83R8571 ATP-F
By: Carona S.B. No. 952
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 providing authorizations
with respect to certain transactions do not affect or negatively
impact any rules of law applicable either to other transactions
subject to this chapter or to any 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 interest
[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 when
due, 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, regardless of whether the interest added to
the principal balance is evidenced by an existing or a separate
promissory note or other agreement. 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.