New Postjudgment Rate Calculation
House Bill 2415 relating to the calculation of the postjudgment interest rate, Section 304.003(c) Texas Finance Code, was signed by Governor Perry on June 20, 2003. This bill changes the basis of calculation for the rate. Although HB 2415 became effective the date of signing, the change to the postjudgment interest rate will not be evident until August 2003.
Under HB 2415, the postjudgment interest rate will be now computed by using the prime rate as published by the Federal Reserve Bank of New York and then subjecting that rate to floor and ceiling limit tests. If the prime rate is less than 5%, then the postjudgment rate will be 5%. If the prime rate is more than 15%, then the postjudgment rate will be 15%. As the postjudgment interest rates change, they will be published on this Web site on the Interest Rates main page and in the Texas Credit Letter.
The date the rate is computed by the agency is not changed. Section 304.003(b) of the Texas Finance Code directs the consumer credit commissioner to determine the postjudgment interest rate on the 15th day of each month; that rate is applied to a money judgment rendered by a Texas court during the succeeding calendar month. This subsection was not amended during the 78th Regular Legislative Session. The bill was signed after the fifteenth of June. Therefore, the first computation of the new postjudgment rate occurs July 15, 2003, for the month of August 2003. The postjudgment interest rate remains at the long-standing 10% through July 31, 2003.
Postjudgment Rate Summary for the Transition Period
- June 2003 (determined May 15): 10%
- July 2003 (determined June 15): 10%
- August 2003 (determined July 15): 5%
