. i

**OFFICE OF**  **THE ATTORNEY**  **GENERAL OF**  **TEXAS AUSTIN** 



### l diOt.Nlt. .*Inth8

trial of pv a JE OatlOP

f8r lajuno- tioa und8r thlr &t thmra tutth8

.atuaY%

z%L r ry l twh loantamba el.

t 08)Honorable Den Y. 

### Jaakaon, pagr 2



### Dollar **r0r** 

### raoh **r ’** **irtr** 

### (#50.00) Dollarr, or frao

### tfonal part **thereoi** loanedj **but thir**  prim **raole** prO8\ElpptiOn

8halZ 8Xt8nd Otir t0 th8 fir8t not8 or d8bt ovlng at the **84m8** f-4 by an lndlvldual t0 My p8ClOIl,firla, OOrpOratiOn,piWtn8r8hlp OF &88OOi&tiOn, and 8h11 **not** apply **t0** w **r4lU3V8l** Or: l Xten8iOn thGl'4Of lUll488

th0 Ori@ll&~ not4 or debt and all sxt8nsionr thereofvero for a **period** of not **1488 than**  **8ixtJ** 

### (60) dayr.'
US qUOt8 from YOUr letter8 **tV0** Of YOUr rubmittsd QU48tiOn8:'@48tiOll - Yhat **18 Or**  **VI8** the intention Of 

### the **bgi8hltUN** 

### in permitting the OoleOtlon of **oharger** of $1.00 for eaoh $50.00 loaned or fraotion thereor?' 8ion8a$etd&on t Can a lender under **thr** provl**8** Aot **Ohprg8 a**  borrover iOr **aotual out-or-pocket**  **exp4nre** necearary in meklng the loan, ruch oharge **to** be over and above the $1.00 for eacih$50.00 or fraction thereof advanced to the borrover?' 4he latter **per7** 18 a portion 0r an alternative **QU48tiOn TOU**  **8Uhitt8d. sin08**  **th8** rOliOVing **di8OU88iOLI COll**  **8titUt88 OUr**  MlV4r **t0** the **above QU48tiOn8,**  **it** become8 un**n40488&P~ t0**  M8VOl’ **~0ll.l ’**  **8lt8l ’** **MtiVe QU4rx**  bared On the 4Xample8 8Ubmitted therrmader.

Tha **Aot** 8peOirtCall~provider that aharger may be made ror l

otuxl and n4Oe888ry 8xpen888, nov.or herearter permitted and l

uthorlxed by lav and rhall not **be** OOlI81dered a8 int8l'48t. Th4r4 i8 IlOl&~U&g8 in the blll t&It plaO48 8 limltatlon on ths amount that ma)- be oharged for the actual and lleO8884ry4Xp4PX48, **WI1488 48**  **YOU 8w48t,**  **that Part**  **Of** SeOtiOn 2a providing th8re Ihell 8Xi8t a prima ia pI'48UlQtiOn that th8 aOtIS and **n4C888Uy 4Xpen8e8**  in nrakw ang ruch loan **V48** 41.00 ror eaoh 450.00, or rraotional **part** thereof loaned, 18 a llmltatlon **48** to the amount that may be oolleoted **ror** the84 aotual md neoerrary expenres. Hovev8r, thlr prime f8014 preiumptlon 18 raid to eXi8t in the trial of any 

### l

ppllcatl.onfor injunctionunder the Act. X4 interpret,

Honor&b18 Dm Y. Jaokaon, pag8 3

thlr 

### pqwtlon or 

### SeotIon 24 to mean that b a trial 

## oran l 

### p**P**

### 11oatiQa r0r an lnnjunatlon under th8 pFOVi8iOn8 of thi8 bl **1,** thW8 **Vi11** 8XiXt **4 priu**  **i4Ol4 p88U@iOIi**  t&t Oh-g48 bared on the abolr ratio Vera 4Otual and **n4ao88ary,** and the lender I8 reli8red 0r producing rush p0r unlera thi8 prr8UDlptIo3i

