76R11144 DWS-F
By Ehrhardt H.B. No. 2338
Substitute the following for H.B. No. 2338:
By Ehrhardt C.S.H.B. No. 2338
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to certain charges for administration of loans and loan
1-3 applications.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 ARTICLE 1. AMENDMENTS TO TITLE 79, REVISED STATUTES
1-6 SECTION 1.01. Article 3A.301, Title 79, Revised Statutes
1-7 (Article 5069-3A.301, Vernon's Texas Civil Statutes), is amended by
1-8 adding Subsection (e) to read as follows:
1-9 (e) A loan contract under this subchapter may provide for an
1-10 administrative fee in an amount not to exceed $25 for a loan of
1-11 more than $1,000 or $20 for a loan of $1,000 or less. The
1-12 administrative fee is considered earned when the loan is made or
1-13 refinanced and is not subject to refund. A lender refinancing the
1-14 loan may not contract for or receive an administrative fee for the
1-15 loan more than once in any 180-day period. Fifty cents of each
1-16 administrative fee shall be deposited with the comptroller for use
1-17 in carrying out the finance commission's responsibilities under
1-18 Section 11.305, Finance Code.
1-19 SECTION 1.02. Section 3A.508, Title 79, Revised Statutes
1-20 (Article 5069-3A.508, Vernon's Texas Civil Statutes), is amended by
1-21 amending Subsection (a) and adding Subsection (c) to read as
1-22 follows:
1-23 (a) A lender or a person who is assigned a secondary
1-24 mortgage loan may collect on or before the closing of the loan, or
2-1 include in the principal of the loan:
2-2 (1) reasonable fees for:
2-3 (A) title examination and preparation of an
2-4 abstract of title by:
2-5 (i) an attorney who is not an employee of
2-6 the lender; or
2-7 (ii) a title company or property search
2-8 company authorized to do business in this state; or
2-9 (B) premiums or fees for title insurance or
2-10 title search for the benefit of the mortgagee and, at the
2-11 mortgagor's option, for title insurance or title search for the
2-12 benefit of the mortgagor;
2-13 (2) reasonable fees charged to the lender by an
2-14 attorney who is not a salaried employee of the lender for
2-15 preparation of the loan documents in connection with the mortgage
2-16 loan if the fees are evidenced by a statement for services rendered
2-17 addressed to the lender;
2-18 (3) charges prescribed by law that are paid to public
2-19 officials for determining the existence of a security interest or
2-20 for perfecting, releasing, or satisfying a security interest;
2-21 (4) reasonable fees for an appraisal of real property
2-22 offered as security for the loan prepared by a certified appraiser
2-23 who is not a salaried employee of the lender;
2-24 (5) the reasonable cost of a credit report;
2-25 (6) reasonable fees for a survey of real property
2-26 offered as security for the loan prepared by a registered surveyor
2-27 who is not a salaried employee of the lender;
3-1 (7) the premiums received in connection with the sale
3-2 of credit life insurance, credit accident and health insurance, or
3-3 other insurance that protects the mortgagee against default by the
3-4 mortgagor, the benefits of which are applied in whole or in part to
3-5 reduce or extinguish the loan balance; [and]
3-6 (8) reasonable fees relating to real property offered
3-7 as security for the loan that are incurred to comply with a
3-8 federally mandated program if the collection of the fees or the
3-9 participation in the program is required by a federal agency; and
3-10 (9) an administrative fee, subject to Subsection (c),
3-11 in an amount not to exceed $25 for a loan of more than $1,000 or
3-12 $20 for a loan of $1,000 or less.
3-13 (c) An administrative fee under Subsection (a)(9) is
3-14 considered earned when the loan is made or refinanced and is not
3-15 subject to refund. A lender refinancing the loan may not contract
3-16 for or receive an administrative fee for the loan more than once in
3-17 any 180-day period. Fifty cents of each administrative fee shall
3-18 be deposited with the comptroller for use in carrying out the
3-19 finance commission's responsibilities under Section 11.305, Finance
3-20 Code.
3-21 ARTICLE 2. AMENDMENTS TO FINANCE CODE
3-22 SECTION 2.01. Section 342.201, Finance Code, is amended by
3-23 adding Subsection (e) to read as follows:
3-24 (e) A loan contract under this subchapter may provide for an
3-25 administrative fee in an amount not to exceed $25 for a loan of
3-26 more than $1,000 or $20 for a loan of $1,000 or less. The
3-27 administrative fee is considered earned when the loan is made or
4-1 refinanced and is not subject to refund. A lender refinancing the
4-2 loan may not contract for or receive an administrative fee for the
4-3 loan more than once in any 180-day period. Fifty cents of each
4-4 administrative fee shall be deposited with the comptroller for use
4-5 in carrying out the finance commission's responsibilities under
4-6 Section 11.305.
