Texas House Bill HB1350

Texas 2025 - 89th Regular

• Filed: 11/15/24

Caption

Relating to a restriction on total charges charged for extensions of consumer credit that a credit services organization obtains for a consumer or assists a consumer in obtaining.

Impact

The introduction of this bill is anticipated to have significant ramifications on existing state laws regarding consumer credit and financial services. By enforcing a specific limit on the APR for credit extensions, HB1350 aligns with other consumer protection measures aiming to enhance the financial safety of citizens. The bill would also impact credit access businesses by defining more transparent fee structures and requiring clear disclosure of charges, potentially leading to more informed consumer choices.

Summary

House Bill 1350 seeks to impose a cap on the total charges that can be applied to extensions of consumer credit by credit services organizations. Specifically, the bill stipulates that the annual percentage rate (APR) for consumer credit obtained through these organizations may not exceed 36 percent. This regulation is designed to protect consumers from excessively high fees and interest rates associated with credit services, aiming to promote fairer lending practices and reduce predatory financial behaviors.

Contention

While supporters of HB1350 argue that the bill serves as an essential measure to combat predatory lending and promote equitable access to credit, there may be opposition from some financial service providers and lobbyists. Critics might express concerns that imposing a cap on interest rates could limit the availability of credit options for consumers, particularly those with lower credit scores who may require these services. Thus, the bill is likely to prompt discussions on finding a balance between consumer protection and financial service viability.