2023 Texas Statutes › Finance Code › Title 5 - Protection of Consumers of Financial Services › Chapter 394 - Debtor Assistance › Subchapter C. Consumer Debt Management Services › Section 394.210. Permitted Fees

Sec. 394.210.  PERMITTED FEES.  (a)  With respect to the provision of a debt management plan service, a provider may not impose a fee or other charge on a consumer, or receive payment from a consumer or other person on behalf of a consumer, except as allowed under this section.
(b)  For the purposes of this section, fees or charges include both voluntary contributions and any other fees charged to or collected from a consumer or on behalf of the consumer.
(c)  A provider may not impose fees or other charges on a consumer or receive payment for debt management services until the consumer has entered into a debt management service agreement with the provider that complies with Section 394.209.
(d)  If a consumer enters into a debt management service agreement with a provider, the provider may not impose a fee or other charge for debt counseling, education services, or similar services except as otherwise authorized by this section.  The commissioner may authorize a provider to charge a fee based on the nature and extent of the counseling, education services, or other similar services furnished by the provider.
(e)  Subsections (f)-(j) apply subject to an adjustment made under Section 394.2101.
(f)  If a consumer is enrolled in a debt management plan that provides for a reduction of finance charges or fees for late payment, default, or delinquency as a concession from creditors, the provider may charge:
(1)  a fee not to exceed $100 for debt consultation or education services, including obtaining a credit report, setting up an account, and other similar services; and
(2)  a monthly service fee, not to exceed the lesser of:
(A)  $10 multiplied by the number of accounts remaining in the plan on the day of the month the fee is assessed; or
(B)  $50.
(g)  If a consumer is enrolled in a debt management plan that provides for settlement of debts for amounts that are less than the principal amounts of the debts as a concession from creditors, the provider may charge:
(1)  a fee for debt consultation or education services, including obtaining a credit report, setting up an account, and other similar services, in an amount not to exceed the lesser of $400 or four percent of the total amount of the outstanding debt included in the plan at the time the plan is established; and
(2)  a monthly service fee, not to exceed the lesser of:
(A)  $10 multiplied by the number of accounts remaining in the plan on the day of the month the fee is assessed; or
(B)  $50; and
(3)  one of the following:
(A)  with respect to a debt management service agreement in which a flat fee is charged based on the total amount of debt that is included in a debt management plan, the total aggregate amount of fees charged to a consumer under this subchapter, including fees charged under Subdivisions (1) and (2), may not exceed 17 percent of the total principal amount of debt included in the debt management plan; or
(B)  with respect to a debt management service agreement in which fees are computed as a percentage of the amount saved by a consumer as a result of a concession, in addition to fees charged under Subdivisions (1) and (2), a settlement fee may not exceed 30 percent of the excess of the outstanding amount of each debt over the amount actually paid to the creditor, as computed at the time of settlement.
(h)  Settlement fees authorized under Subsection (g)(3)(B) may be charged only as debts are settled, and the total aggregate amount of fees charged to a consumer under this subchapter, including fees charged under Subsections (g)(1) and (2), may not exceed 20 percent of the principal amount of debt included in the debt management plan.
(i)  The flat fee authorized under this subchapter shall be assessed in equal monthly payments for a period that is at least as long as the term of the debt management plan, as estimated when the debt management plan is established, unless:
(1)  the fee payment period is voluntarily accelerated by the consumer in an addendum to the agreement or other separate agreement; and
(2)  offers of settlement by creditors have been obtained on at least half of the outstanding debt included in the debt management plan.
(j)  If a consumer is enrolled in a debt management plan that provides for the settlement of debts for amounts that are less than the principal amount of the debts as a concession from creditors, if fees for debt management services will not be charged or collected until the time a settlement agreement is reached with a creditor, and if at least one payment has been made toward the settlement agreement by or on behalf of the consumer, the fee limitations in Subsection (g) do not apply and the provider may charge reasonable settlement fees.  The fee with respect to each debt included in the plan must:
(1)  bear the same proportional relationship to the total fee for settling all debts included in the debt management plan as the principal amount of the particular debt bears to the total principal amount of the debt included in the plan; or
(2)  be a percentage of the amount saved as a result of the settlement, determined as the difference between the principal amount of a debt and the amount actually paid to satisfy the debt.  The percentage charged cannot change from one debt to another.
(k)  A provider may impose fees or other charges or receive fees or payment under only one of Subsection (f), (g), or (j).
(l)  If a consumer does not enter into a debt management service agreement with a provider, the provider may receive payment for debt counseling or education services provided to the consumer in an amount not to exceed $100 or a greater amount, on approval of the commissioner.  The commissioner may approve a fee in an amount greater than $100 if the nature and extent of the educational and counseling services warrant the greater amount.
(m)  If, before the expiration of the 90th day after the date debt counseling or education services are completed or canceled, a consumer enters into a debt management service agreement with a provider, the provider shall refund to the consumer any payments received under Subsection (l).
(n)  Subject to an adjustment made under Section 394.2101, if any payment made by a consumer to a provider under this subchapter is dishonored, the provider may impose a reasonable charge on the consumer not to exceed the lesser of $25 or an amount permitted by a law other than this chapter.
Added by Acts 2005, 79th Leg., Ch. 336 (S.B. 1112), Sec. 1, eff. September 1, 2005.
Amended by:
Acts 2007, 80th Leg., R.S., Ch. 48 (S.B. 884), Sec. 4, eff. September 1, 2007.
Acts 2011, 82nd Leg., R.S., Ch. 368 (S.B. 141), Sec. 7, eff. September 1, 2011.