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A BILL TO BE ENTITLED
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AN ACT
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relating to authorized charges for certain consumer loans. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 342.201, Finance Code, is amended to |
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read as follows: |
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Sec. 342.201. MAXIMUM INTEREST CHARGE. (a) A loan contract |
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under this chapter that is a regular transaction and is not secured |
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by real property may provide for an interest charge on the cash |
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advance that does not exceed the amount of add-on interest equal to |
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the amount computed for the full term of the contract at an add-on |
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interest amount equal to: |
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(1) $18 for each $100 per year on the part of the cash |
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advance that is less than or equal to the amount computed under |
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Subchapter C, Chapter 341, using the reference base amount of $300; |
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and |
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(2) $8 for each $100 per year on the part of the cash |
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advance that is more than the amount computed for Subdivision (1) |
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but less than or equal to an amount computed under Subchapter C, |
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Chapter 341, using the reference base amount of $2,500. |
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(b) For the purpose of Subsection (a): |
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(1) when the loan is made an interest charge may be |
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computed for the full term of the loan contract; |
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(2) if the period before the first installment due |
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date includes a part of a month that is longer than 15 days, that |
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portion of a month may be considered a full month; and |
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(3) if a loan contract provides for precomputed |
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interest, the amount of the loan is the total of: |
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(A) the cash advance; and |
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(B) the amount of precomputed interest. |
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(c) A loan contract under this chapter that is an irregular |
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transaction and is not secured by real property may provide for an |
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interest charge, using any method or formula, that does not exceed |
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the amount that, having due regard for the schedule of installment |
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payments, would produce the same effective return as allowed under |
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this section if the loan were payable in equal successive monthly |
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installments beginning one month from the date of the contract. |
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(d) A loan contract under this chapter that is not secured |
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by real property may provide for a rate or amount of interest |
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computed using the true daily earnings method or the scheduled |
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installment earnings method that does not exceed the alternative |
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interest rate as computed under Subchapter A, Chapter 303. Interest |
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may accrue on the principal balance and amounts added to principal |
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after the date of the loan contract from time to time unpaid at the |
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rate provided for by the contract until the date of payment in full |
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or demand for payment in full. |
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(e) A loan contract under this chapter that is not secured |
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by real property may provide for a rate or amount of interest |
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computed using the true daily earnings method or the scheduled |
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installment earnings method that does not exceed: |
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(1) 30 percent a year on that part of the cash advance |
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that is less than or equal to the amount computed under Subchapter |
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C, Chapter 341, using the reference base amount of $500; |
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(2) 24 percent a year on that part of the cash advance |
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that is more than the amount computed for Subdivision (1) but less |
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than or equal to an amount computed under Subchapter C, Chapter 341, |
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using the reference base amount of $1,050; and |
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(3) 18 percent a year on that part of the cash advance |
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that is more than the amount computed for Subdivision (2) but less |
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than or equal to an amount computed under Subchapter C, Chapter 341, |
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using the reference base amount of $2,500. |
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(f) A loan contract under this subchapter may provide for an |
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administrative fee [$25 for a loan of more than $1,000 or $20 for a
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loan of $1,000 or less]. The administrative fee is considered |
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earned when the loan is made or refinanced and is not subject to |
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refund. An administrative fee is not interest. A lender |
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refinancing the loan may not contract for or receive an |
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administrative fee for the loan more than once in any 180-day |
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period, except that if the loan has an interest charge authorized by |
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Subsection (e) the lender may not contract for or receive the |
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administrative fee more than once in any 365-day period. One dollar |
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of each administrative fee may be deposited with the comptroller |
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for use in carrying out the finance commission's responsibilities |
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under Section 11.3055. |
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(g) The finance commission shall prescribe by rule the |
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maximum amount of an administrative fee. |
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SECTION 2. Section 342.252, Finance Code, is amended to |
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read as follows: |
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Sec. 342.252. ALTERNATE INTEREST CHARGE. (a) Instead of |
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the charges authorized by Section 342.201, a loan contract may |
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provide for: |
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(1) on a cash advance of less than $30, an acquisition |
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charge [that is not more than $1 for each $5 of the cash advance]; |
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(2) on a cash advance equal to or more than $30 but not |
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more than $100: |
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(A) an acquisition charge [that is not more than
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the amount equal to one-tenth of the amount of the cash advance]; |
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and |
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(B) an installment account handling charge that |
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is not more than: |
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(i) $3 a month if the cash advance is not |
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more than $35; |
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(ii) $3.50 a month if the cash advance is |
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more than $35 but not more than $70; or |
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(iii) $4 a month if the cash advance is more |
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than $70; or |
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(3) on a cash advance of more than $100: |
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(A) an acquisition charge [that is not more than
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$10]; and |
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(B) an installment account handling charge that |
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is not more than the ratio of $4 a month for each $100 of cash |
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advance. |
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(b) The finance commission shall prescribe by rule the |
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maximum amount of an acquisition charge. |
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(c) An acquisition charge under this subchapter is not |
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considered to be interest. |
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SECTION 3. Section 342.259(a), Finance Code, is amended to |
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read as follows: |
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(a) Instead of the charges authorized by Sections 342.201 |
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and 342.252, a loan made under this subchapter with a maximum cash |
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advance computed under Subchapter C, Chapter 341, using a reference |
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base amount that is more than $100 but not more than $200, may |
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provide for: |
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(1) an acquisition charge [that is not more than $10]; |
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and |
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(2) an installment account handling charge that is not |
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more than the ratio of $4 a month for each $100 of cash advance. |
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SECTION 4. The changes in law made by this Act apply only to |
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a loan made on or after the effective date of this Act. A loan made |
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before the effective date of this Act is governed by the law in |
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effect on the date the loan was made, and the former law is |
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continued in effect for that purpose. |
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SECTION 5. This Act takes effect September 1, 2013. |