Texas Laws - Finance Code
FINANCE CODE
TITLE 4. REGULATION OF INTEREST, LOANS, AND FINANCED TRANSACTIONS

TITLE 4. REGULATION OF INTEREST, LOANS, AND FINANCED TRANSACTIONS (14918)(1-click HTML)

SUBTITLE A. INTEREST (14919)(1-click HTML)

CHAPTER 301. GENERAL PROVISIONS (14920)(1-click HTML)
Sec. 301.001. SHORT TITLE. (14921)(1-click HTML)

This title may be cited as the Texas Credit Title. (14922)

Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999. (14923)

Sec. 301.002. DEFINITIONS. (14924)(1-click HTML)

(a) In this subtitle: (14925)

(1) "Contract interest" means interest that an obligor has paid or agreed to pay to a creditor under a written contract of the parties. The term does not include judgment interest. (14926)

(2) "Credit card transaction" means a transaction for personal, family, or household use in which a credit card, plate, coupon book, or credit card cash advance check may be used or is used to debit an open-end account in connection with: (14927)

(A) a purchase or lease of goods or services; or (14928)

(B) a loan of money. (14929)

(3) "Creditor" means a person who loans money or otherwise extends credit. The term does not include a judgment creditor. (14930)

(4) "Interest" means compensation for the use, forbearance, or detention of money. The term does not include time price differential, regardless of how it is denominated. The term does not include compensation or other amounts that are determined or stated by this code or other applicable law not to constitute interest or that are permitted to be contracted for, charged, or received in addition to interest in connection with an extension of credit. (14931)

(5) "Judgment creditor" means a person to whom a money judgment is payable. (14932)

(6) "Judgment debtor" means a person obligated to pay a money judgment. (14933)

(7) "Judgment interest" means interest on a money judgment, whether the interest accrues before, on, or after the date the judgment is rendered. (14934)

(8) "Legal interest" means interest charged or received in the absence of any agreement by an obligor to pay contract interest. The term does not include judgment interest. (14935)

(9) "Lender credit card agreement": (14936)

(A) means an agreement between a creditor and an obligor that provides that: (14937)

(i) the obligor, by means of a credit card transaction for personal, family, or household use, may: (14938)

(a) obtain loans from the creditor directly or through other participating persons; and (14939)

(b) lease or purchase goods or services from more than one participating lessor or seller who honors the creditor's credit card; (14940)

(ii) the creditor or another person acting in cooperation with the creditor is to reimburse the participating persons, lessors, or sellers for the loans or the goods or services purchased or leased; (14941)

(iii) the obligor is to pay the creditor the amount of the loan or cost of the lease or purchase; (14942)

(iv) the unpaid balance of the loan, lease, or purchase and interest on that unpaid balance are debited to the obligor's account under the agreement; (14943)

(v) interest may be computed on the balances of the obligor's account but is not precomputed; and (14944)

(vi) the obligor and the creditor may agree that payment of part of the balance may be deferred; (14945)

(B) includes an agreement under Section 342.455 or Section 346.003(b) or (c) for an open-end account under which credit card transactions may be made or a merchant discount may be taken; and (14946)

(C) does not include: (14947)

(i) an agreement, including an open-end account credit agreement, between a seller and a buyer or between a lessor and a lessee; or (14948)

(ii) an agreement under which: (14949)

(a) the entire balance is due in full each month; and (14950)

(b) no interest is charged if the obligor pays the entire balance each month. (14951)

(10) "Loan" means an advance of money that is made to or on behalf of an obligor, the principal amount of which the obligor has an obligation to pay the creditor. The term does not include a judgment. (14952)

(11) "Merchant discount" means the consideration, including a fee, charge, discount, or compensating balance, that a creditor requires, or that a creditor, subsidiary, or parent company of the creditor, or subsidiary of the creditor's parent company, receives directly or indirectly from a person other than the obligor in connection with a credit card transaction under a lender credit card agreement between the obligor and the creditor. The term does not include consideration received by a creditor from the obligor in connection with the credit card transaction. (14953)

(12) "Money judgment" means a judgment for money. For purposes of this subtitle, the term includes legal interest or contract interest, if any, that is payable to a judgment creditor under a judgment. (14954)

(13) "Obligor" means a person to whom money is loaned or credit is otherwise extended. The term does not include: (14955)

(A) a judgment debtor; or (14956)

(B) a surety, guarantor, or similar person. (14957)

(14) "Open-end account": (14958)

(A) means an account under a written contract between a creditor and an obligor in connection with which: (14959)

(i) the creditor reasonably contemplates repeated transactions and the obligor is authorized to make purchases or borrow money; (14960)

(ii) interest or time price differential may be charged from time to time on an outstanding unpaid balance; and (14961)

(iii) the amount of credit that may be extended during the term of the account is generally made available to the extent that any outstanding balance is repaid; and (14962)

(B) includes an account under an agreement described by Section 342.455 or Chapter 345 or 346. (14963)

(15) "Prepayment penalty" means consideration agreed on and contracted for a discharge of a loan, other than a loan governed by Chapter 306, before its maturity or a regularly scheduled date of payment, as a result of an obligor's election to pay all of the principal amount before its stated maturity or a regularly scheduled date of payment. (14964)

(16) "Time price differential" means an amount, however denominated or expressed, that is: (14965)

(A) added to the price at which a seller offers to sell services or property to a purchaser for cash payable at the time of sale; and (14966)

(B) paid or payable to the seller by the purchaser for the privilege of paying the offered sales price after the time of sale. (14967)

(17) "Usurious interest" means interest that exceeds the applicable maximum amount allowed by law. (14968)

(b) The Finance Commission of Texas by rule may adopt other definitions to accomplish the purposes of this title. (14969)

Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999; Acts 1999, 76th Leg., ch. 909, Sec. 2.01, eff. Sept. 1, 1999. (14970)

Amended by: (14971)

Acts 2005, 79th Leg., Ch. 1018 (H.B. 955), Sec. 2.01, eff. September 1, 2005. (14972)

CHAPTER 302. INTEREST RATES (14973)(1-click HTML)
SUBCHAPTER A. USURIOUS INTEREST (14974)(1-click HTML)
Sec. 302.001. CONTRACTING FOR, CHARGING, OR RECEIVING INTEREST OR TIME PRICE DIFFERENTIAL; USURIOUS INTEREST. (14975)(1-click HTML)

(a) A creditor may contract for, charge, and receive from an obligor interest or time price differential. (14976)

(b) The maximum rate or amount of interest is 10 percent a year except as otherwise provided by law. A greater rate of interest than 10 percent a year is usurious unless otherwise provided by law. All contracts for usurious interest are contrary to public policy and subject to the appropriate penalty prescribed by Chapter 305. (14977)

(c) To determine the interest rate of a loan under this subtitle, all interest at any time contracted for shall be aggregated and amortized using the actuarial method during the stated term of the loan. (14978)

(d) In addition to interest authorized by Subsection (b), a loan providing for a rate of interest that is 10 percent a year or less may provide for a delinquency charge on the amount of any payment in default for a period of not less than 10 days in an amount not to exceed the greater of five percent of the amount of the payment or $7.50. The charging of the delinquency charge does not make the loan subject to Chapter 342 or any other provision of Subtitle B. (14979)

Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999; Acts 2001, 77th Leg., ch. 916, Sec. 8, eff. Sept. 1, 2001. (14980)

Sec. 302.002. ACCRUAL OF INTEREST WHEN NO RATE SPECIFIED. (14981)(1-click HTML)

If a creditor has not agreed with an obligor to charge the obligor any interest, the creditor may charge and receive from the obligor legal interest at the rate of six percent a year on the principal amount of the credit extended beginning on the 30th day after the date on which the amount is due. If an obligor has agreed to pay to a creditor any compensation that constitutes interest, the obligor is considered to have agreed on the rate produced by the amount of that interest, regardless of whether that rate is stated in the agreement. (14982)

Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999. (14983)

SUBCHAPTER B. OTHER RATES AND PROVISIONS ON LOANS SECURED BY REAL PROPERTY (14984)(1-click HTML)
Sec. 302.101. DETERMINING RATES OF INTEREST BY SPREADING. (14985)(1-click HTML)

(a) To determine whether a loan secured in any part by an interest in real property, including a lien, mortgage, or security interest, is usurious, the interest rate is computed by amortizing or spreading, using the actuarial method during the stated term of the loan, all interest at any time contracted for, charged, or received in connection with the loan. (14986)

(b) If a loan described by Subsection (a) is paid in full before the end of the stated term of the loan and the amount of interest received for the period that the loan exists exceeds the amount that produces the maximum rate authorized by law for that period, the lender shall: (14987)

(1) refund the amount of the excess to the borrower; or (14988)

(2) credit the amount of the excess against amounts owing under the loan. (14989)

(c) A lender who complies with Subsection (b) is not subject to any of the penalties provided by law for contracting for, charging, or receiving interest in excess of the maximum rate authorized. (14990)

Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999. (14991)

Sec. 302.102. PROHIBITION ON PREPAYMENT PENALTY. (14992)(1-click HTML)

If the interest rate on a loan for property that is or is to be the residential homestead of the borrower is greater than 12 percent a year, a prepayment penalty may not be collected on the loan unless the penalty is required by an agency created by federal law. (14993)

Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999; Acts 1999, 76th Leg., ch. 909, Sec. 2.02, eff. Sept. 1, 1999. (14994)

Sec. 302.103. EFFECT OF FEDERAL PREEMPTION ON LATE CHARGES. (14995)(1-click HTML)

On loans subject to 12 U.S.C. Sections 1735f-7 and 1735f-7a, as amended, any late charges assessed are interest that is included in computing the amount or rate of interest on the loan and, therefore, covered by the federal preemption of state interest rate limitations. (14996)

Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999. (14997)

Sec. 302.104. LOAN TO PURCHASE INTEREST IN ENTITY WITH FOREIGN REAL PROPERTY AS PRINCIPAL ASSET. (14998)(1-click HTML)

(a) A loan the proceeds of which are used primarily to purchase an interest in a trust or other entity that has as its principal asset real property located outside the United States is: (14999)

(1) not subject to Subtitle B; and (15000)

(2) subject to the interest rate limitations of Chapter 303. (15001)

(b) For the purpose of determining the interest rate on a loan to which this section applies, all interest contracted for, charged, or received shall be amortized, prorated, allocated, and spread over the full stated term of the loan. (15002)

(c) This section does not affect application of a law of this state governing collateral that may be used to secure a loan to which this section applies. (15003)

Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999. (15004)

CHAPTER 303. OPTIONAL RATE CEILINGS (15005)(1-click HTML)
SUBCHAPTER A. RATE CEILINGS: APPLICABILITY, COMPUTATION, AND PUBLICATION (15006)(1-click HTML)
Sec. 303.001. USE OF CEILINGS. (15007)(1-click HTML)

(a) Except as provided by Subchapter B, a person may contract for, charge, or receive a rate or amount that does not exceed the applicable interest rate ceiling provided by this chapter. The use of a ceiling provided by this chapter for any contract is optional, and a contract may provide for a rate or amount allowed by other applicable law. (15008)

(b) A contract that is subject to Chapter 342, 345, 347, 348, or 353, including a contract for an open-end account, may, as an alternative to an interest rate or amount of time price differential allowed under that chapter, provide for a simple or precomputed rate or amount of time price differential that does not exceed the applicable ceiling provided by this chapter or by the equivalent yield authorized by Chapter 342, 345, 347, 348, or 353. (15009)

(c) Except as inconsistent with this chapter, a party to a contract that is subject to Chapter 342, 345, 347, 348, or 353, or the party's assignee, has all rights, duties, and obligations under the applicable chapter, including those relating to refund credits on prepayment or acceleration. (15010)

Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999. (15011)

Amended by: (15012)

Acts 2011, 82nd Leg., R.S., Ch. 117 (H.B. 2559), Sec. 2, eff. September 1, 2011. (15013)

