1-1 AN ACT
1-2 relating to usury and the regulation of lenders and credit
1-3 reporting agencies; providing penalties.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Subtitle 1, Title 79, Revised Statutes (Article
1-6 5069-1.01 et seq., Vernon's Texas Civil Statutes), is amended by
1-7 adding Chapters 1B-1H to read as follows:
1-8 CHAPTER 1B. GENERAL PROVISIONS
1-9 Art. 1B.001. SHORT TITLE. This title may be cited as the
1-10 Texas Credit Title.
1-11 Art. 1B.002. DEFINITIONS. (a) In this subtitle:
1-12 (1) "Contract interest" means interest that an obligor
1-13 has paid or agreed to pay to a creditor under a written contract of
1-14 the parties. The term "contract interest" does not include
1-15 judgment interest.
1-16 (2) "Credit card transaction" means a transaction for
1-17 personal, family, or household use in which a credit card, plate,
1-18 coupon book, or credit card cash advance check may be used or is
1-19 used to debit an open-end account in connection with:
1-20 (A) a purchase or lease of goods or services; or
1-21 (B) a loan of money.
1-22 (3) "Creditor" means a person who loans money or
1-23 otherwise extends credit. The term "creditor" does not include a
1-24 judgment creditor.
2-1 (4) "Interest" means compensation for the use,
2-2 forbearance, or detention of money. The term "interest" does not
2-3 include time price differential, regardless of how it is
2-4 denominated.
2-5 (5) "Judgment creditor" means a person to whom a money
2-6 judgment is payable.
2-7 (6) "Judgment debtor" means a person obligated to pay
2-8 a money judgment.
2-9 (7) "Judgment interest" means interest on a money
2-10 judgment, whether the interest accrues before, on, or after the
2-11 date the judgment is rendered.
2-12 (8) "Legal interest" means interest charged or
2-13 received in the absence of any agreement by an obligor to pay
2-14 contract interest. The term "legal interest" does not include
2-15 judgment interest.
2-16 (9) "Lender credit card agreement":
2-17 (A) means an agreement between a creditor and an
2-18 obligor that provides:
2-19 (i) the obligor, by means of a credit card
2-20 transaction for personal, family, or household use, may:
2-21 (a) obtain loans from the
2-22 creditor directly or through other participating persons; and
2-23 (b) lease or purchase goods
2-24 or services from more than one participating lessor or seller who
2-25 honors the creditor's credit card;
2-26 (ii) the creditor or another person acting
2-27 in cooperation with the creditor is to reimburse the participating
3-1 persons, lessors, or sellers for the loans or the goods or
3-2 services purchased or leased;
3-3 (iii) the obligor is to pay the creditor
3-4 the amount of the loan or cost of the lease or purchase;
3-5 (iv) the unpaid balance of the loan,
3-6 lease, or purchase and interest on that unpaid balance are debited
3-7 to the obligor's account under the agreement;
3-8 (v) interest may be computed on the
3-9 balances of the obligor's account but is not precomputed; and
3-10 (vi) the obligor and the creditor may
3-11 agree that payment of part of the balance may be deferred;
3-12 (B) includes an agreement under Article 3A.805,
3-13 15.01(k), or 15.01(l) for an open-end account under which credit
3-14 card transactions may be made or a merchant discount may be taken;
3-15 and
3-16 (C) does not include:
3-17 (i) an agreement, including an open-end
3-18 account credit agreement, between a seller and a buyer or between a
3-19 lessor and a lessee; or
3-20 (ii) an agreement under which:
3-21 (a) the entire balance is
3-22 due in full each month; and
3-23 (b) no interest is charged
3-24 if the obligor pays the entire balance each month.
3-25 (10) "Loan" means an advance of money that is made to
3-26 or on behalf of an obligor, the principal amount of which the
3-27 obligor has an obligation to pay the creditor. The term "loan"
4-1 does not include a judgment.
4-2 (11) "Merchant discount" means the consideration,
4-3 including a fee, charge, discount, or compensating balance, that a
4-4 creditor requires, or that a creditor, subsidiary, or parent
4-5 company of the creditor, or subsidiary of the creditor's parent
4-6 company, receives directly or indirectly from a person other than
4-7 the obligor in connection with a credit card transaction under a
4-8 lender credit card agreement between the obligor and the creditor.
4-9 The term "merchant discount" does not include consideration
4-10 received by a creditor from the obligor in connection with the
4-11 credit card transaction.
4-12 (12) "Money judgment" means a judgment for money
4-13 entered by a court of competent jurisdiction. For purposes of this
4-14 subtitle, the term "money judgment" includes legal interest or
4-15 contract interest, if any, that is payable to a judgment creditor
4-16 under a judgment.
4-17 (13) "Obligor" means a person to whom money is loaned
4-18 or credit is otherwise extended. The term "obligor" does not
4-19 include:
4-20 (A) a judgment debtor; or
4-21 (B) a surety, guarantor, or similar person.
4-22 (14) "Open-end account":
4-23 (A) means an account under a written contract
4-24 between a creditor and an obligor in connection with which:
4-25 (i) the creditor reasonably contemplates
4-26 repeated transactions and the obligor is authorized to make
4-27 purchases or borrow money;
5-1 (ii) interest or time price differential
5-2 may be charged from time to time on an outstanding unpaid balance;
5-3 and
5-4 (iii) the amount of credit that may be
5-5 extended during the term of the account is generally made available
5-6 to the extent that any outstanding balance is repaid; and
5-7 (B) includes an account under an agreement
5-8 described by Article 3A.805 or Chapter 6 or 15.
5-9 (15) "Person" means an individual, partnership,
5-10 corporation, joint venture, trust, association, limited liability
5-11 company, or any legal entity however organized.
5-12 (16) "Prepayment penalty" means consideration agreed
5-13 on and contracted for a discharge and release of a loan before its
5-14 maturity or its regularly scheduled date or dates of payment, as a
5-15 result of an election by the obligor to pay all of the principal
5-16 amount before its stated maturity or its regularly scheduled date
5-17 or dates of payment.
5-18 (17) "Time price differential" means an amount,
5-19 however denominated or expressed, that is:
5-20 (A) added to the price at which a seller offers
5-21 to sell services or real or personal property to a purchaser for
5-22 cash payable at the time of sale; and
5-23 (B) paid or payable to the seller by the
5-24 purchaser for the privilege of paying the offered sales price after
5-25 the time of sale.
5-26 (18) "Usury" or "usurious interest" means interest
5-27 that exceeds the applicable maximum amount allowed by law.
6-1 (b) These definitions shall be liberally construed to
6-2 accomplish the purposes of this subtitle.
6-3 (c) The finance commission by rule may adopt other
6-4 definitions to accomplish the purposes of this subtitle.
6-5 CHAPTER 1C. INTEREST RATES
6-6 SUBCHAPTER A. USURY
6-7 Art. 1C.001. USURIOUS RATE OF INTEREST. (a) A creditor may
6-8 contract for, charge, and receive from an obligor interest or time
6-9 price differential.
6-10 (b) The maximum rate or amount of interest is 10 percent a
6-11 year except as otherwise provided by law. A greater rate of
6-12 interest than 10 percent a year unless otherwise provided by law is
6-13 usurious. All contracts for usury are contrary to public policy
6-14 and subject to the appropriate penalty prescribed by Chapter 1F.
6-15 (c) To determine the interest rate of a loan under this
6-16 subtitle, all interest at any time contracted for shall be
6-17 aggregated and amortized using the actuarial method during the
6-18 stated term of the loan.
6-19 Art. 1C.002. ACCRUAL OF INTEREST WHEN NO RATE SPECIFIED. If
6-20 a creditor has not agreed with an obligor to charge the obligor any
6-21 interest, the creditor may charge and receive from the obligor
6-22 legal interest at the rate of six percent a year on the principal
6-23 amount of the credit extended by the creditor to the obligor
6-24 beginning on the 30th day after the date on which the amount is
6-25 due. If an obligor has agreed to pay to a creditor any
6-26 compensation that constitutes interest, the obligor is considered
6-27 to have agreed on the rate produced by the amount of that interest,
7-1 regardless of whether that rate is stated in the agreement.
7-2 SUBCHAPTER B. OTHER RATES AND PROVISIONS
7-3 ON LOANS SECURED BY REAL PROPERTY
7-4 Art. 1C.101. DETERMINING RATES OF INTEREST BY SPREADING.
7-5 (a) To determine whether a loan secured in any part by an interest
7-6 in real property, including a lien, mortgage, or security interest,
7-7 is usurious, the interest rate is computed by amortizing or
7-8 spreading, using the actuarial method during the stated term of the
7-9 loan, all interest at any time contracted for, charged, or received
7-10 in connection with the loan.
7-11 (b) If a loan described in Subsection (a) is paid in full
7-12 before the end of the stated term of the loan and the amount of
7-13 interest received for the period that the loan exists exceeds the
7-14 amount that produces the maximum rate authorized by law for that
7-15 period, the lender shall:
7-16 (1) refund the amount of the excess to the borrower;
7-17 or
7-18 (2) credit the amount of the excess against amounts
7-19 owing under the loan.
7-20 (c) A lender who complies with Subsection (b) is not subject
7-21 to any of the penalties provided by law for contracting for,
7-22 charging, or receiving interest in excess of the maximum rate
7-23 authorized.
7-24 Art. 1C.102. PROHIBITION ON PREPAYMENT CHARGE OR PENALTY.
7-25 If a loan for property that is to be the residential homestead of
7-26 the borrower is made at an interest rate that is greater than a
7-27 rate of 12 percent a year, a prepayment charge or penalty may not
8-1 be collected on the loan unless the charge or penalty is required
8-2 by an agency created by federal law.
8-3 Art. 1C.103. EFFECT OF FEDERAL PREEMPTION ON LATE CHARGES.
8-4 On loans subject to 12 U.S.C. Sections 1735f-7 and 1735f-7a, as
8-5 amended, late charges, if assessed, are interest that is included
8-6 in computing the amount or rate of interest on the loan and,
8-7 therefore, covered by the federal preemption of state interest rate
8-8 limitations.
8-9 CHAPTER 1D. OPTIONAL RATE CEILINGS
8-10 SUBCHAPTER A. RATE CEILINGS: APPLICABILITY, COMPUTATION,
8-11 AND PUBLICATION
8-12 Art. 1D.001. USE OF CEILINGS. (a) Except as provided by
8-13 Subchapter B, a person may contract for, charge, or receive a rate
8-14 or amount that does not exceed the applicable interest rate ceiling
8-15 provided by this chapter. The use of a ceiling provided by this
8-16 chapter for any contract is optional, and a contract may provide
8-17 for a rate or amount allowed by other applicable law.
8-18 (b) A contract, including a contract for an open-end
8-19 account, that is subject to Chapter 3A, 6, 6A, or 7 may, as an
8-20 alternative to an interest rate or amount of time price
8-21 differential allowed under that chapter, provide for a simple or
8-22 precomputed rate or amount of time price differential that does not
8-23 exceed the applicable ceiling provided by this chapter or by the
8-24 equivalent yield authorized by Chapter 3A, 6, 6A, or 7.
8-25 (c) Except as inconsistent with this chapter, a party to a
8-26 contract that is subject to Chapter 3A, 6, 6A, or 7, or the party's
8-27 assignee, has all rights, duties, and obligations under the
9-1 applicable chapter, including those relating to refund credits on
9-2 prepayment or acceleration.
9-3 Art. 1D.002. WEEKLY CEILING. The parties to a written
9-4 agreement may agree to an interest rate, or in an agreement
9-5 described in Chapter 6, 6A, or 7, an amount of time price
9-6 differential producing a rate, that does not exceed the applicable
9-7 weekly ceiling.
9-8 Art. 1D.003. COMPUTATION OF WEEKLY CEILING. (a) The weekly
9-9 ceiling is computed by:
9-10 (1) multiplying the auction rate by two; and
9-11 (2) rounding the result obtained under Subdivision (1)
9-12 to the nearest one-quarter of one percent.
9-13 (b) The weekly rate ceiling becomes effective on Monday of
9-14 each week and remains in effect through the following Sunday.
9-15 (c) In this article, "auction rate" means the auction
9-16 average rate quoted on a bank discount basis for 26-week treasury
9-17 bills issued by the United States government, as published by the
9-18 Federal Reserve Board, for the week preceding the week in which the
9-19 weekly rate ceiling is to take effect.
9-20 Art. 1D.004. MONTHLY CEILING. (a) The monthly ceiling may
9-21 be used as an alternative to the weekly ceiling only for a contract
9-22 that:
9-23 (1) provides for a variable rate, including a contract
9-24 for an open-end account; and
9-25 (2) is not made for personal, family, or household
9-26 use.
9-27 (b) A contract that provides for the use of the monthly
10-1 ceiling may not provide for the use of another rate ceiling
10-2 provided under this subchapter.
10-3 Art. 1D.005. COMPUTATION OF MONTHLY CEILING. (a) The
10-4 consumer credit commissioner shall compute the monthly ceiling on
10-5 the first business day of the calendar month in which the rate
10-6 applies. The monthly ceiling is effective for one month beginning
10-7 on the first calendar day of each month. If the parties agree that
10-8 the rate is subject to being adjusted on a monthly basis, they may
10-9 further contract that the rate from time to time in effect may not
10-10 exceed the monthly ceiling from time to time in effect under this
10-11 article and the monthly ceiling from time to time in effect is the
10-12 ceiling on those contracts.
10-13 (b) The monthly ceiling is computed by averaging all of the
10-14 weekly ceilings computed using rates from auctions held during the
10-15 calendar month preceding the computation date of the monthly
10-16 ceiling.
10-17 Art. 1D.006. QUARTERLY CEILING. (a) A written contract,
10-18 including a contract that involves an open-end account, may, as an
10-19 alternative to the weekly ceiling, provide for an interest rate or
10-20 an amount of time price differential producing a rate that does not
10-21 exceed the applicable quarterly ceiling.
10-22 (b) A variable rate contract authorized under Article 1D.015
10-23 may not provide for use of both the weekly ceiling and the
10-24 quarterly ceiling.
10-25 Art. 1D.007. ANNUALIZED CEILING. The annualized ceiling may
10-26 be used as an alternative to the weekly ceiling only for a written
10-27 contract that involves an open-end account.
11-1 Art. 1D.008. COMPUTATION OF QUARTERLY AND ANNUALIZED
11-2 CEILING. (a) On December 1, March 1, June 1, and September 1 of
11-3 each year, the consumer credit commissioner shall compute the
11-4 quarterly ceiling and annualized ceiling for the calendar quarter
11-5 beginning the following January 1, April 1, July 1, and October 1,
11-6 respectively. The quarterly ceiling becomes effective for
11-7 three-month periods beginning on the four calendar dates set out in
11-8 this subsection and is subject to adjustment after each three-month
11-9 period. The annualized ceiling becomes effective on each of the
11-10 four calendar dates set out in this subsection and remains in
11-11 effect for a period of 12 months, at which time it is subject to
11-12 adjustment.
11-13 (b) The quarterly ceiling and annualized ceiling are
11-14 computed by averaging all of the weekly ceilings computed using
11-15 average auction rates during the three calendar months preceding
11-16 the computation date of the ceiling.
11-17 Art. 1D.009. MAXIMUM AND MINIMUM WEEKLY, MONTHLY, QUARTERLY,
11-18 OR ANNUALIZED CEILING. (a) If the rate computed for the weekly,
11-19 monthly, quarterly, or annualized ceiling is less than 18 percent a
11-20 year, the ceiling is 18 percent a year.
11-21 (b) Except as provided by Subsection (c) or (d), if the rate
11-22 computed for the weekly, monthly, quarterly, or annualized ceiling
11-23 is more than 24 percent a year, the ceiling is 24 percent a year.
11-24 (c) For a contract made, extended, or renewed under which
11-25 credit is extended for a business, commercial, investment, or
11-26 similar purpose and the amount of the credit extension is $250,000
11-27 or more, the 24-percent limitation on the ceilings in Subsection
12-1 (b) does not apply, and the limitation on the ceilings determined
12-2 by those computations is 28 percent a year.
12-3 (d) For an open-end account credit agreement that provides
12-4 for credit card transactions on which a merchant discount is not
12-5 imposed or received by the creditor, if the rate computed for the
12-6 weekly ceiling, monthly ceiling, quarterly ceiling, or annualized
12-7 ceiling is more than 21 percent a year, the ceiling is 21 percent a
12-8 year.
12-9 (e) In this chapter, "weekly ceiling," "monthly ceiling,"
12-10 "quarterly ceiling," or "annualized ceiling" refers to that ceiling
12-11 as determined after the application of this article.
12-12 Art. 1D.010. COMPUTATION OF CEILING IF INFORMATION
12-13 UNAVAILABLE. If any of the information required to compute a rate
12-14 ceiling is discontinued or is no longer available to the consumer
12-15 credit commissioner from the Federal Reserve Board in the time
12-16 required for the computation, the ceiling last computed remains in
12-17 effect until the information becomes available and a new ceiling is
12-18 computed from the obtained information.
12-19 Art. 1D.011. PUBLICATION OF RATE CEILINGS. (a) The
12-20 consumer credit commissioner shall send the rate ceilings computed
12-21 under this subchapter to the secretary of state for publication in
12-22 the Texas Register.
12-23 (b) The monthly, quarterly, or annualized ceiling shall be
12-24 published before the 11th day after the date on which the ceiling
12-25 is computed.
12-26 Art. 1D.012. JUDICIAL NOTICE. A court may take judicial
12-27 notice of interpretations issued by the consumer credit
13-1 commissioner or information published in the Texas Register under
13-2 Article 1D.011.
13-3 Art. 1D.013. DETERMINATION OF CEILING FOR CONTRACT TO RENEW
13-4 OR EXTEND DEBT PAYMENT. The rate ceiling for a contract to renew
13-5 or extend the terms of payment of a debt is the ceiling in effect
13-6 under this chapter when the contract for renewal or extension is
13-7 made, regardless of when the debt is incurred.
13-8 Art. 1D.014. RATE FOR LENDER CREDIT CARD AGREEMENT WITH
13-9 MERCHANT DISCOUNT. On an amount owed for a credit card transaction
13-10 under a lender credit card agreement that imposes or allows the
13-11 creditor to receive a merchant discount, the creditor may not
13-12 contract for, charge, or receive:
13-13 (1) a rate that exceeds the ceiling provided under
13-14 Article 15.02; or
13-15 (2) a fee or charge that:
13-16 (A) is not allowed under Chapter 15; or
13-17 (B) exceeds the amount allowed under Chapter 15.
13-18 Art. 1D.015. VARIABLE RATE. (a) The parties to a contract,
13-19 including a contract for an open-end account, may agree to any
13-20 index, formula, or provision of law by which the interest rate or
13-21 amount of time price differential will be determined, but the
13-22 agreed rate of interest or yield from an amount of time price
13-23 differential may not exceed the amount that would be produced by
13-24 the rate ceiling applicable to the contract.
13-25 (b) A variable contract rate described by this article may
13-26 not be used in a contract in which the interest or time price
13-27 differential is precomputed and added into the amount of the
14-1 contract at the time the contract is made.
14-2 (c) A variable rate agreement for credit extended primarily
14-3 for personal, family, or household use must have the disclosures
14-4 identified for variable rate contracts as specified by the
14-5 regulations issued by the Federal Reserve Board under the Truth in
14-6 Lending Act (15 U.S.C. Section 1601 et seq.), as amended, or if
14-7 that Act does not apply to a transaction for personal, family, or
14-8 household use due to the amount of the transaction, the following
14-9 disclosure must be given in a size equal to at least 10-point type
14-10 that is boldface, capitalized, underlined, or otherwise set out
14-11 from surrounding material so as to be conspicuous:
14-12 "NOTICE TO CONSUMER: UNDER TEXAS LAW, IF YOU CONSENT TO
14-13 THIS AGREEMENT, YOU MAY BE SUBJECT TO A FUTURE RATE AS
14-14 HIGH AS 24 PERCENT PER YEAR."
14-15 Art. 1D.016. CHARGING OF RATE LOWER THAN AGREED RATE. A
14-16 creditor may charge an interest rate or amount of time price
14-17 differential that is lower than the rate agreed to in the contract.
14-18 SUBCHAPTER B. OPEN-END ACCOUNTS
14-19 Art. 1D.101. OPEN-END ACCOUNT: CEILINGS. (a) To use the
14-20 quarterly or annualized ceiling for setting the interest rate on
14-21 current and future open-end account balances, the agreement must
14-22 provide for use of the ceiling, and the creditor must give notice
14-23 of the interest rate after the date on which the quarterly or
14-24 annualized ceiling is computed but before the last day of the next
14-25 succeeding calendar quarter.
14-26 (b) If the annualized ceiling is used, the rate is effective
14-27 for the 12-month period beginning on the date on which the rate
15-1 takes effect for the account.
15-2 (c) If the quarterly ceiling is used, the rate is effective
15-3 for the three-month period beginning on the date on which the rate
15-4 takes effect for the account.
15-5 (d) If a quarterly or annualized ceiling is being used for
15-6 an account and if the rate for the applicable period is less than
15-7 or equal to the ceiling to be in effect for the succeeding period
15-8 of equal length, the creditor may leave that rate in effect for the
15-9 succeeding period.
15-10 (e) A creditor who has disclosed to an obligor that an
15-11 election may be renewed under Subsection (d) is not required to
15-12 give additional notice of a renewal under that subsection.
15-13 (f) To increase a previously agreed rate, a creditor shall
15-14 comply with Article 1D.103 before the end of the last calendar
15-15 quarter of the period in which the rate previously agreed to is in
15-16 effect. The ceiling in effect for that period remains the ceiling
15-17 until the parties to the agreement agree to a new rate.
15-18 Art. 1D.102. VARIABLE RATE OPEN-END ACCOUNT: CEILINGS. The
15-19 applicable rate ceiling for an open-end account agreement that
15-20 provides for a variable rate or amount according to an index,
15-21 formula, or provision of law disclosed to the obligor, other than a
15-22 variable rate commercial contract that is subject to Article
15-23 1D.004, is the annualized, quarterly, or weekly ceiling as
15-24 disclosed to the obligor. The annualized ceiling shall be adjusted
15-25 after each 12-month period, the quarterly ceiling shall be adjusted
15-26 after each three-month period, and the weekly ceiling shall be
15-27 adjusted weekly.
16-1 Art. 1D.103. OPEN-END ACCOUNT: CHANGE OF ANY AGREEMENT TERM.
16-2 (a) An agreement covering an open-end account may provide that the
16-3 creditor may change the terms of the agreement for current and
16-4 future balances of that account by giving notice of the change to
16-5 the obligor.
16-6 (b) A notice under this article to change a provision of an
16-7 account, including the rate, or the index or formula used to
16-8 compute the rate, must include:
16-9 (1) the new provision, the new rate, or the index or
16-10 formula to be used to compute the rate;
16-11 (2) the date on which the change is to take effect;
16-12 (3) the period for which the change is to be effective
16-13 or after which the rate will be adjusted;
16-14 (4) a statement of whether the change is to affect
16-15 current and future balances; and
16-16 (5) the obligor's rights under this article and the
16-17 procedures for the obligor to exercise those rights.
