76R12093 DWS-F
By Denny H.B. No. 3240
Substitute the following for H.B. No. 3240:
By Marchant C.S.H.B. No. 3240
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to an alternate maximum interest charge on a non-real
1-3 property loan.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Article 3A.301, Title 79, Revised Statutes
1-6 (Article 5069-3A.301, Vernon's Texas Civil Statutes), is amended to
1-7 read as follows:
1-8 Art. 3A.301. MAXIMUM INTEREST CHARGE. (a) A loan contract
1-9 under this chapter that is a regular transaction and is not secured
1-10 by real property may provide for an interest charge on the cash
1-11 advance that does not exceed the amount of add-on interest equal to
1-12 the amount computed for the full term of the contract at an add-on
1-13 interest amount equal to:
1-14 (1) $18 for each $100 per year on the part of the cash
1-15 advance that is less than or equal to the amount computed under
1-16 Article 2.08, using the reference base amount of $300; and
1-17 (2) $8 for each $100 per year on the part of the cash
1-18 advance that is more than the amount computed for Subdivision (1)
1-19 but less than or equal to an amount computed under Article 2.08,
1-20 using the reference base amount of $2,500.
1-21 (b) As an alternative to the interest charge permitted by
1-22 Subsection (a), a loan contract under this chapter that is not
1-23 secured by real property may provide for an interest charge on the
1-24 cash advance that does not exceed 30 percent per year. On a loan
2-1 using an interest charge under this subsection:
2-2 (1) the maximum cash advance is the revised ceiling as
2-3 provided by Subchapter C, Chapter 341, Finance Code, using the
2-4 reference base amount of $2,500; and
2-5 (2) interest may not be precomputed and shall be
2-6 computed by the actuarial method.
2-7 (c) For the purpose of Subsections [Subsection] (a) and (b):
2-8 (1) when the loan is made an interest charge may be
2-9 computed for the full term of the loan contract;
2-10 (2) if the period before the first installment due
2-11 date includes a part of a month that is longer than 15 days, then
2-12 that portion of a month may be considered a full month; and
2-13 (3) if a loan contract provides for precomputed
2-14 interest, the amount of the loan is the total of:
2-15 (A) the cash advance; and
2-16 (B) the amount of precomputed interest.
2-17 (d) [(c)] A loan contract under this chapter that is an
2-18 irregular transaction and is not secured by real property may
2-19 provide for an interest charge, using any method or formula, that
2-20 does not exceed the amount that, having due regard for the schedule
2-21 of installment payments, would produce the same effective return as
2-22 allowed under Subsection (a) if the loan were payable in equal
2-23 successive monthly installments beginning one month from the date
2-24 of the contract.
2-25 (e) [(d)] A loan contract under this chapter that is not
2-26 secured by real property may provide for a rate or amount of
2-27 interest computed using the true daily earnings method or the
3-1 scheduled installment earnings method that does not exceed the
3-2 alternative interest rate as computed under Subchapter A, Chapter
3-3 1D. Interest may accrue on the principal balance and amounts added
3-4 to principal after the date of the loan contract from time to time
3-5 unpaid at the rate provided for by the contract until the date of
3-6 payment in full or demand for payment in full.
3-7 SECTION 2. Section 342.201, Finance Code, is amended to read
3-8 as follows:
3-9 Sec. 342.201. MAXIMUM INTEREST CHARGE. (a) A loan contract
3-10 under this chapter that is a regular transaction and is not secured
3-11 by real property may provide for an interest charge on the cash
3-12 advance that does not exceed the amount of add-on interest equal to
3-13 the amount computed for the full term of the contract at an add-on
3-14 interest amount equal to:
3-15 (1) $18 for each $100 per year on the part of the cash
3-16 advance that is less than or equal to the amount computed under
3-17 Subchapter C, Chapter 341, using the reference base amount of $300;
3-18 and
3-19 (2) $8 for each $100 per year on the part of the cash
3-20 advance that is more than the amount computed for Subdivision (1)
3-21 but less than or equal to an amount computed under Subchapter C,
3-22 Chapter 341, using the reference base amount of $2,500.
3-23 (b) As an alternative to the interest charge permitted by
3-24 Subsection (a), a loan contract under this chapter that is not
3-25 secured by real property may provide for an interest charge on the
3-26 cash advance that does not exceed 30 percent per year. On a loan
3-27 using an interest charge under this subsection:
4-1 (1) the maximum cash advance is the revised ceiling as
4-2 provided by Subchapter C, Chapter 341, using the reference base
4-3 amount of $2,500; and
4-4 (2) interest may not be precomputed and shall be
4-5 computed by the actuarial method.
4-6 (c) For the purpose of Subsections [Subsection] (a) and (b):
4-7 (1) when the loan is made an interest charge may be
4-8 computed for the full term of the loan contract;
4-9 (2) if the period before the first installment due
4-10 date includes a part of a month that is longer than 15 days, that
4-11 portion of a month may be considered a full month; and
4-12 (3) if a loan contract provides for precomputed
4-13 interest, the amount of the loan is the total of:
4-14 (A) the cash advance; and
4-15 (B) the amount of precomputed interest.
4-16 (d) [(c)] A loan contract under this chapter that is an
4-17 irregular transaction and is not secured by real property may
4-18 provide for an interest charge, using any method or formula, that
4-19 does not exceed the amount that, having due regard for the schedule
4-20 of installment payments, would produce the same effective return as
4-21 allowed under Subsection (a) if the loan were payable in equal
4-22 successive monthly installments beginning one month from the date
4-23 of the contract.
4-24 (e) [(d)] A loan contract under this chapter that is not
4-25 secured by real property may provide for a rate or amount of
4-26 interest computed using the true daily earnings method or the
4-27 scheduled installment earnings method that does not exceed the
5-1 alternative interest rate as computed under Subchapter A, Chapter
5-2 303. Interest may accrue on the principal balance and amounts
5-3 added to principal after the date of the loan contract from time to
5-4 time unpaid at the rate provided for by the contract until the date
5-5 of payment in full or demand for payment in full.
5-6 SECTION 3. (a) Except as provided by Subsections (b) and
5-7 (c) of this section, this Act takes effect September 1, 1999.
5-8 (b) Section 1 of this Act takes effect only if the Act of
5-9 the 76th Legislature, Regular Session, 1999, relating to
5-10 nonsubstantive additions to and corrections in enacted codes does
5-11 not take effect.
5-12 (c) Section 2 of this Act takes effect only if the Act of
5-13 the 76th Legislature, Regular Session, 1999, relating to
5-14 nonsubstantive additions to and corrections in enacted codes takes
5-15 effect.
5-16 SECTION 4. The importance of this legislation and the
5-17 crowded condition of the calendars in both houses create an
5-18 emergency and an imperative public necessity that the
5-19 constitutional rule requiring bills to be read on three several
5-20 days in each house be suspended, and this rule is hereby suspended.