Texas House Bill HB4312

Texas 2009 - 81st Regular

Caption

Relating to providing protections to consumers of financial services.

Impact

Significantly, the bill caps the maximum interest rate for credit extensions at nine percent per annum, ensuring that consumers are not subjected to exorbitant charges. Additionally, it prohibits increases in interest rates once payments have begun on a purchased good, thereby protecting consumers from unpredictable financial burdens during repayment periods. This measure aims to create a fairer lending environment, compliant with consumer-friendly practices that should benefit a wide range of the population.

Summary

House Bill 4312 aims to provide essential protections to consumers engaging with financial services in Texas. The bill introduces Chapter 390 to Title 5 of the Finance Code, establishing a framework for general consumer protections applicable to retail transactions. It acknowledges the increasing complexity of consumer transactions, ensuring that there are basic rules in place that cannot be circumvented by deceptive practices. The fundamental goal is to safeguard consumers’ rights and maintain transparency in financial dealings.

Contention

Another notable aspect of HB4312 is its stipulation concerning late fees. The bill limits late fees to a maximum of five dollars and specifically exempts consumers aged 65 years or older and those making incomes at or below 200% of the federal poverty level from such fees. While this is a step toward protecting vulnerable populations from financial stress, it has sparked debate among lenders who argue that such stringent limitations may impact their operations and profitability. Critics may also express concerns about the balance between protecting consumers and ensuring the viability of financial institutions.