LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
May 3, 2001
TO: Honorable Kip Averitt, Chair, House Committee on
Financial Institutions
FROM: John Keel, Director, Legislative Budget Board
IN RE: SB471 by Carona (Relating to deferred deposit loans.),
As Engrossed
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* SB471, As Engrossed: positive impact of $0 through the biennium *
* ending August 31, 2003. *
* *
* The bill would make no appropriation but could provide the legal *
* basis for an appropriation of funds to implement the provisions of *
* the bill. *
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General Revenue-Related Funds, Five-Year Impact:
****************************************************
* Fiscal Year Probable Net Positive/(Negative) *
* Impact to General Revenue Related *
* Funds *
* 2002 $0 *
* 2003 0 *
* 2004 0 *
* 2005 0 *
* 2006 0 *
****************************************************
All Funds, Five-Year Impact:
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*Fiscal Probable Probable Revenue Change in Number of *
* Year Savings/(Cost) from Gain/(Loss) from State Employees from *
* General Revenue Fund General Revenue Fund FY 2001 *
* 0001 0001 *
* 2002 $(939,000) $939,000 10.0 *
* 2003 (889,000) 889,000 10.0 *
* 2004 (889,000) 889,000 10.0 *
* 2005 (889,000) 889,000 10.0 *
* 2006 (889,000) 889,000 10.0 *
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Technology Impact
Additional computers for the ten Full-time equivalent positions (FTEs),
eight printers for the examiners, a HUB upgrade to accommodate the new
network, and a new dial-in server for examiners to hook up from the
field totaling $42,000 in fiscal year 2002.
Fiscal Analysis
The bill amends the Finance Code by adding Subchapter M which requires
deferred deposit lenders (a.k.a. payday lenders) operating in Texas to
become licensed by the Office of Consumer Credit Commissioner (OCCC).
The provisions of the bill allow each licensed lender to be examined and
investigated by the agency.
The effective date of the bill is September 1, 2001.
Methodology
The OCCC estimates the provisions of the bill would require ten
additional FTEs that include eight examiners to perform 1,500
examinations annually with each examiner performing 225 examinations.
The agency estimates travel costs at $15,000 per year per examiner, with
total travel costs of approximately $103,000 each year. The OCCC
estimates it would need an attorney responsible for drafting rules and
enforcement actions and an administrative technician responsible for
coordinating the activities of the examination staff in the field
including scheduling. The agency estimates $240,000 in Federal Bureau of
Investigation fingerprint costs for 6,000 sets in fiscal year 2002 and
$120,000 in subsequent years for an anticipated reduced number of new
licenses. The agency estimates regular operating costs in the second year
and subsequent years equal to fifty percent of salary costs. Operating
costs include enforcement actions, court reporting fees, administrative
hearing costs, and other related costs.
It is assumed the agency would adjust fees to offset any costs associated
with implementation of the bill.
Local Government Impact
No fiscal implication to units of local government is anticipated.
Source Agencies: 466 Office of Consumer Credit Commissioner
LBB Staff: JK, JO, RT, DE