78R13062 DWS-F


By:  Averitt                                                      S.B. No. 1429

Substitute the following for S.B. No. 1429:                                   

By:  Flynn                                                    C.S.S.B. No. 1429



A BILL TO BE ENTITLED

AN ACT

relating to certain agreements offered in connection with a loan.             
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Section 342.308, Finance Code, is amended by 
adding Subsection (d) to read as follows:
	(d)  Costs that conform to Section 342.4021(a) may be added 
to the loan contract.
	SECTION 2.  Subchapter I, Chapter 342, Finance Code, is 
amended by adding Section 342.4021 to read as follows:
	Sec. 342.4021.  AGREEMENTS REGARDING DEBT SUSPENSION, DEBT 
CANCELLATION, GAP WAIVER, AND MOTOR VEHICLE SERVICE.  (a)  In 
connection with a loan made under this chapter that is subject to 
Section 342.201(d) or 342.301(c), a lender may offer to the 
borrower a debt suspension agreement or debt cancellation agreement 
under similar terms and conditions as such an agreement may be 
offered by a bank or savings association.
	(b)  In connection with a loan made under this chapter that 
is subject to Section 342.201(d) and that is secured by a motor 
vehicle, a lender may offer to the borrower at the time the loan is 
made a gap waiver agreement, a service contract, or both.
	(c)  A lender may not require that a borrower accept or 
provide an agreement or contract under Subsection (a) or (b).
	(d)  In addition to other disclosures required by state or 
federal law and before offering an agreement or contract authorized 
by this section, the lender shall provide to the borrower a notice 
separate from the loan documents stating that the borrower is not 
required to accept or provide the agreement or contract to obtain 
the loan.
	SECTION 3.  Section 342.411, Finance Code, is amended to 
read as follows:    
	Sec. 342.411.  INSURANCE OR OTHER GAIN NOT INTEREST.  Any 
gain or advantage to the lender or the lender's employee, officer, 
director, agent, general agent, affiliate, or associate from 
insurance or from another agreement or contract permitted under 
this subchapter or the provision or sale of insurance or another 
agreement or contract permitted under this subchapter is not 
additional interest or an additional charge in connection with a 
loan made under this chapter except as specifically provided by 
this chapter.
	SECTION 4.  This Act takes effect immediately if it receives 
a vote of two-thirds of all the members elected to each house, as 
provided by Section 39, Article III, Texas Constitution.  If this 
Act does not receive the vote necessary for immediate effect, this 
Act takes effect September 1, 2003.