This section lets a creditor use quarterly or annualized interest-rate ceilings for open-end accounts if the agreement allows it and notice is given on time.
Sec. 303.101. OPEN-END ACCOUNT: CEILINGS. (a) To use the quarterly or annualized ceiling for setting the interest rate on current and future open-end account balances, the agreement must provide for use of the ceiling, and the creditor must give notice of the interest rate after the date on which the quarterly or annualized ceiling is computed but before the last day of the next succeeding calendar quarter. (b) If the annualized ceiling is used, the rate is effective for the 12-month period beginning on the date on which the rate takes effect for the account. (c) If the quarterly ceiling is used, the rate is effective for the three-month period beginning on the date on which the rate takes effect for the account. For an open-end account authorized under Section 342.455 or 346.003, in connection with which credit card transactions are authorized or a merchant discount is imposed or received by the creditor, the quarterly ceiling shall be adjusted, at the option of the creditor, on: (1) the effective dates provided by Section 303.008; or (2) the first day of the first billing cycle of the account beginning after those dates. (d) If a quarterly or annualized ceiling is being used for an account and if the rate for the applicable period is less than or equal to the ceiling to be in effect for the succeeding period of equal length, the creditor may leave that rate in effect for the succeeding period. (e) A creditor who has disclosed to an obligor that an election may be renewed under Subsection (d) is not required to give additional notice of a renewal under that subsection. (f) To increase a previously agreed rate, a creditor shall comply with Section 303.103 before the end of the last calendar quarter of the period in which the rate previously agreed to is in effect. The ceiling in effect for that period remains the ceiling until the parties to the agreement agree to a new rate. Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999.