(a)
This
article may be known and cited as “credit access business regulation.”
(b)
The
purpose of this article is to protect the welfare of the citizens
of the city by monitoring credit access businesses in an effort to
reduce abusive and predatory lending practices. To this end, this
article establishes a registration program for credit access businesses,
imposes restrictions on extensions of consumer credit made by credit
access businesses, and imposes recordkeeping requirements on credit
access businesses.
(Ordinance 1054 adopted 2/6/17; 1999 Code, sec. 118.01)
As used in this article:
A certificate of registration issued by the director under
this article to the owner or operator of a credit access business.
An individual who is solicited to purchase or who purchases
the services of a credit access business.
The language the consumer understands best.
Has the meaning given that term in section 393.601 of the
Texas Finance Code.
Has the meaning given that term in section 393.601 of the
Texas Finance Code.
The director of code enforcement or as otherwise designated
by the city manager to enforce and administer this article.
Has the meaning given that term in section 393.001 of the
Texas Finance Code.
Has the meaning given that term in section 393.601 of the
Texas Finance Code.
Any individual, corporation, organization, partnership, association,
financial institution, or any other legal entity.
A person issued a certificate of registration for a credit
access business under this article and includes all owners and operators
of the credit access business identified in the registration application
filed under this article.
A license to operate a credit access business issued by the
state consumer credit commissioner under chapter 393, subchapter G
of the Texas Finance Code.
(Ordinance 1054 adopted 2/6/17; 1999 Code, sec. 118.02)
(a)
A
person who violates a provision of this article, or who fails to perform
an act required of the person by this article, commits an offense.
A person commits a separate offense for each and every violation relating
to an extension of consumer credit, and for each day during which
a violation is committed, permitted, or continued.
(b)
An offense under this article is punishable by a fine in accordance with the general penalty provided in section 1.01.009 of this code.
(c)
A
culpable mental state is not required for the commission of an offense
under this article and need not be proved.
(Ordinance 1054 adopted 2/6/17; 1999 Code, sec. 118.03; Ordinance adopting 2023 Code)
It is a defense to prosecution under this article that at the
time of the alleged offense the person was not required to be licensed
by the state as a credit access business under chapter 393, subchapter
G, of the Texas Finance Code.
(Ordinance 1054 adopted 2/6/17; 1999 Code, sec. 118.04)
A person commits an offense if the person acts, operates, or
conducts business as a credit access business without a valid certificate
of registration. A certificate of registration is required for each
physically separate credit access business.
(Ordinance 1054 adopted 2/6/17; 1999 Code, sec. 118.05)
(a)
To
obtain a certificate of registration for a credit access business,
a person must submit an application on a form provided for that purpose
to the director. The application must contain the following:
(1)
The name, street address, mailing address, facsimile number, and
telephone number of the applicant.
(2)
The business or trade name, street address, mailing address, facsimile
number, and telephone number of the credit access business.
(3)
The names, street addresses, mailing addresses, and telephone numbers
of all owners of the credit access business, and the nature and extent
of each person’s interest in the credit access business.
(4)
A copy of a current, valid state license held by the credit access
business pursuant to chapter 393, subchapter G of the Texas Finance
Code.
(5)
A copy of a current, valid certificate of occupancy showing that
the credit access business is in compliance with the city code.
(b)
An
applicant or registrant shall notify the director within 45 days after
any material change in the information contained in the application
for a certificate of registration, including, but not limited to,
any change of address and any change in the status of the state license
held by the applicant or registrant.
(Ordinance 1054 adopted 2/6/17; 1999 Code, sec. 118.06; Ordinance adopting 2023 Code)
(a)
The director shall issue to the applicant a certificate of registration upon receiving a completed application under section 5.04.006.
(b)
A
certificate of registration issued under this section must be conspicuously
displayed to the public in the credit access business. The certificate
of registration must be presented upon request to the director or
any peace officer for examination.
(Ordinance 1054 adopted 2/6/17; 1999 Code, sec. 118.07)
(Ordinance 1054 adopted 2/6/17; 1999 Code, sec. 118.08)
A certificate of registration for a credit access business is
not transferable.
