CHAPTER 301. GENERAL PROVISIONS
FINANCE CODE
TITLE 4. REGULATION OF INTEREST, LOANS, AND FINANCED TRANSACTIONS
SUBTITLE A. INTEREST
CHAPTER 301. GENERAL PROVISIONS
Sec. 301.001. SHORT TITLE. This title may be cited as the Texas
Credit Title.
Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept.
1, 1999.
Sec. 301.002. DEFINITIONS. (a) In this subtitle:
(1) "Contract interest" means interest that an obligor has paid
or agreed to pay to a creditor under a written contract of the
parties. The term does not include judgment interest.
(2) "Credit card transaction" means a transaction for personal,
family, or household use in which a credit card, plate, coupon
book, or credit card cash advance check may be used or is used to
debit an open-end account in connection with:
(A) a purchase or lease of goods or services; or
(B) a loan of money.
(3) "Creditor" means a person who loans money or otherwise
extends credit. The term does not include a judgment creditor.
(4) "Interest" means compensation for the use, forbearance, or
detention of money. The term does not include time price
differential, regardless of how it is denominated. The term does
not include compensation or other amounts that are determined or
stated by this code or other applicable law not to constitute
interest or that are permitted to be contracted for, charged, or
received in addition to interest in connection with an extension
of credit.
(5) "Judgment creditor" means a person to whom a money judgment
is payable.
(6) "Judgment debtor" means a person obligated to pay a money
judgment.
(7) "Judgment interest" means interest on a money judgment,
whether the interest accrues before, on, or after the date the
judgment is rendered.
(8) "Legal interest" means interest charged or received in the
absence of any agreement by an obligor to pay contract interest.
The term does not include judgment interest.
(9) "Lender credit card agreement":
(A) means an agreement between a creditor and an obligor that
provides that:
(i) the obligor, by means of a credit card transaction for
personal, family, or household use, may:
(a) obtain loans from the creditor directly or through other
participating persons; and
(b) lease or purchase goods or services from more than one
participating lessor or seller who honors the creditor's credit
card;
(ii) the creditor or another person acting in cooperation with
the creditor is to reimburse the participating persons, lessors,
or sellers for the loans or the goods or services purchased or
leased;
(iii) the obligor is to pay the creditor the amount of the loan
or cost of the lease or purchase;
(iv) the unpaid balance of the loan, lease, or purchase and
interest on that unpaid balance are debited to the obligor's
account under the agreement;
(v) interest may be computed on the balances of the obligor's
account but is not precomputed; and
(vi) the obligor and the creditor may agree that payment of part
of the balance may be deferred;
(B) includes an agreement under Section 342.455 or Section
346.003(b) or (c) for an open-end account under which credit card
transactions may be made or a merchant discount may be taken; and
(C) does not include:
(i) an agreement, including an open-end account credit
agreement, between a seller and a buyer or between a lessor and a
lessee; or
(ii) an agreement under which:
(a) the entire balance is due in full each month; and
(b) no interest is charged if the obligor pays the entire
balance each month.
(10) "Loan" means an advance of money that is made to or on
behalf of an obligor, the principal amount of which the obligor
has an obligation to pay the creditor. The term does not include
a judgment.
(11) "Merchant discount" means the consideration, including a
fee, charge, discount, or compensating balance, that a creditor
requires, or that a creditor, subsidiary, or parent company of
the creditor, or subsidiary of the creditor's parent company,
receives directly or indirectly from a person other than the
obligor in connection with a credit card transaction under a
lender credit card agreement between the obligor and the
creditor. The term does not include consideration received by a
creditor from the obligor in connection with the credit card
transaction.
(12) "Money judgment" means a judgment for money. For purposes
of this subtitle, the term includes legal interest or contract
interest, if any, that is payable to a judgment creditor under a
judgment.
(13) "Obligor" means a person to whom money is loaned or credit
is otherwise extended. The term does not include:
(A) a judgment debtor; or
(B) a surety, guarantor, or similar person.
(14) "Open-end account":
(A) means an account under a written contract between a creditor
and an obligor in connection with which:
(i) the creditor reasonably contemplates repeated transactions
and the obligor is authorized to make purchases or borrow money;
(ii) interest or time price differential may be charged from
time to time on an outstanding unpaid balance; and
(iii) the amount of credit that may be extended during the term
of the account is generally made available to the extent that any
outstanding balance is repaid; and
(B) includes an account under an agreement described by Section
342.455 or Chapter 345 or 346.
(15) "Prepayment penalty" means consideration agreed on and
contracted for a discharge of a loan, other than a loan governed
by Chapter 306, before its maturity or a regularly scheduled date
of payment, as a result of an obligor's election to pay all of
the principal amount before its stated maturity or a regularly
scheduled date of payment.
(16) "Time price differential" means an amount, however
denominated or expressed, that is:
(A) added to the price at which a seller offers to sell services
or property to a purchaser for cash payable at the time of sale;
and
(B) paid or payable to the seller by the purchaser for the
privilege of paying the offered sales price after the time of
sale.
(17) "Usurious interest" means interest that exceeds the
applicable maximum amount allowed by law.
(b) The Finance Commission of Texas by rule may adopt other
definitions to accomplish the purposes of this title.
Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept.
1, 1999; Acts 1999, 76th Leg., ch. 909, Sec. 2.01, eff. Sept. 1,
1999.
Amended by:
Acts 2005, 79th Leg., Ch.
1018, Sec. 2.01, eff. September 1, 2005.