By D. Smith of Harris H.B. No. 2127
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the definition of interest; certain penalties for
1-3 receipt of interest in an amount that produces a rate in excess of
1-4 the maximum rate; agreements to pay interest in an amount that
1-5 produces a rate in excess of the maximum rate; determinations
1-6 whether the amount of interest received produces a rate in excess
1-7 of the maximum rate; determinations of the amount of interest
1-8 received; contracting for, charging, or receipt of time price
1-9 differentials; the enforceability of agreements to pay prepayment
1-10 premiums; and expenses that may be charged and received in
1-11 connection with making, renewing, or extending certain loans.
1-12 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-13 SECTION 1. Article 5069-1.01, chapter 1, title 79, Revised
1-14 Civil Statutes of Texas, 1925, is amended to read as follows:
1-15 Art. 5069-1.01. Definitions
1-16 The following terms used in this Subtitle shall have the
1-17 following meanings.
1-18 (a) "Interest" <is the> means compensation <allowed by law>
1-19 for the use <or>, forbearance, or detention of money; provided,
1-20 however, <this term shall not include any time price differential
1-21 however denominated arising out of a credit sale> that this
1-22 definition is subject to the provisions of Articles 1.13, 1.14,
1-23 1.15, and 1.16 of this Title.
2-1 (b) "Legal <I>interest" <is that> means interest <which is
2-2 allowed by law> when an obligor has not agreed to pay to a creditor
2-3 any compensation that constitutes <the parties to a contract have
2-4 not agreed on any particular rate of> interest; provided, however,
2-5 that the term shall not include judgment interest.
2-6 (c) "Conventional <I>interest" <is that> means interest when
2-7 an obligor has agreed to pay to a creditor any compensation that
2-8 constitutes interest; provided, however, that the term shall not
2-9 include judgment interest <which is agreed upon and fixed by the
2-10 parties to a written contract>. For purposes of this Subtitle, a
2-11 promise by an obligor to pay to a creditor any compensation that
2-12 constitutes interest shall constitute an agreement by the obligor
2-13 to pay interest to the creditor regardless of whether that
2-14 agreement is unenforceable by the creditor under this Subtitle or
2-15 any other provision of law. If an obligor has agreed to pay to a
2-16 creditor any compensation that constitutes interest, the obligor
2-17 shall be deemed to have agreed upon the rate produced by the amount
2-18 of that interest, whether or not that rate is stated in the
2-19 agreement.
2-20 (d) <"Usury" is interest in excess of the amount allowed by
2-21 law.> "Creditor" means a person that loans money or otherwise
2-22 extends credit; provided, however, that the term shall not include
2-23 a judgment creditor.
2-24 (e) "Person" means an individual, partnership, corporation,
2-25 joint venture, limited liability company, trust, association, or
3-1 <any> other legal entity, however organized.
3-2 (f) "Open-end <A>account" means any account<, under> created
3-3 pursuant to a written contract under which <the> a creditor may
3-4 permit <the> an obligor to make purchases or borrow money from time
3-5 to time, and under which interest or time price differential may
3-6 from time to time be computed on an outstanding unpaid balance.
3-7 The term includes, but is not limited to, accounts under agreements
3-8 described by Section (4)<,> of Article 3.15; Section (4)<,> of
3-9 Article 4.01; and Chapters 6 and 15 of this Title.
3-10 (g) "Credit <C>card <T>transaction" means a transaction in
3-11 which a card is or may be used to debit an open-end account in
3-12 connection with the purchase or lease of goods or services or the
3-13 lending of money, which card is or may be used for personal,
3-14 family, or household use.
3-15 (h) "Merchant <D>discount" means any charge, fee, discount,
3-16 compensating balance, or other consideration imposed by a creditor
3-17 on or received directly or indirectly by the creditor from any
3-18 seller or lessor of goods or services in connection with a credit
3-19 card transaction under a lender credit card agreement between <the
3-20 customer> an obligor and the creditor. The term includes any
3-21 consideration whatsoever received by <a> the creditor from any
3-22 person other than the obligor in connection with a credit card
3-23 transaction under a lender credit card agreement between the
3-24 obligor and the creditor. Any such consideration received by a
3-25 subsidiary of the creditor or parent company of the creditor or any
4-1 subsidiary of the creditor's parent company shall be deemed to have
4-2 been received by the creditor <in determining if any such
4-3 consideration has been received by the creditor>.
4-4 (i) "Lender <C>credit <C>card <A>agreement" means an
4-5 agreement between a creditor (other than the seller or lessor) and
4-6 an obligor under which credit is or may be extended for personal,
4-7 family, or household use and under which: (1) by means of a
4-8 credit card, the obligor may obtain loans from the creditor, which
4-9 may be advanced by other participating persons, and may lease or
4-10 purchase goods or services from more than one participating lessor
4-11 or seller who honor the creditor's card, and the creditor or some
4-12 other person acting in cooperation with the creditor will reimburse
4-13 the other participating persons, lessors, or sellers for the goods
4-14 or services purchased or leased, and the obligor is obligated under
4-15 his or her agreement with the creditor to pay the creditor the
4-16 amount of such loans or the costs of such leases or purchases;
4-17 (2) the unpaid balance of such loans, leases, and purchases and
4-18 any interest thereon are debited to the obligor's account with the
4-19 creditor under the obligor's agreement with the creditor;
4-20 (3) interest is not precomputed but may be computed on the
4-21 balances of the obligor's account outstanding with the creditor
4-22 from time to time; and (4) the obligor may defer payment of any
4-23 part of the balance. The term includes all agreements for open-end
4-24 accounts authorized or defined under Articles 3.15(4), 4.01(4),
4-25 15.01(k), and 15.01(l) of this Title pursuant to which credit card
5-1 transactions as defined in <Article 1.01> Section (g) of this
5-2 <Title> Article may be made or in connection with which a merchant
5-3 discount as defined in <Article 1.01> Section (h) of this <Title>
5-4 Article is imposed or received by the creditor. The term does not
5-5 include an open-end account credit agreement between a seller or
5-6 lessor and its own buyer or lessee. The term does not include
5-7 agreements under which the entire balance is due and payable in
5-8 full each month and no interest is charged when the obligor pays in
5-9 accordance with such terms.
5-10 (j) "Obligor" means a person to whom or which money is
5-11 loaned or credit is otherwise extended; provided, however, that the
5-12 term shall not include (1) a judgment debtor or (2) a surety,
5-13 guarantor, or the like.
5-14 (k) "Judgment interest" means interest on a money judgment,
5-15 whether such interest accrues before, on, or after the date the
5-16 judgment is rendered. For purposes of this Subtitle, the term
5-17 "money judgment" includes legal interest or conventional interest,
5-18 if any, that is payable to a judgment creditor pursuant to a
5-19 judgment.
5-20 (l) "Loan" means a loan of money or other extension of
5-21 credit if (1) the obligor has contracted to pay to the creditor the
5-22 principal amount of such loan or other extension of credit and (2)
5-23 that contract is unconditional; provided, however, that the term
5-24 shall not include a judgment.
5-25 (m) "Commercial loan" means a loan that is made primarily
6-1 for business, commercial, investment, agricultural, or other
6-2 similar purposes; provided, however, that the term shall not
6-3 include a loan that is made primarily for personal, family, or
6-4 household use.
6-5 (n) "Prepayment premium" means compensation that:
6-6 (1) is or will become due and payable, or was paid, by an
6-7 obligor to a creditor solely as a result of, or as a condition to,
6-8 the payment or maturity of all or a portion of the principal amount
6-9 of a loan prior to its stated maturity or its regularly scheduled
6-10 date or dates of payment, whether as a result of (A) acceleration
6-11 of maturity upon a declaration by the creditor or otherwise, (B)
6-12 any election by the obligor to pay all or a portion of such
6-13 principal amount prior to its stated maturity or its regularly
6-14 scheduled date or dates of payment, or (C) the happening of a
6-15 contingency; and
6-16 (2) is not denominated by the creditor as principal or
6-17 interest; provided, however, that the term shall not include
6-18 judgment interest.
6-19 (o) "Time price differential" means an amount, however
6-20 denominated, that:
6-21 (1) is added to the price at which a seller offers to sell
6-22 services or real or personal property to a purchaser for cash
6-23 payable at the time of sale; and
6-24 (2) is paid or payable to the seller by the purchaser for
6-25 the privilege of paying such price after such time.
7-1 (p) "Guaranty" means an agreement pursuant to which an
7-2 obligor:
7-3 (1) assumes, guarantees, or otherwise becomes primarily or
7-4 contingently liable for the payment or performance of an obligation
7-5 of another person;
7-6 (2) provides security for such payment or performance,
7-7 whether through the creation of a lien or security interest or
7-8 otherwise; or
7-9 (3) agrees to purchase, or to advance consideration to
7-10 purchase, such obligation or any property constituting security for
7-11 such payment or performance.
7-12 (q) "Affiliate" of an obligor means a person that directly
7-13 or indirectly, through one or more intermediaries, controls, is
7-14 controlled by, or is under common control with the obligor. The
7-15 term "control" means the possession, directly or indirectly, of the
7-16 power to direct or cause the direction of the management and
7-17 policies of a person, whether through the ownership of voting
7-18 securities, by contract, or otherwise.
