Texas House Bill HB3673

Texas 2017 - 85th Regular

Caption

Relating to deferred payments under motor vehicle retail installment contracts.

Impact

The enactment of HB 3673 is expected to have significant implications for both consumers and lenders involved in motor vehicle financing. By refining the rules regarding time price differentials during the deferment period, the bill aims to protect consumers from excessive charges while still allowing lenders to recoup some costs associated with the deferment. This balance is necessary to ensure fair dealings in the retail financing landscape, particularly for individuals who may face financial difficulties and seek flexibility in payment options.

Summary

House Bill 3673 addresses the regulations surrounding deferred payments under motor vehicle retail installment contracts. The bill amends certain provisions of the Finance Code to clarify and modify how deferment charges are calculated when payments are deferred. Specifically, it allows for a deferment charge to be collected based on the amount deferred for a limited duration and defines the conditions under which the holder of a retail installment contract may continue to accrue time price differentials during a period of deferment. This clarification is essential for both lenders and consumers in understanding their rights and obligations under such contracts.

Contention

While HB 3673 aims to create clarity in the law, there may be points of contention regarding the interpretation of what constitutes an 'additional cost' to lenders during the deferment. Stakeholders might raise questions about the fairness of fees that can be charged, as well as the potential impact on lending practices. Some consumer advocacy groups may argue that, despite the intent to protect consumers, such provisions could lead to higher overall costs for vehicle financing or deter lenders from offering flexible payment options altogether.