The bill, H.B. No. 476, proposes amendments to the Finance Code regarding the maximum permitted rates of interest and fees associated with deferred presentment transactions. It introduces new sections, specifically Section 342.606 and Section 393.629, which establish that for deferred presentment transactions exceeding $300, the maximum interest rate is set at 38.5% per year, while transactions of $300 or less are capped at 36% per year. Additionally, any deferred presentment transaction that violates these interest rate limits will be deemed void and unenforceable. The bill also establishes that lenders who contravene these provisions will be committing a Class A misdemeanor.

Furthermore, the bill clarifies that the annual percentage rate for these transactions must include all charges related to the extension of consumer credit, encompassing interest, lender charges, and any fees. The provisions outlined in Sections 342.606 and 393.629 will only apply to loans or extensions of consumer credit made on or after the effective date of the Act, which is set for September 1, 2025. Loans made prior to this date will continue to be governed by the existing laws.

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