Bill > HB476

This bill establishes new maximum interest rate limits for deferred presentment transactions (commonly known as payday loans) in Texas. Specifically, for loans over $300, the maximum annual interest rate is set at 38.5%, and for loans of $300 or less, the maximum rate is 36%. If a lender violates these interest rate caps, the loan becomes void and unenforceable, and the lender can be charged with a Class A misdemeanor. The bill calculates the annual percentage rate (APR) by including all charges associated with the transaction, such as interest, lender fees, and any other valuable considerations received by the credit access business. These new regulations will apply only to loans made on or after September 1, 2025, with existing loans continuing to be governed by the previous legal framework. The primary goal of the bill appears to be protecting consumers from excessively high-interest rates in short-term lending by establishing clear maximum rate limits and creating legal consequences for lenders who exceed these limits.

Labor and Employment

https://capitol.texas.gov/BillLookup/History.aspx?LegSess=89R&Bill=HB476