SRC-TBR S.B. 272 77(R)   BILL ANALYSIS


Senate Research Center   S.B. 272
77R3308 DWS-FBy: Carona
Business & Commerce
1/29/2001
As Filed


DIGEST AND PURPOSE 

Currently, there is an established maximum interest charge of approximately
32 percent permitted on non-real property loans and this rate varies
depending upon the amount borrowed and terms of the loan.  As proposed,
S.B. 272 allows lenders to price loan products and offer a wider range of
rates on larger loans without an increase in the maximum rates on smaller
loans. 

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 342.201, Finance Code, to authorize as an
alternative to the  interest charge permitted on a loan contract under this
chapter that is not secured by real property to provide for an interest
charge on the cash advance that does not exceed 30 percent per year.
Provides that on a loan using an interest charge under this subsection, the
maximum cash advance is the revised ceiling as provide by Chapter 341C,
using the reference base amount of $2,500, and interest may not be
precomputed and is required to be computed by the actuarial method.  Makes
conforming changes. 

SECTION 2.  Effective date: September 1, 2001.