Part 1.
FINANCE COMMISSION OF TEXAS
Chapter 1.
CONSUMER CREDIT REGULATION
Subchapter E. INTEREST CHARGES IN LOANS
7 TAC §1.503, §1.504
The Finance Commission of Texas proposes amendments to 7
TAC §1.503 and §1.504, concerning interest charges in Subchapter
E loans.
The purpose of the amendments is to make technical and conforming changes
to the rules that parallel examination policies. The specific issues addressed
relate to: (1) the propriety of charging administrative loan fees on multiple
loans to the same borrower; and (2) the propriety of charging late charges
on single installment loans.
Section 1.503 addresses when a lender may charge an additional administrative
fee to a borrower who has multiple loans under Subchapter E. The modification
to Subchapter E under Senate Bill 272, 77th Legislature, created new limitations
on the assessment of administrative loan fees when a lender chooses to use
the new rate structure available under Subchapter E. When a lender uses the
new rate structure under Subchapter E, charges an administrative fee, and
then makes another loan to the same borrower the lender may not again assess
an administrative fee until the time limitation provided by the statute has
lapsed.
Section 1.504 provides that default charges may not be assessed on single
payment loans. At the time at which the payment becomes due, the loan has
matured and, thus, after maturity interest is the appropriate compensation
for the delinquency.
Leslie L. Pettijohn, Consumer Credit Commissioner, has determined that
for the first five-year period the amendments are in effect there will be
no fiscal implications for state or local government as a result of administering
the rules.
Commissioner Pettijohn also has determined that for each year of the first
five years the amendments are in effect the public benefit anticipated as
a result of the amendments will be consistent application of examination policies.
Additionally creditors will be more informed regarding the situations in which
fees can be assessed.
Comments on the proposed amendments may be submitted in writing to Leslie
L. Pettijohn, Consumer Credit Commissioner, Office of Consumer Credit Commissioner,
2601 North Lamar Boulevard, Austin, Texas 78705-4207 or by e-mail to: leslie.pettijohn@occc.state.tx.us.
The amendments are proposed under the Texas Finance Code §11.304
and §342.551, which authorizes the Finance Commission of Texas to adopt
rules to enforce Title 4 of the Texas Finance Code.
These rules affect Texas Finance Code Chapter 342, Subchapter E.
§1.503.Administrative Loan Fee.
An authorized lender may collect an administrative loan fee pursuant
to §342.201(f), Texas Finance Code on interest bearing and pre-computed
loans.
(1) - (2)
(No change.)
(3)
An administrative fee may not be contracted
for, charged, or received by an authorized lender on the refinance of a loan
that utilizes §342.201(a), (d), or (e) rates for a period of 365 days
after the lender has entered into a §342.201(e) rate loan in which an
administrative fee was contracted for, charged, or received.
(4)
[
§1.504.Default Charges.
(a) - (f)
(No change.)
(g)
Prohibition of default charge on single
payment loan. A default charge is prohibited on a single payment loan. After
maturity interest is allowed in lieu of a default charge.
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of
the Secretary of State on February 22, 2002.
TRD-200201129
Leslie L. Pettijohn
Commissioner
Finance Commission of Texas
Earliest possible date of adoption: April 7, 2002
For further information, please call: (512) 936-7640
7 TAC §1.601
The Finance Commission of Texas proposes amendments to 7
TAC §1.601, concerning alternate charges for consumer Subchapter F loans.
The purpose of the amendments is to make technical and conforming changes
to the rules that parallel examination policies. The specific issue addressed
relates to consistent limitations on acquisition charges under Subchapter
F.
Section 1.601 provides that an acquisition charge ($10 on a cash advance
of $100 to $500) may only be assessed to a borrower once in a given month.
This is a conforming charge, consistent with the application of the agency's
examination policy for more than thirty years. Additionally this rule is consistent
with the payday lending rules limitations on earning acquisition charges.
These rule changes are necessary to provide clarity and consistency to lenders
who construct their transactions in compliance with Chapter 342.
Leslie L. Pettijohn, Consumer Credit Commissioner, has determined that
for the first five-year period the amendments are in effect there will be
no fiscal implications for state or local government as a result of administering
the rules.
Commissioner Pettijohn also has determined that for each year of the first
five years the amendments are in effect the public benefit anticipated as
a result of the amendments will be consistent application of examination policies.
Additionally creditors will be more informed regarding the situations in which
fees can be assessed.
Comments on the proposed amendments may be submitted in writing to Leslie
L. Pettijohn, Consumer Credit Commissioner, Office of Consumer Credit Commissioner,
2601 North Lamar Boulevard, Austin, Texas 78705-4207 or by e-mail to: leslie.pettijohn@occc.state.tx.us.
The amendments are proposed under the Texas Finance Code §11.304
and §342.551, which authorizes the Finance Commission of Texas to adopt
rules to enforce Title 4 of the Texas Finance Code.
These rules affect Texas Finance Code Chapter 342, Subchapter F.
§1.601.Authorized Charges.
(a) - (b)
(No change.)
(c)
An acquisition charge may only be contracted
for, charged, or collected once a month on a Subchapter F loan.
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of
the Secretary of State on February 22, 2002.
TRD-200201130
Leslie L. Pettijohn
Commissioner
Finance Commission of Texas
Earliest possible date of adoption: April 7, 2002
For further information, please call: (512) 936-7640
7 TAC §1.845
The Finance Commission of Texas proposes new §1.845
concerning the filing of consumer complaints with the Office of Consumer Credit
Commissioner.
New §1.845 implements the requirements of Finance Code, §11.307,
pertaining to the filing of consumer complaints with the agency.
