82R4748 CLG-F     By: Flynn H.B. No. 754       A BILL TO BE ENTITLED   AN ACT   relating to the regulation of credit reporting bureaus; providing   penalties.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Subtitle E, Title 3, Finance Code, is amended by   adding Chapter 158 to read as follows:   CHAPTER 158. CREDIT REPORTING BUREAUS   SUBCHAPTER A. GENERAL PROVISIONS          Sec. 158.001.  DEFINITIONS. In this chapter:                (1)  "Commissioner" means the consumer credit   commissioner.                (2)  "Credit reporting bureau" means a person who   engages in the practice of assembling or reporting credit   information about individuals for the purpose of furnishing the   information to a third party.  The term does not include a business   or other person that reports to a credit reporting bureau   information relating to a debt owed to that business or person or   owed to a business or other person who holds a general   distinguishing number issued under Chapter 503, Transportation   Code.                (3)  "Finance commission" means the Finance Commission   of Texas.                (4)  "Office" means the Office of Consumer Credit   Commissioner.                (5)  "Principal," in connection with management of a   license holder or applicant, means a person who performs executive   functions or otherwise controls the executive affairs of a license   holder, including an owner, officer, director, partner, trustee, or   manager of the license holder.   [Sections 158.002-158.100 reserved for expansion]   SUBCHAPTER B. POWERS AND DUTIES OF OFFICE AND FINANCE COMMISSION          Sec. 158.101.  ADMINISTRATION.  The office shall administer   this chapter.          Sec. 158.102.  RULES.  (a)  The finance commission may:                (1)  adopt rules necessary to enforce and administer   this chapter, including rules relating to an application for a   license; and                (2)  adopt rules to accomplish the purposes of Chapter   20, Business & Commerce Code, and any other law applicable to a   credit reporting bureau, including rules reasonable or necessary   to:                      (A)  implement and clarify Chapter 20, Business &   Commerce Code; and                      (B)  defray the cost of enforcing Chapter 20,   Business & Commerce Code, and any other law applicable to a credit   reporting bureau.          (b)  In adopting rules under this section, the finance   commission shall consider the necessity to:                (1)  promote a stable consumer reporting environment;                (2)  provide adequate protection to consumers and their   personal identifying information; and                (3)  ensure a consumer's ability to correct   information provided by a credit reporting bureau to third parties.   [Sections 158.103-158.200 reserved for expansion]   SUBCHAPTER C. APPLICATION FOR AND ISSUANCE OF LICENSE          Sec. 158.201.  LICENSE REQUIREMENT.  A credit reporting   bureau may not engage in the practice of assembling or reporting   credit information about individuals in this state for the purpose   of furnishing the information to a third party, as a service or for   consideration, unless the credit reporting bureau holds a license   issued under this chapter.          Sec. 158.202.  APPLICATION. (a)  An application for a   license issued under this chapter must be in writing, sworn to, and   filed with the commissioner in the form prescribed by the   commissioner.          (b)  The application must:                (1)  state the legal name, federal taxpayer   identification number or social security number, and business   address of:                      (A)  the applicant;                      (B)  each individual who is a principal of the   applicant; and                      (C)  each individual who is a principal of any   person that is a principal of the applicant; and                (2)  disclose any other information that may be   required by rule or reasonably requested by the commissioner.          Sec. 158.203.  ACCOMPANYING FEE, STATEMENTS, AND BOND.  An   application for a license issued under this chapter must be   accompanied by:                (1)  a nonrefundable application fee in the amount   prescribed by finance commission rule that is sufficient to cover   the costs of administering this chapter;                (2)  audited financial statements of the applicant that   are reasonably satisfactory to the commissioner;                (3)  the location of the home office of the applicant   and of the main office of the applicant in this state; and                (4)  a surety bond in the amount of $100,000 that is:                      (A)  in a form satisfactory to the commissioner;   and                      (B)  issued by a bonding company or insurance   company authorized to do business in this state.          