Payday Loans - Texas Law - Houston Personal Finance

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Personal Finance 101: Payday Loans - Texas Law - Houston Personal Finance | Examiner.comThis document contains a reference that I have made to a law(s) pertaining to Finance in the State of Texas in my article "SAY NO TO PAYDAY LOANS". These are directly from the state and not from any other third party listing agency. These will be reviewed periodically and updates made as the laws are amended or changed. Enjoy!TEXAS FINANCE CODE: CHAPTER 342 - CONSUMER LOANS: SUBCHAPTER E. INTEREST CHARGES ON NON-REAL PROPERTY LOANSSec. 342.201. MAXIMUM INTEREST CHARGE. (a) A loan contract under this chapter that is a regular transaction and is not secured by real property may provide for an interest charge on the cash advance that does not exceed the amount of add-on interest equal to the amount computed for the full term of the contract at an add-on interest amount equal to:(1) $18 for each $100 per year on the part of the cash advance that is less than or equal to the amount computed under Subchapter C, Chapter 341, using the reference base amount of $300; and (2) $8 for each $100 per year on the part of the cash advance that is more than the amount computed for Subdivision (1) but less than or equal to an amount computed under Subchapter C, Chapter 341, using the reference base amount of $2,500.(b) For the purpose of Subsection (a):(1) when the loan is made an interest charge may be computed for the full term of the loan contract;(2) if the period before the first installment due date includes a part of a month that is longer than 15 days, that portion of a month may be considered a full month; and(3) if a loan contract provides for precomputed interest, the amount of the loan is the total of:(A) the cash advance; and(B) the amount of precomputed interest.(c) A loan contract under this chapter that is an irregular transaction and is not secured by real property may provide for an interest charge, using any method or formula, that does not exceed the amount that, having due regard for the schedule of installment payments, would produce the same effective return as allowed under this section if the loan were payable in equal successive monthly installments beginning one month from the date of the contract.(d) A loan contract under this chapter that is not secured by real property may provide for a rate or amount of interest computed using the true daily earnings method or the scheduled installment earnings method that does not exceed the alternative interest rate as computed under Subchapter A, Chapter 303. Interest may accrue on the principal balance and amounts added to principal after the date of the loan contract from time to time unpaid at the rate provided for by the contract until the date of payment in full or demand for payment in full.(e) A loan contract under this chapter that is not secured by real property may provide for a rate or amount of interest computed using the true daily earnings method or the scheduled installment earnings method that does not exceed:(1) 30 percent a year on that part of the cash advance that is less than or equal to the amount computed under Subchapter C, Chapter 341, using the reference base amount of $500;(2) 24 percent a year on that part of the cash advance that is more than the amount computed for Subdivision (1) but less than or equal to an amount computed under Subchapter C, Chapter 341, using the reference base amount of $1,050; and(3) 18 percent a year on that part of the cash advance that is more than the amount computed for Subdivision (2) but less than or equal to an amount computed under Subchapter C, Chapter 341, using the reference base amount of $2,500.(f) A loan contract under this subchapter may provide for an administrative fee in an amount not to exceed $25 for a loan of more than $1,000 or $20 for a loan of $1,000 or less. The administrative fee is considered earned when the loan is made or refinanced and is not subject to refund. A lender refinancing the loan may not contract for or receive an administrative fee for the loan more than once in any 180-day period, except that if the loan has an interest charge authorized by Subsection (e) the lender may not contract for or receive the administrative fee more than once in any 365-day period. One dollar of each administrative fee may be deposited with the comptroller for use in carrying out the finance commission's responsibilities under Section 11.3055.Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.19(a), eff. Sept. 1, 1999; Acts 1999, 76th Leg., ch. 935, Sec. 2.01, eff. Sept. 1, 1999; Acts 2001, 77th Leg., ch. 916, Sec. 1, eff. Sept. 1, 2001; Acts 2003, 78th Leg., ch. 211, Sec. 2.03(a), eff. June 16, 2003.Sec. 342.202. MAXIMUM CHARGE FOR LOAN WITH SINGLE REPAYMENT. A loan contract that exceeds the maximum cash advance under Section 342.251 and that is payable in a single installment may provide for an interest charge on the cash advance that does not exceed a rate or amount that would produce the same effective return, determined as a true daily earnings rate, as allowed under Section 342.201 considering the amount and term of the loan. If a loan under this section is prepaid in full, the lender may earn a minimum interest charge of $25.Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.19(a), eff. Sept. 1, 1999; Acts 1999, 76th Leg., ch. 909, Sec. 2.09, eff. Sept. 1, 1999. Sec. 342.203. ADDITIONAL INTEREST FOR DEFAULT: REGULAR TRANSACTION. (a) A loan contract that includes precomputed interest or uses the scheduled installment earnings method and that is a regular transaction may provide for additional interest for default if any part of an installment remains unpaid after the 10th day after the date on which the installment is due, including Sundays and holidays.(b) A loan contract that uses the scheduled installment earnings method and that is a regular transaction may provide for additional interest for default if any part of an installment remains unpaid after the 10th day after the date on which the installment is due, including Sundays and holidays.