Section 1.845 specifies the manner in which regulated license holders provide
consumers with information on how to file complaints with the agency. The
section also requires that the information on how to file complaints be included
with each privacy notice a regulated license holder is required by law to
provide to consumers.
The agency is considering an alternative method of compliance with the
proposed rule and specifically seeks comment on the alternative. The alternative
addresses the following situation: if a lender delivers a copy of the loan
agreement containing the complaint and inquiries notice simultaneously with
the privacy notice, the lender need only deliver one copy of the complaint
and inquiry notice to comply with the section. In this situation the notice
contained in the loan agreement will satisfy the requirements of the rule
for delivery of a notice with the privacy notice
Leslie L. Pettijohn, Consumer Credit Commissioner, has determined that,
for the first five years that the rules are in effect, there will be no fiscal
implications for state or local government as a result of enforcing or administering
the rules as adopted.
Commissioner Pettijohn also has determined that, for each year of the first
five years the rules as adopted are in effect, the public benefit anticipated
as a result of the adoption of these rules will be the provision of information
to the consumers of regulated licensed holders on how to file complaints with
the agency. Costs to comply with this section will be less than $100.00, and
there will be no deleterious effect on small businesses.
Comments on proposed §1.845 may be submitted in writing to Leslie
L. Pettijohn, Consumer Credit Commissioner, Office of Consumer Credit Commissioner,
2601 North Lamar Boulevard, Austin, Texas 78705-4207, or by e-mail to: leslie.pettijohn@occc.state.tx.us.
Section 1.845 is proposed under the authority of Finance Code, §11.307,
which requires the Finance Commission to adopt rules specifying the manner
in which regulated license holders provide consumers with information on how
to file complaints with the agency.
§1.845.Complaints and Inquiries Notice.
(a)
Definitions. "Privacy notice" means any notice that a lender
gives regarding a consumer's right to privacy as required by a specific state
or federal law.
(b)
Required Notice.
(1)
The following notice must be given to let consumers know
how to file complaints: The (your name) is (licensed and examined or registered)
under the laws of the State of Texas and by state law is subject to regulatory
oversight by the Office of Consumer Credit Commissioner. Any consumer wishing
to file a complaint against the (your name) should contact the Office of Consumer
Credit Commissioner through one of the means indicated below: In Person or
U.S. Mail: 2601 North Lamar Boulevard, Austin, Texas 78705-4207. Telephone
No.: 800/538-1579. Fax No.: 512/936-7610. E-mail: consumer.complaints@occc.state.tx.us.
Website: www.occc.state.tx.us.
(2)
The required notice must be given in the language in which
a transaction is conducted.
(3)
The required notice must be included with each privacy
notice.
(4)
Regardless of whether any state or federal law requires
the lender to give privacy notices, the lender must take appropriate steps
to let consumers know how to file complaints by giving the required notice
in compliance with paragraph (1) of this subsection.
(5)
A notice is also required on each contract of a licensed
lender pursuant to §14.104, Texas Finance Code.
(A)
The text of the notice required by subsection (b)(1) of
this subsection is acceptable to meet this requirement; or
(B)
A lender may use the following notice: "This lender is
licensed and examined by the State of Texas - Office of Consumer Credit Commissioner.
Call the Consumer Credit Hotline or write for credit information or assistance
with credit problems. Office of Consumer Credit Commissioner, 2601 North Lamar
Boulevard, Austin, Texas 78705-4207, (512) 936-7600, (800) 538-1579."
This agency hereby certifies that the proposal
has been reviewed by legal counsel and found to be within the agency's legal
authority to adopt.
Filed with the Office of
the Secretary of State on February 25, 2002.
TRD-200201140
Leslie L. Pettijohn
Commissioner
Finance Commission of Texas
Earliest possible date of adoption: April 7, 2002
For further information, please call: (512) 936-7640
Subchapter F. ACCESS TO INFORMATION
7 TAC §3.112
The Finance Commission of Texas (the commission) proposes
new §3.112, concerning charges for providing public information. The
commission is concurrently proposing to repeal §11.27, concerning charges
for open record requests, in this issue of the
Texas
Register
.
The proposed section incorporates by reference the Texas Building and Procurement
Commission rules for determining the charges applicable to providing public
information. Government Code, §552.262, requires governmental bodies
to use these rules.
Stephanie Newberg, Deputy Commissioner, Texas Department of Banking, has
determined that, for each year of the first five years that the section is
in effect, there will be no fiscal implication for state or local government
as a result of enforcing or administering the section.
Ms. Newberg also has determined that, for each of the first five years
the section as proposed is in effect, the public benefit anticipated as a
result of the adoption of the section will be clear guidance on charges applicable
to requests for public information.
Comments concerning the proposed section should be submitted within 30
days of publication to Robin Robinson, Assistant General Counsel, Texas Department
of Banking, 2601 North Lamar Boulevard, Austin, Texas 78705-4294, or by email
to robin.robinson@banking.state.tx.us.
The new section is proposed under Government Code §552.262,
which requires governmental entities to use Texas Building and Procurement
Commission rules in determining charges for providing public information.
Government Code, Chapter 552, is affected by the proposed section.
§3.112.What will the department charge for providing public information?
(a)
If you request the department to provide copies or allow
inspection of public information in the possession of the department, you
may be required to pay the charges and meet other requirements specified by
the Texas Building and Procurement Commission in 1 TAC §§111.61,
et seq.
(b)
The department may reduce or waive an applicable charge
under subsection (a) of this section, in the discretion of the commissioner,
if the cost of collecting the charge will exceed the amount of the charge
or a public benefit will result from the reduction or waiver.