7-19 (r) "Late payment charge" means compensation that:
7-20 (1) is or will become due and payable, or was paid, by an
7-21 obligor to a creditor solely as a result of the fact that a regular
7-22 installment was not paid to the creditor at or before the time such
7-23 regular installment first became due and payable; and
7-24 (2) is not denominated by the creditor as principal or
7-25 interest; provided, however, that the term shall not include
8-1 judgment interest. For purposes of this Subtitle, the term
8-2 "regular installment" means an amount of money (other than a late
8-3 payment charge) paid or payable by an obligor to a creditor
8-4 pursuant to an agreement in which the obligor has agreed to pay to
8-5 the creditor interest that is denominated as such by the creditor.
8-6 (s) "Business entity" means a partnership, corporation,
8-7 joint venture, limited liability company, or other business
8-8 organization, however organized.
8-9 (t) "Loan expenses", in connection with any loan, means the
8-10 expenses incurred by a creditor, either for its own account or for
8-11 the account of itself and other creditors, in documenting, making,
8-12 closing, disbursing, extending, or renewing such loan. Such
8-13 expenses may include, but shall not be limited to, fees and
8-14 expenses of legal counsel for the creditor and of appraisers or
8-15 other persons retained by the creditor for the purpose of
8-16 determining whether to make such loan.
8-17 (u) "Contract interest" means conventional interest, whether
8-18 or not denominated as interest, than an obligor has agreed to pay
8-19 to a creditor.
8-20 (v) "Qualified commercial loan" means:
8-21 (1) a commercial loan in the original principal amount of
8-22 $250,000 or more; or
8-23 (2) any renewal or extension of such a loan, whether or not
8-24 the principal amount of such loan at the time of its renewal or
8-25 extension is $250,000 or more.
9-1 (w) "Judgment creditor" means a person to whom or which a
9-2 money judgment is payable.
9-3 (x) "Judgment debtor" means a person who or which is
9-4 obligated to pay a money judgment.
9-5 SECTION 2. Article 5069-1.02, chapter 1, title 79, Revised
9-6 Civil Statutes of Texas, 1925, is amended to read as follows:
9-7 Art. 5069-1.02. Conventional interest or time price differential
9-8 allowed; <M>maximum rate<s> of conventional interest unless
9-9 otherwise fixed by law
9-10 (a) A creditor shall be allowed to contract for, charge, and
9-11 receive from an obligor conventional interest or a time price
9-12 differential.
9-13 (b) Except as otherwise fixed by law, the maximum rate of
9-14 conventional interest shall be ten percent <per annum> a year. <A
9-15 greater rate of interest than ten percent per annum unless
9-16 otherwise authorized by law shall be deemed usurious. All
9-17 contracts for usury are contrary to public policy and shall be
9-18 subject to the appropriate penalties prescribed in Article 1.06 of
9-19 this Subtitle.>
9-20 SECTION 3. Article 5069-1.03, chapter 1, title 79, Revised
9-21 Civil Statutes of Texas, 1925, is amended to read as follows:
9-22 Art. 5069-1.03. Legal interest allowed; maximum rate <applicable>
9-23 of legal interest
9-24 (a) Unless a creditor has agreed with an obligor not to
9-25 charge the obligor any interest, the creditor shall be allowed to
10-1 charge and receive from the obligor legal interest on the principal
10-2 amount of the credit extended by the creditor to the obligor.
10-3 (b) <When no specified rate of interest is agreed upon by
10-4 the parties,> The maximum rate of legal interest <at the rate of>
10-5 is hereby fixed at six percent <per annum> a year <shall be allowed
10-6 on all accounts and contracts ascertaining the sum payable,>
10-7 commencing on the <thirtieth (>30th<)> day <from and> after the
10-8 <time> date <when the sum is> the principal amount first became due
10-9 and payable.
10-10 SECTION 4. Article 5069-1.04, chapter 1, title 79, Revised
10-11 Civil Statutes of Texas, 1925, is amended to read as follows:
10-12 Art. 5069-1.04. <Limit on> Maximum rate of conventional interest;
10-13 maximum rate produced by a time price differential pursuant to
10-14 certain agreements
10-15 (a) Both (i) the maximum rate of conventional interest, and
10-16 (ii) the maximum rate produced by a time price differential
10-17 pursuant to an agreement described in Chapter 6, 6A, or 7 of this
10-18 Title, are hereby fixed at <The parties to any written contract may
10-19 agree to and stipulate for any rate of interest, or in an agreement
10-20 described in Chapter 6, 6A, or 7 of this Title, any rate or amount
10-21 of time price differential producing a rate, that does not exceed>:
10-22 (1) an indicated rate ceiling that is the auction average
10-23 rate quoted on a bank discount basis for 26-week treasury bills
10-24 issued by the United States government, as published by the Federal
10-25 Reserve Board, for the week preceding the week in which the rate is
11-1 contracted for, multiplied by two, and rounded to the nearest
11-2 one-quarter of one percent; or, as an alternative,
11-3 (2) an annualized or quarterly ceiling that is the average
11-4 of the computations under Subsection (1) of this section and is
11-5 computed pursuant to Section (d) of this Article.
11-6 (b)(1) If a computation under Section (a)(1), (a)(2), or (c)
11-7 of this Article is less than 18 percent a year, the ceiling under
11-8 that provision is 18 percent a year. If a computation under
11-9 Section (a)(1), (a)(2), or (c) of this Article is more than 24
11-10 percent a year, the ceiling under that provision is 24 percent a
11-11 year.
11-12 (2) Notwithstanding the provisions of Subsection (1) of this
11-13 Section (b), in the case of any qualified commercial loan <on any
11-14 contract under which credit in an amount in excess of $250,000 is
11-15 or is to be extended, or any extension or renewal of such contract,
11-16 and under which the credit is extended for business, commercial,
11-17 investment, or other similar purpose, but excluding any contract
11-18 that is not for any of those purposes and is primarily for
11-19 personal, family, household, or agricultural use>, the 24 percent
11-20 limitation on the ceilings in Section (b)(1) above that is
11-21 applicable to the computations under Section (a)(1), (a)(2), or (c)
11-22 of this Article shall not apply, and the limitation on the ceilings
11-23 determined by those computations shall be 28 percent a year.
11-24 (3) References in this Article to the indicated rate
11-25 ceiling, annualized ceiling, quarterly ceiling, or monthly ceiling
12-1 mean such a ceiling as modified by this Section (b).
12-2 (4) Any credit agreement described in Section (a), Article
12-3 1.11, of this Title is subject to the terms, ceilings, and other
12-4 provisions of that Article and, except as limited by Article 1.11,
12-5 to the terms, ceilings, and other provisions of this Article.
12-6 (5) Notwithstanding any other provision of law, on any
12-7 lender credit card agreement in connection with which a merchant
12-8 discount as defined in Article 1.01(h) of this Title is imposed or
12-9 received by the creditor, the creditor may not contract for,
12-10 charge, or receive, on any amount owed for any credit card
12-11 transaction, a rate in excess of the ceiling allowed under Article
12-12 15.02(d) of this Title (which ceiling shall be adjusted in
12-13 accordance with Article 15.02(d)) or any other fees or charges
12-14 which are not authorized under Chapter 15 of this Title or which
12-15 are in excess of the amounts authorized under Chapter 15.
12-16 (6) Notwithstanding Article 15.10 of this Title, any lender
12-17 credit card agreement in which the creditor is a bank, savings and
12-18 loan association, or authorized lender under Chapter 3 of this
12-19 Title is subject to Chapter 15 of this Title and Article 15.02(d)
12-20 thereof.
12-21 (7) If a creditor and an obligor agree that contract
12-22 interest in respect of any qualified commercial loan shall be
12-23 computed on the basis of a 360-day year of twelve 30-day months,
12-24 each rate per year referred to in this Article shall, in the case
12-25 of such loan, mean a rate per year consisting of 360 days and of
13-1 twelve 30-day months.
13-2 (c) A monthly ceiling is available only in variable rate
13-3 contracts, including contracts for open-end accounts, that are not
13-4 made for personal, family, or household use. Subject to Section
13-5 (b) of this Article, the monthly ceiling is the average of all the
13-6 computations under Section (a)(1) of this Article for auctions
13-7 occurring during the preceding calendar month and shall be computed
13-8 by the consumer credit commissioner on the first business day of
13-9 the calendar month in which the rate applies. In contracts for
13-10 which the monthly ceiling is available under this section, if the
13-11 parties agree that the rate is subject to being adjusted on a
13-12 monthly basis in accordance with Section (f) of this Article, they
13-13 may further contract that the rate from time to time in effect may
13-14 not exceed the monthly ceiling from time to time in effect under
13-15 this section <and>, in which event the monthly ceiling from time to
13-16 time in effect is the ceiling on those contracts, instead of any
13-17 ceiling under <Article 1.04> Section (a) of this <Title> Article.
13-18 (d) The consumer credit commissioner shall compute, on the
13-19 computation dates of December 1, March 1, June 1, and September 1
13-20 of each year, the quarterly and annualized ceilings for the next
13-21 succeeding calendar quarter beginning January 1, April 1, July 1,
13-22 and October 1, respectively. For each computation date, the
13-23 computation under Section (a)(2) of this Article for the quarterly
13-24 ceiling is the average of all the computations under Section (a)(1)
13-25 of this Article for auctions occurring during the three calendar
14-1 months preceding the computation date. For each computation date,
14-2 the computation under Section (a)(2) of this Article for the
14-3 annualized ceiling is the average of all the computations under
14-4 Section (a)(1) of this Article for auctions occurring during the
14-5 three calendar months preceding the computation date.
14-6 (e) In a contract that does not involve an open-end account,
14-7 as an alternative to the indicated rate ceiling, the parties may
14-8 contract for a rate not exceeding the quarterly ceiling in effect
14-9 at the time the rate is contracted for, but the creditor may not
14-10 rely on the annualized ceiling in such a contract, and in a
14-11 contract subject to Section (f) of this Article may not rely on
14-12 both the indicated rate ceiling and the quarterly ceiling in any
14-13 given contract.
