Consumer Credit Late Charges & Fees
Printer-friendly VersionThe Texas Credit Title is a complex set of laws regulating usury, fees and charges, and other matters. This section provides helpful, quick information including a chart of permissible Late Charges & Fees as well as interpretations from the Consumer Credit Commissioner. Please remember that just because a fee is permissible and is NOT interest does not mean that it is NOT a finance charge. In fact, except for late charges, all of the fees listed below would be finance charges for Regulation Z purposes on nonreal estate transactions.
Late Charges & Fees
Late charges and fees continue to be a source of great frustration to Texas bankers. The Texas Legislature routinely changes which fees are permissible on different types of transactions. Below you will find a chart of the most recent changes effective September 1, 2005.
In addition, IBAT obtained clarification of changes from 1999 that are still of critical importance to Texas lenders. Click on the following link for the full text of an informative letter from the Consumer Credit Commissioner: Late Charges & Fees Interpretive Letter.
Created on: 09/01/2005
Last review date: 05/02/2011
Last update: No updates needed since creation.
360 Day Calendar
In 2000, Commissioner Pettijohn responded to a request for clarification from IBAT regarding when and how to use 360 day calculations in commercial loans. To access a copy of that letter, click on the following link: 360 Day Calendar Interpretive Letter.
Administrative Fee
For helpful FAQs on administrative fees, click on the following link: Administrative Fees. Financial institutions need not remit $1 out of each administrative fee collected on a consumer installment loan. Click here for an explanatory letter from the Comptroller of Public Accounts.
Late Charges & Fees
Late charges and fees continue to be a source of great frustration to Texas bankers. The Texas Legislature routinely changes which fees are permissible on different types of transactions. Below you will find a chart of the most recent changes effective September 1, 2005.
In addition, IBAT obtained clarification of changes from 1999 that are still of critical importance to Texas lenders. Click on the following link for the full text of an informative letter from the Consumer Credit Commissioner: Late Charges & Fees Interpretive Letter.
Created on: 09/01/2005
Last review date: 05/02/2011
Last update: No updates needed since creation.
LATE
CHARGES & FEES CHART
|
Type Of Loan |
Permitted Fees |
Permitted Fees
Which Are
Interest
|
Late Charges |
|
Commercial; including real estate |
commitment fee, application fee, third-party fees, "loan fees," documentation fees, returned check fee |
origination fee (points) |
YES [1] |
|
Real Estate: Residential First Lien |
commitment fee, application fee, third-party fees, "loan fees" |
origination fee (points) - no usury ceiling on first lien notes |
YES [2] |
|
Real Estate: Residential Second Lien - Precomputed & Scheduled Installment Method |
third-party fees, returned check fee |
administrative fee |
YES [1] |
|
Real Estate: Residential Second Lien - Simple Interest - Over 10% |
third-party fees, returned check fee |
origination fee (points)[3], administrative fee |
YES [1] |
|
Real Estate: Residential Second Lien - 10% or less |
commitment fee, application fee, third party fees, "loan fees" |
origination fee (points) |
YES [4] |
|
Consumer: Single-pay (term) over 10% |
certain third-party fees |
administrative fee |
NO |
|
Consumer: Installment - rate of 10% or less (simple interest only) |
"loan fees," documentation fees, third-party fees |
|
YES [4] |
|
Consumer: Rate of 10% or less (term) |
"loan fees," documentation fees, third party fees |
|
NO |
|
Consumer: Installment - rate over 10% |
certain recording fees and collection expenses, returned check fee, reasonable third party fees |
administrative fee |
YES [1] |
|
Consumer: Open-end credit under Chapter 346 |
annual fee, overline fee, cash advance fee, returned check fee |
|
YES capped at $15 |
|
Manufactured Housing Purchase Money (retail) |
transfer fee, acquisition charges (on prepayment), fees or taxes paid to agency |
|
YES [5] capped at $20 |
|
Motor Vehicle Dealer Paper |
documentation fees, fees and taxes to agency, inspection fee, policy or agent fee |
|
YES [5] |
360 Day Calendar
In 2000, Commissioner Pettijohn responded to a request for clarification from IBAT regarding when and how to use 360 day calculations in commercial loans. To access a copy of that letter, click on the following link: 360 Day Calendar Interpretive Letter.
Administrative Fee
For helpful FAQs on administrative fees, click on the following link: Administrative Fees. Financial institutions need not remit $1 out of each administrative fee collected on a consumer installment loan. Click here for an explanatory letter from the Comptroller of Public Accounts.
Comments & Questions
If you would like to comment on legal topics or if you have questions about this information please call Shannon Phillips at (800) 749-4228 or e-mail sphillips@ibat.org.
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