


A BILL TO BE ENTITLED


AN ACT


relating to methods of computing interest charges on certain 

consumer loans. 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 

SECTION 1. Section 342.201, Finance Code, is amended by 

adding Subsection (e1) to read as follows: 

(e1) The interest charge under Subsection (e) must be 

contracted for, charged, or received using the scheduled 

installment earnings method or the true daily earnings method under 

one of the following methods: 

(1) applying the applicable daily rate to each part of 

the unpaid principal balance corresponding to the brackets 

described by Subsection (e) for the actual or scheduled number of 

days during a payment period; or 

(2) applying a single equivalent daily rate to the 

unpaid principal balance for the actual or scheduled number of days 

during a payment period, where the single equivalent daily rate is 

determined at the inception of the loan using the scheduled 

installment earnings method and would earn an amount of interest 

authorized under Subsection (e) if the debt were paid to maturity 

according to the schedule of payments. 

SECTION 2. This Act takes effect September 1, 2019. 