By Armbrister S.B. No. 1836 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.