Relating to the interest and fees that may be charged for certain consumer loans; providing a criminal penalty.
Impact
The key impact of SB248 on state laws hinges on its restructuring of the Finance Code related to consumer lending. By establishing a statutory ceiling on interest rates, the bill aims to curtail predatory lending practices that disproportionately affect vulnerable populations. The implementation of the bill could enhance financial protection for consumers, allowing for more equitable access to loans while fostering a more predictable lending environment. Moreover, it lays down criminal penalties for violations, thereby holding lenders accountable and discouraging potentially exploitative lending behaviors.
Summary
SB248 addresses the regulation of interest rates and fees that can be charged for certain consumer loans in the state of Texas. The bill explicitly sets a cap on the annual interest rate for unsecured loans, limiting it to a maximum of 36%. This limit applies to any fees included in the computation of interest, aiming to protect consumers from exorbitant lending rates that often accompany high-interest loans. Additional provisions of the bill require lenders to refund or credit unearned interest charges if a loan is prepaid in full, bringing greater transparency and fairness to loan agreements.
Contention
While SB248 seeks to modernize the framework for consumer lending, it may face contention particularly from financial institutions that argue such regulations could limit their ability to extend credit. Lenders may contend that capping interest rates universally could reduce their incentive to offer loans to higher-risk borrowers. Thus, the bill could inadvertently limit access to credit for those who might need it the most, raising concerns about unintended consequences that could exacerbate financial exclusion. Legislative discussions around this topic are expected to focus on balancing consumer protection with the practicalities of lending.
Relating to credit services organizations and extensions of consumer credit facilitated by credit services organizations; increasing a criminal penalty.
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.
Relating to the regulation of sports wagering; requiring occupational permits; authorizing fees; imposing a tax; decriminalizing wagering on certain sports events; creating criminal offenses; providing administrative penalties.
Relating to the regulation of sports wagering; requiring occupational permits; authorizing fees; imposing a tax; decriminalizing wagering on certain sports events; creating criminal offenses; providing administrative penalties.
Relating to reporting ownership of mineral interests severed from the surface estate and the vesting of title by judicial proceeding to certain abandoned mineral interests.