I8 rebutted br OCmtradiOtOr~ 8VIdenoe. MO bOli8V8 that thl8 I8 the OOlutrUOtiOn t&t **V&8** Intended t0 be pleO8d on thlr portltm of th8

### Aot **and t&t**  **it8 pUFpO84**  V&l 

### not **to** plaoe a oelllng 

### on the amount 

### that a lender oould Oolleot for actual and n8oer raq l xpen888. A8 long 

### a8 the expenrer V8rO aotual and neoesrar~ the rum My br gr84tOr than th8 ratI<~~.OO for aray 450.00 or fraotlonal

## part thereof loaned, **but** vhen the expense8 are ior a 811111 greater thaa that of the 8414 

### ratio, the prima faole pre8umptIon a8 to the aotuallt~ and neoesrity 0r the expen888 i8 not availabl8 to thr lender In the trial for an lnjunotlon, yet there 8x

### pen888 oan be ool~ect8d if th87 **be** prov8d 48 

### being l 

### otual and MO8884 ry.

The above dirourrlon I8 **bared** upon the arrumptlon that the oondltlona set forth In theAct creating the 

### pr8- 8UlU~tiOn

4OtUall~ 8Xi8t.
WO turther 

### oonrtrue thin Aot to the 8ffeOt that no oharge **VhlLtroeTer** aan be 4884884d agaIn8t the borrover 

### ror 8xpenae8, unlerr thr 8xpen848 Vera aotually and in ract inOUrr8d and 

### vme neoe88ary In making the loan. If no expen848 v8re lnourr8d In makIng a loan, no oharge at all oan be 4884684d 4g4in8t the **borrover rOr**  **eXpen488,** regardle8r
**or the**  **amount** loaned.

Uo rurther **quote** rr0pl **your 18itOr8**  **48 fOiiOV8:**  %l48tIoTAI 18 thi8 bill retroeotlve 48 to **4~17 1OaU8**  made **prior t0**  **it8** df8OtiVe **date? ”**  

## l Quertlm - 18 the oolleation or wury on oontraot8 ti 8XI8tenoe prior to the l naotment of the bill and prior to the raid bill beoomlng offeotlre, vlx: the oolleotlon 0r **urury** on pre-exlrtlng oontr6ot8, 

### a violation of the Aott'

**- If**  **4 loan**  **ooiapay quit8**  

### buriners 8frOOtiV8 date 0r 

### the bill, and in

### 590

Honorable Den Y. 

### Jaokxon, page 4

11QUidatIXQ it8 bU8inr88 OOlbOt8 U8UrJ On OUtrtandhg aaoounta 00 pr8-•xlirtlng oontraot8, VOdd i.njUMtiOIl u8 4@hXt 8UOh OOQMZlr, Or it8 Uquidatiag agent, ror the oollrotlon 0r U8Ur7 On 8Uch a4eOUllt8in vlndlng Up 1t8 **bual** ne881rn 

### In thr 

### 0484 

## 0rfielllnger v. Cltr 0r 80u8ton, 68 T8x. 

### 37, 3 S.V. 

### 249, Judge Stay'ton 8aidr
.In the l

b8enoe 

## 0r oon8titutionalreetrlatiOIA8 UpOO th8 8Ubj8Ot it I8 4&08t 

### UlliVOr8allJ 

## l ooipted a8 

### a round ruie 0r oon8truotlo.n that a rtatute 8h4ll hare only a pro8peotIvs operation, unlrrr It8 term8 rhou olearly a leglrlatiV4 intently that It r&11 havr a retroaotIv84rreot.

l . .
Taxi 175, TO the 8aEI48ffOOt ar8 State v.Railvay Co., 100 

### 8. U. 637 9

### 7 S. Y. 71~ Fr8eman T, V. 8. Walker end Bono, 

### 212

Corn..