14-14 (f) The parties to any contract, including a contract for an
14-15 open-end account, may agree to and stipulate for a rate or amount
14-16 by contracting for any index, formula, or provision of law, by or
14-17 under which the numerical rate or amount can from time to time be
14-18 determined. However, the rate or amount so produced may not exceed
14-19 the ceiling that may from time to time be in effect and applicable
14-20 to the contract, for so long as debt is outstanding under the
14-21 contract. Provided, further, that variable contract rates as
14-22 described in this Section (f) are not allowed in a contract in
14-23 which the interest or time price differential is precomputed and
14-24 added into the amount of the contract at the time of the contract.
14-25 (f)-(1) Any agreement or amendment to an agreement for
15-1 credit extended primarily for personal, family, or household use,
15-2 entered under the authority of Article 1.04 and providing for a
15-3 variable rate or amount on the balance under the agreement or
15-4 amendment shall disclose the following in not less than 10-point
15-5 type or computer equivalent on or with the agreement or amendment:
15-6 "NOTICE TO CONSUMER: UNDER TEXAS LAW, IF YOU CONSENT
15-7 TO THIS AGREEMENT, YOU MAY BE SUBJECT TO A FUTURE RATE
15-8 AS HIGH AS 24 PERCENT PER YEAR."
15-9 This section shall not apply to or affect any agreement or
15-10 amendment for which a disclosure relating to variable rates or
15-11 amounts is required or provided by federal law, regulation, or
15-12 interpretation. In the event that the contract provides for a
15-13 maximum rate of less than 24 percent per year, then the above
15-14 disclosure may be amended to reflect the actual maximum rate of the
15-15 contract.
15-16 (g) Unless otherwise agreed, when the parties have agreed to
15-17 a rate, they are considered also to have agreed to any lesser rate
15-18 that the creditor may elect, or is required under Section (h) of
15-19 this Article to implement.
15-20 (h)(1) If the agreement of the parties so provides, or is
15-21 amended pursuant to Section (i) of this Article or Article 1A.01 of
15-22 this Title to so provide, a creditor of an open-end account may, as
15-23 an alternative to the indicated rate ceiling, from time to time
15-24 implement any rate permitted under the quarterly or annualized
15-25 ceiling, as to any current and future balances in any of its
16-1 open-end accounts by giving notice of the rate at any time or times
16-2 after the computation date for the quarterly or annualized ceiling
16-3 and before the last day of the next succeeding calendar quarter.
16-4 The creditor may implement a rate, not exceeding the annualized
16-5 ceiling, for a 12-month period from the date it becomes effective
16-6 as to an account, or the creditor may implement a rate not
16-7 exceeding the quarterly ceiling for a three-month period from the
16-8 date it becomes effective as to an account. The rate may not
16-9 exceed the ceiling for the period elected. If the period elected
16-10 is 12 months, and the rate in effect is less than or equal to the
16-11 annualized ceiling in effect at the end of 12 months, the creditor
16-12 may leave the election in effect for the succeeding 12-month
16-13 period, which is then the new elected period. If the period
16-14 elected is three months, and the rate in effect is less than or
16-15 equal to the quarterly ceiling in effect at the end of the three
16-16 months, the creditor may leave the election in effect for the
16-17 succeeding three-month period, which is then the new elected
16-18 period. No further notice of the renewal of an election, or of any
16-19 successive renewals of elections, is required if the creditor has
16-20 previously disclosed to the obligor that the election may be
16-21 renewed in accordance with this section and the rate does not
16-22 exceed the rate previously agreed to by the obligor. If a rate in
16-23 excess of that previously agreed to is to be implemented by the
16-24 creditor under Section (a) of this Article, or other applicable
16-25 law, the creditor shall comply with Section (i) of this Article
17-1 before the end of the calendar quarter in which the prior period
17-2 elected ends, and the ceiling previously in effect remains the
17-3 ceiling until a new rate is agreed to.
17-4 (2) If an open-end account agreement provides, or is amended
17-5 pursuant to Article 1A.01 of this Title or Section (i) of this
17-6 Article to provide, for a variable rate or amount, according to any
17-7 index, formula, or provision of law disclosed to the obligor, the
17-8 applicable rate ceiling is the annualized ceiling, quarterly
17-9 ceiling, or indicated rate ceiling as disclosed to the obligor,
17-10 except for variable rate commercial contracts subject to Section
17-11 (c) of this Article. The annualized ceiling shall be adjusted
17-12 every 12 months, the quarterly ceiling shall be adjusted every
17-13 three months, and the indicated rate ceiling shall be adjusted
17-14 weekly.
17-15 Except to the extent inconsistent with any federal law,
17-16 regulation, or interpretation from time to time in effect, on any
17-17 open-end account entered under authority of this Article 1.04 which
17-18 is primarily for personal, family, or household use, the creditor
17-19 shall disclose any changes in the rate resulting from operation of
17-20 the index, formula, or provision of law by giving notice of the
17-21 change in the rate on or with the billing statement for a billing
17-22 cycle preceding the first cycle as to which the change in the rate
17-23 is effective or by a separate document mailed on or before the
17-24 beginning of the first cycle as to which the change in the rate is
17-25 effective, except that this notice may be given on or with any
18-1 billing statement if the open-end account is not covered by Article
18-2 1.11 or 15.02(d) of this Title. Variations in the rate of the
18-3 account due to operation of the previously disclosed index,
18-4 formula, or provision of law need not be further disclosed under
18-5 this Section (h) or under Section (i) of this Article.
18-6 (i)(1) In any open-end account, the creditor may provide in
18-7 the agreement covering the open-end account or, pursuant to Article
18-8 1A.01 of this Title, amend the agreement to provide that the terms,
18-9 including the rate, or index, formula, or provision of law used to
18-10 compute the rate on the open-end account, will be subject to
18-11 revision as to current and future balances, from time to time, by
18-12 notice from the creditor to the obligor. Any creditor revising a
18-13 rate, or index, formula, or provision used to compute the rate,
18-14 shall disclose in the notice:
18-15 (A) the new rate, or the new index, formula, or provision to
18-16 be used in computing the rate;
18-17 (B) the date on which it will become effective;
18-18 (C) the period for which it is elected, or at which the
18-19 ceiling will be adjusted and whether or not it will affect current
18-20 as well as future balances;
18-21 (D) the obligor's rights under this section and the
18-22 procedures for the obligor to exercise those rights; and
18-23 (E) the address to which the obligor may send notification
18-24 of the obligor's election not to continue the open-end account.
18-25 (F) If the amendment increases the rate, the notice shall
19-1 contain the following printed in not less than 10-point type or
19-2 computer equivalent:
19-3 "YOU MAY TERMINATE THIS AGREEMENT IF YOU DO NOT WISH TO
19-4 PAY THE NEW RATE."
19-5 (2) With a notice required by Subsection (1) of this
19-6 section, the creditor shall include a form which may be returned at
19-7 the expense of the creditor and on which the obligor may indicate
19-8 his or her decision not to continue the account by checking or
19-9 marking an appropriate box, or similar arrangement. The form may
19-10 be included on a portion of the account statement to be returned to
19-11 the creditor or on a separate sheet. Any obligor who is mailed a
19-12 notice required by Subsection (1) of this section addressed to the
19-13 obligor's last known address as shown by the creditor's records<,>
19-14 is considered to have agreed to the revision if the obligor, or a
19-15 person authorized by the obligor, after the expiration of five days
19-16 after the notice is mailed, accepts or uses any extensions of
19-17 credit, or if the obligor elects to retain the privilege of using
19-18 the open-end account. Such an election is considered to have
19-19 occurred unless the obligor notifies the creditor in writing before
19-20 the 21st day after the date on which the notice is sent that the
19-21 obligor does not wish to continue the open-end account. The
19-22 parties may also amend the contract by any other means of amending
19-23 those agreements permitted by any applicable law. Any obligor who
19-24 rejects a rate change in accordance with this section has the right
19-25 to pay off the then existing balance on the open-end account at the
20-1 rate, and over the time period, in effect prior to the change, and
20-2 at the same minimum payment terms previously agreed to, unless the
20-3 obligor agrees to the new rate in accordance with this section.
20-4 Rejection of a new rate may not accelerate the balance due.
20-5 (j) If a creditor implements an annualized or quarterly
20-6 ceiling as to a majority of its open-end accounts that are under a
20-7 particular plan or arrangement and are for obligors in this state,
20-8 that ceiling is also the ceiling for all open-end accounts that are
20-9 opened or activated under that plan for obligors in this state
20-10 during the period that the election is in effect.
20-11 (k)(1) The consumer credit commissioner shall cause the
20-12 annualized, quarterly, and monthly ceilings to be published in the
20-13 Texas Register before the 11th day after the date on which they are
20-14 computed, and shall cause the indicated rate ceiling in effect
20-15 under Section (a) of this Article to be published from time to
20-16 time. If the furnishing of any of the information required to
20-17 compute the ceilings is discontinued so that it is no longer
20-18 available to the consumer credit commissioner from the Federal
20-19 Reserve Board on a timely basis, the consumer credit commissioner
20-20 shall obtain that information from reliable sources satisfactory to
20-21 the commissioner.
20-22 (2) If the information required to compute a ceiling is not
20-23 available, then that ceiling remains at the level at which it was
20-24 when the information became unavailable until the information again
20-25 becomes available.
