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A BILL TO BE ENTITLED
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AN ACT
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relating to the maximum permitted rate of interest, sum of fees, and |
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other amounts that may be charged in connection with deferred |
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presentment transactions; creating a criminal offense. |
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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. MAXIMUM INTEREST RATES. (a) Unless a lower |
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rate of interest is otherwise provided by law, the maximum rate or |
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amount of interest that may be contracted for, charged, or received |
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from a borrower is: |
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(1) for a deferred presentment transaction that |
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advances more than $300, 38.5 percent a year; and |
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(2) for a deferred presentment transaction that |
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advances not more than $300, 36 percent a year. |
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(b) A deferred presentment transaction entered into in |
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violation of this section is void and unenforceable. |
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(c) A lender commits an offense if the lender enters into a |
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deferred presentment transaction in violation of this section. An |
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offense under this section is a Class A misdemeanor. |
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SECTION 2. 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. RESTRICTION ON CHARGES CHARGED IN CONNECTION |
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WITH DEFERRED PRESENTMENT TRANSACTIONS. (a) For purposes of this |
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section, the annual percentage rate of an extension of consumer |
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credit in the form of a deferred presentment transaction is |
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calculated including the total charges charged to the consumer in |
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connection with the extension of consumer credit, including |
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interest, lender charges, and any fees or any other valuable |
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consideration received by the credit access business or a |
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representative of the credit access business. |
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(b) The annual percentage rate of an extension of consumer |
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credit in the form of a deferred presentment transaction that a |
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credit access business obtains for a consumer or assists a consumer |
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in obtaining may not exceed: |
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(1) for a deferred presentment transaction that |
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advances more than $300, 38.5 percent; and |
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(2) for a deferred presentment transaction that |
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advances not more than $300, 36 percent. |
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(c) A deferred presentment transaction entered into in |
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violation of this section is void and unenforceable. |
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SECTION 3. Sections 342.606 and 393.629, Finance Code, as |
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added by this Act, apply only to a loan or extension of consumer |
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credit, as applicable, made on or after the effective date of this |
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Act. A loan or extension of consumer credit made before the |
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effective date of this Act is governed by the law in effect on the |
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date the loan or extension of consumer credit was made, and the |
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former law is continued in effect for that purpose. For purposes of |
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this section, a refinance of a loan or extension of consumer credit |
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is considered made on the date the loan or extension of consumer |
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credit being refinanced was made. |
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SECTION 4. This Act takes effect September 1, 2025. |