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


Office of House Bill AnalysisH.B. 2154
By: Averitt
Financial Institutions
3/16/2001
Introduced



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.  Under current law, the holder of such a
contract with an unpaid installment may collect a delinquency charge or
simple interest, but not both. House Bill 2154  allows the charging of a
late charge, in addition to regular interest accrual, on contracts. 

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 (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

On passage, or the Act does not receive the necessary vote, the Act  takes
effect September 1, 2001.