Relating to authorized charges and terms for certain consumer loans.
Impact
The changes implemented by SB1251 signify a critical shift in how consumer loans are regulated in Texas, potentially reducing the financial burden on borrowers by limiting excessive fees and interest accumulation. By capping administrative fees at specified amounts, the bill helps to protect consumers from unexpected financial charges that might arise during the lifecycle of a loan. The specified maximum loan term provisions also aim to provide clearer guidelines for lenders and borrowers, allowing them to better manage their financial commitments.
Summary
SB1251 relates to the authorized charges and terms for certain consumer loans. The bill introduces amendments to the Finance Code, particularly focusing on interest charges and administrative fees associated with consumer loans. Key changes include provisions that prohibit the compounding of interest under specific methods and set maximum limits on administrative fees that can be charged by lenders. These alterations aim to standardize and clarify the terms under which consumer loans are provided in the state of Texas, ensuring greater transparency for borrowers.
Contention
There is potential contention surrounding the amendments proposed by SB1251, particularly from lenders who may feel constrained by the limitations placed on fees and interest calculations. Opponents of the bill may argue that these restrictions could reduce the availability of credit for consumers, particularly for those seeking smaller loan amounts. This balance between consumer protection and the interests of lenders will be crucial in determining the overall effectiveness and reception of the bill within the financial services industry.
Relating to credit services organizations and extensions of consumer credit facilitated by credit services organizations; increasing a criminal penalty.
Relating to the regulation of money services businesses; creating a criminal offense; creating administrative penalties; authorizing the imposition of a fee.
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 procurement by local governments of energy savings performance contracts for certain conservation measures; creating criminal offenses; authorizing a fee.