Aun-rm. TB:XAS 7~3711 February 28, 1972 Hon. Sam Kelley, Commissioner Office of Consumer Credit 1011 SanJacinto Austin, Texas

Dear Mr. Kelley: Opinion No. ~-1082 Re: Acrethe charges specified inArt. 5069-3.15(8), V.C.S. authorized byArt. 5069-3.16 V.C.S., both statutes pertaining to consumer credit loans? You have requested an opinion from this office as towhether the charges authorized inArticle 5069-3.15(8), Vernon’s Civil Statutes, are authorized charges under Article 5069-3.16.

The statutory provisions, relevant toyour request, state inpart the following:

Article 5069-3.15(l)

“Every licensee may contract for and receive on anyloan made under this chapter.

. .an add-on interest charge computed on the cash advance for the full term ofthe loan contract inaccordance with the following schedule:

“Eighteen Dollars per One Hundred Dollars per annum on that part of the cash advance not in excess of Three Hundred Dollars, and Eight Dollars per One Hundred Dollars per annum on that part of the cash advance in excess ofThree Hundred Dollars but not in excess of Twenty-Five Hundred Dollars.” A~rticle 5069-3.15(8)

“In addition tothe authorized charges provided inthis chapter nofurther or other charge or amount whatsoever shall be directly or indirectly, charged, contracted for, or received. This includes (but is not limited by) all charges such as fees, compensation, bonuses, commissions, brokerage, discounts, expenses, and every other charge of any nature whatsoever, whether of the types listed herein or not. Without limitation of the foregoing, such charges may be any form ofcosts or compensation whether contracted for or not, received bythe licensee, or any other person, inconnection with (a) the investigation, arranging, negotiation, procuring, guaranteeing, -5293-Hon. Sam Kelley, page 2. (M-1082) making, servicing, collecting, or enforcing of a loan; or (b) for the forbearance of money, credit, goods or things in action; or (c) for any other service or services performed or offered. However, the prohibitions set out herein shall not apply to amounts actually incurred by alicensee as court costs; attorney fees assessed by acourt; lawful fees for filing, recording, or releasing in anypublic office any security for a loan; the reasonable cost actually expended for repossessing, storing, preparing for sale, or selling any security; or fees for noting alien on or transferring acertificate of title to any motor vehicle offered as security for a loan made under this Chapter, or premiums or identifiable charge received inconnection with the sale of insurance authorized under this Chapter. ” Article 5069-3.16(l)

“On loans having a cash advance of One Hundred Dollars or less, a licensee may charge, inlieu of charges specified in Article 3.15, the following amounts: (Emphasis added) 1,

. . .

“On any cash advance of anamount in excess of Seventy Dollars butnot in excess of One Hundred Dollars, there shall be allowed an acquisition charge for making the advance not in excess of one-tenth of the amount of the cash advance. In addition thereto, an installment account handling charge shall be allowed not to exceed Four DoIlars per month. ” Article 5069-3.16(3)

“On such loans under this Article, no insurance charges or any other charges of any nature whatsoever shall be permitted.” (Emphasis added) Article 5069-3.16(4)

“The acquisition charge.

. .shall not be subject to refund on the prepayment of any loan under this Article; the installment

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Hon. Sam Kelley, page 3 (M-1082)

account handling charge shall be subject tothe provisions of Article 3.15 as it relates to refunds, Provisions of Article 3.15 relating todefault charges on loans andthe deferment of loans shall apply toloans made under this Article. ” Itis the opinion of this office thatthe charges authorized by Article 5069-3.15(g) do not apply tothose loans made pursuant toArticle 5069-3.16.

Article 5069-3.16 ($100or less) differs from Article 5069-3.15 ($2,500 or less) in several respects: Loans made pursuant tothe former produce a considerably higher interest yield tothe licensee; the maximum term of the loan is less; and the acquisition charge is not subject to refund. Article 5069-3.16(4) makes reference toArticle 5069-3.15 andthe applicability thereof regarding refunds of the account handling charge [Article 5069-3.15(6)] anddefault charges andthe deferment of loans [Article 5069-3.15(S)]. Article 5069-3.16(3) makes noreference whatsoever toArticle 5069-3.15(8), andlikewise, Article 3.15(g) contains nolanguage indicating that its provisions are applicable toArticle 3.16.

Article 5069-3.16 has nolanguage which would authorize a licensee to charge a borrower those actually incurred expenses ofArticle 5069-3.15(g) in the making or collecting of aloan made pursuant to its high rate provisions.

Subsection (3) ofArticle 5069-3.16 is unambiguous in its language that loans made pursuant to its provisions shall not include insurance charges or any other charges of any nature whatsoever.

You have advlised that, “It has long been the policy of this office that Article 3.15 and 3.16 are mutually exclusive andthattheArticle 3.16 prohibition against ‘any other charges of any nature whatsoever’ applies to

’ Theseand 3.16 as enacted by the Leg. (Acts 60th. Leg., R.S., 1967, ch. 274, p.*608) are codified byVernon as Articles 5069-3.15 and 5069-3.16, V.C.S., respectively.

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andprohibits the imposition on Article 3.16 loans of those charges enumerated inArticle 3.15(a)“

. We are in agreement with your construction, which is entitled togreat weight before the courts ifthere be anydoubt or ambiguity and should be followed unless clearly erroneous. Armco Steel Corp. v. Texas Employment Commission, 386 S.W.2d 894 (Tex. Civ. App. 1965, error ref. , n.r. e.) SUMMARY

The charges authorized inArticle 5069-3.15(8), V.C. S., are not authorized charges under Article 5069-3.16, V.C.S.

ey Genera1 of Texas Prepared by Ray McGregor Assistant Attorney General APPROVED: OPINIONCOMMITTEE Kerns Taylor, Chairman W. E. Allen, Co-Chairman Wayne Rodgers Scott Garrison Jack Sparks Harriet Burke SAMUEL D. MCDANIEL StaffLegal Assistant ALFRED WALKER Executive Assistant NOLA WHITE First Assistant

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