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of
the Secretary of State on February 22, 2002.
TRD-200201108
Everette D. Jobe
Certifying Official
Finance Commission of Texas
Proposed date of adoption: April 19, 2002
For further information, please call: (512) 475-1300
Chapter 11.
MISCELLANEOUS
Subchapter A. GENERAL
7 TAC §11.27
(Editor's note: The text of the following section proposed for
repeal will not be published. The section may be examined in the offices of
the Texas Department of Banking or in the Texas Register office, Room 245,
James Earl Rudder Building, 1019 Brazos Street, Austin.)
The Finance Commission of Texas (the commission)
proposes the repeal of §11.27, concerning charges for public information
requests. The commission is concurrently proposing new §3.112 in this
issue of the
Texas Register
, to incorporate
the Texas Building and Procurement Commission rules by reference.
The repeal is necessary because Government Code, §552.262, requires
governmental entities to use Texas Building and Procurement Commission rules
for this purpose.
Stephanie Newberg, Deputy Commissioner, Texas Department of Banking, has
determined that, for each year of the first five years that the repeal is
in effect, there will be no fiscal implications for state or local government
as a result of enforcing or administering the repeal.
Ms. Newberg also has determined that, for each of the first five years
the repeal as proposed will be in effect, the public benefit anticipated as
a result of the repeal is the removal of obsolete regulations. There is no
anticipated cost to persons who are required to comply with the repeal as
proposed. There will be no adverse economic effect on small businesses.
Comments concerning the proposed repeal should be submitted within 30 days
of publication to Robin Robinson, Assistant General Counsel, Texas Department
of Banking, 2601 North Lamar Boulevard, Austin, Texas 78705-4294, or by e-mail
to robin.robinson@banking.state.tx.us.
The repeal is proposed under Government Code, §552.262,
which requires governmental entities to use Texas Building and Procurement
Commission rules in determining charges for providing public information.
Government Code, Chapter 552, is affected by the proposed repeal.
§11.27.Open Records Requests; Charges.
This agency hereby certifies that the proposal has been
reviewed by legal counsel and found to be within the agency's legal authority
to adopt.
Filed with the Office of
the Secretary of State on February 22, 2002.
TRD-200201110
Everette D. Jobe
Certifying Official
Texas Department of Banking
Proposed date of adoption: April 19, 2002
For further information, please call: (512) 475-1300
Subchapter B. REGULATION OF LICENSES
7 TAC §25.41
The Finance Commission of Texas (the commission) proposes
to amend §25.41, concerning the filing of consumer complaints with the
Texas Department of Banking (department).
The proposed amendment revises the language of the required notice to consumers
of prepaid funeral benefits contract sellers on how to file complaints with
the department to be consistent with the notice contained in the model prepaid
funeral benefits contract and required by §25.3(j) of this title (relating
to What Requirements Apply to a Non-Model Contract or Waiver). The amendment
also clarifies that the requirement to provide consumers with the required
notice when the consumer first obtains a product or service may be accomplished
by including the required notice in all prepaid funeral benefits contract
forms. The amendment also provides that the notice required to be included
with each privacy notice under subsection (b)(3) and required to be accessible
on a website offering consumer goods and services under subsection (b)(5)(B)
be in substantially the same language and form as the required notice set
out in subsection (b)(1).
Stephanie Newberg, Deputy Commissioner, Texas Department of Banking, has
determined that, for each year of the first five years that the section is
in effect, there will be no fiscal implication for state or local government
as a result of enforcing or administering the section as amended.
Ms. Newberg also has determined that, for each of the first five years
the section as amended is in effect, the public benefit anticipated as a result
of the amendment of this section will be clarification of the manner in which
the required notice may be provided as well as improved uniformity and predictability
in the provision of information to the consumers of prepaid funeral benefits
contract sellers on how to file complaints with the department. No economic
costs will be incurred by a person required to comply with this section, and
there will be no deleterious effect on small businesses.
Comments on the proposed amendment may be submitted, within 30 days of
the date of publication, to Steven L. Martin, Senior Assistant General Counsel,
Texas Department of Banking, 2601 North Lamar Boulevard, Suite 300, Austin,
Texas 78705-4294, or by e-mail to: steve.martin@banking.state.tx.us.
The amendment is proposed under the authority of Finance Code, §11.307,
which requires the commission to adopt rules specifying the manner in which
prepaid funeral benefits contract sellers provide consumers with information
on how to file complaints with the department.
Finance Code, §11.307 is affected by this proposed amendment.
§25.41.How Do I Provide Information to Consumers on How to File a Complaint?
(a)
(No change.)
(b)
How do I provide notice of how to file complaints?
(1)
You must use the following notice in order to let your
consumers know how to file complaints:
Inquiries should be directed as
below. All complaints must be in writing. Concerning the Prepaid Contract:
Texas Department of Banking
[
(2)
(No change.)
(3)
You must include the required notice with each privacy
notice that you send out.
The language and form of the notice must substantially
conform to the required notice set out in paragraph (1) of this subsection.
(4)
(No change.)
(5)
You must use the following measures to give the required
notice:
(A)
You
[
(B)
Those portions of your website that offer consumer goods
and services must contain access to the required notice.
The language
and form of the notice must substantially conform to the required notice set
out in paragraph (1) of this subsection.
[(C)
You must also include in all contract
forms the notice required by §25.3(j) of this title (relating to What
Requirements Apply to a Non-Model Contract or Waiver).]
This agency hereby certifies that the proposal
has been reviewed by legal counsel and found to be within the agency's legal
authority to adopt.
Filed with the Office of
the Secretary of State on February 22, 2002.
