Texas Administrative Code › Title 7 - BANKING AND SECURITIES › Part 5 - OFFICE OF CONSUMER CREDIT COMMISSIONER › Chapter 83 - REGULATED LENDERS AND CREDIT ACCESS BUSINESSES › Subchapter A - RULES FOR REGULATED LENDERS › Division 5 - INTEREST CHARGES ON LOANS › Section 83.501 - Maximum Interest Charge

Current through Reg. 49, No. 28; July 12, 2024
(a)
					 Precomputed loans. An authorized lender may charge the add-on rates authorized
					 by Texas Finance Code, §
											RSA
					 342.201(a) or the
					 alternative simple interest rate authorized by Texas Finance Code, §
											RSA
					 342.201(d) or (e) as
					 calculated by the scheduled installment earnings method, for precomputed loans
					 that are either unsecured or secured by personal property. Prepaid interest in
					 the form of points is not permitted, unless expressly authorized by
					 statute.
(b) Interest-bearing
					 loans. An authorized lender may charge any rate of interest that does not
					 exceed the maximum rate authorized by Texas Finance Code, §
											RSA
					 342.201(d) or (e) as
					 calculated by the true daily earnings method or the scheduled installment
					 earnings method, for an interest-bearing loan that is either unsecured or
					 secured by personal property. Prepaid interest in the form of points is not
					 permitted, unless expressly authorized by statute.
(c) Method of calculation.
(1) An authorized lender making loans under
					 Texas Finance Code, §
												RSA
					 342.201(a), (d), or (e) may
					 calculate the rate and amount of interest by any method of calculation as long
					 as the amount of interest charged does not exceed the maximum rate or amount of
					 interest set forth in Texas Finance Code, §
												RSA
					 342.201(a), (d), or (e)
					 calculated using the specified earnings methods of Texas Finance Code, §
												RSA
					 342.201.
(2) An authorized lender making a loan under
					 Texas Finance Code, §
												RSA
					 342.201(e) and (e-1)(1) may
					 contract for, charge, and receive an amount of interest, calculated according
					 to the scheduled installment earnings method or true daily earnings method, not
					 exceeding the equivalent total of a:
(A)
					 simple annual rate of 30% on that portion of the unpaid balance of the cash
					 advance that is less than or equal to the amount computed under Texas Finance
					 Code, Chapter 341, Subchapter C, using the reference base amount of
					 $500;
(B) simple annual rate of 24%
					 on that portion of the unpaid balance of the cash advance that is more than the
					 amount computed for subparagraph (A) of this paragraph but less than or equal
					 to an amount computed under Texas Finance Code, Chapter 341, Subchapter C,
					 using the reference base amount of $1,050; and
(C) simple annual rate of 18% on that portion
					 of the unpaid balance of the cash advance that is more than the amount computed
					 for subparagraph (B) of this paragraph but less than or equal to an amount
					 computed under Texas Finance Code, Chapter 341, Subchapter C, using the
					 reference base amount of $2,500.
(3) An authorized lender making a loan under
					 Texas Finance Code, §
												RSA
					 342.201(e) and (e-1)(2) may
					 contract for, charge, and receive an amount of interest, calculated according
					 to the scheduled installment earnings method or true daily earnings method, by
					 applying a single equivalent daily rate to the unpaid principal balance for the
					 actual or scheduled number of days during a payment period, where the single
					 equivalent daily rate is determined at the inception of the loan using the
					 scheduled installment earnings method and would earn an amount of interest
					 authorized under Texas Finance Code, §
												RSA
					 342.201(e) if the debt were
					 paid to maturity according to the schedule of payments.