Relating to the extension of consumer credit to certain members of the Texas National Guard and armed forces of the United States and their dependents; providing a penalty.
Impact
A key component of HB2408 is the establishment of a maximum annual percentage rate (APR) cap of 36% on consumer credit extended to servicemembers and their dependents. This provision directly impacts state credit laws by ensuring that military members do not incur exorbitant interest rates that can lead to financial hardship. The bill also mandates that creditors provide clear and comprehensive information regarding the terms of the credit being extended, ensuring that servicemembers are well-informed about their financial obligations. This creates a more transparent lending environment for those serving in the military and their families.
Summary
House Bill 2408 aims to extend consumer credit protections specifically to members of the Texas National Guard and the United States armed forces, as well as their dependents. The legislation introduces a new chapter to the Finance Code that defines the scope of consumer credit transactions involving servicemembers and stipulates specific requirements and limitations that creditors must adhere to when granting credit to these individuals. The intention behind the bill is to safeguard servicemembers from predatory lending practices that can take advantage of their unique situations, particularly as many may face financial challenges due to frequent relocations or deployments.
Contention
While there is widespread support for protecting servicemembers from exploitive lending practices, some stakeholders remain concerned about the implications of such stringent regulations on creditors. Opponents argue that caps on interest rates could limit access to credit for servicemembers, particularly in situations where credit might be necessary for urgent expenditures. Furthermore, the exclusion of certain categories of creditors, such as insured depository institutions and credit unions, raises questions about the uniformity of protections extended to servicemembers, potentially creating discrepancies in how different lenders operate under the new law.
Identical
Relating to the extension of consumer credit to certain members of the Texas National Guard and armed forces of the United States and their dependents; providing a penalty.
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 service requirements of certain current or former members of the Texas National Guard, the Texas Air National Guard, or a reserve component of the armed forces of the United States for tuition and fee exemptions at public institutions of higher education.
Relating to the regulation of the collection, use, processing, and treatment of consumers' personal data by certain business entities; imposing a civil penalty.
Relating to the regulation of the collection, use, processing, and treatment of consumers' personal data by certain business entities; imposing a civil penalty.
Relating to a restriction on total charges charged for extensions of consumer credit that a credit services organization obtains for a consumer or assists a consumer in obtaining.
Relating to the extension of consumer credit to certain members of the Texas National Guard and armed forces of the United States and their dependents; providing a penalty.