83R3832 ATP-F
By: Villarreal H.B. No. 1979
A BILL TO BE ENTITLED
AN ACT
relating to interest on commercial loans.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 306.002, Finance Code, is amended by
adding Subsection (c) to read as follows:
(c) The provisions of this chapter do not affect
transactions that are not subject to this chapter nor affect or
negatively impact any rule of law applicable to transactions not
subject to this chapter.
SECTION 2. Section 306.003, Finance Code, is amended to
read as follows:
Sec. 306.003. COMPUTATION OF LOAN TERMS [TERM]. (a) In
addition to any other method otherwise permitted under this title,
a creditor and an obligor may agree to compute an annual interest
rate on a commercial loan on a 365/360 basis, determined by applying
the ratio of the percentage annual interest rate agreed to by the
parties over a year of 360 days, multiplied by the outstanding
principal balance, multiplied by the actual number of days the
principal balance is outstanding. A creditor and an obligor may
also agree to compute the term and rate of a commercial loan based
on a 360-day year consisting of 12 30-day months. Each [For
purposes of this chapter, each] rate ceiling under Chapters 302 and
303 expressed as a rate per year may mean a rate per year computed in
accordance with this section [consisting of 360 days and of 12
30-day months].
(b) A creditor and an obligor may agree that one or more
payments of interest due or that are scheduled to be due with
respect to a commercial loan may be paid on a periodic basis, but
not more often than monthly, wholly or partly by adding to the
principal balance of the loan the amount of unpaid interest due or
scheduled to be due. On and after the date an amount of interest is
added to the principal balance under this subsection, that amount
no longer constitutes interest, but instead constitutes part of the
principal for purposes of calculating the maximum lawful rate or
amount of interest on the loan.
SECTION 3. The changes in law made by this Act apply only to
a loan agreement entered into on or after the effective date of this
Act. A loan agreement entered into before the effective date of
this Act is governed by the law in effect on the date the agreement
was entered into, and the former law is continued in effect for that
purpose.
SECTION 4. This Act takes effect September 1, 2013.