HBA-BSM H.B. 2876 77(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 2876 By: Grusendorf Financial Institutions 3/23/2001 Introduced BACKGROUND AND PURPOSE During the 76th Legislative Session, legislation was passed relating to delinquency charges in connection with certain loans, affecting bank related simple interest interactions. However, the legislation did not correct the issue of late fees on simple interest loans with non-regulated lenders. House Bill 2876 conforms the law relating to late fees. 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 2876 amends the Finance Code to provide that a loan providing for a rate of interest that is 10 percent a year or less may provide for a delinquency charge on the amount of any payment in default for a period of not less than 10 days in an amount not to exceed the greater of five percent of the amount of the payment or $7.50. The charging of the delinquency charge does not make the loan subject to provisions governing consumer loans or interest rates for loans or financed transactions. EFFECTIVE DATE On passage, or if the Act does not receive the necessary vote, the Act takes effect September 1, 2001.