H.B. No. 606
1-1 AN ACT
1-2 relating to finance charge limitations.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Section (6), Article 7.03, Title 79, Revised
1-5 Statutes (Article 5069-7.03, Vernon's Texas Civil Statutes), is
1-6 amended to read as follows:
1-7 (6) The holder of a retail installment contract, other than
1-8 for the purchase of a heavy commercial vehicle, may collect a
1-9 delinquency charge on each installment in default for a period of
1-10 more than fifteen <ten> days in an amount not to exceed five
1-11 percent of each installment <or Five Dollars, whichever is less>,
1-12 or, in lieu thereof, interest after maturity on each such
1-13 installment not to exceed the highest lawful contract rate. The
1-14 holder of a retail installment contract for the purchase of a heavy
1-15 commercial vehicle may collect a delinquency charge on each
1-16 installment in default for a period of more than ten days in an
1-17 amount not to exceed five percent of the installment or, in lieu of
1-18 the delinquency charge, interest after maturity on the installment
1-19 that does not exceed the highest lawful contract rate. In any
1-20 retail installment contract, only one delinquency charge under this
1-21 section may be collected on any installment regardless of the
1-22 period during which it remains in default. In addition, such
1-23 contracts may provide for the payment of an attorney's reasonable
2-1 fee where it is referred for collection to an attorney not a
2-2 salaried employee of the seller or holder of the contract, and for
2-3 court costs and disbursements, and in the event of repossession,
2-4 sequestration, or other action necessary to secure possession of a
2-5 motor vehicle securing the payment of a retail installment
2-6 contract, such contracts may provide for the charge and collection
2-7 of actual and reasonable out-of-pocket expenses incurred in
2-8 connection with such repossession or foreclosure, including costs
2-9 of storing, reconditioning and reselling such motor vehicle,
2-10 subject to the standards of good faith and commercial
2-11 reasonableness set by the Uniform Commercial Code as adopted in
2-12 Texas.
2-13 SECTION 2. This Act applies only to installment contracts
2-14 initiated on or after the effective date of the passage of this
2-15 Act. Finance charges on installment contracts under this section
2-16 shall be charged according to the law in existence and the law is
2-17 continued in effect for that purpose. For purposes of this section
2-18 a contract takes effect before the effective date of this Act if
2-19 any element of the contractual agreement occurs before that date.
2-20 SECTION 3. The importance of this legislation and the
2-21 crowded condition of the calendars in both houses create an
2-22 emergency and an imperative public necessity that the
2-23 constitutional rule requiring bills to be read on three several
2-24 days in each house be suspended, and this rule is hereby suspended.