By Eiland H.B. No. 1277
75R4698 T
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to open-end credit.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Amend Chapter 15 of the Texas Credit Code on
1-5 revolving loan and revolving tri-party account as follows:
1-6 Amend Art. 5069 by deleting Art. 15.02 and substituting
1-7 therefor the following:
1-8 Art. 15.02. MAXIMUM RATES OF INTEREST.
1-9 (a) The maximum interest which may be contracted for and
1-10 collected under this article shall be 18 percent. A creditor may
1-11 charge one-twelfth of the applicable annual rate in any billing
1-12 cycle on the average daily balance of an account during such
1-13 billing cycle.
1-14 (b) The following fees and charges may be charged to or
1-15 collected from a customer in connection with an account subject to
1-16 this chapter:
1-17 (i) an annual fee not to exceed $50.00 per annum
1-18 (ii) a late charge not to exceed five percent of the
1-19 payment or $15.00, whichever is greater, after the payment
1-20 continues unpaid for ten days or more following the date such
1-21 payment is due including Sundays and holidays
1-22 (iii) a cash advance charge not to exceed two percent
1-23 of the cash advance or $2.00, whichever is greater.
1-24 (iv) a returned check fee calculated in the same
2-1 manner as returned check fees for merchants (see Art. 9022)
2-2 (v) a fee for accounts that exceed their credit limit
2-3 of $15.00 or five percent of the amount which exceeds the credit
2-4 limit, whichever is greater.
2-5 SECTION 2. Amend Chapter 15 of the Texas Credit Code by
2-6 adding a new Article 15.12 as follows:
2-7 Art. 15.12. VARIATION IN PERIODIC PERCENTAGE RATE.
2-8 (a) If the arrangement governing the account so provides,
2-9 the periodic percentage rate of interest or finance charges under
2-10 the account may vary in accordance with an index that is made
2-11 readily available to and verifiable by the customer and is beyond
2-12 the control of the creditor.
2-13 (b) The periodic percentage rate, as varied, may be made
2-14 applicable to all outstanding unpaid indebtedness on or after the
2-15 effective date of the variation, including any indebtedness arising
2-16 out of purchases made or loans obtained prior to the variation.
2-17 (c) The periodic percentage rate, as varied, may not exceed
2-18 the maximum rate permitted pursuant to Article 15.02 of this
2-19 chapter.
2-20 SECTION 3. Amend Chapter 15 of the Texas Credit Code by
2-21 adding a new Article 15.13 as follows:
2-22 Art. 15.13. ACCOUNT CONNECTED WITH DEMAND DEPOSIT ACCOUNT.
2-23 (a) If an account is offered and extended by a creditor
2-24 which is a depository institution in connection with a demand
2-25 deposit account or other transaction account maintained by the
2-26 customer with the creditor under an arrangement where the creditor
2-27 agrees to honor checks, drafts, or other debits to the account by
3-1 making extensions of credit to the customer under the account, any
3-2 charges customarily imposed by the creditor under the terms
3-3 governing said demand deposit or other transaction account in the
3-4 absence of any associated arrangement with respect to an account
3-5 subject to the requirements of this chapter may continue to be
3-6 imposed on said demand deposit or other transaction account without
3-7 specific reference or incorporation in the arrangement governing
3-8 the account.
3-9 (b) The account charges referred to in Subsection (a) of
3-10 this article include:
3-11 (1) check charges;
3-12 (2) monthly maintenance charges;
3-13 (3) checkbook charges;
3-14 (4) charges for checks drawn in excess of an available
3-15 line of credit; or
3-16 (5) any similar charges.
3-17 (c) The amount of any charge imposed on said demand deposit
3-18 or other transaction account may be charged to the account under
3-19 the arrangement as a loan and may be included in the outstanding
3-20 unpaid indebtedness under the terms of the arrangement governing
3-21 the account, to the extent the balance in the demand deposit or
3-22 other transaction account is insufficient to pay the charge.
3-23 SECTION 4. This Act takes effect September 1, 1997.
3-24 SECTION 5. The importance of this legislation and the
3-25 crowded condition of the calendars in both houses create an
3-26 emergency and an imperative public necessity that the
3-27 constitutional rule requiring bills to be read on three several
4-1 days in each house be suspended, and this rule is hereby suspended.