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COMMITTEE VOTE |
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YeaNayAbsentPNV |
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SchwertnerX |
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JohnsonX |
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A BILL TO BE ENTITLED
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AN ACT
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relating to the maximum rate or amount of interest of certain |
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consumer loans. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 342.201, Finance Code, is amended by |
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amending Subsection (e) and adding Subsections (e-2) and (e-3) to |
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read as follows: |
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(e) A loan contract under this chapter that is not secured |
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by real property may provide for a rate or amount of interest |
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computed using the true daily earnings method or the scheduled |
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installment earnings method that does not exceed: |
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(1) 30 percent plus the federal funds rate a year on |
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that part of the cash advance that is less than or equal to the |
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amount computed under Subchapter C, Chapter 341, using the |
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reference base amount of $500; |
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(2) 24 percent plus the federal funds rate a year on |
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that part of the cash advance that is more than the amount computed |
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for Subdivision (1) but less than or equal to an amount computed |
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under Subchapter C, Chapter 341, using the reference base amount of |
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$1,050; and |
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(3) 18 percent plus the federal funds rate a year on |
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that part of the cash advance that is more than the amount computed |
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for Subdivision (2) but less than or equal to an amount computed |
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under Subchapter C, Chapter 341, using the reference base amount of |
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$2,500. |
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(e-2) On March 1 and September 1 of each year, the |
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commissioner shall compute the ceilings applicable under |
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Subsection (e) for the six-month period effective the following May |
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1 and November 1, respectively. As prescribed by this subsection, |
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the ceilings are effective for the six-month period beginning on |
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the effective date and are subject to adjustment after each |
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six-month period. The commissioner shall submit to the secretary |
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of state for publication in the Texas Register the ceilings |
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computed under this subsection not later than the 11th day after the |
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date on which the ceiling is computed. |
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(e-3) For purposes of this section: |
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(1) "Ceiling" means the maximum rate or amount of |
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interest. |
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(2) "Federal funds rate" means an interest rate |
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computed by averaging the Federal Funds rates published by the |
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Federal Reserve Bank of New York for each day during the six |
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calendar months preceding the computation date of the ceilings, |
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except that if that average: |
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(A) is greater than five percent, the federal |
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funds rate is five percent; and |
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(B) is less than zero percent, the federal funds |
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rate is zero percent. |
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SECTION 2. The change in law made by this Act applies only |
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to a loan made on or after the effective date of this Act. A loan |
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made before the effective date of this Act is governed by the law in |
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effect on the date the loan was made, and the former law is |
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continued in effect for that purpose. For purposes of this section, |
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a refinance or renewal of a loan is considered made on the date the |
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loan being refinanced or renewed was made. |
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SECTION 3. This Act takes effect September 1, 2023. |
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* * * * * |