Texas Finance Code 124.002 – Limitations On Interest Rates
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Terms Used In Texas Finance Code 124.002
- Interest rate: The amount paid by a borrower to a lender in exchange for the use of the lender's money for a certain period of time. Interest is paid on loans or on debt instruments, such as notes or bonds, either at regular intervals or as part of a lump sum payment when the issue matures. Source: OCC
- Month: means a calendar month. See Texas Government Code 312.011
- Year: means 12 consecutive months. See Texas Government Code 311.005
The interest rate on a loan to a member may not exceed:
(1) 1-1/2 percent per month on the unpaid balance;
(2) 28 percent a year to the extent that federal credit unions are permitted to charge that rate; or
(3) a higher rate authorized by law, including a rate authorized by Chapter 303.