(c) A loan contract that includes simple interest and that is a regular transaction may provide for additional interest for default if any part of an installment remains unpaid after the 10th day after the date on which the installment is due, including Sundays and holidays.(d) The additional interest may not exceed five cents for each $1 of a scheduled installment.(e) Interest under this section may not be collected more than once on the same installment.Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.19(a), eff. Sept. 1, 1999; Acts 1999, 76th Leg., ch. 909, Sec. 2.10, eff. Sept. 1, 1999; Acts 1999, 76th Leg., ch. 934, Sec. 2.01, eff. Sept. 1, 1999. Sec. 342.204. ADDITIONAL INTEREST FOR INSTALLMENT DEFERMENT: REGULAR TRANSACTION. (a) On a loan contract that includes precomputed interest or uses the scheduled installment earnings method and that is a regular transaction, an authorized lender may charge additional interest for the deferment of an installment if:(1) the entire amount of the installment is unpaid;(2) no interest for default has been collected on the installment; and(3) payment of the installment is deferred for one or more full months and the maturity of the contract is extended for a corresponding period.(b) The interest for deferment under Subsection (a) may not exceed the amount computed by:(1) taking the difference between the refund that would be required for prepayment in full as of the date of deferment and the refund that would be required for prepayment in full one month before the date of deferment; and(2) multiplying the results under Subdivision (1) by the number of months in the deferment period.(c) The amount of interest applicable to each deferred balance or installment period occurring after a deferment period remains the amount applicable to that balance or period under the original loan contract.(d) If a loan is prepaid in full during the deferment period, the borrower shall receive, in addition to the refund required under Subchapter H, a pro rata refund of that part of the interest for deferment applicable to the number of full months remaining in the deferment period on the payment date.(e) For the purposes of this section, a deferment period is the period during which a payment is not required or made because of the deferment and begins on the day after the due date of the scheduled installment that precedes the first installment being deferred.Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.19(a), eff. Sept. 1, 1999; Acts 1999, 76th Leg., ch. 909, Sec. 2.11, eff. Sept. 1, 1999. Sec. 342.205. COLLECTION OF DEFAULT OR DEFERMENT INTEREST. Interest for default under Section 342.203 or for installment deferment under Section 342.204 may be collected when it accrues or at any time after it accrues.Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.19(a), eff. Sept. 1, 1999.Sec. 342.206. ADDITIONAL INTEREST FOR DEFAULT: IRREGULAR TRANSACTION. (a) A loan contract that includes precomputed interest and that is an irregular transaction may provide for additional interest for default using the true daily earnings method for the period from the maturity date of an installment until the date the installment is paid. The rate of the additional interest may not exceed the maximum contract interest rate.(b) A loan contract that includes simple interest and that is an irregular transaction may provide for additional interest for default if any part of an installment remains unpaid after the 10th day after the date on which the installment is due, including Sundays and holidays. The additional interest may not exceed five cents for each $1 of a scheduled installment. Interest under this subsection may not be collected more than once on the same installment.Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.19(a), eff. Sept. 1, 1999; Acts 1999, 76th Leg., ch. 934, Sec. 2.02, eff. Sept. 1, 1999.SUBCHAPTER F. ALTERNATE CHARGES FOR CERTAIN LOANSSec. 342.251. MAXIMUM CASH ADVANCE. The maximum cash advance of a loan made under this subchapter is an amount computed under Subchapter C, Chapter 341, using the reference base amount of $100, except that for loans that are subject to Section 342.259 the reference base amount is $200.Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.19(a), eff. Sept. 1, 1999.Amended by:Acts 2005, 79th Leg., Ch. 1018, Sec. 2.22, eff. September 1, 2005.Sec. 342.252. ALTERNATE INTEREST CHARGE. Instead of the charges authorized by Section 342.201, a loan contract may provide for:(1) on a cash advance of less than $30, an acquisition charge that is not more than $1 for each $5 of the cash advance;(2) on a cash advance equal to or more than $30 but not more than $100:(A) an acquisition charge that is not more than the amount equal to one-tenth of the amount of the cash advance; and(B) an installment account handling charge that is not more than:(i) $3 a month if the cash advance is not more than $35;(ii) $3.50 a month if the cash advance is more than $35 but not more than $70; or(iii) $4 a month if the cash advance is more than $70; or(3) on a cash advance of more than $100:(A) an acquisition charge that is not more than $10; and(B) an installment account handling charge that is not more than the ratio of $4 a month for each $100 of cash advance.Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.19(a), eff. Sept. 1, 1999.Sec. 342.253. MAXIMUM INTEREST CHARGE FOR LOAN WITH SINGLE REPAYMENT. A loan contract to which Section 342.251 applies and that is payable in a single installment may provide for an acquisition charge and an interest charge on the cash advance that does not exceed a rate or amount that would produce the same effective return, determined as a true daily earnings rate, as allowed under Section 342.252 considering the amount and term of the loan. If a loan that has a term in excess of one month under this section is prepaid in full, the lender may earn a minimum of the acquisition charge and interest charge for one month. If a loan under this section has an initial term of less than one month, the lender may earn a minimum of the acquisition charge and an interest charge that produces the same effective return as the installment account handling charge computed at a daily rate for the term the loan is outstanding.Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.19(a), eff. Sept. 1, 1999; Acts 1999, 76th Leg., ch. 909, Sec. 2.12, eff. Sept. 1, 1999.Sec. 342.254. NO OTHER CHARGES AUTHORIZED. (a) On a loan made under this subchapter a lender may not contract for, charge, or receive an amount unless this subchapter authorizes the amount to be charged.(b) An insurance charge is not authorized on a loan made under this subchapter.Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.19(a), eff. Sept. 1, 1999.Sec. 342.255. MAXIMUM LOAN TERM. The maximum term of a loan made under this subchapter is:(1) for a loan of $100 or less, the lesser of:(A) one month for each multiple of $10 of cash advance; or(B) six months; and(2) for a loan of more than $100, one month for each multiple of $20 of cash advance.Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.19(a), eff. Sept. 1, 1999.Sec. 342.256. REFUND. (a) An acquisition charge authorized under Section 342.252(1), (2), or (3) is considered to be earned at the time a loan is made and is not subject to refund.(b) On the prepayment of a loan with a cash advance of $30 or more, the installment account handling charge authorized under Section 342.252(2) or (3) is subject to refund in accordance with Subchapter H.Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.19(a), eff. Sept. 1, 1999. Amended by Acts 2001, 77th Leg., ch. 189, Sec. 1, eff. Sept. 1, 2001.Sec. 342.257. DEFAULT CHARGE; DEFERMENT OF PAYMENT. The provisions of Subchapter E relating to additional interest for default and additional interest for the deferment of installments apply to a loan made under this subchapter. Provided, that on a loan contract in which the cash advance is $100 or more, instead of additional interest for default under Subchapter E, the contract may provide for a delinquency charge if any part of an installment remains unpaid after the 10th day after the date on which the installment is due, including Sundays and holidays. The delinquency charge on a loan with a cash advance of $100 or more may not exceed the greater of $10 or five cents for each $1 of the delinquent installment.Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.19(a), eff. Sept. 1, 1999.Amended by:Acts 2005, 79th Leg., Ch. 1018, Sec. 2.23, eff. September 1, 2005.Sec. 342.258. SCHEDULES FOR WEEKLY, BIWEEKLY, OR SEMIMONTHLY INSTALLMENTS. The commissioner may prepare schedules that may be used by an authorized lender for the repayment of a loan made under this subchapter by weekly, biweekly, or semimonthly installments.Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.19(a), eff. Sept. 1, 1999.Sec. 342.259. LOANS WITH LARGER ADVANCES. (a) Instead of the charges authorized by Sections 342.201 and 342.252, a loan made under this subchapter with a maximum cash advance computed under Subchapter C, Chapter 341, using a reference base amount that is more than $100 but not more than $200, may provide for:(1) an acquisition charge that is not more than $10; and(2) an installment account handling charge that is not more than the ratio of $4 a month for each $100 of cash advance.(b) An acquisition charge under this section is considered to be earned at the time a loan is made and is not subject to refund. On the prepayment of a loan that is subject to this section, the installment account handling charge is subject to refund in accordance with Subchapter H.(c) Except as provided by this section, provisions of this chapter applicable to a loan that is subject to Section 342.252 also apply to a loan that is subject to this section.Added by Acts 2005, 79th Leg., Ch. 1018, Sec. 2.24, eff. September 1, 2005.Click here to search other areas of Texas Law!(c) 2009 Steve Straughter All Rights Reserved.

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Personal Finance 101: Payday Loans - Texas Law - Houston Personal Finance | Examiner.comThis document contains a reference that I have made to a law(s) pertaining to Finance in the State of Texas in my article "SAY NO TO PAYDAY LOANS". These are directly from the state and not from any other third party listing agency. These will be reviewed periodically and updates made as the laws are amended or changed. Enjoy!TEXAS FINANCE CODE: CHAPTER 342 - CONSUMER LOANS: SUBCHAPTER E. INTEREST CHARGES ON NON-REAL PROPERTY LOANSSec. 342.201. MAXIMUM INTEREST CHARGE. (a) A loan contract under this chapter that is a regular transaction and is not secured by real property may provide for an interest charge on the cash advance that does not exceed the amount of add-on interest equal to the amount computed for the full term of the contract at an add-on interest amount equal to:(1) $18 for each $100 per year on the part of the cash advance that is less than or equal to the amount computed under Subchapter C, Chapter 341, using the reference base amount of $300; and (2) $8 for each $100 per year on the part of the cash advance that is more than the amount computed for Subdivision (1) but less than or equal to an amount computed under Subchapter C, Chapter 341, using the reference base amount of $2,500.(b) For the purpose of Subsection (a):(1) when the loan is made an interest charge may be computed for the full term of the loan contract;(2) if the period before the first installment due date includes a part of a month that is longer than 15 days, that portion of a month may be considered a full month; and(3) if a loan contract provides for precomputed interest, the amount of the loan is the total of:(A) the cash advance; and(B) the amount of precomputed interest.