21-1 (3) Any court may take judicial notice of the ceilings, and
21-2 related information, caused to be published in the Texas Register
21-3 by the consumer credit commissioner pursuant to this Article and of
21-4 the information published pursuant to Article 2.08 of this Title.
21-5 (l) The maximum rate on any contract to renew or extend the
21-6 terms of payment of any indebtedness <at any time incurred,> is the
21-7 applicable ceiling allowed by this Article for a contract entered
21-8 at the time the renewal or extension is made or agreed to.
21-9 (m) The ceilings provided by this Article for a contract,
21-10 including a contract for an open-end account, are optional and any
21-11 person may, notwithstanding any other law, contract for, charge,
21-12 and receive the rates or amounts allowed by this Article for that
21-13 contract, or the rates or amounts allowed by any other applicable
21-14 provision of this Title or any other law applicable to such a
21-15 contract, except as restricted under Section (q) of this Article.
21-16 (n)(1) Any loan made under authority of this Article that is
21-17 extended either primarily for personal, family, or household use
21-18 but not for business, commercial, investment, agricultural, or
21-19 other similar purposes, or primarily for the purchase of a motor
21-20 vehicle, other than a heavy commercial vehicle as defined in
21-21 Section (n) <,> <of> Article 7.01 <, Title 79, Revised Statutes
21-22 (Article 5069-7.01, Vernon's Texas Civil Statutes)> of this Title,
21-23 and that is payable in two or more installments, not secured by a
21-24 lien on real estate, and that is entered by a person engaged in the
21-25 business of making or negotiating those types of loans, is subject
22-1 to Chapter 4 of this Title, and any person except a bank or savings
22-2 and loan association engaged in that business shall obtain a
22-3 license under Chapter 3 of this Title.
22-4 (2) Any loan made under this Article that is extended
22-5 primarily for personal, family, or household use but not for
22-6 business, commercial, investment, agricultural, or other similar
22-7 purposes, and that is predominantly payable in monthly installments
22-8 and is described by Section (1), Article 5.01, of this Title and
22-9 Sections (1), (3), and (4), Article 5.02, of this Title and that is
22-10 made, negotiated, or arranged by a person engaged in the business
22-11 of making, negotiating, or arranging those types of loans, is
22-12 subject to Chapter 5 of this Title, and any person except a bank or
22-13 savings and loan association engaged in that business shall obtain
22-14 a license under Chapter 3 of this Title.
22-15 (3) In any contract, including any contract for an open-end
22-16 account, subject to Chapter 6, 6A, or 7 of this Title, the rate or
22-17 amount contracted for, charged, or received under this Article is
22-18 considered to be the rate or amount of time price differential
22-19 within the meanings given to that term in those respective
22-20 Chapters, and those contracts are not subject to the provisions of
22-21 Chapters 3, 4, and 5 of this Title.
22-22 (4) In any contract, including a contract for an open-end
22-23 account, which is subject to Chapter 4, 5, 6, 6A, or 7 of this
22-24 Title, the parties and their assignees may contract for any rate or
22-25 amount allowed by that Chapter, or any simple or precomputed
23-1 contract rate or amount not exceeding those allowed by this
23-2 Article, but except to the extent inconsistent with this Article in
23-3 any event the parties to any contract under any of such Chapters or
23-4 to any contract under Chapter 3 of this Title shall comply with all
23-5 of the other rights, duties, and obligations under the applicable
23-6 Chapter and the parties and their assignees have all other rights
23-7 under the applicable Chapter, including those provisions requiring
23-8 certain refund credits in event of prepayment or acceleration.
23-9 (5) Any person (except a person subject to Chapter 24 of the
23-10 Insurance Code) engaged in the business of extending open-end
23-11 credit primarily for personal, family, or household use and
23-12 charging a rate or amount under authority of this Article 1.04
23-13 shall be subject to either the applicable Chapter in Subtitle 2 of
23-14 this Title or Chapter 15 of this Title, as applicable, except to
23-15 the extent inconsistent with this Article; the parties to such
23-16 open-end accounts and their assignees shall comply with and have
23-17 all other rights, duties, and obligations under the applicable
23-18 Chapter, except to the extent inconsistent with this Article.
23-19 (6) Any person subject to the Texas Credit Union Act, as
23-20 amended (Article 246-1.01 et seq., Vernon's Texas Civil Statutes),
23-21 who contracts for, charges, or receives a rate authorized by this
23-22 Article shall comply with all other duties, obligations, and
23-23 prohibitions of that Act, and the parties to the transaction have
23-24 all other rights provided by that Act, except to the extent
23-25 inconsistent with this Article.
24-1 (7) Any person subject to a provision of Chapter 24 of the
24-2 Insurance Code who contracts for, charges, or receives a rate
24-3 authorized by this Article shall comply with all other applicable
24-4 duties, obligations, and prohibitions in that law, and the parties
24-5 to those contracts, including those for open-end accounts, have all
24-6 other rights applicable to those transactions under Chapter 24 of
24-7 the Insurance Code, except to the extent inconsistent with this
24-8 Article. The licensing requirements of Subtitle 2 of this Title
24-9 are not applicable to those persons.
24-10 (o)<(1) All other written contracts whatsoever, except those
24-11 otherwise authorized by law, which may in any way, directly or
24-12 indirectly, provide for a greater rate of interest shall be subject
24-13 to the appropriate penalties prescribed in this Subtitle.>
24-14 <(2)> (1) If, in any contract, including one for an open-end
24-15 account, subject to Chapter 4, 5, 6, 6A, 7, or 15 of this Title,
24-16 any person contracts for, charges, or receives a rate or amount of
24-17 interest or time price differential that exceeds the rate allowed
24-18 by that Chapter and the rate allowed by this Article, the amount of
24-19 the penalty for that overcharge shall be determined under Chapter 8
24-20 of this Title rather than under this Subtitle, and all of the
24-21 provisions of Articles 8.01, 8.02, 8.03, 8.04, 8.05, and 8.06 of
24-22 this Title are in effect as to that contract and are applicable to
24-23 this Article as if it were a part of Subtitle 2 of this Title. The
24-24 failure to perform any duty or comply with any prohibition required
24-25 by this Article <1.04>, in a contract entered under authority of
25-1 this Article <1.04>, shall be subject to the penalties set out in
25-2 Article 8.01(b) and shall be subject to such of the other
25-3 provisions of Articles 8.01 through 8.06 which apply to failures to
25-4 perform duties or comply with prohibitions to the same extent as if
25-5 the duties and prohibitions in this Article <1.04> were contained
25-6 in Subtitle 2.
25-7 <(3)> (2) The consumer credit commissioner, subject to
25-8 Section (l), Article 2.01, of this Title, shall enforce Chapters 2,
25-9 3, 4, 5, 6, 6A, 7, 8, 15, and 51 of this Title, as modified by this
25-10 Article and Article 2.08 of this Title, and shall enforce this
25-11 Article as applicable to contracts subject to those Chapters.
25-12 Article 3.08 of this Title is applicable to transactions made by
25-13 licensees pursuant to this Article that otherwise are subject to
25-14 Chapters 4, 5, or 15 of this Title. The provisions of Article 3.12
25-15 of this Title will apply to loans made under authority of this
25-16 Article which are subject to Chapter 4 of this Title. In any
25-17 contracts subject to the Texas Credit Union Act, as amended
25-18 (Article 2461-1.01 et seq., Vernon's Texas Civil Statutes), the
25-19 credit union commissioner shall enforce this Article.
25-20 <(4)> (3) In any contract subject to Chapter 24 of the
25-21 Insurance Code, the State Board of Insurance shall enforce this
25-22 Article.
25-23 (p) A person does not violate this Title by contracting for,
25-24 charging, or receiving any rate or dollar amount, or by any acts
25-25 done or omitted, that conform to the provisions of this Article, or
26-1 to the provisions determined by the consumer credit commissioner,
26-2 or that conform to an interpretation of this Title by the consumer
26-3 credit commissioner under Section (10) of Article 2.02A or by a
26-4 decision of an appellate court of this state or of the United
26-5 States in effect at the time that the acts were done or omitted.
26-6 (q) The maximum rates authorized by this Article do not
26-7 apply to agreements under which credit is extended for a home
26-8 solicitation transaction as defined in Chapter 13 of this Title if
26-9 the agreement is secured by a lien on the obligor's homestead and
26-10 the credit is extended by the seller or its owner, subsidiary, or
26-11 corporate affiliate.
26-12 (r) In the event of any inconsistency or conflict between
26-13 the disclosure or notice requirements under this Article and
26-14 disclosures or notices required or provided under any current or
26-15 future federal law, regulation, or interpretation, the requirements
26-16 of the federal law, regulation, or interpretation shall control and
26-17 the inconsistent or conflicting requirements under this Article
26-18 need not be complied with. A creditor may modify the disclosure
26-19 and notice requirements under this Article to conform to the
26-20 terminology or other provisions required or provided under federal
26-21 law, regulation, or interpretation.
26-22 SECTION 5. Article 5069-1.05, chapter 1, title 79, Revised
26-23 Civil Statutes of Texas, 1925, is amended to read as follows:
26-24 Art. 5069-1.05. Judgment interest imposed; <R>rates of judgment<s>
26-25 interest
27-1 <Sec. 1.> (a) All money judgments of the courts of this
27-2 state based on a contract that provides for the payment of a
27-3 <specific> rate of interest earn postjudgment interest at a rate
27-4 equal to the lesser of:
27-5 (1) the rate specified in the contract, which may be a
27-6 variable rate; or
27-7 (2) 18 percent a year.
