SRC-BWC H.B. 2154 77(R)   BILL ANALYSIS


Senate Research Center   H.B. 2154
77R6108 DWS-FBy: Averitt (Sponsor Unknown)
State Affairs
5/11/2001
Engrossed


DIGEST AND PURPOSE 

Under current law, the holder of a delinquent motor vehicle retail
installment sales contract may be assessed either a late charge or simple
interest charge, at the contracted rate, on delinquent contracts. During
the 76th Legislature, legislation was enacted to facilitate the charging of
late fees, in addition to interest accrual, on many types of loan
contracts.  However, motor vehicle retail installment sales contracts were
not included in the legislation.  Under current law, the holder of such a
contract with an unpaid installment may collect a delinquency charge or
simple interest, but not both.  H.B. 2154 allows the assessment of a late
charge, in addition to regular interest accrual, on contracts. 

RULEMAKING AUTHORITY

This bill does not expressly grant any additional rulemaking authority to a
state officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Section 348.107, Finance Code, to authorize a retail
installment contract to provide that if an installment remains unpaid after
the 10th day after the maturity of the installment for a heavy commercial
vehicle or after the 15th day after the maturity of the installment for any
other motor vehicle the holder is authorized to collect a delinquency
charge that does not exceed five percent of the amount of the installment,
or interest on the amount of the installment accruing after the maturity of
the installment and until the installment is paid in full at a rate that
does not exceed the maximum rate authorized for the contract.  Authorizes a
retail installment contract that provides for the accrual earnings method
to provide for the delinquency charge authorized by this section, the
interest authorized by this section, or both. 

SECTION 2.  Makes application of this Act prospective.

SECTION 3.  Effective date: upon passage or September 1, 2001.