General and Special Laws of The State of Texas Passed By The Third Called Session of the Fifty-Seventh Legislature and the Regular Session of the Fifty-Eighth Legislature Page: 551
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THE TEXAS REGULATORY LOAN ACT
Be it enacted by the Legislature of the State of Texas:
Declaration of Legislative Intent
Section 1. The Legislature finds as facts and determines:
(a) The Legislature should, in obedience to Article XVI, Section 11, of
the Constitution of Texas, as amended in 1960, classify loans and lenders,
license and regulate lenders, define interest and fix a maximum rate of
interest pertaining to licensees under this Act.
(b) Consumer loans make an essential and useful contribution to our
society in that they provide the only means by which many individuals
and families can secure credit to improve their standards of living and to
meet unforeseen financial emergencies.
(c) There exists among citizens of this state a widespread demand for
such loans, the scope and intensity of which has been increased progres-
sively by many social and economic forces.
(d) Due to the lack of adequate regulation, many unethical and un-
scrupulous lenders are engaged in the making of loans of this type and
are subjecting borrowers to abuses.
(e) These facts characterize and distinguish loans with cash ad-
vances of One Thousand Five Hundred Dollars ($1,500) or less, and
legislation to control this class of loans is necessary to protect the pub-
lic welfare.
(f) It is the intent of the Legislature in enacting this statute to
bring under public supervision those engaged in the business of making
such loans, to eliminate practices that facilitate abuse of borrowers;
to establish a system of regulation for the purpose of insuring honest
and efficient loan service and of stimulating competition in such lend-
ing; to provide for interest that is fair, just and equitable, and to provide
the administrative machinery necessary for effective enforcement.
Short Title
Sec. 2. This Act may be cited as the "Texas Regulatory Loan Act."
Definitions
Sec. 3. The following words and terms when used in this Act shall
have the following meanings, unless the context clearly requires a dif-
ferent meaning. The meanings applied to the singular forms shall also
apply to the plural.
(a) "Person" means an individual, copartnership, association, trust,
corporation and any other legal entity.
(b) "License" means the authority to do business under this Act.
(c) "Licensee" means any person to whom one or more licenses have
been issued.
(d) "Commissioner" means the Regulatory Loan Commissioner of
the State of Texas.
(e) "Finance Commission" means the Finance Commission of Texas
created by the Texas Banking Code of 1943.
(f) "Cash advance" means the amount of cash or its equivalent the
borrower actually receives and shall also include that paid out at his
direction or request, on his behalf or for his benefit.
(g) "Interest" shall be that compensation allowed by this Act, for
the use or forbearance or detention of the cash advance. The maximum
rate of interest permitted by this Act is that amount authorized in Sec-
tion 17 Any gain or advantage arising from the sale or providing of in-
surance as authorized in Section 18 shall not be interest.
551Ch. 205
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Texas. Legislature. General and Special Laws of The State of Texas Passed By The Third Called Session of the Fifty-Seventh Legislature and the Regular Session of the Fifty-Eighth Legislature, legislative document, 1963; [Austin, Texas]. (https://texashistory.unt.edu/ark:/67531/metapth221759/m1/887/?q=+date%3A1945-1972: accessed July 16, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu; crediting UNT Libraries Government Documents Department.