H.B. No. 4219
AN ACT
relating to the maximum rate or amount of interest of certain
consumer loans.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 342.201, Finance Code, is amended by
amending Subsection (e) and adding Subsections (e-2) and (e-3) to
read as follows:
(e) A loan contract under this chapter that is not secured
by real property may provide for a rate or amount of interest
computed using the true daily earnings method or the scheduled
installment earnings method that does not exceed:
(1) 30 percent plus the federal funds rate a year on
that part of the cash advance that is less than or equal to the
amount computed under Subchapter C, Chapter 341, using the
reference base amount of $500;
(2) 24 percent plus the federal funds rate a year on
that part of the cash advance that is more than the amount computed
for Subdivision (1) but less than or equal to an amount computed
under Subchapter C, Chapter 341, using the reference base amount of
$1,050; and
(3) 18 percent plus the federal funds rate a year on
that part of the cash advance that is more than the amount computed
for Subdivision (2) but less than or equal to an amount computed
under Subchapter C, Chapter 341, using the reference base amount of
$2,500.
(e-2) On March 1 and September 1 of each year, the
commissioner shall compute the ceilings applicable under
Subsection (e) for the six-month period effective the following May
1 and November 1, respectively. As prescribed by this subsection,
the ceilings are effective for the six-month period beginning on
the effective date and are subject to adjustment after each
six-month period. The commissioner shall submit to the secretary
of state for publication in the Texas Register the ceilings
computed under this subsection not later than the 11th day after the
date on which the ceiling is computed.
(e-3) For purposes of this section:
(1) "Ceiling" means the maximum rate or amount of
interest.
(2) "Federal funds rate" means an interest rate
computed by averaging the Federal Funds rates published by the
Federal Reserve Bank of New York for each day during the six
calendar months preceding the computation date of the ceilings,
except that if that average:
(A) is greater than five percent, the federal
funds rate is five percent; and
(B) is less than zero percent, the federal funds
rate is zero percent.
SECTION 2. The change in law made by this Act applies only
to a loan made on or after the effective date of this Act. A loan
made before the effective date of this Act is governed by the law in
effect on the date the loan was made, and the former law is
continued in effect for that purpose. For purposes of this section,
a refinance or renewal of a loan is considered made on the date the
loan being refinanced or renewed was made.
SECTION 3. This Act takes effect September 1, 2023.
______________________________ ______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 4219 was passed by the House on May 9,
2023, by the following vote: Yeas 130, Nays 13, 2 present, not
voting.
______________________________
Chief Clerk of the House
I certify that H.B. No. 4219 was passed by the Senate on May
22, 2023, by the following vote: Yeas 28, Nays 3.
______________________________
Secretary of the Senate
APPROVED: _____________________
Date
_____________________
Governor