Texas Business and Commerce Code 523.002 – Verification of Consumer Identity
(a) In this section:
(1) “Consumer report” has the meaning assigned by § 20.01.
(2) “Extension of credit” does not include:
(A) an increase in the dollar limit of an existing open-end credit plan as defined by federal Regulation Z (12 C.F.R. § 226.2), as amended; or
(B) any change to, or review of, an existing credit account.
(3) “Security alert” has the meaning assigned by § 20.01.
(b) A person who receives notification of a security alert under § 20.032 in connection with a request for a consumer report for the approval of a credit-based application, including an application for an extension of credit, a purchase, lease, or rental agreement for goods, or for an application for a noncredit-related service, may not lend money, extend credit, or authorize an application without taking reasonable steps to verify the consumer’s identity.
Terms Used In Texas Business and Commerce Code 523.002
- Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
- Open-end credit: A credit agreement (typically a credit card) that allows a customer to borrow against a preapproved credit line when purchasing goods and services. The borrower is only billed for the amount that is actually borrowed plus any interest due. (Also called a charge account or revolving credit.) Source: OCC
- Person: includes corporation, organization, government or governmental subdivision or agency, business trust, estate, trust, partnership, association, and any other legal entity. See Texas Government Code 311.005
(c) If a consumer has included with a security alert a specified telephone number to be used for identity verification purposes, a person who receives that number with a security alert must take reasonable steps to contact the consumer using that number before lending money, extending credit, or completing any purchase, lease, or rental of goods, or approving any noncredit-related services.
(d) If a person uses a consumer report to facilitate the extension of credit or for any other transaction on behalf of a subsidiary, affiliate, agent, assignee, or prospective assignee, that person, rather than the subsidiary, affiliate, agent, assignee, or prospective assignee, may verify the consumer’s identity.