Usury

"Section 11 of Article 16 of the state constitution provides:

The Legislature shall have authority to define interest and fix maximum rates of interest; provided, however, in the absence of legislation fixing maximum rates of interest all contracts for a greater rate of interest than ten per centum (10%) per annum shall be deemed usurious; provided, further, that in contracts where no rate of interest is agreed upon, the rate shall not exceed six per centum (6%) per annum.

In the Texas Finance Code, Title 4, Subtitle A deals specifically with interest. Section 302 is titled ""Usurious Interest."" Section 305 establishes liability for various types of usurious interest.

Subsection B of Title 4 provides rules for various types of loans, and section 349 sets out penalties and liabilities, including for overcharging.

A number of transactions, assuming certain facts, are outside the scope of the Texas Finance Code. Examples are bona fide investments, leases, sales-leasebacks, and broker transactions to name a few. See Kinerd v. Colonial Leasing Co., 800 S.W.2d 187 (Tex. 1990) (commercial time-price-differentials); Holley v. Watts, 629 S.W.2d 694 (Tex. 1982) (sale-leasebacks).