Bill Text: TX HB2315 | 2013-2014 | 83rd Legislature | Comm Sub
Bill Title: Relating to authorized charges and terms for certain consumer loans.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2013-05-02 - Laid on the table subject to call [HB2315 Detail]
Download: Texas-2013-HB2315-Comm_Sub.html
83R18211 CLG-F | |||
By: Villarreal | H.B. No. 2315 | ||
Substitute the following for H.B. No. 2315: | |||
By: Villarreal | C.S.H.B. No. 2315 |
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relating to authorized charges and terms for certain consumer | ||
loans. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Section 342.002, Finance Code, is amended by | ||
adding Subsection (d) to read as follows: | ||
(d) Interest under the scheduled installment earnings | ||
method or true daily earnings method may not be compounded. | ||
SECTION 2. The heading to Section 342.201, Finance Code, is | ||
amended to read as follows: | ||
Sec. 342.201. MAXIMUM INTEREST CHARGE AND ADMINISTRATIVE | ||
FEE. | ||
SECTION 3. Section 342.201, Finance Code, is amended by | ||
amending Subsection (f) and adding Subsection (g) to read as | ||
follows: | ||
(f) A loan contract under this subchapter may provide for an | ||
administrative fee in an amount not to exceed $25 for a loan of more | ||
than $1,000 or $20 for a loan of $1,000 or less. The administrative | ||
fee is considered earned when the loan is made or refinanced and is | ||
not subject to refund. An administrative fee is not interest. A | ||
lender refinancing the loan may not contract for or receive an | ||
administrative fee for the loan more than once in any 180-day | ||
period, except that if the loan has an interest charge authorized by | ||
Subsection (e) the lender may not contract for or receive the | ||
administrative fee more than once in any 365-day period. One dollar | ||
of each administrative fee may be deposited with the comptroller | ||
for use in carrying out the finance commission's responsibilities | ||
under Section 11.3055. | ||
(g) The finance commission by rule may prescribe a | ||
reasonable maximum amount of an administrative fee for a loan | ||
contract under this subchapter that is greater than the maximum | ||
amount authorized by this section for the amount of the loan. | ||
SECTION 4. Section 342.252, Finance Code, is amended to | ||
read as follows: | ||
Sec. 342.252. ALTERNATE CHARGES [ |
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Instead of the charges authorized by Section 342.201, a loan | ||
contract may provide for: | ||
(1) on a cash advance of less than $30, an acquisition | ||
charge that is not more than $1 for each $5 of the cash advance; | ||
(2) on a cash advance equal to or more than $30 but not | ||
more than $100: | ||
(A) an acquisition charge that is not more than | ||
the amount equal to one-tenth of the amount of the cash advance; and | ||
(B) an installment account handling charge that | ||
is not more than: | ||
(i) $3 a month if the cash advance is not | ||
more than $35; | ||
(ii) $3.50 a month if the cash advance is | ||
more than $35 but not more than $70; or | ||
(iii) $4 a month if the cash advance is more | ||
than $70; or | ||
(3) on a cash advance of more than $100: | ||
(A) an acquisition charge that is not more than | ||
$10; and | ||
(B) an installment account handling charge that | ||
is not more than the ratio of $4 a month for each $100 of cash | ||
advance. | ||
(b) For an acquisition charge authorized by this | ||
subchapter, the finance commission by rule may prescribe a | ||
reasonable maximum amount for an acquisition charge that is greater | ||
than the maximum amount authorized by the applicable section of | ||
this subchapter for the amount of the cash advance. | ||
(c) An acquisition charge under this subchapter is not | ||
interest. | ||
SECTION 5. Section 342.255, Finance Code, is amended to | ||
read as follows: | ||
Sec. 342.255. MAXIMUM LOAN TERM. The maximum scheduled | ||
term of a loan made under this subchapter is: | ||
(1) for a loan of $100 or less, the lesser of: | ||
(A) one month for each multiple of $10 of cash | ||
advance; or | ||
(B) six months; and | ||
(2) for a loan of more than $100, one month for each | ||
multiple of $20 of cash advance. | ||
SECTION 6. Section 342.352(a), Finance Code, is amended to | ||
read as follows: | ||
(a) This section applies to a loan contract: | ||
(1) that includes precomputed interest and to which | ||
Section 342.351 does not apply; | ||
(2) that includes interest contracted for under | ||
Section 342.201 or 342.260; or | ||
(3) that has a term of more than 60 months. | ||
SECTION 7. Subchapter F, Chapter 342, Finance Code, is | ||
amended by adding Section 342.260 to read as follows: | ||
Sec. 342.260. ALTERNATE INTEREST CHARGE COMPUTATION | ||
METHODS. (a) A loan contract under this subchapter may provide for | ||
an interest charge computed using the true daily earnings method or | ||
the scheduled installment earnings method that does not exceed the | ||
equivalent rate or effective return of the installment account | ||
handling charge for the original scheduled term of the loan. | ||
(b) The principal balance of a loan contract authorized by | ||
this section may not include the acquisition charge, installment | ||
account handling charge, default charges, or deferment charges or | ||
the return check fees authorized by Section 3.506, Business & | ||
Commerce Code. | ||
(c) Interest may accrue on the principal balance from time | ||
to time unpaid at the rate provided for by the contract until the | ||
date of payment in full or demand for payment in full. | ||
(d) A payment on a loan contract authorized by this section | ||
shall be applied to the borrower's account in the following order | ||
or, at the lender's option, under another method of applying a | ||
payment that is more favorable to the borrower: | ||
(1) the straight line allocation of the acquisition | ||
charge using the original scheduled term of the loan based on the | ||
proportional scheduled payment that was paid or scheduled to be | ||
paid; | ||
(2) default charges authorized by Section 342.257; | ||
(3) return check fees authorized by Section 3.506, | ||
Business & Commerce Code; | ||
(4) any other charges authorized by this subchapter; | ||
(5) accrued interest authorized by this section; and | ||
(6) principal. | ||
SECTION 8. The changes in law made by this Act apply only to | ||
a loan made on or after the effective date of this Act. A loan made | ||
before the effective date of this Act is governed by the law in | ||
effect on the date the loan was made, and the former law is | ||
continued in effect for that purpose. | ||
SECTION 9. This Act takes effect September 1, 2013. |