27-8 <Sec. 2.> (b) Except as provided in Section <1> (a) of this
27-9 <a>Article, all money judgments, together with taxable court costs
27-10 and prejudgment interest (if any), of the courts of this state earn
27-11 postjudgment interest<, compounded annually,> at the postjudgment
27-12 interest rate published by the consumer credit commissioner in the
27-13 Texas Register. The consumer credit commissioner shall <compute>
27-14 establish on the 15th day of each month the <judgment> postjudgment
27-15 interest rate <by taking> to be so published, which shall be the
27-16 auction rate quoted on a bank discount basis for 52-week treasury
27-17 bills issued by the United States government as published by the
27-18 Federal Reserve Board on the most recent date preceding <the date
27-19 of computation. The interest rate so computed shall be the
27-20 judgment interest rate, except> such 15th day; provided, however,
27-21 that if <the> such auction rate <so computed> is less than 10
27-22 percent a year, the <judgment> postjudgment interest rate to be so
27-23 published shall be 10 percent a year, and if <it be> such auction
27-24 rate is more than 20 percent a year, the <judgment> postjudgment
27-25 interest rate to be so published shall be 20 percent a year. The
28-1 postjudgment interest rate so established on that <computation
28-2 date> 15th day shall be the postjudgment interest rate on money
28-3 judgments <for> rendered during the next calendar month.
28-4 <Sec. 3. (a)> (c)(1) Except as provided by Subsection
28-5 <(c)> (3) of this section, all money judgments earn postjudgment
28-6 interest for the period beginning on the <day> date the judgment is
28-7 rendered and ending on the <day> date the judgment is satisfied.
28-8 Postjudgment <I>interest shall be compounded annually.
28-9 <(b)> (2) Each money judgment shall state the rate of
28-10 prejudgment interest (if any) earned, and postjudgment interest to
28-11 be earned, on that judgment.
28-12 <(c)> (3) If a case is appealed and a motion for extension
28-13 of time to file a brief is granted for a party who was a <plaintiff
28-14 at trial> claimant, postjudgment interest does not accrue for the
28-15 period of extension.
28-16 <Sec. 4.> (d) This <a>Article does not apply to a judgment
28-17 that earns interest <that is set by> pursuant to Title 2, Tax Code.
28-18 <Sec. 5.> (e) The consumer credit commissioner shall cause
28-19 the <judgment> postjudgment interest rate <of interest> to be
28-20 published in the Texas Register at the same time that other rates
28-21 directed by other provisions of this Title to be <calculated are
28-22 caused to be> published by the consumer credit commissioner <under
28-23 other provisions of this code> are so published. The courts of
28-24 this state shall take judicial notice of <such> the postjudgment
28-25 interest rate <as> so published.
29-1 <Sec. 6. (a)> (f)(1) All money <J>judgments of the courts
29-2 of this state in wrongful death, personal injury, and property
29-3 damage cases <must include> earn prejudgment interest. Except as
29-4 provided by Subsections <(b), (c)> (2), (3), and <(d)> (4) of this
29-5 section, prejudgment interest accrues <on the amount of the
29-6 judgment> during the period beginning on the 180th day after the
29-7 date the defendant receives written notice of a claim or on the
29-8 date the suit is filed, whichever occurs first, and ending on the
29-9 day preceding the date the judgment is rendered.
29-10 <(b)> (2) If a money judgment for a claimant is equal to or
29-11 less than the amount of a settlement offer by the defendant,
29-12 prejudgment interest does not accrue <on the amount of the
29-13 judgment> for the period during which the offer may be accepted.
29-14 <(c)> (3) If a money judgment for a claimant is more than
29-15 the amount of <the> a settlement offer by the defendant,
29-16 prejudgment interest does not accrue <include prejudgment interest>
29-17 on that portion of <the amount of> the judgment that is equal to
29-18 the amount of the settlement offer for the period during which the
29-19 offer may be accepted.
29-20 <(d)> (4) In addition to the exceptions provided under
29-21 Subsections <(b)> (2) and <(c)> (3) of this section, the court in
29-22 its discretion may order that prejudgment interest does or does not
29-23 accrue during periods of delay in the trial, taking into
29-24 consideration:
29-25 <(1)> (A) periods of delay caused by a defendant; and
30-1 <(2)> (B) periods of delay caused by a claimant.
30-2 <(e)> (5) <In order f>For a settlement offer to toll the
30-3 <running> accrual of prejudgment interest in accordance with the
30-4 provisions of this section, the offer must be communicated to a
30-5 party or <his> that party's attorney or representative in writing.
30-6 <(f)> (6) If a settlement offer is made for other than
30-7 <present> cash <payment> payable at the time of settlement,
30-8 prejudgment interest on the amount of the settlement offer is
30-9 computed on the basis of <cost or> the fair market value of the
30-10 settlement offer at the time it is made.
30-11 <(g)> (7) The <rate of> prejudgment interest rate on any
30-12 money judgment shall be the same as the <rate of> postjudgment
30-13 interest rate <at the time of> on that judgment and shall be
30-14 computed as simple interest.
30-15 <Sec. 7.> (g) The <rate of> prejudgment interest rate on
30-16 any money judgment in a condemnation case<s> shall be the same as
30-17 the <rate of> postjudgment interest rate <at the time of> on that
30-18 judgment and shall be computed as simple interest.
30-19 SECTION 6. Article 5069-1.06, chapter 1, title 79, Revised
30-20 Civil Statutes of Texas, 1925, is amended to read as follows:
30-21 Art. 5069-1.06. Penalties and Remedies
30-22 (a)(1) <Any person who contracts for, charges or> Subject to
30-23 the provisions of Sections (f) and (g) of this Article, the
30-24 provisions of Article 1.07 of this Title, and the provisions of
30-25 Article 1.17 of this Title, if a creditor receives from an obligor
31-1 contract interest <which is greater than the amount authorized> in
31-2 respect of a loan and the amount of such contract interest produces
31-3 a rate in excess of the maximum rate of conventional interest fixed
31-4 by this Subtitle, the creditor shall <forfeit to the obligor three
31-5 times the amount of usurious interest contracted for, charged or
31-6 received, such usurious interest being the amount the total
31-7 interest contracted for, charged, or received exceeds the amount of
31-8 interest allowed by law, and reasonable attorney fees fixed by the
31-9 court except that in no event shall the amount forfeited be less
31-10 than Two Thousand Dollars or twenty percent of the principal,
31-11 whichever is the smaller sum; provided, that there shall be no
31-12 penalty for any usurious interest which results from an accidental
31-13 and bona fide error> be liable to the obligor for 300 percent of
31-14 the remainder obtained by subtracting:
31-15 (A) the total amount of interest that would have been
31-16 payable to the creditor by the obligor in respect of such loan if
31-17 the obligor had agreed to pay to the creditor interest in a total
31-18 amount that produced a rate equal to the maximum rate of
31-19 conventional interest fixed by this Subtitle, from
31-20 (B) the total amount of contract interest received by the
31-21 creditor from the obligor in respect of such loan; provided,
31-22 however, that if the amount of that liability would be less than
31-23 $2,000, the creditor shall be liable to the obligor for 20 percent
31-24 of the principal amount of such loan or for the sum of $2,000,
31-25 whichever is less.
32-1 (2) The liability provided in Subsection (1) of this section
32-2 is inclusive of any other liabilities of creditors provided by
32-3 common law for contracting for, charging, or receiving conventional
32-4 interest in an amount that produces a rate in excess of the maximum
32-5 rate of conventional interest fixed by this Subtitle, including any
32-6 other liabilities imposed by the courts of this State to enforce
32-7 Article XVI, Section 11 of the Constitution, and a creditor shall
32-8 not be subject to such other liabilities.
32-9 <(1) Any person who contracts for, charges or receives
32-10 interest which is in excess of double the amount of interest
32-11 allowed by this Subtitle shall forfeit as an additional penalty,
32-12 all principal as well as interest and all other charges and shall
32-13 pay reasonable attorney fees set by the court; provided further
32-14 that any such person violating the provisions of this section shall
32-15 be guilty of a misdemeanor and upon conviction thereof shall be
32-16 punished by fine of not more than One Thousand Dollars. Each
32-17 contract or transaction in violation of this section shall
32-18 constitute a separate offense punishable hereunder.>
32-19 <(3) All such actions brought under this Article shall be
32-20 brought in any court of this State having jurisdiction thereof
32-21 within four years from the date when the usurious charge was
32-22 received or collected in the county of the defendant's residence,
32-23 or in the county where the interest in excess of the amount
32-24 authorized by this Subtitle has been received or collected, or
32-25 where such transaction had been entered into or where the parties
33-1 who paid interest in excess of the amount authorized by this
33-2 Subtitle resided when such transaction occurred, or where he
33-3 resides.>
33-4 (b)(1) Subject to the provisions of Sections (f) and (g) of
33-5 this Article and the provisions of Article 1.17 of this Title, if a
33-6 creditor charges and receives from an obligor legal interest in an
33-7 amount that produces a rate in excess of the maximum rate of legal
33-8 interest fixed by this Subtitle, the creditor shall be liable to
33-9 the obligor for 300 percent of the remainder obtained by
33-10 subtracting:
33-11 (A) the total amount of legal interest that would have been
33-12 received by the creditor from the obligor if the creditor had
33-13 charged and received from the obligor legal interest in a total
33-14 amount that produced a rate equal to the maximum rate of legal
33-15 interest fixed by this Subtitle, from
33-16 (B) the total amount of legal interest charged and received
33-17 by the creditor from the obligor; provided, however, that if the
33-18 amount of that liability would be less than $2,000, the creditor
33-19 shall be liable to the obligor for 20 percent of the principal
33-20 amount of the credit extended by the creditor to the obligor or for
33-21 the sum of $2,000, whichever is less.
