                           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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