16-18 (c) A creditor who increases a rate shall include with a
16-19 notice required by this article a form that may be returned at the
16-20 expense of the creditor and on which the obligor may indicate by
16-21 checking or marking an appropriate box or by a similar arrangement
16-22 the obligor's decision not to continue the account. The form may
16-23 be included on a part of the account statement that is to be
16-24 returned to the creditor or on a separate sheet. In addition to
16-25 the requirements of Subsection (b), the notice must include:
16-26 (1) the address to which the obligor may send notice
16-27 of the obligor's election not to continue the open-end account; and
17-1 (2) the following statement printed in not less than
17-2 10-point type or computer equivalent:
17-3 "YOU MAY TERMINATE THIS AGREEMENT IF YOU DO NOT WISH TO
17-4 PAY THE NEW RATE."
17-5 (d) An obligor is considered to have agreed to a change
17-6 under this article if the creditor mails a notice required by this
17-7 article to the obligor's most recent address shown in the
17-8 creditor's records and:
17-9 (1) the obligor chooses to retain the privilege of
17-10 using the open-end account;
17-11 (2) the obligor or a person authorized by the obligor
17-12 accepts or uses an extension of credit after the fifth day after
17-13 the date on which the notice is mailed; or
17-14 (3) the obligor does not notify the creditor in
17-15 writing before the 21st day after the date on which the notice is
17-16 mailed that the obligor does not wish to continue to use the
17-17 open-end account.
17-18 (e) An obligor who rejects a rate change in accordance with
17-19 this article is entitled to pay the balance on the open-end account
17-20 at the rate and over the period in effect immediately before the
17-21 date of the proposed change and under the same minimum payment
17-22 terms provided by the agreement. Rejection of a new rate does not
17-23 accelerate payment of the balance due.
17-24 (f) The procedure provided by this article for changing the
17-25 terms of an agreement is in addition to other means of amending the
17-26 agreement provided by law.
17-27 Art. 1D.104. OPEN-END ACCOUNT: DISCLOSURE OF CERTAIN RATE
18-1 VARIATIONS. (a) Except as provided by Subsection (b), a variation
18-2 in an interest rate on an account resulting from operation of the
18-3 previously disclosed index, formula, or provision of law is not
18-4 required to be disclosed under Article 1D.101 or 1D.103.
18-5 (b) Except as inconsistent with federal law, the creditor on
18-6 an open-end account agreement that provides for a variable interest
18-7 rate according to an index, formula, or provision of law, that is
18-8 primarily for personal, family, or household use, and that is
18-9 subject to this chapter shall give to the obligor notice of a
18-10 change in the rate resulting from operation of the index, formula,
18-11 or provision of law. The notice must be given:
18-12 (1) by a document mailed on or before the beginning of
18-13 the first cycle for which the change becomes effective; or
18-14 (2) on or with:
18-15 (A) the billing statement for a billing cycle
18-16 that precedes the cycle for which the change becomes effective, if
18-17 the account is covered by Article 15.02(d); or
18-18 (B) any billing statement, if the account is not
18-19 covered by Article 15.02(d).
18-20 Art. 1D.105. OPEN-END ACCOUNT: CEILING FOR PLAN OR
18-21 ARRANGEMENT. If a creditor implements a quarterly or annualized
18-22 ceiling for a majority of the creditor's open-end accounts that are
18-23 under a particular plan or arrangement and that are for obligors in
18-24 this state, that ceiling is also the ceiling for all open-end
18-25 accounts that are opened or activated under that plan for obligors
18-26 in this state during the period that the election is in effect.
18-27 SUBCHAPTER C. OTHER PROVISIONS
19-1 Art. 1D.201. CONSUMER LOANS AND SECONDARY MORTGAGE LOANS.
19-2 (a) A loan for which the rate is authorized under this chapter is
19-3 subject to Chapter 3A if the loan is:
19-4 (1) extended primarily for personal, family, or
19-5 household use and not extended for a business, commercial,
19-6 investment, agricultural, or other similar purpose;
19-7 (2) not secured by a lien on real estate; and
19-8 (3) made by a person engaged in the business of making
19-9 or negotiating those types of loans.
19-10 (b) A loan for which the rate is authorized is subject to
19-11 Chapter 3A if the loan is:
19-12 (1) extended primarily for personal, family, or
19-13 household use and not for a business, commercial, investment,
19-14 agricultural, or other similar purpose;
19-15 (2) predominantly payable in monthly installments;
19-16 (3) described by Article 3A.001(3), 3A.501, or 3A.806;
19-17 and
19-18 (4) made, negotiated, or arranged by a person engaged
19-19 in the business of making, negotiating, or arranging those types of
19-20 loans.
19-21 (c) A person engaged in the business of making loans
19-22 described by Subsection (a) or (b) must obtain a license under
19-23 Chapter 3A unless the person is:
19-24 (1) a bank, savings bank, or savings and loan
19-25 association; or
19-26 (2) an insurance agent licensed under Article 21.14,
19-27 Insurance Code, who negotiates or arranges a loan described by
20-1 Subsection (a) or (b) on behalf of a bank or savings and loan
20-2 association provided that the insurance agent or the bank or
20-3 savings and loan association does not make the provision of
20-4 insurance a condition to apply for or obtain a loan or service from
20-5 the bank or savings and loan association.
20-6 (d) Except as inconsistent with this chapter:
20-7 (1) a person engaged in the business of extending
20-8 open-end credit primarily for personal, family, or household use
20-9 and who charges on an open-end account a rate or amount under
20-10 authority of this chapter is subject to the applicable chapter in
20-11 Subtitle 2 or Chapter 15; and
20-12 (2) a party to an account described in Subdivision (1)
20-13 or the party's assignees has all the rights, duties, and
20-14 obligations under that applicable chapter.
20-15 (e) Subsection (c) does not apply to a person who is subject
20-16 to Chapter 24, Insurance Code.
20-17 SUBCHAPTER D. LIMITATIONS ON APPLICABILITY OF CHAPTER
20-18 Art. 1D.301. AGREEMENT TO WHICH CHAPTER DOES NOT APPLY. The
20-19 rate ceilings provided by this chapter do not apply to an
20-20 agreement:
20-21 (1) under which credit is extended by the seller, or
20-22 an owner, subsidiary, or corporate affiliate of the seller, for a
20-23 home solicitation transaction as defined by Chapter 13; and
20-24 (2) that is secured by a lien on the obligor's
20-25 homestead.
20-26 Art. 1D.302. REQUIREMENTS INCONSISTENT WITH FEDERAL LAW.
20-27 (a) A person is not required to comply with a disclosure or notice
21-1 requirement of this chapter that is inconsistent with federal law
21-2 or regulation.
21-3 (b) A creditor may modify a disclosure or notice requirement
21-4 of this chapter to conform to federal law.
21-5 SUBCHAPTER E. ENFORCEMENT
21-6 Art. 1D.401. WHEN ACT OR OMISSION NOT VIOLATION. An act or
21-7 omission does not violate this title if the act or omission
21-8 conforms to an interpretation of this title that is in effect at
21-9 the time of the act or omission and that was made by:
21-10 (1) the consumer credit commissioner under Article
21-11 2.02A(10) of this title; or
21-12 (2) an appellate court of this state or the United
21-13 States.
21-14 Art. 1D.402. PENALTY FOR VIOLATION OF CHAPTER FOR CERTAIN
21-15 CONTRACTS SUBJECT TO SUBTITLE 2. (a) A person who contracts for,
21-16 charges, or receives under a contract subject to Chapter 3A, 6, 6A,
21-17 7, or 15, including a contract for an open-end account, a rate or
21-18 amount of time price differential that exceeds the maximum
21-19 applicable rate or amount authorized by the applicable chapter or
21-20 this chapter is subject to a penalty for that violation determined
21-21 under Chapter 8.
21-22 (b) For a contract described in Subsection (a) that contains
21-23 a rate or amount authorized under this chapter, the failure to
21-24 perform a duty or comply with a prohibition provided by this
21-25 chapter is subject to Chapter 8 as if this chapter were in Subtitle
21-26 2.
21-27 Art. 1D.403. PENALTY FOR VIOLATION OF CEILING IN CERTAIN
22-1 CONTRACTS. A written contract, other than a contract to which
22-2 Article 1D.402 applies, that directly or indirectly provides for a
22-3 rate that exceeds the rate authorized by this chapter and that is
22-4 not otherwise authorized by law, is subject to the penalty
22-5 prescribed by Chapter 1F.
22-6 Art. 1D.404. ENFORCEMENT BY CONSUMER CREDIT COMMISSIONER.
22-7 Subject to Article 2.01, the consumer credit commissioner shall
22-8 enforce Chapters 2, 3A, 6, 6A, 7, 8, 15, and 51 as they apply to
22-9 contracts subject to those chapters.
22-10 Art. 1D.405. EXAMINATION OF RECORDS; INSPECTIONS; RULES.
22-11 (a) Article 3A.902 applies to a transaction:
22-12 (1) that is made by a person who holds a license under
22-13 Chapter 3A;
22-14 (2) that is subject to Chapter 15 or 3A; and
22-15 (3) the rate of which is authorized by this chapter.
22-16 (b) Subchapter L, Chapter 3A, applies to a loan:
22-17 (1) that is subject to Chapter 3A; and
22-18 (2) the rate of which is authorized by this chapter.
22-19 Art. 1D.406. ENFORCEMENT BY CREDIT UNION COMMISSIONER. The
22-20 credit union commissioner shall enforce this chapter as it applies
22-21 to contracts subject to the Texas Credit Union Act (Article
22-22 2461-1.01 et seq., Vernon's Texas Civil Statutes).
22-23 Art. 1D.407. ENFORCEMENT BY DEPARTMENT OF INSURANCE. The
22-24 Texas Department of Insurance shall enforce this chapter as it
22-25 applies to contracts subject to Chapter 24, Insurance Code.
22-26 SUBCHAPTER F. EFFECT ON OTHER STATUTES OF USING OPTIONAL RATE
22-27 Art. 1D.501. APPLICABILITY OF CREDIT UNION ACT. Except as
23-1 inconsistent with this chapter:
23-2 (1) a person subject to the Texas Credit Union Act
23-3 (Article 2461-1.01 et seq., Vernon's Texas Civil Statutes) who
23-4 contracts for, charges, or receives a rate or amount authorized by
23-5 this chapter remains subject to that Act; and
23-6 (2) a party to a transaction described by Subdivision
23-7 (1) has all the rights provided by that Act.
23-8 Art. 1D.502. APPLICABILITY OF CHAPTER 24, INSURANCE CODE.
23-9 (a) Except as inconsistent with this chapter:
23-10 (1) a person subject to Chapter 24, Insurance Code,
23-11 who contracts for, charges, or receives an interest rate authorized
23-12 by this chapter remains subject to that chapter; and
23-13 (2) a party to an insurance premium finance agreement,
23-14 including an agreement for an open-end account, has all the rights
23-15 provided by Chapter 24, Insurance Code.
23-16 (b) The licensing requirements of Chapter 3A do not apply to
23-17 a transaction described by Subsection (a)(1). The penalty
23-18 provisions of this title do not apply to a transaction described in
23-19 Subsection (a)(1).
23-20 CHAPTER 1E. JUDGMENT INTEREST
23-21 SUBCHAPTER A. GENERAL PROVISIONS
23-22 Art. 1E.001. INTEREST RATE REQUIRED IN JUDGMENT. A money
23-23 judgment of a court in this state must specify the postjudgment
23-24 interest rate applicable to that judgment.
23-25 Art. 1E.002. JUDGMENT INTEREST RATE: INTEREST RATE OR TIME
23-26 PRICE DIFFERENTIAL IN CONTRACT. A money judgment of a court of
23-27 this state on a contract that provides for interest or time price
24-1 differential earns postjudgment interest at a rate equal to the
24-2 lesser of:
24-3 (1) the rate specified in the contract, which may be a
24-4 variable rate; or
24-5 (2) 18 percent a year.
24-6 Art. 1E.003. JUDGMENT INTEREST RATE: INTEREST RATE OR TIME
24-7 PRICE DIFFERENTIAL NOT IN CONTRACT. (a) A money judgment of a
24-8 court of this state to which Article 1E.002 does not apply,
24-9 including court costs awarded in the judgment and prejudgment
24-10 interest, if any, earns postjudgment interest at the rate
24-11 determined under this article.
24-12 (b) On the 15th day of each month, the consumer credit
24-13 commissioner shall determine the postjudgment interest rate to be
24-14 applied to a money judgment rendered during the succeeding calendar
24-15 month.
24-16 (c) The postjudgment interest rate is:
24-17 (1) the auction rate quoted on a discount basis for
24-18 52-week treasury bills issued by the United States government as
24-19 most recently published by the Federal Reserve Board before the
24-20 date of computation;
24-21 (2) 10 percent a year if the auction rate described by
24-22 Subdivision (1) is less than 10 percent; or
24-23 (3) 20 percent a year if the auction rate described by
24-24 Subdivision (1) is more than 20 percent.
24-25 Art. 1E.004. PUBLICATION OF JUDGMENT INTEREST RATE. The
24-26 consumer credit commissioner shall send to the secretary of state
24-27 the postjudgment interest rate for publication, and the secretary
25-1 shall publish the rate in the Texas Register.
25-2 Art. 1E.005. ACCRUAL OF JUDGMENT INTEREST. (a) Except as
25-3 provided by Subsection (b), postjudgment interest on a money
25-4 judgment of a court in this state accrues during the period
25-5 beginning on the date the judgment is rendered and ending on the
25-6 date the judgment is satisfied.
25-7 (b) If a case is appealed and a motion for extension of time
25-8 to file a brief is granted for a party who was a claimant at trial,
25-9 interest does not accrue for the period of extension.
25-10 Art. 1E.006. COMPOUNDING OF JUDGMENT INTEREST. Postjudgment
25-11 interest on a judgment of a court in this state compounds annually.
25-12 Art. 1E.007. JUDICIAL NOTICE OF JUDGMENT INTEREST RATE. A
25-13 court of this state shall take judicial notice of a published
25-14 postjudgment interest rate.
25-15 SUBCHAPTER B. PREJUDGMENT INTEREST IN WRONGFUL DEATH,
25-16 PERSONAL INJURY, OR PROPERTY DAMAGE CASE
25-17 Art. 1E.101. APPLICABILITY OF SUBCHAPTER. This subchapter
25-18 applies only to a wrongful death, personal injury, or property
25-19 damage case of a court of this state.
25-20 Art. 1E.102. PREJUDGMENT INTEREST REQUIRED IN CERTAIN CASES.
25-21 A judgment in a wrongful death, personal injury, or property damage
25-22 case earns prejudgment interest.
25-23 Art. 1E.103. PREJUDGMENT INTEREST RATE FOR WRONGFUL DEATH,
25-24 PERSONAL INJURY, OR PROPERTY DAMAGE CASE. The prejudgment interest
25-25 rate is equal to the postjudgment interest rate applicable at the
25-26 time of judgment.
25-27 Art. 1E.104. ACCRUAL OF PREJUDGMENT INTEREST. Except as
26-1 provided by Article 1E.105 or 1E.108, prejudgment interest accrues
26-2 on the amount of a judgment during the period beginning on the
26-3 earlier of the 180th day after the date the defendant receives
26-4 written notice of a claim or the date the suit is filed and ending
26-5 on the day preceding the date judgment is rendered. Prejudgment
26-6 interest is computed as simple interest and does not compound.
26-7 Art. 1E.105. EFFECT OF SETTLEMENT OFFER ON ACCRUAL OF
26-8 PREJUDGMENT INTEREST. (a) If judgment for a claimant is equal to
26-9 or less than the amount of a settlement offer of the defendant,
26-10 prejudgment interest does not accrue on the amount of the judgment
26-11 during the period that the offer may be accepted.
26-12 (b) If judgment for a claimant is more than the amount of a
26-13 settlement offer of the defendant, prejudgment interest does not
26-14 accrue on the amount of the settlement offer during the period that
26-15 the offer may be accepted.
26-16 Art. 1E.106. SETTLEMENT OFFER REQUIREMENTS TO PREVENT
26-17 PREJUDGMENT INTEREST ACCRUAL. To prevent the accrual of
26-18 prejudgment interest under this subchapter, a settlement offer must
26-19 be in writing and delivered to the claimant or the claimant's
26-20 attorney or representative.
26-21 Art. 1E.107. VALUE OF SETTLEMENT OFFER FOR COMPUTING
26-22 PREJUDGMENT INTEREST. If a settlement offer does not provide for
26-23 cash payment at the time of settlement, the amount of the
26-24 settlement offer for the purpose of computing prejudgment interest
26-25 is the cost or fair market value of the settlement offer at the
26-26 time it is made.
26-27 Art. 1E.108. ACCRUAL OF PREJUDGMENT INTEREST DURING PERIODS
27-1 OF TRIAL DELAY. (a) In addition to the exceptions provided by
27-2 Article 1E.105, a court may order that prejudgment interest does
27-3 not accrue during periods of delay in the trial.
27-4 (b) A court shall consider:
27-5 (1) periods of delay caused by a defendant; and
27-6 (2) periods of delay caused by a claimant.
27-7 SUBCHAPTER C. OTHER PREJUDGMENT INTEREST PROVISIONS
27-8 Art. 1E.201. PREJUDGMENT INTEREST RATE FOR CONDEMNATION
27-9 CASE. The prejudgment interest rate in a condemnation case is
27-10 equal to the postjudgment interest rate at the time of judgment and
27-11 is computed as simple interest.
27-12 SUBCHAPTER D. EXCEPTIONS TO APPLICATION OF CHAPTER
27-13 Art. 1E.301. EXCEPTION FOR DELINQUENT TAXES. This chapter
27-14 does not apply to a judgment that earns interest at a rate set by
27-15 Title 2, Tax Code.
27-16 Art. 1E.302. EXCEPTION FOR DELINQUENT CHILD SUPPORT. This
27-17 chapter does not apply to interest that accrues on an amount of
27-18 unpaid child support under Section 157.265, Family Code.
27-19 CHAPTER 1F. PENALTIES AND REMEDIES
27-20 SUBCHAPTER A. CIVIL LIABILITY; CRIMINAL PENALTY
27-21 Art. 1F.001. LIABILITY FOR USURIOUS INTEREST. (a) A
27-22 creditor who contracts for, charges, or receives interest that is
27-23 greater than the amount authorized by this subtitle is liable to
27-24 the obligor for an amount that is equal to the greater of:
27-25 (1) three times the amount computed by subtracting the
27-26 amount of interest allowed by law from the total amount of interest
27-27 contracted for, charged, or received; or
28-1 (2) $2,000 or 20 percent of the amount of the
28-2 principal, whichever is less.
28-3 (b) This article applies only to a contract or transaction
28-4 subject to this subtitle.
28-5 (c) A creditor who charges or receives interest in excess of
28-6 the amount contracted for, but not in excess of the maximum amount
28-7 authorized by law, is not subject to penalties for usury but may be
28-8 liable for other remedies and relief as provided by law.
28-9 Art. 1F.002. ADDITIONAL LIABILITY FOR MORE THAN TWICE
28-10 AUTHORIZED RATE OF INTEREST. (a) In addition to the amount
28-11 determined under Article 1F.001, a creditor who charges and
28-12 receives interest that is greater than twice the amount authorized
28-13 by this subtitle is liable to the obligor for:
28-14 (1) the principal amount on which the interest is
28-15 charged and received; and
28-16 (2) the interest and all other amounts charged and
28-17 received.
28-18 (b) This article applies only to a contract or transaction
28-19 subject to this subtitle.
28-20 Art. 1F.003. LIABILITY FOR USURIOUS LEGAL INTEREST. (a) A
28-21 creditor who charges or receives legal interest that is greater
28-22 than the amount authorized by this subtitle is liable to the
28-23 obligor for an amount that is equal to the greater of:
28-24 (1) three times the amount computed by subtracting the
28-25 amount of legal interest allowed by law from the total amount of
28-26 interest charged or received; or
28-27 (2) $2,000 or 20 percent of the amount of the
29-1 principal, whichever is less.
29-2 (b) This article applies only to a transaction subject to
29-3 this subtitle.
29-4 Art. 1F.004. ADDITIONAL LIABILITY FOR MORE THAN TWICE
29-5 AUTHORIZED RATE OF LEGAL INTEREST. (a) In addition to the amount
29-6 determined under Article 1F.003, a creditor who charges and
29-7 receives legal interest that is greater than twice the amount
29-8 authorized by this subtitle is liable to the obligor for:
29-9 (1) the principal amount on which the interest is
29-10 charged and received; and
29-11 (2) the interest and all other amounts charged and
29-12 received.
29-13 (b) This article applies only to a transaction subject to
29-14 this subtitle.
29-15 Art. 1F.005. ATTORNEY'S FEES. A creditor who is liable
29-16 under Article 1F.001 or 1F.003 is also liable to the obligor for
29-17 reasonable attorney's fees set by the court.
29-18 Art. 1F.006. LIMITATION ON FILING SUIT. (a) An action
29-19 under this chapter must be brought within four years from the date
29-20 on which the usurious interest was contracted for, charged, or
29-21 received. The action must be brought in the county in which:
29-22 (1) the transaction was entered into;
29-23 (2) the usurious interest was charged or received;
29-24 (3) the creditor resides at the time of the cause of
29-25 action if the creditor is a natural person;
29-26 (4) the creditor maintains its principal office if the
29-27 creditor is not a natural person; or
30-1 (5) the obligor resides at the time of the accrual of
30-2 the cause of action.
30-3 (b) In the case of a transaction in which a creditor has
30-4 contracted for or charged usurious interest, at least 60 days
30-5 before filing suit seeking usury penalties the obligor shall give
30-6 written notice to the creditor advising the creditor in reasonable
30-7 detail of the nature and amount of the violation.
30-8 (c) A creditor who receives a notice under this article may
30-9 correct the violation as provided by Article 1F.103 during the
30-10 period beginning on the date the notice is received and ending on
30-11 the 60th day after that date. A creditor who corrects a violation
30-12 as provided by this article is not liable to an obligor for the
30-13 violation.
30-14 (d) The notice provision is not applicable to a defendant
30-15 filing a counterclaim action alleging usury in an original action
30-16 by the creditor.
30-17 Art. 1F.007. EXTENT OF LIABILITY. The penalties provided by
30-18 this chapter are the only penalties for violation of this subtitle
30-19 for contracting for, charging, or receiving interest in an amount
30-20 that produces a rate in excess of the maximum rate allowed by law
30-21 and no common law penalties apply.
30-22 Art. 1F.008. CRIMINAL PENALTY. (a) A person commits an
30-23 offense if the person contracts for, charges, or receives interest
30-24 on a transaction for personal, family, or household use that is
30-25 greater than twice the amount authorized by this subtitle.
30-26 (b) An offense under this article is a misdemeanor
30-27 punishable by a fine of not more than $1,000.
31-1 (c) Each contract or transaction that violates this article
31-2 is a separate offense.
31-3 (d) This article applies only to a contract or transaction
31-4 subject to this subtitle.
31-5 SUBCHAPTER B. EXCEPTION FROM LIABILITY
31-6 Art. 1F.101. ACCIDENTAL AND BONA FIDE ERROR. A creditor is
31-7 not subject to penalty under this chapter for any usurious interest
31-8 that results from an accidental and bona fide error.
