BILL ANALYSIS H.B. 4134 By: Lujan Pensions, Investments & Financial Services Committee Report (Unamended) BACKGROUND AND PURPOSE The bill author has informed the committee that the Office of Consumer Credit Commissioner perceives an ambiguity in current law regarding a borrower purchasing a motor vehicle in installments of electronic payments, allowing for an unregulated third party to charge and collect a fee from the customer for processing the payment but preventing the regulated creditor or account servicer from offering such payment methods to their own customers. Additionally, a creditor subject to that law may assess a late fee that does not exceed five percent of the entire installment if not paid within 15 days after the installment due date. H.B. 4134 seeks to clarify this ambiguity and help customers avoid a late fee by providing for certain creditors to offer their own customers various payment method options, including those that may be accompanied by a fee in order to expedite and apply the payment immediately to the customers' accounts. CRIMINAL JUSTICE IMPACT It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution. ANALYSIS H.B. 4134 amends the Finance Code to authorize the holder of a retail installment contract or the holder's agent to collect a fee for processing a retail buyer's electronic payment for a motor vehicle under the contract only if the following conditions apply: the fee is reasonably related to the expense incurred by the holder or holder's agent in processing the electronic payment; the fee does not exceed the lesser of $10 or five percent of the amount of the payment; and the holder or holder's agent: o allows the buyer to make a payment by a method other than an electronic payment that does not incur a fee; o does not establish electronic payment as the expected form of payment; and o informs the buyer, before the buyer agrees to make an electronic payment, of the amount of the fee to be charged; that the buyer may make a payment by an alternative method that does not incur a fee, including by check, cash, or money order; and that the holder or holder's agent may not establish electronic payment as the expected form of payment. The bill defines "electronic payment" as a payment made by credit card, debit card, electronic funds transfer, electronic check, or other electronic method. EFFECTIVE DATE September 1, 2025.
BILL ANALYSIS
# BILL ANALYSIS
H.B. 4134
By: Lujan
Pensions, Investments & Financial Services
Committee Report (Unamended)
H.B. 4134
By: Lujan
Pensions, Investments & Financial Services
Committee Report (Unamended)
BACKGROUND AND PURPOSE The bill author has informed the committee that the Office of Consumer Credit Commissioner perceives an ambiguity in current law regarding a borrower purchasing a motor vehicle in installments of electronic payments, allowing for an unregulated third party to charge and collect a fee from the customer for processing the payment but preventing the regulated creditor or account servicer from offering such payment methods to their own customers. Additionally, a creditor subject to that law may assess a late fee that does not exceed five percent of the entire installment if not paid within 15 days after the installment due date. H.B. 4134 seeks to clarify this ambiguity and help customers avoid a late fee by providing for certain creditors to offer their own customers various payment method options, including those that may be accompanied by a fee in order to expedite and apply the payment immediately to the customers' accounts.
CRIMINAL JUSTICE IMPACT It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.
RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.
ANALYSIS H.B. 4134 amends the Finance Code to authorize the holder of a retail installment contract or the holder's agent to collect a fee for processing a retail buyer's electronic payment for a motor vehicle under the contract only if the following conditions apply: the fee is reasonably related to the expense incurred by the holder or holder's agent in processing the electronic payment; the fee does not exceed the lesser of $10 or five percent of the amount of the payment; and the holder or holder's agent: o allows the buyer to make a payment by a method other than an electronic payment that does not incur a fee; o does not establish electronic payment as the expected form of payment; and o informs the buyer, before the buyer agrees to make an electronic payment, of the amount of the fee to be charged; that the buyer may make a payment by an alternative method that does not incur a fee, including by check, cash, or money order; and that the holder or holder's agent may not establish electronic payment as the expected form of payment. The bill defines "electronic payment" as a payment made by credit card, debit card, electronic funds transfer, electronic check, or other electronic method.
EFFECTIVE DATE September 1, 2025.
BACKGROUND AND PURPOSE
The bill author has informed the committee that the Office of Consumer Credit Commissioner perceives an ambiguity in current law regarding a borrower purchasing a motor vehicle in installments of electronic payments, allowing for an unregulated third party to charge and collect a fee from the customer for processing the payment but preventing the regulated creditor or account servicer from offering such payment methods to their own customers. Additionally, a creditor subject to that law may assess a late fee that does not exceed five percent of the entire installment if not paid within 15 days after the installment due date. H.B. 4134 seeks to clarify this ambiguity and help customers avoid a late fee by providing for certain creditors to offer their own customers various payment method options, including those that may be accompanied by a fee in order to expedite and apply the payment immediately to the customers' accounts.
CRIMINAL JUSTICE IMPACT
It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.
RULEMAKING AUTHORITY
It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.
ANALYSIS
H.B. 4134 amends the Finance Code to authorize the holder of a retail installment contract or the holder's agent to collect a fee for processing a retail buyer's electronic payment for a motor vehicle under the contract only if the following conditions apply:
the fee is reasonably related to the expense incurred by the holder or holder's agent in processing the electronic payment;
the fee does not exceed the lesser of $10 or five percent of the amount of the payment; and
the holder or holder's agent:
o allows the buyer to make a payment by a method other than an electronic payment that does not incur a fee;
o does not establish electronic payment as the expected form of payment; and
o informs the buyer, before the buyer agrees to make an electronic payment, of the amount of the fee to be charged; that the buyer may make a payment by an alternative method that does not incur a fee, including by check, cash, or money order; and that the holder or holder's agent may not establish electronic payment as the expected form of payment.
The bill defines "electronic payment" as a payment made by credit card, debit card, electronic funds transfer, electronic check, or other electronic method.
EFFECTIVE DATE
September 1, 2025.