Bill Text: TX HB1979 | 2013-2014 | 83rd Legislature | Introduced
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Relating to interest on commercial loans.
Spectrum: Bipartisan Bill
Status: (Passed) 2013-06-14 - Effective on 9/1/13 [HB1979 Detail]
Download: Texas-2013-HB1979-Introduced.html
Bill Title: Relating to interest on commercial loans.
Spectrum: Bipartisan Bill
Status: (Passed) 2013-06-14 - Effective on 9/1/13 [HB1979 Detail]
Download: Texas-2013-HB1979-Introduced.html
83R3832 ATP-F | ||
By: Villarreal | H.B. No. 1979 |
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relating to interest on commercial loans. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Section 306.002, Finance Code, is amended by | ||
adding Subsection (c) to read as follows: | ||
(c) The provisions of this chapter do not affect | ||
transactions that are not subject to this chapter nor affect or | ||
negatively impact any rule of law applicable to transactions not | ||
subject to this chapter. | ||
SECTION 2. Section 306.003, Finance Code, is amended to | ||
read as follows: | ||
Sec. 306.003. COMPUTATION OF LOAN TERMS [ |
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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, 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 [ |
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303 expressed as a rate per year may mean a rate per year computed in | ||
accordance with this section [ |
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(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, but | ||
not more often than monthly, wholly or partly by adding to the | ||
principal balance of the loan the amount of unpaid interest due or | ||
scheduled to be due. 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. | ||
SECTION 3. The changes in law made by this Act apply only to | ||
a loan agreement entered into on or after the effective date of this | ||
Act. A loan agreement entered into before the effective date of | ||
this Act is governed by the law in effect on the date the agreement | ||
was entered into, and the former law is continued in effect for that | ||
purpose. | ||
SECTION 4. This Act takes effect September 1, 2013. |