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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 certain |
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extensions of credit; 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) Except as |
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provided by Subsection (b), the maximum annual percentage rate that |
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may be contracted for, charged, or received from a borrower for a |
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deferred presentment transaction is 36 percent a year. |
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(b) If another law provides for a restriction or limitation |
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on fees, rates, or charges that results in a total cost to a |
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borrower that is less than the total cost to the borrower under the |
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maximum annual percentage rate allowed by Subsection (a), that law |
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prevails. |
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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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(d) 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 subsection is a Class A misdemeanor. |
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SECTION 2. Subchapter D, Chapter 393, Finance Code, is |
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amended by adding Section 393.3035 to read as follows: |
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Sec. 393.3035. RESTRICTION ON CHARGES CHARGED IN CONNECTION |
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WITH EXTENSION OF CONSUMER CREDIT. (a) For purposes of this |
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section, the annual percentage rate of an extension of consumer |
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credit is calculated including the total charges charged to the |
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consumer in connection with the extension of consumer credit, |
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including interest, lender charges, and any fees or any other |
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valuable consideration received by the credit services |
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organization or a representative of the credit services |
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organization. |
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(b) The annual percentage rate of an extension of consumer |
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credit that a credit services organization obtains for a consumer |
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or assists a consumer in obtaining may not exceed 36 percent. |
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(c) An extension of consumer credit 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 393.3035, 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, 2027. |