CHAPTER 352. TAX REFUND ANTICIPATION LOANS - Texas Statutes

FINANCE CODE

TITLE 4. REGULATION OF INTEREST, LOANS, AND FINANCED TRANSACTIONS

SUBTITLE B. LOANS AND FINANCED TRANSACTIONS

CHAPTER 352. TAX REFUND ANTICIPATION LOANS

Sec. 352.001. DEFINITIONS. In this chapter:

(1) "Borrower" means an individual who receives the proceeds of

a refund anticipation loan.

(2) "Facilitator" means a person who processes, receives, or

accepts for delivery an application for a refund anticipation

loan, delivers a check in payment of refund anticipation loan

proceeds, or in any other manner acts to allow the making of a

refund anticipation loan.

(3) "Lender" means a person who extends credit to a borrower in

the form of a refund anticipation loan.

(4) "Refund anticipation loan" means a loan borrowed by a

taxpayer based on the taxpayer's anticipated federal income tax

refund.

(5) "Refund anticipation loan fee" means a fee imposed or other

consideration required by the facilitator or the lender for a

refund anticipation loan. The term does not include a fee

usually imposed or other consideration usually required by the

facilitator in the ordinary course of business for services not

related to the making of loans, including a fee imposed for tax

return preparation or for the electronic filing of a tax return.

Added by Acts 2007, 80th Leg., R.S., Ch.

135, Sec. 1, eff. September 1, 2007.

Renumbered from Finance Code, Section 351.001 by Acts 2009, 81st

Leg., R.S., Ch.

87, Sec. 27.001(17), eff. September 1, 2009.

Sec. 352.002. RESTRICTION ON ACTING AS FACILITATOR. (a) A

person may not, individually or in conjunction or cooperation

with another person, act as a facilitator unless the person is:

(1) engaged in the business of preparing tax returns, or

employed by a person engaged in the business of preparing tax

returns;

(2) primarily involved in financial services or tax

preparations;

(3) authorized by the Internal Revenue Service as an e-file

provider; and

(4) registered with the commissioner as a facilitator under

Section 352.003.

(b) This section does not apply to:

(1) a bank, thrift, savings association, industrial bank, or

credit union operating under the laws of the United States or

this state;

(2) an affiliate that is a servicer of a person described by

Subdivision (1) operating under the name of that person; or

(3) any person who acts solely as an intermediary and does not

interact directly with a taxpayer in the making of the refund

anticipation loan.

Added by Acts 2007, 80th Leg., R.S., Ch.

135, Sec. 1, eff. September 1, 2007.

Renumbered from Finance Code, Section 351.002 by Acts 2009, 81st

Leg., R.S., Ch.

87, Sec. 27.001(17), eff. September 1, 2009.

Amended by:

Acts 2009, 81st Leg., R.S., Ch.

87, Sec. 27.002(4), eff. September 1, 2009.

Sec. 352.003. REGISTRATION OF FACILITATORS. (a) To register as

a facilitator, a person must provide to the commissioner, on or

before December 31 preceding each calendar year in which the

person seeks to act as a facilitator:

(1) a list of each location in this state at which e-file

providers authorized by the Internal Revenue Service file tax

returns on behalf of borrowers for whom the facilitator acts to

allow the making of a refund anticipation loan; and

(2) a processing fee for each location included on the list

furnished under Subdivision (1).

(b) The commissioner shall prescribe the processing fee in an

amount necessary to cover the costs of administering this

section.

(c) After the December 31 deadline, a facilitator may amend the

registration required under Subsection (a) to reflect any change

in the information provided by the registration.

(d) The commissioner shall make available to the public a list

of facilitators registered under this section.

(e) The commissioner may prescribe the registration form.

Added by Acts 2007, 80th Leg., R.S., Ch.

135, Sec. 1, eff. September 1, 2007.

Renumbered from Finance Code, Section 351.003 by Acts 2009, 81st

Leg., R.S., Ch.

87, Sec. 27.001(17), eff. September 1, 2009.

Sec. 352.004. DISCLOSURE REQUIREMENTS. (a) A facilitator to

which Section 352.002 applies shall discuss with and clearly

disclose to a borrower, after the borrower's tax return has been

prepared and before the loan is closed:

(1) the refund anticipation loan fee schedule;

(2) a written statement disclosing:

(A) that a refund anticipation loan is a loan and is not the

borrower's actual income tax refund;

(B) that the taxpayer may file an income tax return

electronically without applying for a refund anticipation loan;

(C) that the borrower is responsible for repayment of the loan

and related fees if the tax refund is not paid or is insufficient

to repay the loan;

(D) any fee that will be charged if the loan is not approved;

