By: Lambert H.B. No. 4219
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to increasing the interest rate of certain consumer loans.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 342.201(e), Finance Code, is amended to
  read as follows:
         (e)  A loan contract under this chapter that is not secured
  by real property may provide for a rate or amount of interest
  computed using the true daily earnings method or the scheduled
  installment earnings method that does not exceed:
               (1)  30 percent plus the federal funds rate a year on
  that part of the cash advance that is less than or equal to the
  amount computed under Subchapter C, Chapter 341, using the
  reference base amount of $500;
               (2)  24 percent plus the federal funds rate a year on
  that part of the cash advance that is more than the amount computed
  for Subdivision (1) but less than or equal to an amount computed
  under Subchapter C, Chapter 341, using the reference base amount of
  $1,050; and
               (3)  18 percent plus the federal funds rate a year on
  that part of the cash advance that is more than the amount computed
  for Subdivision (2) but less than or equal to an amount computed
  under Subchapter C, Chapter 341, using the reference base amount of
  $2,500.
  As used in this section, the “federal funds rate” means the rate
  published by the Board of Governors of the Federal Reserve System in
  its statistical release H.15 Selected Interest Rates subject to
  section XXX.
         SECTION 2.  Section XXX:
         (a)  On September 1 and March 1 of each year, the consumer
  credit commissioner shall compute the 342.201(e) ceilings for the
  calendar quarter effective the following November 1 and May 1,
  respectively. The 342.201(e) semi-annual ceilings become effective
  for six month periods beginning on the effective dates set out in
  this subsection and are subject to adjustment after each six month
  period.
         (b)  The 342.201(e) semi-annual ceilings are computed by
  averaging all of the published federal funds rates during the six
  calendar months preceding the computation date of the ceiling. For
  the purposes of this section, if the average computed for the
  federal funds rate is more than five percent, the rate for the
  purposes of calculation is five percent; if the average rate
  computed for the federal funds rate is less than zero, the rate for
  the purposes of calculation is zero.
         (c)  The ceiling shall be published before the 11th day after
  the date on which the ceiling is computed.
         SECTION 3.  The change in law made by this Act applies only
  to a loan made on or after the effective date of this Act. A loan
  made before the effective date of this Act is governed by the law in
  effect on the date the loan was made, and the former law is
  continued in effect for that purpose. For purposes of this section,
  a refinance or renewal of a loan is considered made on the date the
  loan being refinanced or renewed was made.
         SECTION 4.  This Act takes effect September 1, 2023.