App.). There 18 nothing In thlr **Aot** vhlch vould ole8rly IndIoatr or 8hov an lntontlon of the Legislature that It 8hould not 

### retroaotIrely. Ther8fore it 18 th8 opfnlon 0r thlr department that raid Senatr Blli 

### 43 18not retroaotIve. mt Ye mean by thi8 i8 explained in the rOllOVing d18OU8- 8100. S8OttOn 1 of the Aot 

### under di8OU88iO11 provider that 4 8uitEar be iMttitut8d br eOrt&lnpart188 **named** th4rOin 'to onjoln an7 p8r80nr

## rirm, or oorporatlon or any orrioer, agent, 8ervant or 8mployee 0r ruch perlon, rim, or oorporatlon vho 18 engaged in the **bWilU388** Or habitual17 loan1 for the uIe a& detention Or vhloh u8urlOU8 intsr48 3 

### ~?~een oharged &g&inlt or contraoted to b8 **pa-id** by 

### the borrover, 

### rrm demanding,reoeloing or tythe ~88 0r any aa-8 attemptlug to oolleot from the borrover wurlou8 interart 

### on acCOW Or 9 10&I, or rrarnthereattar charging arq borrower uayrlour lnterert or oontraoting for any wurlou8 Lnterert.

. . . (undery~,oringourr)

Section 

### 2 Or the AOt prOVid88 48 fO11OV81Honorable DenV. 

### Jaak8on, pag8 

### 5

"By the 

### term thabitually'a8 u8ed in thl8 Act, 18meant the m8klng Oi ae many 88 three (3) loan8 on vhiah or in oonneotionvith uhioh u8u.riour interrrt 18 ohar ed in R period of 81x 

### (6'3 or oontraoted iOr vlthmonth8 nextpreceding the riilag Of MY 8UOh Itit* 'By the term ~ururlou8 interart a8 

### u8ed la thir

### Aot, 18 m8ant int8rert at a rate in ex0488 or t8n (10%)per oentum per annum." By eaylng the Act 18

### not retroaotivs,ve mean~the making of the loan8 reierred to in geotlon 2, quoted above, mutt have occurred rubrequently to the l Pfeotive date of the Act. Hovever, a parron, rem, or oorporatIon 80 engaged in the buSin of 'habituelly" loaning

### money, a8 defined by Section 2, m8y be 

### enjoined, after the effective date of the Act, rr0m OOll8Oting U8UriOU8 lnter8rt on aooount 0r an -%at'r vhether executedprior or rubrequent to ruoh effective In other vord8, to 8eaure an lnjuuotion under the term8 of thIs'Act, the *er8on, iem1 or oorporatlon mu8t be guilty of loaning money habitually, 88 80 definedby theAot, and the loan8 referred to therein mu8t havr been Bade after the etrectlve date or the Aot. After 8uCh faot ha8 been ertabllrhed, the guilty party niaybe enjoined irom oolleotlng ururiou8 lnterert OA any loexs,vhether lame VP8 8xeouted

### before or subrequent to the date the Act vent into efteot.

It fO11OV8 from what ve have 8aid that a loan oompazq which qultrbU8in488 prior to th8 l f'feotive

date of the Act may not be enjoined r"romdemanding, reoelving or &tte!Ept1n.gto collect 

### rrm borrover8 urur1ou8 interert on loan8 made prior to ruch date, for it 18 

### no longer

### engaged in the bwIne88 of habitually loaningmoney at 

### a u8uriourrate of interest, a burine88 vhioh 818~ 

### be 8njOinOd only rhen oonduoted after the A& beoomer afieotlve.

Ve trust the roregolng fully 

### 6n8ver8 your questlonr. Very truly your8

I. ‘Cf,

,. ‘_....,.d_ * ‘r ;y.;,.& A8818t=t By / ( ' '*- ROKldb Robert 0. 

### Koh j =OMM,,