(c) A loan contract under this chapter that is an irregular transaction and is not secured by real property may provide for an interest charge, using any method or formula, that does not exceed the amount that, having due regard for the schedule of installment payments, would produce the same effective return as allowed under this section if the loan were payable in equal successive monthly installments beginning one month from the date of the contract.(d) A loan contract under this chapter that is not secured by real property may provide for a rate or amount of interest computed using the true daily earnings method or the scheduled installment earnings method that does not exceed the alternative interest rate as computed under Subchapter A, Chapter 303. Interest may accrue on the principal balance and amounts added to principal after the date of the loan contract from time to time unpaid at the rate provided for by the contract until the date of payment in full or demand for payment in full.(e) A loan contract under this chapter that is not secured by real property may provide for a rate or amount of interest computed using the true daily earnings method or the scheduled installment earnings method that does not exceed:(1) 30 percent a year on that part of the cash advance that is less than or equal to the amount computed under Subchapter C, Chapter 341, using the reference base amount of $500;(2) 24 percent a year on that part of the cash advance that is more than the amount computed for Subdivision (1) but less than or equal to an amount computed under Subchapter C, Chapter 341, using the reference base amount of $1,050; and(3) 18 percent a year on that part of the cash advance that is more than the amount computed for Subdivision (2) but less than or equal to an amount computed under Subchapter C, Chapter 341, using the reference base amount of $2,500.(f) A loan contract under this subchapter may provide for an administrative fee in an amount not to exceed $25 for a loan of more than $1,000 or $20 for a loan of $1,000 or less. The administrative fee is considered earned when the loan is made or refinanced and is not subject to refund. A lender refinancing the loan may not contract for or receive an administrative fee for the loan more than once in any 180-day period, except that if the loan has an interest charge authorized by Subsection (e) the lender may not contract for or receive the administrative fee more than once in any 365-day period. One dollar of each administrative fee may be deposited with the comptroller for use in carrying out the finance commission's responsibilities under Section 11.3055.Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.19(a), eff. Sept. 1, 1999; Acts 1999, 76th Leg., ch. 935, Sec. 2.01, eff. Sept. 1, 1999; Acts 2001, 77th Leg., ch. 916, Sec. 1, eff. Sept. 1, 2001; Acts 2003, 78th Leg., ch. 211, Sec. 2.03(a), eff. June 16, 2003.Sec. 342.202. MAXIMUM CHARGE FOR LOAN WITH SINGLE REPAYMENT. A loan contract that exceeds the maximum cash advance under Section 342.251 and that is payable in a single installment may provide for an interest charge on the cash advance that does not exceed a rate or amount that would produce the same effective return, determined as a true daily earnings rate, as allowed under Section 342.201 considering the amount and term of the loan. If a loan under this section is prepaid in full, the lender may earn a minimum interest charge of $25.Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.19(a), eff. Sept. 1, 1999; Acts 1999, 76th Leg., ch. 909, Sec. 2.09, eff. Sept. 1, 1999. Sec. 342.203. ADDITIONAL INTEREST FOR DEFAULT: REGULAR TRANSACTION. (a) A loan contract that includes precomputed interest or uses the scheduled installment earnings method and that is a regular transaction may provide for additional interest for default if any part of an installment remains unpaid after the 10th day after the date on which the installment is due, including Sundays and holidays.(b) A loan contract that uses the scheduled installment earnings method and that is a regular transaction may provide for additional interest for default if any part of an installment remains unpaid after the 10th day after the date on which the installment is due, including Sundays and holidays.(c) A loan contract that includes simple interest and that is a regular transaction may provide for additional interest for default if any part of an installment remains unpaid after the 10th day after the date on which the installment is due, including Sundays and holidays.(d) The additional interest may not exceed five cents for each $1 of a scheduled installment.(e) Interest under this section may not be collected more than once on the same installment.Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.19(a), eff. Sept. 1, 1999; Acts 1999, 76th Leg., ch. 909, Sec. 2.10, eff. Sept. 1, 1999; Acts 1999, 76th Leg., ch. 934, Sec. 2.01, eff. Sept. 1, 1999. Sec. 342.204. ADDITIONAL INTEREST FOR INSTALLMENT DEFERMENT: REGULAR TRANSACTION. (a) On a loan contract that includes precomputed interest or uses the scheduled installment earnings method and that is a regular transaction, an authorized lender may charge additional interest for the deferment of an installment if:(1) the entire amount of the installment is unpaid;(2) no interest for default has been collected on the installment; and(3) payment of the installment is deferred for one or more full months and the maturity of the contract is extended for a corresponding period.(b) The interest for deferment under Subsection (a) may not exceed the amount computed by:(1) taking the difference between the refund that would be required for prepayment in full as of the date of deferment and the refund that would be required for prepayment in full one month before the date of deferment; and(2) multiplying the results under Subdivision (1) by the number of months in the deferment period.(c) The amount of interest applicable to each deferred balance or installment period occurring after a deferment period remains the amount applicable to that balance or period under the original loan contract.