Court Opinion

ID: 9642895
Source: CourtListenerOpinion
Date Created: 2023-08-22 18:11:49.54173+00
Date Added: 2024-06-11T18:10:53.968597
License: Public Domain

SPEARS, Justice,
concurring.
I reluctantly concur. No longer is there any viable claim of usury against the extra *105charges made by a bank. The principle now seems well established that any expenses incurred by a bank to protect its security and collect its loan may be added to the interest charged on the indebtedness without violating the usury laws.
Those business expenses of a lending institution that may be added to the debt without being called “interest” are now without limitation. This court has held a plethora of charges can be added to the interest charged on an indebtedness without being charges for the “use, forebearance or detention” of money.
A time-price differential is not interest. Rattan v. Commercial Credit Co., 131 S.W.2d 399 (Tex.Civ.App.—Dallas 1939, writ refd). A “commission” charged when the loan is passed through an intermediary financial institution is not interest. Crow v. Home Savings Association, 522 S.W.2d 457 (Tex.1975). “Commitment fees” are not interest. Gonzales County Savings & Loan Association v. Freeman, 534 S.W.2d 903 (Tex.1976). “Prepayment penalties” are not interest. Boyd v. Life Insurance Co. of the Southwest, 546 S.W.2d 132 (Tex.Civ.App.—Houston [14th Dist.] 1977, writ refd). Fees for obtaining a loan are not interest. Ross v. Walker, 554 S.W.2d 189 (Tex.1977) (per curiam). We have even held that charges that the lender itself specifically terms “interest” in the instruments are not interest. Stedman v. Georgetown Savings & Loan Association, 595 S.W.2d 486 (Tex.1979).1
Each of these decisions, and this decision, extends the holding in Greever v. Persky, 140 Tex. 64, 165 S.W.2d 709 (1942), that so long as charges are for “distinctly separate and additional consideration other than the simple lending of money” they are not interest. The rule has now been stretched to the point that if another label can be applied to the charge, it isn’t interest in the eyes of the law. This is so even though the nexus of the transaction is the making of the loan, and without a loan, there would be no occasion to make any charges at all.
The legislature has carved out additional exceptions to the usury statutes. For example, the distinction between interest and time price differentials, first created by the courts, has been legislatively adopted. See TEX.REV.CIV.STAT.ANN. art. 5069-6.-01(h) (Vernon 1971 & Supp.1971-1982). Credit insurance premiums are not considered interest even though the lender profits. Art. 5069-3.18(7), -6.04(10), *106-6A.08(11). The legislature has even proclaimed non-usurious the collection of interest exceeding 100% per annum on certain small loans. Art. 5069-3.16.
It would now seem plausible for banks to add to each loan “overhead” charges that would not be interest. Such charges can no more be said to be for the “use, fore-bearance or detention” of money than the charge involved in this case. What we have done is to permit the banks to add the expenses of doing business on top of the interest charged on the loans they make, thus avoiding the usury laws altogether by means of mirrors.
These results are not fortuitous; the majority recognizes the ramifications of its decision and the cumulative thrust of this case and those it cites, i.e., so long as a bank can put a different label on a charge, it will not be called “interest” by the courts.
To be sure, the facts of this case generate little empathy with the position of the Goldrings, the debtors. Judicial wisdom, however, should transcend the facts of any one case in enunciating a rule for all. If this court were writing on a clean slate, the proper result would be to treat the charges in this case as interest. The services of the bank’s attorneys in the prior suit were aimed at protecting the bank's security interest, not the interests of the Goldrings. The Goldrings and the bank were each represented by their own lawyers. See Goldring v. Goldring, 523 S.W.2d 749 (Tex.Civ.App.—Port Worth 1975, writ ref d n.r.e.). Accordingly, the fees incurred by the bank should be treated as any other expense incident to the simple lending of money.
Unfortunately, the slate is not clean. I concur with the result in this case because I agree that it follows from the cases cited above.
Thus ends this requiem to usury by banks. Requiescat in pacel
KILGARLIN, J., joins in this concurring opinion.

. The courts of appeals have joined this trend by excluding from the definition of "interest" finance charges representing the difference between the cash price and time price, Rotello v. International Harvester Co., 624 S.W.2d 249 (Tex.App. — Dallas 1981, writ ref’d n.r.e.); Rotel-lo v. Twin City International, Inc., 616 S.W.2d 318 (Tex.Civ.App. — Houston [14th Dist.] 1981, writ ref d n.r.e.); Mid-States Homes, Inc. v. Sullivan, 592 S.W.2d 29 (Tex.Civ.App. — Beaumont 1979, writ refd n.r.e.); Argonaut Insurance Co. v. ABC Steel Products Co., 582 S.W.2d 883 (Tex. Civ.App. — Texarkana 1979, writ refd n.r.e.); An-guiano v. Jim Walter Homes, Inc., 561 S.W.2d 249 (Tex.Civ.App. — San Antonio 1978, writ refd n.r.e.); cash "discounts” or “trade discounts," Argonaut Insurance Co. v. ABC Steel Products Co., supra; prepayment penalties, Bearden v. Tarrant Savings Association, 643 S.W.2d 247 (Tex.App. — Fort Worth 1982, writ refd n.r.e.); a percentage charge for the period between the ordering and delivery of goods, Meyer v. Mack Sales, Inc., 645 S.W.2d 493 (Tex.App. — Corpus Christi 1982, no writ); a percentage increase in the purchase price during the period before a purchase option was exercised, Delta Enterprises v. Gage, 555 S.W.2d 555 (Tex.Civ.App. — Fort Worth 1977, writ refd n.r.e.); a fee for the release of a lien held by the lender, Wagner v. Austin Savings & Loan Association, 525 S.W.2d 724 (Tex.Civ.App. — Beaumont 1975, no writ); payment of a prior debt of the borrower as a condition precedent to a new loan, Dorfman v. Smith, 517 S.W.2d 562 (Tex.Civ.App. — Houston [1st Dist.] 1974, no writ); Laid-Rite, Inc. v. Texas Industries, Inc., 512 S.W.2d 384 (Tex.Civ.App. —Fort Worth 1974, no writ); see also Stephens v. First Bank & Trust of Richardson, 540 S.W.2d 572 (Tex.Civ.App. — Waco 1976, writ refd n.r.e.); and, foreshadowing the decision in this case, attorney fees of the lender charged to the borrower, Sapphire Homes, Inc. v. Gilbert, 426 S.W.2d 278 (Tex.Civ.App. — Dallas 1968, writ refd n.r.e.).
I should note that the Federal Government has narrowed the meaning of "interest” even further. In the Depository Institutions Deregulation and Monetary Control Act of 1980, Congress removed discount points on residential real estate loans from state usury law definitions of interest. 12 U.S.C. § 1735f-7 (Supp. V 1981).