The bill, H.B. No. 476, amends the Finance Code to establish new maximum interest rates and fees for deferred presentment transactions. Specifically, it introduces Section 342.606, which sets the maximum interest rate at 38.5% per year for transactions exceeding $300 and 36% per year for those at or below that amount. Additionally, it states that any deferred presentment transaction that violates these interest rate limits is void and unenforceable. It also creates a criminal offense for lenders who engage in such transactions, classifying it as a Class A misdemeanor.

Furthermore, the bill adds Section 393.629, which outlines that the annual percentage rate for these transactions must include all charges associated with the credit extension, such as interest and fees. Similar to Section 342.606, it establishes the same maximum interest rates for transactions based on the amount advanced. The provisions of this bill will apply only to loans or extensions of consumer credit made on or after its effective date of September 1, 2025, ensuring that any prior agreements remain governed by the existing law at the time they were made.

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