By Averitt                                            H.B. No. 2154
         77R6108 DWS-F                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to charges for default on a motor vehicle retail
 1-3     installment contract.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1. Section 348.107, Finance Code, is amended to read
 1-6     as follows:
 1-7           Sec. 348.107.  CHARGE FOR DEFAULT IN PAYMENT OF INSTALLMENT.
 1-8     (a)  A retail installment contract may provide that if an
 1-9     installment remains unpaid after the 10th day after the maturity of
1-10     the installment for a heavy commercial vehicle or after the 15th
1-11     day after the maturity of the installment for any other motor
1-12     vehicle the holder may collect:
1-13                 (1)  a delinquency charge that does not exceed five
1-14     percent of the amount of the installment; or
1-15                 (2)  interest on the amount of the installment accruing
1-16     after the maturity of the installment and until the installment is
1-17     paid in full at a rate that does not exceed the maximum rate
1-18     authorized for the contract.
1-19           (b)  A retail installment contract that provides for the
1-20     accrual earnings method may provide for the delinquency charge
1-21     authorized by Subsection (a)(1), the interest authorized by
1-22     Subsection (a)(2), or both.
1-23           (c)  Only one delinquency charge may be collected on an
1-24     installment under this section regardless of the duration of the
 2-1     default.
 2-2           SECTION 2. The change in law made by this Act applies only to
 2-3     a retail installment transaction entered into on or after the
 2-4     effective date of this Act.  A retail installment transaction
 2-5     entered into before the effective date of this Act is governed by
 2-6     the law in effect when the retail installment transaction was
 2-7     entered into, and the former law is continued in effect for that
 2-8     purpose.
 2-9           SECTION 3.  This Act takes effect immediately if it receives
2-10     a vote of two-thirds of all the members elected to each house, as
2-11     provided by Section 39, Article III, Texas Constitution.  If this
2-12     Act does not receive the vote necessary for immediate effect, this
2-13     Act takes effect September 1, 2001.