By: Carona S.B. No. 952
(In the Senate - Filed February 28, 2013; March 12, 2013,
read first time and referred to Committee on Business and Commerce;
March 21, 2013, reported adversely, with favorable Committee
Substitute by the following vote: Yeas 9, Nays 0; March 21, 2013,
sent to printer.)
COMMITTEE SUBSTITUTE FOR S.B. No. 952 By: Carona
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 the 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 or a 366/360 basis, as
applicable, 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 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.
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