By Elkins                                             H.B. No. 2406
                                 A BILL TO BE ENTITLED
    1-1                                AN ACT
    1-2  relating to debt cancellation contracts offered by banks under
    1-3  retail installment contracts.
    1-4        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
    1-5        SECTION 1.  Article 6.01, Subsection (j), Title 79, Revised
    1-6  Statutes (Article 5069-6.01, Vernon's Texas Civil Statutes) is
    1-7  amended by adding Subparagraph (viii) to read as follows:
    1-8        Delete the period at the end of Subparagraph (vii) following
    1-9  the word "transaction" and insert in lieu thereof a semicolon
   1-10  followed by "and".
   1-11                          (viii)  debt cancellation contract fees.
   1-12        SECTION 2.  Article 6.13, Title 79, Revised Statutes (Article
   1-13  5069-6.13, Vernon's Texas Civil Statutes) is enacted to read as
   1-14  follows:
   1-15        Art. 6.13.  A bank and a borrower may agree to include in a
   1-16  retail installment contract a separate charge for a debt
   1-17  cancellation contract or waiver by which the bank agrees to waive,
   1-18  reduce or cancel the remaining balance on a consumer loan in the
   1-19  event of the death or disability of the borrower.  Each bank
   1-20  proposing to issue debt cancellation contracts shall file a copy of
   1-21  such contracts and fees with the banking commissioner, which filing
   1-22  if not disapproved within 30 days shall be deemed permissible.  The
   1-23  commissioner may establish a reasonable filing fee.  Before
    2-1  disapproving a contract or reducing proposed fees for debt
    2-2  cancellation contracts, the banking commissioner shall consider the
    2-3  individual and aggregate risks to the bank to determine if such
    2-4  risks are reasonable in relation to the reserves proposed to be
    2-5  established and the capital structure of the bank and whether the
    2-6  debt cancellation charges are excessive to borrowers.  A bank that
    2-7  is dissatisfied with the decision of the banking commissioner may
    2-8  appeal to the finance commission.  Appeals shall be governed by the
    2-9  Administrative Procedure Act.
   2-10        SECTION 3.  The importance of this legislation and the
   2-11  crowded condition of the calendars in both houses create an
   2-12  emergency and an imperative public necessity that the
   2-13  constitutional rule requiring bills to be read on three several
   2-14  days in each house be suspended, and this rule is hereby suspended,
   2-15  and that this Act take effect and be in force from and after its
   2-16  passage, and it is so enacted.