This bill was authored by Pickett, and is “relating to limitations on the renewal of deferred presentment transactions and motor vehicle title loans.” The primary goal of this bill is to decrease the options a consumer has, and restrict the ways in which they might be able to re-finance a loan. Section 1 of the bill addresses Chapter 342 which is primarily for ” Regulated Lenders” versus CAB’s who operate under Chapter 393 of the Texas Finance Code. The bill would restrict the the “lender” from allowing a consumer to “rollover” a loan more than 4 times. A rollover is defined in this rule as “a refinancing or paying of all or part of the finance charges and cash advance of a deferred presentment transaction with a new deferred presentment transaction.”

Section 3 of HB 1715 is relating to Chapter 393 and CABs. The bill would limit rollovers to 4 as it also does with Chapter 342 loans. The way the rollover is defined is the same as above, which is different from the most common definition in the industry. A “rollover” traditionally has referred to the scenario where a consumer opts to pay interest and fees only with no payment towards principal, instead of paying off the loan as originally agreed.

“Rollovers” do not typically occur when there is an amount of principal that is paid down in addition to the interest and fees that are due that day. This is Pickett’s new definition, the key difference lies in the phrase “all or part of the finance charges or cash advance.” Would go into effect 9-1-2013.

Click here for a PDF of HB 1715! HB.1715