Bill Text: TX HB886 | 2013-2014 | 83rd Legislature | Introduced

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Bill Title: Relating to restrictions in connection with motor vehicle title loans that a credit access business obtains for a consumer or assists a consumer in obtaining.

Sponsorship: Partisan Bill (Democrat 1)

Status: (Introduced - Dead) 2013-02-19 - Referred to Investments & Financial Services [HB886 Detail]

Download: Texas-2013-HB886-Introduced.html

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83R1879 CLG-D
By: Anchia H.B. No. 886

A BILL TO BE ENTITLED
AN ACT
relating to restrictions in connection with motor vehicle title
loans that a credit access business obtains for a consumer or
assists a consumer in obtaining.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. The heading to Subchapter C-1, Chapter 393,
Finance Code, is amended to read as follows:
SUBCHAPTER C-1. [NOTICE AND DISCLOSURE] REQUIREMENTS FOR CERTAIN
CREDIT SERVICES ORGANIZATIONS AND RESTRICTIONS PERTAINING TO
CERTAIN EXTENSIONS OF CONSUMER CREDIT FACILITATED BY THE
ORGANIZATIONS
SECTION 2. Subchapter C-1, Chapter 393, Finance Code, is
amended by adding Section 393.225 to read as follows:
Sec. 393.225. RESTRICTIONS PERTAINING TO CERTAIN MOTOR
VEHICLE TITLE LOANS. (a) This section applies only to an extension
of consumer credit in the form of a motor vehicle title loan that a
credit access business obtains for a consumer or that a credit
access business assists a consumer in obtaining.
(b) The cash advanced under the extension of consumer credit
may not exceed 70 percent of the retail value of the motor vehicle.
(c) If the extension of consumer credit is payable in a
single payment, the consumer must make a payment that reduces the
principal amount of the loan by at least five percent each time the
loan is refinanced. If the consumer does not make the required
payment, the loan may be refinanced, except that the credit access
business must compute its fees as if the consumer has made the
required payment each time the loan is refinanced. Accrued credit
access business fees may not be added to the unpaid loan amount.
(d) If the consumer does not make the payment required by
Subsection (c) and the lender chooses not to refinance the motor
vehicle title loan, the loan becomes due and payable under the
loan's original terms.
(e) An extension of consumer credit that is payable in
installments must be payable on a fully amortizing, declining
principal balance basis, with substantially equal payments to be
made as agreed to by the parties to the loan. If credit access
business fees are precomputed and the loan is prepaid in full, the
business must refund any unearned fees to the consumer.
SECTION 3. The changes in law made by this Act apply only to
an extension of consumer credit made on or after the effective date
of this Act. An extension of consumer credit made before the
effective date of this Act is governed by the law in effect on the
date the extension of consumer credit was made, and the former law
is continued in effect for that purpose.
SECTION 4. This Act takes effect September 1, 2013.