79R6782 DWS-D

By:  Guillen                                                      H.B. No. 1726



A BILL TO BE ENTITLED

AN ACT

relating to the amount of a late charge or reinstatement fee under a 
rental-purchase agreement.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Section 35.72(c), Business & Commerce Code, is 
amended to read as follows:
	(c)  A rental-purchase agreement may not contain a 
provision:                
		(1)  requiring a confession of judgment;                                      
		(2)  authorizing a merchant or an agent of the merchant 
to commit a breach of the peace in the repossession of merchandise;
		(3)  waiving a defense, counterclaim, or right the 
consumer may have against the merchant or an agent of the merchant;
		(4)  requiring the purchase of insurance or a loss 
damage waiver from the merchant to cover the merchandise;
		(5)  requiring the payment of a late charge or 
reinstatement fee unless a periodic payment is delinquent for more 
than seven days if the payment is due monthly, or is delinquent for 
more than three days if the payment is due more frequently than 
monthly, and the charge or fee is in an amount equal to not more than 
the lesser of 10 [five] percent of the delinquent payment or $11
[$5], and not less than $6 [$2]; or
		(6)  requiring a payment at the end of the scheduled 
rental-purchase term in excess of or in addition to a regular 
periodic payment in order to acquire ownership of the merchandise.  
In no event shall the consumer be required to pay a sum greater than 
the total amount to be paid to acquire ownership, as disclosed in 
Subsection (g)(3) of this section.
	SECTION 2.  The change in law made by this Act applies only 
to a rental-purchase agreement entered into on or after the 
effective date of this Act.  A rental-purchase agreement entered 
into before the effective date of this Act is governed by the law in 
effect when the rental-purchase agreement was entered into, and the 
former law is continued in effect for that purpose.
	SECTION 3.  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, 2005.