31-9 Art. 1F.102. LEGAL INTEREST DURING INTEREST-FREE PERIOD. A
31-10 person is not liable to an obligor solely because the person
31-11 charges or receives legal interest before the 30th day after the
31-12 date on which the debt is due.
31-13 Art. 1F.103. CORRECTION OF VIOLATION. (a) A creditor is
31-14 not liable to an obligor for a violation of this subtitle if:
31-15 (1) not later than the 60th day after the date the
31-16 creditor actually discovered the violation, the creditor corrects
31-17 the violation as to that obligor by taking any necessary action and
31-18 making any necessary adjustment, including the payment of interest
31-19 on a refund, if any, at the applicable rate provided for in the
31-20 contract of the parties; and
31-21 (2) the creditor gives written notice to the obligor
31-22 of the violation before the obligor gives written notice of the
31-23 violation or files an action alleging the violation.
31-24 (b) For the purposes of Subsection (a), a violation is
31-25 actually discovered at the time of the discovery of the violation
31-26 in fact and not at the time when an ordinarily prudent person,
31-27 through reasonable diligence, could or should have discovered or
32-1 known of the violation. Actual discovery of a violation in one
32-2 transaction may constitute actual discovery of the same violation
32-3 in other transactions if the violation is of such a nature that it
32-4 would necessarily be repeated and would be clearly apparent in the
32-5 other transactions without the necessity of examining all the other
32-6 transactions.
32-7 (c) For purposes of Subsection (a), written notice is given
32-8 when the notice is delivered to the person or to the person's duly
32-9 authorized agent or attorney of record personally, by telecopier,
32-10 or by United States mail to the address shown on the most recent
32-11 documents in the transaction. Deposit of the notice as registered
32-12 or certified mail in a postage paid, properly addressed wrapper in
32-13 a post office or official depository under the care and custody of
32-14 the United States Postal Service is prima facie evidence of the
32-15 delivery of the notice to the person to whom the notice is
32-16 addressed.
32-17 Art. 1F.104. CORRECTION EXCEPTION AVAILABLE TO ALL SIMILARLY
32-18 SITUATED. If in a single transaction more than one creditor may be
32-19 liable for a violation of this subtitle, compliance with Article
32-20 1F.103 by any of those creditors entitles each to the same
32-21 protection provided by that article.
32-22 Art. 1F.105. AMOUNTS PAYABLE PURSUANT TO A FINAL JUDGMENT.
32-23 A creditor is not liable to an obligor for a violation of this
32-24 subtitle if the creditor receives interest that has been awarded
32-25 pursuant to a final judgment that is no longer subject to
32-26 modification or reversal.
32-27 CHAPTER 1G. MISCELLANEOUS PROVISIONS RELATING TO INTEREST
33-1 Art. 1G.001. IMPOSITION OF SURCHARGE FOR USE OF CREDIT CARD.
33-2 (a) In a sale of goods or services, a seller may not impose a
33-3 surcharge on a buyer who uses a credit card for an extension of
33-4 credit instead of cash, a check, or a similar means of payment.
33-5 (b) This article does not apply to a state agency, county,
33-6 local governmental entity, or other governmental entity that
33-7 accepts a credit card for the payment of fees, taxes, or other
33-8 charges.
33-9 Art. 1G.002. BILLING CYCLE INTEREST LIMITATION ON OPEN-END
33-10 ACCOUNT WITHOUT MERCHANT DISCOUNT. (a) This article applies to an
33-11 open-end account agreement that provides for credit card
33-12 transactions:
33-13 (1) in which the creditor relies on one of the
33-14 ceilings authorized by Chapter 1D for the rate of interest; and
33-15 (2) in connection with which the creditor does not
33-16 impose or receive a merchant discount.
33-17 (b) Interest or time price differential may not be charged
33-18 for a billing cycle of an open-end account credit agreement if:
33-19 (1) the total amount of the obligor's payments during
33-20 the cycle equal or exceed the balance owed under the agreement at
33-21 the end of the preceding billing cycle; or
33-22 (2) an amount is not owed under the agreement at the
33-23 end of the preceding billing cycle.
33-24 Art. 1G.003. SALE OF OPEN-END ACCOUNT WITHOUT MERCHANT
33-25 DISCOUNT. A seller or lessor may sell an open-end account credit
33-26 agreement described by Article 1G.002(a) or any balance under that
33-27 agreement to a purchaser who purchases a substantial part of the
34-1 seller's or lessor's open-end account credit agreements or balances
34-2 under those agreements in accordance with Article 6.07. A charge,
34-3 fee, or discount on that sale:
34-4 (1) is not a merchant discount;
34-5 (2) does not disqualify the open-end account credit
34-6 agreement or a balance under that agreement from being subject to
34-7 Chapter 3A or from coverage under this article; and
34-8 (3) does not subject the account to the limitations
34-9 provided by Article 15.02(d).
34-10 Art. 1G.004. APPLICATION OF LICENSING REQUIREMENT AND
34-11 SUBTITLE 2 AND CHAPTER 15 TO CREDIT UNION OR EMPLOYEE BENEFIT PLAN.
34-12 (a) A credit union is not subject to Subtitle 2 or Chapter 15 and
34-13 is not required to obtain a license under this title.
34-14 (b) With respect to a loan that an employee benefit plan
34-15 that is subject to Title I of the Employee Retirement Income
34-16 Security Act of 1974 (29 U.S.C. Sections 1001-1114) makes to a
34-17 participant in the plan or a participant's beneficiary, the plan is
34-18 not subject to Subtitle 2 and is not required to obtain a license
34-19 under this title.
34-20 CHAPTER 1H. COMMERCIAL TRANSACTIONS
34-21 SUBCHAPTER A. GENERAL PROVISIONS
34-22 Art. 1H.001. DEFINITIONS. In this chapter:
34-23 (1) "Account purchase transaction" means an agreement
34-24 under which a person engaged in a commercial enterprise sells
34-25 accounts, instruments, documents, or chattel paper subject to this
34-26 subtitle at a discount, regardless of whether the person has a
34-27 repurchase obligation related to the transaction.
35-1 (2) "Affiliate" of an obligor means a person who
35-2 directly or indirectly, through one or more intermediaries,
35-3 controls, is controlled by, or is under common control with the
35-4 obligor. In this subdivision "control" means the possession,
35-5 directly or indirectly, of the power to direct or cause the
35-6 direction of the management and policies of a person, whether
35-7 through the ownership of voting securities, by contract, or
35-8 otherwise.
35-9 (3) "Asset-backed securities" means debt obligations
35-10 or certificates of beneficial ownership that:
35-11 (A) are a part of a single issue or single
35-12 series of securities in an aggregate of $1,000,000 or more and
35-13 issuable in one or more classes;
35-14 (B) are secured by a pledge of, or represent an
35-15 undivided ownership interest in:
35-16 (i) one or more fixed or revolving
35-17 financial assets that by their terms convert into cash within a
35-18 definite period; and
35-19 (ii) rights or other assets designed to
35-20 assure the servicing or timely distribution of proceeds to security
35-21 holders; and
35-22 (C) are issued for a business, commercial,
35-23 agricultural, investment, or similar purpose by a pass-through
35-24 entity.
35-25 (4) "Business entity" means a partnership,
35-26 corporation, joint venture, limited liability company, or other
35-27 business organization or association, however organized.
36-1 (5) "Commercial loan" means a loan that is made
36-2 primarily for business, commercial, investment, agricultural, or
36-3 similar purposes. The term does not include a loan made primarily
36-4 for personal, family, or household use.
36-5 (6) "Guaranty" means an agreement under which a
36-6 person:
36-7 (A) assumes, guarantees, or otherwise becomes
36-8 primarily or contingently liable for the payment or performance of
36-9 an obligation of another person;
36-10 (B) provides security for the payment or
36-11 performance of an obligation of another person, whether through the
36-12 creation of a lien or security interest or otherwise; or
36-13 (C) agrees to purchase, or to advance
36-14 consideration to purchase, the obligation or any property
36-15 constituting security for the payment or performance of the
36-16 obligation.
36-17 (7) "Pass-through entity" means a business entity,
36-18 association, grantor or common-law trust under state law, or
36-19 segregated pool of assets under federal tax law that, on the date
36-20 of original issuance of asset-backed securities, does not have
36-21 significant assets other than:
36-22 (A) assets pledged to or held for the benefit of
36-23 holders of the asset-backed securities; or
36-24 (B) assets pledged to or held for the benefit of
36-25 holders of other asset-backed securities previously issued.
36-26 (8) "Prepayment charge or penalty" means compensation
36-27 that is or will become due and payable, or was paid, by an obligor
37-1 to a creditor solely as a result of, or as a condition to, the
37-2 payment or maturity of all or a portion of the principal amount of
37-3 a loan before its stated maturity or its regularly scheduled date
37-4 or dates of payment, as a result of any election by the obligor to
37-5 pay all or a portion of the principal amount before its stated
37-6 maturity or its regularly scheduled date or dates of payment.
37-7 (9) "Qualified commercial loan" means:
37-8 (A) a commercial loan in the original principal
37-9 amount of $3,000,000 or more; or
37-10 (B) a renewal or extension of a commercial loan
37-11 in the original principal amount of $3,000,000 or more, whether the
37-12 principal amount of the loan at the time of its renewal or
37-13 extension is $3,000,000 or more.
37-14 Art. 1H.002. INTEREST. A creditor may contract for,
37-15 charge, and receive from an obligor on a commercial loan a rate or
37-16 amount of interest that does not exceed the applicable ceilings
37-17 computed in accordance with Chapter 1D. All other applicable
37-18 provisions, remedies, and penalties of this subtitle apply to a
37-19 commercial loan unless expressly provided otherwise by this
37-20 chapter.
37-21 Art. 1H.003. COMPUTATION OF TERM. A creditor and an obligor
37-22 may agree to compute the term and rate of a commercial loan on the
37-23 basis of a 360-day year consisting of twelve 30-day months. For
37-24 purposes of this chapter, each rate ceiling expressed as a rate per
37-25 year may mean a rate per year consisting of 360 days and of twelve
37-26 30-day months.
37-27 Art. 1H.004. DETERMINING RATES OF INTEREST BY SPREADING.
38-1 (a) To determine whether a commercial loan is usurious, the
38-2 interest rate is computed by amortizing or spreading using the
38-3 actuarial method during the stated term of the loan all interest at
38-4 any time contracted for, charged, or received in connection with
38-5 the loan.
38-6 (b) If a commercial loan is paid in full before the end of
38-7 the stated term of the loan and the amount of interest received for
38-8 the period that the loan exists exceeds the amount that produces
38-9 the maximum rate authorized by law for that period, the lender
38-10 shall:
38-11 (1) refund the amount of the excess to the borrower;
38-12 or
38-13 (2) credit the amount of the excess against amounts
38-14 owing under the loan.
38-15 (c) A lender who complies with Subsection (b) is not subject
38-16 to any of the penalties provided by law for contracting for,
38-17 charging, or receiving interest in excess of the maximum rate
38-18 authorized.
38-19 Art. 1H.005. PREPAYMENT CHARGE. A creditor and an obligor
38-20 may agree to a charge for prepayment in a loan subject to this
38-21 chapter. A charge for prepayment is not interest.
38-22 Art. 1H.006. CERTAIN AUTHORIZED CHARGES ON COMMERCIAL LOANS.
38-23 In addition to the interest authorized by this chapter, the parties
38-24 to a commercial loan may agree and stipulate for:
38-25 (1) a delinquency charge on the amount of any
38-26 installment or other amount in default for a period of not less
38-27 than 10 days in a reasonable amount not to exceed five percent of
39-1 the total amount of the installment; and
39-2 (2) a returned check fee in an amount not to exceed
39-3 $25 on any check, draft, order, or other instrument or form of
39-4 remittance that is returned unpaid or dishonored for any reason.
39-5 SUBCHAPTER B. SPECIAL PROVISIONS
39-6 Art. 1H.101. QUALIFIED COMMERCIAL LOAN. (a) The parties
39-7 to a qualified commercial loan agreement may contract for a rate or
39-8 amount of interest that does not exceed the applicable rate
39-9 ceiling.
39-10 (b) The parties may contract for the following additional
39-11 charges:
39-12 (1) a discount or commission that an obligor has paid
39-13 or agreed to pay to one or more underwriters of securities issued
39-14 by the obligor;
39-15 (2) an option or right to exchange, redeem, or convert
39-16 all or a portion of the principal amount of the loan, or interest
39-17 on the principal amount, for or into capital stock or other equity
39-18 securities of an obligor or of an affiliate of the obligor;
39-19 (3) an option or right to purchase capital stock or
39-20 other equity securities of an obligor or of an affiliate of the
39-21 obligor;
39-22 (4) an option or other right, whether by contract,
39-23 conveyance, or otherwise, to participate in or own a share of the
39-24 income, revenues, production, or profits:
39-25 (A) of an obligor or of an affiliate of the
39-26 obligor;
39-27 (B) of any segment of the business or operations
40-1 of an obligor or of an affiliate of the obligor; or
40-2 (C) derived or to be derived from any ownership
40-3 rights of an obligor or of an affiliate of the obligor in real or
40-4 personal property, including any proceeds of the sale or other
40-5 disposition of ownership rights; or
40-6 (5) any compensation realized as a result of the
40-7 receipt, exercise, sale, or other disposition of any option or
40-8 other right described by this subsection.
40-9 (c) A charge under Subsection (b) is not interest.
40-10 Art. 1H.102. ASSET-BACKED SECURITIES TRANSACTION. An amount
40-11 that is paid, passed through, or obligated to be paid or to be
40-12 passed through in connection with asset-backed securities or that
40-13 is not paid as a result of a discounted sale price to the holders
40-14 of asset-backed securities by a pass-through entity is not
40-15 interest. This article does not affect interest that is agreed on
40-16 and fixed by the parties to a written contract and paid, charged,
40-17 or received on the ultimate underlying assets pledged to or held
40-18 for the benefit of holders of asset-backed securities.
40-19 Art. 1H.103. ACCOUNT PURCHASE TRANSACTION. (a) An amount
40-20 of a discount in, or charged under, an account purchase transaction
40-21 is not interest.
40-22 (b) For the purposes of this chapter, the parties'
40-23 characterization of an account purchase transaction as a purchase
40-24 is conclusive that the account purchase transaction is not a
40-25 transaction for the use, forbearance, or detention of money.
40-26 SECTION 2. Subtitle 2, Title 79, Revised Statutes (Article
40-27 5069-2.01 et seq., Vernon's Texas Civil Statutes), is amended by
41-1 adding Chapter 3A to read as follows:
41-2 CHAPTER 3A. CONSUMER LOANS
41-3 SUBCHAPTER A. GENERAL PROVISIONS; APPLICABILITY OF CHAPTER
41-4 Art. 3A.001. DEFINITIONS. In this chapter:
41-5 (1) "Irregular transaction" means a loan that is
41-6 payable:
41-7 (A) in installments that are not consecutive or
41-8 monthly;
41-9 (B) with installments that are not substantially
41-10 equal in amount; or
41-11 (C) with a first scheduled installment due that
41-12 is not within one month and 15 days after the date of the loan.
41-13 (2) "Regular transaction" means a loan that is
41-14 payable:
41-15 (A) in consecutive monthly installments;
41-16 (B) with installments substantially equal in
41-17 amount; and
41-18 (C) with a first scheduled installment due
41-19 within one month and 15 days after the date of the loan.
41-20 (3) "Secondary mortgage loan" means a loan that is:
41-21 (A) secured in whole or in part by an interest,
41-22 including a lien or security interest, in real property that is:
41-23 (i) improved by a dwelling designed for
41-24 occupancy by four or fewer families; and
41-25 (ii) subject to one or more liens,
41-26 security interests, prior mortgages, or deeds of trust; and
41-27 (B) not to be repaid before the 91st day after
42-1 the date of the loan.
42-2 Art. 3A.002. INTEREST COMPUTATION METHODS. (a) The
42-3 scheduled installment earnings method is a method to compute an
42-4 interest charge by applying a daily rate to the unpaid balance of
42-5 the amount financed as if all payments will be made upon the
42-6 scheduled installment date. The daily rate is 1/365th of the
42-7 equivalent contract rate. Payments received before or after the
42-8 due date do not cause an adjustment in the amount of the scheduled
42-9 principal reduction.
42-10 (b) The true daily earnings method is a method to compute an
42-11 interest charge by applying a daily rate to the unpaid balance of
42-12 the amount financed. The daily rate is 1/365th of the equivalent
42-13 contract rate. The earned finance charge is computed by
42-14 multiplying the daily rate of the finance charge by the number of
42-15 days the actual principal balance is outstanding.
42-16 Art. 3A.003. PURCHASE FROM MORTGAGEE. For the purposes of
42-17 this chapter, a purchase from a mortgagee of an interest in a
42-18 secondary mortgage loan that was made to secure that loan is
42-19 treated as if it were a secondary mortgage loan.
42-20 Art. 3A.004. CONSTITUTIONAL INTEREST; EXEMPTION.
42-21 (a) Except as otherwise fixed by law, the maximum rate of interest
42-22 is 10 percent per year.
42-23 (b) A loan providing for a rate of interest that is 10
42-24 percent per year or less is not subject to this chapter.
42-25 Art. 3A.005. APPLICABILITY OF CHAPTER. (a) A loan is
42-26 subject to this chapter if the loan:
42-27 (1) provides for interest in excess of 10 percent per
43-1 year;
43-2 (2) is extended primarily for personal, family, or
43-3 household use;
43-4 (3) is not secured by a lien on real property; and
43-5 (4) is made by a person engaged in the business of
43-6 making, arranging, or negotiating those types of loans.
43-7 (b) A loan is subject to this chapter if the loan:
43-8 (1) provides for interest in excess of 10 percent per
43-9 year;
43-10 (2) is extended primarily for personal, family, or
43-11 household use;
43-12 (3) is predominantly payable in monthly installments;
43-13 (4) is described by Article 3A.001(3), 3A.501, or
43-14 3A.806; and
43-15 (5) is made by a person engaged in the business of
43-16 making, arranging, or negotiating those types of loans.
43-17 (c) This chapter does not apply to a secondary mortgage loan
43-18 made by a seller of property to secure all or part of the unpaid
43-19 purchase price.
43-20 SUBCHAPTER B. DESCRIPTION OF AND REQUIREMENTS FOR
43-21 AUTHORIZED ACTIVITIES
43-22 Art. 3A.101. AUTHORIZED ACTIVITIES; CEILING AMOUNT. (a) A
43-23 person must hold a license issued under this chapter to:
43-24 (1) engage in the business of making, transacting, or
43-25 negotiating loans subject to this chapter; and
43-26 (2) contract for, charge, or receive, directly or
43-27 indirectly, in connection with a loan subject to this chapter, a
44-1 charge, including interest, compensation, consideration, or another
44-2 expense, authorized under this chapter that in the aggregate
44-3 exceeds the charges authorized under other law.
44-4 (b) A person may not use any device, subterfuge, or pretense
44-5 to evade the application of this article.
44-6 (c) A bank, savings bank, or savings and loan association is
44-7 not required to obtain a license under Subsection (a).
44-8 (d) An insurance agent licensed under Article 21.14,
44-9 Insurance Code, is not required to obtain a license to negotiate or
44-10 arrange a loan on behalf of a bank, savings bank, or savings and
44-11 loan association provided that the insurance agent or the bank,
44-12 savings bank, or savings and loan association does not make the
44-13 provision of insurance a condition to apply for or obtain a loan or
44-14 service from the bank, savings bank, or savings and loan
44-15 association.
44-16 Art. 3A.102. ISSUANCE OF MORE THAN ONE LICENSE FOR A PERSON.
44-17 (a) The commissioner may issue more than one license to a person
44-18 on compliance with this chapter for each license.
44-19 (b) A person who is required to hold a license under this
44-20 chapter must hold a separate license for each office at which loans
44-21 are made, negotiated, or collected under this chapter.
44-22 (c) A license is not required under this chapter for a place
44-23 of business:
44-24 (1) devoted to accounting or other recordkeeping; and
44-25 (2) at which loans are not made, negotiated, or
44-26 collected under this chapter or Chapter 15.
44-27 Art. 3A.103. AREA OF BUSINESS; LOANS BY MAIL. (a) A lender
45-1 is not limited to making loans to residents of the community in
45-2 which the office for which the license or other authority is
45-3 granted.
45-4 (b) A lender may make, negotiate, arrange, and collect loans
45-5 by mail from a licensed office.
45-6 SUBCHAPTER C. APPLICATION FOR AND ISSUANCE OF LICENSE
45-7 Art. 3A.201. APPLICATION REQUIREMENTS. (a) The application
45-8 for a license under this chapter must:
45-9 (1) be under oath;
45-10 (2) give the approximate location from which business
45-11 is to be conducted;
45-12 (3) identify the business's principal parties in
45-13 interest; and
45-14 (4) contain other relevant information that the
45-15 commissioner requires for the findings required under Article
45-16 3A.204.
45-17 (b) On the filing of one or more license applications, the
45-18 applicant shall pay to the commissioner an investigation fee of
45-19 $200.
45-20 (c) On the filing of each license application, the applicant
45-21 shall pay to the commissioner for the license's year of issuance a
45-22 license fee of:
45-23 (1) $100 if the license is granted not later than June
45-24 30; or
45-25 (2) $50 if the license is granted after June 30.
45-26 Art. 3A.202. BOND. (a) If the commissioner requires, an
45-27 applicant for a license under this chapter shall file with the
46-1 application a bond that is:
46-2 (1) in an amount not to exceed the total of:
46-3 (A) $5,000 for the first license; and
46-4 (B) $1,000 for each additional license;
46-5 (2) satisfactory to the commissioner; and
46-6 (3) issued by a surety company qualified to do
46-7 business as a surety in this state.
46-8 (b) The bond must be in favor of this state for the use of
46-9 this state and the use of a person who has a cause of action under
46-10 this chapter against the license holder.
46-11 (c) The bond must be conditioned on:
46-12 (1) the license holder's faithful performance under
46-13 this chapter and rules adopted under this chapter; and
46-14 (2) the payment of all amounts that become due to the
46-15 state or another person under this chapter during the calendar year
46-16 for which the bond is given.
46-17 (d) The aggregate liability of a surety to all persons
46-18 damaged by the license holder's violation of this chapter may not
46-19 exceed the amount of the bond.
46-20 Art. 3A.203. INVESTIGATION OF APPLICATION. On the filing of
46-21 an application and, if required, a bond, and on payment of the
46-22 required fees, the commissioner shall conduct an investigation to
46-23 determine whether to issue the license.
46-24 Art. 3A.204. APPROVAL OR DENIAL OF APPLICATION. (a) The
46-25 commissioner shall approve the application and issue to the
46-26 applicant a license to make loans under this chapter if the
46-27 commissioner finds that:
47-1 (1) the financial responsibility, experience,
47-2 character, and general fitness of the applicant are sufficient to:
47-3 (A) command the confidence of the public; and
47-4 (B) warrant the belief that the business will be
47-5 operated lawfully and fairly, within the purposes of this chapter;
47-6 and
47-7 (2) the applicant has net assets of at least $25,000
47-8 available for the operation of the business.
