| 1 | 1 | | 86R1895 GRM-F |
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| 2 | 2 | | By: Buckingham S.B. No. 2277 |
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| 3 | 3 | | |
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| 4 | 4 | | |
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| 5 | 5 | | A BILL TO BE ENTITLED |
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| 6 | 6 | | AN ACT |
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| 7 | 7 | | relating to increasing the interest rate and maximum reference base |
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| 8 | 8 | | amount of certain consumer loans. |
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| 9 | 9 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 10 | 10 | | SECTION 1. Section 342.201(e), Finance Code, is amended to |
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| 11 | 11 | | read as follows: |
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| 12 | 12 | | (e) A loan contract under this chapter that is not secured |
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| 13 | 13 | | by real property may provide for a rate or amount of interest |
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| 14 | 14 | | computed using the true daily earnings method or the scheduled |
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| 15 | 15 | | installment earnings method that does not exceed: |
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| 16 | 16 | | (1) 36 [30] percent a year on that part of the cash |
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| 17 | 17 | | advance that is less than or equal to the amount computed under |
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| 18 | 18 | | Subchapter C, Chapter 341, using the reference base amount of $500; |
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| 19 | 19 | | (2) 24 percent a year on that part of the cash advance |
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| 20 | 20 | | that is more than the amount computed for Subdivision (1) but less |
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| 21 | 21 | | than or equal to an amount computed under Subchapter C, Chapter 341, |
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| 22 | 22 | | using the reference base amount of $1,050; and |
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| 23 | 23 | | (3) 18 percent a year on that part of the cash advance |
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| 24 | 24 | | that is more than the amount computed for Subdivision (2) but less |
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| 25 | 25 | | than or equal to an amount computed under Subchapter C, Chapter 341, |
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| 26 | 26 | | using the reference base amount of $2,500. |
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| 27 | 27 | | SECTION 2. Section 342.251, Finance Code, is amended to |
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| 28 | 28 | | read as follows: |
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| 29 | 29 | | Sec. 342.251. MAXIMUM CASH ADVANCE. The maximum cash |
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| 30 | 30 | | advance of a loan made under this subchapter is an amount computed |
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| 31 | 31 | | under Subchapter C, Chapter 341, using the reference base amount of |
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| 32 | 32 | | $100, except that for loans that are subject to Section 342.259 the |
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| 33 | 33 | | reference base amount is $300 [$200]. |
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| 34 | 34 | | SECTION 3. Section 342.259(a), Finance Code, is amended to |
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| 35 | 35 | | read as follows: |
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| 36 | 36 | | (a) Instead of the charges authorized by Sections 342.201 |
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| 37 | 37 | | and 342.252, a loan made under this subchapter with a maximum cash |
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| 38 | 38 | | advance computed under Subchapter C, Chapter 341, using a reference |
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| 39 | 39 | | base amount that is more than $100 but not more than $300 [$200], |
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| 40 | 40 | | may provide for: |
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| 41 | 41 | | (1) an acquisition charge that is not more than $10; |
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| 42 | 42 | | and |
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| 43 | 43 | | (2) an installment account handling charge that is not |
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| 44 | 44 | | more than the ratio of $4 a month for each $100 of cash advance. |
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| 45 | 45 | | SECTION 4. The changes in law made by this Act apply only to |
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| 46 | 46 | | a loan made on or after the effective date of this Act. A loan made |
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| 47 | 47 | | before the effective date of this Act is governed by the law in |
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| 48 | 48 | | effect on the date the loan was made, and the former law is |
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| 49 | 49 | | continued in effect for that purpose. For purposes of this section, |
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| 50 | 50 | | a refinance or renewal of a loan is considered made on the date the |
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| 51 | 51 | | loan being refinanced or renewed was made. |
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| 52 | 52 | | SECTION 5. This Act takes effect September 1, 2019. |
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