4-7 SECTION 2.02. Section 342.308, Finance Code, is amended by
4-8 amending Subsection (a) and adding Subsection (c) to read as
4-9 follows:
4-10 (a) A lender or a person who is assigned a secondary
4-11 mortgage loan may collect on or before the closing of the loan, or
4-12 include in the principal of the loan:
4-13 (1) reasonable fees for:
4-14 (A) title examination and preparation of an
4-15 abstract of title by:
4-16 (i) an attorney who is not an employee of
4-17 the lender; or
4-18 (ii) a title company or property search
4-19 company authorized to do business in this state; or
4-20 (B) premiums or fees for title insurance or
4-21 title search for the benefit of the mortgagee and, at the
4-22 mortgagor's option, for title insurance or title search for the
4-23 benefit of the mortgagor;
4-24 (2) reasonable fees charged to the lender by an
4-25 attorney who is not a salaried employee of the lender for
4-26 preparation of the loan documents in connection with the mortgage
4-27 loan if the fees are evidenced by a statement for services rendered
5-1 addressed to the lender;
5-2 (3) charges prescribed by law that are paid to public
5-3 officials for determining the existence of a security interest or
5-4 for perfecting, releasing, or satisfying a security interest;
5-5 (4) reasonable fees for an appraisal of real property
5-6 offered as security for the loan prepared by a certified appraiser
5-7 who is not a salaried employee of the lender;
5-8 (5) the reasonable cost of a credit report;
5-9 (6) reasonable fees for a survey of real property
5-10 offered as security for the loan prepared by a registered surveyor
5-11 who is not a salaried employee of the lender;
5-12 (7) the premiums received in connection with the sale
5-13 of credit life insurance, credit accident and health insurance, or
5-14 other insurance that protects the mortgagee against default by the
5-15 mortgagor, the benefits of which are applied in whole or in part to
5-16 reduce or extinguish the loan balance; [and]
5-17 (8) reasonable fees relating to real property offered
5-18 as security for the loan that are incurred to comply with a
5-19 federally mandated program if the collection of the fees or the
5-20 participation in the program is required by a federal agency; and
5-21 (9) an administrative fee, subject to Subsection (c),
5-22 in an amount not to exceed $25 for a loan of more than $1,000 or
5-23 $20 for a loan of $1,000 or less.
5-24 (c) An administrative fee under Subsection (a)(9) is
5-25 considered earned when the loan is made or refinanced and is not
5-26 subject to refund. A lender refinancing the loan may not contract
5-27 for or receive an administrative fee for the loan more than once in
6-1 any 180-day period. Fifty cents of each administrative fee shall
6-2 be deposited with the comptroller for use in carrying out the
6-3 finance commission's responsibilities under Section 11.305.
6-4 SECTION 2.03. Section 342.502(b), Finance Code, is amended
6-5 to read as follows:
6-6 (b) On a loan subject to Subchapter E or a secondary
6-7 mortgage loan subject to Subchapter G a lender may assess and
6-8 collect from the borrower[:]
6-9 [(1)] an amount incurred by the lender for:
6-10 (1) [(A)] court costs;
6-11 (2) [(B)] attorney's fees assessed by a court;
6-12 (3) [(C)] a fee authorized by law for filing,
6-13 recording, or releasing in a public office a security for a loan;
6-14 (4) [(D)] a reasonable amount spent for repossessing,
6-15 storing, preparing for sale, or selling any security;
6-16 (5) [(E)] a fee for recording a lien on or
6-17 transferring a certificate of title to a motor vehicle offered as
6-18 security for a loan made under this chapter; or
6-19 (6) [(F)] a premium or an identifiable charge received
6-20 in connection with the sale of insurance authorized under this
6-21 chapter[; and]
6-22 [(2) an administrative fee, subject to Subsection (c),
6-23 in an amount not to exceed:]
6-24 [(A) $25 for a loan of more than $1,000; or]
6-25 [(B) $10 for a loan of $1,000 or less].
6-26 SECTION 2.04. Section 342.502(c), Finance Code, is repealed.
6-27 ARTICLE 3. EFFECTIVE DATE; EMERGENCY
7-1 SECTION 3.01. (a) Except as provided by Subsections (b) and
7-2 (c) of this section, this Act takes effect September 1, 1999.
7-3 (b) Article 1 of this Act takes effect only if the Act of
7-4 the 76th Legislature, Regular Session, 1999, relating to
7-5 nonsubstantive additions to and corrections in enacted codes does
7-6 not take effect.
7-7 (c) Article 2 of this Act takes effect only if the Act of
7-8 the 76th Legislature, Regular Session, 1999, relating to
7-9 nonsubstantive additions to and corrections in enacted codes takes
7-10 effect.
7-11 SECTION 3.02. The importance of this legislation and the
7-12 crowded condition of the calendars in both houses create an
7-13 emergency and an imperative public necessity that the
7-14 constitutional rule requiring bills to be read on three several
7-15 days in each house be suspended, and this rule is hereby suspended.