Enrolled Bill Summary

            House Bill 1380 amends the Finance Code to permit an authorized lender to offer noncredit insurance and certain other products contemporaneously with or subsequent to a non-real property loan and provides that those offerings are subject to all applicable insurance laws in Texas. The bill requires the lender to offer the borrower the option of purchasing any of those products separately and prohibits the lender from requiring such purchase as a condition for loan approval. The bill requires the Consumer Credit Commissioner to adopt rules providing for a version of the disclosure language in Spanish and to establish a disclosure form that meets statutory requirements for plain language and readability. The bill amends a provision relating to the payment for insurance from loan proceeds to authorize a lender to deduct a premium for noncredit insurance or other permitted product from the proceeds of the loan and to authorize the lender to pay that deducted amount to the vendor of the product.

                Reason Given for Veto: "House Bill No. 1380 would fail to protect consumers from unreasonable interest rates. It would allow lenders to finance the charges for noncredit insurance covering life, disability income, accident, loss of income and mechanical breakdown. Lenders could also finance home security plans, club memberships, and service contracts. The rates for these types of noncredit insurance and other products are not regulated and only some of the policy forms have oversight.