33-22 (2) The liability provided in Subsection (1) of this section
33-23 is inclusive of any other liabilities of creditors provided by
33-24 common law for charging or receiving legal interest in an amount
33-25 that produces a rate in excess of the maximum rate of legal
34-1 interest fixed by this Subtitle, including any other liabilities
34-2 imposed by the courts of this State to enforce Article XVI, Section
34-3 11 of the Constitution, and a creditor shall not be subject to such
34-4 other liabilities.
34-5 (c)(1) Subject to the provisions of Section (f) of this
34-6 Article and the provisions of Article 1.17 of this Title, if a
34-7 creditor receives from an obligor conventional interest (including,
34-8 without limitation, any prepayment premium, late payment charge, or
34-9 loan expenses that the obligor has not agreed to pay) in an amount
34-10 in excess of the total amount of contract interest, the creditor
34-11 shall be liable to the obligor for the amount of the excess.
34-12 (2) The liability provided in Subsection (1) of this section
34-13 is inclusive of any other liabilities of creditors provided by
34-14 common law for charging or receiving conventional interest in an
34-15 amount in excess of the total amount of contract interest,
34-16 including any other liabilities imposed by the courts of this State
34-17 to enforce Article XVI, Section 11 of the Constitution, and a
34-18 creditor shall not be subject to such other liabilities.
34-19 (d)(1) Subject to the provisions of Section (f) of this
34-20 Article and the provisions of Article 1.17 of this Title, if a
34-21 creditor that has agreed with an obligor not to charge the obligor
34-22 any interest charges and receives legal interest from the obligor,
34-23 the creditor shall be liable to the obligor for the amount of the
34-24 legal interest so charged and received or for the total amount of
34-25 legal interest that would have been received by the creditor from
35-1 the obligor if the creditor had charged and received from the
35-2 obligor legal interest in a total amount that produced a rate equal
35-3 to the maximum rate of legal interest fixed by this Subtitle,
35-4 whichever is less.
35-5 (2) The liability provided in Subsection (1) of this section
35-6 is inclusive of any other liabilities of creditors provided by
35-7 common law for charging or receiving legal interest when the
35-8 creditor has agreed with an obligor not to charge the obligor any
35-9 interest, including any other liabilities imposed by the courts of
35-10 this State to enforce Article XVI, Section 11 of the Constitution,
35-11 and a creditor shall not be subject to such other liabilities;
35-12 provided, however, that if a creditor that has agreed with an
35-13 obligor not to charge the obligor any interest charges and receives
35-14 from the obligor legal interest in an amount that produces a rate
35-15 in excess of the maximum rate of legal interest fixed by this
35-16 Subtitle, the creditor shall also be liable to the obligor as
35-17 provided in Subsection (1) of Section (b) of this Article.
35-18 (e)(1) Subject to the provisions of Section (f) of this
35-19 Article, if a judgment creditor receives from a judgment debtor
35-20 judgment interest in an amount that produces a rate in excess of
35-21 the rate at which the judgment earns interest, the judgment
35-22 creditor shall be liable to the judgment debtor for the remainder
35-23 obtained by subtracting:
35-24 (A) the total amount of interest earned by the judgment,
35-25 from
36-1 (B) the total amount of judgment interest received by the
36-2 judgment creditor from the judgment debtor.
36-3 (2) The liability provided in Subsection (1) of this section
36-4 is inclusive of any other liabilities of judgment creditors
36-5 provided by common law for contracting for, charging, or receiving
36-6 judgment interest in an amount that produces a rate in excess of
36-7 the rate at which the judgment earns interest or in excess of the
36-8 rate provided by Article 1.05 of this Subtitle, including any other
36-9 liabilities imposed by the courts of this State to enforce Article
36-10 XVI, Section 11 of the Constitution, and a judgment creditor shall
36-11 not be subject to such other liabilities.
36-12 (3) For purposes of this section, a judgment earns interest
36-13 at the rate stated in the judgment at the time that the judgment
36-14 becomes final and is no longer subject to modification or reversal.
36-15 (f)(1) An action to establish liability of a creditor or
36-16 judgment creditor as a result of the creditor's or judgment
36-17 creditor's receipt of interest shall be barred unless such action
36-18 is filed in a court of competent jurisdiction within four years
36-19 after the date of such receipt.
36-20 (2) Venue in an action to establish liability of a creditor
36-21 or judgment creditor as a result of the creditor's or judgment
36-22 creditor's receipt of interest shall be in the county in which
36-23 either the creditor or judgment creditor or the obligor or judgment
36-24 debtor resides or maintains its principal place of business in this
36-25 state.
37-1 (3) If a judgment is obtained against a creditor or judgment
37-2 creditor as a result of the creditor's or judgment creditor's
37-3 receipt of interest, the creditor or judgment creditor shall be
37-4 liable to the obligor or judgment debtor for the obligor's or
37-5 judgment debtor's reasonable attorneys' fees, which shall be fixed
37-6 by the court.
37-7 (g)(1) A creditor shall not be liable to an obligor under
37-8 Section (a) of this Article if:
37-9 (A) before January 1, 1994, or within 60 days after the date
37-10 the creditor actually discovers such liability, whichever is later,
37-11 the creditor refunds to the obligor the excess of (i) the total
37-12 amount of contract interest received by the creditor from the
37-13 obligor over (ii) the total amount of interest that would have been
37-14 payable to the creditor by the obligor if the obligor had agreed to
37-15 pay to the creditor interest in a total amount that produced a rate
37-16 equal to the maximum rate of conventional interest fixed by this
37-17 Subtitle; and
37-18 (B) before the obligor files an action against the creditor
37-19 under Section (a) of this Article in a court of competent
37-20 jurisdiction, the creditor gives written notice to the obligor of
37-21 the creditor's violation of this Subtitle.
37-22 (2) A creditor shall not be liable to an obligor under
37-23 Section (b) of this Article if:
37-24 (A) before January 1, 1994, or within 60 days after the date
37-25 the creditor actually discovers such liability, whichever is later,
38-1 the creditor refunds to the obligor the excess of (i) the total
38-2 amount of legal interest charged and received by the creditor from
38-3 the obligor over (ii) the total amount of legal interest that would
38-4 have been received by the creditor from the obligor if the creditor
38-5 had charged and received from the obligor legal interest in a total
38-6 amount that produced a rate equal to the maximum rate of legal
38-7 interest fixed by this Subtitle; and
38-8 (B) before the obligor files an action against the creditor
38-9 under Section (b) of this Article in a court of competent
38-10 jurisdiction, the creditor gives written notice to the obligor of
38-11 the creditor's violation of this Subtitle.
38-12 (3) For purposes of this section, the phrase "actually
38-13 discovers" refers to discovery in fact, without reference to
38-14 whether, through reasonable diligence, a reasonably prudent person
38-15 could or should have made that discovery.
38-16 (4) For purposes of this section, the giving of written
38-17 notice to an obligor shall be accomplished by delivering or mailing
38-18 the notice:
38-19 (A) to the obligor at the last known address of the obligor
38-20 as disclosed by the records of the creditor; or
38-21 (B) to the obligor's duly authorized agent or attorney of
38-22 record.
38-23 (h)(1) For purposes of this Article and Article 1.07 of this
38-24 Title, unless a creditor and an obligor otherwise agree, the
38-25 maximum rate of conventional interest fixed by this Subtitle means
39-1 the maximum rate of conventional interest fixed by this Subtitle as
39-2 in effect at the time the obligor agreed to pay interest to the
39-3 creditor.
39-4 (2) For purposes of this Article, the maximum rate of legal
39-5 interest fixed by this Subtitle means the maximum rate of legal
39-6 interest fixed by this Subtitle as in effect at the time the
39-7 creditor charged legal interest to the obligor.
39-8 (i) If an agreement by an obligor provides that the obligor
39-9 shall pay to a creditor an amount of conventional interest that
39-10 produces a rate in excess of the maximum rate of conventional
39-11 interest fixed by this Subtitle, the creditor shall not be entitled
39-12 to enforce the agreement of the obligor to pay the portion of that
39-13 amount that exceeds the total amount of interest that would have
39-14 been payable if the obligor had agreed to pay interest in a total
39-15 amount that produced a rate equal to the maximum rate of
39-16 conventional interest fixed by this Subtitle; provided, however,
39-17 that this Section (i) shall not be construed to impose any
39-18 liability on a creditor that is or was liable to an obligor as
39-19 provided in Subsection (1) of Section (a) of this Article.
39-20 SECTION 7. Article 5069-1.07, chapter 1, title 79, Revised
39-21 Civil Statutes of Texas, 1925, is amended to read as follows:
39-22 Art. 5069-1.07. Determinations whether the amount of contract
39-23 interest received produces a rate in excess of the maximum rate;
39-24 determinations of the total amount of contract interest received
39-25 <of the rate of interest on loans secured by a lien on any interest
40-1 in real property>
40-2 (a) For purposes of determining whether the amount of
40-3 contract interest received at any date in respect of any loan
40-4 produces a rate in excess of the maximum rate of conventional
40-5 interest fixed by this Subtitle:
40-6 (1) the total amount of contract interest received by the
40-7 creditor from the obligor at that date in respect of such loan
40-8 shall be allocated on a daily basis in proportion to
40-9 (A) the principal amount of the loan outstanding on that
40-10 date and on each day preceding that date, and
40-11 (B) the then unpaid principal amount, if any, of the loan
40-12 that will be outstanding on each day following that date, assuming
40-13 that such principal amount is paid at its stated maturity
40-14 (including any portion of such principal amount required to be paid
40-15 on any regularly scheduled date of payment, but excluding all or
40-16 any portion of such principal amount required or permitted to be
40-17 paid as a result of (i) acceleration of maturity upon a
40-18 declaration by the creditor or otherwise, (ii) any election by the
40-19 obligor to pay all or a portion of such principal amount prior to
40-20 its stated maturity or its regularly scheduled date or dates of
40-21 payment, or (iii) the happening of a contingency); and
40-22 (2) unless the amount of contract interest so allocated to
40-23 any day produces a rate in excess of the maximum rate of
40-24 conventional interest fixed by this Subtitle, the amount of
40-25 contract interest received at that date in respect of such loan
41-1 shall be deemed not to produce a rate in excess of such maximum
41-2 rate.
