Texas 2013 - 83rd Regular

Texas Senate Bill SB1251 Compare Versions

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Old	New	Differences
1	1	83R18211 CLG-F
2	2	By: Carona S.B. No. 1251
3	3	(Villarreal)
4	4	Substitute the following for S.B. No. 1251: No.
5	5
6	6
7	7	A BILL TO BE ENTITLED
8	8	AN ACT
9	9	relating to authorized charges and terms for certain consumer
10	10	loans.
11	11	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
12	12	SECTION 1. Section 342.002, Finance Code, is amended by
13	13	adding Subsection (d) to read as follows:
14	14	(d) Interest under the scheduled installment earnings
15	15	method or true daily earnings method may not be compounded.
16	16	SECTION 2. The heading to Section 342.201, Finance Code, is
17	17	amended to read as follows:
18	18	Sec. 342.201. MAXIMUM INTEREST CHARGE AND ADMINISTRATIVE
19	19	FEE.
20	20	SECTION 3. Section 342.201, Finance Code, is amended by
21	21	amending Subsection (f) and adding Subsection (g) to read as
22	22	follows:
23	23	(f) A loan contract under this subchapter may provide for an
24	24	administrative fee in an amount not to exceed $25 for a loan of more
25	25	than $1,000 or $20 for a loan of $1,000 or less. The administrative
26	26	fee is considered earned when the loan is made or refinanced and is
27	27	not subject to refund. An administrative fee is not interest. A
28	28	lender refinancing the loan may not contract for or receive an
29	29	administrative fee for the loan more than once in any 180-day
30	30	period, except that if the loan has an interest charge authorized by
31	31	Subsection (e) the lender may not contract for or receive the
32	32	administrative fee more than once in any 365-day period. One dollar
33	33	of each administrative fee may be deposited with the comptroller
34	34	for use in carrying out the finance commission's responsibilities
35	35	under Section 11.3055.
36	36	(g) The finance commission by rule may prescribe a
37	37	reasonable maximum amount of an administrative fee for a loan
38	38	contract under this subchapter that is greater than the maximum
39	39	amount authorized by this section for the amount of the loan.
40	40	SECTION 4. Section 342.252, Finance Code, is amended to
41	41	read as follows:
42	42	Sec. 342.252. ALTERNATE CHARGES [INTEREST CHARGE]. (a)
43	43	Instead of the charges authorized by Section 342.201, a loan
44	44	contract may provide for:
45	45	(1) on a cash advance of less than $30, an acquisition
46	46	charge that is not more than $1 for each $5 of the cash advance;
47	47	(2) on a cash advance equal to or more than $30 but not
48	48	more than $100:
49	49	(A) an acquisition charge that is not more than
50	50	the amount equal to one-tenth of the amount of the cash advance; and
51	51	(B) an installment account handling charge that
52	52	is not more than:
53	53	(i) $3 a month if the cash advance is not
54	54	more than $35;
55	55	(ii) $3.50 a month if the cash advance is
56	56	more than $35 but not more than $70; or
57	57	(iii) $4 a month if the cash advance is more
58	58	than $70; or
59	59	(3) on a cash advance of more than $100:
60	60	(A) an acquisition charge that is not more than
61	61	$10; and
62	62	(B) an installment account handling charge that
63	63	is not more than the ratio of $4 a month for each $100 of cash
64	64	advance.
65	65	(b) For an acquisition charge authorized by this
66	66	subchapter, the finance commission by rule may prescribe a
67	67	reasonable maximum amount for an acquisition charge that is greater
68	68	than the maximum amount authorized by the applicable section of
69	69	this subchapter for the amount of the cash advance.
70	70	(c) An acquisition charge under this subchapter is not
71	71	interest.
72	72	SECTION 5. Section 342.255, Finance Code, is amended to
73	73	read as follows:
74	74	Sec. 342.255. MAXIMUM LOAN TERM. The maximum scheduled
75	75	term of a loan made under this subchapter is:
76	76	(1) for a loan of $100 or less, the lesser of:
77	77	(A) one month for each multiple of $10 of cash
78	78	advance; or
79	79	(B) six months; and
80	80	(2) for a loan of more than $100, one month for each
81	81	multiple of $20 of cash advance.
82	82	SECTION 6. Section 342.352(a), Finance Code, is amended to
83	83	read as follows:
84	84	(a) This section applies to a loan contract:
85	85	(1) that includes precomputed interest and to which
86	86	Section 342.351 does not apply;
87	87	(2) that includes interest contracted for under
88	88	Section 342.201 or 342.260; or
89	89	(3) that has a term of more than 60 months.
90	90	SECTION 7. Subchapter F, Chapter 342, Finance Code, is
91	91	amended by adding Section 342.260 to read as follows:
92	92	Sec. 342.260. ALTERNATE INTEREST CHARGE COMPUTATION
93	93	METHODS. (a) A loan contract under this subchapter may provide for
94	94	an interest charge computed using the true daily earnings method or
95	95	the scheduled installment earnings method that does not exceed the
96	96	equivalent rate or effective return of the installment account
97	97	handling charge for the original scheduled term of the loan.
98	98	(b) The principal balance of a loan contract authorized by
99	99	this section may not include the acquisition charge, installment
100	100	account handling charge, default charges, or deferment charges or
101	101	the return check fees authorized by Section 3.506, Business &
102	102	Commerce Code.
103	103	(c) Interest may accrue on the principal balance from time
104	104	to time unpaid at the rate provided for by the contract until the
105	105	date of payment in full or demand for payment in full.
106	106	(d) A payment on a loan contract authorized by this section
107	107	shall be applied to the borrower's account in the following order
108	108	or, at the lender's option, under another method of applying a
109	109	payment that is more favorable to the borrower:
110	110	(1) the straight line allocation of the acquisition
111	111	charge using the original scheduled term of the loan based on the
112	112	proportional scheduled payment that was paid or scheduled to be
113	113	paid;
114	114	(2) default charges authorized by Section 342.257;
115	115	(3) return check fees authorized by Section 3.506,
116	116	Business & Commerce Code;
117	117	(4) any other charges authorized by this subchapter;
118	118	(5) accrued interest authorized by this section; and
119	119	(6) principal.
120	120	SECTION 8. The changes in law made by this Act apply only to
121	121	a loan made on or after the effective date of this Act. A loan made
122	122	before the effective date of this Act is governed by the law in
123	123	effect on the date the loan was made, and the former law is
124	124	continued in effect for that purpose.
125	125	SECTION 9. This Act takes effect September 1, 2013.