(E) the average time, as published by the Internal Revenue

Service, within which a taxpayer can expect to receive a refund

for an income tax return filed:

(i) electronically, and the refund is:

(a) deposited directly into the taxpayer's bank account; or

(b) mailed to the taxpayer; and

(ii) by mail, and the refund is:

(a) deposited directly into the taxpayer's financial institution

account; or

(b) mailed to the taxpayer;

(F) that the Internal Revenue Service does not guarantee:

(i) payment of the full amount of the anticipated refund; or

(ii) a specific date on which it will mail a refund or deposit

the refund into a taxpayer's financial institution account; and

(G) the estimated time within which the proceeds of the refund

anticipation loan will be paid to the borrower if the loan is

approved; and

(3) the following information, specific to the borrower:

(A) the estimated total fees for the loan; and

(B) the estimated annual percentage rate for the loan,

calculated using the guidelines established under the Truth in

Lending Act (15 U.S.C. Section 1601 et seq.).

(b) A refund anticipation loan fee schedule required by

Subsection (a)(1) must be a listing or table of refund

anticipation loan fees charged by the lender for refund

anticipation loan amounts. The schedule shall:

(1) list separately each fee imposed related to the making of a

refund anticipation loan;

(2) list the total amount of fees imposed related to the making

of a refund anticipation loan; and

(3) include, for each stated loan amount, the estimated annual

percentage rate for the loan, calculated using the guidelines

established under the Truth in Lending Act (15 U.S.C. Section

1601 et seq.).

(c) A facilitator who advertises or markets refund anticipation

loans in Spanish shall offer any borrower the option of receiving

a Spanish-language printed disclosure and loan contract. A

facilitator who negotiates a loan with a borrower in Spanish

shall offer that borrower the option of receiving a

Spanish-language printed disclosure and loan contract.

Added by Acts 2007, 80th Leg., R.S., Ch.

135, Sec. 1, eff. September 1, 2007.

Renumbered from Finance Code, Section 351.004 by Acts 2009, 81st

Leg., R.S., Ch.

87, Sec. 27.001(17), eff. September 1, 2009.

Amended by:

Acts 2009, 81st Leg., R.S., Ch.

87, Sec. 27.002(5), eff. September 1, 2009.

Sec. 352.005. INVESTIGATION BY COMMISSIONER. The commissioner

shall:

(1) monitor the operations of a facilitator to ensure compliance

with this chapter; and

(2) receive and investigate complaints against a facilitator or

a person acting as a facilitator.

Added by Acts 2007, 80th Leg., R.S., Ch.

135, Sec. 1, eff. September 1, 2007.

Renumbered from Finance Code, Section 351.005 by Acts 2009, 81st

Leg., R.S., Ch.

87, Sec. 27.001(17), eff. September 1, 2009.

Sec. 352.006. REVOCATION OF REGISTRATION. (a) The commissioner

may revoke the registration of a facilitator if the commissioner

concludes that the facilitator has violated this chapter. The

commissioner shall recite the basis of the decision in an order

revoking the registration.

(b) If the commissioner proposes to revoke a registration, the

facilitator is entitled to a hearing before the commissioner or a

hearings officer, who shall propose a decision to the

commissioner. The commissioner or hearings officer shall

prescribe the time and place of the hearing. The hearing is

governed by Chapter 2001, Government Code.

(c) A facilitator aggrieved by a ruling, order, or decision of

the commissioner is entitled to appeal to a district court in the

county in which the hearing was held. An appeal under this

subsection is governed by Chapter 2001, Government Code.

Added by Acts 2007, 80th Leg., R.S., Ch.

135, Sec. 1, eff. September 1, 2007.

Renumbered from Finance Code, Section 351.006 by Acts 2009, 81st

Leg., R.S., Ch.

87, Sec. 27.001(17), eff. September 1, 2009.

Sec. 352.007. ADMINISTRATIVE PENALTY. The commissioner may

assess an administrative penalty of $500 against a person for

each knowing and wilful violation of this chapter.

Added by Acts 2007, 80th Leg., R.S., Ch.

135, Sec. 1, eff. September 1, 2007.

Renumbered from Finance Code, Section 351.007 by Acts 2009, 81st

Leg., R.S., Ch.

87, Sec. 27.001(17), eff. September 1, 2009.

Sec. 352.008. PREEMPTION OF LOCAL ORDINANCE. This chapter

preempts a local ordinance or rule regulating refund anticipation

loans.

Added by Acts 2007, 80th Leg., R.S., Ch.

135, Sec. 1, eff. September 1, 2007.

Renumbered from Finance Code, Section 351.008 by Acts 2009, 81st

Leg., R.S., Ch.

87, Sec. 27.001(17), eff. September 1, 2009.