By: Harris of Dallas S.B. No. 1232
A BILL TO BE ENTITLED
AN ACT
1-1 relating to finance charge limitations.
1-2 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-3 SECTION 1. Chapter 48, Acts of the 70th Legislature, Regular
1-4 Session, 1987 (Article 5069-7.03 (6), Vernon's Texas Civil
1-5 Statutes), is amended to read as follows:
1-6 (6) The holder of a retail installment contract, other
1-7 than for the purchase of a heavy commercial vehicle, may collect a
1-8 delinquency charge on each installment in default for a period of
1-9 more than ten days in an amount not to exceed five percent of each
1-10 installment <or Five Dollars, whichever is less>, or, in lieu
1-11 thereof, interest after maturity on each such installment not to
1-12 exceed the highest lawful contract rate. The holder of a retail
1-13 installment contract for the purchase of a heavy commercial vehicle
1-14 may collect a delinquency charge on each such installment in
1-15 default for a period of more than ten days in an amount not to
1-16 exceed five percent of the installment, or, in lieu of the
1-17 delinquency charge, interest after maturity on the installment that
1-18 does not exceed the highest lawful contract rate. In any retail
1-19 installment contract, only one delinquency charge under this
1-20 section may be collected on any installment regardless of the
1-21 period during which it remains in default. In addition, such
1-22 contracts may provide for the payment of an attorney's reasonable
1-23 fee where it is referred for collection to an attorney not a
2-1 salaried employee of the seller of the contract, and for court
2-2 costs and disbursements, and in the event of repossession,
2-3 sequestration, or other action necessary to secure possession of a
2-4 motor vehicle securing the payment of a retail installment
2-5 contract, such contracts may provide for the charge and collection
2-6 of actual and reasonable out-of-pocket expenses incurred in
2-7 connection with such repossession or foreclosure, including costs
2-8 of storing, reconditioning and reselling such motor vehicle,
2-9 subject to the standards of good faith and commercial
2-10 reasonableness set by the Uniform Commercial Code as adopted in
2-11 Texas.
2-12 SECTION 2. This Act applies only to installment contracts
2-13 initiated on or after the effective date of the passage of this
2-14 Act. Finance charges on installment contracts under this section
2-15 shall be charged according to the law in existence and the law is
2-16 continued in effect for that purpose. For purposes of this section
2-17 a contract takes effect before the effective date of this Act if
2-18 any element of the contractural agreement occurs before that date.
2-19 SECTION 3. The importance of this legislation and the
2-20 crowded condition of the calendars in both houses create an
2-21 emergency and an imperative public necessity that the
2-22 constitutional rule requiring bills to be read on three several
2-23 days in each house be suspended, and this rule is hereby suspended.