TRD-200201113
Everette D. Jobe
Certifying Official
Texas Department of Banking
Proposed date of adoption: April 19, 2002
For further information, please call: (512) 475-1300
7 TAC §26.2
The Finance Commission of Texas (the commission) proposes
new §26.2, concerning recordkeeping requirements for perpetual care cemeteries.
Proposed §26.2 will require owners or operators of perpetual care
cemeteries to keep a general file that includes records such as documents
and correspondence relating to perpetual care operations, financial information,
sample forms of agreements, trustee or bank statements, corporate information,
and other documents required to be maintained by provisions of Health &
Safety Code, Chapters 711 and 712. The proposed section will also require
owners or operators to keep a consumer complaint file, purchase agreement
files, a historical register of all interment rights sold, and a monthly recapitulation
of all conveyances of interment rights issued subsequent to an examination.
Other than records of consumer complaints, the records that proposed §26.2
will require to be maintained were previously recommended to be maintained
by Texas Department of Banking Policy Memorandum No. 1013 (November 25, 1996),
as those necessary to support examinations by the banking commissioner. The
banking department has not experienced significant recordkeeping compliance
problems since Memorandum No. 1013 has been in effect because the recommended
records are readily available to perpetual care cemeteries. The new section
will appropriately formalize Memorandum No. 1013 as a rule promulgated under
Health & Safety Code, §712.008. Consumer complaint records must be
maintained for examination by the commissioner under Health & Safety Code, §712.044(a),
as amended by the legislature effective September 1, 2001.
Finally, proposed §26.2 will require that records be kept at the cemetery
or corporate office. If these locations are not conducive to examination,
the proposed section authorizes the banking department to request delivery
of the records to another more suitable location for examination.
Stephanie Newberg, Deputy Commissioner, Texas Department of Banking, has
determined that, for each year of the first five years that the section is
in effect, there will be no fiscal implication for state or local government
as a result of enforcing or administering the section as adopted.
Ms. Newberg also has determined that, for each of the first five years
the section as proposed is in effect, the public benefit will be clear guidance
for perpetual care cemeteries on the records that are required under Health &
Safety Code, Chapter 712 for examination by the commissioner. No economic
cost will be incurred by a person required to comply with this section, and
there will be no deleterious effect on small businesses.
Comments concerning the proposed section should be submitted within 30
days of publication to Robin Robinson, Assistant General Counsel, Texas Department
of Banking, 2601 North Lamar Boulevard, Austin, Texas 78705-4294, or by e-mail
to robin.robinson@banking.state.tx.us.
The section is proposed under Health & Safety Code, §712.008,
which authorizes the commission to adopt rules necessary to enforce and administer
Health & Safety Code, Chapter 712.
Health & Safety Code, Chapter 712, is affected by the proposed section.
§26.2.What records am I required to maintain?
(a)
What unique defined terms are used in this section?
(1)
"You" or "I" means the owner or operator of a perpetual
care cemetery.
(2)
"Perpetual care property" or "property" means all niches,
crypts, and ground space sold in connection with perpetual care.
(3)
"Consumer complaint" means a written complaint relating
to the perpetual care fund or to discharge of the corporation's perpetual
care responsibilities that you receive from a consumer at your cemetery location.
The term does not include oral complaints.
(4)
"Maintain" means to store and retain information and documents
specified by this section in such a way that the information can be expeditiously
retrieved for examination by the commissioner, whether by hard copy or produced
electronically and printed for review.
(b)
What records must I maintain?
(1)
You must maintain the following records in a general file:
(A)
the current certificate of authority to operate a perpetual
care cemetery, unless prominently displayed in the cemetery office;
(B)
the latest filed annual statement required under Health &
Safety Code, §712.041;
(C)
your most current consolidated financial statement or,
in the alternative, your most current financial records and/or tax return,
provided that the records must substantiate your use or expenditure of fund
income;
(D)
a sample form of each purchase agreement you currently
use;
(E)
a sample form of each document of conveyance of interment
rights you currently use;
(F)
the current trust agreement governing the fund;
(G)
all examination reports and official correspondence sent
to you by the banking department during the preceding three years;
(H)
all trustee statements and all written correspondence from
the trustee that you received since the last examination;
(I)
minutes of each meeting of the cemetery corporation's board
of directors held since the last banking department examination or, if the
cemetery corporation is a wholly-owned subsidiary and does not hold board
meetings, minutes of each meeting of the parent corporation's board of directors
held since the last examination;
(J)
all correspondence you sent to or received from the banking
department during the preceding three years;
(K)
all maps, plats, and property dedications that you have
filed reflecting the dates of filing in the county records under Health &
Safety Code, §711.034;
(L)
your current sales maps showing all gardens, mausoleums,
crematories, and columbaria in the cemetery;
(M)
records and photographs relating to lawn crypt construction
and completion, to demonstrate you complied with Health & Safety Code, §711.061;
(N)
each cemetery price list that you used at any time in the
preceding three years; and
(O)
your quarterly reconciliation of capital gains and losses
in the fund since the last examination, if your trust agreement includes capital
gains and losses in the definition of trust income.
(2)
You must maintain the following records in a segregated
consumer complaint file:
(A)
each written complaint that you received from a consumer
regarding the manner in which you operate the perpetual care cemetery or perform
your contractual obligations to a consumer; and
(B)
all written correspondence and other records relating to
a consumer complaint, including records showing how you resolved or otherwise
disposed of the complaint.
(3)
You must maintain a separate file for each property purchaser
that contains all executed property purchase agreements, conveyance documents,
and all related information.
