Relating to the elimination of the remittance of a portion of certain loan administration fees to the comptroller.
LowStandard timeline
Low Cost
Effective:2026-01-01
Enforcing Agencies
Office of Consumer Credit Commissioner (OCCC) • Comptroller of Public Accounts (regarding pre-2026 collections)
01
Compliance Analysis
Key implementation requirements and action items for compliance with this legislation
Implementation Timeline
Effective Date: January 1, 2026
Compliance Deadline: January 1, 2026 (Loan Origination Systems must switch fee logic on this date).
Agency Rulemaking: No statutory requirement for new rules. However, watch for administrative guidance from the Comptroller regarding the deadline for the final "clean-up" payment for December 2025 activity.
Immediate Action Plan
Immediate: Notify your Loan Origination System (LOS) vendor or internal IT department to program a logic change effective 01/01/2026 to stop "tagging" the remittance portion of the fee.
Q4 2025: Conduct a "sandbox" test to ensure the LOS correctly distinguishes between loans originated on Dec 31 (remittance required) and Jan 1 (no remittance).
Q4 2025: Update General Ledger mapping to route the full administrative fee to revenue accounts starting Jan 1.
January 2026: Execute the final "true-up" payment to the Comptroller for all 2025 originations to satisfy the Section 3 Savings Clause.
Operational Changes Required
Contracts
Loan Documents: Review promissory notes and disclosure forms. If your current documents explicitly itemize the administrative fee distribution (e.g., "$24.00 to Lender, $1.00 to State"), these must be amended to reflect that the Lender retains the full amount.
Vendor Agreements: If you contract with third-party payment processors specifically to handle state fee remittances, notify them of the scope reduction to prevent auto-renewal of obsolete services.
Hiring/Training
Accounting Staff: Train accounts payable teams on the new General Ledger coding. The $1.00 (or $0.50) portion previously booked as "Payable to State" must be reclassified as "Revenue" for all loans originated post-implementation.
Reporting & Record-Keeping
Audit Trails: You must maintain a bifurcated record system during the transition.
Pre-2026: Maintain full remittance records for audit purposes under the Act's "Savings Clause."
Post-2026: Ensure loan origination records clearly timestamp the January 1, 2026 start date to justify the sudden drop in payments to the Comptroller in the event of an audit.
Fees & Costs
Revenue Increase: Lenders will retain an additional $1.00 per non-real property loan and $0.50 per secondary mortgage loan.
Cost Reduction: Elimination of administrative overhead associated with calculating and remitting these specific monthly/quarterly payments.
Strategic Ambiguities & Considerations
The "Final Reconciliation" Window: The bill preserves liability for fees accrued before the effective date but does not set a specific deadline for the final remittance.
*Risk:* Lenders may inadvertently stop payments too early (December 2025) or continue them too long (January 2026).
*Guidance:* Assume standard remittance cycles apply. If you remit monthly, your final payment for December 2025 activity will likely be due in January or February 2026. Do not let the "repeal" cause you to miss the final payment.
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Information 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.
Under current state law, administrative fees may be charged for non-real property loans and secondary mortgage loans, and for each such fee collected, $1 for non-real property loans and 50 cents for secondary mortgage loans may be deposited with the comptroller of public accounts for use in carrying out the responsibilities of the Finance Commission of Texas relating to a financial services study. The bill author has informed the committee that, as a self-directed semi-independent agency since 2009, the commission no longer receives appropriated funds and only collects minimal revenue from such fees. H.B. 4738 seeks to improve government efficiency and eliminate the unnecessary collection of fees by removing certain provisions providing for the remittance of a portion of certain administrative fees associated with loan contracts to the comptroller.
CRIMINAL JUSTICE IMPACT
It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.
RULEMAKING AUTHORITY
It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.
ANALYSIS
H.B. 4738 amends the Finance Code to remove the following statutory authorizations regarding the portion of loan administration fees remitted to the comptroller of public accounts related to certain consumer loans:
·with respect to certain non-real property consumer loans in regard to the maximum interest charge and the applicable administrative fee, the authorization for one dollar of each applicable administrative fee collected to be deposited with the comptroller for use in carrying out the responsibilities of the Finance Commission of Texas under statutory provisions relating to a financial services study; and
·with respect to certain secondary mortgage consumer loans in regard to the administrative fee, the authorization for 50 cents of each administrative fee collected to be deposited with the comptroller for use in carrying out those same responsibilities.
The bill does not affect tax liability accruing before the bill's effective date. That liability continues in effect as if a certain article had not been enacted, and the former law is continued in effect for the collection of taxes due and for civil and criminal enforcement of the liability for those taxes.
Honorable Stan Lambert, Chair, House Committee on Pensions, Investments & Financial Services
FROM:
Jerry McGinty, Director, Legislative Budget Board
IN RE:
HB4738 by Geren (Relating to the elimination of the portion of the Loan Administration Fee remitted to the comptroller.), As Introduced
No significant fiscal implication to the State is anticipated.
The bill would remove the provisions of the Finance Code that allows for the remittance of a portion of the Loan Administration Fee to the Comptroller.
Currently, a financial institution may charge an administrative fee for non-real property loans and secondary mortgage loans in the amounts set by Chapter 342 of the Finance Code or by Finance Commission rule. For each fee collected, one dollar for non-real property loans and 50 cents for secondary mortgage loans may be deposited with the Comptroller for use in carrying out the Finance Commission's responsibilities under Section 11.3055. The bill would repeal the fee remittance-related provisions.
Although the bill would remove the ability to remit to the Comptroller a portion of the Loan Administration Fee, based on the remittance history, the fiscal impact would not be significant.
Local Government Impact
No fiscal implication to units of local government is anticipated.
Source Agencies:
304 Comptroller of Public Accounts, 466 Office of Consumer Credit Commissioner
LBB Staff:
JMc, FV, SD, BRI
Related Legislation
Explore more bills from this author and on related topics
HB4738 eliminates the requirement for Authorized Lenders (Chapter 342) to remit a portion of loan administrative fees to the Comptroller, allowing lenders to retain the full fee revenue starting in 2026. This creates a strict accounting cut-off: lenders must cease remittances for loans originated on or after January 1, 2026, while ensuring full payment for all liabilities accrued prior to that date. Implementation Timeline Effective Date: January 1, 2026 Compliance Deadline: January 1, 2026 (Loan Origination Systems must switch fee logic on this date).
Q
Who authored HB4738?
HB4738 was authored by Texas Representative Charlie Geren during the Regular Session.
Q
When was HB4738 signed into law?
HB4738 was signed into law by Governor Greg Abbott on June 20, 2025.
Q
Which agencies enforce HB4738?
HB4738 is enforced by Office of Consumer Credit Commissioner (OCCC) and Comptroller of Public Accounts (regarding pre-2026 collections).
Q
How urgent is compliance with HB4738?
The compliance urgency for HB4738 is rated as "low". Businesses and organizations should review the requirements and timeline to ensure timely compliance.
Q
What is the cost impact of HB4738?
The cost impact of HB4738 is estimated as "low". This may vary based on industry and implementation requirements.
Q
What topics does HB4738 address?
HB4738 addresses topics including fees & other nontax revenue, fees & other nontax revenue--state, state finances, state finances--management & control and loans.
Legislative data provided by LegiScanLast updated: November 25, 2025
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