(d) If a loan is prepaid in full during the deferment period, the borrower shall receive, in addition to the refund required under Subchapter H, a pro rata refund of that part of the interest for deferment applicable to the number of full months remaining in the deferment period on the payment date.(e) For the purposes of this section, a deferment period is the period during which a payment is not required or made because of the deferment and begins on the day after the due date of the scheduled installment that precedes the first installment being deferred.Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.19(a), eff. Sept. 1, 1999; Acts 1999, 76th Leg., ch. 909, Sec. 2.11, eff. Sept. 1, 1999. Sec. 342.205. COLLECTION OF DEFAULT OR DEFERMENT INTEREST. Interest for default under Section 342.203 or for installment deferment under Section 342.204 may be collected when it accrues or at any time after it accrues.Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.19(a), eff. Sept. 1, 1999.Sec. 342.206. ADDITIONAL INTEREST FOR DEFAULT: IRREGULAR TRANSACTION. (a) A loan contract that includes precomputed interest and that is an irregular transaction may provide for additional interest for default using the true daily earnings method for the period from the maturity date of an installment until the date the installment is paid. The rate of the additional interest may not exceed the maximum contract interest rate.(b) A loan contract that includes simple interest and that is an irregular transaction may provide for additional interest for default if any part of an installment remains unpaid after the 10th day after the date on which the installment is due, including Sundays and holidays. The additional interest may not exceed five cents for each $1 of a scheduled installment. Interest under this subsection may not be collected more than once on the same installment.Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.19(a), eff. Sept. 1, 1999; Acts 1999, 76th Leg., ch. 934, Sec. 2.02, eff. Sept. 1, 1999.SUBCHAPTER F. ALTERNATE CHARGES FOR CERTAIN LOANSSec. 342.251. MAXIMUM CASH ADVANCE. The maximum cash advance of a loan made under this subchapter is an amount computed under Subchapter C, Chapter 341, using the reference base amount of $100, except that for loans that are subject to Section 342.259 the reference base amount is $200.Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.19(a), eff. Sept. 1, 1999.Amended by:Acts 2005, 79th Leg., Ch. 1018, Sec. 2.22, eff. September 1, 2005.Sec. 342.252. ALTERNATE INTEREST CHARGE. Instead of the charges authorized by Section 342.201, a loan contract may provide for:(1) on a cash advance of less than $30, an acquisition charge that is not more than $1 for each $5 of the cash advance;(2) on a cash advance equal to or more than $30 but not more than $100:(A) an acquisition charge that is not more than the amount equal to one-tenth of the amount of the cash advance; and(B) an installment account handling charge that is not more than:(i) $3 a month if the cash advance is not more than $35;(ii) $3.50 a month if the cash advance is more than $35 but not more than $70; or(iii) $4 a month if the cash advance is more than $70; or(3) on a cash advance of more than $100:(A) an acquisition charge that is not more than $10; and(B) an installment account handling charge that is not more than the ratio of $4 a month for each $100 of cash advance.Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.19(a), eff. Sept. 1, 1999.Sec. 342.253. MAXIMUM INTEREST CHARGE FOR LOAN WITH SINGLE REPAYMENT. A loan contract to which Section 342.251 applies and that is payable in a single installment may provide for an acquisition charge and an interest charge on the cash advance that does not exceed a rate or amount that would produce the same effective return, determined as a true daily earnings rate, as allowed under Section 342.252 considering the amount and term of the loan. If a loan that has a term in excess of one month under this section is prepaid in full, the lender may earn a minimum of the acquisition charge and interest charge for one month. If a loan under this section has an initial term of less than one month, the lender may earn a minimum of the acquisition charge and an interest charge that produces the same effective return as the installment account handling charge computed at a daily rate for the term the loan is outstanding.Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.19(a), eff. Sept. 1, 1999; Acts 1999, 76th Leg., ch. 909, Sec. 2.12, eff. Sept. 1, 1999.Sec. 342.254. NO OTHER CHARGES AUTHORIZED. (a) On a loan made under this subchapter a lender may not contract for, charge, or receive an amount unless this subchapter authorizes the amount to be charged.(b) An insurance charge is not authorized on a loan made under this subchapter.Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.19(a), eff. Sept. 1, 1999.Sec. 342.255. MAXIMUM LOAN TERM. The maximum term of a loan made under this subchapter is:(1) for a loan of $100 or less, the lesser of:(A) one month for each multiple of $10 of cash advance; or(B) six months; and(2) for a loan of more than $100, one month for each multiple of $20 of cash advance.Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.19(a), eff. Sept. 1, 1999.Sec. 342.256. REFUND. (a) An acquisition charge authorized under Section 342.252(1), (2), or (3) is considered to be earned at the time a loan is made and is not subject to refund.(b) On the prepayment of a loan with a cash advance of $30 or more, the installment account handling charge authorized under Section 342.252(2) or (3) is subject to refund in accordance with Subchapter H.Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.19(a), eff. Sept. 1, 1999. Amended by Acts 2001, 77th Leg., ch. 189, Sec. 1, eff. Sept. 1, 2001.Sec. 342.257. DEFAULT CHARGE; DEFERMENT OF PAYMENT. The provisions of Subchapter E relating to additional interest for default and additional interest for the deferment of installments apply to a loan made under this subchapter. Provided, that on a loan contract in which the cash advance is $100 or more, instead of additional interest for default under Subchapter E, the contract may provide for a delinquency charge if any part of an installment remains unpaid after the 10th day after the date on which the installment is due, including Sundays and holidays. The delinquency charge on a loan with a cash advance of $100 or more may not exceed the greater of $10 or five cents for each $1 of the delinquent installment.Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.19(a), eff. Sept. 1, 1999.Amended by:Acts 2005, 79th Leg., Ch. 1018, Sec. 2.23, eff. September 1, 2005.Sec. 342.258. SCHEDULES FOR WEEKLY, BIWEEKLY, OR SEMIMONTHLY INSTALLMENTS. The commissioner may prepare schedules that may be used by an authorized lender for the repayment of a loan made under this subchapter by weekly, biweekly, or semimonthly installments.Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.19(a), eff. Sept. 1, 1999.Sec. 342.259. LOANS WITH LARGER ADVANCES. (a) Instead of the charges authorized by Sections 342.201 and 342.252, a loan made under this subchapter with a maximum cash advance computed under Subchapter C, Chapter 341, using a reference base amount that is more than $100 but not more than $200, may provide for:(1) an acquisition charge that is not more than $10; and(2) an installment account handling charge that is not more than the ratio of $4 a month for each $100 of cash advance.(b) An acquisition charge under this section is considered to be earned at the time a loan is made and is not subject to refund. On the prepayment of a loan that is subject to this section, the installment account handling charge is subject to refund in accordance with Subchapter H.(c) Except as provided by this section, provisions of this chapter applicable to a loan that is subject to Section 342.252 also apply to a loan that is subject to this section.Added by Acts 2005, 79th Leg., Ch. 1018, Sec. 2.24, eff. September 1, 2005.Click here to search other areas of Texas Law!(c) 2009 Steve Straughter All Rights Reserved.

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Personal Finance 101: Payday Loans - Texas Law - Houston Personal Finance | Examiner.comThis document contains a reference that I have made to a law(s) pertaining to Finance in the State of Texas in my article "SAY NO TO PAYDAY LOANS". These are directly from the state and not from any other third party listing agency. These will be reviewed periodically and updates made as the laws are amended or changed. Enjoy!TEXAS FINANCE CODE: CHAPTER 342 - CONSUMER LOANS: SUBCHAPTER E. INTEREST CHARGES ON NON-REAL PROPERTY LOANSSec. 342.201. MAXIMUM INTEREST CHARGE. (a) A loan contract under this chapter that is a regular transaction and is not secured by real property may provide for an interest charge on the cash advance that does not exceed the amount of add-on interest equal to the amount computed for the full term of the contract at an add-on interest amount equal to:(1) $18 for each $100 per year on the part of the cash advance that is less than or equal to the amount computed under Subchapter C, Chapter 341, using the reference base amount of $300; and (2) $8 for each $100 per year on the part of the cash advance that is more than the amount computed for Subdivision (1) but less than or equal to an amount computed under Subchapter C, Chapter 341, using the reference base amount of $2,500.(b) For the purpose of Subsection (a):(1) when the loan is made an interest charge may be computed for the full term of the loan contract;(2) if the period before the first installment due date includes a part of a month that is longer than 15 days, that portion of a month may be considered a full month; and(3) if a loan contract provides for precomputed interest, the amount of the loan is the total of:(A) the cash advance; and(B) the amount of precomputed interest.(c) A loan contract under this chapter that is an irregular transaction and is not secured by real property may provide for an interest charge, using any method or formula, that does not exceed the amount that, having due regard for the schedule of installment payments, would produce the same effective return as allowed under this section if the loan were payable in equal successive monthly installments beginning one month from the date of the contract.(d) A loan contract under this chapter that is not secured by real property may provide for a rate or amount of interest computed using the true daily earnings method or the scheduled installment earnings method that does not exceed the alternative interest rate as computed under Subchapter A, Chapter 303. Interest may accrue on the principal balance and amounts added to principal after the date of the loan contract from time to time unpaid at the rate provided for by the contract until the date of payment in full or demand for payment in full.(e) A loan contract under this chapter that is not secured by real property may provide for a rate or amount of interest computed using the true daily earnings method or the scheduled installment earnings method that does not exceed:(1) 30 percent a year on that part of the cash advance that is less than or equal to the amount computed under Subchapter C, Chapter 341, using the reference base amount of $500;(2) 24 percent a year on that part of the cash advance that is more than the amount computed for Subdivision (1) but less than or equal to an amount computed under Subchapter C, Chapter 341, using the reference base amount of $1,050; and(3) 18 percent a year on that part of the cash advance that is more than the amount computed for Subdivision (2) but less than or equal to an amount computed under Subchapter C, Chapter 341, using the reference base amount of $2,500.