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