SRC-AAA S.B. 251 75(R)    BILL ANALYSIS


Senate Research CenterS.B. 251
By: Carona
Economic Development
3-5-97
As Filed


DIGEST 

Currently, there is no administrative fee for loans made under Articles
3.15, 4.01, and 5.02, Texas Credit Code. The fee for a returned check on
loan covered by these sections is $15.   The last rate increase for
Article 3.15 lenders was 1981.  Many finance companies have either left
Texas or have drastically scaled back their Texas operations.  This bill
proposes a fee of $25 when the loan is made, and $25 if  the loan is
financed.  Such a fee at the time of refinancing cannot be charged or
received by the lender more than once every 180 days. 

PURPOSE

As proposed, S.B. 251 prohibits an administrative fee exceeding $25 that
is considered earned at the time the loan is made or refinanced, and if
refinanced, may not be contracted for or received by the lender
refinancing the loan more than once in any 180-day period.  This bill also
increases the fee for returned checks from $15 to $25. 

RULEMAKING AUTHORITY

This bill does not grant any additional rulemaking authority to a state
officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Article 5069-3.15(8), V.T.C.S.,  to provide that the
prohibition against charges for loans and other charges shall not apply to
an administrative fee not to exceed $25 that is considered earned at the
time the loan is made or refinanced, is not subject to refund, and, if the
loan is refinanced, may not be contracted for or received by the lender
refinancing the loan more than once in any 180-day period. 

SECTION 2. Amends Article 5069-4.01(7), V.T.C.S., to make conforming
changes. 

SECTION 3. Amends Article 5069-5.02(7), V.T.C.S.,  to authorize a
secondary  mortgage loan lender to provide for an administrative fee not
to exceed $25 that  is considered earned at the time the loan is made or
refinanced, is not subject to refund, and, if the loan is refinanced, may
not be contracted for or received by the lender refinancing the loan more
than once in any 180-day period. 
Provides that the fee for a returned check is $25, rather than $15.

SECTION 4. Effective date: September 1, 1997.

SECTION 5. Emergency clause.