47-9 (b) If the commissioner does not find the eligibility
47-10 requirements of Subsection (a), the commissioner shall notify the
47-11 applicant.
47-12 (c) If an applicant requests a hearing on the application
47-13 not later than the 30th day after the date of notification under
47-14 Subsection (b), the applicant is entitled to a hearing not later
47-15 than the 60th day after the date of the request.
47-16 (d) The commissioner shall approve or deny the application
47-17 not later than the 60th day after the date of the filing of a
47-18 completed application with payment of the required fees, or if a
47-19 hearing is held, after the date of the completion of the hearing on
47-20 the application. The commissioner and the applicant may agree to a
47-21 later date in writing.
47-22 Art. 3A.205. DISPOSITION OF FEES ON DENIAL OF APPLICATION.
47-23 If the commissioner denies the application, the commissioner shall
47-24 retain the investigation fee and shall return to the applicant the
47-25 license fee submitted with the application.
47-26 SUBCHAPTER D. LICENSE
47-27 Art. 3A.251. NAME AND PLACE ON LICENSE. (a) A license must
48-1 state:
48-2 (1) the name of the license holder; and
48-3 (2) the address of the office from which the business
48-4 is to be conducted.
48-5 (b) A license holder may not conduct business under this
48-6 chapter under a name or at a place of business in this state other
48-7 than the name or office stated on the license.
48-8 Art. 3A.252. LICENSE DISPLAY. A license holder shall
48-9 display a license at the place of business provided on the license.
48-10 Art. 3A.253. MINIMUM ASSETS FOR LICENSE. (a) Except as
48-11 provided by Subsection (b) or (c), a license holder shall maintain
48-12 for each office for which a license is held net assets of at least
48-13 $25,000 that are used or readily available for use in conducting
48-14 the business of that office.
48-15 (b) A license holder who held a license under the Texas
48-16 Regulatory Loan Act and was issued a license to make loans under
48-17 that chapter as provided by Section 4, Chapter 274, Acts of the
48-18 60th Legislature, Regular Session, 1967, shall maintain for the
48-19 office for which that license is held net assets of at least
48-20 $15,000 that are used or readily available for use in conducting
48-21 the business of that office.
48-22 (c) A license holder who paid the pawnbroker's occupational
48-23 tax for 1967 and was issued a license to make loans under that
48-24 chapter as provided by Section 4, Chapter 274, Acts of the 60th
48-25 Legislature, Regular Session, 1967, is exempt from the minimum
48-26 assets requirement of Subsection (a) for the office for which that
48-27 license is held.
49-1 (d) If a license holder holds a license to which Subsection
49-2 (b) or (c) applies and subsequently transfers the license to
49-3 another person, the minimum assets required under Subsection (a)
49-4 shall apply to the license and the subsequent license holder.
49-5 Art. 3A.254. ANNUAL LICENSE FEE. (a) Not later than
49-6 December 1, a license holder shall pay to the commissioner for each
49-7 license held an annual fee for the year beginning the next January
49-8 1.
49-9 (b) The annual fee for a license under this chapter is $200
49-10 except that if, on September 30 preceding the date on which the
49-11 annual fee is due, the gross unpaid balance of loans regulated
49-12 under this chapter in the office for which the license is issued is
49-13 $100,000 or less, the annual fee is $100.
49-14 Art. 3A.255. EXPIRATION OF LICENSE ON FAILURE TO PAY ANNUAL
49-15 FEE. If the annual fee for a license is not paid before the 16th
49-16 day after the date on which the written notice of delinquency of
49-17 payment has been given to the license holder, the license expires
49-18 on the later of:
49-19 (1) that day; or
49-20 (2) December 31 of the last year for which an annual
49-21 fee was paid.
49-22 Art. 3A.256. LICENSE SUSPENSION OR REVOCATION. After notice
49-23 and a hearing the commissioner may suspend or revoke a license if
49-24 the commissioner finds that:
49-25 (1) the license holder failed to pay the annual
49-26 license fee, an examination fee, an investigation fee, or another
49-27 charge imposed by the commissioner under this chapter;
50-1 (2) the license holder, knowingly or without the
50-2 exercise of due care, violated this chapter or a rule adopted or
50-3 order issued under this chapter; or
50-4 (3) a fact or condition exists that, if it had existed
50-5 or had been known to exist at the time of the original application
50-6 for the license, clearly would have justified the commissioner's
50-7 denial of the application.
50-8 Art. 3A.257. CORPORATE CHARTER FORFEITURE. (a) A license
50-9 holder who violates this chapter is subject to revocation of the
50-10 holder's license and, if the license holder is a corporation,
50-11 forfeiture of its charter.
50-12 (b) When the attorney general is notified of a violation of
50-13 this chapter and revocation of a license, the attorney general
50-14 shall file suit in a district court in Travis County, if the
50-15 license holder is a corporation, for forfeiture of the license
50-16 holder's charter.
50-17 Art. 3A.258. LICENSE SUSPENSION OR REVOCATION FILED WITH
50-18 PUBLIC RECORDS. The decision of the commissioner on the suspension
50-19 or revocation of a license and the evidence considered by the
50-20 commissioner in making the decision shall be filed in the public
50-21 records of the commissioner.
50-22 Art. 3A.259. REINSTATEMENT OF SUSPENDED LICENSE; ISSUANCE OF
50-23 NEW LICENSE AFTER REVOCATION. The commissioner may reinstate a
50-24 suspended license or issue a new license on application to a person
50-25 whose license has been revoked if at the time of the reinstatement
50-26 or issuance no fact or condition exists that clearly would have
50-27 justified the commissioner's denial of an original application for
51-1 the license.
51-2 Art. 3A.260. SURRENDER OF LICENSE. A license holder may
51-3 surrender a license issued under this chapter by delivering to the
51-4 commissioner:
51-5 (1) the license; and
51-6 (2) a written notice of the license's surrender.
51-7 Art. 3A.261. EFFECT OF LICENSE SUSPENSION, REVOCATION, OR
51-8 SURRENDER. (a) The suspension, revocation, or surrender of a
51-9 license issued under this chapter does not affect the obligation of
51-10 a contract between the license holder and a debtor entered into
51-11 before the revocation, suspension, or surrender.
51-12 (b) Surrender of a license does not affect the license
51-13 holder's civil or criminal liability for an act committed before
51-14 surrender.
51-15 Art. 3A.262. MOVING AN OFFICE. (a) A license holder shall
51-16 give written notice to the commissioner before the 30th day
51-17 preceding the date the license holder moves an office from the
51-18 location provided on the license.
51-19 (b) The commissioner shall amend a holder's license
51-20 accordingly.
51-21 Art. 3A.263. TRANSFER OR ASSIGNMENT OF LICENSE. A license
51-22 may be transferred or assigned only with the approval of the
51-23 commissioner.
51-24 SUBCHAPTER E. INTEREST CHARGES ON NON-REAL PROPERTY LOANS
51-25 Art. 3A.301. MAXIMUM INTEREST CHARGE. (a) A loan contract
51-26 under this chapter that is a regular transaction and is not secured
51-27 by real property may provide for an interest charge on the cash
52-1 advance that does not exceed the amount of add-on interest equal to
52-2 the amount computed for the full term of the contract at an add-on
52-3 interest amount equal to:
52-4 (1) $18 for each $100 per year on the part of the cash
52-5 advance that is less than or equal to the amount computed under
52-6 Article 2.08, using the reference base amount of $300; and
52-7 (2) $8 for each $100 per year on the part of the cash
52-8 advance that is more than the amount computed for Subdivision (1)
52-9 but less than or equal to an amount computed under Article 2.08,
52-10 using the reference base amount of $2,500.
52-11 (b) For the purpose of Subsection (a):
52-12 (1) when the loan is made an interest charge may be
52-13 computed for the full term of the loan contract;
52-14 (2) if the period before the first installment due
52-15 date includes a part of a month that is longer than 15 days, then
52-16 that portion of a month may be considered a full month; and
52-17 (3) if a loan contract provides for precomputed
52-18 interest, the amount of the loan is the total of:
52-19 (A) the cash advance; and
52-20 (B) the amount of precomputed interest.
52-21 (c) A loan contract under this chapter that is an irregular
52-22 transaction and is not secured by real property may provide for an
52-23 interest charge, using any method or formula, that does not exceed
52-24 the amount that, having due regard for the schedule of installment
52-25 payments, would produce the same effective return as allowed under
52-26 Subsection (a) if the loan were payable in equal successive monthly
52-27 installments beginning one month from the date of the contract.
53-1 (d) A loan contract under this chapter that is not secured
53-2 by real property may provide for a rate or amount of interest
53-3 computed using the true daily earnings method or the scheduled
53-4 installment earnings method that does not exceed the alternative
53-5 interest rate as computed under Subchapter A, Chapter 1D. Interest
53-6 may accrue on the principal balance and amounts added to principal
53-7 after the date of the loan contract from time to time unpaid at the
53-8 rate provided for by the contract until the date of payment in full
53-9 or demand for payment in full.
53-10 Art. 3A.302. MAXIMUM CHARGE FOR LOAN WITH SINGLE REPAYMENT.
53-11 A loan contract that exceeds the maximum cash advance of Article
53-12 3A.401 and that is payable in a single installment may provide for
53-13 an interest charge on the cash advance that does not exceed a rate
53-14 or amount that would produce the same effective return as allowed
53-15 under Article 3A.301 having due consideration for the amount and
53-16 term of the loan. If a loan under this article is prepaid in full,
53-17 the lender may earn a minimum interest charge of $25.
53-18 Art. 3A.303. ADDITIONAL INTEREST FOR DEFAULT: REGULAR
53-19 TRANSACTION. (a) A loan contract that includes precomputed
53-20 interest and that is a regular transaction may provide for
53-21 additional interest for default if any part of an installment
53-22 remains unpaid after the 10th day after the date on which the
53-23 installment is due, including Sundays and holidays.
53-24 (b) A loan contract that uses the scheduled installment
53-25 earnings method and that is a regular transaction may provide for
53-26 additional interest for default if any part of an installment
53-27 remains unpaid after the 10th day after the date on which the
54-1 installment is due, including Sundays and holidays.
54-2 (c) The additional interest may not exceed five cents for
54-3 each $1 of a scheduled installment.
54-4 (d) Interest under this article may not be collected more
54-5 than once on the same installment.
54-6 Art. 3A.304. ADDITIONAL INTEREST FOR INSTALLMENT DEFERMENT:
54-7 REGULAR TRANSACTION. (a) On a loan contract that includes
54-8 precomputed interest and is a regular transaction, an authorized
54-9 lender may charge additional interest for the deferment of an
54-10 installment if:
54-11 (1) the entire amount of the installment is unpaid;
54-12 (2) no interest for default has been collected on the
54-13 installment; and
54-14 (3) payment of the installment is deferred for one or
54-15 more full months and the maturity of the contract is extended for a
54-16 corresponding period.
54-17 (b) The interest for deferment under Subsection (a) may not
54-18 exceed the amount computed by:
54-19 (1) taking the difference between the refund that
54-20 would be required for prepayment in full as of the date of
54-21 deferment and the refund that would be required for prepayment in
54-22 full one month before the date of deferment; and
54-23 (2) multiplying the results under Subdivision (1) by
54-24 the number of months in the deferment period.
54-25 (c) The amount of interest applicable to each deferred
54-26 balance or installment period occurring after a deferment period
54-27 remains the amount applicable to that balance or period under the
55-1 original loan contract.
55-2 (d) If a loan is prepaid in full during the deferment
55-3 period, the borrower shall receive, in addition to the refund
55-4 required under Subchapter H, a pro rata refund of that part of the
55-5 interest for deferment applicable to the number of full months
55-6 remaining in the deferment period on the payment date.
55-7 (e) For the purposes of this article, a deferment period is
55-8 the period during which a payment is not required or made because
55-9 of the deferment and begins on the day after the due date of the
55-10 scheduled installment that precedes the first installment being
55-11 deferred.
55-12 Art. 3A.305. COLLECTION OF DEFAULT OR DEFERMENT INTEREST.
55-13 Interest for default under Article 3A.303 or for installment
55-14 deferment under Article 3A.304 may be collected when it accrues or
55-15 at any time after it accrues.
55-16 Art. 3A.306. ADDITIONAL INTEREST FOR DEFAULT: IRREGULAR
55-17 TRANSACTION. A loan contract that includes precomputed interest
55-18 and that is an irregular transaction may provide for additional
55-19 interest for default using the true daily earnings method for the
55-20 period from the maturity date of an installment until the date the
55-21 installment is paid. The rate of the additional interest may not
55-22 exceed the maximum contract interest rate.
55-23 SUBCHAPTER F. ALTERNATE CHARGES FOR CERTAIN LOANS
55-24 Art. 3A.401. MAXIMUM CASH ADVANCE. The maximum cash advance
55-25 of a loan made under this subchapter is an amount computed under
55-26 Article 2.08, using the reference base amount of $100.
55-27 Art. 3A.402. ALTERNATE INTEREST CHARGE. Instead of the
56-1 charges authorized by Article 3A.301, a loan contract may provide
56-2 for:
56-3 (1) on a cash advance of less than $30, an acquisition
56-4 charge that is not more than $1 for each $5 of the cash advance;
56-5 (2) on a cash advance equal to or more than $30 but
56-6 not more than $100:
56-7 (A) an acquisition charge that is not more than
56-8 the amount equal to one-tenth of the amount of the cash advance;
56-9 and
56-10 (B) an installment account handling charge that
56-11 is not more than:
56-12 (i) $3 a month if the cash advance is not
56-13 more than $35;
56-14 (ii) $3.50 a month if the cash advance is
56-15 more than $35 but not more than $70; or
56-16 (iii) $4 a month if the cash advance is
56-17 more than $70; or
56-18 (3) on a cash advance of more than $100:
56-19 (A) an acquisition charge that is not more than
56-20 $10; and
56-21 (B) an installment account handling charge that
56-22 is not more than the ratio of $4 a month for each $100 of cash
56-23 advance.
56-24 Art. 3A.403. MAXIMUM INTEREST CHARGE FOR LOAN WITH SINGLE
56-25 REPAYMENT. A loan contract to which Article 3A.401 applies and
56-26 that is payable in a single installment may provide for an
56-27 acquisition charge and an interest charge on the cash advance that
57-1 does not exceed a rate or amount that would produce the same
57-2 effective return as allowed under Article 3A.402 having due
57-3 consideration for the amount and term of the loan. If a loan under
57-4 this article is prepaid in full, the lender may earn a minimum of
57-5 the acquisition charge and interest charge for one month.
57-6 Art. 3A.404. NO OTHER CHARGES AUTHORIZED. (a) On a loan
57-7 made under this subchapter a lender may not contract for, charge,
57-8 or receive an amount unless this subchapter authorizes the amount
57-9 to be charged.
57-10 (b) An insurance charge is not authorized on a loan made
57-11 under this subchapter.
57-12 Art. 3A.405. MAXIMUM LOAN TERM. The maximum term of a loan
57-13 made under this subchapter is:
57-14 (1) for a loan of $100 or less the lesser of:
57-15 (A) one month for each multiple of $10 of cash
57-16 advance; or
57-17 (B) six months; and
57-18 (2) for a loan of more than $100, one month for each
57-19 multiple of $20 of cash advance.
57-20 Art. 3A.406. REFUND. (a) An acquisition charge authorized
57-21 under Article 3A.402(1) or (2) is considered to be earned at the
57-22 time a loan is made and is not subject to refund.
57-23 (b) On the prepayment of a loan with a cash advance of $30
57-24 or more but not more than $100, the installment account handling
57-25 charge authorized under Article 3A.402(2) is subject to refund in
57-26 accordance with Subchapter H.
57-27 (c) On the prepayment of a loan with a cash advance of more
58-1 than $100, the acquisition charge and the installment account
58-2 handling charge authorized under Article 3A.402(3) are subject to
58-3 refund in accordance with Subchapter H.
58-4 Art. 3A.407. DEFAULT CHARGE; DEFERMENT OF PAYMENT. The
58-5 provisions of Subchapter E relating to additional interest for
58-6 default and additional interest for the deferment of installments
58-7 apply to a loan made under this subchapter.
58-8 Art. 3A.408. SCHEDULES FOR WEEKLY, BIWEEKLY, OR SEMIMONTHLY
58-9 INSTALLMENTS. The commissioner may prepare schedules that may be
58-10 used by an authorized lender for the repayment of a loan made under
58-11 this subchapter by weekly, biweekly, or semimonthly installments.
58-12 SUBCHAPTER G. INTEREST AND OTHER CHARGES ON SECONDARY
58-13 MORTGAGE LOANS
58-14 Art. 3A.501. MAXIMUM INTEREST CHARGE. (a) A secondary
58-15 mortgage loan that is a regular transaction may provide for an
58-16 interest charge on the cash advance that is precomputed and that
58-17 does not exceed a rate or amount that would produce the same
58-18 effective return as allowed under Subchapter A, Chapter 1D.
58-19 (b) For the purpose of Subsection (a):
58-20 (1) when the loan is made an interest charge may be
58-21 computed for the full term of the loan contract;
58-22 (2) if the period before the first installment due
58-23 date includes a part of a month that is longer than 15 days, that
58-24 portion of a month may be considered a full month; and
58-25 (3) if a loan contract provides for precomputed
58-26 interest, the amount of the loan is the total of:
58-27 (A) the cash advance; and
59-1 (B) the amount of precomputed interest.
59-2 (c) A secondary mortgage loan may provide for a rate or
59-3 amount of interest calculated using the true daily earnings method
59-4 or the scheduled installment earnings method that does not exceed
59-5 the alternative rate ceiling in Subchapter A, Chapter 1D. Interest
59-6 may accrue on the principal balance and amounts added to principal
59-7 after the date of the loan contract from time to time unpaid at the
59-8 rate provided for by the contract until the date of payment in full
59-9 or demand for payment in full. An interest charge under this
59-10 subsection may not be precomputed.
59-11 Art. 3A.502. ADDITIONAL INTEREST FOR DEFAULT: REGULAR
59-12 TRANSACTION. (a) A secondary mortgage loan that includes
59-13 precomputed interest and that is a regular transaction may provide
59-14 for additional interest for default if any part of an installment
59-15 remains unpaid after the 10th day after the date on which the
59-16 installment is due, including Sundays and holidays.
59-17 (b) A secondary mortgage loan contract that uses the
59-18 scheduled installment earnings method and that is a regular
59-19 transaction may provide for additional interest for default if any
59-20 part of an installment remains unpaid after the 10th day after the
59-21 date on which the installment is due, including Sundays and
59-22 holidays.
59-23 (c) The additional interest for default may not exceed five
59-24 cents for each $1 of a scheduled installment.
59-25 (d) Interest under this article may not be collected more
59-26 than once on the same installment.
59-27 Art. 3A.503. ADDITIONAL INTEREST FOR INSTALLMENT DEFERMENT:
60-1 REGULAR TRANSACTIONS. (a) On a secondary mortgage loan that
60-2 includes precomputed interest and is a regular transaction, an
60-3 authorized lender may charge additional interest for the deferment
60-4 of an installment if:
60-5 (1) the entire amount of the installment is unpaid;
60-6 (2) no interest for default has been collected on the
60-7 installment; and
60-8 (3) payment of the installment is deferred for one or
60-9 more full months and the maturity of the contract is extended for a
60-10 corresponding period.
60-11 (b) The interest for deferment under Subsection (a) may not
60-12 exceed the amount computed by:
60-13 (1) taking the difference between the refund that
60-14 would be required for prepayment in full as of the date of
60-15 deferment and the refund that would be required for prepayment in
60-16 full one month before the date of deferment; and
60-17 (2) multiplying the results under Subdivision (1) by
60-18 the number of months in the deferment period.
60-19 (c) The amount of interest applicable to each deferred
60-20 balance or installment period occurring after a deferment period
60-21 remains the amount applicable to that balance or period under the
60-22 original loan contract.
60-23 (d) If a loan is prepaid in full during the deferment
60-24 period, the borrower shall receive, in addition to the refund
60-25 required under Subchapter H, a pro rata refund of that part of the
60-26 interest for deferment applicable to the number of full months
60-27 remaining in the deferment period on the payment date.
61-1 (e) For the purposes of this article, a deferment period is
61-2 the period during which a payment is not required or made because
61-3 of the deferment and begins on the day after the due date of the
61-4 scheduled installment that precedes the first installment being
61-5 deferred.
61-6 Art. 3A.504. COLLECTION OF DEFAULT OR DEFERMENT INTEREST.
61-7 Interest for default under Article 3A.502 or for installment
61-8 deferment under Article 3A.503 may be collected when it accrues or
61-9 at any time after it accrues.
61-10 Art. 3A.505. ADDITIONAL INTEREST FOR DEFAULT: IRREGULAR
61-11 TRANSACTION. A secondary mortgage loan that includes precomputed
61-12 interest and that is an irregular transaction may provide for
61-13 additional interest for default using the true daily earnings
61-14 method for the period from the maturity date of an installment
61-15 until the date the installment is paid. The rate of the additional
61-16 interest may not exceed the maximum contract interest rate.
61-17 Art. 3A.506. DATE OF FIRST SCHEDULED INSTALLMENT. On a
61-18 secondary mortgage loan made under this chapter the due date of the
61-19 first installment may not be scheduled later than three months
61-20 after the date of the loan.
61-21 Art. 3A.507. AMOUNTS AUTHORIZED TO BE INCLUDED IN CONTRACT.
61-22 A secondary mortgage loan contract may provide for:
61-23 (1) reasonable fees or charges paid to the trustee in
61-24 connection with a deed of trust or similar instrument executed in
61-25 connection with the secondary mortgage loan, including fees for
61-26 enforcing the lien against or posting for sale, selling, or
61-27 releasing the property secured by the deed of trust;
62-1 (2) reasonable fees paid to an attorney who is not an
62-2 employee of the creditor in the collection of a delinquent
62-3 secondary mortgage loan;
62-4 (3) court costs and fees incurred in the collection of
62-5 the loan or foreclosure of a lien created by the loan; or
62-6 (4) a fee that does not exceed $15 for the return by a
62-7 depository institution of a dishonored check, negotiable order of
62-8 withdrawal, or share draft offered in full or partial payment of a
62-9 secondary mortgage loan.