41-3 (b) For purposes of Section (a) of this Article and Section
41-4 (a) of Article 1.06 of this Title:
41-5 (1) the total amount of contract interest received by a
41-6 creditor from an obligor at any date in respect of any loan shall
41-7 not include
41-8 (A) any amount of contract interest that the creditor
41-9 refunds to the obligor, or applies to reduce the principal amount
41-10 of such loan, within 30 days of the receipt of such amount by the
41-11 creditor, whether or not such refund or application has been made
41-12 at that date,
41-13 (B) any amount of contract interest that the creditor
41-14 interpleads in a court of competent jurisdiction within 30 days of
41-15 the receipt of such amount by the creditor, whether or not such
41-16 amount has been deposited with the court at that date,
41-17 (C) any amount of contract interest that the creditor
41-18 refunds to the obligor, or applies to reduce the principal amount
41-19 of such loan, as a result of the payment of all or a portion of
41-20 such principal amount prior to its stated maturity or its regularly
41-21 scheduled date or dates of payment,
41-22 (D) any amount of contract interest received by the creditor
41-23 from the obligor in respect of any other loan, or
41-24 (E) any amount of conventional interest that does not
41-25 constitute contract interest;
42-1 (2) if the contract interest received by a creditor from an
42-2 obligor includes compensation other than money, the fair value of
42-3 such compensation at the time the obligor agreed to pay such
42-4 compensation to the creditor shall be included in the total amount
42-5 of contract interest received by the creditor from the obligor; and
42-6 (3) any amount of contract interest, or any amount of
42-7 prepayment premium, late payment charge, or loan expenses agreed to
42-8 be paid by an obligor, that was not paid when such amount first
42-9 became due and payable shall be considered the principal amount of
42-10 a separate loan, which may bear contract interest in an amount that
42-11 produces a rate not in excess of the maximum rate of conventional
42-12 interest fixed by this Subtitle.
42-13 <(a) On any loan or agreement to loan secured or to be
42-14 secured, in whole or in part, by a lien, mortgage, security
42-15 interest, or other interest in or with respect to any interest in
42-16 real property, determination of the rate of interest for the
42-17 purpose of determining whether the loan is usurious under all
42-18 applicable Texas laws shall be made by amortizing, prorating,
42-19 allocating, and spreading, in equal parts during the period of the
42-20 full stated term of the loan, all interest at any time contracted
42-21 for, charged, or received from the borrower in connection with the
42-22 loan. However, in the event the loan is paid in full by the
42-23 borrower prior to the end of the full stated term of the loan and
42-24 the interest received for the actual period of the existence of the
42-25 loan exceeds the maximum lawful rate, the lender contracting for,
43-1 charging, or receiving all such interest shall refund to the
43-2 borrower the amount of the excess or shall credit the amount of the
43-3 excess against amounts owing under the loan and shall not be
43-4 subject to any of the penalties provided by law for contracting
43-5 for, charging, or receiving interest in excess of the maximum
43-6 lawful rate.>
43-7 <(b) Notwithstanding any contrary provisions of law, any
43-8 person may agree to pay, and may pay pursuant to such an agreement,
43-9 any rate of interest not exceeding 18 percent per annum, if such
43-10 agreement is evidenced by a written bond, note, or other contract
43-11 of such person providing for a loan or other extension of credit in
43-12 the original principal amount of $250,000 or more, or any series of
43-13 advances of money if the aggregate of all sums advanced or agreed
43-14 to or contemplated to be advanced pursuant to such agreement equals
43-15 or exceeds $250,000, or any extension or renewal of such loan or
43-16 other extension of credit (regardless of whether or not the
43-17 outstanding principal balance thereof at the time of such renewal
43-18 or extension is $250,000 or more); and as to any such agreement to
43-19 pay or payment, the claim or defense of usury by such person or
43-20 such person's heirs, personal representatives, successors,
43-21 substitutes, or anyone else on such person's behalf, or by any
43-22 person acting as guarantor, surety, accommodation maker, or
43-23 endorser for or with respect to such agreement to pay or payment,
43-24 or by any person assuming the obligation of such payment or
43-25 otherwise becoming liable therefor, or by any person owning or
44-1 acquiring property subject to a lien securing such agreement to pay
44-2 or such payment is prohibited. Notwithstanding anything to the
44-3 contrary contained herein, this Subsection (b) shall not apply to
44-4 any loan or other extension of credit secured by (i) a lien on a
44-5 building, constructed or to be constructed, which both is used or
44-6 intended to be used as a single one-to-four family residence and is
44-7 occupied or intended to be occupied by a person obligated to pay
44-8 such loan or other extension of credit or (ii) a lien on land
44-9 intended to be used primarily for agricultural or ranching
44-10 purposes. Nothing herein shall be construed to limit or otherwise
44-11 affect the provisions or application of Article 2.09, Texas
44-12 Miscellaneous Corporation Laws Act, as amended (Article 1302-1.01
44-13 et seq., Vernon's Texas Civil Statutes), with respect to loans or
44-14 other extensions of credit not covered hereby.>
44-15 <(c) Notwithstanding any contrary provisions of law, any
44-16 person may agree to pay, and may pay pursuant to such an agreement,
44-17 the same rate of interest as corporations (other than nonprofit
44-18 corporations) on any loan in the principal amount of $500,000 or
44-19 more, which is made for the purpose of the payment of the direct or
44-20 indirect costs of exploration for oil and gas, the development of
44-21 oil and gas properties, or the reworking of oil or gas wells,
44-22 provided that the value of the collateral securing such loan is
44-23 reasonably estimated by the lender at the time of the making of the
44-24 loan to be in excess of the amount of the loan. Such a loan shall
44-25 not be subject to the defense of usury or the penalties for usury
45-1 unless the interest rate exceeds the maximum lawful interest rate
45-2 for corporations (other than nonprofit corporations).>
45-3 <Text of (d) as added by Acts 1979, 66th Leg.,>
45-4 <p. 1766, ch. 715, Sec. 1>
45-5 <(d)(1) On any loan or agreement to loan secured or to be
45-6 secured in whole or in part by a lien, mortgage, security interest,
45-7 or other interest in or with respect to real property on which is
45-8 located one or more single family dwellings, or dwelling units for
45-9 not more than four families in the aggregate, interest may be
45-10 charged at such rates as may be permitted by other applicable law
45-11 or at the lesser of the following rates:>
45-12 <(i) 12 percent per annum; or>
45-13 <(ii) a rate equivalent to the average per annum market
45-14 yield rate adjusted to constant maturities on 10-year United States
45-15 Treasury notes and bonds as published by the board of governors of
45-16 the Federal Reserve System for the second calendar month preceding
45-17 the month in which the lender becomes legally bound to make the
45-18 loan plus an additional two percent per annum rounded off to the
45-19 nearest quarter of one percent per annum.>
45-20 <A "dwelling unit" shall mean for the purpose of this section
45-21 a unified combination of rooms that is designed for residential use
45-22 by one family.>
45-23 <(2) Before the 20th day of each month, the savings and loan
45-24 commissioner shall ascertain the average per annum market yield
45-25 rate adjusted to constant maturities on 10-year United States
46-1 Treasury notes and bonds for the preceding calendar month and cause
46-2 such rate to be published in the Texas Register.>
46-3 <(3) The interest rates authorized by this subsection shall
46-4 not be applicable to any loan made on or after September 1, 1981,
46-5 unless the lender had become legally bound to make such loan prior
46-6 to such date.>
46-7 <(4) No prepayment charge or penalty may be collected on any
46-8 loan transaction of the class defined in Subsection (d)(1) bearing
46-9 a rate of interest in excess of that authorized by Article 1.04,
46-10 Title 79, Revised Civil Statutes of Texas, 1925, except where such
46-11 collection is required by an agency created by federal law.>
46-12 <Text of (d) as added by Acts 1979, 66th Leg., p. 1766,>
46-13 <ch. 715, Sec. 3, effective if floating rate provisions of (d)>
46-14 <as added by Sec. 1 thereof are held to be unconstitutional>
46-15 <(d)(1) On any loan or agreement to loan secured or to be
46-16 secured in whole or in party by a lien, mortgage, security
46-17 interest, or other interest in or with respect to real property on
46-18 which is located one or more single family dwellings, or dwelling
46-19 units for not more than four families in the aggregate, interest
46-20 may be charged at the rate of 12 percent per annum.>
46-21 <A "dwelling unit" shall mean for the purpose of this section
46-22 a unified combination of rooms that is designed for residential use
46-23 by one family.>
46-24 <(2) The interest rates authorized by this subsection shall
46-25 not be applicable to any loan made on or after September 1, 1981,
47-1 unless the lender had become legally bound to make such loan prior
47-2 to such date.>
47-3 <(3) No prepayment charge or penalty may be collected on any
47-4 loan transaction of the class defined in Subsection (d)(1) bearing
