HB5462 - Relating to the regulation of earned income access providers and earned income access transactions; requiring an occupational license; authorizing fees; providing an administrative penalty; creating a criminal offense.

  89R8609 PRL-F     By: Oliverson H.B. No. 5462       A BILL TO BE ENTITLED   AN ACT   relating to the regulation of earned income access providers and   earned income access transactions; requiring an occupational   license; authorizing fees; providing an administrative penalty;   creating a criminal offense.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Section 14.107, Finance Code, is amended to read   as follows:          Sec. 14.107.  FEES.  (a)  The finance commission shall   establish reasonable and necessary fees for carrying out the   commissioner's powers and duties under this chapter, Title 4,   Chapter 393 with respect to a credit access business, and Chapters   371, 392, [ and ] 394 , and 398 and under Chapters 51, 302, 601, and   621, Business & Commerce Code.          (b)  The finance commission by rule shall set the fees for   licensing and examination, as applicable, under Chapter 393 with   respect to a credit access business or Chapter 342, 347, 348, 351,   353, [ or ] 371 , or 398 at amounts or rates necessary to recover the   costs of administering those chapters.  The rules may provide that   the amount of a fee charged to a license holder is based on the   volume of the license holder's regulated business and other key   factors.  The commissioner may provide for collection of a single   fee for the term of the license from a person licensed under   Subchapter G of Chapter 393 or Chapter 342, 347, 348, 351, or 371.     The fee must include amounts due for both licensing and   examination.          SECTION 2.  Section 14.112(a), Finance Code, is amended to   read as follows:          (a)  The finance commission by rule shall prescribe the   licensing or registration period for licenses and registrations   issued under Chapters 342, 345, 347, 348, 351, 352, 353, 371, 393,   [ and ] 394 , and 398 of this code and Chapter 1956, Occupations Code,   not to exceed two years.          SECTION 3.  Section 14.201, Finance Code, is amended to read   as follows:          Sec. 14.201.  INVESTIGATION AND ENFORCEMENT AUTHORITY.     Investigative and enforcement authority under this subchapter   applies only to:                (1)  this chapter;                (2)  Subtitles B and C, Title 4;                (3)  Chapter 393 with respect to a credit access   business;                (4)  Chapter 394;                 (5)  Chapter 398; and                 (6)  [ (5) ]  Subchapter B, Chapter 1956, Occupations   Code.          SECTION 4.  Sections 14.251(a) and (b), Finance Code, are   amended to read as follows:          (a)  The commissioner may assess an administrative penalty   against a person who knowingly and wilfully violates or causes a   violation of this chapter, Chapter 394, Chapter 398, or Subtitle B,   Title 4, or a rule adopted under this chapter, Chapter 394, Chapter   398, or Subtitle B, Title 4.          (b)  The commissioner may order the following businesses or   other persons to pay restitution to an identifiable person:                (1)  a person who violates or causes a violation of this   chapter, Chapter 394, or Subtitle B, Title 4, or a rule adopted   under this chapter, Chapter 394, or Subtitle B, Title 4;                (2)  a credit access business who violates or causes a   violation of Chapter 393 or a rule adopted under Chapter 393;                 (3)     an earned income access provider who violates or   causes a violation of Chapter 398 or a rule adopted under Chapter   398; or                 (4)  [ (3) ]  a person who violates or causes a violation   of Subchapter B, Chapter 1956, Occupations Code, or a rule adopted   under that subchapter.          SECTION 5.  Title 5, Finance Code, is amended by adding   Chapter 398 to read as follows:   CHAPTER 398.   EARNED INCOME ACCESS TRANSACTIONS   SUBCHAPTER A. GENERAL PROVISIONS           Sec.   398.001.     SHORT TITLE.   This chapter may be cited as the   Texas Earned Income Access Act.           Sec. 398.002.  DEFINITIONS.  In this chapter:                 (1)     "Commissioner" means the consumer credit   commissioner.                 (2)     "Consumer" means an individual who resides in this   state.                 (3)  "Debt collection activity" means:                       (A)     the business of collecting any debts,   directly or indirectly, owed or due another person or any debts   asserted to be owed or due another person;                       (B)     the business of a buyer of debts seeking to   collect the debts, directly or indirectly; or                       (C)     the business of a creditor collecting its own   debts if the creditor uses a name other than the creditor's own name   that would suggest or indicate that someone other than the creditor   is collecting or attempting to collect the debts.                 (4)     "Earned but unpaid income" means salary, wages, or   compensation that has been earned by, or has accrued to the benefit   of, a consumer for labor or services performed for or on behalf of   an obligor but has not, at the time of the payment of proceeds, been   paid to the consumer by the obligor.                 (5)     "Earned income access provider" or "provider"   means a person that:                       (A)     provides or offers to provide, on behalf of   an obligor, an earned income access transaction to a consumer   earning salary, wages, or compensation from the obligor;                       (B)     offers an earned income access transaction to   a consumer; or                       (C)     enters into an earned income access   transaction with a consumer.                 (6)     "Earned income access rate cap" means the limit,   established by the commissioner, on the amount that may be charged   to or received from a consumer for an earned income access   transaction, without option to the consumer.                 (7)     "Earned income access transaction" means a payment   of earned but unpaid income to a consumer occurring on a day other   than:                       (A)  the consumer's regular payday; or                       (B)     a regularly scheduled day on which the   obligor pays to the consumer wages or compensation that has been   earned by or has accrued to the benefit of the consumer.                 (8)  "Fee":                       (A)  means:                             (i)     an amount charged to a consumer by a   provider for an earned income access transaction; and                             (ii)     an amount received by a provider from a   consumer for an earned income access transaction; and                       (B)     includes an amount paid voluntarily as   described by Section 398.103(a)(11).                 (9)     "Finance commission" means the Finance Commission   of Texas.                 (10)     "Legal representative" means an executor,   administrator, trustee, conservator, receiver, or other person   appointed by a court or by trust or will to be empowered to control   the person or property of any person.   The term includes a successor   to the person in accordance with the provisions of the appointment.                 (11)     "Nonrecourse" means, with respect to an earned   income access transaction, the unavailability of a legal cause of   action or remedy that may be brought against a consumer relating to   the transaction.                 (12)     "Obligor" means a person who is obligated to pay a   consumer a sum of money on an hourly, project-based, piecework, or   other basis for labor or services performed by the consumer for or   on behalf of the person. The term does not include:                       (A)  a customer of an obligor; or                       (B)     a third party, other than a person described   by Paragraph (A), that has an obligation to make a payment to a   consumer based solely on the consumer's agency relationship with   the obligor.                 (13)     "Proceeds" means money received by a consumer   under an earned income access transaction.           Sec.   398.003.     CONTROL. (a)   For purposes of this chapter, a   person has control of another person if the person has possession,   directly or indirectly, of the power to direct or cause the   direction of the management and policies of the other person   through the ownership of voting shares or in another manner.           (b)     The following create a presumption that a person has   control of another person:                 (1)     a person's ownership of, control of, or having the   power to vote 20 percent or more of:                       (A)     another person's outstanding voting shares;   or                       (B)     the outstanding voting shares of a person   that owns, controls, or holds the power to vote 10 percent or more   of the outstanding voting shares of a person described by Paragraph   (A); or                 (2)     subject to Subsection (c), a person who, directly   or indirectly, could effectively shut down the operations of   another person by the person's voting activities or by authorities   that lie within the other person's established corporate governance   structure.           (c)     A person is not considered to have control of another   person who is a company solely by virtue of being an officer or   director of the company.           Sec.   398.004.       RULES. The finance commission may adopt   rules as necessary to implement this chapter.   SUBCHAPTER B. LICENSE REQUIREMENT           Sec.   398.051. [Text truncated for display. Full text available on Congress.gov.]