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Senate Bill 1251 |
Senate Author: Carona |
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Effective: 9-1-13 |
House Sponsor: Villarreal |
Senate Bill 1251 amends the Finance Code to prohibit the compounding of interest under the authorized interest computation methods for consumer loans. The bill authorizes the Finance Commission of Texas by rule to set a reasonable maximum amount of an administrative fee for a secured consumer installment loan contract and of a finance charge on a signature loan contract that is greater than the statutorily authorized maximum amount. The bill clarifies that the administrative fee or finance charge is not interest. The bill authorizes alternate interest charge computation methods for a signature loan, excludes certain charges and fees from the principal balance of the loan, authorizes interest to accrue on the principal balance at a rate set in the loan contract until the date of final payment or demand for full payment, and sets out the order in which a payment must be applied to the loan account.