By: Wentworth S.B. No. 1798
A BILL TO BE ENTITLED
AN ACT
1-1 relating to charging an amount in connection with a loan or other
1-2 extension of credit.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Subsection (1), Section (n), Article 1.04, Title
1-5 79, Revised Statutes (Article 5069-1.04, Vernon's Texas Civil
1-6 Statutes), is amended to read as follows:
1-7 (1) Any loan made under authority of this Article that is
1-8 extended either primarily for personal, family, or household use
1-9 but not for business, commercial, investment, agricultural, or
1-10 other similar purposes, or primarily for the purchase of a motor
1-11 vehicle, other than a heavy commercial vehicle as defined in
1-12 Section (n), Article 7.01, Title 79, Revised Statutes (Article
1-13 5069-7.01, Vernon's Texas Civil Statutes), and that is payable in
1-14 two or more installments, not secured by a lien on real estate, and
1-15 that is entered by a person engaged in the business of making or
1-16 negotiating those types of loans, is subject to Chapter 4 of
1-17 this Title, and any person except a bank or savings and loan
1-18 association engaged in that business or a representative of the
1-19 bank or savings and loan association acting on behalf of the bank
1-20 or savings and loan association shall obtain a license under
1-21 Chapter 3 of this Title.
1-22 SECTION 2. Section (1), Article 3.01, Title 79, Revised
1-23 Statutes (Article 5069-3.01, Vernon's Texas Civil Statutes), is
2-1 amended to read as follows:
2-2 (1) Only a person who has obtained a license from the
2-3 Consumer Credit Commissioner or a bank or savings and loan
2-4 association doing business under the laws of this state or of the
2-5 United States or a representative of the bank or savings and loan
2-6 association acting on behalf of the bank or savings and loan
2-7 association is an authorized lender under this Chapter and may
2-8 engage in the business of making, transacting, or negotiating loans
2-9 with cash advances of Two Thousand, Five Hundred Dollars or less,
2-10 and contract for, charge or receive, directly, or indirectly, on or
2-11 in connection with any such loan, any charges, whether for
2-12 interest, compensation, consideration or expense or other thing or
2-13 otherwise, which in the aggregate are greater than such person
2-14 would be permitted by law to charge if he were not an authorized
2-15 lender under this Chapter.
2-16 SECTION 3. Section (a), Article 8.01, Title 79, Revised
2-17 Statutes (Article 5069-8.01, Vernon's Texas Civil Statutes), is
2-18 amended to read as follows:
2-19 (a)(1) [(a)] Any person who violates this Subtitle by
2-20 contracting for, charging or receiving interest or[,] time price
2-21 differential [or other charges] which are greater than the amount
2-22 authorized by this Subtitle, shall forfeit to the obligor twice the
2-23 amount of interest or time price differential [and default and
2-24 deferment charges] contracted for, charged or received, and
2-25 reasonable attorneys' fees fixed by the court.
3-1 (2) Any person who violates this Subtitle by
3-2 contracting for, charging, or receiving a charge, other than
3-3 interest or time price differential, which is greater than the
3-4 amount authorized by this Subtitle, shall forfeit to the obligor:
3-5 (A) the greater of:
3-6 (i) three times the amount of the
3-7 difference between the amount of the other charge contracted for,
3-8 charged or received, and the appropriate amount authorized by this
3-9 Subtitle; or
3-10 (ii) $2,000 or 20 percent of the principal
3-11 balance, whichever is less; and
3-12 (B) reasonable attorneys' fees fixed by the
3-13 court.
3-14 SECTION 4. Article 8.02, Title 79, Revised Statutes (Article
3-15 5069-8.02, Vernon's Texas Civil Statutes), is amended to read as
3-16 follows:
3-17 Art. 8.02. CONTRACTING FOR, CHARGING OR RECEIVING INTEREST,
3-18 TIME PRICE DIFFERENTIAL OR OTHER CHARGES IN EXCESS OF DOUBLE THE
3-19 AMOUNT AUTHORIZED. Any person who violates this Subtitle by
3-20 contracting for, charging or receiving interest or[,] time price
3-21 differential [or other charges] which are in the aggregate in
3-22 excess of double the total amount of interest or[,] time price
3-23 differential [and other charges] authorized by this Subtitle shall
3-24 forfeit to the obligor as an additional penalty all principal or
3-25 principal balance, as well as all interest or time price
4-1 differential, [and all other charges,] and shall pay reasonable
4-2 attorneys' fees actually incurred by the obligor in enforcing the
4-3 provisions of this Article; provided further that any such person
4-4 violating provisions of this Article shall be guilty of a
4-5 misdemeanor and upon conviction thereof shall be punished by a fine
4-6 of not more than One Hundred Dollars. Each contract or transaction
4-7 in violation of this Article shall constitute a separate offense
4-8 punishable hereunder.
4-9 SECTION 5. The importance of this legislation and the
4-10 crowded condition of the calendars in both houses create an
4-11 emergency and an imperative public necessity that the
4-12 constitutional rule requiring bills to be read on three several
4-13 days in each house be suspended, and this rule is hereby suspended,
4-14 and that this Act take effect and be in force from and after its
4-15 passage, and it is so enacted.