Sec. 303.002. WEEKLY CEILING. (15014)(1-click HTML)

The parties to a written agreement may agree to an interest rate, or in an agreement described by Chapter 345, 347, 348, or 353, an amount of time price differential producing a rate, that does not exceed the applicable weekly ceiling. (15015)

Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999. (15016)

Amended by: (15017)

Acts 2011, 82nd Leg., R.S., Ch. 117 (H.B. 2559), Sec. 3, eff. September 1, 2011. (15018)

Sec. 303.003. COMPUTATION OF WEEKLY CEILING. (15019)(1-click HTML)

(a) The weekly ceiling is computed by: (15020)

(1) multiplying the auction rate by two; and (15021)

(2) rounding the result obtained under Subdivision (1) to the nearest one-quarter of one percent. (15022)

(b) The weekly rate ceiling becomes effective on Monday of each week and remains in effect through the following Sunday. (15023)

(c) In this subchapter, "auction rate" means the auction average rate quoted on a bank discount basis for 26-week treasury bills issued by the United States government, as published by the Federal Reserve Board, for the week preceding the week in which the weekly rate ceiling is to take effect. (15024)

Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999; Acts 1999, 76th Leg., ch. 909, Sec. 2.03, eff. Sept. 1, 1999. (15025)

Sec. 303.004. MONTHLY CEILING. (15026)(1-click HTML)

(a) The monthly ceiling may be used as an alternative to the weekly ceiling only for a contract that: (15027)

(1) provides for a variable rate, including a contract for an open-end account; and (15028)

(2) is not made for personal, family, or household use. (15029)

(b) A contract that provides for the use of the monthly ceiling may not provide for the use of another rate ceiling provided under this subchapter. (15030)

(c) If the parties agree that the rate may be adjusted monthly, they may agree that the rate from time to time in effect may not exceed the monthly ceiling from time to time in effect, and the monthly ceiling is the ceiling on those contracts. (15031)

Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999. (15032)

Sec. 303.005. COMPUTATION OF MONTHLY CEILING. (15033)(1-click HTML)

(a) The consumer credit commissioner shall compute the monthly ceiling on the first business day of the calendar month in which the rate applies. The monthly ceiling is effective for one month beginning on the first calendar day of each month. (15034)

(b) The monthly ceiling is computed by averaging all of the weekly ceilings computed using rates from auctions held during the calendar month preceding the computation date of the monthly ceiling. (15035)

Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999. (15036)

Sec. 303.006. QUARTERLY CEILING. (15037)(1-click HTML)

(a) A written contract, including a contract that involves an open-end account, may, as an alternative to the weekly ceiling, provide for an interest rate or an amount of time price differential producing a rate that does not exceed the applicable quarterly ceiling. (15038)

(b) A variable rate contract authorized under Section 303.015 may not provide for use of both the weekly ceiling and the quarterly ceiling. (15039)

(c) Notwithstanding other provisions of this subchapter, the rate of interest on an open-end account authorized under Section 342.455 or 346.003, or an amount owed for a credit card transaction under another type of credit card agreement, in connection with which a merchant discount is imposed or received by the creditor may not exceed the applicable quarterly ceiling. (15040)

Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999. (15041)

Sec. 303.007. ANNUALIZED CEILING. (15042)(1-click HTML)

The annualized ceiling may be used as an alternative to the weekly ceiling only for a written contract that involves an open-end account. (15043)

Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999. (15044)

Sec. 303.008. COMPUTATION OF QUARTERLY AND ANNUALIZED CEILING. (15045)(1-click HTML)

(a) On December 1, March 1, June 1, and September 1 of each year, the consumer credit commissioner shall compute the quarterly ceiling and annualized ceiling for the calendar quarter effective the following January 1, April 1, July 1, and October 1, respectively. The quarterly ceiling becomes effective for three-month periods beginning on the effective dates set out in this subsection and is subject to adjustment after each three-month period. The annualized ceiling becomes effective on each of the effective dates set out in this subsection and remains in effect for a period of 12 months, after which it is subject to adjustment. (15046)

(b) The quarterly ceiling and annualized ceiling are computed by averaging all of the weekly ceilings computed using average auction rates during the three calendar months preceding the computation date of the ceiling. (15047)

Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999. (15048)

Sec. 303.009. MAXIMUM AND MINIMUM WEEKLY, MONTHLY, QUARTERLY, OR ANNUALIZED CEILING. (15049)(1-click HTML)

(a) If the rate computed for the weekly, monthly, quarterly, or annualized ceiling is less than 18 percent a year, the ceiling is 18 percent a year. (15050)

(b) Except as provided by Subsection (c), if the rate computed for the weekly, monthly, quarterly, or annualized ceiling is more than 24 percent a year, the ceiling is 24 percent a year. (15051)

(c) For a contract made, extended, or renewed under which credit is extended for a business, commercial, investment, or similar purpose, the limitation on the ceilings determined by those computations is 28 percent a year. (15052)

(d) For an open-end account credit agreement that provides for credit card transactions on which a merchant discount is not imposed or received by the creditor or a retail charge agreement under Chapter 345 without a merchant discount, the ceiling is 21 percent a year. (15053)

(e) Repealed by Acts 1999, 76th Leg., ch. 1348, Sec. 5, eff. Sept. 1, 1999. (15054)

(f) In this chapter, "weekly ceiling," "monthly ceiling," "quarterly ceiling," or "annualized ceiling" refers to that ceiling as determined after the application of this section. (15055)

Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999. Amended by Acts 1999, 76th Leg., ch. 1348, Sec. 5, eff. Sept. 1, 1999. (15056)

Amended by: (15057)

Acts 2005, 79th Leg., Ch. 1018 (H.B. 955), Sec. 2.02, eff. September 1, 2005. (15058)

Acts 2011, 82nd Leg., R.S., Ch. 1182 (H.B. 3453), Sec. 3, eff. September 1, 2011. (15059)

Sec. 303.010. COMPUTATION OF CEILING IF INFORMATION UNAVAILABLE. (15060)(1-click HTML)

If any of the information required to compute a ceiling is discontinued or is otherwise not available to the consumer credit commissioner from the Federal Reserve Board in the time required for the computation, the ceiling last computed remains in effect until the information becomes available and a new ceiling is computed from the obtained information. (15061)

Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999. (15062)

Sec. 303.011. PUBLICATION OF RATE CEILINGS. (15063)(1-click HTML)

(a) The consumer credit commissioner shall send the rate ceilings computed under this subchapter to the secretary of state for publication in the Texas Register. (15064)

(b) The monthly, quarterly, or annualized ceiling shall be published before the 11th day after the date on which the ceiling is computed. (15065)

Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999. (15066)

Sec. 303.012. JUDICIAL NOTICE. (15067)(1-click HTML)

A court may take judicial notice of interpretations issued by the consumer credit commissioner or information published in the Texas Register under Section 303.011. (15068)

Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999. (15069)

Sec. 303.013. DETERMINATION OF CEILING FOR CONTRACT TO RENEW OR EXTEND DEBT PAYMENT. (15070)(1-click HTML)

The rate ceiling for a contract to renew or extend the terms of payment of a debt is the ceiling in effect under this chapter when the contract for renewal or extension is made, regardless of when the debt is incurred. (15071)

Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999. (15072)

Sec. 303.014. RATE FOR LENDER CREDIT CARD AGREEMENT WITH MERCHANT DISCOUNT. (15073)(1-click HTML)

On an amount owed for a credit card transaction under a lender credit card agreement that imposes or allows the creditor to receive a merchant discount, the creditor may not contract for, charge, or receive: (15074)

(1) a rate that exceeds the ceiling provided under Section 303.006(c); or (15075)

(2) a fee or charge that: (15076)

(A) is not allowed under Chapter 346; or (15077)

(B) exceeds the amount allowed under Chapter 346. (15078)

Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999. (15079)

Sec. 303.015. VARIABLE RATE. (15080)(1-click HTML)

(a) The parties to a contract, including a contract for an open-end account, may agree to any index, formula, or provision of law by which the interest rate or amount of time price differential will be determined, but the agreed rate of interest or yield from an amount of time price differential may not exceed the amount that would be produced by the rate ceiling applicable to the contract. (15081)

(b) A variable contract rate described by this section may not be used in a contract in which the interest or time price differential is precomputed and added into the amount of the contract at the time the contract is made. (15082)

(c) A variable rate agreement for credit extended primarily for personal, family, or household use must include the disclosures identified for variable rate contracts required by regulations issued by the Federal Reserve Board under the Truth in Lending Act (15 U.S.C. Section 1601 et seq.), as amended, except that if that Act does not apply because of the amount of the transaction, the following disclosure must be included in a size equal to at least 10-point type that is boldface, capitalized, underlined, or otherwise set out from surrounding material so as to be conspicuous: (15083)

"NOTICE TO CONSUMER: UNDER TEXAS LAW, IF YOU CONSENT TO THIS AGREEMENT, YOU MAY BE SUBJECT TO A FUTURE RATE AS HIGH AS 24 PERCENT PER YEAR." (15084)

Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999. (15085)

Sec. 303.016. CHARGING OF RATE LOWER THAN AGREED RATE. (15086)(1-click HTML)

A creditor may charge an interest rate or amount of time price differential that is lower than the rate or amount agreed to in the contract. (15087)

Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999. (15088)

Sec. 303.017. VARIOUS CHARGES ON CONSUMER LOANS MADE BY PARTICULAR LENDERS. (15089)(1-click HTML)

Notwithstanding Section 342.005, a bank, savings association, savings bank, or credit union making a loan primarily for personal, family, or household use under authority of this chapter may charge all reasonable expenses and fees incurred in connection with making, closing, disbursing, extending, readjusting, or renewing a loan not secured by real property, whether or not those expenses or fees are paid to third parties. Those reasonable expenses and fees paid to third parties are not interest. (15090)

Added by Acts 2005, 79th Leg., Ch. 1018 (H.B. 955), Sec. 2.03, eff. September 1, 2005. (15091)

SUBCHAPTER B. OPEN-END ACCOUNTS (15092)(1-click HTML)
Sec. 303.101. OPEN-END ACCOUNT: CEILINGS. (15093)(1-click HTML)

(a) To use the quarterly or annualized ceiling for setting the interest rate on current and future open-end account balances, the agreement must provide for use of the ceiling, and the creditor must give notice of the interest rate after the date on which the quarterly or annualized ceiling is computed but before the last day of the next succeeding calendar quarter. (15094)

(b) If the annualized ceiling is used, the rate is effective for the 12-month period beginning on the date on which the rate takes effect for the account. (15095)

(c) If the quarterly ceiling is used, the rate is effective for the three-month period beginning on the date on which the rate takes effect for the account. For an open-end account authorized under Section 342.455 or 346.003, in connection with which credit card transactions are authorized or a merchant discount is imposed or received by the creditor, the quarterly ceiling shall be adjusted, at the option of the creditor, on: (15096)

(1) the effective dates provided by Section 303.008; or (15097)

(2) the first day of the first billing cycle of the account beginning after those dates. (15098)

(d) If a quarterly or annualized ceiling is being used for an account and if the rate for the applicable period is less than or equal to the ceiling to be in effect for the succeeding period of equal length, the creditor may leave that rate in effect for the succeeding period. (15099)

(e) A creditor who has disclosed to an obligor that an election may be renewed under Subsection (d) is not required to give additional notice of a renewal under that subsection. (15100)

(f) To increase a previously agreed rate, a creditor shall comply with Section 303.103 before the end of the last calendar quarter of the period in which the rate previously agreed to is in effect. The ceiling in effect for that period remains the ceiling until the parties to the agreement agree to a new rate. (15101)

Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999. (15102)

Sec. 303.102. VARIABLE RATE OPEN-END ACCOUNT: CEILINGS. (15103)(1-click HTML)

