Bill Text: TX HB1979 | 2013-2014 | 83rd Legislature | Comm Sub
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-Comm_Sub.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-Comm_Sub.html
83R17088 ATP-D | |||
By: Villarreal | H.B. No. 1979 | ||
Substitute the following for H.B. No. 1979: | |||
By: Villarreal | C.S.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 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. | ||
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 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 [ |
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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 | ||
[ |
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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 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. | ||
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. |