By: Menéndez S.B. No. 1736
A BILL TO BE ENTITLED
AN ACT
relating to a convenience fee for processing electronic payments
for motor vehicles.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter E, Chapter 348, Finance Code, is
amended by adding Section 348.416 to read as follows:
Sec. 348.416. CONVENIENCE FEE FOR PROCESSING ELECTRONIC
PAYMENTS AUTHORIZED. (a) In this section, "electronic payment"
means a payment made by credit card, debit card, electronic funds
transfer, electronic check, or other electronic method.
(b) A holder of a retail installment contract or the
holder's agent may collect a fee for processing a retail buyer's
electronic payment under the contract only if:
(1) the fee is reasonably related to the expense
incurred by the holder or holder's agent in processing the
electronic payment;
(2) the fee does not exceed the lesser of $10 or five
percent of the amount of the payment; and
(3) the holder or holder's agent:
(A) allows the buyer to make a payment by a method
other than an electronic payment that does not incur a fee;
(B) does not establish electronic payment as the
expected form of payment; and
(C) informs the buyer of the following before the
buyer agrees to make an electronic payment:
(i) the amount of the fee to be charged
under this section;
(ii) 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
(iii) that the holder or holder's agent may
not establish electronic payment as the expected form of payment.
SECTION 2. This section is effective September 1, 2025.