The applicable rate ceiling for an open-end account agreement that provides for a variable rate or amount according to an index, formula, or provision of law disclosed to the obligor, other than a variable rate commercial contract that is subject to Section 303.004, is the annualized, quarterly, or weekly ceiling as disclosed to the obligor. The annualized ceiling shall be adjusted after each 12-month period, the quarterly ceiling shall be adjusted after each three-month period, and the weekly ceiling shall be adjusted weekly. (15104)

Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999. (15105)

Sec. 303.103. OPEN-END ACCOUNT: CHANGE OF AGREEMENT TERM. (15106)(1-click HTML)

(a) An agreement covering an open-end account may provide that the creditor may change the terms of the agreement for current and future balances of that account by giving notice of the change to the obligor. (15107)

(b) A notice under this section to change a provision of an account, including the rate, or the index or formula used to compute the rate, must include: (15108)

(1) the new provision, the new rate, or the index or formula to be used to compute the rate; (15109)

(2) the date on which the change is to take effect; (15110)

(3) the period for which the change is to be effective or after which the rate will be adjusted; (15111)

(4) a statement of whether the change is to affect current and future balances; and (15112)

(5) the obligor's rights under this section and the procedures for the obligor to exercise those rights. (15113)

(c) A creditor who increases a rate shall include with a notice required by this section a form that may be returned at the expense of the creditor and on which the obligor may indicate by checking or marking an appropriate box or by a similar arrangement the obligor's decision not to continue the account. The form may be included on a part of the account statement that is to be returned to the creditor or on a separate sheet. In addition to the requirements of Subsection (b), the notice must include: (15114)

(1) the address to which the obligor may send notice of the obligor's election not to continue the open-end account; and (15115)

(2) the following statement printed in not less than 10-point type or computer equivalent: (15116)

"YOU MAY TERMINATE THIS AGREEMENT IF YOU DO NOT WISH TO PAY THE NEW RATE." (15117)

(d) An obligor is considered to have agreed to a change under this section if the creditor mails a notice required by this section to the obligor's most recent address shown in the creditor's records and: (15118)

(1) the obligor chooses to retain the privilege of using the open-end account; (15119)

(2) the obligor or a person authorized by the obligor accepts or uses an extension of credit after the fifth day after the date on which the notice is mailed; or (15120)

(3) the obligor does not notify the creditor in writing before the 21st day after the date on which the notice is mailed that the obligor does not wish to continue to use the open-end account. (15121)

(e) An obligor who rejects a rate change in accordance with this section is entitled to pay the balance on the open-end account at the rate and over the period in effect immediately before the date of the proposed change and under the same minimum payment terms provided by the agreement. Rejection of a new rate does not accelerate payment of the balance due. (15122)

(f) The procedure provided by this section for changing the terms of an agreement is in addition to other means of amending the agreement provided by law. (15123)

Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999. (15124)

Sec. 303.104. DISCLOSURE OF DECREASE IN INTEREST RATE NOT REQUIRED ON OPEN-END ACCOUNTS INVOLVING CREDIT CARD TRANSACTION OR MERCHANT DISCOUNT. (15125)(1-click HTML)

On an open-end account authorized under Section 342.455 or 346.003, in connection with which credit card transactions are authorized or a merchant discount is imposed or received by the creditor and on which interest is charged under this chapter, the creditor is not required to disclose a decrease in the applicable interest rate. (15126)

Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999. (15127)

Sec. 303.105. OPEN-END ACCOUNT: DISCLOSURE OF CERTAIN RATE VARIATIONS. (15128)(1-click HTML)

(a) Except as provided by Subsection (b), a variation in an interest rate on an account resulting from operation of the previously disclosed index, formula, or provision of law is not required to be disclosed under Section 303.101 or 303.103. (15129)

(b) Except as inconsistent with federal law, the creditor on an open-end account agreement that provides for a variable interest rate according to an index, formula, or provision of law, that is primarily for personal, family, or household use, and that is subject to this chapter shall give to the obligor notice of a change in the rate resulting from operation of the index, formula, or provision of law. The notice must be given: (15130)

(1) by a document mailed on or before the beginning of the first cycle for which the change becomes effective; or (15131)

(2) on or with: (15132)

(A) the billing statement for a billing cycle that precedes the cycle for which the change becomes effective, if the account is covered by Section 303.006(c); or (15133)

(B) any billing statement, if the account is not covered by Section 303.006(c). (15134)

Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999. (15135)

Sec. 303.106. OPEN-END ACCOUNT: CEILING FOR PLAN OR ARRANGEMENT. (15136)(1-click HTML)

If a creditor implements a quarterly or annualized ceiling for a majority of the creditor's open-end accounts that are under a particular plan or arrangement and that are for obligors in this state, that ceiling is also the ceiling for all open-end accounts that are opened or activated under that plan for obligors in this state during the period that the election is in effect. (15137)

Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999. (15138)

SUBCHAPTER C. PROVISIONS APPLICABLE TO CERTAIN CONSUMER LOANS AND SECONDARY MORTGAGE LOANS (15139)(1-click HTML)
Sec. 303.201. LICENSE REQUIRED. (15140)(1-click HTML)

A person engaged in the business of making loans for personal, family, or household use for which the rate is authorized under this chapter must obtain a license under Chapter 342 unless the person is not required to obtain a license under Section 342.051. (15141)

Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999. (15142)

Amended by: (15143)

Acts 2005, 79th Leg., Ch. 1018 (H.B. 955), Sec. 2.04, eff. September 1, 2005. (15144)

Sec. 303.202. APPLICABILITY OF SUBTITLE B. (15145)(1-click HTML)

Except as inconsistent with this chapter: (15146)

(1) a person engaged in the business of extending open-end credit primarily for personal, family, or household use and who charges on an open-end account a rate or amount under authority of this chapter is subject to the applicable chapter in Subtitle B; and (15147)

(2) a party to an account described by Subdivision (1) or the party's assignees have all the rights, duties, and obligations under that applicable chapter. (15148)

Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999. (15149)

Sec. 303.203. AUTOMOBILE CLUB MEMBERSHIP OFFERED IN CONNECTION WITH A LOAN. (15150)(1-click HTML)

(a) A lender may, at the time or after a loan is made, offer to sell to the borrower and finance in a loan contract subject to this subtitle a charge for an automobile club membership. (15151)

(b) The lender may not require the purchase of the membership authorized under Subsection (a) as a condition for approval of the loan. (15152)

(c) The borrower shall provide the lender with written acknowledgment of the borrower's intent to purchase the membership. (15153)

(d) The amount charged for a membership as authorized by Subsection (a) must be reasonable. (15154)

Added by Acts 2005, 79th Leg., Ch. 252 (H.B. 1088), Sec. 1, eff. September 1, 2005. (15155)

Amended by: (15156)

Acts 2011, 82nd Leg., R.S., Ch. 1182 (H.B. 3453), Sec. 4, eff. September 1, 2011. (15157)

SUBCHAPTER D. LIMITATIONS ON APPLICABILITY OF CHAPTER (15158)(1-click HTML)
Sec. 303.301. AGREEMENT TO WHICH CHAPTER DOES NOT APPLY. (15159)(1-click HTML)

The rate ceilings provided by this chapter do not apply to an agreement: (15160)

(1) under which credit is extended by the seller, or an owner, subsidiary, or corporate affiliate of the seller, for a transaction governed by Chapter 601, Business & Commerce Code; and (15161)

(2) that is secured by a lien on the obligor's homestead. (15162)

Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999. (15163)

Amended by: (15164)

Acts 2007, 80th Leg., R.S., Ch. 885 (H.B. 2278), Sec. 2.16, eff. April 1, 2009. (15165)

Sec. 303.302. REQUIREMENTS INCONSISTENT WITH FEDERAL LAW. (15166)(1-click HTML)

(a) A person is not required to comply with a disclosure or notice requirement of this chapter that is inconsistent with federal statute or regulation. (15167)

(b) A creditor may modify a disclosure or notice requirement of this chapter to conform to federal law. (15168)

Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999. (15169)

Sec. 303.401. WHEN ACT OR OMISSION NOT VIOLATION. (15170)(1-click HTML)

An act or omission does not violate this title if the act or omission conforms to an interpretation of this title that is in effect at the time of the act or omission and that was made by: (15171)

(1) the consumer credit commissioner under Section 14.108; or (15172)

(2) an appellate court of this state or the United States. (15173)

Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999. (15174)

Sec. 303.402. PENALTY FOR VIOLATION OF CHAPTER FOR CERTAIN CONTRACTS SUBJECT TO SUBTITLE B. (15175)(1-click HTML)

(a) A person who contracts for, charges, or receives under a contract subject to Chapter 342, 345, 346, 347, 348, or 353, including a contract for an open-end account, a rate or amount of time price differential that exceeds the maximum applicable rate or amount authorized by the applicable chapter or this chapter is subject to a penalty for that violation determined under Chapter 349. (15176)

(b) For a contract described by Subsection (a) that contains a rate or amount authorized under this chapter, the failure to perform a duty or comply with a prohibition provided by this chapter is subject to Chapter 349 as if this chapter were in Subtitle B. (15177)

Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999. (15178)

Amended by: (15179)

Acts 2011, 82nd Leg., R.S., Ch. 117 (H.B. 2559), Sec. 4, eff. September 1, 2011. (15180)

Sec. 303.403. PENALTY FOR VIOLATION OF CEILING IN CERTAIN CONTRACTS. (15181)(1-click HTML)

A written contract, other than a contract to which Section 303.402 applies, that directly or indirectly provides for a rate that exceeds the rate authorized by this chapter and that is not otherwise authorized by law, is subject to the penalty prescribed by Chapter 305. (15182)

Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999. (15183)

Sec. 303.404. ENFORCEMENT BY CONSUMER CREDIT COMMISSIONER. (15184)(1-click HTML)

Subject to Subchapter B, Chapter 341, the consumer credit commissioner shall enforce Subtitles B and C as they apply to contracts subject to those chapters. (15185)

Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999. (15186)

Sec. 303.405. EXAMINATION OF RECORDS; INSPECTIONS; RULES. (15187)(1-click HTML)

(a) Section 342.552 applies to a transaction: (15188)

(1) that is made by a person who holds a license under Chapter 342; (15189)

(2) that is subject to Chapter 342 or 346; and (15190)

(3) the rate of which is authorized by this chapter. (15191)

(b) Subchapter L, Chapter 342, applies to a loan: (15192)

(1) that is subject to Chapter 342; and (15193)

(2) the rate of which is authorized by this chapter. (15194)

Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999. (15195)

Sec. 303.406. ENFORCEMENT BY CREDIT UNION COMMISSIONER. (15196)(1-click HTML)

The credit union commissioner shall enforce this chapter as it applies to contracts subject to Subtitle D, Title 3. (15197)

Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999. (15198)

Sec. 303.407. ENFORCEMENT BY TEXAS DEPARTMENT OF INSURANCE. (15199)(1-click HTML)

The Texas Department of Insurance shall enforce this chapter as it applies to contracts subject to Chapter 651, Insurance Code. (15200)

Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999. (15201)

Amended by: (15202)

Acts 2005, 79th Leg., Ch. 728 (H.B. 2018), Sec. 11.113, eff. September 1, 2005. (15203)

SUBCHAPTER F. EFFECT ON OTHER STATUTES OF USING OPTIONAL RATE (15204)(1-click HTML)
Sec. 303.501. APPLICABILITY OF CREDIT UNION ACT. (15205)(1-click HTML)

Except as inconsistent with this chapter: (15206)

(1) a person subject to Subtitle D, Title 3, who contracts for, charges, or receives a rate or amount authorized by this chapter remains subject to that subtitle; and (15207)

(2) a party to a transaction described by Subdivision (1) has all the rights provided by that subtitle. (15208)

Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999. (15209)

Sec. 303.502. APPLICABILITY OF CHAPTER 24, INSURANCE CODE. (15210)(1-click HTML)

