1-1 By: Wentworth S.B. No. 1798
1-2 (In the Senate - Filed March 14, 1997; March 24, 1997, read
1-3 first time and referred to Committee on Economic Development;
1-4 May 9, 1997, reported adversely, with favorable Committee
1-5 Substitute by the following vote: Yeas 6, Nays 0; May 9, 1997,
1-6 sent to printer.)
1-7 COMMITTEE SUBSTITUTE FOR S.B. No. 1798 By: Patterson
1-8 A BILL TO BE ENTITLED
1-9 AN ACT
1-10 relating to charging an amount in connection with a loan or other
1-11 extension of credit.
1-12 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-13 SECTION 1. Subsection (1), Section (n), Article 1.04, Title
1-14 79, Revised Statutes (Article 5069-1.04, Vernon's Texas Civil
1-15 Statutes), is amended to read as follows:
1-16 (1) Any loan made under authority of this Article that
1-17 is extended either primarily for personal, family, or household use
1-18 but not for business, commercial, investment, agricultural, or
1-19 other similar purposes, or primarily for the purchase of a motor
1-20 vehicle, other than a heavy commercial vehicle as defined in
1-21 Section (n), Article 7.01, Title 79, Revised Statutes (Article
1-22 5069-7.01, Vernon's Texas Civil Statutes), and that is payable in
1-23 two or more installments, not secured by a lien on real estate, and
1-24 that is entered by a person engaged in the business of making or
1-25 negotiating those types of loans, is subject to Chapter 4 of this
1-26 Title, and any person except a bank or savings and loan association
1-27 engaged in that business or a representative of the bank or savings
1-28 and loan association acting on behalf of the bank or savings and
1-29 loan association shall obtain a license under Chapter 3 of this
1-30 Title.
1-31 SECTION 2. Section (1), Article 3.01, Title 79, Revised
1-32 Statutes (Article 5069-3.01, Vernon's Texas Civil Statutes), is
1-33 amended to read as follows:
1-34 (1) Only a person who has obtained a license from the
1-35 Consumer Credit Commissioner or a bank or savings and loan
1-36 association doing business under the laws of this state or of the
1-37 United States or a representative of the bank or savings and loan
1-38 association acting on behalf of the bank or savings and loan
1-39 association is an authorized lender under this Chapter and may
1-40 engage in the business of making, transacting, or negotiating loans
1-41 with cash advances of Two Thousand, Five Hundred Dollars or less,
1-42 and contract for, charge or receive, directly, or indirectly, on or
1-43 in connection with any such loan, any charges, whether for
1-44 interest, compensation, consideration or expense or other thing or
1-45 otherwise, which in the aggregate are greater than such person
1-46 would be permitted by law to charge if he were not an authorized
1-47 lender under this Chapter.
1-48 SECTION 3. Section (a), Article 8.01, Title 79, Revised
1-49 Statutes (Article 5069-8.01, Vernon's Texas Civil Statutes), is
1-50 amended to read as follows:
1-51 (a)(1) [(a)] Any person who violates this Subtitle by
1-52 contracting for, charging or receiving interest or[,] time price
1-53 differential [or other charges] which are greater than the amount
1-54 authorized by this Subtitle, shall forfeit to the obligor twice the
1-55 amount of interest or time price differential [and default and
1-56 deferment charges] contracted for, charged or received, and
1-57 reasonable attorneys' fees fixed by the court.
1-58 (2) Any person who violates this Subtitle by
1-59 contracting for, charging, or receiving a charge, other than
1-60 interest or time price differential, which is greater than the
1-61 amount authorized by this Subtitle, shall forfeit to the obligor:
1-62 (A) the greater of:
1-63 (i) three times the amount of the
1-64 difference between the amount of the other charge contracted for,
2-1 charged or received, and the appropriate amount authorized by this
2-2 Subtitle; or
2-3 (ii) $2,000 or 20 percent of the principal
2-4 balance, whichever is less; and
2-5 (B) reasonable attorneys' fees fixed by the
2-6 court.
2-7 SECTION 4. Article 8.02, Title 79, Revised Statutes (Article
2-8 5069-8.02, Vernon's Texas Civil Statutes), is amended to read as
2-9 follows:
2-10 Art. 8.02. CONTRACTING FOR, CHARGING OR RECEIVING INTEREST,
2-11 TIME PRICE DIFFERENTIAL OR OTHER CHARGES IN EXCESS OF DOUBLE THE
2-12 AMOUNT AUTHORIZED. Any person who violates this Subtitle by
2-13 contracting for, charging or receiving interest or[,] time price
2-14 differential [or other charges] which are in the aggregate in
2-15 excess of double the total amount of interest or[,] time price
2-16 differential [and other charges] authorized by this Subtitle shall
2-17 forfeit to the obligor as an additional penalty all principal or
2-18 principal balance, as well as all interest or time price
2-19 differential, [and all other charges,] and shall pay reasonable
2-20 attorneys' fees actually incurred by the obligor in enforcing the
2-21 provisions of this Article; provided further that any such person
2-22 violating provisions of this Article shall be guilty of a
2-23 misdemeanor and upon conviction thereof shall be punished by a fine
2-24 of not more than One Hundred Dollars. Each contract or transaction
2-25 in violation of this Article shall constitute a separate offense
2-26 punishable hereunder.
2-27 SECTION 5. The importance of this legislation and the
2-28 crowded condition of the calendars in both houses create an
2-29 emergency and an imperative public necessity that the
2-30 constitutional rule requiring bills to be read on three several
2-31 days in each house be suspended, and this rule is hereby suspended,
2-32 and that this Act take effect and be in force from and after its
2-33 passage, and it is so enacted.
2-34 * * * * *