Texas House Bill HB2459

Texas 2013 - 83rd Regular

Caption

Relating to the limitation on the amount that may be charged for certain debt cancellation agreements.

Impact

The bill is expected to significantly impact the financial industry, particularly those businesses that offer retail installment contracts and related services. By capping the fees that can be charged for debt cancellation agreements, HB2459 promotes transparency and fairness in lending practices. This move could also lead to a decrease in the number of such products being offered if companies find the new limitations unprofitable. However, it is anticipated that it will enhance consumer trust and satisfaction regarding such financial products as users will have better financial protections.

Summary

House Bill 2459 seeks to amend the Finance Code to place limitations on the charges associated with debt cancellation agreements that are linked to retail installment contracts. The proposed legislation stipulates that the maximum charge for such debt cancellation agreements cannot exceed five percent of the financed amount. This is aimed at protecting consumers from potentially exorbitant fees that can arise from debt cancellation products, ensuring that these charges are both commercially reasonable and created in good faith.

Contention

Notable points of contention surrounding HB2459 may arise from financial institutions and businesses that depend on higher fees associated with debt cancellation. Some stakeholders may argue that this bill could lead to a reduction in available credit options for consumers, as lenders may feel constrained by the mandated limits. On the other hand, consumer advocacy groups are likely to support the bill, viewing it as a necessary step toward reducing predatory lending practices and protecting vulnerable borrowers from potentially excessive financial burdens.