(a) Except as inconsistent with this chapter: (15211)

(1) a person subject to Chapter 651, Insurance Code, who contracts for, charges, or receives an interest rate authorized by this chapter remains subject to that chapter; and (15212)

(2) a party to an insurance premium finance agreement, including an agreement for an open-end account, has all the rights provided by Chapter 651, Insurance Code. (15213)

(b) The licensing requirements of Chapter 342 do not apply to a transaction described by Subsection (a)(1). The penalty provisions of this title do not apply to a transaction described by Subsection (a)(1). (15214)

Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999. (15215)

Amended by: (15216)

Acts 2005, 79th Leg., Ch. 728 (H.B. 2018), Sec. 11.114, eff. September 1, 2005. (15217)

CHAPTER 304. JUDGMENT INTEREST (15218)(1-click HTML)
Sec. 304.001. INTEREST RATE REQUIRED IN JUDGMENT. (15219)(1-click HTML)

A money judgment of a court in this state must specify the postjudgment interest rate applicable to that judgment. (15220)

Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999. (15221)

Sec. 304.002. JUDGMENT INTEREST RATE: INTEREST RATE OR TIME PRICE DIFFERENTIAL IN CONTRACT. (15222)(1-click HTML)

A money judgment of a court of this state on a contract that provides for interest or time price differential earns postjudgment interest at a rate equal to the lesser of: (15223)

(1) the rate specified in the contract, which may be a variable rate; or (15224)

(2) 18 percent a year. (15225)

Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999. (15226)

Sec. 304.003. JUDGMENT INTEREST RATE: INTEREST RATE OR TIME PRICE DIFFERENTIAL NOT IN CONTRACT. (15227)(1-click HTML)

(a) A money judgment of a court of this state to which Section 304.002 does not apply, including court costs awarded in the judgment and prejudgment interest, if any, earns postjudgment interest at the rate determined under this section. (15228)

(b) On the 15th day of each month, the consumer credit commissioner shall determine the postjudgment interest rate to be applied to a money judgment rendered during the succeeding calendar month. (15229)

(c) The postjudgment interest rate is: (15230)

(1) the prime rate as published by the Board of Governors of the Federal Reserve System on the date of computation; (15231)

(2) five percent a year if the prime rate as published by the Board of Governors of the Federal Reserve System described by Subdivision (1) is less than five percent; or (15232)

(3) 15 percent a year if the prime rate as published by the Board of Governors of the Federal Reserve System described by Subdivision (1) is more than 15 percent. (15233)

Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999; Acts 2003, 78th Leg., ch. 204, Sec. 6.01, eff. Sept. 1, 2003; Acts 2003, 78th Leg., ch. 676, Sec. 1, eff. June 20, 2003. (15234)

Amended by: (15235)

Acts 2005, 79th Leg., Ch. 387 (S.B. 1450), Sec. 1, eff. September 1, 2005. (15236)

Acts 2005, 79th Leg., Ch. 1018 (H.B. 955), Sec. 7.01, eff. September 1, 2005. (15237)

Sec. 304.004. PUBLICATION OF JUDGMENT INTEREST RATE. (15238)(1-click HTML)

The consumer credit commissioner shall send to the secretary of state the postjudgment interest rate for publication, and the secretary shall publish the rate in the Texas Register. (15239)

Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999. (15240)

Sec. 304.005. ACCRUAL OF JUDGMENT INTEREST. (15241)(1-click HTML)

(a) Except as provided by Subsection (b), postjudgment interest on a money judgment of a court in this state accrues during the period beginning on the date the judgment is rendered and ending on the date the judgment is satisfied. (15242)

(b) If a case is appealed and a motion for extension of time to file a brief is granted for a party who was a claimant at trial, interest does not accrue for the period of extension. (15243)

Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999. (15244)

Sec. 304.006. COMPOUNDING OF JUDGMENT INTEREST. (15245)(1-click HTML)

Postjudgment interest on a judgment of a court in this state compounds annually. (15246)

Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999. (15247)

Sec. 304.007. JUDICIAL NOTICE OF JUDGMENT INTEREST RATE. (15248)(1-click HTML)

A court of this state shall take judicial notice of a published postjudgment interest rate. (15249)

Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999. (15250)

SUBCHAPTER B. PREJUDGMENT INTEREST IN WRONGFUL DEATH, PERSONAL INJURY, OR PROPERTY DAMAGE CASE (15251)(1-click HTML)
Sec. 304.101. APPLICABILITY OF SUBCHAPTER. (15252)(1-click HTML)

This subchapter applies only to a wrongful death, personal injury, or property damage case of a court of this state. (15253)

Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999. (15254)

Sec. 304.102. PREJUDGMENT INTEREST REQUIRED IN CERTAIN CASES. (15255)(1-click HTML)

A judgment in a wrongful death, personal injury, or property damage case earns prejudgment interest. (15256)

Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999. (15257)

Sec. 304.103. PREJUDGMENT INTEREST RATE FOR WRONGFUL DEATH, PERSONAL INJURY, OR PROPERTY DAMAGE CASE. (15258)(1-click HTML)

The prejudgment interest rate is equal to the postjudgment interest rate applicable at the time of judgment. (15259)

Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999. (15260)

Sec. 304.104. ACCRUAL OF PREJUDGMENT INTEREST. (15261)(1-click HTML)

Except as provided by Section 304.105 or 304.108, prejudgment interest accrues on the amount of a judgment during the period beginning on the earlier of the 180th day after the date the defendant receives written notice of a claim or the date the suit is filed and ending on the day preceding the date judgment is rendered. Prejudgment interest is computed as simple interest and does not compound. (15262)

Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999. (15263)

Sec. 304.1045. FUTURE DAMAGES. (15264)(1-click HTML)

Prejudgment interest may not be assessed or recovered on an award of future damages. (15265)

Added by Acts 2003, 78th Leg., ch. 204, Sec. 6.02, eff. Sept. 1, 2003. (15266)

Sec. 304.105. EFFECT OF SETTLEMENT OFFER ON ACCRUAL OF PREJUDGMENT INTEREST. (15267)(1-click HTML)

(a) If judgment for a claimant is equal to or less than the amount of a settlement offer of the defendant, prejudgment interest does not accrue on the amount of the judgment during the period that the offer may be accepted. (15268)

(b) If judgment for a claimant is more than the amount of a settlement offer of the defendant, prejudgment interest does not accrue on the amount of the settlement offer during the period that the offer may be accepted. (15269)

Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999. (15270)

Sec. 304.106. SETTLEMENT OFFER REQUIREMENTS TO PREVENT PREJUDGMENT INTEREST ACCRUAL. (15271)(1-click HTML)

To prevent the accrual of prejudgment interest under this subchapter, a settlement offer must be in writing and delivered to the claimant or the claimant's attorney or representative. (15272)

Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999. (15273)

Sec. 304.107. VALUE OF SETTLEMENT OFFER FOR COMPUTING PREJUDGMENT INTEREST. (15274)(1-click HTML)

If a settlement offer does not provide for cash payment at the time of settlement, the amount of the settlement offer for the purpose of computing prejudgment interest is the cost or fair market value of the settlement offer at the time it is made. (15275)

Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999. (15276)

SUBCHAPTER C. OTHER PREJUDGMENT INTEREST PROVISIONS (15277)(1-click HTML)
Sec. 304.201. PREJUDGMENT INTEREST RATE FOR CONDEMNATION CASE. (15278)(1-click HTML)

The prejudgment interest rate in a condemnation case is equal to the postjudgment interest rate at the time of judgment and is computed as simple interest. (15279)

Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999. (15280)

SUBCHAPTER D. EXCEPTIONS TO APPLICATION OF CHAPTER (15281)(1-click HTML)
Sec. 304.301. EXCEPTION FOR DELINQUENT TAXES. (15282)(1-click HTML)

This chapter does not apply to a judgment: (15283)

(1) in favor of a taxing unit in a delinquent tax suit under Subchapter C, Chapter 33, Tax Code; or (15284)

(2) that earns interest at a rate set by Title 2, Tax Code. (15285)

Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999. (15286)

Sec. 304.302. EXCEPTION FOR DELINQUENT CHILD SUPPORT. (15287)(1-click HTML)

This chapter does not apply to interest that accrues on an amount of unpaid child support under Section 157.265, Family Code. (15288)

Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999. (15289)

CHAPTER 305. PENALTIES AND REMEDIES (15290)(1-click HTML)
SUBCHAPTER A. CIVIL LIABILITY; CRIMINAL PENALTY (15291)(1-click HTML)
Sec. 305.001. LIABILITY FOR USURIOUS INTEREST. (15292)(1-click HTML)

(a) A creditor who contracts for, charges, or receives interest that is greater than the amount authorized by this subtitle in connection with a transaction for personal, family, or household use is liable to the obligor for an amount that is equal to the greater of: (15293)

(1) three times the amount computed by subtracting the amount of interest allowed by law from the total amount of interest contracted for, charged, or received; or (15294)

(2) $2,000 or 20 percent of the amount of the principal, whichever is less. (15295)

(a-1) A creditor who contracts for or receives interest that is greater than the amount authorized by this subtitle in connection with a commercial transaction is liable to the obligor for an amount that is equal to three times the amount computed by subtracting the amount of interest allowed by law from the total amount of interest contracted for or received. (15296)

(b) This section applies only to a contract or transaction subject to this subtitle. (15297)

(c) A creditor who charges or receives interest in excess of the amount contracted for, but not in excess of the maximum amount authorized by law, is not subject to penalties for usurious interest but may be liable for other remedies and relief as provided by law. (15298)

Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999. (15299)

Amended by: (15300)

Acts 2005, 79th Leg., Ch. 1018 (H.B. 955), Sec. 2.05, eff. September 1, 2005. (15301)

Sec. 305.002. ADDITIONAL LIABILITY FOR MORE THAN TWICE AUTHORIZED RATE OF INTEREST. (15302)(1-click HTML)

(a) In addition to the amount determined under Section 305.001, a creditor who charges and receives interest that is greater than twice the amount authorized by this subtitle is liable to the obligor for: (15303)

(1) the principal amount on which the interest is charged and received; and (15304)

(2) the interest and all other amounts charged and received. (15305)

(b) This section applies only to a contract or transaction for personal, family, or household use subject to this subtitle. (15306)

Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999. (15307)

Amended by: (15308)

Acts 2005, 79th Leg., Ch. 1018 (H.B. 955), Sec. 2.06, eff. September 1, 2005. (15309)

Sec. 305.003. LIABILITY FOR USURIOUS LEGAL INTEREST. (15310)(1-click HTML)

(a) A creditor who charges or receives legal interest that is greater than the amount authorized by this subtitle is liable to the obligor for an amount that is equal to the greater of: (15311)

(1) three times the amount computed by subtracting the amount of legal interest allowed by law from the total amount of interest charged or received; or (15312)

(2) $2,000 or 20 percent of the amount of the principal, whichever is less. (15313)

(b) This section applies only to a transaction subject to this subtitle. (15314)

Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999. (15315)

Sec. 305.004. ADDITIONAL LIABILITY FOR MORE THAN TWICE AUTHORIZED RATE OF LEGAL INTEREST. (15316)(1-click HTML)

(a) In addition to the amount determined under Section 305.003, a creditor who charges and receives legal interest that is greater than twice the amount authorized by this subtitle is liable to the obligor for: (15317)

(1) the principal amount on which the interest is charged and received; and (15318)

(2) the interest and all other amounts charged and received. (15319)

(b) This section applies only to a transaction subject to this subtitle. (15320)

Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999. (15321)

Sec. 305.005. ATTORNEY'S FEES. (15322)(1-click HTML)

A creditor who is liable under Section 305.001 or 305.003 is also liable to the obligor for reasonable attorney's fees set by the court. (15323)

Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999. (15324)

Sec. 305.006. LIMITATION ON FILING SUIT. (15325)(1-click HTML)