62-10 Art. 3A.508. AMOUNTS AUTHORIZED TO BE COLLECTED OR ADDED TO
62-11 LOAN. (a) A lender or a person who is assigned a secondary
62-12 mortgage loan may collect on or before the closing of the loan, or
62-13 include in the principal of the loan:
62-14 (1) reasonable fees for:
62-15 (A) title examination and preparation of an
62-16 abstract of title by:
62-17 (i) an attorney who is not an employee of
62-18 the lender; or
62-19 (ii) a title company or property search
62-20 company authorized to do business in this state; or
62-21 (B) premiums or fees for title insurance or
62-22 title search for the benefit of the mortgagee and, at the
62-23 mortgagor's option, for title insurance or title search for the
62-24 benefit of the mortgagor;
62-25 (2) reasonable fees charged to the lender by an
62-26 attorney who is not a salaried employee of the lender for
62-27 preparation of the loan documents in connection with the mortgage
63-1 loan if the fees are evidenced by a statement for services rendered
63-2 addressed to the lender;
63-3 (3) charges prescribed by law that are paid to public
63-4 officials for determining the existence of a security interest or
63-5 for perfecting, releasing, or satisfying a security interest;
63-6 (4) reasonable fees for an appraisal of real property
63-7 offered as security for the loan prepared by a certified appraiser
63-8 who is not a salaried employee of the lender;
63-9 (5) the reasonable cost of a credit report;
63-10 (6) reasonable fees for a survey of real property
63-11 offered as security for the loan prepared by a registered surveyor
63-12 who is not a salaried employee of the lender;
63-13 (7) the premiums received in connection with the sale
63-14 of credit life insurance, credit accident and health insurance, or
63-15 other insurance that protects the mortgagee against default by the
63-16 mortgagor, the benefits of which are applied in whole or in part to
63-17 reduce or extinguish the loan balance; and
63-18 (8) reasonable fees relating to real property offered
63-19 as security for the loan that are incurred to comply with a
63-20 federally mandated program if the collection of the fees or the
63-21 participation in the program is required by a federal agency.
63-22 (b) Premiums for property insurance that conforms with
63-23 Article 3A.701 may be added to the loan contract.
63-24 SUBCHAPTER H. REFUND OF PRECOMPUTED INTEREST
63-25 Art. 3A.601. REFUND OF PRECOMPUTED INTEREST: REGULAR
63-26 TRANSACTION. (a) This article applies to a loan contract that
63-27 includes precomputed interest and that is a regular transaction.
64-1 (b) If the contract is prepaid in full, including payment in
64-2 cash or by a new loan or renewal of the loan, or if the lender
64-3 demands payment in full of the unpaid balance, after the first
64-4 installment due date but before the final installment due date, the
64-5 lender shall refund or credit to the borrower the amount computed
64-6 by:
64-7 (1) dividing the sum of the periodic balances
64-8 scheduled to follow the installment date after the date of the
64-9 prepayment or demand, as appropriate, by the sum of all the
64-10 periodic balances under the schedule of payments set out in the
64-11 loan contract; and
64-12 (2) multiplying the total interest contracted for
64-13 under Article 3A.301, 3A.402, or 3A.501, as appropriate, by the
64-14 result under Subdivision (1).
64-15 (c) If the prepayment in full or demand for payment in full
64-16 occurs before the first installment due date, the lender shall:
64-17 (1) retain an amount computed by:
64-18 (A) dividing 30 into the amount that could be
64-19 retained if the first installment period were one month and the
64-20 loan were prepaid in full on the date the first installment is due;
64-21 and
64-22 (B) multiplying the result under Paragraph (A)
64-23 by the number of days in the period beginning on the date the loan
64-24 was made and ending on the date of the prepayment or demand; and
64-25 (2) refund or credit to the borrower the amount
64-26 computed by subtracting the amount retained under Subdivision (1)
64-27 from the interest contracted for under Article 3A.301, 3A.402, or
65-1 3A.501, as appropriate.
65-2 Art. 3A.602. REFUND OF PRECOMPUTED INTEREST ON CONTRACT:
65-3 IRREGULAR TRANSACTION OR TERM OF MORE THAN 60 MONTHS. (a) This
65-4 article applies to a loan contract that:
65-5 (1) includes precomputed interest and to which Article
65-6 3A.601 does not apply; or
65-7 (2) has a term of more than 60 months.
65-8 (b) If the contract is prepaid in full, including payment in
65-9 cash or by a new loan or renewal of the loan, or if the lender
65-10 demands payment in full of the unpaid balance before final maturity
65-11 of the contract, the lender earns interest for the period beginning
65-12 on the date of the loan and ending on the date of the prepayment or
65-13 demand, as applicable, an amount that does not exceed the amount
65-14 allowed by Subsection (f) using the simple annual interest rate
65-15 under the contract.
65-16 (c) If prepayment in full or demand for payment in full
65-17 occurs during an installment period, the lender may retain, in
65-18 addition to interest that accrued during any elapsed installment
65-19 periods, an amount computed by:
65-20 (1) multiplying the simple annual interest rate under
65-21 the contract by the unpaid principal balance of the loan determined
65-22 according to the schedule of payments to be outstanding on the
65-23 immediately preceding installment due date;
65-24 (2) dividing 365 into the product under Subdivision
65-25 (1); and
65-26 (3) multiplying the number of days in the period
65-27 beginning on the day after the installment due date and ending on
66-1 the date of the prepayment or demand, as appropriate, by the result
66-2 obtained under Subdivision (2).
66-3 (d) The lender may also earn interest on an addition to
66-4 principal, or other permissible charges, added to the loan after
66-5 the date of the loan contract, accruing at the simple annual
66-6 interest rate under the contract from the date of the addition
66-7 until the date paid or the date the lender demands payment in full
66-8 of the total unpaid balance under the loan contract.
66-9 (e) The lender shall refund or credit to the borrower the
66-10 amount computed by subtracting the total amount retained under
66-11 Subsections (b), (c), and (d) from the total amount of interest
66-12 contracted for and precomputed in the amount of loan.
66-13 (f) For the purposes of this article, the simple annual
66-14 interest rate under a contract is equal to the rate that the
66-15 contract would have produced over its full term if, assuming that
66-16 each scheduled payment under the contract is paid on the date due
66-17 and considering the amount of each scheduled installment and the
66-18 time of each scheduled installment period, the rate were applied to
66-19 the unpaid principal amounts determined to be outstanding from time
66-20 to time according to the schedule of payments.
66-21 Art. 3A.603. NO REFUND ON PARTIAL PREPAYMENT OR OF AMOUNT
66-22 LESS THAN $1. A refund is not required under this subchapter for a
66-23 partial prepayment or if the amount to be refunded is less than $1.
66-24 SUBCHAPTER I. INSURANCE
66-25 Art. 3A.701. REQUIRED PROPERTY INSURANCE. (a) On a loan
66-26 that is subject to Subchapter E with a cash advance of $300 or
66-27 more, a lender may request or require a borrower to insure tangible
67-1 personal property offered as security for the loan.
67-2 (b) On a secondary mortgage loan, a lender may request or
67-3 require a borrower to provide property insurance as security
67-4 against reasonable risks of loss, damage, and destruction.
67-5 (c) The insurance coverage and the premiums or charges for
67-6 the coverage must bear a reasonable relationship to:
67-7 (1) the amount, term, and conditions of the loan;
67-8 (2) the value of the collateral; and
67-9 (3) the existing hazards or risk of loss, damage, or
67-10 destruction.
67-11 (d) The insurance may not:
67-12 (1) cover unusual or exceptional risks; or
67-13 (2) provide coverage not ordinarily included in
67-14 policies issued to the general public.
67-15 (e) A creditor may not require the purchase of duplicate
67-16 property insurance if the creditor has knowledge that the borrower:
67-17 (1) has valid and collectible insurance covering the
67-18 property; and
67-19 (2) has provided a loss payable endorsement sufficient
67-20 to protect the creditor.
67-21 (f) For purposes of determining the knowledge required under
67-22 Subsection (e), a creditor may rely on a written consent to
67-23 purchase insurance in which the borrower is given the opportunity
67-24 to disclose the existence of other coverage.
67-25 Art. 3A.702. CREDIT LIFE INSURANCE, CREDIT HEALTH AND
67-26 ACCIDENT INSURANCE, OR INVOLUNTARY UNEMPLOYMENT INSURANCE. (a) On
67-27 a loan made under this chapter that is subject to Subchapter E with
68-1 a cash advance of $100 or more, a lender may:
68-2 (1) offer or request that a borrower provide credit
68-3 life insurance and credit health and accident insurance as
68-4 additional protection for the loan; and
68-5 (2) offer involuntary unemployment insurance to the
68-6 borrower at the time the loan is made.
68-7 (b) A lender may not require that the borrower accept or
68-8 provide the insurance described by Subsection (a).
68-9 (c) On a secondary mortgage loan made under this chapter, a
68-10 lender may request or require that a borrower provide credit life
68-11 insurance and credit accident and health insurance as additional
68-12 protection for the loan.
68-13 Art. 3A.703. MAXIMUM AMOUNT OF INSURANCE COVERAGE. (a) At
68-14 any time the total amount of the policies of credit life insurance
68-15 in force on one borrower on one loan contract may not exceed the
68-16 greater of:
68-17 (1) the total amount repayable under the loan contract
68-18 if the loan is an irregular transaction; or
68-19 (2) the greater of the scheduled or actual amount of
68-20 unpaid indebtedness if the loan is a regular transaction.
68-21 (b) At any time the total amount of the policies of credit
68-22 accident and health insurance or involuntary unemployment insurance
68-23 in force on one borrower on one loan contract may not exceed the
68-24 total amount repayable under the loan contract, and the amount of
68-25 each periodic indemnity payment may not exceed the scheduled
68-26 periodic installment payment on the loan.
68-27 Art. 3A.704. INSURANCE NOTICE. (a) If insurance is
69-1 required on a loan made under this chapter, the lender shall give
69-2 to the borrower written notice that clearly and conspicuously
69-3 states that:
69-4 (1) insurance is required in connection with the loan;
69-5 and
69-6 (2) the borrower as an option may furnish the required
69-7 insurance coverage through an insurance policy that is in existence
69-8 and that is owned or controlled by the borrower or an insurance
69-9 policy obtained from an insurance company authorized to do business
69-10 in this state.
69-11 (b) If insurance requested or required on a loan made under
69-12 this chapter is sold or obtained by a lender at a premium or rate
69-13 of charge that is not fixed or approved by the commissioner of
69-14 insurance, the lender shall notify the borrower of that fact. If
69-15 notice is required under Subsection (a), the lender shall include
69-16 that fact in the notice required by Subsection (a).
69-17 (c) A notice required under this article may be:
69-18 (1) a separate writing delivered with the loan
69-19 contract; or
69-20 (2) a part of the loan contract.
69-21 Art. 3A.705. INSURANCE MAY BE FURNISHED BY BORROWER. (a)
69-22 If insurance is required on a loan made under this chapter, the
69-23 borrower may furnish the insurance coverage through an insurance
69-24 policy that is in existence and that is owned or controlled by the
69-25 borrower or an insurance policy obtained by the borrower from an
69-26 insurance company authorized to do business in this state.
69-27 (b) If insurance is required on a loan made under this
70-1 chapter and the insurance is sold or obtained by the lender at a
70-2 premium or rate of charge that is not fixed or approved by the
70-3 commissioner of insurance, the borrower has the option of
70-4 furnishing the required insurance under this article at any time
70-5 before the sixth day after the date of the loan.
70-6 Art. 3A.706. BORROWER'S FAILURE TO PROVIDE REQUIRED
70-7 INSURANCE. (a) If a borrower fails to obtain or maintain
70-8 insurance coverage required under a loan contract or requests the
70-9 lender to obtain that coverage, the lender may obtain substitute
70-10 insurance coverage that is substantially equivalent to or more
70-11 limited than the coverage originally required.
70-12 (b) If a loan is subject to Subchapter E, the lender may
70-13 obtain insurance to cover only the interest of the lender as a
70-14 secured party if the borrower does not request that the borrower's
70-15 interest be covered.
70-16 (c) Insurance obtained under this article must comply with
70-17 Articles 3A.707 and 3A.708.
70-18 (d) The lender may add the amount advanced by the lender for
70-19 insurance coverage obtained under this article to the unpaid
70-20 balance of the loan contract and may charge interest on that amount
70-21 from the time it is added to the unpaid balance until it is paid.
70-22 The rate of additional interest may not exceed the rate that the
70-23 loan contract would produce over its full term if each scheduled
70-24 payment were paid on the due date.
70-25 Art. 3A.707. REQUIREMENTS FOR INCLUDING INSURANCE CHARGE IN
70-26 CONTRACT. Insurance for which a charge is included in a loan
70-27 contract must be written:
71-1 (1) at lawful rates;
71-2 (2) in accordance with the Insurance Code; and
71-3 (3) by a company authorized to do business in this
71-4 state.
71-5 Art. 3A.708. FURNISHING OF INSURANCE DOCUMENT TO BORROWER.
71-6 If a lender obtains insurance for which a charge is included in the
71-7 loan contract, the lender, not later than the 30th day after the
71-8 date on which the loan contract is executed, shall deliver, mail,
71-9 or cause to be mailed to the borrower at the borrower's address
71-10 specified in the contract one or more policies or certificates of
71-11 insurance that clearly set forth:
71-12 (1) the amount of the premium;
71-13 (2) the kind of insurance provided;
71-14 (3) the coverage of the insurance; and
71-15 (4) all terms, including options, limitations,
71-16 restrictions, and conditions, of each insurance policy.
71-17 Art. 3A.709. LENDER'S DUTY IF INSURANCE IS ADJUSTED OR
71-18 TERMINATED. (a) If insurance for which a charge is included in or
71-19 added to the loan contract is canceled, adjusted, or terminated,
71-20 the lender shall:
71-21 (1) credit to the amount unpaid on the loan the amount
71-22 of the refund received by the lender for unearned insurance
71-23 premiums, less the amount of the refund that is applied to the
71-24 purchase by the lender of similar insurance; and
71-25 (2) if the amount to be credited under Subdivision (1)
71-26 is more than the unpaid balance, refund promptly to the borrower
71-27 the difference between those amounts.
72-1 (b) A cash refund is not required under this article if the
72-2 amount of the refund is less than $1.
72-3 Art. 3A.710. PAYMENT FOR INSURANCE FROM LOAN PROCEEDS. A
72-4 lender, including an officer, agent, or employee of the lender, who
72-5 accepts insurance under this subchapter as protection for a loan:
72-6 (1) may deduct the premium or identifiable charge for
72-7 the insurance from the proceeds of the loan; and
72-8 (2) shall pay the deducted amounts to the insurance
72-9 company writing the insurance.
72-10 Art. 3A.711. INSURANCE GAIN NOT INTEREST. Any gain, or
72-11 advantage to the lender or the lender's employee, officer,
72-12 director, agent, general agent, affiliate, or associate from
72-13 insurance under this subchapter or the provision or sale of
72-14 insurance under this subchapter is not additional interest or an
72-15 additional charge in connection with a loan made under this chapter
72-16 except as specifically provided by this chapter.
72-17 Art. 3A.712. ACTION UNDER SUBCHAPTER NOT SALE OF INSURANCE.
72-18 Arranging for insurance or collecting an identifiable charge as
72-19 authorized by this subchapter is not a sale of insurance.
72-20 Art. 3A.713. REQUIRED AGENT OR BROKER PROHIBITED. A lender
72-21 may not by any direct or indirect method require the purchase of
72-22 insurance from an agent or broker designated by the lender.
72-23 Art. 3A.714. DECLINATION OF EQUAL INSURANCE COVERAGE
72-24 PROHIBITED. A lender may not decline at any time existing
72-25 insurance coverage providing substantially equal benefits that
72-26 comply with this subchapter.
72-27 Art. 3A.715. EFFECT OF UNAUTHORIZED INSURANCE CHARGE. (a)
73-1 If a lender charges for insurance an amount that is not authorized
73-2 under this subchapter, the lender:
73-3 (1) is not entitled to collect an amount for insurance
73-4 or interest on an amount for insurance; and
73-5 (2) shall refund to the borrower or credit to the
73-6 borrower's account all amounts collected for insurance and interest
73-7 collected on those amounts.
73-8 (b) An overcharge that results from an accidental or bona
73-9 fide error may be corrected as provided by Article 8.01.
73-10 (c) The remedy provided by this article is not exclusive of
73-11 any other remedy or penalty provided by this subtitle.
73-12 Art. 3A.716. NONFILING INSURANCE. (a) Instead of charging
73-13 fees for the filing, recording, and releasing of a document
73-14 securing a loan to which Subchapter E applies, an authorized lender
73-15 may include in the loan contract a charge for a nonfiling insurance
73-16 premium.
73-17 (b) The amount of a charge under Subsection (a) may not
73-18 exceed the amount of fees authorized for filing and recording an
73-19 original financing statement in the standard form prescribed by the
73-20 secretary of state.
73-21 (c) A lender may receive an amount authorized under this
73-22 article only if the lender purchases nonfiling insurance in
73-23 connection with the loan contract.
73-24 (d) A lender is not required to furnish to a borrower a
73-25 policy or certificate of insurance evidencing nonfiling insurance.
73-26 SUBCHAPTER J. AUTHORIZED LENDER'S DUTIES AND AUTHORITY
73-27 Art. 3A.801. DELIVERY OF INFORMATION TO BORROWER. (a) When
74-1 a loan is made under this chapter, the lender shall deliver to the
74-2 borrower, or to one borrower if there is more than one, a copy of
74-3 each document signed by the borrower, including the note or loan
74-4 contract, and a written statement in English that contains:
74-5 (1) the names and addresses of the borrower and the
74-6 lender; and
74-7 (2) any type of insurance for which a charge is
74-8 included in the loan contract and the charge to the borrower for
74-9 the insurance.
74-10 (b) If the note or loan contract shows the information
74-11 required by Subsection (a), the written statement is not required.
74-12 Art. 3A.802. RECEIPT FOR CASH PAYMENT. A lender shall give
74-13 a receipt to a person making a cash payment on a loan.
74-14 Art. 3A.803. ACCEPTANCE OF PREPAYMENT. At any time during
74-15 regular business hours, the lender shall accept prepayment of a
74-16 loan in full or, if the amount tendered is less than the amount
74-17 required to prepay the loan in full, prepayment of an amount equal
74-18 to one or more full installments.
74-19 Art. 3A.804. RETURN OF INSTRUMENTS TO BORROWER ON REPAYMENT.
74-20 Within a reasonable time after a loan is repaid in full or an
74-21 open-end account is terminated according to the terms of the
74-22 contract, a lender shall cancel and return to a borrower any
74-23 instrument, including a note, assignment, security agreement, or
74-24 mortgage, or pledged property that:
74-25 (1) secured the loan; and
74-26 (2) does not secure another indebtedness of the
74-27 borrower to the lender.
75-1 Art. 3A.805. AGREEMENT FOR MORE THAN ONE LOAN OR CASH
75-2 ADVANCE. (a) A lender and a borrower may enter an agreement under
75-3 which one or more loans or cash advances are from time to time made
75-4 to or for the account of the borrower.
75-5 (b) An agreement under this article may provide for a
75-6 maximum loan charge on the unpaid principal amounts from time to
75-7 time outstanding at a rate that does not exceed the rate that
75-8 produces the maximum interest charge computed under Article 3A.301
75-9 for an equivalent loan amount.
75-10 (c) An agreement under this article must be written and
75-11 signed by the lender and borrower.
75-12 (d) An agreement under this article must contain:
75-13 (1) the date of the agreement;
75-14 (2) the name and address of each borrower; and
75-15 (3) the name and address of the lender.
75-16 (e) If a charge for insurance coverage is to be included in
75-17 a loan contract, an agreement under this article must clearly set
75-18 forth a simple statement of the amount of the charge or the method
75-19 by which the charge is to be computed.
75-20 (f) The lender shall deliver a copy of an agreement under
75-21 this article to the borrower.
75-22 (g) The commissioner may prescribe monthly rates of charge
75-23 that produce the maximum interest charge computed under Article
75-24 3A.301 for use under Subsection (b) of this article.
75-25 Art. 3A.806. AGREEMENT TO MODIFY TERM OF SECONDARY MORTGAGE
75-26 LOAN CONTRACT. (a) A lender and a borrower may enter into an
75-27 agreement under which a term of a secondary mortgage loan contract
76-1 is amended, restated, or rescheduled.
76-2 (b) An agreement under this article must be written and
76-3 signed by the lender and borrower.
76-4 (c) An agreement under this article must contain:
76-5 (1) the date of the agreement;
76-6 (2) the name and address of the lender; and
76-7 (3) the name and address of each borrower.
76-8 (d) The lender shall deliver a copy of an agreement under
76-9 this article to the borrower.
76-10 SUBCHAPTER K. PROHIBITIONS ON AUTHORIZED LENDER
76-11 Art. 3A.851. OBLIGATION UNDER MORE THAN ONE CONTRACT. (a)
76-12 An authorized lender may not induce or permit a person or a husband
76-13 and wife to be directly or indirectly obligated under more than one
76-14 loan contract at any time for the purpose or with the effect of
76-15 obtaining an amount of interest that is more than the amount of
76-16 interest that is otherwise authorized under this chapter for a loan
76-17 of that aggregate amount with a maximum interest charge computed
76-18 under:
76-19 (1) Article 3A.301(a);
76-20 (2) Article 3A.402; or
76-21 (3) both Articles 3A.301(a) and 3A.402.
76-22 (b) Subsection (a) does not prohibit the purchase of a bona
76-23 fide retail installment contract or revolving charge agreement of a
76-24 borrower for the purchase of goods or services.
76-25 (c) A lender who purchases all or substantially all of the
76-26 loan contracts of another authorized lender and who at the time of
76-27 purchase has a loan contract with a borrower whose loan contract is
77-1 purchased may collect principal and authorized charges according to
77-2 the terms of each loan contract.
77-3 Art. 3A.852. AMOUNT AUTHORIZED. (a) A lender may not
77-4 directly or indirectly charge, contract for, or receive an amount
77-5 that is not authorized under this chapter in connection with a loan
77-6 to which this chapter applies. This includes, but is not limited
77-7 to, any fees, compensation, bonuses, commissions, brokerage,
77-8 discounts, expenses and every other charge of any nature
77-9 whatsoever, whether of the types listed herein or not.
77-10 (b) On a loan subject to Subchapter E or a secondary
77-11 mortgage loan subject to Subchapter G a lender may assess and
77-12 collect from the borrower an amount incurred by the lender for:
77-13 (1) court costs;
77-14 (2) attorney's fees assessed by a court;
77-15 (3) a fee authorized by law for filing, recording, or
77-16 releasing in a public office a security for a loan;
77-17 (4) a reasonable amount spent for repossessing,
77-18 storing, preparing for sale, or selling any security;
77-19 (5) a fee for recording a lien on or transferring a
77-20 certificate of title to a motor vehicle offered as security for a
77-21 loan made under this chapter; or
77-22 (6) a premium or an identifiable charge received in
77-23 connection with the sale of insurance authorized under this
77-24 chapter.
77-25 Art. 3A.853. SECURITY FOR LOAN. (a) A lender may not take
77-26 as security for a loan made under this chapter an assignment of
77-27 wages.
78-1 (b) A lender may not take as security for a loan made under
78-2 Subchapter E or Subchapter F a lien on real property other than a
78-3 lien created by law on the recording of an abstract of judgment.
78-4 (c) A lender may take as security for a loan made under
78-5 Subchapter E or Subchapter F an assignment of:
78-6 (1) a warrant drawn against a state fund; or
78-7 (2) a claim against a state fund or a state agency.
78-8 Art. 3A.854. CONFESSION OF JUDGMENT; POWER OF ATTORNEY. A
78-9 lender may not take a confession of judgment or a power of attorney
78-10 authorizing the lender or a third person to confess judgment or to
78-11 appear for a borrower in a judicial proceeding.
78-12 Art. 3A.855. DISCLOSURE OF AMOUNT FINANCED AND SCHEDULE OF
78-13 PAYMENTS. A lender may not take a promise to pay or loan
78-14 obligation that does not disclose the amount financed and the
78-15 schedule of payments, except for an open-end account.
