Texas Finance Code - Section 34.203. Loan Expenses And Fees
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Texas Lawyer > Finance Code > Texas Finance Code - Section 34.203. Loan Expenses And Fees
§ 34.203. LOAN EXPENSES AND FEES. (a) A bank may require
a borrower to pay all reasonable expenses and fees incurred in
connection with the making, closing, disbursing, extending,
readjusting, or renewing of a loan, regardless of whether those
expenses or fees are paid to third parties. A fee charged by the
bank under this section may not exceed the cost the bank reasonably
expects to incur in connection with the transaction to which the fee
relates. Payment for those expenses may be:
(1) collected by the bank from the borrower and:
(A) retained by the bank; or
(B) paid to a person rendering services for which
a charge has been made; or
(2) paid directly by the borrower to a third party to
whom they are payable.
(b) This section does not authorize the bank to charge its
borrower for payment of fees and expenses to an officer, director,
manager, or managing participant of the bank for services rendered
in the person's capacity as an officer, director, manager, or
managing participant.
(c) A bank may charge a penalty for prepayment or late
payment. Only one penalty may be charged by the bank on each past
due payment. Unless otherwise agreed in writing, prepayment of
principal must be applied on the final installment of the note or
other obligation until that installment is fully paid, and further
prepayments must be applied on installments in the inverse order of
their maturity.
(d) Fees and expenses charged and collected as provided by
this section are not considered a part of the interest or
compensation charged by the bank for the use, forbearance, or
detention of money.
(e) To the extent of any conflict between this section and a
provision of Subtitle B, Title 4, the provision of Subtitle B, Title
4, prevails.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
Section: 34.103 34.104 34.105 34.106 34.107 34.201 34.202 34.203 34.204 34.301 34.302 34.303 34.304 34.305 34.306
Last modified: August 10, 2007
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