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.