Aun-rm. TB:XAS 7~3711
February 28, 1972
Hon. Sam Kelley, Commissioner Opinion No. ~-1082
Office of Consumer Credit
1011San Jacinto Re: Acre the charges specified
Austin, Texas in Art. 5069-3.15(8), V.C.S.
authorized by Art. 5069-3.16
V.C.S., both statutes per-
taining to consumer credit
Dear Mr. Kelley: loans?
You have requested an opinion from this office as to whether the
charges authorized in Article 5069-3.15(8), Vernon’s Civil Statutes, are
authorized charges under Article 5069-3.16.
The statutory provisions, relevant to your request, state in part
the following:
Article 5069-3.15(l)
“Every licensee may contract for and receive on any loan
made under this chapter. . . an add-on interest charge computed
on the cash advance for the full term of the loan contract in accord-
ance with the following schedule:
“Eighteen Dollars per One Hundred Dollars per annum on that
part of the cash advance not in excess of Three Hundred Dollars,
and Eight Dollars per One Hundred Dollars per annum on that part
of the cash advance in excess of Three Hundred Dollars but not in
excess of Twenty-Five Hundred Dollars.”
A~rticle 5069-3.15(8)
“In addition to the authorized charges provided in this chapter
no further or other charge or amount whatsoever shall be directly
or indirectly, charged, contracted for, or received. This includes
(but is not limited by) all charges such as fees, compensation,
bonuses, commissions, brokerage, discounts, expenses, and every
other charge of any nature whatsoever, whether of the types listed
herein or not. Without limitation of the foregoing, such charges may
be any form of costs or compensation whether contracted for or not,
received by the licensee, or any other person, in connection with (a)
the investigation, arranging, negotiation, procuring, guaranteeing,
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Hon. Sam Kelley, page 2. (M-1082)
making, servicing, collecting, or enforcing of a loan; or (b)
for the forbearance of money, credit, goods or things in action;
or (c) for any other service or services performed or offered.
However, the prohibitions set out herein shall not apply to
amounts actually incurred by a licensee as court costs; attorney
fees assessed by a court; lawful fees for filing, recording, or
releasing in any public office any security for a loan; the reason-
able cost actually expended for repossessing, storing, preparing
for sale, or selling any security; or fees for noting a lien on or
transferring a certificate of title to any motor vehicle offered
as security for a loan made under this Chapter, or premiums or
identifiable charge received in connection with the sale of insurance
authorized under this Chapter. ”
Article 5069-3.16(l)
“On loans having a cash advance of One Hundred Dollars
or less, a licensee may charge, in lieu of charges specified
in Article 3.15, the following amounts: (Emphasis added)
1,
. . .
“On any cash advance of an amount in excess of Seventy
Dollars but not in excess of One Hundred Dollars, there shall
be allowed an acquisition charge for making the advance not
in excess of one-tenth of the amount of the cash advance. In
addition thereto, an installment account handling charge shall
be allowed not to exceed Four DoIlars per month. ”
Article 5069-3.16(3)
“On such loans under this Article, no insurance charges or
any other charges of any nature whatsoever shall be permitted.”
(Emphasis added)
Article 5069-3.16(4)
“The acquisition charge. . . shall not be subject to refund
on the prepayment of any loan under this Article; the installment
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,
Hon. Sam Kelley, page 3 (M-1082)
account handling charge shall be subject to the provisions
of Article 3.15 as it relates to refunds, Provisions of
Article 3.15 relating to default charges on loans and the
deferment of loans shall apply to loans made under this
Article. ”
It is the opinion of this office that the charges authorized by
Article 5069-3.15(g) do not apply to those loans made pursuant to Article
5069-3.16.
Article 5069-3.16 ($100 or less) differs from Article 5069-3.15
($2,500 or less) in several respects: Loans made pursuant to the former
produce a considerably higher interest yield to the licensee; the maximum
term of the loan is less; and the acquisition charge is not subject to refund.
Article 5069-3.16(4) makes reference to Article 5069-3.15 and the applica-
bility thereof regarding refunds of the account handling charge [Article
5069-3.15(6)] and default charges and the deferment of loans [Article 5069-3.15(S)].
Article 5069-3.16(3) makes no reference whatsoever to Article 5069-3.15(8),
and likewise, Article 3.15(g) contains no language indicating that its provisions
are applicable to Article 3.16.
Article 5069-3.16 has no language which would authorize a licensee
to charge a borrower those actually incurred expenses of Article 5069-3.15(g)
in the making or collecting of a loan made pursuant to its high rate provisions.
Subsection (3) of Article 5069-3.16 is unambiguous in its language
that loans made pursuant to its provisions shall not include insurance charges
or any other charges of any nature whatsoever.
You have advlised that, “It has long been the policy of this office that
Article 3.15 and 3.16 are mutually exclusive and that the Article 3.16 pro-
hibition against ‘any other charges of any nature whatsoever’ applies to
’ Theseand 3.16 as enacted by the Leg. (Acts 60th. Leg., R.S.,
1967, ch. 274, p.* 608) are codified by Vernon as Articles 5069-3.15 and
5069-3.16, V. C. S., respectively.
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Hon. Sam Kelley, page 4 (M-1082)
and prohibits the imposition on Article 3.16 loans of those charges
enumerated in Article 3.15(a)“. We are in agreement with your construction,
which is entitled to great weight before the courts if there be any doubt
or ambiguity and should be followed unless clearly erroneous. Armco Steel
Corp. v. Texas Employment Commission, 386 S. W. 2d 894 ( Tex. Civ. App.
1965, error ref. , n. r. e. )
SUMMARY
The charges authorized in Article 5069-3.15(8),
V.C. S. , are not authorized charges under Article 5069-3.16,
V.C.S.
ey Genera1 of Texas
Prepared by Ray McGregor
Assistant Attorney General
APPROVED:
OPINION COMMITTEE
Kerns Taylor, Chairman
W. E. Allen, Co-Chairman
Wayne Rodgers
Scott Garrison
Jack Sparks
Harriet Burke
SAMUEL D. MCDANIEL
Staff Legal Assistant
ALFRED WALKER
Executive Assistant
NOLA WHITE
First Assistant
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