By Grusendorf H.B. No. 2876
77R7519 DWS-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to delinquency charges in connection with certain loans.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Section 302.001, Finance Code, is amended by
1-5 adding Subsection (d) to read as follows:
1-6 (d) In addition to interest authorized by Subsection (b), a
1-7 loan providing for a rate of interest that is 10 percent a year or
1-8 less may provide for a delinquency charge on the amount of any
1-9 payment in default for a period of not less than 10 days in an
1-10 amount not to exceed the greater of five percent of the amount of
1-11 the payment or $7.50. The charging of the delinquency charge does
1-12 not make the loan subject to Chapter 342 or any other provision of
1-13 Subtitle B.
1-14 SECTION 2. Section 342.004, Finance Code, is amended by
1-15 adding Subsection (c) to read as follows:
1-16 (c) A loan described by Section 302.001(d) may provide for a
1-17 delinquency charge as provided by that section without being
1-18 subject to this chapter or any other provision of this subtitle.
1-19 SECTION 3. Section 342.005, Finance Code, is amended to read
1-20 as follows:
1-21 Sec. 342.005. APPLICABILITY OF CHAPTER. Except as provided
1-22 by Sections 302.001(d) and 342.004(c), a [A] loan is subject to
1-23 this chapter if the loan:
1-24 (1) provides for interest in excess of 10 percent a
2-1 year;
2-2 (2) is extended primarily for personal, family, or
2-3 household use;
2-4 (3) is made by a person engaged in the business of
2-5 making, arranging, or negotiating those types of loans; and
2-6 (4) either:
2-7 (A) is not secured by a lien on real property;
2-8 or
2-9 (B) is described by Section 342.001(3), 342.301,
2-10 or 342.456 and is predominantly payable in monthly installments.
2-11 SECTION 4. This Act takes effect immediately if it receives
2-12 a vote of two-thirds of all the members elected to each house, as
2-13 provided by Section 39, Article III, Texas Constitution. If this
2-14 Act does not receive the vote necessary for immediate effect, this
2-15 Act takes effect September 1, 2001.