S.B. No. 1736 introduces a new provision to the Texas Finance Code regarding the collection of convenience fees for processing electronic payments related to retail installment contracts for motor vehicles. The bill allows holders of these contracts or their agents to charge a fee for processing electronic payments, provided that the fee is reasonable and does not exceed $10 or five percent of the payment amount. Additionally, the bill stipulates that buyers must be informed of the fee and their options for making payments without incurring a fee, such as through cash or check.

The new section, 348.416, outlines specific conditions that must be met for the fee to be charged. These include ensuring that electronic payment is not established as the expected form of payment and that buyers are made aware of the fee and alternative payment methods before agreeing to an electronic payment. This legislation is set to take effect on September 1, 2025.

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