediately before the effective date of this Act, and the
	former law is continued in effect for that purpose.
	SECTION 8.  Not later than October 1, 2011, the Texas
	Commission of Licensing and Regulation shall adopt rules required
	by Section 392.505, Finance Code, as added by this Act.
	SECTION 9.  A person is not required to obtain a license
	under Subchapter F, Chapter 392, Finance Code, as added by this Act,
	until January 1, 2012.
	SECTION 10.  This Act takes effect September 1, 2011.