(a) An action under this chapter must be brought within four years after the date on which the usurious interest was contracted for, charged, or received. The action must be brought in the county in which: (15326)

(1) the transaction was entered into; (15327)

(2) the usurious interest was charged or received; (15328)

(3) the creditor resides at the time of the cause of action, if the creditor is an individual; (15329)

(4) the creditor maintains its principal office, if the creditor is not an individual; or (15330)

(5) the obligor resides at the time of the accrual of the cause of action. (15331)

(b) Not later than the 61st day before the date an obligor files a suit seeking penalties for a transaction in which a creditor has contracted for, charged, or received usurious interest, the obligor shall give the creditor written notice stating in reasonable detail the nature and amount of the violation. (15332)

(c) A creditor who receives a notice under this section may correct the violation as provided by Section 305.103 during the period beginning on the date the notice is received and ending on the 60th day after that date. A creditor who corrects a violation as provided by this section is not liable to an obligor for the violation. (15333)

(d) With respect to a defendant filing a counterclaim action alleging usurious interest in an original action by the creditor, the defendant shall provide notice complying with Subsection (b) at the time of filing the counterclaim and, on application of the creditor to the court, the action is subject to abatement for a period of 60 days from the date of the court order. During the abatement period the creditor may correct a violation. As part of the correction of the violation, the creditor shall offer to pay the obligor's reasonable attorney's fees as determined by the court based on the hours reasonably expended by the obligor's counsel with regard to the alleged violation before the abatement. A creditor who corrects a violation as provided by this subsection is not liable to an obligor for the violation. (15334)

Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999. (15335)

Amended by: (15336)

Acts 2005, 79th Leg., Ch. 1018 (H.B. 955), Sec. 2.07, eff. September 1, 2005. (15337)

Sec. 305.007. PENALTIES EXCLUSIVE. (15338)(1-click HTML)

The penalties provided by this chapter are the only penalties for violation of this subtitle for contracting for, charging, or receiving interest in an amount that produces a rate in excess of the maximum rate allowed by law. Common law penalties do not apply. (15339)

Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999. (15340)

Sec. 305.008. CRIMINAL PENALTY. (15341)(1-click HTML)

(a) A person commits an offense if the person contracts for, charges, or receives interest on a transaction for personal, family, or household use that is greater than twice the amount authorized by this subtitle. (15342)

(b) An offense under this section is a misdemeanor punishable by a fine of not more than $1,000. (15343)

(c) Each contract or transaction that violates this section is a separate offense. (15344)

(d) This section applies only to a contract or transaction subject to this subtitle. (15345)

Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999. (15346)

SUBCHAPTER B. EXCEPTION FROM LIABILITY (15347)(1-click HTML)
Sec. 305.101. ACCIDENTAL AND BONA FIDE ERROR. (15348)(1-click HTML)

A creditor is not subject to penalty under this chapter for any usurious interest that results from an accidental and bona fide error. (15349)

Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999. (15350)

Sec. 305.102. LEGAL INTEREST DURING INTEREST-FREE PERIOD. (15351)(1-click HTML)

A person is not liable to an obligor solely because the person charges or receives legal interest before the 30th day after the date on which the debt is due. (15352)

Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999. (15353)

Sec. 305.103. CORRECTION OF VIOLATION. (15354)(1-click HTML)

(a) A creditor is not liable to an obligor for a violation of this subtitle if: (15355)

(1) not later than the 60th day after the date the creditor actually discovered the violation, the creditor corrects the violation as to that obligor by taking any necessary action and making any necessary adjustment, including the payment of interest on a refund, if any, at the applicable rate provided for in the contract of the parties; and (15356)

(2) the creditor gives written notice to the obligor of the violation before the obligor gives written notice of the violation or files an action alleging the violation. (15357)

(b) For the purposes of Subsection (a), a violation is actually discovered at the time of the discovery of the violation in fact and not at the time when an ordinarily prudent person, through reasonable diligence, could or should have discovered or known of the violation. Actual discovery of a violation in one transaction may constitute actual discovery of the same violation in other transactions if the violation is of such a nature that it would necessarily be repeated and would be clearly apparent in the other transactions without the necessity of examining all the other transactions. (15358)

(c) For purposes of Subsection (a), written notice is given when the notice is delivered to the person or to the person's authorized agent or attorney of record personally, by telecopier, or by United States mail to the address shown on the most recent documents in the transaction. Deposit of the notice as registered or certified mail in a postage paid, properly addressed wrapper in a post office or official depository under the care and custody of the United States Postal Service is prima facie evidence of the delivery of the notice to the person to whom the notice is addressed. (15359)

Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999. (15360)

Sec. 305.104. CORRECTION EXCEPTION AVAILABLE TO ALL SIMILARLY SITUATED. (15361)(1-click HTML)

If in a single transaction more than one creditor may be liable for a violation of this subtitle, compliance with Section 305.103 by any of those creditors entitles each to the same protection provided by that section. (15362)

Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999. (15363)

Sec. 305.105. AMOUNTS PAYABLE PURSUANT TO A FINAL JUDGMENT. (15364)(1-click HTML)

A creditor is not liable to an obligor for a violation of this subtitle if the creditor receives interest that has been awarded pursuant to a final judgment that is no longer subject to modification or reversal. (15365)

Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999. (15366)

CHAPTER 306. COMMERCIAL TRANSACTIONS (15367)(1-click HTML)
Sec. 306.001. DEFINITIONS. (15368)(1-click HTML)

In this chapter: (15369)

(1) "Account purchase transaction" means an agreement under which a person engaged in a commercial enterprise sells accounts, instruments, documents, or chattel paper subject to this subtitle at a discount, regardless of whether the person has a repurchase obligation related to the transaction. (15370)

(2) "Affiliate of an obligor" means a person who directly or indirectly, or through one or more intermediaries or other entities, owns an interest in, controls, is controlled by, or is under common control with the obligor, or a person in which the obligor directly or indirectly, or through one or more intermediaries or other entities, owns an interest. In this subdivision "control" means the possession, directly or indirectly, or with one or more other persons, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract, or otherwise. (15371)

(3) "Asset-backed securities" means debt obligations or certificates of beneficial ownership that: (15372)

(A) are a part of a single issue or single series of securities in an aggregate of $1 million or more and issuable in one or more classes; (15373)

(B) are secured by a pledge of, or represent an undivided ownership interest in: (15374)

(i) one or more fixed or revolving financial assets that by their terms convert into cash within a definite period; and (15375)

(ii) rights or other assets designed to assure the servicing or timely distribution of proceeds to security holders; and (15376)

(C) are issued for a business, commercial, agricultural, investment, or similar purpose by a pass-through entity. (15377)

(4) "Business entity" means a partnership, corporation, joint venture, limited liability company, or other business organization or business association, however organized. (15378)

(5) "Commercial loan" means a loan that is made primarily for business, commercial, investment, agricultural, or similar purposes. The term does not include a loan made primarily for personal, family, or household use. (15379)

(6) "Guaranty" means an agreement under which a person: (15380)

(A) assumes, guarantees, or otherwise becomes primarily or contingently liable for the payment or performance of an obligation of another person; (15381)

(B) provides security, by creation of a lien or security interest or otherwise, for the payment or performance of an obligation of another person; or (15382)

(C) agrees to purchase or to advance consideration to purchase an obligation of another person or property that is security for the payment or performance of the obligation. (15383)

(7) "Pass-through entity" means a business entity, association, grantor or common-law trust under state law, or segregated pool of assets under federal tax law that, on the date of original issuance of asset-backed securities, does not have significant assets other than: (15384)

(A) assets pledged to or held for the benefit of holders of the asset-backed securities; or (15385)

(B) assets pledged to or held for the benefit of holders of other asset-backed securities previously issued. (15386)

(8) "Prepayment premium" means compensation paid by or that is or will become due from an obligor to a creditor solely as a result or condition of the payment or maturity of all or a portion of the principal amount of a loan before its stated maturity or a regularly scheduled date of payment, as a result of the obligor's election to pay all or a portion of the principal amount before its stated maturity or a regularly scheduled date of payment. (15387)

(9) "Qualified commercial loan": (15388)

(A) means: (15389)

(i) a commercial loan in which one or more persons as part of the same transaction lends, advances, borrows, or receives, or is obligated to lend or advance or entitled to borrow or receive, money or credit with an aggregate value of: (15390)

(a) $3 million or more if the commercial loan is secured by real property; or (15391)

(b) $250,000 or more if the commercial loan is not secured by real property and, if the aggregate value of the commercial loan is less than $500,000, the loan documents contain a written certification from the borrower that: (15392)

(1) the borrower has been advised by the lender to seek the advice of an attorney and an accountant in connection with the commercial loan; and (15393)

(2) the borrower has had the opportunity to seek the advice of an attorney and accountant of the borrower's choice in connection with the commercial loan; and (15394)

(ii) a renewal or extension of a commercial loan described by Paragraph (A), regardless of the principal amount of the loan at the time of the renewal or extension; and (15395)

(B) does not include a commercial loan made for the purpose of financing a business licensed by the Motor Vehicle Board of the Texas Department of Motor Vehicles under Section 2301.251(a), Occupations Code. (15396)

Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999. Amended by Acts 1999, 76th Leg., ch. 531, Sec. 2, eff. Sept. 1, 1999; Acts 1999, 76th Leg., ch. 994, Sec. 2, eff. Sept. 1, 1999; Acts 2003, 78th Leg., ch. 1276, Sec. 14A.772, eff. Sept. 1, 2003. (15397)

Amended by: (15398)

Acts 2005, 79th Leg., Ch. 1018 (H.B. 955), Sec. 2.08, eff. September 1, 2005. (15399)

Acts 2009, 81st Leg., R.S., Ch. 933 (H.B. 3097), Sec. 3D.01, eff. September 1, 2009. (15400)

Sec. 306.002. INTEREST; APPLICATION OF OTHER PROVISIONS OF SUBTITLE. (15401)(1-click HTML)

(a) A creditor may contract for, charge, and receive from an obligor on a commercial loan a rate or amount of interest that does not exceed the applicable ceilings computed in accordance with Chapter 303. (15402)

(b) All other applicable provisions, remedies, and penalties of this subtitle apply to a commercial loan unless this chapter expressly provides otherwise. (15403)

(c) The provisions of this chapter providing authorizations with respect to certain transactions do not affect or negatively impact any rules of law applicable either to other transactions subject to this chapter or to any transactions not subject to this chapter. (15404)

Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999. (15405)

Amended by: (15406)

Acts 2013, 83rd Leg., R.S., Ch. 973 (H.B. 1979), Sec. 1, eff. September 1, 2013. (15407)

Sec. 306.003. COMPUTATION OF LOAN TERMS. (15408)(1-click HTML)

(a) In addition to any other method otherwise permitted under this title, a creditor and an obligor may agree to compute an annual interest rate on a commercial loan on a 365/360 basis or a 366/360 basis, as applicable, determined by applying the ratio of the percentage annual interest rate agreed to by the parties over a year of 360 days, multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance is outstanding. A creditor and an obligor may also agree to compute the term and rate of a commercial loan based on a 360-day year consisting of 12 30-day months. Each interest rate ceiling under Chapters 302 and 303 expressed as a rate per year may mean a rate per year computed in accordance with this section. (15409)

(b) A creditor and an obligor may agree that one or more payments of interest due or that are scheduled to be due with respect to a commercial loan may be paid on a periodic basis when due wholly or partly by adding to the principal balance of the loan the amount of unpaid interest due or scheduled to be due, regardless of whether the interest added to the principal balance is evidenced by an existing or a separate promissory note or other agreement. On and after the date an amount of interest is added to the principal balance under this subsection, that amount no longer constitutes interest, but instead constitutes part of the principal for purposes of calculating the maximum lawful rate or amount of interest on the loan. (15410)

Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999. (15411)

Amended by: (15412)

