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A BILL TO BE ENTITLED
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AN ACT
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relating to the renewal of a deferred presentment transaction. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 342.601, Finance Code, is amended by |
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amending Subdivision (1) and adding Subdivisions (1-a) and (3) to |
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read as follows: |
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(1) "Instrument" means a personal check or |
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authorization to debit a deposit account payable on demand on |
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maturity of a deferred presentment transaction. |
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(1-a) "Lender" means a lender licensed under this |
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chapter. |
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(3) "Renewal" means a transaction in which a borrower |
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refinances or pays all or part of the finance charges and advance of |
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a deferred presentment transaction with a new deferred presentment |
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transaction. |
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SECTION 2. Subchapter M, Chapter 342, Finance Code, is |
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amended by adding Section 342.606 to read as follows: |
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Sec. 342.606. RENEWAL. A deferred presentment transaction |
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may not be renewed more than four consecutive times. Following the |
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fourth renewal, the borrower shall pay the debt in full in cash or |
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its equivalent. If the borrower does not pay the debt, the |
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borrower's instrument may be deposited or otherwise presented for |
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payment. |
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SECTION 3. The changes in law made by this Act apply only to |
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a deferred presentment transaction entered into on or after the |
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effective date of this Act. A deferred presentment transaction |
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entered into before the effective date of this Act is governed by |
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the law in effect on the date the transaction was entered into, and |
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the former law is continued in effect for that purpose. |
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SECTION 4. This Act takes effect September 1, 2011. |