(Ordinance 1054 adopted 2/6/17; 1999 Code, sec. 118.09)
(a)
A
credit access business shall maintain a complete set of records of
all extensions of consumer credit arranged or obtained by the credit
access business, which must include the following information:
(1)
The name and address of the consumer;
(2)
The principal amount of cash actually advanced;
(3)
The length of the extension of consumer credit, including the number
of installments and renewals;
(4)
The fees charged by the credit access business to arrange or obtain
an extension of consumer credit; and
(b)
A
credit access business shall maintain a copy of each written agreement
between the credit access business and a consumer evidencing an extension
of a consumer credit (including, but not limited to, any refinancing
or renewal granted to the consumer).
(c)
A
credit access business shall maintain copies of all quarterly reports
filed with the state consumer credit commissioner under section 393.627
of the Texas Finance Code.
(d)
The
records required to be maintained by a credit access business under
this section must be retained for at least three years and made available
for inspection by the city upon request during the usual and customary
business hours of the credit access business.
(Ordinance 1054 adopted 2/6/17; 1999 Code, sec. 118.10)
(a)
The
cash advanced under an extension of consumer credit that a credit
access business obtains for a consumer or assists a consumer in obtaining
in the form of a deferred presentment transaction may not exceed 20
percent of the consumer’s gross monthly income.
(b)
The
cash advanced under an extension of consumer credit that a credit
access business obtains for a consumer or assists a consumer in obtaining
in the form of a motor vehicle title loan may not exceed the lesser
of:
(c)
A
credit access business shall use a paycheck or other documentation
establishing income to determine a consumer’s income.
(d)
An
extension of consumer credit that a credit access business obtains
for a consumer or assists a consumer in obtaining and that provides
for repayment in installments may not be payable in more than four
installments. Proceeds from each installment must be used to repay
at least 25 percent of the principal amount of the extension of consumer
credit. An extension of consumer credit that provides for repayment
in installments may not be refinanced or renewed.
(e)
An
extension of consumer credit that a credit access business obtains
for a consumer or assists a consumer in obtaining and that provides
for a single lump sum repayment may not be refinanced or renewed more
than three times. Proceeds from each refinancing or renewal must be
used to repay at least 25 percent of the principal amount of the original
extension of consumer credit.
(f)
For
purposes of this section, an extension of consumer credit that is
made to a consumer within seven days after a previous extension of
consumer credit has been paid by the consumer will constitute a refinancing
or renewal.
(Ordinance 1054 adopted 2/6/17; 1999 Code, sec. 118.11)
(a)
Every
agreement between the credit access business and a consumer evidencing
an extension of consumer credit (including, but not limited to, any
refinancing or renewal granted to the consumer) must be written in
the consumer’s language of preference. Every credit access business
location must maintain on its premises, to be available for use by
consumers, agreements in the English and Spanish languages.
(b)
For
every consumer who cannot read, every agreement between the credit
access business and a consumer evidencing an extension of consumer
credit (including, but not limited to, any refinancing or renewal
granted to the consumer) must be read to the consumer in its entirety
in the consumer’s language of preference, prior to the consumer’s
signature.
(c)
For
every consumer who cannot read, every disclosure and notice required
by law must be read to the consumer in its entirety in the consumer’s
language of preference, prior to the consumer’s signature.
(Ordinance 1054 adopted 2/6/17; 1999 Code, sec. 118.12)
A credit access business shall provide a form, to be prescribed by the director, to each consumer seeking assistance in obtaining an extension of consumer credit which references nonprofit agencies that provide financial education and training programs and agencies with cash assistance programs. The form will also contain information regarding extensions of consumer credit, and must include the information required by section 5.04.010(a)(1) through (5) of this article specific to the loan agreement with the consumer. If the director has prescribed a form in the consumer’s language of preference, the form must be provided in the consumer’s language of preference.
(Ordinance 1054 adopted 2/6/17; 1999 Code, sec. 118.13)
