BILL ANALYSIS H.B. 2674 By: Hunter, T. (Cain) Economic Development 05-17-95 Senate Committee Report (Unamended) BACKGROUND Article 5069-1.03, V.T.C.S. (Consumer Credit Code), establishes the rate of interest applicable to a contract when no specified rate of interest is agreed upon by the parties to the agreement. It also prohibits the charging of interest until 30 days after the sum is due and payable, which makes it the only provision in the Consumer Credit Code that provides a statutory interest-free window after the debt is due. Because of conflicts with standard business practice, which begins charging interest on the day payment is due, a problem arises when Article 5069-1.03 is applied to open accounts. PURPOSE As proposed, H.B. 2674 provides that a person has no civil liability to an obligor and no criminal liability for a violation of Subtitle 1 resulting solely from contracting for, charging, or receiving the interest provided in Article 5069-1.03, V.T.C.S., prior to 30 days after the debt is due and payable. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not grant any additional rulemaking authority to a state officer, institution, or agency. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section (4), Article 5069-1.06, V.T.C.S., by adding Subsection (D), to provide that a person has no civil liability to an obligor and no criminal liability for a violation of Subtitle 1 resulting solely from contracting for, charging, or receiving the interest provided in Article 1.03 of Subtitle 1 prior to 30 days after the debt is due and payable. SECTION 2. Emergency clause. Effective date: upon passage.