Texas debt collection licensing laws

Texas does not issue a traditional collection agency license. Instead, third-party debt collectors register with the Texas Secretary of State and file a $10,000 surety bond before collecting, under Chapter 392 of the Texas Finance Code. The bond filing is the gating step: collecting in Texas without the bond on file exposes the agency to statutory penalties and private suits under the Texas Debt Collection Act.

Chapter 392 is also Texas's own practice act. It applies alongside the federal FDCPA and reaches some conduct the federal statute does not, including certain first-party collection activity by creditors collecting their own accounts. Agencies working Texas accounts should map both statutes in their policy set rather than assuming FDCPA compliance covers the state layer.

On time limits, Texas applies a four-year limitations period to most suits on consumer debt under Section 16.004 of the Civil Practice and Remedies Code, and a 2019 amendment to Chapter 392 bars reviving time-barred debt through partial payment. Agencies and debt buyers working older Texas paper should build the time-barred determination into account scrubbing before the first contact.

Texas classification: settlement-specific statute state, under the Texas Finance Code ch. 394, subch. C (debt management services). The relevant authority is the Office of Consumer Credit Commissioner. Texas registers debt management services providers; the chapter's definition reaches debt settlement negotiation.

Texas Finance Code Chapter 394 defines debt management services broadly enough to cover negotiating reduced payoffs, so a settlement company enrolling Texas consumers registers with the OCCC before signing its first Texas client. The registration is separate from the Chapter 392 third-party collection bond covered above; a company that both settles consumer debts and collects purchased accounts in Texas carries both filings.

The OCCC reviews the provider's consumer agreement and fee arrangements as part of registration, and Chapter 394 carries its own disclosure and contract-content requirements. Whatever the state regime, the FTC's Telemarketing Sales Rule bars charging advance fees for debt settlement services marketed through telemarketing, so the federal fee-timing rules apply on top of any state license.