Texas Law Relaxes Disclosure Requirements for First-Party Debt Collectors

AUSTIN, Texas – On Oct. 13, Texas Governor Rick Perry signed HB 7, an omnibus bill that amends the Texas Debt Collection Act as found under Section 392.304(a) of the Texas Finance Code and includes a Texas Credit Union League-supported provision that specifies disclosure requirements for "third-party debt collectors. The revisions approved in the third special session of the 78th Legislature clarify debt collection practices put in place by SB 533 during the regular session of the 78th Legislature. The measures become effective Jan. 11, 2004. HB 7 is labeled primarily as a government reorganization bill. Previous legislation did not differentiate between in-house and third-party debt collection efforts. Just like third-party debt collectors, credit union employees attempting to collect debts from members were required to provide multiple disclosures. Beginning Jan. 11, credit union in-house debt collectors will no longer be required to issue the disclosures. HB 7 also adds a new Sub-section to the Finance Code that prohibits debt collectors from "using any other false representation or deceptive means to collect a debt or obtain information concerning a consumer."