HBA-BSM H.B. 2154 77(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 2154
By: Averitt
Financial Institutions
7/25/2001
Enrolled



BACKGROUND AND PURPOSE 

Under current law, the holder of a delinquent motor vehicle retail
installment sales contract may be assessed either a late charge or simple
interest charge at the contracted rate on delinquent contracts. During the
76th Legislature, legislation was enacted to facilitate the charging of
late fees in addition to interest accrual on many types of loan contracts.
However, motor vehicle retail installment sales contracts were not included
in the legislation.  Prior to the 77th Legislature, the holder of such a
contract with an unpaid installment could collect a delinquency charge or
simple interest, but not both. House Bill 2154  allows the charging of a
late charge on contracts in addition to regular interest accrual. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

ANALYSIS

House Bill 2154 amends the Finance Code to provide that a  motor vehicle
retail installment contract that provides for the accrual earnings method
may provide for a delinquency charge,  interest, or both  on a delinquent
contract.  The bill provides that a contract may provide for an unpaid
installment to collect interest on the amount of the installment accruing
after the maturity of the installment and until the installment is paid in
full. 

EFFECTIVE DATE

June 15, 2001.