Tex. Codes » Finance Code · TITLE 4. REGULATION OF INTEREST, LOANS, AND FINANCED TRANSACTIONS · SUBTITLE A. INTEREST · CHAPTER 306. COMMERCIAL TRANSACTIONS
Texas Codes

Tex. Fin. Code § 306.004 (2026)

Determining Rates Of Interest By Spreading

✓ current as of May 2026
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Sec. 306.004. DETERMINING RATES OF INTEREST BY SPREADING. (a) To determine whether a commercial loan is usurious, the interest rate is computed by amortizing or spreading, using the actuarial method during the stated term of the loan, all interest at any time contracted for, charged, or received in connection with the loan.

(b) If a commercial loan is paid in full before the end of the stated term of the loan and the amount of interest received for the period that the loan exists exceeds the amount that produces the maximum rate authorized by law for that period, the lender shall:

(1) refund the amount of the excess to the borrower; or

(2) credit the amount of the excess against amounts owing under the loan.

(c) A lender who complies with Subsection (b) is not subject to any of the penalties provided by law for contracting for, charging, or receiving interest in excess of the maximum rate authorized.

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

Notes of Decisions
Cited in 5 cases (4 in the last 5 years), 2010–2025 · leading case: In Re Perry, 425 B.R. 323 (Bankr. S.D. Tex. 2010).
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In Re Perry, 425 B.R. 323 (Bankr. S.D. Tex. 2010). · cites it 2× “40 Under Tex. Fin.Code, § 306.004, to determine whether a commercial loan is usurious, the interest rate is computed by amortizing or spreading, using the actuarial method during the stated term of the loan, all interest at any time contracted for, charged, or received in…”
Amer Pearl Grp v. Natl Payment Sys (5th Cir. 2024). · cites it 5× “Spe- cifically, Pearl contends that the district court erred in its interpretation and application of Texas Finance Code § 306.004, which addresses the calcula- tion of interest rates on commercial loans.”
Am. Pearl Grp., L.L.C., a Texas Ltd. Liab. Co.; John Sarkissian; Andrei Wirth v. Nat'l Payment Sys., L.L.C. (Tex. 2025). · cites it 5× “TEX. FIN. CODE § 306.004. As we explain below, the parties disagree on what “using the actuarial method” requires under Section 306.”
Am. Pearl Grp., LLC v. Nat'l Payment Sys., LLC (N.D. Tex. 2022). “TEX. FIN. CODE § 306.004(a) (codifying Nevels v.”
Am. Pearl Grp., LLC v. Nat'l Payment Sys., LLC (N.D. Tex. 2023). “Laws 127 , 236 (current version at TEX. FIN. CODE § 306.004(a) (“To determine whether a commercial loan is usurious, the interest rate is computed by amortizing or spreading, using the actuarial method during the stated term of the loan, all interest at any time contracted for,…”
Tex. Fin. Code § 306.004(a): 3 cases
Am. Pearl Grp., L.L.C., a Texas Ltd. Liab. Co.; John Sarkissian; Andrei Wirth v. Nat'l Payment Sys., L.L.C. (Tex. 2025). “TEX. FIN. CODE § 306.004. As we explain below, the parties disagree on what “using the actuarial method” requires under Section 306.”
Am. Pearl Grp., LLC v. Nat'l Payment Sys., LLC (N.D. Tex. 2022). “TEX. FIN. CODE § 306.004(a) (codifying Nevels v.”
Am. Pearl Grp., LLC v. Nat'l Payment Sys., LLC (N.D. Tex. 2023). “Laws 127 , 236 (current version at TEX. FIN. CODE § 306.004(a) (“To determine whether a commercial loan is usurious, the interest rate is computed by amortizing or spreading, using the actuarial method during the stated term of the loan, all interest at any time contracted for,…”
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