(4)
You must maintain, and update at least monthly, a historical
register of all interment rights sold, showing:
(A)
the purchaser's name;
(B)
the date of purchase;
(C)
the purchase agreement number;
(D)
a specific description of the property you sold; and
(E)
how and when you disposed of the purchase agreement, including
whether the agreement was conveyed, canceled, or voided.
(5)
You must maintain a monthly recapitulation of all conveyance
of interment rights issued since the date of your last examination that includes,
for each paid-in-full property sale:
(A)
the date the purchase agreement was executed;
(B)
the property purchaser's name;
(C)
the purchase agreement number;
(D)
the date that the purchase agreement was paid-in-full;
(E)
the conveyance document number;
(F)
the amount of ground area, number of crypts, or number
of niches conveyed under the purchase agreement, and the corresponding sales
price of each;
(G)
the deposits to the fund from sales, as required by Health &
Safety Code, §712.028;
(H)
any additional deposits to the fund:
(i)
that are required by contract in an amount in excess of
the deposits required by Health & Safety Code, §712.028;
(ii)
that result from exchanged or traded-in property;
(iii)
that result from the sale of additional or subsequent
rights of interment; or
(iv)
that are voluntarily made in excess of the amount of deposits
required by Health & Safety Code, §712.028;
(I)
total deposits for each conveyance, which is the sum of
subparagraphs (G) and (H) of this paragraph for each conveyance; and
(J)
cumulative monthly totals of the amounts listed in subparagraphs
(F), (G), and (H) of this paragraph.
(c)
Where do I need to keep the records required under this
section?
(1)
You must keep all required records at the perpetual care
cemetery's physical location or corporate office.
(2)
If the physical location of the records is not conducive
to examination by banking department personnel, the banking department may
request that you deliver your records to a mutually agreeable location in
your area that is more suitable for conducting an examination. In this situation,
if you refuse to agree, the commissioner may consider your inaction to constitute
refusal to submit to an examination and initiate an appropriate enforcement
action against you under Health & Safety Code, §712.0441.
This agency hereby certifies that the proposal has been
reviewed by legal counsel and found to be within the agency's legal authority
to adopt.
Filed with the Office of
the Secretary of State on February 22, 2002.
TRD-200201114
Everette D. Jobe
Certifying Official
Texas Department of Banking
Proposed date of adoption: April 19, 2002
For further information, please call: (512) 475-1300
7 TAC §26.3
The Finance Commission of Texas (commission) proposes new §26.3,
concerning written notice to prohibit interment of a homicide perpetrator
in the same perpetual care cemetery as the homicide victim.
Proposed §26.3 will implement and clarify Health & Safety Code, §712.009,
which generally prohibits a perpetual care cemetery from interring an individual
that caused the death of a victim interred in the cemetery (barred individual)
upon receipt of a specified written notice. Proposed §26.3 provides that
a written notice is ineffective if the cemetery does not receive the written
notice prior to the time it inters the remains of a barred individual, and
that a written notice must be supported by or promptly supplemented with records
showing the barred individual caused the death of the victim in a manner that
invokes Health & Safety Code, §712.009.
The proposed section will provide guidance on how a cemetery should respond
to a written notice, what options are available to a cemetery that receives
a written notice, and how a cemetery should deal with the authorized representative
of the victim and the authorized representative of the barred individual.
The proposed section also suggests possible means of resolving contractual
issues if the cemetery is a party to a pre-existing contract to inter the
remains of a barred individual.
Proposed §26.3 will require the cemetery to maintain specified records
relating to a written notice for three years after the date of a written notice
determined to be invalid or ineffective, or ten years after the date of an
effective written notice or any subsequent renewal notice.
Stephanie Newberg, Deputy Commissioner, Texas Department of Banking, has
determined that, for each year of the first five years that the section is
in effect, there will be no fiscal implication for state or local government
as a result of enforcing or administering the section.
Ms. Newberg also has determined that, for each of the first five years
the new section is in effect, the public benefit anticipated as a result of
the adoption is enhancement of the rights of crime victims and their families.
No economic cost will be incurred by a person required to comply with this
section, and there will be no deleterious effect on small businesses.
Comments concerning the proposed section may be submitted within 30 days
of publication to Robin Robinson, Assistant General Counsel, Texas Department
of Banking, 2601 North Lamar Boulevard, Austin, Texas 78705-4294, or by e-mail
to robin.robinson@banking.state.tx.us.
The commission requests comment from the public regarding the potential
operation and impact of Health & Safety Code, §712.009, and the proposed
section. Commentors are requested to address the following questions:
1. Assuming a proper notice, if the perpetrator owned a burial plot and/or
a preneed contract, is the perpetual care cemetery obligated to repurchase
the property from or refund the contract to the perpetrator's representative?
2. Assuming a proper notice, what are the perpetual care cemetery's obligations
if:
a. the perpetrator's arrangements were made prior to arrangements by or
for the victim?
b. a deceased family member of the perpetrator had purchased property for
all of the family members, including the perpetrator?
c. a family member of the perpetrator is buried in the cemetery, and the
perpetrator's representative wants the perpetrator buried next to the family
member?
d. the families of both the victim and the perpetrator own burial plots
in which family members are buried?
3. If the perpetrator is buried in violation of the notice, can the cemetery
disinter and relocate the perpetrator's remains without incurring liability
to the perpetrator's representative or family members?
4. If the perpetrator is buried prior to notice by the victim's representative
and the victim owned a burial plot and/or a preneed contract, is the perpetual
care cemetery obligated to repurchase the property from or refund the contract
to the victim's representative?
