The implications of HB 1979 are significant for financial institutions and businesses engaging in commercial lending. By enabling varied methods of interest calculation, the bill could potentially streamline the loan servicing process and make lending more competitive. The law stipulates that agreements entered before the effective date will remain governed by the existing regulations, indicating a respect for established contracts while allowing newer agreements to benefit from the updated provisions.
Summary
House Bill 1979 seeks to amend the Finance Code of Texas, specifically addressing interest computations on commercial loans. The bill introduces new methodologies by which creditors and obligors can agree on the annual interest rate for commercial loans, including the option to compute interest using a 365/360 or 366/360 basis. This change aims to provide more clarity and flexibility in loan agreements between parties, enhancing the terms under which commercial loans can be calculated financially.
Contention
Throughout the legislative discussions, there were concerns raised about the potential complexity that could arise from the dual methods of interest computation. Some stakeholders feared that these changes might mislead less experienced borrowers regarding the total cost of borrowing, while proponents argued that the bill would foster greater transparency and wider acceptance of flexible loan terms. Notably, some had concerns about the implications for consumer protections in the commercial lending space, advocating for clearer guidelines to ensure borrowers are adequately informed.
Relating to amendments to the Uniform Commercial Code, including amendments concerning certain intangible assets and the perfection of security interests in those assets.
Relating to amendments to the Uniform Commercial Code, including amendments concerning certain intangible assets and the perfection of security interests in those assets.
Relating to the regulation of money services businesses; creating a criminal offense; creating administrative penalties; authorizing the imposition of a fee.
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.