47-5 a rate of interest in excess of that authorized by Article 1.04,
47-6 Title 79, Revised Civil Statutes of Texas, 1925, except where such
47-7 collection is required by an agency created by federal law.>
47-8 <(e)(1) In this subsection "financial institution" means a
47-9 state bank, state savings and loan association, mortgage banking
47-10 institution, credit union, national bank, or federal savings and
47-11 loan association, and "housing accommodation" means improved or
47-12 unimproved real property, or a portion of that property, that is
47-13 used or occupied or is intended, arranged, or designed to be used
47-14 or occupied as the residence of one or more individuals.>
47-15 <(2) A financial institution may not charge interest under
47-16 Subsection (d), Section 1 or Subsection (d) of Section 3 of this
47-17 Act and the maximum rate of interest that it may charge is limited
47-18 to 10 percent if the financial institution in connection with such
47-19 loan discriminates in providing or granting financial assistance to
47-20 purchase, rehabilitate, improve, or refinance a housing
47-21 accommodation, due, in whole or in part, to the consideration of:>
47-22 <(i) conditions, characteristics, or trends in the
47-23 neighborhood where the property is located, unless the financial
47-24 institution can demonstrate that such a consideration in the
47-25 particular case is required to avoid an unsafe or unsound business
48-1 practice; or>
48-2 <(ii) race, color, religion, sex, marital status, national
48-3 origin, or ancestry; or>
48-4 <in appraising a housing accommodation or in determining whether or
48-5 not, or under what terms and conditions, to provide financial
48-6 assistance to purchase, rehabilitate, improve, or refinance a
48-7 housing accommodation, considers:>
48-8 <(i) the racial, ethnic, religious, or national origin
48-9 composition of the neighborhood or geographic area surrounding the
48-10 property; or>
48-11 <(ii) whether or not that composition is undergoing change,
48-12 or is expected to undergo change.>
48-13 <(f) Notwithstanding the provisions of this Article relating
48-14 to the date of expiration of authority to charge certain rates of
48-15 interest, as an alternative to the rates of interest provided for
48-16 by this Article, any person may agree to pay, and may pay pursuant
48-17 to such an agreement, any rate of interest that does not exceed a
48-18 rate authorized by Article 1.04 of this Title. If a loan for
48-19 property that is to be the residential homestead of the borrower is
48-20 made at a rate of interest that is greater than the rate prescribed
48-21 by Subsection (d) of this Article, a prepayment charge or penalty
48-22 may not be collected on the loan unless the charge or penalty is
48-23 required by an agency created by federal law.>
48-24 SECTION 8. Title 79, Revised Civil Statutes of Texas, 1925
48-25 (compiled as Title 79, Article 5069-1.01, et seq., Vernon's Texas
49-1 Civil Statutes), is amended by adding a new Article 1.13 to read as
49-2 follows:
49-3 Art. 5069-1.13. Certain items that do not constitute interest
49-4 (a) The term "interest", as used in this Subtitle, does not
49-5 include any time price differential. The contracting for,
49-6 charging, or receipt of a time price differential is not regulated
49-7 by this Title, except to the extent regulated by Chapter 6, 6A, or
49-8 7 of this Title.
49-9 (b) In the case of any qualified commercial loan made to a
49-10 business entity, the term "interest", as used in this Subtitle,
49-11 does not include:
49-12 (1) any discount or commission that an obligor has paid or
49-13 agreed to pay to one or more underwriters of securities issued by
49-14 the obligor;
49-15 (2) any option or other right
49-16 (A) to exchange or redeem all or a portion of the principal
49-17 amount of such loan, or interest on such principal amount, for,
49-18 (B) to convert all or a portion of such principal amount, or
49-19 interest thereon, into, or
49-20 (C) to purchase in any other manner,
49-21 capital stock or other equity securities of an obligor or of any
49-22 affiliate of the obligor;
49-23 (3) any option or other right to participate in the income,
49-24 revenues, or profits
49-25 (A) of an obligor, or of any affiliate of the obligor,
50-1 (B) of any segment of the business or operations of an
50-2 obligor, or of any affiliate of the obligor, or
50-3 (C) derived or to be derived from any interest of an
50-4 obligor, or of any affiliate of the obligor, in any real or
50-5 personal property, including without limitation any proceeds of the
50-6 sale or other disposition of any such interest; or
50-7 (4) any compensation realized as a result of the receipt,
50-8 exercise, sale, or other disposition of any option or other right
50-9 described in Subsection (2) or (3) of this section.
50-10 (c) For purposes of this Article, the terms "security" and
50-11 "equity security" have the meanings assigned to those respective
50-12 terms in the Securities Exchange Act of 1934, as amended.
50-13 SECTION 9. Title 79, Revised Civil Statutes of Texas, 1925
50-14 (compiled as Title 79, Article 5069-1.01, et seq., Vernon's Texas
50-15 Civil Statutes), is amended by adding a new Article 1.14 to read as
50-16 follows:
50-17 Art. 5069-1.14. Prepayment premiums
50-18 (a) A creditor shall be allowed to contract for, charge, and
50-19 receive prepayment premiums, and an agreement to pay a prepayment
50-20 premium shall be enforceable in accordance with the terms of that
50-21 agreement.
50-22 (b) A prepayment premium that an obligor has agreed to pay
50-23 to a creditor does not constitute "interest", as that term is used
50-24 in this Subtitle.
50-25 (c) This Article does not apply to any loan that is subject
51-1 to Chapter 2, 3, 4, 5, 6, 6A, 7, 8, or 15 of this Title.
51-2 SECTION 10. Title 79, Revised Civil Statutes of Texas, 1925
51-3 (compiled as Title 79, Article 5069-1.01, et seq., Vernon's Texas
51-4 Civil Statutes), is amended by adding a new Article 1.15 to read as
51-5 follows:
51-6 Art. 5069-1.15. Guaranties
51-7 (a) A creditor may require, as a condition to making,
51-8 renewing, or extending a qualified commercial loan made to a
51-9 business entity, that an obligor enter into a guaranty, and neither
51-10 the guaranty nor any compensation received by the creditor pursuant
51-11 to the guaranty shall constitute "interest", as that term is used
51-12 in this Subtitle, in respect of such loan or in respect of the
51-13 obligation that is the subject of the guaranty.
51-14 (b) This Article does not apply to any loan that is subject
51-15 to Chapter 2, 3, 4, 5, 6, 6A, 7, 8, or 15 of this Title.
51-16 SECTION 11. Title 79, Revised Civil Statutes of Texas, 1925
51-17 (compiled as Title 79, Article 5069-1.01, et seq., Vernon's Texas
51-18 Civil Statutes), is amended by adding a new Article 1.16 to read as
51-19 follows:
51-20 Art. 5069-1.16. Loan Expenses
51-21 (a) A creditor shall be allowed to (1) contract for the
51-22 payment by an obligor of loan expenses in connection with a loan
51-23 that is or was made, or is or was proposed to be made, to the
51-24 obligor, and (2) charge and receive such loan expenses from the
51-25 obligor or require the obligor to pay such loan expenses to the
52-1 persons who rendered services to the creditor.
52-2 (b) Loan expenses agreed to be paid by an obligor in
52-3 connection with a loan that is or was made, or is or was proposed
52-4 to be made, to the obligor do not constitute "interest", as that
52-5 term is used in this Subtitle.
52-6 (c) This Article does not apply to any loan that is subject
52-7 to Chapter 2, 3, 4, 5, 6, 6A, 7, 8, or 15 of this Title.
52-8 SECTION 12. Title 79, Revised Civil Statutes of Texas, 1925
52-9 (compiled as Title 79, Article 5069-1.01, et seq., Vernon's Texas
52-10 Civil Statutes), is amended by adding a new Article 1.17 to read as
52-11 follows:
52-12 Art. 5069-1.17. No penalty in respect of amounts payable pursuant
52-13 to a final judgment
52-14 A creditor shall not be liable to an obligor under this
52-15 Subtitle as a result of the receipt by the creditor from the
52-16 obligor of any amount of conventional interest (including, without
52-17 limitation, any prepayment premium, late payment charge, or loan
52-18 expenses that the obligor has not agreed to pay), any amount of
52-19 legal interest, or any amount of prepayment premium, late payment
52-20 charge, or loan expenses agreed to be paid by the obligor if such
52-21 amount is payable by the obligor to the creditor pursuant to a
52-22 judgment that has become final and is no longer subject to
52-23 modification or reversal.
52-24 SECTION 13. Article 342-5.08, The Texas Banking Code of 1943
52-25 (Article 342-501, et seq., Vernon's Texas Civil Statutes), is
53-1 repealed.
53-2 SECTION 14. This Act shall apply to any loan of money, or
53-3 other extension of credit, made or extended before, on, or after
53-4 the effective date of this Act; provided, however, that this Act
53-5 shall not apply to any action that was filed in a court of
53-6 competent jurisdiction before the effective date of this Act, and
53-7 the provisions of Subtitle 1 of Title 79, Revised Civil Statutes of
53-8 Texas, 1925, in effect immediately prior to the effective date of
53-9 this Act are continued in full force and effect solely for the
53-10 purposes of determining the rights and liabilities of the parties
53-11 to such an action.
53-12 SECTION 15. This Act takes effect September 1, 1993.
53-13 SECTION 16. The importance of this legislation and the
53-14 crowded condition of the calendars in both houses create an
53-15 emergency and an imperative necessity that the constitutional rule
53-16 requiring bills to be read on three several days in each house be
53-17 suspended, and this rule is hereby suspended.