(f) A loan contract under this subchapter may provide for an administrative fee in an amount not to exceed $25 for a loan of more than $1,000 or $20 for a loan of $1,000 or less. The administrative fee is considered earned when the loan is made or refinanced and is not subject to refund. A lender refinancing the loan may not contract for or receive an administrative fee for the loan more than once in any 180-day period, except that if the loan has an interest charge authorized by Subsection (e) the lender may not contract for or receive the administrative fee more than once in any 365-day period. One dollar of each administrative fee may be deposited with the comptroller for use in carrying out the finance commission's responsibilities under Section 11.3055.Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.19(a), eff. Sept. 1, 1999; Acts 1999, 76th Leg., ch. 935, Sec. 2.01, eff. Sept. 1, 1999; Acts 2001, 77th Leg., ch. 916, Sec. 1, eff. Sept. 1, 2001; Acts 2003, 78th Leg., ch. 211, Sec. 2.03(a), eff. June 16, 2003.Sec. 342.202. MAXIMUM CHARGE FOR LOAN WITH SINGLE REPAYMENT. A loan contract that exceeds the maximum cash advance under Section 342.251 and that is payable in a single installment may provide for an interest charge on the cash advance that does not exceed a rate or amount that would produce the same effective return, determined as a true daily earnings rate, as allowed under Section 342.201 considering the amount and term of the loan. If a loan under this section is prepaid in full, the lender may earn a minimum interest charge of $25.Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.19(a), eff. Sept. 1, 1999; Acts 1999, 76th Leg., ch. 909, Sec. 2.09, eff. Sept. 1, 1999. Sec. 342.203. ADDITIONAL INTEREST FOR DEFAULT: REGULAR TRANSACTION. (a) A loan contract that includes precomputed interest or uses the scheduled installment earnings method and that is a regular transaction may provide for additional interest for default if any part of an installment remains unpaid after the 10th day after the date on which the installment is due, including Sundays and holidays.(b) A loan contract that uses the scheduled installment earnings method and that is a regular transaction may provide for additional interest for default if any part of an installment remains unpaid after the 10th day after the date on which the installment is due, including Sundays and holidays.(c) A loan contract that includes simple interest and that is a regular transaction may provide for additional interest for default if any part of an installment remains unpaid after the 10th day after the date on which the installment is due, including Sundays and holidays.(d) The additional interest may not exceed five cents for each $1 of a scheduled installment.(e) Interest under this section may not be collected more than once on the same installment.Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.19(a), eff. Sept. 1, 1999; Acts 1999, 76th Leg., ch. 909, Sec. 2.10, eff. Sept. 1, 1999; Acts 1999, 76th Leg., ch. 934, Sec. 2.01, eff. Sept. 1, 1999. Sec. 342.204. ADDITIONAL INTEREST FOR INSTALLMENT DEFERMENT: REGULAR TRANSACTION. (a) On a loan contract that includes precomputed interest or uses the scheduled installment earnings method and that is a regular transaction, an authorized lender may charge additional interest for the deferment of an installment if:(1) the entire amount of the installment is unpaid;(2) no interest for default has been collected on the installment; and(3) payment of the installment is deferred for one or more full months and the maturity of the contract is extended for a corresponding period.(b) The interest for deferment under Subsection (a) may not exceed the amount computed by:(1) taking the difference between the refund that would be required for prepayment in full as of the date of deferment and the refund that would be required for prepayment in full one month before the date of deferment; and(2) multiplying the results under Subdivision (1) by the number of months in the deferment period.(c) The amount of interest applicable to each deferred balance or installment period occurring after a deferment period remains the amount applicable to that balance or period under the original loan contract.(d) If a loan is prepaid in full during the deferment period, the borrower shall receive, in addition to the refund required under Subchapter H, a pro rata refund of that part of the interest for deferment applicable to the number of full months remaining in the deferment period on the payment date.(e) For the purposes of this section, a deferment period is the period during which a payment is not required or made because of the deferment and begins on the day after the due date of the scheduled installment that precedes the first installment being deferred.Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.19(a), eff. Sept. 1, 1999; Acts 1999, 76th Leg., ch. 909, Sec. 2.11, eff. Sept. 1, 1999. Sec. 342.205. COLLECTION OF DEFAULT OR DEFERMENT INTEREST. Interest for default under Section 342.203 or for installment deferment under Section 342.204 may be collected when it accrues or at any time after it accrues.Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.19(a), eff. Sept. 1, 1999.Sec. 342.206. ADDITIONAL INTEREST FOR DEFAULT: IRREGULAR TRANSACTION. (a) A loan contract that includes precomputed interest and that is an irregular transaction may provide for additional interest for default using the true daily earnings method for the period from the maturity date of an installment until the date the installment is paid. The rate of the additional interest may not exceed the maximum contract interest rate.(b) A loan contract that includes simple interest and that is an irregular transaction may provide for additional interest for default if any part of an installment remains unpaid after the 10th day after the date on which the installment is due, including Sundays and holidays. The additional interest may not exceed five cents for each $1 of a scheduled installment. Interest under this subsection may not be collected more than once on the same installment.Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.19(a), eff. Sept. 1, 1999; Acts 1999, 76th Leg., ch. 934, Sec. 2.02, eff. Sept. 1, 1999.SUBCHAPTER F. ALTERNATE CHARGES FOR CERTAIN LOANSSec. 