By Heflin H.B. No. 606
A BILL TO BE ENTITLED
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. Chapter 48, Acts of the 70th Legislature, Regular
1-5 Session, 1987 (Article 5069-7.03 (6), Vernon's Texas Civil
1-6 Statutes), is 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 ten days in an amount not to exceed five percent of each
1-11 installment <or Five Dollars, whichever is less>, or, in lieu
1-12 thereof, interest after maturity on each such installment not to
1-13 exceed the highest lawful contract rate. The holder of a retail
1-14 installment contract for the purchase of a heavy commercial vehicle
1-15 may collect a delinquency charge on each such installment in
1-16 default for a period of more than ten days in an amount not to
1-17 exceed five percent of the installment, or, in lieu of the
1-18 delinquency charge, interest after maturity of the installment that
1-19 does not exceed the highest lawful contract rate. In any retail
1-20 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 of the contract, and for court
2-3 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.