Acts 2013, 83rd Leg., R.S., Ch. 973 (H.B. 1979), Sec. 2, eff. September 1, 2013. (15413)

Sec. 306.004. DETERMINING RATES OF INTEREST BY SPREADING. (15414)(1-click HTML)

(a) To determine whether a commercial loan is usurious, the interest rate is computed by amortizing or spreading, using the actuarial method during the stated term of the loan, all interest at any time contracted for, charged, or received in connection with the loan. (15415)

(b) If a commercial loan is paid in full before the end of the stated term of the loan and the amount of interest received for the period that the loan exists exceeds the amount that produces the maximum rate authorized by law for that period, the lender shall: (15416)

(1) refund the amount of the excess to the borrower; or (15417)

(2) credit the amount of the excess against amounts owing under the loan. (15418)

(c) A lender who complies with Subsection (b) is not subject to any of the penalties provided by law for contracting for, charging, or receiving interest in excess of the maximum rate authorized. (15419)

Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999. (15420)

Sec. 306.005. PREPAYMENT PREMIUMS AND SIMILAR AMOUNTS. (15421)(1-click HTML)

With respect to a loan subject to this chapter, a creditor and an obligor may agree to a prepayment premium, make-whole premium, or similar fee or charge, whether payable in the event of voluntary prepayment, involuntary prepayment, acceleration of maturity, or other cause that involves premature termination of the loan, and those amounts do not constitute interest. (15422)

Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999. (15423)

Amended by: (15424)

Acts 2005, 79th Leg., Ch. 1018 (H.B. 955), Sec. 2.12, eff. September 1, 2005. (15425)

Sec. 306.006. CERTAIN AUTHORIZED CHARGES ON COMMERCIAL LOANS. (15426)(1-click HTML)

In addition to the interest authorized by this chapter, the parties to a commercial loan may agree and stipulate for: (15427)

(1) a delinquency charge on the amount of any installment or other amount in default for a period of not less than 10 days in an amount not to exceed five percent of the total amount of the installment; and (15428)

(2) a returned check fee in an amount that does not exceed the maximum fee authorized in Section 3.506, Business & Commerce Code, on any check, draft, order, or other instrument or form of remittance that is returned unpaid or dishonored for any reason. (15429)

Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999. (15430)

Amended by: (15431)

Acts 2005, 79th Leg., Ch. 1018 (H.B. 955), Sec. 2.13, eff. September 1, 2005. (15432)

Sec. 306.007. GUARANTY, ASSUMPTION, PAYMENT, OR OTHER AGREEMENT. (15433)(1-click HTML)

With respect to a commercial loan, an obligor may be required to assume, pay, or provide a guaranty of another person's existing or future obligation as a condition of the obligor's own use, forbearance, or detention of money. The amount of the other person's obligation required to be assumed, paid, or guaranteed does not constitute interest with respect to any obligation of the obligor. (15434)

Added by Acts 2005, 79th Leg., Ch. 1018 (H.B. 955), Sec. 2.14, eff. September 1, 2005. (15435)

SUBCHAPTER B. PROVISIONS RELATING TO SPECIFIC TYPES OF COMMERCIAL LOANS OR TRANSACTIONS (15436)(1-click HTML)
Sec. 306.101. QUALIFIED COMMERCIAL LOAN. (15437)(1-click HTML)

(a) The parties to a qualified commercial loan agreement may contract for a rate or amount of interest that does not exceed the applicable rate ceiling. (15438)

(b) The parties to a qualified commercial loan agreement may contract for the following charges: (15439)

(1) a discount or commission that an obligor has paid or agreed to pay to one or more underwriters of securities issued by the obligor; (15440)

(2) an option or right to exchange, redeem, or convert all or a portion of the principal amount of the loan, or interest on the principal amount, for or into capital stock or other equity securities of an obligor or of an affiliate of an obligor; (15441)

(3) an option or right to purchase capital stock or other equity securities of an obligor or of an affiliate of an obligor; (15442)

(4) an option or other right created by contract, conveyance, or otherwise, to participate in or own a share of the income, revenues, production, or profits: (15443)

(A) of an obligor or of an affiliate of an obligor; (15444)

(B) of any segment of the business or operations of an obligor or of an affiliate of an obligor; or (15445)

(C) derived or to be derived from ownership rights of an obligor or of an affiliate of an obligor in property, including any proceeds of the sale or other disposition of ownership rights; or (15446)

(5) compensation realized as a result of the receipt, exercise, sale, or other disposition of an option or other right described by this subsection. (15447)

(c) A charge under Subsection (b) is not interest. (15448)

Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999. (15449)

Sec. 306.102. ASSET-BACKED SECURITIES TRANSACTION. (15450)(1-click HTML)

An amount that is paid, passed through, or obligated to be paid or to be passed through in connection with asset-backed securities or that is not paid as a result of a discounted sale price to the holders of asset-backed securities by a pass-through entity is not interest. This section does not affect interest that is agreed on and fixed by the parties to a written contract and paid, charged, or received on the ultimate underlying assets pledged to or held for the benefit of holders of asset-backed securities. (15451)

Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999. (15452)

Sec. 306.103. ACCOUNT PURCHASE TRANSACTION. (15453)(1-click HTML)

(a) An amount of a discount in, or charged under, an account purchase transaction is not interest. (15454)

(b) For the purposes of this chapter, the parties' characterization of an account purchase transaction as a purchase is conclusive that the account purchase transaction is not a transaction for the use, forbearance, or detention of money. (15455)

Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999. (15456)

CHAPTER 307. COLLATERAL PROTECTION INSURANCE (15457)(1-click HTML)
Sec. 307.001. DEFINITIONS. (15458)(1-click HTML)

In this chapter: (15459)

(1) "Collateral" means property pledged or used to secure payment, repayment, or performance under a credit or lease agreement, including personal property, real property, fixtures, inventory, receivables, rights, or privileges. (15460)

(2) "Collateral protection insurance" means insurance coverage described by Section 307.051. (15461)

(3) "Credit agreement" means a written document that sets forth the terms of a credit transaction. (15462)

(4) "Credit transaction" means a transaction with terms that require the payment of money, goods, services, property, rights, or privileges on a future date and in which the obligation for payment is secured by collateral. (15463)

(5) "Creditor" means a person who is a lender of money or a vendor or lessor of goods, services, property, rights, or privileges for which a payment is arranged through a credit transaction and includes any successor to the rights, title, interest, or liens of the lender, vendor, or lessor. (15464)

(6) "Debtor" means a borrower of money or a purchaser or lessee of goods, services, property, rights, or privileges for which payment is arranged through a credit agreement. The term does not include a person who is not a primary obligor under a credit transaction or who is not jointly and severally liable with the debtor for the obligation. (15465)

(7) "Title insurance" means insurance that may be issued only by persons regulated under Title 11, Insurance Code, and that insures: (15466)

(A) a lender or owner against loss caused by: (15467)

(i) defective title held by the mortgagor or owner or insured; (15468)

(ii) unknown mortgages or defective recording of mortgages or liens on real property; (15469)

(iii) failure of any person to pay ad valorem taxes resulting in a lien; or (15470)

(iv) failure to research properly title, taxes, liens, or other matters relative to the validity of loans or liens secured by real property or insurance; or (15471)

(B) the validity, enforceability, or priority of any lien or title on real property. (15472)

Added by Acts 2001, 77th Leg., ch. 726, Sec. 1, eff. Sept. 1, 2001. (15473)

Amended by: (15474)

Acts 2005, 79th Leg., Ch. 728 (H.B. 2018), Sec. 11.115, eff. September 1, 2005. (15475)

SUBCHAPTER B. REQUIREMENTS FOR COLLATERAL PROTECTION INSURANCE (15476)(1-click HTML)
Sec. 307.051. COLLATERAL PROTECTION INSURANCE. (15477)(1-click HTML)

(a) Collateral protection insurance is insurance coverage that: (15478)

(1) is purchased by a creditor after the date of a credit agreement; (15479)

(2) provides monetary protection against loss of or damage to the collateral or against liability arising out of the ownership or use of the collateral; and (15480)

(3) is purchased according to the terms of a credit agreement as a result of a debtor's failure to provide evidence of insurance or failure to obtain or maintain insurance covering the collateral, with the costs of the collateral protection insurance, including interest and any other charges incurred by the creditor in connection with the placement of collateral protection insurance, payable by a debtor. (15481)

(b) Collateral protection insurance includes insurance coverage that is purchased to protect: (15482)

(1) only the interest of the creditor; or (15483)

(2) both the interest of the creditor and some or all of the interest of a debtor. (15484)

(c) The term of a collateral protection insurance policy may be: (15485)

(1) not greater than 12 months; or (15486)

(2) the remaining term of the credit transaction if the remaining term is less than or equal to 24 months. (15487)

(d) The effective date of coverage for collateral protection insurance may be earlier than the date of issuance of the policy. The effective date may not be earlier than the date the collateral became uninsured. (15488)

(e) A premium for collateral protection insurance covering collateral other than real property may not be based on an amount that exceeds the actual amount of unpaid indebtedness of the debtor as of the effective date of the policy. This condition applies without regard to whether the coverage under the policy limits the insurer's liability to: (15489)

(1) the amount of unpaid debt; (15490)

(2) the cash value of the collateral; or (15491)

(3) the cost of repair of the collateral. (15492)

(e-1) With respect to collateral protection insurance covering real property, a creditor, at the creditor's option, may obtain insurance that will cover either the replacement cost of improvements or the amount of unpaid indebtedness, subject to policy limits. The debtor shall be obligated to reimburse the creditor for the premium, finance charges, and any other charges incurred by the creditor in connection with the placement of the insurance. The creditor may use the previous evidence of insurance coverage furnished by the debtor to determine the sufficient level of replacement cost coverage to be provided. (15493)

(f) Collateral protection insurance does not include insurance coverage that: (15494)

(1) is purchased by the creditor for which the debtor is not charged; (15495)

(2) is purchased at the inception of a credit transaction in which the debtor is a party or to which the debtor agrees, whether or not costs are included in a payment plan under the credit transaction; (15496)

(3) is maintained by the creditor for the protection of collateral that comes into the possession or control of the creditor through foreclosure, repossession, or a similar event; (15497)

(4) is credit insurance, mortgage protection insurance, insurance issued to cover the life or health of the debtor, or any other insurance maintained to cover the inability or failure of the debtor to make payment under the credit agreement; (15498)

(5) is title insurance; (15499)

(6) is flood insurance required to be placed by creditors under Section 102, National Flood Insurance Act of 1968 (42 U.S.C. Section 4012a); or (15500)

(7) is insurance on a commercial vehicle securing a retail installment contract under Chapter 353. (15501)

Added by Acts 2001, 77th Leg., ch. 726, Sec. 1, eff. Sept. 1, 2001. Amended by Acts 2003, 78th Leg., ch. 1219, Sec. 1, eff. June 20, 2003. (15502)

Amended by: (15503)

Acts 2009, 81st Leg., R.S., Ch. 238 (S.B. 1965), Sec. 1, eff. September 1, 2009. (15504)

Acts 2011, 82nd Leg., R.S., Ch. 117 (H.B. 2559), Sec. 5, eff. September 1, 2011. (15505)

Sec. 307.052. CREDITOR DUTIES. (15506)(1-click HTML)

(a) A creditor who requires collateral protection insurance that is paid for directly or indirectly by a debtor may place collateral protection insurance if: (15507)

(1) the debtor has entered into a credit transaction with the creditor for which a credit agreement exists; (15508)

(2) the credit agreement requires the debtor to maintain insurance on the collateral; and (15509)

(3) a notice has been included in the credit agreement or a separate document provided to the debtor at the time the credit agreement is executed that states that: (15510)

(A) the debtor is required to: (15511)

(i) keep the collateral insured against damage in the amount the creditor specifies; (15512)

(ii) purchase the insurance from an insurer that is authorized to do business in this state or an eligible surplus lines insurer; and (15513)

