Where do I find the verbiage about Loan Administration Fees? If you can provide the URL that would be great.
Thank you.

The Texas Credit Laws will address this.

Here is one example: §342.201(f) A loan contract under this subchapter may provide for an administrative fee in an amount not to exceed $25 for a loan of more than $1,000 or $20 for a loan of $1,000 or less. The administrative fee is considered earned when the loan is made or refinanced and is not subject to refund. A lender refinancing the loan may not contract for or receive an administrative fee for the loan more than once in any 180-day period, except that if the loan has an interest charge authorized by Subsection (e) the lender may not contract for or receive the administrative fee more than once in any 365-day period. One dollar of each administrative fee shall be deposited with the comptroller for use in carrying out the finance commission's responsibilities under Section 11.305.

Thank you. I am trying to find out if it says anything about charge one person charge them all and if you don't charge everyone is that a violation of law.

Now you are getting into a selection process and the possibility of fair lending concerns. I don't recall it discussing pricing, except what is allowed. Personally, I'd charge or not charge. The admin costs are the same. Compensating balances can vary, but it is simplest to just charge it to offset your costs of doing the loan.

Andy, are there any disclosure requirements related to this fee?

Thanks

Admin fees are finance charges and must be disclosed under Reg. Z. You also have limits on how frequently you can impose this fee on a borrower.

The Finance Code says that one dollar of each administative fee may be deposited with the comptroller. Our senior management thinks that because it says may, we are not required to send the money. What does everybody else think? They also want to charge the fee at the end of the note. They have been told that if we do it that way it is not interest.

Lestie is correct. That money was to fund a study which was done. The state says you may send it, but are not required to. Like, who is going to send it in when it isn't required? Duh.

Thanks for the info guys!

In a previous post regarding Loan Administration Fees, you said "...You also have limits on how frequently you can impose this fee on a borrower." Can you expand on such limits in Texas?

I have a Legal Comment from Karen Neeley, IBAT's general counsel, from May 2004, in which she states "The loan administrative fee should only be charged on a particular loan no more frequently than once every 180 days, In other words, the customer could refinance in six months and you could charge the fee again".

She goes on to say "Theoretically, the customer could pay a loan fee on more than one transacation with the bank in a year".

My situation is troublesome due to the fact we have a local self-employed individual who comes to us at least 6 times a year to get small loans for cash flow, personal expenses, etc. My officer is charging the $20 on each of these new loans.

So far this year, this particular loan officer has collected five times on this same customer. Five different loans, five different purposes, five $20 fees.

Am I right to be nervous?

I'm not a lawyer, and I typically refer to Karen Neeley's comments on this, but I think the point is that you can't charge an admin fee on the same money more than once every 180 days, i.e. if the loan is modified, extended, changed, etc. more often than that, you can't charge an additional fee.

If this customer is getting separate, new loans each time, I think you're well within the law to charge an admin fee on each loan.

Thanks Lestie, it helps to hear some positive feedback. I must admit I will still be a little jittery when examiners and/or auditors hit my front door.

Anyone had any experience in Texas with this situation?

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the point is that you can't charge an admin fee on the same money more than once every 180 days

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That is correct.