By:  Ellis                                            S.B. No. 1781

                                A BILL TO BE ENTITLED

                                       AN ACT

 1-1     relating to delinquency charges in retail charge agreements.

 1-2           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-3           SECTION 1.  Subsection (c), Section (6), Article 6.03, Title

 1-4     79, Revised Statutes (Article 5069-6.03, Vernon's Texas Civil

 1-5     Statutes), is amended to read as follows:

 1-6           (c)  The time price differential in a retail charge agreement

 1-7     resulting from the computation under this Section shall be computed

 1-8     utilizing the average daily balance method.  A minimum time price

 1-9     differential not in excess of 75 cents per month may be charged,

1-10     received, and collected for any billing cycle in which a balance is

1-11     due.  Under this Section, a retail charge agreement may provide for

1-12     a delinquency charge on each installment in default for a period of

1-13     more than 35 [21] days in an amount not to exceed $20 [$10].  Only

1-14     one such delinquency charge may be collected on any installment

1-15     regardless of the period during which it remains in default.  In

1-16     addition, such retail charge agreement may provide for the payment

1-17     of an attorney's reasonable fee when it is referred for collection

1-18     to an attorney who is not a salaried employee of the holder of the

1-19     contract and for court costs and disbursements.  The creditor shall

1-20     remit 50 cents from each delinquency charge collected under this

1-21     Section to the comptroller, in the time and manner established by

1-22     the comptroller, for deposit to the credit of an account in the

1-23     general revenue fund.  One-half of the money deposited in the

1-24     account may be used only to finance research conducted by the

 2-1     Finance Commission of Texas under Section 1.011(f), Texas Banking

 2-2     Act (Article 342-1.011, Vernon's Texas Civil Statutes).  The other

 2-3     one-half of the money deposited in the account may be used only to

 2-4     finance educational activities and counseling services under

 2-5     Articles 2.02A and 9.01, Title 79, Revised Statutes (Articles

 2-6     5069-2.02A and 5069-9.01, Vernon's Texas Civil Statutes).  If the

 2-7     Consumer Credit Commissioner determines that any seller that was

 2-8     operating under this Chapter on September 1, 1997, has after that

 2-9     date moved its credit operations out of this state in a manner that

2-10     results in the seller's retail installment contracts not being

2-11     subject to this Chapter, the Consumer Credit Commissioner shall

2-12     notify the Finance Commission of Texas and the Finance Commission

2-13     shall by rule reduce the maximum delinquency charge that may be

2-14     collected under this subsection to $10.

2-15           SECTION 2.  The importance of this legislation and the

2-16     crowded condition of the calendars in both houses create an

2-17     emergency and an imperative public necessity that the

2-18     constitutional rule requiring bills to be read on three several

2-19     days in each house be suspended, and this rule is hereby suspended,

2-20     and that this Act take effect and be in force from and after its

2-21     passage, and it is so enacted.

2-22                          COMMITTEE AMENDMENT NO. 1

2-23           Amend S.B. No. 1781 in SECTION 1 of the bill by striking the

2-24     underlined language beginning on page 1, line 19, and ending on

2-25     page 2, line 15 (Senate engrossment), and substituting the

2-26     following:

2-27                             (ii)  The Consumer Credit Commissioner may

 3-1     accept financial contributions from a seller or a creditor

 3-2     operating under this Chapter who collects a delinquency charge in

 3-3     excess of $10 for the purpose of research conducted by the Finance

 3-4     Commission of Texas under Section 1.011(f), Texas Banking Act

 3-5     (Article 342-1.011, Vernon's Texas Civil Statutes) and to fulfill

 3-6     responsibilities of developing consumer education programs and

 3-7     voluntary counseling services under Articles 2.02A and 9.01, Title

 3-8     79, Revised Statutes (Article 5069-1.01 et seq., Vernon's Texas

 3-9     Civil Statutes).

3-10                             (iii)  A creditor operating under this

3-11     chapter who collects a delinquency charge in excess of $10 shall

3-12     provide financial support to private credit counseling

3-13     institutions.

3-14                             (vi)  If the Consumer Credit Commissioner

3-15     determines that any seller or creditor that was operating under

3-16     this Chapter on September 1, 1997, and that has charged a

3-17     delinquency charge in excess of $10, has after that date moved its

3-18     credit operations out of this state in a manner that results in the

3-19     seller's retail installment contracts not being subject to this

3-20     Chapter, the Consumer Credit Commissioner shall collect from the

3-21     creditor an amount equal to 25 cents for each delinquency charge

3-22     collected during the 12-month period preceding the date of the

3-23     move.

3-24                                                                  Elkins

3-25                          COMMITTEE AMENDMENT NO. 2

3-26           Amend S.B. No. 1781 in SECTION 1 of the bill by striking the

3-27     underlined language on page 1, line 13 (Senate engrossment), and

 4-1     substituting the following:

 4-2     more than 21 days in an amount not to exceed $20 [$10]. Only

 4-3                                                                Marchant