Texas Codes

Tex. Fin. Code § 305.003 (2026)

Liability For Usurious Legal Interest

✓ current as of May 2026

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Sec. 305.003. LIABILITY FOR USURIOUS LEGAL INTEREST. (a) A creditor who charges or receives legal interest that is greater than the amount authorized by this subtitle is liable to the obligor for an amount that is equal to the greater of:

(1) three times the amount computed by subtracting the amount of legal interest allowed by law from the total amount of interest charged or received; or

(2) $2,000 or 20 percent of the amount of the principal, whichever is less.

(b) This section applies only to a transaction subject to this subtitle.

Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999.

Notes of Decisions

Cited in 5 cases, 2001–2013 · leading case: Walker & Assocs. Surveying, Inc. v. Roberts, 306 S.W.3d 839 (Tex. App. 2010).

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Walker & Assocs. Surveying, Inc. v. Roberts, 306 S.W.3d 839 (Tex. App. 2010). · cites it 3× “When clarifying its ruling, the trial court stated: In granting Defendant’s motion, the Court held that Plaintiff (1) violated Tex. Fin.Code § 305.003 by charging interest greater than the legal rate of 6% per annum, and (2) violated § 305.”

Hoxie Implement Co., Inc. v. Baker, 65 S.W.3d 140 (Tex. App. 2001). · cites it 2× “" Tex. Fin.Code Ann. § 305.003. Since Baker pled for attorney's fees via his counterclaim and Hoxie was found liable under § 305.”

In Re Perry, 425 B.R. 323 (Bankr. S.D. Tex. 2010). · cites it 2× “In addition to the disallowance of these Proofs of Claim, the Complaint seeks: (1) actual damages pursuant to Tex. Fin.Code §§ 305.003 and 305.004 in favor of Hidden Lakes and Southern Colony; (2) equitable subordination of any claim that this Court may allow in favor of UDF or…”

Walker & Assocs. Surveying, Inc., & Dennis Walker, D/B/A Walker & Assocs. Constr. v. Royce Roberts (Tex. App. 2010). · cites it 2× “‖ TEX. FIN. CODE ANN. § 305.003 (Vernon 2006).”

Couns. Fin. Servs., Llc v. David McQuade Leibowitz & David McQuade Leibowitz, P. C. (Tex. App. 2013). “TEX. FIN. CODE ANN. § 305.003 (West 2006).”

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