Regular Session
Government Affairs & Regulatory Compliance Analysis
HB4134 authorizes holders of motor vehicle retail installment contracts to charge convenience fees for electronic payments, subject to a strict cap of the lesser of $10 or 5% of the payment amount. Immediate compliance is required regarding fee limits and mandatory pre-payment disclosures to avoid administrative penalties and restitution orders from the OCCC.
Rep. John Lujan·House Bill·Regular Session
This legislation has regulatory implications for the following Texas businesses and organizations:
Notable regulatory updates (effective 2025-06-20). Consider how these changes may affect your operations.
Affected business types:
lowMinimal cost impact anticipated.
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Key implementation requirements and action items for compliance with this legislation
Review agreements with third-party payment processors immediately. If your vendor charges you more than $10 per transaction, you cannot pass the excess cost to the consumer. You must absorb the difference or renegotiate. Ensure Retail Installment Contracts do not mandate electronic payment as the exclusive payment method.
Customer Service Representatives (CSRs) require immediate training on mandatory disclosure scripts. Staff must be instructed to read the fee disclosure and obtain verbal assent *before* processing any payment. Failure to do so renders the fee illegal.
Implement "hard stop" logic in payment portals and CRM systems to capture timestamped proof of fee disclosure and consumer acceptance (e.g., call recordings or server logs of checkbox acknowledgments). Maintain an internal accounting file justifying the fee amount based on actual processing expenses.
Update billing software to cap convenience fees at the lesser of $10 or 5% of the payment amount. This is a dynamic calculation; a $150 payment cannot carry a $10 fee (5% is $7.50).
The statute allows fees "reasonably related to the expense incurred" without defining if overhead (labor/software) is included or only direct interchange fees. Until the OCCC clarifies, adopt a conservative approach based on direct vendor costs. Additionally, the prohibition on making electronic payment the "expected" method creates risk for Auto-Pay incentive programs; the OCCC may scrutinize interest rate discounts tied to EFTs as a violation.
JD Key Consulting specializes in Texas regulatory compliance strategy. Work directly with James Dickey—former Chairman of the Republican Party of Texas—to understand this bill's impact on your operations and develop an actionable compliance plan.
Schedule a ConsultationInformation presented is for general knowledge only and is provided without warranty, express or implied. Consult qualified government affairs professionals and legal counsel before making compliance decisions.
This bill's path through the Texas Legislature
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Common questions about HB4134
HB4134 authorizes holders of motor vehicle retail installment contracts to charge convenience fees for electronic payments, subject to a strict cap of the lesser of $10 or 5% of the payment amount. Immediate compliance is required regarding fee limits and mandatory pre-payment disclosures to avoid administrative penalties and restitution orders from the OCCC.
HB4134 was authored by Texas Representative John Lujan during the Regular Session.
HB4134 was signed into law by Governor Greg Abbott on June 20, 2025.
HB4134 is enforced by Office of Consumer Credit Commissioner (OCCC).
The regulatory priority for HB4134 is rated as "moderate". Businesses and organizations should review the legislation to understand potential impacts.
The cost impact of HB4134 is estimated as "low". This may vary based on industry and implementation requirements.
HB4134 addresses topics including financial, financial--general, credit & debit cards, electronic funds transfer and electronic information systems.
Key dates for HB4134: Effective date is 2025-06-20. Consult with legal counsel regarding applicability.
HB4134 establishes the following penalties: administrative/civil penalty of Restitution of excess fees / Administrative fines for Charging a convenience fee exceeding the lesser of $10 or 5%, or failing to provide required pre-payment disclosures.. Consult with legal counsel for specific applicability to your situation.
JD Key Consulting is an Austin, Texas-based government affairs firm led by James Dickey, former Chairman of the Republican Party of Texas. We specialize in Texas regulatory compliance and legislative strategy for data centers, energy, banking, and manufacturing.
