Texas Finance Code - FIN § 347.110. Use of Optional Ceiling

(a) This section applies to a credit transaction only if the federal usury preemptions for residential mortgage loans contained in the Veterans' Disability Compensation and Survivors' Benefits Act of 1979 (38 U.S.C. Section 101 et seq.), the Housing and Community Development Act of 1979 (42 U.S.C. Section 5401 et seq.), and the Depository Institutions Deregulation and Monetary Control Act of 1980 (12 U.S.C. Section 1735f-7) are expressly made inapplicable to transactions made in this state by an Act of the legislature of this state. Application of this section begins on the effective date of that Act.

(b) The interest or time price differential in a credit transaction may not exceed the amount obtained by applying a simple interest rate equal to 13.32 percent a year to the unpaid balance for the scheduled term of the transaction.

(c) If the credit transaction is payable for a period that is shorter or longer than a year or is for an amount that is less or greater than $100, the amount of the maximum charge computed under this section is decreased or increased proportionately.

(d) For the purpose of a computation under this section, 15 or more days of a month may be considered a full month.

(e) A transaction payable other than in substantially equal successive monthly installments beginning one month from the date of the credit document may provide for a finance charge that does not exceed an amount that, having due regard for the schedule of payments, provides the same effective return as if the credit transaction were payable in substantially equal successive monthly installments beginning one month from the date of the credit document.

(f) As an alternative to the rate authorized under Subsection (b), a credit transaction may provide for a rate that does not exceed the applicable optional interest rate ceiling under Chapter 303.