According to the Legislative Budget Board (LBB), HB 4738 would eliminate the statutory requirement that lenders remit a portion of loan administrative fees to the Texas Comptroller. Currently, financial institutions collecting these fees must remit $1 per non–real property loan and $0.50 per secondary mortgage loan to the Comptroller. These funds are used to support the responsibilities of the Finance Commission under Section 11.3055 of the Finance Code.

The removal of this remittance requirement is not expected to have a significant fiscal impact on the state. While the bill would reduce the amount of fee revenue flowing to the Comptroller, the historical volume of these remittances is not large enough to cause a meaningful budgetary disruption. Thus, any loss of revenue is considered minimal and manageable within the existing state budget framework.

Additionally, there are no anticipated fiscal implications for local governments. The bill solely affects the state-level financial structure related to the Finance Commission’s funding mechanism and does not impose new duties or costs on local entities. Overall, while the bill eliminates a minor revenue source for the state, its fiscal impact is expected to be negligible.

HB 4738 presents a straightforward deregulatory measure that eliminates the requirement for lenders to remit a portion of administrative fees to the comptroller for deposit into funds supporting the Finance Commission of Texas. Specifically, it removes the statutory obligation to remit $1 from each non-real property loan administrative fee and $0.50 from each secondary mortgage loan administrative fee. The bill reflects a policy shift in light of the Finance Commission’s status as a self-directed, semi-independent agency since 2009, which no longer relies on state appropriations and receives only minimal revenue from these fee remittances.

From a liberty-oriented perspective, the bill aligns well with principles of limited government and free enterprise. It eliminates a relatively obscure and functionally obsolete remittance requirement, thereby reducing government intervention in private lending transactions without compromising consumer protections. The bill allows lenders to retain the full amount of administrative fees, potentially reducing regulatory compliance costs and contributing to greater operational flexibility. By simplifying the fee structure and removing administrative overhead, the legislation promotes efficiency in government and in the regulated financial services sector.

Additionally, fiscal analyses indicate that the change would not result in a significant loss of revenue to the state, as the current remittances are minimal and no longer integral to the operation of the Finance Commission. There is also no anticipated impact on local governments. The bill does not create or modify any criminal offenses, nor does it expand rulemaking authority, making it a narrow and targeted reform.

In sum, HB 4738 is a modest but meaningful improvement in regulatory policy. It removes an outdated funding mechanism without generating fiscal, administrative, or legal complications. It enhances administrative clarity, upholds fiscal responsibility, and aligns with the core values of a restrained and efficient government. For these reasons, Texas Policy Research recommends that lawmakers vote YES on HB 4738.

• Individual Liberty: By removing this fee remittance requirement, the bill reduces indirect regulatory burdens that often get passed on to consumers. Administrative fees, while capped, still influence loan pricing and accessibility. Though the bill does not directly alter loan terms for borrowers, limiting state-imposed costs on private transactions helps protect individuals’ freedom to enter into financial agreements without the state siphoning funds through embedded fees.
• Personal Responsibility: The bill does not shift any moral or legal responsibility from individuals to the state. Borrowers and lenders remain accountable for fulfilling the terms of their loan agreements. However, it subtly reinforces the notion that voluntary contracts between private parties should not be distorted or monetized by the state, thus preserving the integrity of personal responsibility in financial decision-making.
• Free Enterprise: The bill promotes free enterprise by removing a regulatory cost imposed on lenders that served no consumer protection function. The Finance Commission no longer relies on this funding stream, and maintaining it only added compliance costs and administrative friction for lenders. Removing the remittance requirement allows market actors to retain the full administrative fee, freeing resources that can be reinvested in operations, services, or passed back to consumers in competitive pricing.
• Private Property Rights: By ensuring that lenders retain full control over the administrative fees they charge (within statutory limits), the bill upholds the principle that private actors should control the proceeds of their services unless a compelling justification exists for state intervention. The now-removed remittance amounted to a mandated diversion of private revenue for regulatory purposes, which, though minor in scale, contravened this principle.
• Limited Government: This bill is a textbook example of reducing the scope of government to its essential functions. The Finance Commission, being self-directed and semi-independent, no longer requires this revenue, and thus continuing to collect it would reflect unnecessary state overreach. The bill ensures that the government does not perpetuate obsolete funding mechanisms simply out of institutional inertia, thereby trimming back the size and footprint of state bureaucracy.