(iii) name the creditor as the person to be paid under the policy in the event of a loss; (15514)

(B) the debtor must, if required by the creditor, deliver to the creditor a copy of the policy and proof of the payment of premiums; and (15515)

(C) if the debtor fails to meet any requirement listed in Paragraph (A) or (B), the creditor may obtain collateral protection insurance on behalf of the debtor at the debtor's expense. (15516)

(b) Not later than the 31st day after the date the collateral protection insurance is charged to the debtor, the creditor, by prepaid, first class mail, shall mail to each debtor at the last known address on file with the creditor a notice that states: (15517)

(1) that the creditor has purchased or will purchase collateral protection insurance on behalf of the debtor and at the debtor's expense as provided by the credit agreement; (15518)

(2) the type of insurance that the creditor has obtained or will obtain, the extent of the coverage, and whose interest the policy protects; (15519)

(3) the beginning and ending dates of the policy period; (15520)

(4) the total cost of the policy to the debtor; (15521)

(5) the annual interest rate charged on the cost of insurance if that rate is different from the rate charged in the related credit transaction; (15522)

(6) the manner in which the debtor may pay the cost of insurance, interest, or finance charge relating to the purchase of the collateral protection insurance; (15523)

(7) at the option of the creditor, other repayment options to which the debtor has agreed in the original credit transaction; and (15524)

(8) if collateral protection insurance covering real property is obtained under Section 307.051(e-1): (15525)

(A) that coverage may be available to the debtor through the Texas FAIR plan at a lower cost; and (15526)

(B) contact information about the Texas FAIR plan. (15527)

(c) The creditor shall mail the notice required under Subsection (b) to each person who is a cosigner or guarantor to the debt, if the last known address of that person differs from the last known address of the debtor. (15528)

(d) The creditor may delegate the notice requirements under Subsections (b) and (c) to the insurer or the insurer's agent. (15529)

(e) The notice required by Subsection (b) must be printed in type that is: (15530)

(1) underlined; (15531)

(2) in all capital letters; (15532)

(3) in all bold letters; or (15533)

(4) otherwise conspicuous. (15534)

(f) If the required notice to any debtor, cosigner, or guarantor is returned to the creditor undelivered, the creditor shall: (15535)

(1) locate the person by using the procedures the creditor regularly uses for locating debtors; and (15536)

(2) mail a second notice at the time the person is located. (15537)

(g) The terms for payment of the costs of the collateral protection insurance, including interest and any other charges actually incurred that the creditor may impose in connection with the placement of the collateral protection insurance, must include one or more of the following: (15538)

(1) a final balloon payment on or before the 30th day after the date of the last scheduled payment required by the credit agreement; (15539)

(2) full amortization over the term of the credit transaction, the term of the collateral protection insurance coverage, or the term for which the amortization is used by the creditor; or (15540)

(3) any other repayment terms agreed to by a debtor in the original credit transaction. (15541)

Added by Acts 2001, 77th Leg., ch. 726, Sec. 1, eff. Sept. 1, 2001. Amended by Acts 2003, 78th Leg., ch. 1219, Sec. 2, eff. June 20, 2003. (15542)

Sec. 307.053. AMORTIZATION OF DEBT. (15543)(1-click HTML)

If any form of amortization is used by the creditor, the creditor shall send to each debtor notice of the terms of the amortization and any change in the debtor's periodic payment. (15544)

Added by Acts 2001, 77th Leg., ch. 726, Sec. 1, eff. Sept. 1, 2001. (15545)

Sec. 307.054. CANCELLATION OF COLLATERAL PROTECTION INSURANCE. (15546)(1-click HTML)

A debtor may at any time cause the cancellation of collateral protection insurance by providing proper evidence to the creditor that the debtor has obtained insurance as required by the credit agreement. If a debtor provides the creditor with proper evidence that the debtor had insurance on the collateral as required by the credit agreement on or before the date the collateral protection insurance is effective and that the debtor continues to have insurance on the collateral as required by the credit agreement, the creditor shall cancel the insurance that it purchased and may not charge the debtor any costs, interest, or other charges in connection with the insurance. (15547)

Added by Acts 2001, 77th Leg., ch. 726, Sec. 1, eff. Sept. 1, 2001. (15548)

Sec. 307.055. REFUND OF UNEARNED PREMIUMS. (15549)(1-click HTML)

(a) On the date the collateral protection insurance is canceled or expires, the amount of unearned premiums, as computed by the Texas Automobile Rules and Rating Manual for collateral to which that manual applies and pro rata for all other types of collateral, shall be refunded to the creditor. Except as otherwise provided in Subsection (b), not later than the 14th day after the date the creditor receives the refund, the creditor shall distribute a refund of unearned premiums by any method selected by the creditor, including: (15550)

(1) payment to the debtor by check; or (15551)

(2) an adjustment to a credit transaction of the debtor. (15552)

(b) If not later than the 28th day after the date the creditor receives the refund the creditor distributes the refund of the unearned premiums by an adjustment to a credit transaction of the debtor that is made effective not later than the 14th day after the date the creditor receives the refund, the creditor shall be in compliance with this section. (15553)

Added by Acts 2001, 77th Leg., ch. 726, Sec. 1, eff. Sept. 1, 2001. (15554)

Sec. 307.056. CHOICE OF CARRIER. (15555)(1-click HTML)

Collateral protection insurance may be placed with an insurer that is authorized to write insurance in this state or an eligible surplus lines insurer selected by the creditor. The insurance shall be evidenced by an individual policy or a certificate of insurance. (15556)

Added by Acts 2001, 77th Leg., ch. 726, Sec. 1, eff. Sept. 1, 2001. (15557)

Sec. 307.057. CREDITOR LIABILITY. (15558)(1-click HTML)

(a) A creditor, its insurer, or the insurer's agent that places collateral protection insurance in substantial compliance with the terms of this chapter is not directly or indirectly liable to a debtor, cosigner, or guarantor or any other person in connection with the placement of the collateral protection insurance. (15559)

(b) This chapter does not impose a fiduciary relationship between the creditor and debtor. Placement of collateral protection insurance is for the principal purpose of protecting the interest of the creditor if the debtor fails to insure collateral as required by the credit agreement. (15560)

(c) A creditor is not required under this chapter to purchase collateral protection insurance or to otherwise insure collateral. A creditor is not liable to a debtor or any other person for failing to purchase collateral protection insurance, failing to purchase a certain amount or level of coverage of collateral protection insurance, or purchasing collateral protection insurance that protects only the interests of the creditor or less than all the interest of a debtor. This chapter does not create a cause of action for damages on behalf of a debtor or any other person in connection with the placement of collateral protection insurance. (15561)

Added by Acts 2001, 77th Leg., ch. 726, Sec. 1, eff. Sept. 1, 2001. (15562)

Sec. 307.058. RIGHTS OF CREDITOR AND DEBTOR. (15563)(1-click HTML)

(a) The obligations and rights of the creditor and debtor with respect to the collateral under Chapters 1 through 9, Business & Commerce Code, are not affected by this chapter. (15564)

(b) This chapter does not impair other remedies, rights, or options available to a creditor under any law, rule, regulation, ruling, court order, or agreement. (15565)

(c) This chapter does not impair or alter other requirements of this code or other law that may apply to a credit transaction. (15566)

Added by Acts 2001, 77th Leg., ch. 726, Sec. 1, eff. Sept. 1, 2001. (15567)

CHAPTER 308. CONSUMER CREDIT PROTECTIONS (15568)(1-click HTML)
Sec. 308.001. APPLICABILITY. (15569)(1-click HTML)

This chapter applies to a person regularly engaged in the business of extending credit under this subtitle primarily for personal, family, or household use and not for a business, commercial, investment, or agricultural purpose. This chapter does not apply to a transaction primarily for a business, commercial, investment, or agricultural purpose. (15570)

Added by Acts 2005, 79th Leg., Ch. 1018 (H.B. 955), Sec. 1.01, eff. September 1, 2005. (15571)

Sec. 308.002. FALSE, MISLEADING, OR DECEPTIVE ADVERTISING. (15572)(1-click HTML)

(a) A creditor may not, in any manner, advertise or cause to be advertised a false, misleading, or deceptive statement or representation relating to a rate, term, or condition of a credit transaction or advertise credit terms that the person does not intend to offer to consumers who qualify for those terms. (15573)

(b) This section does not create a private right of action. (15574)

(c) In interpreting this section, an administrative agency or a court shall be guided by the applicable advertising provisions of: (15575)

(1) Part C of 15 U.S.C. Chapter 41, Subchapter I (15 U.S.C. Section 1601 et seq.); (15576)

(2) 12 C.F.R. Part 226 adopted by the Board of Governors of the Federal Reserve System; and (15577)

(3) the Official Staff Commentary and other interpretations of that statute and regulation by the Board of Governors of the Federal Reserve System and its staff. (15578)

(d) If a requirement of this section and a requirement of a federal law, including a regulation or an interpretation of federal law, are inconsistent or in conflict, federal law controls and the inconsistent or conflicting requirements of this chapter do not apply. (15579)

(e) A creditor who complies with the Truth in Lending Act (15 U.S.C. Section 1601 et seq.) and Federal Reserve Regulation Z (12 C.F.R. Part 226) in advertising a credit transaction is considered to have fully complied with this section. (15580)

Added by Acts 2005, 79th Leg., Ch. 1018 (H.B. 955), Sec. 1.01, eff. September 1, 2005. (15581)

Sec. 308.003. NO DOUBLE LIABILITY OR ENFORCEMENT FOR SAME ACT OR PRACTICE. (15582)(1-click HTML)

A judgment, consent decree, assurance of compliance, or other resolution of a claimed violation asserted by a federal agency under the Consumer Credit Protection Act (15 U.S.C. Section 1601 et seq.) bars a subsequent action or other enforcement under this chapter with respect to the same act or practice. (15583)

Added by Acts 2005, 79th Leg., Ch. 1018 (H.B. 955), Sec. 1.01, eff. September 1, 2005. (15584)

CHAPTER 339. MISCELLANEOUS PROVISIONS RELATING TO INTEREST (15585)(1-click HTML)
Sec. 339.001. IMPOSITION OF SURCHARGE FOR USE OF CREDIT CARD. (15586)(1-click HTML)

(a) In a sale of goods or services, a seller may not impose a surcharge on a buyer who uses a credit card for an extension of credit instead of cash, a check, or a similar means of payment. (15587)

(b) This section does not apply to: (15588)

(1) a state agency, county, local governmental entity, or other governmental entity that accepts a credit card for the payment of fees, taxes, or other charges; or (15589)

(2) a private school that accepts a credit card for the payment of fees or other charges, as provided by Section 111.002, Business & Commerce Code. (15590)

(c) The consumer credit commissioner has exclusive jurisdiction to enforce this section. (15591)

(d) The Finance Commission of Texas may adopt rules relating to this section. Rules adopted pursuant to this section shall be consistent with federal laws and regulations governing credit card transactions described by this section. (15592)

(e) This section does not create a cause of action against an individual for violation of this section. (15593)

Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999. (15594)

Amended by: (15595)

Acts 2005, 79th Leg., Ch. 1018 (H.B. 955), Sec. 2.15, eff. September 1, 2005. (15596)

Acts 2013, 83rd Leg., R.S., Ch. 63 (H.B. 2548), Sec. 1, eff. September 1, 2013. (15597)

Acts 2015, 84th Leg., R.S., Ch. 357 (H.B. 1881), Sec. 3, eff. June 9, 2015. (15598)

Sec. 339.002. BILLING CYCLE INTEREST LIMITATION ON OPEN-END ACCOUNT WITHOUT MERCHANT DISCOUNT. (15599)(1-click HTML)

(a) This section applies to an open-end account agreement that provides for credit card transactions: (15600)