5. If the perpetrator is buried prior to notice by the victim's representative,
what are the perpetual care cemetery's obligations if:
a. the victim's arrangements were made prior to arrangements by or for
the perpetrator?
b. a deceased family member of the victim had purchased property for all
of the family members, including the victim?
c. a family member of the victim is buried in the cemetery, and the victim's
representative wants the victim buried next to the family member?
d. the families of both the victim and the perpetrator own burial plots
in which family members are buried?
6. If the perpetual care cemetery must repurchase property or refund a
contract, is the cemetery entitled to keep any portion of a refund to cover
recordkeeping expenses, or additional expenses incurred such as handling remains
or opening a grave prior to notice? If so, are expenses reimbursable at cost
or per a pricing schedule?
7. Under any scenario represented by the preceding questions, does the
cemetery incur liability to any person under applicable law, such as for infliction
of emotional distress or violations of the Deceptive Trade Practices-Consumer
Protection Act (Business & Commerce Code, §§17.41 et seq?
8. Does the commission possess adequate rulemaking authority to adopt rules
regarding disposition of any of the preceding questions?
The new section is proposed under Health & Safety Code, §712.009,
which requires the commission to adopt rules to implement that statutory provision.
Health & Safety Code, §712.009, is affected by the proposed new
section.
§26.3.How to Respond to a Written Notice to Prohibit Interment of a Homicide Perpetrator in the Same Cemetery as a Homicide Victim.
(a)
What unique defined terms are used in this section?
(1)
"Authorized person" means the person that has the right
to control the disposition of an individual's remains, as specified by Health &
Safety Code, §711.002.
(2)
"Barred individual" means a natural person whose remains
you have been or may be requested to inter in your cemetery, who caused the
death of a victim already interred in your cemetery as a result of conduct
constituting:
(A)
murder under Penal Code, §19.02;
(B)
capital murder under Penal Code, §19.03;
(C)
criminally negligent homicide under Penal Code, §19.05;
(D)
intoxication manslaughter under Penal Code, §49.08;
or
(E)
a crime under a statute of another state that is similar
to Penal Code, §§19.02, 19.03, 19.05, or 49.08.
(3)
"Time of interment" means the time you place the remains
of an individual in the individual's final resting place.
(4)
"Written notice" means the notice specified by Health &
Safety Code, §712.009(b)(2), requesting that a barred individual not
be interred in your cemetery.
(5)
"You" or "I" means the owner or operator of a perpetual
care cemetery.
(b)
What should I do if I receive a written notice requesting
that I not inter a named person in my cemetery? If you receive a written notice
under Health & Safety Code, §712.009(b)(2), this subsection specifies
the actions you should take within the two week period following the date
you receive the notice. It may be in your best interests to inform your attorney
and the banking department that you received a notice under Health & Safety
Code, §712.009(b)(2). If you consult an attorney, you should follow your
attorney's advice.
(1)
If you receive the written notice after the time of interment
of the person named as a barred individual in the notice, you should state
that interment has already occurred in a written reply to the person who sent
you the notice.
(2)
If you receive the written notice prior to the time of
interment of the person named as a barred individual in the notice, you should
take the actions specified in this paragraph.
(A)
If you are not aware that the person named as the barred
individual has died or you have not scheduled internment of the named person's
remains, you should make appropriate entries in your records to temporarily
prevent any future interment of the named person for a period of up to two
weeks, to permit you to investigate the facts and circumstances surrounding
the notice.
(B)
If the named person has died and interment of the remains
of the named person in your cemetery is pending, you should:
(i)
temporarily suspend any plans to inter the named person
for a period of up to two weeks, to permit you to investigate the facts and
circumstances surrounding the notice; and
(ii)
notify the authorized person of the possibly barred individual
that you are required to temporarily suspend interment to investigate the
facts and circumstances surrounding the notice.
(C)
You should immediately examine the written notice and any
accompanying documents to determine if the written notice satisfies the requirements
of subsection (c) of this section. If the written notice satisfies these requirements
without any further inquiry, you must comply with subsection (d) of this section.
If the written notice does not comply with subsection (c) of this section,
you should identify as soon as possible, in a written reply to the person
who sent you the notice, the additional information or documents that must
be furnished to you in order for the notice to comply with subsection (c)
of this section. You should also specify a date by which you must receive
the additional information or documents. You may also choose to include other
information in your reply, such as:
(i)
notice that you have not yet been requested to inter the
barred individual's remains, or that internment has been temporarily suspended
pending a reply to your request for additional information;
(ii)
notice that failure to submit a timely response with the
requested information and documents may permit interment of the person named
as the barred individual;
(iii)
notice that, if you determine the written notice complies
with subsection (c) of this section, you will not inter the barred individual
in your cemetery during the seven year period following the date of the notice,
and that the period can be extended from time to time if you receive a timely
renewal notice; and/or
(iv)
if your cemetery is the only cemetery serving the municipality
or county in which the victim and the person named as the barred individual
lived, notice that you will inter the barred individual's remains in a different
part of your cemetery or otherwise as far away as possible from the place
where the victim is interred, if you determine the written notice complies
with subsection (c) of this section.
(c)
What must the written notice contain to satisfy legal requirements?
To satisfy the requirements of Health & Safety Code, §712.009, a
written notice must be received by you prior to the time of internment of
the person named as the barred individual, and must contain, or have attached
documents containing, information that unambiguously:
(1)
identifies a victim interred in your cemetery;
(2)
identifies the sender as the authorized person of the victim;
(3)
identifies a person as a barred individual and requests
that the barred individual not be interred in your cemetery; and
(4)
demonstrates that the named person is a barred individual,
by including:
(A)
a certified, final trial court judgment that has not been
overturned on appeal, convicting the identified person of an offense specified
in subsection (a)(2) of this section for causing the victim's death; or
(B)
effective only if the individual dies before conviction,
a certified document that:
(i)
identifies the named person as causing the victim's death,
in violation of a specified offense that is listed in subsection (a)(2) of
this section; and
(ii)
is signed by an authorized representative of the medical
examiner or law enforcement agency having jurisdiction over the specified
offense.
