2005 Texas Finance Code CHAPTER 341. GENERAL PROVISIONS

FINANCE CODE

SUBTITLE B. LOANS AND FINANCED TRANSACTIONS

CHAPTER 341. GENERAL PROVISIONS

SUBCHAPTER A. DEFINITIONS AND TIME COMPUTATION


	§ 341.001. DEFINITIONS.  In this subtitle:                                  
		(1)  "Authorized lender" means a person who holds a 
license issued under Chapter 342, a bank, or a savings association.
		(2)  "Bank" means a person:                                                   
			(A)  organized as a state bank under Subtitle A, 
Title 3, or under similar laws of another state if the deposits of a 
bank from another state are insured by the Federal Deposit 
Insurance Corporation;  or
			(B)  organized as a national bank under 12 U.S.C. 
Section 21 et seq., as subsequently amended.
		(3)  "Cash advance" means the total of the amount of 
cash or its equivalent that the borrower receives and the amount 
that is paid at the borrower's direction or request, on the 
borrower's behalf, or for the borrower's benefit.
		(4)  "Commissioner" means the consumer credit 
commissioner.                 
		(5)  "Credit union" means a person:                                           
			(A)  doing business under Subtitle D, Title 3;  or                           
			(B)  organized under the Federal Credit Union Act 
(12 U.S.C. Section 1751 et seq.), as subsequently amended.
		(6)  "Deferred presentment transaction" means a 
transaction in which:       
			(A)  a cash advance in whole or part is made in 
exchange for a personal check or authorization to debit a deposit 
account;
			(B)  the amount of the check or authorized debit 
equals the amount of the advance plus a fee;  and
			(C)  the person making the advance agrees that the 
check will not be cashed or deposited or the authorized debit will 
not be made until a designated future date.
		(7)  "Finance commission" means the Finance Commission 
of Texas or a subcommittee created by rule of the Finance Commission 
of Texas.
		(8)  "Interest" has the meaning assigned by Section 
301.002.                
		(9)  "Loan" has the meaning assigned by Section 301.002 
and includes a sale-leaseback transaction and a deferred 
presentment transaction.
		(10)  "Sale-leaseback transaction" means a transaction 
in which a person sells personal property used primarily for 
personal, family, or household use and the buyer of the property 
agrees to lease the property back to the seller.  In a 
sale-leaseback transaction:
			(A)  the buyer is a creditor and the seller is an 
obligor;                 
			(B)  an agreement to defer payment of a debt and an 
obligation to pay the debt are established;  and
			(C)  any amount received by the buyer in excess of 
the price paid for the property by the buyer is interest subject to 
this subtitle.
		(11)  "Savings association" means a person:                                   
			(A)  organized as a state savings and loan 
association or savings bank under Subtitle B or C, Title 3, or under 
similar laws of another state if the deposits of the savings 
association from another state are insured by the Federal Deposit 
Insurance Corporation;  or
			(B)  organized as a federal savings and loan 
association or savings bank under the Home Owners' Loan Act (12 
U.S.C. Section 1461 et seq.), as subsequently amended.

Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.  Amended 
by Acts 1999, 76th Leg., ch. 344, § 2.033, eff. Sept. 1, 1999;  
Acts 2001, 77th Leg., ch. 1235, § 9, eff. Sept. 1, 2001.


	§ 341.002. COMPUTATION OF MONTH.  (a) For the computation 
of time in this subtitle, a month is the period from a date in a 
month to the corresponding date in the succeeding month.  If the 
succeeding month does not have a corresponding date, the period 
ends on the last day of the succeeding month.
	(b)  For the computation of a fraction of a month, a day is 
equal to one-thirtieth of a month.

Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.                   

SUBCHAPTER B. REGULATING OFFICIAL


	§ 341.101. CONSUMER CREDIT COMMISSIONER.  The consumer 
credit commissioner has the powers and shall perform all duties 
relating to the issuance of a license under this subtitle and is 
responsible for the other administration of this subtitle except as 
provided by this subchapter.

Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.                   


	§ 341.102. REGULATION OF BANKS.  (a) The banking 
commissioner shall enforce this subtitle relating to the regulation 
of a state bank operating under this subtitle.
	(b)  The official exercising authority over the operations 
of national banks equivalent to the authority exercised by the 
banking commissioner over state banks may enforce this subtitle 
relating to the regulation of a national bank operating under this 
subtitle.

Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.                   


	§ 341.103. REGULATION OF SAVINGS ASSOCIATIONS.  (a) The 
savings and loan commissioner  shall enforce this subtitle relating 
to the regulation of state savings associations operating under 
this subtitle.
	(b)  The official exercising authority over the operation of 
federal savings associations equivalent to the authority exercised 
by the savings and loan commissioner over state savings 
associations may enforce this subtitle relating to the regulation 
of a federal savings association operating under this subtitle.

Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.  Amended 
by Acts 1999, 76th Leg., ch. 344, § 2.034, eff. Sept. 1, 1999.


	§ 341.104. REGULATION OF CREDIT UNIONS.  (a) The credit 
union commissioner shall enforce this subtitle relating to the 
regulation of state credit unions operating under this subtitle.
	(b)  The official exercising authority over federal credit 
unions equivalent to the authority exercised by the credit union 
commissioner may enforce this subtitle relating to the regulation 
of a federal credit union operating under this subtitle.

Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.                   

SUBCHAPTER C. REVISED CEILINGS AND BRACKETS


	§ 341.201. DEFINITIONS OF INDEXES.  In this subchapter:                     
		(1)  "Consumer price index" means the Consumer Price 
Index for Urban Wage Earners and Clerical Workers:  U.S. City 
Average, All Items, 1967=100, compiled by the Bureau of Labor 
Statistics, United States Department of Labor, or, if that index is 
canceled or superseded, the index chosen by the Bureau of Labor 
Statistics as most accurately reflecting the changes in the 
purchasing power of the dollar for consumers.
		(2)  "Reference base index" means the consumer price 
index for December 1967.

Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.                   


	§ 341.202. REVISION OF CEILING OR BRACKET.  (a)  Each 
year the commissioner shall compute, in accordance with Section 
341.203, the amount of each:
		(1)  ceiling on a cash advance regulated under this 
subtitle that is required to be revised;  and
		(2)  bracket that establishes a range of cash advances 
or balances to which a maximum charge provided by this subtitle 
applies and that is required to be revised.
	(b)  The revised ceiling or bracket amount takes effect on 
July 1 of the year of its computation.

Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.                   


	§ 341.203. COMPUTATION OF REVISED CEILING OR 
BRACKET.  (a) The amount of a revised ceiling or bracket is 
computed by:
		(1)  dividing the reference base index into the 
consumer price index at the end of the preceding year;
		(2)  computing the percentage of change under 
Subdivision (1) to the nearest whole percent;
		(3)  rounding the result computed under Subdivision (2) 
to the next lower multiple of 10 percent unless the result computed 
under Subdivision (2) is a multiple of 10 percent in which event 
that result is used;  and
		(4)  multiplying the reference amount of the ceiling or 
bracket provided by this subtitle by the result under Subdivision 
(3).
	(b)  If the consumer price index is revised, the revised 
index shall be used to compute amounts under this section after that 
revision takes effect.  If the revision changes the reference base 
index, a revised reference base index shall be used.  The revised 
reference base index shall bear the same ratio to the reference base 
index as the revised consumer price index for the first month in 
which it is available bears to the consumer price index for the 
first month in which the revised consumer price index is available.

Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.                   


	§ 341.204. PUBLICATION OF REVISED CEILING, BRACKET, OR 
INDEX INFORMATION.  (a) The commissioner shall send the amount of a 
revised ceiling or bracket computed under Section 341.203 to the 
secretary of state for publication in the Texas Register before May 
1 of the year in which the amount of the bracket or ceiling is to 
change.
	(b)  If the consumer price index is revised or superseded, 
the commissioner promptly shall send the revised index, the 
numerical equivalent of the reference base index under a revised 
reference base index, or the designation of the index that 
supersedes the consumer price index, as appropriate, to the 
secretary of state for publication in the Texas Register.
	(c)  A court may take judicial notice of information 
published under this section.

Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.                   