78-16 Art. 3A.856. INSTRUMENT WITH BLANK PROHIBITED. A lender may
78-17 not take an instrument in which a blank is left to be filled in
78-18 after the loan is made.
78-19 Art. 3A.857. WAIVER OF BORROWER'S RIGHT PROHIBITED. A
78-20 lender may not take an instrument in which a borrower waives any
78-21 right accruing to the borrower under this chapter.
78-22 Art. 3A.858. MAXIMUM LOAN TERM. A lender may not enter a
78-23 loan contract under Article 3A.301(a) under which the borrower
78-24 agrees to make a scheduled payment of principal more than:
78-25 (1) 37 calendar months after the date on which the
78-26 contract is made, if the contract is for a cash advance of $1,500
78-27 or less;
79-1 (2) 49 calendar months after the date on which the
79-2 contract is made, if the contract is for a cash advance of more
79-3 than $1,500 but not more than $3,000; or
79-4 (3) 60 months after the date on which the contract is
79-5 made, if the contract is for a cash advance of more than $3,000.
79-6 SUBCHAPTER L. ADMINISTRATION OF CHAPTER
79-7 Art. 3A.901. ADOPTION OF RULES. (a) The Finance Commission
79-8 of Texas may adopt rules to enforce this chapter.
79-9 (b) The commissioner shall recommend proposed rules to the
79-10 Finance Commission of Texas.
79-11 (c) A rule shall be entered in a permanent book. The book
79-12 is a public record and shall be kept in the office of the
79-13 commissioner.
79-14 Art. 3A.902. EXAMINATION OF LENDERS; ACCESS TO RECORDS. (a)
79-15 The commissioner or the commissioner's representative shall, at the
79-16 times the commissioner considers necessary:
79-17 (1) examine each place of business of each authorized
79-18 lender; and
79-19 (2) investigate the lender's transactions, including
79-20 loans, and records, including books, accounts, papers, and
79-21 correspondence, to the extent the transactions and records pertain
79-22 to the business regulated under this chapter.
79-23 (b) The lender shall:
79-24 (1) give the commissioner or the commissioner's
79-25 representative free access to the lender's office, place of
79-26 business, files, safes, and vaults; and
79-27 (2) allow the commissioner or the commissioner's
80-1 authorized representative to make a copy of an item that may be
80-2 investigated under Subsection (a)(2).
80-3 (c) During an examination the commissioner or the
80-4 commissioner's representative may administer oaths and examine any
80-5 person under oath on any subject pertinent to a matter that the
80-6 commissioner is authorized or required to consider, investigate, or
80-7 secure information about under this chapter.
80-8 (d) Information obtained under this article is confidential.
80-9 (e) A lender's violation of Subsection (b) is a ground for
80-10 the suspension or revocation of the lender's license.
80-11 Art. 3A.903. GENERAL INVESTIGATION. (a) To discover a
80-12 violation of this chapter or to obtain information required under
80-13 this chapter, the commissioner or the commissioner's representative
80-14 may investigate the records, including books, accounts, papers, and
80-15 correspondence, of a person, including an authorized lender, whom
80-16 the commissioner has reasonable cause to believe is violating this
80-17 chapter regardless of whether the person claims to not be subject
80-18 to this chapter.
80-19 (b) For the purposes of this article, a person who
80-20 advertises, solicits, or otherwise represents that the person is
80-21 willing to make a loan with a cash advance less than or equal to
80-22 the amount computed under Article 2.08 using the reference base
80-23 amount of $2,500 is presumed to be engaged in the business
80-24 described by Article 3A.101.
80-25 Art. 3A.904. CERTIFICATE; CERTIFIED DOCUMENT. On
80-26 application by any person and on payment of any associated cost,
80-27 the commissioner shall furnish under the commissioner's seal and
81-1 signed by the commissioner or an assistant of the commissioner:
81-2 (1) a certificate of good standing; or
81-3 (2) a certified copy of a license, rule, or order.
81-4 Art. 3A.905. TRANSCRIPT OF HEARING: PUBLIC. The transcript
81-5 of a hearing held by the commissioner under this chapter is a
81-6 public record.
81-7 Art. 3A.906. APPOINTMENT OF AGENT. (a) An authorized
81-8 lender shall maintain on file with the commissioner a written
81-9 appointment of a resident of this state as the lender's agent for
81-10 service of all judicial or other process or legal notice, unless
81-11 the lender has appointed an agent under another statute of this
81-12 state.
81-13 (b) If an authorized lender does not comply with this
81-14 article, service of all judicial or other process or legal notice
81-15 may be made on the commissioner.
81-16 Art. 3A.907. PAYMENT OF EXAMINATION COSTS AND ADMINISTRATION
81-17 EXPENSES. An authorized lender shall pay to the commissioner an
81-18 amount assessed by the commissioner to cover the direct and
81-19 indirect cost of an examination of the lender under Article 3A.902
81-20 and a proportionate share of general administrative expense.
81-21 Art. 3A.908. AUTHORIZED LENDER'S RECORDS. (a) An
81-22 authorized lender shall maintain records of each loan made under
81-23 this chapter as is necessary to enable the commissioner to
81-24 determine whether the lender is complying with this chapter.
81-25 (b) An authorized lender shall keep the record, make it
81-26 available in this state, or, if the lender makes, transacts, or
81-27 negotiates loans principally by mail, keep the records or make them
82-1 available at the lender's principal place of business, until the
82-2 later of:
82-3 (1) the fourth anniversary of the date of the loan; or
82-4 (2) the second anniversary of the date on which the
82-5 final entry is made in the record.
82-6 (c) The records described by Subsection (a) must be prepared
82-7 in accordance with accepted accounting practices.
82-8 (d) The commissioner shall accept a lender's system of
82-9 records if the system discloses the information reasonably required
82-10 under Subsection (a).
82-11 (e) An authorized lender shall keep all obligations signed
82-12 by borrowers at an office in this state designated by the lender
82-13 unless an obligation is transferred under an agreement that gives
82-14 the commissioner access to the obligation.
82-15 Art. 3A.909. ANNUAL REPORT. (a) Each year, not later than
82-16 May 1, or a subsequent date set by the commissioner, an authorized
82-17 lender shall file with the commissioner a report that contains
82-18 relevant information required by the commissioner concerning the
82-19 business and operations during the preceding calendar year for each
82-20 office of the lender in this state where business is conducted
82-21 under this chapter.
82-22 (b) A report under this article must be:
82-23 (1) under oath; and
82-24 (2) in the form prescribed by the commissioner.
82-25 (c) A report under this article is confidential.
82-26 (d) Annually the commissioner shall prepare and publish a
82-27 consolidated analysis and recapitulation of reports filed under
83-1 this article.
83-2 Art. 3A.910. CONDUCTING ASSOCIATED BUSINESS. An authorized
83-3 lender may conduct business under this chapter in an office, office
83-4 suite, room, or place of business in which any other business is
83-5 conducted or in combination with any other business unless the
83-6 commissioner:
83-7 (1) after a hearing, finds that the lender's
83-8 conducting of the other business in that office, office suite,
83-9 room, or place of business has concealed evasions of this chapter;
83-10 and
83-11 (2) orders the lender in writing to desist from that
83-12 conduct in that office, office suite, room, or place of business.
83-13 SECTION 3. Article 2.02A(1), Title 79, Revised Statutes
83-14 (Article 5069-2.02A, Vernon's Texas Civil Statutes), is amended to
83-15 read as follows:
83-16 (1) The Consumer Credit Commissioner shall enforce Chapters
83-17 2, 3A, [3, 4, 5,] 6, 6A, 7, 8, 9, and 15 of this title and the
83-18 Texas Pawnshop Act (Article 5069-51.01 et seq., Vernon's Texas
83-19 Civil Statutes) in person or through assistant commissioners or any
83-20 examiner or employee.
83-21 SECTION 4. Article 2.03(1), Title 79, Revised Statutes
83-22 (Article 5069-2.03, Vernon's Texas Civil Statutes), is amended to
83-23 read as follows:
83-24 (1) The investigative and enforcement authority under this
83-25 Article applies only to Chapters 2, 3A, [3, 4, 5,] 6, 6A, 7, 8, 9,
83-26 and 15 of this title and the Texas Pawnshop Act (Article 5069-51.01
83-27 et seq., Vernon's Texas Civil Statutes). Upon receipt of written
84-1 complaint or other reasonable cause to believe that any provision
84-2 of those statutes are being violated by any person, the Consumer
84-3 Credit Commissioner may request such person to furnish information
84-4 in regard to a specific loan or retail transaction or business
84-5 practice alleged to be in violation of those statutes.
84-6 SECTION 5. Article 2.03A(l), Title 79, Revised Statutes
84-7 (Article 5069-2.03A, Vernon's Texas Civil Statutes), is amended to
84-8 read as follows:
84-9 (l) When the judgment of the court becomes final, the court
84-10 shall proceed under this subsection. If the person paid the amount
84-11 of the penalty and if that amount is reduced or is not upheld by
84-12 the court, the court shall order that the appropriate amount plus
84-13 accrued interest be remitted to the person. The rate of the
84-14 interest is the rate authorized by Chapter 1E [Article 1.05] of
84-15 this title, and the interest shall be paid for the period beginning
84-16 on the date the penalty was paid and ending on the date the penalty
84-17 is remitted.
84-18 SECTION 6. Article 2.07, Title 79, Revised Statutes (Article
84-19 5069-2.07, Vernon's Texas Civil Statutes), is amended to read as
84-20 follows:
84-21 Art. 2.07. CREDIT AND LOANS TO INDIVIDUALS. No authorized
84-22 lender under Chapter 3A [Chapter 3] of this Title or other person
84-23 involved in transactions subject to this Title may deny an
84-24 individual who has the capacity to contract credit or loans in his
84-25 or her name, or restrict or limit the credit or loan granted on the
84-26 basis of sex, race, color, religion, national origin, marital
84-27 status, or age or because all or part of the individual's income
85-1 derives from a public assistance program in the form of social
85-2 security or supplemental security income, or the individual has in
85-3 good faith exercised any right under the Consumer Credit Protection
85-4 Act (15 U.S.C. Section 1601 et seq.; 18 U.S.C. Section 891 et
85-5 seq.). In interpreting this section, the courts and administrative
85-6 agencies shall be guided by the federal Equal Credit Opportunity
85-7 Act and regulations thereunder and interpretations thereof by the
85-8 Federal Reserve Board to the extent that that Act and those
85-9 regulations and interpretations pertain to conduct prohibited by
85-10 this section.
85-11 SECTION 7. Article 2.08(1), Title 79, Revised Statutes
85-12 (Article 5069-2.08, Vernon's Texas Civil Statutes), is amended to
85-13 read as follows:
85-14 (1) The dollar amount of the ceilings on the cash advance,
85-15 and the brackets establishing ranges of cash advances or balances
85-16 to which certain rates of charges apply in this Title, except the
85-17 brackets in Articles 3A.401, 3A.402, and 3A.858 [Section (1),
85-18 Article 3.16; Section (2), Article 3.16; Article 3.21]; Section
85-19 (9)(e), Article 6.02; Section (12)(a), Article 6.02; and Article
85-20 15.02, are changed as of the effective date of this Act and shall
85-21 be, subject to Subsections (a) and (b), Section (2) of this
85-22 Article, changed from time to time in accordance with the changes
85-23 in the Consumer Price Index for Urban Wage Earners and Clerical
85-24 Workers: U.S. City Average, All Items, 1967=100, compiled by the
85-25 Bureau of Labor Statistics, United States Department of Labor, and
85-26 referred to in this Article as the Index. The Index for December
85-27 1967 is the Reference Base Index period for the purpose of
86-1 determining the adjustment to be made in the rate brackets and
86-2 ceilings.
86-3 SECTION 8. Article 6.01(q), Title 79, Revised Statutes
86-4 (Article 5069-6.01, Vernon's Texas Civil Statutes), is amended to
86-5 read as follows:
86-6 (q) "Credit card issuer" means a person who issues a
86-7 card, plate, or other identification device used to obtain goods or
86-8 services under a retail credit card arrangement. The term does not
86-9 include any person who honors the credit card but did not issue it,
86-10 nor any bank, savings and loan association, credit union, person
86-11 licensed to do business under the provisions of Chapter 3A [3 or 4]
86-12 of this Subtitle, nor any other person who is regularly and
86-13 principally engaged in the business of lending money to persons for
86-14 personal, family, and household purposes.
86-15 SECTION 9. Article 6.02(15), Title 79, Revised Statutes
86-16 (Article 5069-6.02, Vernon's Texas Civil Statutes), is amended to
86-17 read as follows:
86-18 (15) The dollar amount of the rate brackets prescribed by
86-19 Section (9)(a) of this Article are subject to adjustment from time
86-20 to time under Article 2.08 of this Title. As an alternative to the
86-21 rates and amounts of time price differential provided by Section
86-22 (9)(a) of this Article, the parties may agree to any rate or amount
86-23 of time price differential not exceeding a rate or amount
86-24 authorized by Chapter 1D [Article 1.04] of this Title.
86-25 SECTION 10. Article 6.03(5), Title 79, Revised Statutes
86-26 (Article 5069-6.03, Vernon's Texas Civil Statutes), is amended to
86-27 read as follows:
87-1 (5) The dollar amount of the rate brackets in this Article
87-2 is subject to adjustment from time to time under Article 2.08 of
87-3 this Title. As an alternative to the rates or amounts of time
87-4 price differential provided by Section (3) of this Article, the
87-5 parties may agree to any rate or amount of time price differential
87-6 not exceeding a rate or amount authorized by Chapter 1D [Article
87-7 1.04] of this Title or to the rate or amount of the market
87-8 competitive rate ceiling published by the Consumer Credit
87-9 Commissioner as provided in Section (6) of this Article. The
87-10 provisions of Chapter 1D [Article 1.04] of this Title applicable to
87-11 open-end accounts apply to this Article.
87-12 SECTION 11. Articles 6.03(6)(a) and (e), Title 79, Revised
87-13 Statutes (Article 5069-6.03, Vernon's Texas Civil Statutes), are
87-14 amended to read as follows:
87-15 (a) The Consumer Credit Commissioner shall cause to be
87-16 published in the Texas Register, in its first publication following
87-17 September 1 of each year, the market competitive rate ceiling.
87-18 This ceiling shall be effective on the following October 1 for a
87-19 period of one year. The ceiling shall be based on an annual
87-20 percentage rate, whether it is deemed to be interest, time price
87-21 differential, or other similar charge permitted by the laws of any
87-22 state, imposed on a person residing in Texas by a creditor in any
87-23 other state extending credit by the use of a retail charge
87-24 agreement or a credit card. The rate of time price differential
87-25 for the market competitive rate ceiling shall not exceed the
87-26 ceiling in Article 1D.009(d) [Section (c) of Article 1.11] of this
87-27 Title or be below the minimum ceiling in Article 1D.009(a) [Section
88-1 (b)(1) of Article 1.04] of this Title.
88-2 (e) A retail charge agreement of the parties providing
88-3 for a computation under this Article or Chapter 1D [Article 1.04]
88-4 of this Title may be amended pursuant to Article 1D.103 [Section
88-5 (i) of Article 1.04] of this Title to implement the market
88-6 competitive rate ceiling or change a rate or amount. Any holder
88-7 electing to implement the market competitive rate ceiling as to an
88-8 account existing on the effective date of this Act must allow the
88-9 obligor to pay the balance then existing at the rate previously
88-10 agreed to and at the minimum payment terms previously agreed to.
88-11 For this purpose, payments on an account may be applied by the
88-12 holder to the balance existing on the account on the effective date
88-13 of this Act prior to applying them to credit extended after the
88-14 effective date of this Act. The ceiling under this Section may be
88-15 implemented at any time and shall remain in effect until an
88-16 alternative ceiling is implemented. An alternative ceiling may be
88-17 implemented only at the end of a ceiling year as set out in
88-18 Subsection (a) of this Section.
88-19 SECTION 12. Article 6.05, Title 79, Revised Statutes
88-20 (Article 5069-6.05, Vernon's Texas Civil Statutes), is amended to
88-21 read as follows:
88-22 Art. 6.05. PROHIBITED PROVISIONS. No retail installment
88-23 contract or retail charge agreement shall:
88-24 (1) Provide that the holder may accelerate the
88-25 maturity of any part or all of the amount owing thereunder unless
88-26 (a) the buyer is in default in the performance of any of his
88-27 obligations, or (b) the holder in good faith believes that the
89-1 prospect of payment or performance is impaired;
89-2 (2) Contain a power of attorney to confess judgment,
89-3 or an assignment of wages;
89-4 (3) Authorize the seller or holder or other person
89-5 acting on his behalf to enter upon the buyer's premises unlawfully
89-6 or to commit any breach of the peace in the repossession of goods;
89-7 (4) Provide for a waiver of the buyer's rights of
89-8 action against the seller or holder or other person acting therefor
89-9 for any illegal act committed in the collection of payments under
89-10 the contract or agreement or in the repossession of goods;
89-11 (5) Contain any provision by which the buyer executes
89-12 a power of attorney appointing the seller or holder or other person
89-13 acting on his behalf, as the buyer's agent in the repossession of
89-14 goods;
89-15 (6) Provide that the buyer agrees not to assert
89-16 against the seller any claim or defense arising out of the sale;
89-17 (7) Provide for or grant a first lien upon real estate
89-18 to secure such obligation, except, (a) such lien as is created by
89-19 law upon the recording of an abstract of judgment or (b) such lien
89-20 as is provided for or granted by a contract or series of contracts
89-21 for the sale or construction and sale of a structure to be used as
89-22 a residence so long as the time price differential does not exceed
89-23 an annual percentage rate permitted under either this Chapter or
89-24 Chapter 1D [Article 1.04] of this Title.
89-25 SECTION 13. Article 6.12, Title 79, Revised Statutes
89-26 (Article 5069-6.12, Vernon's Texas Civil Statutes), is amended to
89-27 read as follows:
90-1 Art. 6.12. Rates for prepaid funeral benefits regulated by
90-2 Article 548b, Vernon's Texas Civil Statutes. Prepaid funeral
90-3 benefits regulated by Article 548b, Vernon's Texas Civil Statutes,
90-4 may be financed only at rates authorized by Chapter 1D [Article
90-5 1.04] of this title.
90-6 SECTION 14. Article 6.13, Title 79, Revised Statutes
90-7 (Article 5069-6.13, Vernon's Texas Civil Statutes), is amended to
90-8 read as follows:
90-9 Art. 6.13. Rates for medical and dental services. Medical
90-10 or dental services may be financed only at rates authorized by
90-11 Chapter 1D [Article 1.04] of this title.
90-12 SECTION 15. Article 6A.03(7), Title 79, Revised Statutes
90-13 (Article 5069-6A.03, Vernon's Texas Civil Statutes), is amended to
90-14 read as follows:
90-15 (7) As an alternative to the rates and amounts of time price
90-16 differential that may be charged under this section, the parties
90-17 may agree to any rate or amount of time price differential not
90-18 exceeding a rate or amount authorized by Chapter 1D [Article 1.04]
90-19 of this title.
90-20 SECTION 16. Article 6A.16(b)(1), Title 79, Revised Statutes
90-21 (Article 5069-6A.16, Vernon's Texas Civil Statutes), is amended to
90-22 read as follows:
90-23 (1) Each creditor governed by this chapter who is not
90-24 a credit union or an authorized lender under Chapter 3A [3] of this
90-25 title shall register with the Office of Consumer Credit
90-26 Commissioner. Each creditor shall pay an annual fee of $15 for
90-27 each location at which credit transactions subject to this chapter
91-1 are originated, serviced, or collected. The commissioner by rule
91-2 may establish procedures to facilitate the registration and
91-3 collection of fees, including rules staggering the due dates of the
91-4 fees throughout the year. If a creditor fails to renew the
91-5 creditor's registration, the commissioner shall, not later than 30
91-6 days after the expiration of the registration, notify the creditor
91-7 of the expiration, and of the procedures applicable to renewal. A
91-8 registration renewal is timely if filed with the commissioner,
91-9 together with the annual registration fee, not later than 30 days
91-10 after receipt of notice of expiration. A creditor who fails to
91-11 renew timely as required by this section is subject to the
91-12 penalties set forth in Section (2) of this Article.
91-13 SECTION 17. Article 7.03(7), Title 79, Revised Statutes
91-14 (Article 5069-7.03, Vernon's Texas Civil Statutes), is amended to
91-15 read as follows:
91-16 (7) As an alternative to the time price differential
91-17 authorized by Section (1) of this Article, the parties may agree to
91-18 any rate or amount of time price differential not exceeding a rate
91-19 or amount authorized by Chapter 1D [Article 1.04] of this Title.
91-20 SECTION 18. Article 7.11(1), Title 79, Revised Statutes
91-21 (Article 5069-7.11, Vernon's Texas Civil Statutes), is amended to
91-22 read as follows:
91-23 (1) Each holder governed by this chapter who is not a credit
91-24 union or an authorized lender under Chapter 3A [3] of this title
91-25 shall register with the Office of Consumer Credit Commissioner.
91-26 Each holder shall pay an annual fee of $25 for each location at
91-27 which credit transactions subject to this chapter are originated,
92-1 serviced, or collected. The commissioner by rule may establish
92-2 procedures to facilitate the registration and collection of fees,
92-3 including rules staggering the due dates of the fees throughout the
92-4 year. If a holder or seller fails to renew the holder's or
92-5 seller's registration, the commissioner shall, not later than 30
92-6 days after the expiration of the registration, notify the holder or
92-7 seller of the expiration, and of the procedures applicable to
92-8 renewal. A registration renewal is timely if filed with the
92-9 commissioner, together with the annual registration fee, not later
92-10 than 30 days after receipt of notice of expiration. A holder or
92-11 seller who fails to renew timely as required by this section is
92-12 subject to the penalties set forth in Section (2) of this Article.
92-13 SECTION 19. Subsection (a), Article 8.01, Title 79, Revised
92-14 Statutes (Article 5069-8.01, Vernon's Texas Civil Statutes), is
92-15 amended to read as follows:
92-16 (a)(1) [(a)] Any person who violates this Subtitle by
92-17 contracting for, charging or receiving interest or[,] time price
92-18 differential [or other charges] which is [are] greater than the
92-19 amount authorized by this Subtitle, shall forfeit to the obligor
92-20 twice the amount of interest or time price differential [and
92-21 default and deferment charges] contracted for, charged or received,
92-22 and reasonable attorneys' fees fixed by the court.
92-23 (2) Any person who violates this Subtitle by
92-24 contracting for, charging, or receiving a charge, other than
92-25 interest or time price differential, which is greater than the
92-26 amount authorized by this Subtitle, shall forfeit to the obligor:
92-27 (A) the greater of:
93-1 (i) three times the amount of the
93-2 difference between the amount of the other charge contracted for,
93-3 charged or received, and the appropriate amount authorized by this
93-4 Subtitle; or
93-5 (ii) $2,000 or 20 percent of the principal
93-6 balance, whichever is less; and
93-7 (B) reasonable attorney's fees fixed by the
93-8 court.
