would be an interest rate of more than 400%. Consider now charges on retail sales. Barndt indicates that stores have been on shaky legal ground in assessing service charges of more than 10% as most of the charges have been. This code legalizes service charges on retail sales ranging from 16% to 24%. Barndt cites a number of court rulings which he indicates have served as “ominous portenders of restless nights” for those who have been charging more than 10% in service charges on re-tail sales. “What this proposed law will accomplish is a marked reduction in the consumption of sleeping pills, removing almost the entire membership of the retail sales industry from the list of users,” Barndt chides. On some low-cost sales the interest rate could get astronomical, rivaling even the under-$100 loan category. The purchase of a $3 shirt on a two-month contract under the new code would support a charge of $6, Barndt says, interest of about 1,600%. ANOTHER AREA of concern to Barndt is in home improvement loans. He notes that the ‘code would provide that a home owner would be notified if his retail installment contract under which he is paying for a repair or remodeling job is sold to a third party. The home owner would have 30 days in which to file a complaint if the work of the contractor was unsatisfactory. If no complaint is made in that 30-day period then the home owner has no defense against the demands of the third party for money. Barndt believes that the transfer of a retail contract in such cases to a third party should not bar any defenses, or defeat any rights which the buyer has against the seller. He suggests that defects in workmanship are often unlikely to appear within the 30-day period. In fact, he goes on, “in many cases it is not unlikely that the seller will negotiate the paper before he completes or has agreed to complete the job.” Also, Barndt points out, the code is presuming a sophisticated buyer; “if that were the case, legislation . . . would not be necessary. Hence, the assignee of an installment contract should assume the risk of The code purportedly closes loopholes in statutes on usury, voids loans where a lender has charged more than twice the authorized interest, and provides fines in such instances. Barndt is unimpressed: Lenders have not had the right to usury “since the time that the memory of man runneth not to the contrary. The only change is that there will be a lot less usury on which to sue, i.e., much of what was usurious will become legalized. . . . Moreover, no one but a damn fool would ever get caught up by this provision. The rates are set sufficiently high that it is inconceivable that a person would be grabby enough to more than double [the interest rates] . . . [Usury] is never committed if it is profitable enough to stay legitimate.” Barndt is unconvinced that competition will keep interest rates down, as supporters of the impending law contend. Banks and other “more respectable” lenders are likely to operate under a different chapter of the code than the finance companies. The banks would thereby be limited to lower maximum rates than the loan companies \(however, these rates are higher ‘but would be subject to less regulation. So the loan companies will find that they are not in competition with the banks for the borrower’s business. There are other objections, many others, that Barndt has raised, but these discussed give a good idea of what he’s talking about. Summing up, he indicates that rates are higher in the $100-and-under loans, slightly higher on loans to $500, slightly lower on loans to $1,500, and progressively higher on loans above $1,500. “One can guess,” he says, “with great probabilities of accuracy as to the change in loan distribution [by amounts] which will follow enactment of this bill into law. “No Texan,” he asserts, “should want [the new code] on the books, unless it would make him money to have it there.” G. ,O. Political Intelligence Extra Innings at the Capitol? g’ There is increasing speculation now about the necessity of a special session of the legislature this year. Many important matters remain undone, and protracted battles are foreseen on such items as redrawing the House and Congressional districts and work on an appropriations bill. g/ Some of the Democratic conservatives in the Harris county delegation have asked House redistricting to alter the setup in their county. A majority of the county’s representatives had decided earlier in the session to let the districts stay as they are. But now several of the conservatives from Cong. George Bush’s district want to include some Negro voters not enough to unbalance the conservatives’ control of the Democratic primary but enough to help out in November against the Republicans. ijor Congressional redistricting evidently won’t be the problem that redrawing Texas House districts might be. A plan is ready that would not require any incumbent Congressmen to run against each other. V Some of the liberals in the legislature are smarting about the votes they felt they had to cast in support of the bill that would, among other things, arm campus policemen and a resolution commending the University of Texas at Austin for its handling of the “free speech” flare-up there. House appropriations committee chairman W. S. Heatly was pushing the resolution which passed by a unanimous voice vote. No one felt it worth the risk to oppose Heatly on the matter; he controls money for individual member’s districts. Three representatives voted against the campus police bill. Several others might have opposed it, at least on the basis of its being brought up coincidental to the U.T. “free speech” flare-up. But. these other members felt they couldn’t vote no, lest they seem to be siding with the “beatniks” and “Vietniks.” Criticism of House liberals was harshlyworded and deeply-felt on the campus for their votes on these two issues. 1/ The latest on the minimum wage con cerns a new bill introduced by Rep. Honore Ligarde, Laredo. It would exempt firms that have fewer than five employ ees, would call for $1.25, and would be administered by the management-oriented Texas Employment Commission. Rep. Lauro Cruz, Houston, sponsor of the origi nal minimum wage bill this session, has signed as a co-sponsor of Ligarde’s bill, which is seen as having some chance, if the Connally administration is to take the minimum wage issue away from prospective opponents next year. In the Senate Joe Bernal’s measure awaits floor action. If both bills are passed, a conference committee would have to work out the differences in them. V The industrial safety bill is awaiting John Connally’s signature. Labor leaders, who have worked 20 years for the measure, are watching the appropriations bill to see that enough funds are provided for meaningful enforcement. log Liberals were able to work out what they regard as an improvement in the voter registration bill. They blocked the needed two-thirds majority when the bill’s sponsor, Sen. Tom Creighton, Mineral Wells, sought to bring the measure to the floor. Creighton then agreed to change the bill to require tax assessors to mail registration forms for 1968 to all voters who are registered this year, rather than require in-person sign-ups. Earlier this year Rep. Curtis Graves, Houston, was to attend a gathering at May 12, 1967
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