Sec. 158.204.  ISSUANCE OF LICENSE. On the filing of an   application that meets the requirements of Sections 158.202 and   158.203, the commissioner shall issue a license to the applicant if   the commissioner:                (1)  approves the documents; and                (2)  finds that the bond is in the prescribed amount.          Sec. 158.205.  DENIAL OF LICENSE; HEARING. (a) A hearing   must be held before a license may be denied.          (b)  The commissioner shall give the applicant notice of the   hearing.   [Sections 158.206-158.300 reserved for expansion]   SUBCHAPTER D. REQUIREMENTS TO MAINTAIN LICENSE          Sec. 158.301.  INSUFFICIENT BOND. (a)  If the commissioner   at any time reasonably determines that the bond required by this   chapter is insecure or deficient in amount, the commissioner by   written order may require the license holder to file a new or   supplemental bond to secure compliance with this chapter.          (b)  The license holder shall comply with the order not later   than the 30th day after the date on which the order is served.          Sec. 158.302.  ANNUAL LICENSE FEE. (a)  Not later than June   30 of each year, a license holder shall pay to the commissioner a   license renewal fee in the amount prescribed by finance commission   rule.          (b)  The fee required by Section 158.203(1) satisfies the   license fee requirement for the first license year or part of that   year.          Sec. 158.303.  REVOCATION OF LICENSE. (a)  The commissioner   may revoke a license:                (1)  on a ground on which the commissioner may refuse to   grant a license; or                (2)  for a violation of this chapter.          (b)  The commissioner may investigate the business and   records of a license holder if the commissioner has reasonable   cause to believe that grounds for revocation exist.          Sec. 158.304.  HEARING ON LICENSE REVOCATION. (a)  The   commissioner shall give a license holder an opportunity for a   hearing before a license may be revoked.          (b)  The commissioner shall give the license holder notice of   the hearing.   [Sections 158.305-158.400 reserved for expansion]   SUBCHAPTER E. CRIMINAL PENALTIES AND CIVIL REMEDIES          Sec. 158.401.  CRIMINAL PENALTY.  (a)  A person commits an   offense if the person intentionally:                (1)  makes an untrue statement of a material fact in an   application or report required to be filed with the commissioner   under this chapter; or                (2)  violates Section 158.201.          (b)  An offense under this section is a third degree felony.          Sec. 158.402.  ADMINISTRATIVE PENALTY. (a)  The   commissioner may impose an administrative penalty on a person in an   amount specified by the commissioner if, after notice and hearing,   the commissioner finds the person has violated:                (1)  this chapter;                (2)  a rule adopted under this chapter; or                (3)  an order of the commissioner issued under this   chapter.          (b)  The amount of the penalty may not exceed:                (1)  $1,000 for each violation; or                (2)  $1,000 for each day the violation continues.          (c)  In determining the amount of an administrative penalty,   the commissioner shall consider:                (1)  the seriousness of the violation, including the   nature, circumstances, extent, and gravity of the prohibited act;                (2)  the extent of actual or potential harm to a person;                (3)  the history of violations;                (4)  the amount necessary to deter future violations;                (5)  efforts to correct the violation; and                (6)  any other matter that justice may require.          (d)  The enforcement of the penalty may be stayed during the   time the order is under judicial review if the person pays the   penalty to the clerk of the court or files a supersedeas bond with   the court in the amount of the penalty. A person who cannot afford   to pay the penalty or file the bond may stay the enforcement by   filing an affidavit in the manner required by the Texas Rules of   Civil Procedure for a party who cannot afford to file security for   costs, subject to the right of the commissioner to contest the   affidavit as provided by those rules.          (e)  The attorney general may sue to collect the penalty.          (f)  A proceeding to impose the penalty is considered to be a   contested case under Chapter 2001, Government Code.          Sec. 158.403.  SUIT BY ATTORNEY GENERAL. The attorney   general may sue on behalf of claimants on the bond required by   Section 158.203(4) in a district court in Travis County, either in   one action or successive actions.          SECTION 2.  This Act takes effect September 1, 2011.