SRC-JFA S.B. 1798 75(R)   BILL ANALYSIS


Senate Research Center   S.B. 1798
By: Wentworth
Economic Development
4-29-97
As Filed


DIGEST 

Currently, a person who charges an excess amount in connection with a loan
or other extension of credit can be liable for the full amount of the
interest for the life of the loan under the agreement. Such a penalty may
not bear a rational relationship to the specific violation.  This bill
would revise the penalties assessed against a person for charging excess
interest, time price differentials, or other charges in connection with a
loan or other extension of credit.   

PURPOSE

As proposed, S.B. 1798 revises the penalties assessed against a person for
charging an excess amount in connection with a loan or other extension of
credit.   

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 Section 8.01(a), Article 5069, V.T.C.S., to require any
person who violates this subtitle by contracting for, charging or
receiving interest or time price differential greater than the amount
authorized by this subtitle, to forfeit to the obligor twice the amount of
interest or time price differential contracted for, charged or received,
and reasonable attorneys' fees fixed by the court.  Deletes references to
other charges and default and deferment charges.  Requires any person who
violates this subtitle by contracting for, charging or receiving a charge,
other than interest or time price differential, which is greater than the
amount authorized by this subtitle, to forfeit to the obligor the greater
of three times the amount of the difference between the amount of the
other charge contracted for, charged or received, and the appropriate
amount authorized by this subtitle; or $2,000 or 20 percent of the
principal balance, whichever is less; and reasonable attorneys' fees fixed
by the court.  

SECTION 2. Amends Section 8.02, Article 5069, V.T.C.S., to require any
person who violates this subtitle by contracting for, charging or
receiving interest or time price differential which are in the aggregate
in excess of double the total amount of interest or time price
differential authorized by this subtitle to forfeit to the obligor as an
additional penalty all principal or principal balance, as well as all
interest or time price differential, and to pay reasonable attorneys' fees
actually incurred by the obligor in enforcing the provisions of this
article; under certain conditions.  Deletes references to other charges.   

SECTION 3. Emergency clause.
  Effective date:  upon passage.