(d)
What must I do if I receive a written notice that complies
with subsection (c) of this section? If you are subject to a written notice
that satisfies the requirements of Health & Safety Code, §712.009(b)(2),
as discussed in subsection (c) of this section, you should take the actions
specified in this subsection.
(1)
If the barred individual has died and you had temporarily
suspended interment of the barred individual's remains under subsection (b)(2)(B)
of this section, you should notify the authorized representative of the barred
individual that you may not inter the barred individual in your cemetery.
Alternatively, if your cemetery is the only cemetery serving the municipality
or county in which the victim and the barred individual lived, you should
explain the authorized representative's options to select an interment location
within the boundaries you specify for the purpose of ensuring interment of
the barred individual's remains is in a different part of your cemetery or
otherwise as far away as possible from the place where the victim is interred.
At your option, you may also explain other, non-interment services you can
provide. If a contract exists that purports to require you to inter the barred
individual's remains, you should also comply with subsection (e) of this section.
(2)
If you are not aware that the barred individual has died
or you have not scheduled or been requested to provide interment of the barred
individual's remains, you should make appropriate entries in your records
to either:
(A)
prevent internment of the barred individual's remains for
a period of seven years following the date you received the written notice;
or
(B)
require interment of the barred individual's remains in
a different part of your cemetery or as far as possible away from the place
where the victim is interred, for a period of seven years following the date
you received the written notice, if your cemetery is the only cemetery serving
the municipality or county in which the victim and the barred individual lived.
(3)
If you are not aware that the barred individual has died
or you have not scheduled or been requested to provide interment of the barred
individual's remains, you should also make appropriate entries in your records
to remind you of future actions that may be required if you are requested
in the future to inter the barred individual's remains. For example, if the
written notice contained and relied on a certified trial court judgment, you
should, by means of a notice in writing, give a reasonable opportunity (e.g.,
two weeks) to:
(A)
the authorized person of the barred individual, to submit
satisfactory proof that the conviction was overturned on appeal, to possibly
avoid the application of Health & Safety Code, §712.009; and
(B)
the authorized person of the victim, to submit a document
that satisfies subsection (c)(5)(B) of this section if the conviction was
overturned on appeal, or a certified document demonstrating that the conviction
was finally upheld on appeal, to ensure that Health & Safety Code, §712.009,
will apply to interment of the barred individual.
(e)
Does a written notice that complies with subsection (c)
of this section ever expire?
(1)
If you are subject to a written notice that satisfies the
requirements of Health & Safety Code, §712.009(b)(2), as discussed
in subsection (c) of this section, you are bound by Health & Safety Code, §712.009,
for a period that ends seven years after the date you received the written
notice. However, the authorized representative of the victim may periodically
extend this period by sending you a written renewal notice under Health &
Safety Code, §712.009(f).
(2)
If you receive a written renewal notice before the expiration
of the seven year period initiated by a previous notice, you should immediately
examine the written renewal notice, any accompanying documents, and the documents
you received in connection with any prior notice to determine if the written
renewal notice satisfies the requirements of subsection (c) of this section,
in a manner similar to the investigation you conducted under subsection (b)(2)(C)
of this section when you received the initial written notice.
(3)
If a written renewal notice, any accompanying documents,
and the documents you received in connection with any prior notice collectively
satisfy the requirements of Health & Safety Code, §712.009(b)(2),
as discussed in subsection (c) of this section, the period during which you
are bound by Health & Safety Code, §712.009, will be extended for
an additional period that ends seven years after the date you received the
written renewal notice.
(f)
What should I do if I have a contract to inter the barred
individual's remains and I am subject to a written notice that complies with
subsection (c) of this section? You should consult an attorney if you have
a contract to inter the remains of a barred individual. Although you are protected
from owing damages to the authorized representative of the barred individual
under Health & Safety Code, §712.009(e), if you are barred from interring
remains under that section, you will still be required to return any funds
you received under a contract that you did not earn. You and the authorized
representative of the barred individual may be able to negotiate a satisfactory
settlement to enable you to earn at least a portion of the funds you received
for the contract, such as by performing services not involving interment in
your cemetery or assisting in alternate arrangements for disposition of the
barred individual's remains.
(g)
What records must I maintain if I receive a written notice?
You must maintain the following records with respect to each victim interred
in your cemetery that has been identified by a written notice:
(1)
the written notice you received that identified a victim
interred in your cemetery;
(2)
the documents you received with the written notice or in
response to your request for additional documents;
(3)
each written renewal notice you received relating to the
initial written notice retained under paragraph (1) of this subsection;
(4)
any documents you received with a written renewal notice
or in response to your request for additional documents;
(5)
to the extent not already identified by prior paragraphs
of this subsection, all correspondence to or from the authorized person of
the victim or the authorized person's legal representative or attorney, including
any complaints that you were required by a written notice to comply with Health &
Safety Code, §712.009, but you inappropriately or unlawfully failed to
comply;
(6)
to the extent not already identified by prior paragraphs
of this subsection, all correspondence to or from the authorized person of
the barred individual or the authorized person's legal representative or attorney,
including any complaints that a written notice was defective and did not require
you to comply with Health & Safety Code, §712.009, but you inappropriately
or unlawfully complied;
(7)
all correspondence to or from your attorney concerning
a written notice or related matters, subject to valid claims of privilege;
(8)
if interment is authorized under Health & Safety Code, §712.009(d),
documents demonstrating that you interred the barred individual in a place
that is as far away as possible from the place you interred the victim;
(9)
any contract that purported to require interment of the
barred individual in your cemetery and, to the extent not already identified
by prior paragraphs of this subsection, all correspondence, agreements, modifications,
releases, cancelled checks, and deposit slips relating to the resolution of
claims related to the contract; and
(10)
to the extent not already identified by prior paragraphs
of this subsection, all correspondence, pleadings, briefs, and court orders
relating to litigation you initiated or defended with regard to issues of
compliance or noncompliance with Health & Safety Code, §712.009.