SUBCHAPTER D. ADVERTISING REQUIREMENTS


	§ 341.301. INFORMATION ABOUT ADVERTISERS.  (a) In each 
advertisement that purports to offer credit regulated by this 
subtitle, Subtitle C, or Chapter 394, the advertiser shall disclose 
the legal or registered name of the advertiser and:
		(1)  shall disclose the street address of the 
advertiser's place of business unless the advertisement:
			(A)  is located on the premises of the 
advertiser's place of business;  or 
			(B)  is broadcast by radio or television;  or                                
		(2)  if the advertisement is broadcast by radio or 
television, shall:       
			(A)  disclose the telephone number of the 
advertiser;  and                 
			(B)  comply with the applicable disclosure 
requirements of 12 C.F.R. Section 226.1 et seq.  (Regulation Z).
	(b)  This section does not apply to:                                           
		(1)  a federally insured depository institution;  or                          
		(2)  a person engaged in interstate commerce who 
advertises under a generally recognized trade name, abbreviated 
form of a trade name, or logo.

Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.                   

SUBCHAPTER E. PROHIBITIONS AND VIOLATIONS


	§ 341.401. DISCRIMINATION PROHIBITED.  (a)  An 
authorized lender or other person involved in a transaction subject 
to this title may not deny to an individual who has the capacity to 
contract an extension of credit, including a loan, in the 
individual's name or restrict or limit the credit extended:
		(1)  because of sex, race, color, religion, national 
origin, marital status, or age;
		(2)  because all or part of the individual's income 
derives from a public assistance program in the form of social 
security or supplemental security income;  or
		(3)  because the individual has in good faith exercised 
a right under the Consumer Credit Protection Act (15 U.S.C. Section 
1601 et seq.;  18 U.S.C. Section 891 et seq.).
	(b)  In interpreting this section, a court or administrative 
agency shall be guided by the Equal Credit Opportunity Act (15 
U.S.C. Section 1691 et seq.) and regulations under and 
interpretations of that Act by the Federal Reserve Board to the 
extent that Act and those regulations and interpretations can be 
made applicable to conduct prohibited by this section.

Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.                   


	§ 341.402. PENALTIES FOR PROHIBITED DISCRIMINATION.  (a) 
A person who violates Section 341.401 is liable to the aggrieved 
individual for:
		(1)  the actual damages caused by the violation;                              
		(2)  punitive damages not to exceed $10,000 in an 
action brought by the aggrieved individual;  and
		(3)  court costs.                                                             
	(b)  The liability of a person under this section is instead 
of and not in addition to that person's liability under Title VII of 
the Consumer Credit Protection Act (15 U.S.C. Section 1691 et 
seq.). If the same act or omission violates Section 341.401 and 
applicable federal law, the person aggrieved by that conduct may 
bring a legal action to recover monetary damages either under this 
section or under that federal law, but not both.
	(c)  In addition to the other liabilities prescribed by this 
section, a person holding a license issued under this subtitle who 
violates Section 341.401 is subject to revocation or suspension of 
the license or the assessment of civil penalties by the 
commissioner.

Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.  Amended 
by Acts 2005, 79th Leg., ch. 1018, § 1.02, eff. Sept. 1, 2005.


	§ 341.403. FALSE, MISLEADING, OR DECEPTIVE 
ADVERTISING.  (a) A person may not, in any manner, advertise or 
cause to be advertised a false, misleading, or deceptive statement 
or representation relating to a rate, term, or condition of a credit 
transaction, including a loan, regulated under this subtitle, 
Subtitle C, or Chapter 394, or advertise credit terms that the 
person does not intend to offer to consumers who qualify for those 
terms.
	(b)  If a rate or charge is stated in advertising, the rate or 
charge shall be stated fully and clearly.
	(c)  The finance commission may not adopt rules restricting 
advertising or competitive bidding by a license holder regulated by 
the Office of Consumer Credit Commissioner except to prohibit 
false, misleading, or deceptive practices.
	(d)  In its rules to prohibit false, misleading, or deceptive 
practices, the finance commission may not include a rule that:
		(1)  restricts the use of any medium for advertising;                         
		(2)  restricts the use of a license holder's personal 
appearance or voice in an advertisement;
		(3)  relates to the size or duration of an 
advertisement by the license holder;  or
		(4)  restricts the license holder's advertisement under 
a trade name, unless the trade name is deceptive.

Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.  Amended 
by Acts 2001, 77th Leg., ch. 1235, § 10, eff. Sept. 1, 2001;  Acts 
2005, 79th Leg., ch. 1018, § 1.03, eff. Sept. 1, 2005.


	§ 341.404. PROHIBITED ACTS RELATING TO A LOAN.  A person 
may not perform an act, including advertising, or offer a service 
that would cause another to believe that the person is offering to 
make, arrange, or negotiate a loan that is subject to this subtitle, 
Subtitle C, or Chapter 394 unless the person is authorized to 
perform the act or offer the service as:
		(1)  a credit service organization under Chapter 393;                         
		(2)  a pawnbroker under Chapter 371;  or                                      
		(3)  an authorized lender.                                                    

Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.                   


	§ 341.405. PENALTY FOR MAKING ILLEGAL OFFER.  (a) A 
person commits an offense if the person violates Section 341.404.  
An offense under that section is a Class C misdemeanor.
	(b)  A person who violates Section 341.404:                                    
		(1)  may be prosecuted for the offense;  or                                   
		(2)  may be held liable for:                                                  
			(A)  the penalties under Chapter 349;  and                                   
			(B)  civil penalties assessed by the consumer 
credit commissioner.         
	(c)  A person is not subject to both prosecution and the 
penalties described by Subsection (b)(2).

Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.                   


	§ 341.406. WHEN ACT OR OMISSION NOT VIOLATION.  An act or 
omission does not violate this title if the act or omission conforms 
to:
		(1)  Subchapter C;                                                            
		(2)  a provision determined by the commissioner;  or                          
		(3)  an interpretation of this title that is in effect 
at the time of the act or omission and that was made by:
			(A)  the commissioner under Section 14.108;  or                              
			(B)  an appellate court of this state or the 
United States.                

Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.                   

SUBCHAPTER F. LICENSING AND REGULATION IN GENERAL


	§ 341.501. STAGGERED RENEWAL.  The finance commission by 
rule may adopt a system under which licenses under this subtitle 
expire on various dates during the year.  For the year in which the 
license expiration date is changed, the Office of Consumer Credit 
Commissioner shall prorate license fees on a monthly basis so that 
each license holder pays only that portion of the license fee that 
is allocable to the number of months during which the license is 
valid.  On renewal of the license on the new expiration date, the 
total license renewal fee is payable.

Added by Acts 2001, 77th Leg., ch. 1235, § 11, eff. Sept. 1, 
2001.       


	§ 341.502. FORM OF LOAN CONTRACT AND RELATED 
DOCUMENTS.  (a) A contract for a loan under Chapter 342, a retail 
installment transaction under Chapter 348, or a home equity loan 
regulated by the Office of Consumer Credit Commissioner must be:
		(1)  written in plain language designed to be easily 
understood by the average consumer;  and
		(2)  printed in an easily readable font and type size.                        
	(a-1)  If the terms of the agreement for a loan under 
Subsection (a) were negotiated in Spanish, a copy of a summary of 
those terms and other pertinent information shall be provided to 
the debtor in Spanish in a form identical to disclosures required 
for a closed-end transaction under 12 C.F.R. Section 226.18.
	(b)  The finance commission shall adopt rules governing the 
form of contracts to which this section applies.  The rules must 
include model contracts complying with the rules and this section.
	(c)  A person governed by this section is not required to use 
a model contract.  The person, however, may not use a contract other 
than a model contract unless the person has submitted the contract 
to the commissioner.  The commissioner shall issue an order 
disapproving the contract if the commissioner determines that the 
contract does not comply with this section or rules adopted under 
this section.
	(d)  The person may begin using a contract submitted under 
Subsection (c) on the date it is submitted for review.  If the 
commissioner issues an order disapproving the contract, the person 
may not use the contract after the order takes effect.
	(e)  A person may not represent that the commissioner's 
failure to disapprove a contract constitutes an approval of the 
contract by the commissioner, the Office of Consumer Credit 
Commissioner, or the finance commission.

Added by Acts 2001, 77th Leg., ch. 1235, § 11, eff. Sept. 1, 
2001.  Amended by Acts 2005, 79th Leg., ch. 1071, § 1, 2, eff. 
Sept. 1, 2005.