342.251. MAXIMUM CASH ADVANCE. The maximum cash advance of a loan made under this subchapter is an amount computed under Subchapter C, Chapter 341, using the reference base amount of $100, except that for loans that are subject to Section 342.259 the reference base amount is $200.Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.19(a), eff. Sept. 1, 1999.Amended by:Acts 2005, 79th Leg., Ch. 1018, Sec. 2.22, eff. September 1, 2005.Sec. 342.252. ALTERNATE INTEREST CHARGE. Instead of the charges authorized by Section 342.201, a loan contract may provide for:(1) on a cash advance of less than $30, an acquisition charge that is not more than $1 for each $5 of the cash advance;(2) on a cash advance equal to or more than $30 but not more than $100:(A) an acquisition charge that is not more than the amount equal to one-tenth of the amount of the cash advance; and(B) an installment account handling charge that is not more than:(i) $3 a month if the cash advance is not more than $35;(ii) $3.50 a month if the cash advance is more than $35 but not more than $70; or(iii) $4 a month if the cash advance is more than $70; or(3) on a cash advance of more than $100:(A) an acquisition charge that is not more than $10; and(B) an installment account handling charge that is not more than the ratio of $4 a month for each $100 of cash advance.Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.19(a), eff. Sept. 1, 1999.Sec. 342.253. MAXIMUM INTEREST CHARGE FOR LOAN WITH SINGLE REPAYMENT. A loan contract to which Section 342.251 applies and that is payable in a single installment may provide for an acquisition charge and an interest charge on the cash advance that does not exceed a rate or amount that would produce the same effective return, determined as a true daily earnings rate, as allowed under Section 342.252 considering the amount and term of the loan. If a loan that has a term in excess of one month under this section is prepaid in full, the lender may earn a minimum of the acquisition charge and interest charge for one month. If a loan under this section has an initial term of less than one month, the lender may earn a minimum of the acquisition charge and an interest charge that produces the same effective return as the installment account handling charge computed at a daily rate for the term the loan is outstanding.Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.19(a), eff. Sept. 1, 1999; Acts 1999, 76th Leg., ch. 909, Sec. 2.12, eff. Sept. 1, 1999.Sec. 342.254. NO OTHER CHARGES AUTHORIZED. (a) On a loan made under this subchapter a lender may not contract for, charge, or receive an amount unless this subchapter authorizes the amount to be charged.(b) An insurance charge is not authorized on a loan made under this subchapter.Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.19(a), eff. Sept. 1, 1999.Sec. 342.255. MAXIMUM LOAN TERM. The maximum term of a loan made under this subchapter is:(1) for a loan of $100 or less, the lesser of:(A) one month for each multiple of $10 of cash advance; or(B) six months; and(2) for a loan of more than $100, one month for each multiple of $20 of cash advance.Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.19(a), eff. Sept. 1, 1999.Sec. 342.256. REFUND. (a) An acquisition charge authorized under Section 342.252(1), (2), or (3) is considered to be earned at the time a loan is made and is not subject to refund.(b) On the prepayment of a loan with a cash advance of $30 or more, the installment account handling charge authorized under Section 342.252(2) or (3) is subject to refund in accordance with Subchapter H.Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.19(a), eff. Sept. 1, 1999. Amended by Acts 2001, 77th Leg., ch. 189, Sec. 1, eff. Sept. 1, 2001.Sec. 342.257. DEFAULT CHARGE; DEFERMENT OF PAYMENT. The provisions of Subchapter E relating to additional interest for default and additional interest for the deferment of installments apply to a loan made under this subchapter. Provided, that on a loan contract in which the cash advance is $100 or more, instead of additional interest for default under Subchapter E, the contract may provide for a delinquency charge if any part of an installment remains unpaid after the 10th day after the date on which the installment is due, including Sundays and holidays. The delinquency charge on a loan with a cash advance of $100 or more may not exceed the greater of $10 or five cents for each $1 of the delinquent installment.Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.19(a), eff. Sept. 1, 1999.Amended by:Acts 2005, 79th Leg., Ch. 1018, Sec. 2.23, eff. September 1, 2005.Sec. 342.258. SCHEDULES FOR WEEKLY, BIWEEKLY, OR SEMIMONTHLY INSTALLMENTS. The commissioner may prepare schedules that may be used by an authorized lender for the repayment of a loan made under this subchapter by weekly, biweekly, or semimonthly installments.Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.19(a), eff. Sept. 1, 1999.Sec. 342.259. LOANS WITH LARGER ADVANCES. (a) Instead of the charges authorized by Sections 342.201 and 342.252, a loan made under this subchapter with a maximum cash advance computed under Subchapter C, Chapter 341, using a reference base amount that is more than $100 but not more than $200, may provide for:(1) an acquisition charge that is not more than $10; and(2) an installment account handling charge that is not more than the ratio of $4 a month for each $100 of cash advance.(b) An acquisition charge under this section is considered to be earned at the time a loan is made and is not subject to refund. On the prepayment of a loan that is subject to this section, the installment account handling charge is subject to refund in accordance with Subchapter H.(c) Except as provided by this section, provisions of this chapter applicable to a loan that is subject to Section 342.252 also apply to a loan that is subject to this section.Added by Acts 2005, 79th Leg., Ch. 1018, Sec. 2.24, eff. 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