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A BILL TO BE ENTITLED
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AN ACT
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relating to limitations on the renewal of deferred presentment |
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transactions and motor vehicle title loans. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. 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. LIMITATION ON RENEWALS. A lender may not |
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renew or roll over a deferred presentment transaction more than |
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four times. For purposes of this section, "roll over" means the |
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refinancing or paying of all or part of the finance charges and cash |
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advance of a deferred presentment transaction with a new deferred |
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presentment transaction. |
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SECTION 2. Chapter 342, Finance Code, is amended by adding |
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Subchapter N to read as follows: |
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SUBCHAPTER N. MOTOR VEHICLE TITLE LOANS |
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Sec. 342.651. DEFINITION. In this subchapter, "motor |
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vehicle title loan" means a loan in which an unencumbered motor |
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vehicle is given as security for the loan. |
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Sec. 342.652. INAPPLICABILITY OF SUBCHAPTER. This |
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subchapter does not apply to a retail installment transaction under |
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Chapter 348 or another loan made to finance the purchase of a motor |
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vehicle. |
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Sec. 342.653. LIMITATION ON RENEWALS. A lender may not |
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renew or roll over a motor vehicle title loan more than four times. |
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For purposes of this section, "roll over" means the refinancing or |
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paying of all or part of the finance charges and principal amount of |
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a motor vehicle title loan with a new motor vehicle title loan. |
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SECTION 3. Subchapter G, Chapter 393, Finance Code, is |
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amended by adding Section 393.629 to read as follows: |
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Sec. 393.629. LIMITATION ON RENEWALS OF CERTAIN EXTENSIONS |
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OF CONSUMER CREDIT. A credit access business may not obtain for a |
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consumer or assist a consumer in obtaining more than four renewals |
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or rollovers of an extension of consumer credit in the form of a |
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deferred presentment transaction or motor vehicle title loan. For |
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purposes of this section, "rollover" means the refinance or payment |
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of all or part of the finance charges and principal amount of an |
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extension of consumer credit with a new extension of consumer |
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credit. |
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SECTION 4. The changes in law made by this Act apply only to |
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a deferred presentment transaction entered into or motor vehicle |
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title loan made on or after the effective date of this Act. A |
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deferred presentment transaction entered into or motor vehicle |
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title loan made before the effective date of this Act is governed by |
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the law in effect on the date the deferred presentment transaction |
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was entered into or the motor vehicle title loan was made, and the |
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former law is continued in effect for that purpose. |
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SECTION 5. This Act takes effect September 1, 2013. |