(1) in which the creditor relies on one of the ceilings authorized by Chapter 303 for the rate of interest; and (15601)

(2) in connection with which the creditor does not impose or receive a merchant discount. (15602)

(b) Interest or time price differential may not be charged for a billing cycle of an open-end account credit agreement if: (15603)

(1) the total amount of the obligor's payments during the cycle equal or exceed the balance owed under the agreement at the end of the preceding billing cycle; or (15604)

(2) an amount is not owed under the agreement at the end of the preceding billing cycle. (15605)

Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999. (15606)

Sec. 339.003. SALE OF OPEN-END ACCOUNT WITHOUT MERCHANT DISCOUNT. (15607)(1-click HTML)

A seller or lessor may sell an open-end account credit agreement described by Section 339.002(a) or any balance under that agreement to a purchaser who purchases a substantial part of the seller's or lessor's open-end account credit agreements or balances under those agreements in accordance with Subchapter G, Chapter 345. A charge, fee, or discount on that sale: (15608)

(1) is not a merchant discount; (15609)

(2) does not disqualify the open-end account credit agreement or a balance under that agreement from being subject to Chapter 303 or from coverage under this section; and (15610)

(3) does not subject the account to the limitations provided by Section 303.006(c). (15611)

Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999. (15612)

Sec. 339.004. APPLICATION OF LICENSING REQUIREMENT AND SUBTITLE B TO CREDIT UNION OR EMPLOYEE BENEFIT PLAN. (15613)(1-click HTML)

(a) A credit union is not subject to Subtitle B and is not required to obtain a license under this title. (15614)

(b) With respect to a loan that an employee benefit plan that is subject to Title I of the Employee Retirement Income Security Act of 1974 (29 U.S.C. Sections 1001-1114) makes to a participant in the plan or a participant's beneficiary, the plan is not subject to Subtitle B and is not required to obtain a license under this title. (15615)

Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999. (15616)

Sec. 339.005. APPLICABILITY OF CERTAIN FEDERAL LAW. (15617)(1-click HTML)

This title does not override or restrict the applicability of 12 U.S.C. Section 1735f-7a. (15618)

Added by Acts 2001, 77th Leg., ch. 916, Sec. 9, eff. Sept. 1, 2001. (15619)

SUBTITLE B. LOANS AND FINANCED TRANSACTIONS (15620)(1-click HTML)

CHAPTER 341. GENERAL PROVISIONS (15621)(1-click HTML)
SUBCHAPTER A. DEFINITIONS AND TIME COMPUTATION (15622)(1-click HTML)
Sec. 341.001. DEFINITIONS. (15623)(1-click HTML)

In this subtitle: (15624)

(1) "Authorized lender" means a person who holds a license issued under Chapter 342, a bank, or a savings association. (15625)

(2) "Bank" means a person: (15626)

(A) organized as a state bank under Subtitle A, Title 3, or under similar laws of another state if the deposits of a bank from another state are insured by the Federal Deposit Insurance Corporation; or (15627)

(B) organized as a national bank under 12 U.S.C. Section 21 et seq., as subsequently amended. (15628)

(3) "Cash advance" means the total of the amount of cash or its equivalent that the borrower receives and the amount that is paid at the borrower's direction or request, on the borrower's behalf, or for the borrower's benefit. (15629)

(4) "Commissioner" means the consumer credit commissioner. (15630)

(5) "Credit union" means a person: (15631)

(A) doing business under Subtitle D, Title 3; or (15632)

(B) organized under the Federal Credit Union Act (12 U.S.C. Section 1751 et seq.), as subsequently amended. (15633)

(6) "Deferred presentment transaction" means a transaction in which: (15634)

(A) a cash advance in whole or part is made in exchange for a personal check or authorization to debit a deposit account; (15635)

(B) the amount of the check or authorized debit equals the amount of the advance plus a fee; and (15636)

(C) the person making the advance agrees that the check will not be cashed or deposited or the authorized debit will not be made until a designated future date. (15637)

(7) "Finance commission" means the Finance Commission of Texas or a subcommittee created by rule of the Finance Commission of Texas. (15638)

(8) "Interest" has the meaning assigned by Section 301.002. (15639)

(9) "Loan" has the meaning assigned by Section 301.002 and includes a sale-leaseback transaction and a deferred presentment transaction. (15640)

(10) "Sale-leaseback transaction" means a transaction in which a person sells personal property used primarily for personal, family, or household use and the buyer of the property agrees to lease the property back to the seller. In a sale-leaseback transaction: (15641)

(A) the buyer is a creditor and the seller is an obligor; (15642)

(B) an agreement to defer payment of a debt and an obligation to pay the debt are established; and (15643)

(C) any amount received by the buyer in excess of the price paid for the property by the buyer is interest subject to this subtitle. (15644)

(11) "Savings association" means a person: (15645)

(A) organized as a state savings and loan association or savings bank under Subtitle B or C, Title 3, or under similar laws of another state if the deposits of the savings association from another state are insured by the Federal Deposit Insurance Corporation; or (15646)

(B) organized as a federal savings and loan association or savings bank under the Home Owners' Loan Act (12 U.S.C. Section 1461 et seq.), as subsequently amended. (15647)

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 344, Sec. 2.033, eff. Sept. 1, 1999; Acts 2001, 77th Leg., ch. 1235, Sec. 9, eff. Sept. 1, 2001. (15648)

Sec. 341.002. COMPUTATION OF MONTH. (15649)(1-click HTML)

(a) For the computation of time in this subtitle, a month is the period from a date in a month to the corresponding date in the succeeding month. If the succeeding month does not have a corresponding date, the period ends on the last day of the succeeding month. (15650)

(b) For the computation of a fraction of a month, a day is equal to one-thirtieth of a month. (15651)

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997. (15652)

SUBCHAPTER B. REGULATING OFFICIAL (15653)(1-click HTML)
Sec. 341.101. CONSUMER CREDIT COMMISSIONER. (15654)(1-click HTML)

The consumer credit commissioner has the powers and shall perform all duties relating to the issuance of a license under this subtitle and is responsible for the other administration of this subtitle except as provided by this subchapter. (15655)

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997. (15656)

Sec. 341.102. REGULATION OF BANKS. (15657)(1-click HTML)

(a) The banking commissioner shall enforce this subtitle relating to the regulation of a state bank operating under this subtitle. (15658)

(b) The official exercising authority over the operations of national banks equivalent to the authority exercised by the banking commissioner over state banks may enforce this subtitle relating to the regulation of a national bank operating under this subtitle. (15659)

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997. (15660)

Sec. 341.103. REGULATION OF SAVINGS INSTITUTIONS, LICENSED MORTGAGE BROKERS AND LOAN OFFICERS, AND REGISTERED MORTGAGE BANKERS AND LICENSED LOAN OFFICERS. (15661)(1-click HTML)

(a) The savings and mortgage lending commissioner shall enforce this subtitle relating to the regulation of: (15662)

(1) state savings associations operating under this subtitle; (15663)

(2) state savings banks operating under this subtitle; (15664)

(3) persons licensed under Chapter 156; and (15665)

(4) persons registered or licensed under Chapter 157. (15666)

(b) The official exercising authority over the operation of federal savings associations equivalent to the authority exercised by the savings and mortgage lending commissioner over state savings associations may enforce this subtitle relating to the regulation of a federal savings association operating under this subtitle. (15667)

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 344, Sec. 2.034, eff. Sept. 1, 1999. (15668)

Amended by: (15669)

Acts 2007, 80th Leg., R.S., Ch. 905 (H.B. 2783), Sec. 11, eff. September 1, 2007. (15670)

Acts 2007, 80th Leg., R.S., Ch. 905 (H.B. 2783), Sec. 12, eff. September 1, 2007. (15671)

Acts 2007, 80th Leg., R.S., Ch. 921 (H.B. 3167), Sec. 6.060, eff. September 1, 2007. (15672)

Acts 2009, 81st Leg., R.S., Ch. 1147 (H.B. 2779), Sec. 9, eff. April 1, 2010. (15673)

Acts 2009, 81st Leg., R.S., Ch. 1147 (H.B. 2779), Sec. 10, eff. April 1, 2010. (15674)

Sec. 341.104. REGULATION OF CREDIT UNIONS. (15675)(1-click HTML)

(a) The credit union commissioner shall enforce this subtitle relating to the regulation of state credit unions operating under this subtitle. (15676)

(b) The official exercising authority over federal credit unions equivalent to the authority exercised by the credit union commissioner may enforce this subtitle relating to the regulation of a federal credit union operating under this subtitle. (15677)

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997. (15678)

SUBCHAPTER C. REVISED CEILINGS AND BRACKETS (15679)(1-click HTML)
Sec. 341.201. DEFINITIONS OF INDEXES. (15680)(1-click HTML)

In this subchapter: (15681)

(1) "Consumer price index" means the Consumer Price Index for Urban Wage Earners and Clerical Workers: U.S. City Average, All Items, 1967=100, compiled by the Bureau of Labor Statistics, United States Department of Labor, or, if that index is canceled or superseded, the index chosen by the Bureau of Labor Statistics as most accurately reflecting the changes in the purchasing power of the dollar for consumers. (15682)

(2) "Reference base index" means the consumer price index for December 1967. (15683)

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997. (15684)

Sec. 341.202. REVISION OF CEILING OR BRACKET. (15685)(1-click HTML)

(a) Each year the commissioner shall compute, in accordance with Section 341.203, the amount of each: (15686)

(1) ceiling on a cash advance regulated under this subtitle that is required to be revised; and (15687)

(2) bracket that establishes a range of cash advances or balances to which a maximum charge provided by this subtitle applies and that is required to be revised. (15688)

(b) The revised ceiling or bracket amount takes effect on July 1 of the year of its computation. (15689)

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997. (15690)

Sec. 341.203. COMPUTATION OF REVISED CEILING OR BRACKET. (15691)(1-click HTML)

(a) The amount of a revised ceiling or bracket is computed by: (15692)

(1) dividing the reference base index into the consumer price index at the end of the preceding year; (15693)

(2) computing the percentage of change under Subdivision (1) to the nearest whole percent; (15694)

(3) rounding the result computed under Subdivision (2) to the next lower multiple of 10 percent unless the result computed under Subdivision (2) is a multiple of 10 percent in which event that result is used; and (15695)

(4) multiplying the reference amount of the ceiling or bracket provided by this subtitle by the result under Subdivision (3). (15696)

(b) If the consumer price index is revised, the revised index shall be used to compute amounts under this section after that revision takes effect. If the revision changes the reference base index, a revised reference base index shall be used. The revised reference base index shall bear the same ratio to the reference base index as the revised consumer price index for the first month in which it is available bears to the consumer price index for the first month in which the revised consumer price index is available. (15697)

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997. (15698)

Sec. 341.204. PUBLICATION OF REVISED CEILING, BRACKET, OR INDEX INFORMATION. (15699)(1-click HTML)

(a) The commissioner shall send the amount of a revised ceiling or bracket computed under Section 341.203 to the secretary of state for publication in the Texas Register before May 1 of the year in which the amount of the bracket or ceiling is to change. (15700)

(b) If the consumer price index is revised or superseded, the commissioner promptly shall send the revised index, the numerical equivalent of the reference base index under a revised reference base index, or the designation of the index that supersedes the consumer price index, as appropriate, to the secretary of state for publication in the Texas Register. (15701)

(c) A court may take judicial notice of information published under this section. (15702)

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997. (15703)

SUBCHAPTER D. ADVERTISING REQUIREMENTS (15704)(1-click HTML)
Sec. 341.301. INFORMATION ABOUT ADVERTISERS. (15705)(1-click HTML)

(a) In each advertisement that purports to offer credit regulated by this subtitle, Subtitle C, or Chapter 394, the advertiser shall disclose the legal or registered name of the advertiser and: (15706)

(1) shall disclose the street address of the advertiser's place of business unless the advertisement: (15707)

  

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