LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE 74th Regular Session April 3, 1995 TO: Honorable Kenny Marchant, Chair IN RE: House Bill No. 2406 Committee on Financial Institutions By: Elkins House of Representatives Austin, Texas FROM: John Keel, Director In response to your request for a Fiscal Note on House Bill No. 2406 (relating to debt cancellation contracts offered by banks under retail installment contracts) this office has determined the following: The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill. The bill would provide for debt cancellation in the event of death on certain retail installment agreements. Each bank which proposes such clauses to their contracts would be required to file a copy of such contracts and fees with the Banking Commissioner. Implementing the provisions of the bill would require historical review of exam procedures, review of the applications submitted, and the establishment of procedures to ensure appropriate procedures are in place to maintain financial soundness of each institution submitting applications. The probable fiscal implication of implementing the provisions of the bill during each of the first five years following passage is estimated as follows: Fiscal Probable Revenue Probable Cost Year Gain to Banking Out of Banking Department Expense Department Expense Fund 508 Fund 508 GR Consolidated GR Consolidated 1996 $125,000 $406,493 1997 187,500 394,695 1998 250,000 409,392 1999 375,000 426,624 2000 500,000 466,468 No fiscal implication to units of local government is anticipated. Source: Savings and Loan Department, Department of Banking LBB Staff: JK, VS, RR