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Relating to methods of computing interest charges on certain
consumer loans.
No fiscal impact to the state is anticipated.
HB 3855 updates regulation of interest for certain consumer loans. The bill requires that for applicable loans, the interest charged must be based on one of two methods: (1) applying the applicable daily rate to each part of the unpaid principal balance corresponding to certain brackets for the actual or scheduled number of days during a payment period, or (2) applying a single equivalent daily rate to the unpaid principle balance for the actual or scheduled number of days during a payment period.
The purpose of this bill is to make it easier for consumers to understand the terms of their loans.
Texas Action is neutral on HB 3855 because it does not affect our liberty principles. Interest on consumer loans is already regulated in this state. This bill simply updates those existing regulations.