1-1 By: Heflin, et al. (Senate Sponsor-Harris of Dallas) H.B. No. 606
1-2 (In the Senate - Received from the House April 26, 1993;
1-3 April 27, 1993, read first time and referred to Committee on
1-4 Economic Development; May 13, 1993, reported favorably by the
1-5 following vote: Yeas 10, Nays 0; May 13, 1993, sent to printer.)
1-6 COMMITTEE VOTE
1-7 Yea Nay PNV Absent
1-8 Parker x
1-9 Lucio x
1-10 Ellis x
1-11 Haley x
1-12 Harris of Dallas x
1-13 Harris of Tarrant x
1-14 Leedom x
1-15 Madla x
1-16 Rosson x
1-17 Shapiro x
1-18 Wentworth x
1-19 A BILL TO BE ENTITLED
1-20 AN ACT
1-21 relating to finance charge limitations.
1-22 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-23 SECTION 1. Section (6), Article 7.03, Title 79, Revised
1-24 Statutes (Article 5069-7.03, Vernon's Texas Civil Statutes), is
1-25 amended to read as follows:
1-26 (6) The holder of a retail installment contract, other than
1-27 for the purchase of a heavy commercial vehicle, may collect a
1-28 delinquency charge on each installment in default for a period of
1-29 more than fifteen <ten> days in an amount not to exceed five
1-30 percent of each installment <or Five Dollars, whichever is less>,
1-31 or, in lieu thereof, interest after maturity on each such
1-32 installment not to exceed the highest lawful contract rate. The
1-33 holder of a retail installment contract for the purchase of a heavy
1-34 commercial vehicle may collect a delinquency charge on each
1-35 installment in default for a period of more than ten days in an
1-36 amount not to exceed five percent of the installment or, in lieu of
1-37 the delinquency charge, interest after maturity on the installment
1-38 that does not exceed the highest lawful contract rate. In any
1-39 retail installment contract, only one delinquency charge under this
1-40 section may be collected on any installment regardless of the
1-41 period during which it remains in default. In addition, such
1-42 contracts may provide for the payment of an attorney's reasonable
1-43 fee where it is referred for collection to an attorney not a
1-44 salaried employee of the seller or holder of the contract, and for
1-45 court costs and disbursements, and in the event of repossession,
1-46 sequestration, or other action necessary to secure possession of a
1-47 motor vehicle securing the payment of a retail installment
1-48 contract, such contracts may provide for the charge and collection
1-49 of actual and reasonable out-of-pocket expenses incurred in
1-50 connection with such repossession or foreclosure, including costs
1-51 of storing, reconditioning and reselling such motor vehicle,
1-52 subject to the standards of good faith and commercial
1-53 reasonableness set by the Uniform Commercial Code as adopted in
1-54 Texas.
1-55 SECTION 2. This Act applies only to installment contracts
1-56 initiated on or after the effective date of the passage of this
1-57 Act. Finance charges on installment contracts under this section
1-58 shall be charged according to the law in existence and the law is
1-59 continued in effect for that purpose. For purposes of this section
1-60 a contract takes effect before the effective date of this Act if
1-61 any element of the contractual agreement occurs before that date.
1-62 SECTION 3. The importance of this legislation and the
1-63 crowded condition of the calendars in both houses create an
1-64 emergency and an imperative public necessity that the
1-65 constitutional rule requiring bills to be read on three several
1-66 days in each house be suspended, and this rule is hereby suspended.
1-67 * * * * *
1-68 Austin,
2-1 Texas
2-2 May 13, 1993
2-3 Hon. Bob Bullock
2-4 President of the Senate
2-5 Sir:
2-6 We, your Committee on Economic Development to which was referred
2-7 H.B. No. 606, have had the same under consideration, and I am
2-8 instructed to report it back to the Senate with the recommendation
2-9 that it do pass and be printed.
2-10 Parker,
2-11 Chairman
2-12 * * * * *
2-13 WITNESSES
2-14 FOR AGAINST ON
2-15 ___________________________________________________________________
2-16 Name: Oney A. Hervey x
2-17 Representing: Transouth Financial Corp.
2-18 City: Colleyville
2-19 -------------------------------------------------------------------
2-20 Name: Bob Duke x
2-21 Representing: Tx Financial Services Assn.
2-22 City: Austin
2-23 -------------------------------------------------------------------
2-24 Name: James W. Bantham x
2-25 Representing: Associates Corp. of N. American
2-26 City: Irving
2-27 -------------------------------------------------------------------
2-28 Name: Rob Norcross x
2-29 Representing: Texas Bankers Association
2-30 City: Austin
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2-32 Name: Karen Neeley x
2-33 Representing: Ind. Bankers Assn. of Texas
2-34 City: Austin
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