S.B. No. 1736 introduces a new section to the Finance Code, specifically Section 348.416, which addresses the collection of convenience fees for processing electronic payments related to retail installment contracts for motor vehicles. The bill defines "electronic payment" to include various forms such as credit cards, debit cards, and electronic checks. It stipulates that a holder of a retail installment contract or their agent may charge a fee for processing these payments, provided that the fee is reasonable, does not exceed $10 or 5% of the payment amount, and certain conditions are met. These conditions include allowing alternative payment methods that do not incur a fee, not establishing electronic payment as the expected form of payment, and informing the buyer about the fee and alternative payment options before they agree to make an electronic payment.

The bill emphasizes transparency and consumer choice by requiring that buyers be informed of the fee amount, the availability of fee-free payment methods, and the prohibition against establishing electronic payment as the default payment method. This legislation is set to take effect on September 1, 2025.

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