93-9 SECTION 20. Article 8.01(i), Title 79, Revised Statutes
93-10 (Article 5069-8.01, Vernon's Texas Civil Statutes), is amended to
93-11 read as follows:
93-12 (i) Any person who has or obtains a registration or license
93-13 required by this Title, which registration or license was obtained
93-14 at any time after the date on which the registration or license was
93-15 required, may pay to the Consumer Credit Commissioner all
93-16 registration or license fees that should have been paid pursuant to
93-17 this Title for any and all prior years, plus a late filing fee
93-18 pursuant to this section. In the case of a person who has or
93-19 obtains a registration, the late filing fee shall be $250 except
93-20 that, if the person renews a registration within 30 days after the
93-21 due date, there shall be no penalty. If a person pays the required
93-22 registration fees for the prior periods and the late filing fee,
93-23 the person shall be deemed for all purposes to have had the
93-24 required registration for the periods for which the registration
93-25 fees have been paid. In the case of a person who has or obtains a
93-26 license, the late filing fee shall be $10,000 except that if the
93-27 person previously had a license and the prior license was in good
94-1 standing at the time of its expiration, and the person renews such
94-2 license within 180 days of its expiration, the late filing fee
94-3 shall be $1,000. If a person renews an expired license by payment
94-4 of the license and late filing fees, the person shall be deemed for
94-5 all purposes to have held the required license as if it had not
94-6 expired. If a person has or obtains a license and pays the
94-7 required license fees for prior periods and the late filing fee,
94-8 the person shall be deemed for all purposes to have had the
94-9 required license for such periods but only as to loans as to which
94-10 the person has not contracted for, charged, or received interest in
94-11 excess of that which would be allowed under Chapter 1D [Article
94-12 1.04(a) as modified by Article 1.04(b)] of this Title. A person
94-13 who is deemed to have had a registration or license pursuant to
94-14 this section shall not be subject to any liability, forfeiture, or
94-15 penalty under this Title or other law, other than as set forth in
94-16 this section, resulting from or relating to the fact that the
94-17 person did not have the registration or license at or during the
94-18 earlier periods for which the required registration or license fees
94-19 and late filing fee, as provided in this section, have since been
94-20 paid. The acquisition of the registration or license and payment
94-21 of the filing fees and late filing fee by a person shall also inure
94-22 to the benefit of that person's employees, agents, employers,
94-23 representatives, predecessors, successors, and assigns but not to
94-24 the benefit of any other person who should have been licensed under
94-25 this Title.
94-26 SECTION 21. Article 8.02, Title 79, Revised Statutes
94-27 (Article 5069-8.02, Vernon's Texas Civil Statutes), is amended to
95-1 read as follows:
95-2 Art. 8.02. CONTRACTING FOR, CHARGING OR RECEIVING INTEREST
95-3 OR[,] TIME PRICE DIFFERENTIAL [OR OTHER CHARGES] IN EXCESS OF
95-4 DOUBLE THE AMOUNT AUTHORIZED. Any person who violates this
95-5 Subtitle by contracting for, charging or receiving interest or[,]
95-6 time price differential [or other charges] which is [are] in the
95-7 aggregate in excess of double the total amount of interest or[,]
95-8 time price differential [and other charges] authorized by this
95-9 Subtitle shall forfeit to the obligor as an additional penalty all
95-10 principal or principal balance, as well as all interest or time
95-11 price differential, [and all other charges,] and shall pay
95-12 reasonable attorneys' fees actually incurred by the obligor in
95-13 enforcing the provisions of this Article; provided further that any
95-14 such person violating provisions of this Article shall be guilty of
95-15 a misdemeanor and upon conviction thereof shall be punished by a
95-16 fine of not more than One Hundred Dollars. Each contract or
95-17 transaction in violation of this Article shall constitute a
95-18 separate offense punishable hereunder.
95-19 SECTION 22. Article 8.03, Title 79, Revised Statutes
95-20 (Article 5069-8.03, Vernon's Texas Civil Statutes), is amended to
95-21 read as follows:
95-22 Art. 8.03. ENGAGING IN LENDING BUSINESS WITHOUT LICENSE. In
95-23 addition to the foregoing penalties, if applicable, any person
95-24 engaging in any business under the scope of Chapter 3A [Chapter 3,
95-25 4, 5,] or 15 of this Title without first securing a license
95-26 provided, or without the authorization prescribed, in such Chapter
95-27 shall be guilty of a misdemeanor and upon conviction thereof shall
96-1 be punishable by a fine of not more than One Thousand Dollars, and
96-2 each such loan made without the authority granted by such license
96-3 shall constitute a separate offense punishable hereunder; and in
96-4 addition such person shall forfeit all principal and charges
96-5 contracted for or collected on each such loan, and shall pay
96-6 reasonable attorneys' fees incurred by the obligor.
96-7 SECTION 23. Article 15.01(i), Title 79, Revised Statutes
96-8 (Article 5069-15.01, Vernon's Texas Civil Statutes), is amended to
96-9 read as follows:
96-10 (i) "Licensee" means the holder of a license issued
96-11 pursuant to Chapter 3A [3 of Subtitle 2] of this Title 79.
96-12 SECTION 24. Articles 15.02(d) and (e), Title 79, Revised
96-13 Statutes (Article 5069-15.02, Vernon's Texas Civil Statutes), are
96-14 amended to read as follows:
96-15 (d) Notwithstanding Chapter 1D [Article 1.04] of this Title
96-16 or any other provision of law, on any open-end account authorized
96-17 under Article 3A.805 [3.15(4), 4.01(4)], 15.01(k), or 15.01(l) of
96-18 this Title, pursuant to which credit card transactions [as defined
96-19 in Article 1.01(g) of this Title] may be made or in connection with
96-20 which account a merchant discount [as defined in Article 1.01(h) of
96-21 this Title] is imposed or received by the creditor, the rate of
96-22 interest from time to time in effect on such account is subject to
96-23 and may not exceed the quarterly ceiling from time to time in
96-24 effect as computed pursuant to Chapter 1D [Article 1.04] of this
96-25 Title and as further limited by this section, and the ceiling on
96-26 such account is subject to quarterly adjustment, which adjustment
96-27 shall be made at the option of the creditor either on the quarterly
97-1 calendar dates set out in Article 1D.008 [1.04(d)] of this Title or
97-2 on the first day of the first billing cycle of an account
97-3 immediately following said quarterly calendar dates. If a
97-4 computation of the quarterly ceiling under Chapter 1D [Article
97-5 1.04(a)(2)] of this Title is more than 22 percent per annum, the
97-6 ceiling under this provision shall be 22 percent per annum. If the
97-7 computation of the quarterly ceiling under Chapter 1D [Article
97-8 1.04(a)(2)] of this Title is less than 14 percent per annum, the
97-9 ceiling under this provision shall be 14 percent per annum.
97-10 Notwithstanding any other provision of this Title, a creditor
97-11 charging a rate limited by this section shall not be required to
97-12 disclose any decreases which may from time to time occur in the
97-13 rate on its account.
97-14 (e) Except as provided in Section (d) of this Article, as an
97-15 alternative to the rates authorized by Section (a) of this Article,
97-16 the parties may agree to any rate not exceeding a rate authorized
97-17 by Chapter 1D [Article 1.04] of this Title.
97-18 SECTION 25. Article 15.07, Title 79, Revised Statutes
97-19 (Article 5069-15.07, Vernon's Texas Civil Statutes), is amended to
97-20 read as follows:
97-21 Art. 15.07. COLLATERAL AND INSURANCE. Creditors may require
97-22 and take in connection with an account only such insurance and
97-23 collateral as are allowed under Chapter 3A [4 of Subtitle 2] of
97-24 this Title 79.
97-25 SECTION 26. Article 24.03(g), Insurance Code, is amended to
97-26 read as follows:
97-27 (g) Any person holding a license under Chapter 3A [3], Title
98-1 79, Revised [Civil] Statutes [of Texas, 1925, as amended (Article
98-2 5069-3.01 et seq., Vernon's Texas Civil Statutes)], on the
98-3 effective date of this chapter is required only to pay the license
98-4 fee required under this article and is not required to pay the
98-5 investigation fee required by Section (a) of this article.
98-6 SECTION 27. Article 24.11(h), Insurance Code, is amended to
98-7 read as follows:
98-8 (h) Those additions may be accomplished by a memorandum of
98-9 agreement between the agent and the insured, if before the first
98-10 scheduled payment date of the amended transaction the premium
98-11 finance company gives to the insured the following information in
98-12 writing:
98-13 (1) the amount of the premium increase;
98-14 (2) the down payment on increase;
98-15 (3) the principal amount of increase;
98-16 (4) the total amount of finance charge on increase;
98-17 (5) the total of additional balance due;
98-18 (6) the outstanding balance of original agreement;
98-19 (7) the consolidated agreement balance;
98-20 (8) the annual percentage rate of finance charge on
98-21 additional balance due;
98-22 (9) the revised schedule of payments;
98-23 (10) the amount or method of computing the amount of
98-24 any default, deferment, or similar charges authorized in Chapter 3A
98-25 [3], Title 79, Revised [Civil] Statutes [of Texas, 1925, as amended
98-26 (Article 5069-3.01 et seq., Vernon's Texas Civil Statutes)],
98-27 payable in the event of late payments; and
99-1 (11) identification of the method of computing any
99-2 unearned portion of the finance charge in the event of prepayment
99-3 of the obligation.
99-4 SECTION 28. Article 24.15, Insurance Code, is amended to
99-5 read as follows:
99-6 Art. 24.15. SERVICES CHARGES; LIMITATION OF CHARGES;
99-7 COMPUTATION. A premium finance company may not take or receive
99-8 from an insured a greater rate or charge than is provided by
99-9 Chapter 3A [Chapters 3 and 4], Title 79, Revised [Civil] Statutes
99-10 [of Texas, 1925, as amended (Article 5069-3.01 et seq. and Article
99-11 5069-4.01 et seq., Vernon's Texas Civil Statutes)]. Those charges
99-12 begin on the date from which the insurance company requires payment
99-13 of the premium and payment was made to the insurance company for
99-14 the financed policy or on the effective date of the policy,
99-15 whichever is earlier. The finance charge shall be computed on the
99-16 balance of the premiums due after subtracting the down payment made
99-17 by the insured in accordance with the premium finance agreement.
99-18 On insurance premium finance agreements made under this chapter, no
99-19 insurance charges or any other charge or fee, except those
99-20 authorized by this chapter, are permitted.
99-21 SECTION 29. Article 24.16, Insurance Code, is amended to
99-22 read as follows:
99-23 Art. 24.16. PREPAYMENT; REFUND. Notwithstanding the
99-24 provisions of any premium finance agreement to the contrary, any
99-25 insured may pay it in full at any time before the maturity of the
99-26 final installment of the balance of the agreement, and if the
99-27 insured does so and the agreement included an amount for a charge,
100-1 the insured shall receive for the prepayment either by cash or by
100-2 renewal a refund credit in accordance with the provisions for
100-3 refunds contained in Subchapter H, Chapter 3A [Section (6), Article
100-4 3.15], Title 79, Revised [Civil] Statutes [of Texas, 1925, as
100-5 amended (Article 5069-3.15, Vernon's Texas Civil Statutes)], and
100-6 the regulations issued under that article. Where the amount of the
100-7 credit for anticipation of payments is less than $1, no refund need
100-8 be made.
100-9 SECTION 30. Article 24.17(a), Insurance Code, is amended to
100-10 read as follows:
100-11 (a) A premium finance agreement may provide for the payment
100-12 of a default charge by the insured as provided in Article 3A.303
100-13 [Section (5), Article 3.15], Title 79, Revised [Civil] Statutes [of
100-14 Texas, 1925, as amended (Article 5069-3.15, Vernon's Texas Civil
100-15 Statutes)], the Insurance Code, and the regulations issued under
100-16 those statutes.
100-17 SECTION 31. Article 24.20, Insurance Code, is amended to
100-18 read as follows:
100-19 Art. 24.20. AUTHORITY OF LICENSED LOCAL RECORDING AGENTS TO
100-20 CHARGE INTEREST TO CERTAIN PURCHASERS OF INSURANCE.
100-21 Notwithstanding any other provision of law, any person,
100-22 partnership, or corporation duly licensed as a local recording
100-23 agent under Article 21.14, Insurance Code, as amended, may enter
100-24 into or establish a written agreement with any purchaser of
100-25 insurance from the agent providing for the payment of interest to
100-26 the agent in an amount not to exceed the greater of a rate allowed
100-27 by Chapter 1D [Article 1.04], Title 79, Revised Statutes [(Article
101-1 5069-1.04, Vernon's Texas Civil Statutes)], or the rate of one
101-2 percent a month, on any amount due and owing to the agent for
101-3 insurance purchased by the purchaser. In those instances the claim
101-4 or defense of usury is prohibited.
101-5 SECTION 32. Article 21.79E, Insurance Code, as added by
101-6 Section 2.17C, Chapter 242, Acts of the 72nd Legislature, Regular
101-7 Session, 1991, is amended to read as follows:
101-8 Art. 21.79E. CREDIT INVOLUNTARY UNEMPLOYMENT INSURANCE.
101-9 [(a)] Any insurer authorized to write any form of casualty
101-10 insurance in this state shall also be authorized to write group or
101-11 individual credit involuntary unemployment insurance indemnifying a
101-12 debtor for installment or other periodic payments on the
101-13 indebtedness while the debtor is involuntarily unemployed,
101-14 including policy forms and endorsements which define involuntary
101-15 unemployment to provide coverage and a premium charge for
101-16 interruption or reduction of a debtor's income during periods of
101-17 leave (paid or otherwise) authorized by the Federal Family and
101-18 Medical Leave Act, or other state or federal laws. Such insurance
101-19 may be written alone or in conjunction with credit life insurance,
101-20 credit accident and health insurance, or both, in policies issued
101-21 by any authorized insurer, but not in contravention of the Texas
101-22 Free Enterprise and Antitrust Act of 1983. Rates and forms for
101-23 such insurance may be made and filed in accordance with Articles
101-24 5.14 and 5.15 of this code.
101-25 SECTION 33. (a) Title 2, Business & Commerce Code, is
101-26 amended by adding Chapter 20 to read as follows:
101-27 CHAPTER 20. REGULATION OF CONSUMER CREDIT REPORTING AGENCIES
102-1 Sec. 20.01. DEFINITIONS. In this chapter:
102-2 (1) "Adverse action" includes:
102-3 (A) the denial of, increase in a charge for, or
102-4 reduction in the amount of insurance for personal, family, or
102-5 household purposes;
102-6 (B) the denial of employment or other decision
102-7 made for employment purposes that adversely affects a current or
102-8 prospective employee; or
102-9 (C) an action or determination with respect to a
102-10 consumer's application for credit that is adverse to the consumer's
102-11 interests.
102-12 (2) "Consumer" means an individual who resides in this
102-13 state.
102-14 (3) "Consumer file" means all of the information about
102-15 a consumer that is recorded and retained by a consumer reporting
102-16 agency regardless of how the information is stored.
102-17 (4) "Consumer report" means a communication or other
102-18 information by a consumer reporting agency relating to the credit
102-19 worthiness, credit standing, credit capacity, debts, character,
102-20 general reputation, personal characteristics, or mode of living of
102-21 a consumer that is used or expected to be used or collected, wholly
102-22 or partly, as a factor in establishing the consumer's eligibility
102-23 for credit or insurance for personal, family, or household
102-24 purposes, employment purposes, or other purpose authorized under
102-25 Sections 603 and 604 of the Fair Credit Reporting Act (15 U.S.C.
102-26 Sections 1681a and 1681b), as amended. The term does not include:
102-27 (A) a report containing information solely on a
103-1 transaction between the consumer and the person making the report;
103-2 (B) an authorization or approval of a specific
103-3 extension of credit directly or indirectly by the issuer of a
103-4 credit card or similar device;
103-5 (C) a report in which a person who has been
103-6 requested by a third party to make a specific extension of credit
103-7 directly or indirectly to a consumer makes a decision with respect
103-8 to the request, if the third party advises the consumer of the name
103-9 and address of the person to whom the request was made and the
103-10 person makes the disclosures that must be made under Section 615 of
103-11 the Fair Credit Reporting Act (15 U.S.C. Section 1681m), as
103-12 amended, to the consumer in the event of adverse action against the
103-13 consumer;
103-14 (D) any communication of information described
103-15 in this subdivision among persons related by common ownership or
103-16 affiliated by corporate control; or
103-17 (E) any communication of other information among
103-18 persons related by common ownership or affiliated by corporate
103-19 control, if it is clearly and conspicuously disclosed to the
103-20 consumer that the information may be communicated among such
103-21 persons and the consumer is given the opportunity before the time
103-22 that the information is initially communicated to direct that such
103-23 information not be communicated among such persons.
103-24 (5) "Consumer reporting agency" means a person that
103-25 regularly engages wholly or partly in the practice of assembling or
103-26 evaluating consumer credit information or other information on
103-27 consumers to furnish consumer reports to third parties for monetary
104-1 fees, for dues, or on a cooperative nonprofit basis. The term does
104-2 not include a business entity that provides only check verification
104-3 or check guarantee services.
104-4 (6) "Investigative consumer report" means all or part
104-5 of a consumer report in which information on the character, general
104-6 reputation, personal characteristics, or mode of living of a
104-7 consumer is obtained through a personal interview with a neighbor,
104-8 friend, or associate of the consumer or others with whom the
104-9 consumer is acquainted or who may have knowledge concerning any
104-10 such information. The term does not include specific factual
104-11 information on a consumer's credit record obtained directly from a
104-12 creditor of the consumer or from a consumer reporting agency when
104-13 the information was obtained directly from a creditor of the
104-14 consumer or from the consumer.
104-15 Sec. 20.02. PERMISSIBLE PURPOSES; PROHIBITION; USE OF
104-16 CONSUMER'S SOCIAL SECURITY NUMBER. (a) A consumer reporting
104-17 agency may furnish a consumer report only:
104-18 (1) in response to a court order issued by a court
104-19 with proper jurisdiction;
104-20 (2) in accordance with the written instructions of the
104-21 consumer to whom the report relates; or
104-22 (3) to a person the agency has reason to believe:
104-23 (A) intends to use the information in connection
104-24 with a transaction involving the extension of credit to, or review
104-25 or collection of an account of, the consumer to whom the report
104-26 relates;
104-27 (B) intends to use the information for
105-1 employment purposes as authorized under the Fair Credit Reporting
105-2 Act (15 U.S.C. Section 1681 et seq.), as amended, and regulations
105-3 adopted under that Act;
105-4 (C) intends to use the information in connection
105-5 with the underwriting of insurance involving the consumer as
105-6 authorized under the Fair Credit Reporting Act (15 U.S.C. Section
105-7 1681 et seq.), as amended, and regulations adopted under that Act;
105-8 (D) intends to use the information in connection
105-9 with a determination of the consumer's eligibility for a license or
105-10 other benefit granted by a governmental entity required by law to
105-11 consider an applicant's financial responsibility or status;
105-12 (E) has a legitimate business need for the
105-13 information in connection with a business transaction involving the
105-14 consumer; or
105-15 (F) intends to use the information for any
105-16 purpose authorized under the Fair Credit Reporting Act (15 U.S.C.
105-17 Section 1681 et seq.), as amended, and regulations adopted under
105-18 that Act.
105-19 (b) A consumer reporting agency may not prohibit a user of a
105-20 consumer report or investigative consumer report from disclosing
105-21 the contents of the report or providing a copy of the report to the
105-22 consumer to whom it relates at the consumer's request if adverse
105-23 action against the consumer based wholly or partly on the report
105-24 has been taken or is contemplated by the user of the report. A
105-25 user of a consumer report or a consumer reporting agency may not be
105-26 found liable or otherwise held responsible for a disclosed or
105-27 copied report when acting under this subsection. The disclosure or
106-1 copy of the report, by itself, does not make a user of the report a
106-2 consumer reporting agency.
106-3 (c) If a consumer furnishes the consumer's social security
106-4 number to a person for use in obtaining a consumer report, the
106-5 person shall include the consumer's social security number with the
106-6 request for the consumer report and shall include the social
106-7 security number with all future reports of information regarding
106-8 the consumer made by the person to a consumer reporting agency
106-9 unless the person has reason to believe that the social security
106-10 number is inaccurate.
106-11 Sec. 20.03. DISCLOSURES TO CONSUMERS. (a) On request and
106-12 proper identification provided by a consumer, a consumer reporting
106-13 agency shall disclose to the consumer in writing all information
106-14 pertaining to the consumer in the consumer reporting agency's files
106-15 at the time of the request, including:
106-16 (1) the name of each person requesting credit
106-17 information about the consumer during the preceding six months and
106-18 the date of each request;
106-19 (2) a set of instructions describing how information
106-20 is presented on the consumer reporting agency's written disclosure
106-21 of the consumer file; and
106-22 (3) if the consumer reporting agency compiles and
106-23 maintains files on a nationwide basis, a toll-free number at which
106-24 personnel are available to consumers during normal business hours
106-25 for use in resolving a dispute if the consumer submits a written
106-26 dispute to the consumer reporting agency.
106-27 (b) The information must be disclosed in a clear, accurate
107-1 manner that is understandable to a consumer.
107-2 (c) A consumer reporting agency shall provide a copy of the
107-3 consumer's file to the consumer on the request of the consumer and
107-4 on evidence of proper identification, as directed by the Fair
107-5 Credit Reporting Act (15 U.S.C. Section 1681 et seq.), as amended,
107-6 and regulations adopted under that Act.
107-7 Sec. 20.04. CHARGES FOR CERTAIN DISCLOSURES. (a) Except as
107-8 provided by Subsection (b), a consumer reporting agency may impose
107-9 a reasonable charge on a consumer for the disclosure of information
107-10 pertaining to the consumer. The amount of the charge may not
107-11 exceed $8. On January 1 of each year, a consumer reporting agency
107-12 may increase the charge for disclosure to a consumer. The
107-13 increase, if any, must be based proportionally on changes to the
107-14 Consumer Price Index for All Urban Consumers as determined by the
107-15 United States Department of Labor with fractional changes rounded
107-16 to the nearest 50 cents.
107-17 (b) A consumer reporting agency may not charge a fee for:
107-18 (1) a request by a consumer for a copy of the
107-19 consumer's file made not later than the 60th day after the date on
107-20 which adverse action is taken against the consumer;
107-21 (2) notification of the deletion of information that
107-22 is found to be inaccurate or can no longer be verified sent to a
107-23 person designated by the consumer, as prescribed by Section 611 of
107-24 the Fair Credit Reporting Act (15 U.S.C. Section 1681i), as
107-25 amended;
107-26 (3) a set of instructions for understanding the
107-27 information presented on the consumer report; or
108-1 (4) a toll-free telephone number that consumers may
108-2 call to obtain additional assistance concerning the consumer
108-3 report.
108-4 Sec. 20.05. REPORTING OF INFORMATION PROHIBITED.
