| 1 | 1 | | 87R4833 MLH-D |
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| 2 | 2 | | By: Pacheco H.B. No. 1937 |
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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 the maximum permitted rate of interest, sum of fees, and |
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| 8 | 8 | | other amounts that may be charged in connection with deferred |
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| 9 | 9 | | presentment transactions. |
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| 10 | 10 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 11 | 11 | | SECTION 1. Subchapter M, Chapter 342, Finance Code, is |
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| 12 | 12 | | amended by adding Section 342.606 to read as follows: |
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| 13 | 13 | | Sec. 342.606. MAXIMUM INTEREST RATES. (a) Unless a lower |
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| 14 | 14 | | rate of interest is otherwise provided by law, the maximum rate or |
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| 15 | 15 | | amount of interest that may be contracted for, charged, or received |
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| 16 | 16 | | from a borrower for a deferred presentment transaction is 36 |
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| 17 | 17 | | percent a year. |
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| 18 | 18 | | (b) A deferred presentment transaction entered into in |
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| 19 | 19 | | violation of this section is void and unenforceable. |
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| 20 | 20 | | SECTION 2. Subchapter G, Chapter 393, Finance Code, is |
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| 21 | 21 | | amended by adding Section 393.629 to read as follows: |
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| 22 | 22 | | Sec. 393.629. RESTRICTION ON CHARGES CHARGED IN CONNECTION |
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| 23 | 23 | | WITH DEFERRED PRESENTMENT TRANSACTIONS. (a) For purposes of this |
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| 24 | 24 | | section, the annual percentage rate of an extension of consumer |
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| 25 | 25 | | credit in the form of a deferred presentment transaction is |
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| 26 | 26 | | calculated including the total charges charged to the consumer in |
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| 27 | 27 | | connection with the extension of consumer credit, including |
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| 28 | 28 | | interest, lender charges, and any fees or any other valuable |
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| 29 | 29 | | consideration received by the credit access business or a |
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| 30 | 30 | | representative of the credit access business. |
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| 31 | 31 | | (b) The annual percentage rate of an extension of consumer |
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| 32 | 32 | | credit in the form of a deferred presentment transaction that a |
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| 33 | 33 | | credit access business obtains for a consumer or assists a consumer |
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| 34 | 34 | | in obtaining may not exceed 36 percent. |
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| 35 | 35 | | (c) A deferred presentment transaction entered into in |
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| 36 | 36 | | violation of this section is void and unenforceable. |
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| 37 | 37 | | SECTION 3. Sections 342.606 and 393.629, Finance Code, as |
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| 38 | 38 | | added by this Act, apply only to a loan or extension of consumer |
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| 39 | 39 | | credit, as applicable, made on or after the effective date of this |
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| 40 | 40 | | Act. A loan or extension of consumer credit made before the |
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| 41 | 41 | | effective date of this Act is governed by the law in effect on the |
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| 42 | 42 | | date the loan or extension of consumer credit was made, and the |
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| 43 | 43 | | former law is continued in effect for that purpose. For purposes of |
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| 44 | 44 | | this section, a refinance of a loan or extension of consumer credit |
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| 45 | 45 | | is considered made on the date the loan or extension of consumer |
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| 46 | 46 | | credit being refinanced was made. |
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| 47 | 47 | | SECTION 4. This Act takes effect September 1, 2021. |
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