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