Texas House Bill HB2624

Texas 2021 - 87th Regular

Caption

Relating to a restriction on total charges charged for certain extensions of consumer credit that are facilitated by credit access businesses and entered into by consumers residing in disaster areas.

Impact

The introduction of HB2624 could significantly alter the landscape of consumer lending in Texas by enforcing stringent regulations on credit access businesses operating in disaster areas. By limiting the rates charged, the bill seeks to offer crucial financial relief to individuals and families recovering from disasters such as floods, hurricanes, or other emergencies. This change may foster a more equitable lending environment by protecting at-risk consumers from exorbitant fees and preventing predatory lending practices that often thrive in vulnerable situations.

Summary

House Bill 2624 aims to impose restrictions on the total charges assessed on extensions of consumer credit facilitated by credit access businesses for consumers residing in areas declared as disaster zones. The bill introduces a cap on the annual percentage rate (APR) that can be charged for deferred presentment transactions, limiting it to 30% during a designated disaster period and extending for two years afterward. This regulation is designed to protect vulnerable consumers who may be particularly affected during and after disasters, preventing them from being overburdened by high-interest rates during already challenging times.

Contention

While the bill garners support from consumer protection advocates who emphasize the need to shield financially distressed individuals from exploitative lending practices, there may be concerns raised by credit access businesses about the financial viability of their services under such stringent regulations. Opponents might argue that capping interest rates could limit the availability of credit options for consumers, potentially leading to fewer services offered in disaster-affected areas. The debate will likely center around balancing consumer protections with the economic realities faced by financial service providers.