Relating to insufficient funds charges and check or debit authorization for a deferred presentment transaction.
Impact
The proposed legislation seeks to amend Chapter 393 of the Finance Code, thereby shaping how credit access businesses conduct transactions related to consumer checks. This bill could significantly impact the way these businesses operate by limiting the total fees they can charge for insufficient funds. The intention is to minimize the financial burden placed on consumers, particularly during times when they may already be facing cash flow challenges. By establishing a capped fee structure, the bill hopes to bring more fairness and transparency to deferred presentment transactions.
Summary
SB1714 is a legislative proposal aimed at regulating insufficient funds charges associated with checks or debit authorizations in deferred presentment transactions. under the provisions outlined in the bill, consumers are protected from incurring excessive charges when their checks bounce due to insufficient funds. Specifically, the bill stipulates that aggregate charges for insufficient funds cannot exceed $25, regardless of the number of times payment is presented against an account. This regulation is particularly relevant for individuals engaging with credit access businesses, which facilitate cash advances for consumers.
Sentiment
Overall, the sentiment surrounding SB1714 appears to be supportive among consumer protection advocates and some lawmakers who align with concerns for vulnerable populations. By introducing stricter regulations on insufficient funds charges, supporters argue it can alleviate some of the financial strain faced by consumers who often turn to credit access businesses for short-term cash needs. However, there may be concerns from credit access businesses regarding the potential impact on their operations and profitability as they adapt to these new limitations.
Contention
While the bill has garnered support for its consumer protection elements, there may be notable contention regarding the implications for credit access businesses. Industry stakeholders may argue that such regulations could stifle their operations or lead to unintended consequences, including reduced access to credit for consumers. Debates may center on how best to balance the need for consumer protections with the viability of businesses that provide these financial services, leading to a broader discussion on financial regulation within the state.
Relating to credit services organizations and extensions of consumer credit facilitated by credit services organizations; increasing a criminal penalty.