bill letting car lenders charge a fee for electronic payments

The text as introduced · 277 words

By: Menéndez
S.B. No. 1736

A BILL TO BE ENTITLED

AN ACT

relating to a convenience fee for processing electronic payments

for motor vehicles.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Subchapter E, Chapter 348, Finance Code, is

amended by adding Section 348.416 to read as follows:

Sec. 348.416. CONVENIENCE FEE FOR PROCESSING ELECTRONIC

PAYMENTS AUTHORIZED. (a) In this section, "electronic payment"

means a payment made by credit card, debit card, electronic funds

transfer, electronic check, or other electronic method.

(b) A holder of a retail installment contract or the

holder's agent may collect a fee for processing a retail buyer's

electronic payment under the contract only if:

(1) the fee is reasonably related to the expense

incurred by the holder or holder's agent in processing the

electronic payment;

(2) the fee does not exceed the lesser of $10 or five

percent of the amount of the payment; and

(3) the holder or holder's agent:

(A) allows the buyer to make a payment by a method

other than an electronic payment that does not incur a fee;

(B) does not establish electronic payment as the

expected form of payment; and

(C) informs the buyer of the following before the

buyer agrees to make an electronic payment:

(i) the amount of the fee to be charged

under this section;

(ii) that the buyer may make a payment by an

alternative method that does not incur a fee, including by check,

cash, or money order; and

(iii) that the holder or holder's agent may

not establish electronic payment as the expected form of payment.

SECTION 2. This section is effective September 1, 2025.