108-5 (a) Except as provided by Subsection (b), a consumer reporting
108-6 agency may not furnish a consumer report containing information
108-7 related to:
108-8 (1) a case under Title 11 of the United States Code or
108-9 under the federal Bankruptcy Act in which the date of entry of the
108-10 order for relief or the date of adjudication predates the consumer
108-11 report by more than 10 years;
108-12 (2) a suit or judgment in which the date of entry
108-13 predates the consumer report by more than seven years or the
108-14 governing statute of limitations, whichever is longer;
108-15 (3) a tax lien in which the date of payment predates
108-16 the consumer report by more than seven years;
108-17 (4) a record of arrest, indictment, or conviction of a
108-18 crime in which the date of disposition, release, or parole predates
108-19 the consumer report by more than seven years; or
108-20 (5) another item or event that predates the consumer
108-21 report by more than seven years.
108-22 (b) A consumer reporting agency may furnish a consumer
108-23 report that contains information described by Subsection (a) if the
108-24 information is provided in connection with:
108-25 (1) a credit transaction with a principal amount that
108-26 is or may reasonably be expected to be $150,000 or more;
108-27 (2) the underwriting of life insurance for a face
109-1 amount that is or may reasonably be expected to be $150,000 or
109-2 more; or
109-3 (3) the employment of a consumer at an annual salary
109-4 that is or may reasonably be expected to be $75,000 or more.
109-5 (c) A consumer reporting agency may not furnish medical
109-6 information about a consumer in a consumer report that is being
109-7 obtained for employment purposes or in connection with a credit,
109-8 insurance, or direct marketing transaction unless the consumer
109-9 consents to the furnishing of the medical information.
109-10 Sec. 20.06. DISPUTE PROCEDURE. (a) If the completeness or
109-11 accuracy of information contained in a consumer's file is disputed
109-12 by the consumer and the consumer notifies the consumer reporting
109-13 agency of the dispute, the agency shall reinvestigate the disputed
109-14 information free of charge and record the current status of the
109-15 disputed information not later than the 30th business day after the
109-16 date on which the agency receives the notice. The consumer
109-17 reporting agency shall provide the consumer with the option of
109-18 notifying the agency of a dispute concerning the consumer's file by
109-19 speaking directly to a representative of the agency during normal
109-20 business hours.
109-21 (b) Not later than the fifth business day after the date on
109-22 which a consumer reporting agency receives notice of a dispute from
109-23 a consumer in accordance with Subsection (a), the agency shall
109-24 provide notice of the dispute to each person who provided any
109-25 information related to the dispute.
109-26 (c) A consumer reporting agency may terminate a
109-27 reinvestigation of information disputed by a consumer under
110-1 Subsection (a) if the agency reasonably determines that the dispute
110-2 is frivolous or irrelevant. An agency that terminates a
110-3 reinvestigation of disputed information under this subsection shall
110-4 promptly notify the consumer of the termination and the reasons for
110-5 the termination by mail, or if authorized by the consumer, by
110-6 telephone. The presence of contradictory information in a
110-7 consumer's file does not by itself constitute reasonable grounds
110-8 for determining that the dispute is frivolous or irrelevant.
110-9 (d) If disputed information is found to be inaccurate or
110-10 cannot be verified after a reinvestigation under Subsection (a),
110-11 the consumer reporting agency, unless otherwise directed by the
110-12 consumer, shall promptly delete the information from the consumer's
110-13 file, revise the consumer file, and provide the revised consumer
110-14 report to the consumer and, on the request of the consumer, to each
110-15 person who requested the consumer report within the preceding six
110-16 months. The consumer reporting agency may not report the
110-17 inaccurate or unverified information in subsequent reports.
110-18 (e) Information deleted under Subsection (d) may not be
110-19 reinserted in the consumer's file unless the person who furnishes
110-20 the information to the consumer reporting agency reinvestigates and
110-21 states in writing or by electronic record to the agency that the
110-22 information is complete and accurate.
110-23 (f) A consumer reporting agency shall provide written notice
110-24 of the results of a reinvestigation or reinsertion made under this
110-25 section not later than the fifth business day after the date on
110-26 which the reinvestigation or reinsertion has been completed. The
110-27 notice must include:
111-1 (1) a statement that the reinvestigation is complete;
111-2 (2) a statement of the determination made by the
111-3 agency on the completeness or accuracy of the disputed information;
111-4 (3) a copy of the consumer's file or consumer report
111-5 and a description of the results of the reinvestigation;
111-6 (4) a statement that a description of the procedure
111-7 used to determine the accuracy and completeness of the information
111-8 shall be provided to the consumer by the agency on request,
111-9 including the name, business address, and, if available, the
111-10 telephone number of each person contacted in connection with the
111-11 information;
111-12 (5) a statement that the consumer is entitled to add a
111-13 statement to the consumer's file disputing the accuracy or
111-14 completeness of the information as provided by Section 611 of the
111-15 Fair Credit Reporting Act (15 U.S.C. Section 1681i), as amended;
111-16 and
111-17 (6) a statement that the consumer may be entitled to
111-18 dispute resolution as prescribed by this section, after the
111-19 consumer receives the notice specified under this subsection.
111-20 (g) This section does not require a person who obtains a
111-21 consumer report for resale to another person to alter or correct an
111-22 inaccuracy in the consumer report if the report was not assembled
111-23 or prepared by the person.
111-24 Sec. 20.07. CORRECTION OF INACCURATE INFORMATION. (a) A
111-25 consumer reporting agency shall provide a person who provides
111-26 consumer credit information to the agency with the option of
111-27 correcting previously reported inaccurate information by submitting
112-1 the correction by facsimile or other automated means.
112-2 (b) The credit reporting agency which receives a correction
112-3 shall have reasonable procedures to assure that previously reported
112-4 inaccurate information in a consumer's file is corrected in a
112-5 prompt and timely fashion.
112-6 Sec. 20.08. CONSUMER'S RIGHT TO FILE ACTION IN COURT OR
112-7 ARBITRATE DISPUTES. (a) An action to enforce an obligation of a
112-8 consumer reporting agency to a consumer under this chapter may be
112-9 brought in any court as provided by the Fair Credit Reporting Act
112-10 (15 U.S.C. Section 1681 et seq.), as amended, or, if agreed to by
112-11 both parties, may be submitted to binding arbitration after the
112-12 consumer has followed all dispute procedures in Section 20.06 and
112-13 has received the notice specified in Section 20.06(f) in the manner
112-14 provided by the rules of the American Arbitration Association.
112-15 (b) A decision rendered by an arbitrator under this section
112-16 does not affect the validity of an obligation or debt owed by the
112-17 consumer to any party.
112-18 (c) A prevailing party in an action or arbitration
112-19 proceeding brought under this section shall be compensated for the
112-20 party's attorney fees and costs of the proceeding as determined by
112-21 the court or arbitration.
112-22 (d) A consumer may not submit to arbitration more than one
112-23 action against a particular consumer reporting agency during any
112-24 120-day period.
112-25 (e) The results of an arbitration action brought against a
112-26 consumer reporting agency doing business in this state shall be
112-27 communicated in a timely manner to other consumer reporting
113-1 agencies doing business in this state.
113-2 (f) If a determination is made in favor of a consumer after
113-3 submission of a dispute to arbitration, the disputed adverse
113-4 information in the consumer's file or record shall be removed or
113-5 stricken in a timely manner. If the adverse information is not
113-6 removed or stricken, the consumer may bring an action against the
113-7 noncomplying agency under this section regardless of the 120-day
113-8 waiting period required under this section.
113-9 Sec. 20.09. CIVIL LIABILITY. (a) A consumer reporting
113-10 agency that wilfully violates this chapter is liable to the
113-11 consumer against whom the violation occurs for the greater of three
113-12 times the amount of actual damages to the consumer or $1,000,
113-13 reasonable attorney fees, and court or arbitration costs.
113-14 (b) A consumer reporting agency that negligently violates
113-15 this chapter is liable to the consumer against whom the violation
113-16 occurs for the greater of the amount of actual damages to the
113-17 consumer or $500, reasonable attorney fees, and court or
113-18 arbitration costs. A consumer reporting agency is not considered
113-19 to have negligently violated this chapter if, not later than the
113-20 30th day after the date on which the agency receives notice of a
113-21 dispute from the consumer under Section 20.06 that clearly explains
113-22 the nature and substance of the dispute, the agency completes the
113-23 reinvestigation and sends the consumer and, at the request of the
113-24 consumer, each person who received the consumer information written
113-25 notification of the results of the reinvestigation in accordance
113-26 with Section 20.06(f).
113-27 (c) In addition to liability imposed under Subsection (a), a
114-1 consumer reporting agency that does not correct a consumer's file
114-2 and consumer report before the 10th day after the date on which a
114-3 judgment is entered against the agency because of inaccurate
114-4 information contained in a consumer's file is also liable for
114-5 $1,000 a day until the inaccuracy is corrected.
114-6 Sec. 20.10. REMEDIES CUMULATIVE. An action taken under this
114-7 chapter does not prohibit a consumer from taking any other action
114-8 authorized by law except that a credit reporting agency may not be
114-9 subject to suit with respect to any issue that was the subject of
114-10 an arbitration proceeding brought under Section 20.08.
114-11 (b) Subsection (a) of this section takes effect October 1,
114-12 1997.
114-13 SECTION 34. Section 26.02(a)(2), Business & Commerce Code,
114-14 is amended to read as follows:
114-15 (2) "Loan agreement" means one or more promises,
114-16 promissory notes, agreements, undertakings, security agreements,
114-17 deeds of trust or other documents, or commitments, or any
114-18 combination of those actions or documents, pursuant to which a
114-19 financial institution loans or delays repayment of or agrees to
114-20 loan or delay repayment of money, goods, or another thing of value
114-21 or to otherwise extend credit or make a financial accommodation.
114-22 The term does not include a promise, promissory note, agreement,
114-23 undertaking, document, or commitment relating to:
114-24 (A) a credit card or charge card; or
114-25 (B) an open-end account, as that term is defined
114-26 by Article 1B.002 [1.01], Title 79, Revised Statutes [(Article
114-27 5069-1.01, Vernon's Texas Civil Statutes)], intended or used
115-1 primarily for personal, family, or household use.
115-2 SECTION 35. Section 242.098(b), Health and Safety Code, is
115-3 amended to read as follows:
115-4 (b) Interest on unreimbursed amounts begins to accrue on the
115-5 date on which the funds were disbursed to the home. The rate of
115-6 interest is the rate determined under Article 1E.003, [Section 2,
115-7 Article 1.05,] Title 79, Revised Statutes [(Article 5069-1.05,
115-8 Vernon's Texas Civil Statutes)], to be applicable to judgments
115-9 rendered during the month in which the money was disbursed to the
115-10 home.
115-11 SECTION 36. Section 143.1215(c), Local Government Code, is
115-12 amended to read as follows:
115-13 (c) Interest under Subsection (b) accrues beginning on the
115-14 date of the fire fighter's or police officer's reinstatement at a
115-15 rate equal to three percent plus the rate for court judgments under
115-16 Chapter 1E [Article 1.05], Title 79, Revised Statutes [(Article
115-17 5069-1.05, Vernon's Texas Civil Statutes)], that is in effect on
115-18 the date of the person's reinstatement.
115-19 SECTION 37. Section 395.025(d), Local Government Code, is
115-20 amended to read as follows:
115-21 (d) Any refund shall bear interest calculated from the date
115-22 of collection to the date of refund at the statutory rate as set
115-23 forth in Article 1C.002 [1.03], Title 79, Revised Statutes
115-24 [(Article 5069-1.03, Vernon's Texas Civil Statutes)], or its
115-25 successor statute.
115-26 SECTION 38. Section 32.35(a)(5), Penal Code, is amended to
115-27 read as follows:
116-1 (5) "Creditor" means a person licensed under Chapter
116-2 3A [3], Subtitle 2, Title 79, Revised Statutes [(Article 5069-3.01
116-3 et seq., Vernon's Texas Civil Statutes)], a bank, savings and loan
116-4 association, credit union, or other regulated financial institution
116-5 that lends money or otherwise extends credit to a cardholder
116-6 through a credit card and that authorizes other persons to honor
116-7 the credit card.
116-8 SECTION 39. Section 32.065(d), Tax Code, is amended to read
116-9 as follows:
116-10 (d) Chapters 3A [5] and 15 and Article 1C.102 [and Sections
116-11 1.07(d)(1) and (f)], Title 79, Revised Statutes [(Article 5069-1.01
116-12 et seq., Vernon's Texas Civil Statutes)], do not apply to a
116-13 transaction covered by this section. The transferee of a tax lien
116-14 under this section is not required to obtain a license under Title
116-15 79, Revised Statutes (Article 5069-1.01 et seq., Vernon's Texas
116-16 Civil Statutes).
116-17 SECTION 40. Section 35-1, The Securities Act (Article
116-18 581-35-1, Vernon's Texas Civil Statutes), is amended to read as
116-19 follows:
116-20 Sec. 35-1. FEES FOR SALES OF EXCESS SECURITIES. A. An
116-21 offeror who sells securities in this State in excess of the
116-22 aggregate amount of securities registered for the offering may
116-23 apply to register the excess securities by paying three times the
116-24 difference between the initial fee paid and the fee required under
116-25 Subsection E of Section 35, plus, if the registration is no longer
116-26 in effect, interest on that amount computed at the rate provided by
116-27 Article 1C.002 [1.03], Title 79, Revised Statutes [(Article
117-1 5069-1.03, Vernon's Texas Civil Statutes)], from the date the
117-2 registration was no longer in effect until the date the subsequent
117-3 application is filed, for the securities sold to persons within
117-4 this State, plus the amendment fee prescribed by Subsection D of
117-5 Section 35. Registration of the excess securities, if granted,
117-6 shall be effective retroactively to the effective date of the
117-7 initial registration for the offering.
117-8 B. An offeror who has filed a notice to claim a limited
117-9 offering exemption, who paid less than the maximum fee prescribed
117-10 in Subsection J of Section 35, and who offered a greater amount of
117-11 securities in the offering than authorized pursuant to the formula
117-12 prescribed in Subsection J of Section 35, may file an amended
117-13 notice disclosing the amount of securities offered and paying three
117-14 times the difference between the fee initially paid and the fee
117-15 which should have been paid, plus interest on that amount computed
117-16 at the rate provided by Article 1C.002 [1.03], Title 79, Revised
117-17 Statutes [(Article 5069-1.03, Vernon's Texas Civil Statutes)], from
117-18 the date the original notice was received by the Commissioner until
117-19 the date the amended notice is received by the Commissioner. The
117-20 amended notice shall be retroactive to the date of the initial
117-21 filing.
117-22 SECTION 41. Section 35-2, The Securities Act (Article
117-23 581-35-2, Vernon's Texas Civil Statutes), is amended to read as
117-24 follows:
117-25 Sec. 35-2. FEES FOR SALES OF UNREGISTERED SECURITIES. If,
117-26 after notice and hearing, the commissioner or any court of
117-27 competent jurisdiction finds that an offeror has sold securities in
118-1 this State pursuant to an offering no part of which has been
118-2 registered under Section 7 or 10 of this Act and for which the
118-3 transactions or securities are not exempt under Section 5 or 6 of
118-4 this Act, the commissioner or said court may impose a fee equal to
118-5 six times the amount that would have been paid if the issuer had
118-6 filed an application to register the securities and paid the fee
118-7 prescribed by Subsection E of Section 35 based on the aggregate
118-8 amount of sales made in this State within the prior three years,
118-9 plus interest on that amount at the rate provided by Article 1C.002
118-10 [1.03], Title 79, Revised Statutes [(Article 5069-1.03, Vernon's
118-11 Texas Civil Statutes)], from the date of the first such sale made
118-12 in this State until the date the fee is paid. The payment of the
118-13 fee prescribed by this Section does not effect registration of the
118-14 securities or affect the application of any other Section of this
118-15 Act. The payment of the fee prescribed by this Section is not an
118-16 admission that the transactions or securities were not exempt and
118-17 is not admissible as evidence in a suit or proceeding for failure
118-18 to register the securities.
118-19 SECTION 42. Article 2.09A, Texas Miscellaneous Corporation
118-20 Laws Act (Article 1302-2.09A, Vernon's Texas Civil Statutes), is
118-21 amended to read as follows:
118-22 Art. 2.09A. ALTERNATIVE RATE. Notwithstanding the
118-23 provisions of Article 2.09 of this Act, any corporation, domestic
118-24 or foreign, including but not limited to any charitable or
118-25 religious corporation, may agree to and stipulate for any rate of
118-26 interest that does not exceed a rate authorized by Chapter 1D
118-27 [Article 1.04], Title 79, Revised [Civil] Statutes [of Texas, 1925,
119-1 as amended (Article 5069-1.04, Vernon's Texas Civil Statutes)].
119-2 SECTION 43. Section 7.01, Texas Credit Union Act (Article
119-3 2461-7.01, Vernon's Texas Civil Statutes), is amended to read as
119-4 follows:
119-5 Sec. 7.01. PURPOSE, TERMS, AND INTEREST RATE. If made in
119-6 accordance with rules adopted by the commission, a credit union may
119-7 make loans to members for such purposes as it may approve and on
119-8 such security and terms as it may require, at rates of interest not
119-9 exceeding one and one-half percent per month on the unpaid balance,
119-10 or higher rates otherwise authorized by law, including the rates
119-11 authorized by Chapter 1D [Article 1.04], Title 79, Revised Statutes
119-12 [(Article 5069-1.04, Vernon's Texas Civil Statutes)]. Chapter 15
119-13 and Subtitle 2, Title 79, Revised Statutes [(Article 5069-2.01 et
119-14 seq., Vernon's Texas Civil Statutes)], do not apply to a credit
119-15 union loan or extension of credit unless the agreement evidencing
119-16 that transaction specifically provides otherwise. Every loan must
119-17 be evidenced by a written instrument.
119-18 SECTION 44. Section 16.01, Medical Liability and Insurance
119-19 Improvement Act of Texas (Article 4590i, Vernon's Texas Civil
119-20 Statutes), is amended to read as follows:
119-21 Sec. 16.01. APPLICATION OF OTHER LAW. Notwithstanding
119-22 Articles 1E.101, 1E.102, and 1E.104-1E.108 [Sections 6(a)-(f),
119-23 Article 1.05], Title 79, Revised Statutes [(Article 5069-1.05,
119-24 Vernon's Texas Civil Statutes)], prejudgment interest in a health
119-25 care liability claim shall be awarded in accordance with this
119-26 subchapter.
119-27 SECTION 45. Section 16.02(c), Medical Liability and
120-1 Insurance Improvement Act of Texas (Article 4590i, Vernon's Texas
120-2 Civil Statutes), is amended to read as follows:
120-3 (c) Prejudgment interest allowed under this subchapter shall
120-4 be computed in accordance with Article 1E.103 [Section 6(g),
120-5 Article 1.05], Title 79, Revised Statutes [(Article 5069-1.05,
120-6 Vernon's Texas Civil Statutes)], for a period beginning on the date
120-7 of injury and ending on the date before the date the judgment is
120-8 signed.
120-9 SECTION 46. Section 1.04(c), Texas Revised Partnership Act
120-10 (Article 6132b-1.04, Vernon's Texas Civil Statutes), is amended to
120-11 read as follows:
120-12 (c) Interest Rate. If an obligation to pay interest arises
120-13 under this Act and the rate is not specified, the rate is the rate
120-14 specified by Article 1C.002 [1.03], Title 79, Revised Statutes
120-15 [(Article 5069-1.03, Vernon's Texas Civil Statutes), and its
120-16 subsequent amendments], or a successor statute.
120-17 SECTION 47. Section 1(a), Chapter 617, Acts of the 68th
120-18 Legislature, Regular Session, 1983 (Article 9022, Vernon's Texas
120-19 Civil Statutes), is amended to read as follows:
120-20 (a) The holder of a check or its assignee, agent,
120-21 representative, or any other person retained by the holder to seek
120-22 collection of the face value of the dishonored check on return of
120-23 the check to the holder following its dishonor by a payor may
120-24 charge the drawer or endorser a reasonable processing fee, which
120-25 shall not exceed $25. A person may not charge a processing fee to a
120-26 drawer or endorser under this subsection if the fee has been
120-27 collected under Article 102.007(e) or Article 102.0071, Code of
121-1 Criminal Procedure. If a processing fee has been collected under
121-2 this subsection and the holder subsequently receives a fee
121-3 collected under Article 102.007(e) or Article 102.0071, Code of
121-4 Criminal Procedure, the holder shall immediately refund the fee
121-5 previously collected from the drawer or endorser. Notwithstanding
121-6 any other provisions of law, a loan agreement made under Chapter 3A
121-7 [3 or 4], Title 79, Revised Statutes [(Article 5069-1.01 et seq.,
121-8 Vernon's Texas Civil Statutes)], may provide that on return of a
121-9 dishonored check given in payment under the agreement, the holder
121-10 may charge the obligor under the agreement the processing fee
121-11 authorized by this Act, and the fee may be added to the unpaid
121-12 balance owed under the agreement, except that interest may not be
121-13 charged on the fee during the term of the agreement.
121-14 SECTION 48. Chapters 1, 1A, 3, 4, and 5, Title 79, Revised
121-15 Statutes, are repealed.
121-16 SECTION 49. (a) The change in law made by this Act applies
121-17 only to an act committed or a transaction that occurs on or after
121-18 the effective date of this Act.
121-19 (b) An act committed or a transaction that occurs before the
121-20 effective date of this Act is covered by the law in effect when the
121-21 act was committed or the transaction occurred, and the former law
121-22 is continued in effect for that purpose.
121-23 SECTION 50. (a) If this Act conflicts with another Act of
121-24 the 75th Legislature, Regular Session, 1997:
121-25 (1) the change in law made in the other Act prevails
121-26 and the substance of the change is given effect as part of this Act
121-27 unless:
122-1 (A) this Act or the conflicting Act expressly
122-2 provides otherwise; or
122-3 (B) it is not possible to give the conflicting
122-4 law effect within the context of this Act, in which event this Act
122-5 prevails; and
122-6 (2) the text of a law that is reenacted in the other
122-7 Act only because of the constitutional requirement that the amended
122-8 law be reenacted at length is superseded by this Act.
122-9 (b) If this Act and another Act of the 75th Legislature,
122-10 Regular Session, 1997, make the same substantive change from the
122-11 current law, but differ in text, this Act prevails regardless of
122-12 the relative dates of enactment.
122-13 SECTION 51. This Act takes effect September 1, 1997.
122-14 SECTION 52. The importance of this legislation and the
122-15 crowded condition of the calendars in both houses create an
122-16 emergency and an imperative public necessity that the
122-17 constitutional rule requiring bills to be read on three several
122-18 days in each house be suspended, and this rule is hereby suspended.
_______________________________ _______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 1971 was passed by the House on April
30, 1997, by a non-record vote; and that the House concurred in
Senate amendments to H.B. No. 1971 on May 29, 1997, by a non-record
vote; and that the House adopted H.C.R. No. 330 authorizing certain
corrections in H.B. No. 1971 on May 31, 1997, by a non-record vote.
_______________________________
Chief Clerk of the House
I certify that H.B. No. 1971 was passed by the Senate, with
amendments, on May 26, 1997, by a viva-voce vote; and that the
Senate adopted H.C.R. No. 330 authorizing certain corrections in
H.B. No. 1971 on June 2, 1997, by a viva-voce vote.
_______________________________
Secretary of the Senate
APPROVED: _____________________
Date
_____________________
Governor