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By: Averitt S.B. No. 774
A BILL TO BE ENTITLED
AN ACT
relating to revolving credit accounts.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 346.005, Finance Code, is amended to
read as follows:
Sec. 346.005. APPLICATION OF OTHER CODE PROVISIONS. (a) A
revolving credit account is subject to Chapters 303 and 349 but is
not subject to another chapter of this title unless specifically
provided by this chapter.
(b) A creditor in a revolving credit account under this
chapter for personal, family, or household use must hold a license
under Chapter 342, unless the person is not required to obtain a
license under Section 342.051.
SECTION 2. Subsection (a), Section 346.101, Finance Code,
is amended to read as follows:
(a) A revolving credit account may provide for interest on
an account at an annual rate that does not exceed the greater of:
(1) 18 percent a year; or
(2) the applicable alternative rate ceiling under
Chapter 303.
SECTION 3. Section 346.103, Finance Code, is amended by
adding Subsection (d) to read as follows:
(d) With respect to a revolving credit account secured by an
interest in real property, a creditor may contract for, charge, and
receive additional fees or charges permitted under Section 342.308
as if the revolving credit account were a secondary mortgage loan
under Chapter 342.
SECTION 4. Section 346.201, Finance Code, is amended to
read as follows:
Sec. 346.201. INSURANCE; COLLATERAL. In connection with a
revolving credit account, a creditor may require or take insurance
[or collateral] subject to the provisions of Chapter 342, relating
to insurance [and security], as if the revolving credit account
were a loan contract under that chapter. A creditor may require or
take real or personal property as collateral.
SECTION 5. Section 346.202, Finance Code, is amended to
read as follows:
Sec. 346.202. AMOUNTS AUTHORIZED TO BE RECOVERED FROM
CUSTOMER. (a) A creditor may recover from a customer amounts
incurred by the creditor for:
(1) court costs;
(2) attorney's fees assessed by a court;
(3) a fee authorized by law for filing or recording in
a public office a document securing a revolving credit account,
including a document releasing a security interest;
(4) a fee for recording a lien on or transferring a
certificate of title to a motor vehicle securing a revolving credit
account;
(5) a reasonable amount spent for repossessing,
storing, preparing for sale, or selling collateral; or
(6) a premium or an identifiable charge received in
connection with sale of insurance authorized for a revolving credit
account.
(b) With respect to a revolving credit account secured by an
interest in real property, a creditor may contract for, charge, and
receive additional fees or charges permitted under Section 342.307
as if the revolving credit account were a secondary mortgage loan
under Chapter 342.
SECTION 6. Section 346.204, Finance Code, is amended by
adding Subsection (c) to read as follows:
(c) With respect to a revolving credit account secured by an
interest in real property, a creditor who makes a change under
Subsection (a) that relates to an existing or future balance of the
account and that is adverse to the customer must comply with the
procedures in Section 303.103.
SECTION 7. Subchapter C, Chapter 346, Finance Code, is
amended by adding Section 346.206 to read as follows:
Sec. 346.206. ACCELERATION OR IMMEDIATE PAYMENT DEMAND
PROHIBITED. With respect to a revolving credit account secured by
an interest in real property, a creditor may not accelerate or
demand immediate payment of an amount owed under the account unless
the customer is in default under the terms of the account agreement.
SECTION 8. This Act takes effect September 1, 2003, and
applies only to a revolving credit account agreement entered into
or modified on or after that date.