(h)
How long must I retain records relating to a written notice
I received?
(1)
With respect to a written notice that you determined was
invalid and did not require you to comply with Health & Safety Code, §712.009,
you must retain the records specified by subsection (g) of this section at
least until the day after the third anniversary of the date you received the
written notice.
(2)
With respect to a written notice that you determined met
the requirements of Health & Safety Code, §712.009, you must retain
the records specified by subsection (g) of this section at least until the
day after the 10th anniversary of the date you last received a written notice
or renewal notice (i.e., the day after the third anniversary of the date the
effective period of the last written notice or renewal notice expired).
This agency hereby certifies that the proposal has been
reviewed by legal counsel and found to be within the agency's legal authority
to adopt.
Filed with the Office of
the Secretary of State on February 22, 2002.
TRD-200201115
Everette D. Jobe
Certifying Official
Texas Department of Banking
Proposed date of adoption: April 19, 2002
For further information, please call: (512) 475-1300
7 TAC §26.11
The Finance Commission of Texas (the commission) proposes
to amend §26.11 concerning the filing of consumer complaints with the
Texas Department of Banking (department).
The proposed amendment revises the language of the required notice to consumers
of perpetual care cemeteries on how to file complaints with the department
to be consistent with similar recently adopted rules applying Finance Code, §11.307
to other regulated industries. The amendment requires the required notice
be included in the perpetual care cemetery purchase agreement. The amendment
also provides that the notice required to be included with each privacy notice
under section (b)(3) and required to be accessible on a website offering consumer
goods and services under subsection (b)(5)(B) must be in substantially the
same language and form as the required notice set out in subsection (b)(1).
Stephanie Newberg, Deputy Commissioner, Texas Department of Banking, has
determined that, for each year of the first five years that the section is
in effect, there will be no fiscal implication for state or local government
as a result of enforcing or administering the section as amended.
Ms. Newberg also has determined that, for each of the first five years
the section as amended is in effect, the public benefit anticipated as a result
of the amendment of this section will be clarification of the manner in which
the required notice may be provided as well as improved uniformity and predictability
in the provision of information to the consumers of perpetual care cemeteries
on how to file complaints with the department. No economic costs will be incurred
by a person required to comply with this section, and there will be no deleterious
effect on small businesses.
Comments on the proposed amendment may be submitted, within thirty days
of the date of publication, to Steven L. Martin, Senior Assistant General
Counsel, Texas Department of Banking, 2601 North Lamar Boulevard, Suite 300,
Austin, Texas 78705-4294, or by e-mail to: steve.martin@banking.state.tx.us.
The amendment is proposed under the authority of Finance Code, §11.307,
which requires the commission to adopt rules specifying the manner in which
perpetual care cemeteries provide consumers with information on how to file
complaints with the department.
Finance Code, §11.307 is affected by this proposed amendment.
§26.11.How Do I Provide Information to Consumers on How to File a Complaint?
(a)
(No change.)
(b)
How do I provide notice of how to file complaints?
(1)
You must use the following notice in order to let your
consumers know how to file complaints:
Complaints concerning perpetual
care cemeteries should be directed to: Texas Department of Banking
[
(2)
(No change.)
(3)
You must include the required notice with each privacy
notice that you send out.
The language and form of the notice must substantially
conform to the required notice set out in paragraph (1) of this subsection.
(4)
(No change.)
(5)
You must use the following measures to give the required
notice:
(A)
You
[
(B)
Those portions of your website that offer consumer goods
and services must contain access to the required notice.
The language
and form of the notice must substantially conform to the required notice set
out in paragraph (1) of this subsection.
This agency hereby certifies that the proposal
has been reviewed by legal counsel and found to be within the agency's legal
authority to adopt.
Filed with the Office of
the Secretary of State on February 22, 2002.
TRD-200201116
Everette D. Jobe
Certifying Official
Texas Department of Banking
Proposed date of adoption: April 19, 2002
For further information, please call: (512) 475-1300
Chapter 85.
RULES OF OPERATION FOR PAWNSHOPS
Subchapter D. OPERATION OF PAWNSHOPS
(3)
] Interest may not be assessed,
charged, or received on an administrative fee if the assessment causes the
total amount of interest to exceed the maximum amount authorized under Chapter
342.
Subchapter F. ALTERNATE CHARGES FOR CONSUMER LOANS
Subchapter J. AUTHORIZED LENDER'S DUTIES AND AUTHORITY
Chapter 3.
STATE BANK REGULATION
Part 2.
TEXAS DEPARTMENT OF BANKING
Chapter 25.
PREPAID FUNERAL CONTRACTS
The (your name) is licensed or permitted
under the laws of the State of Texas and by state law is subject to regulatory
oversight by the Texas Department of Banking. Any consumer wishing to file
a complaint against the (your name) should contact the Texas Department of
Banking through one of the means indicated below: In Person or U.S. Mail:
] 2601 North Lamar Boulevard, [
Suite 300,
] Austin, Texas
78705 1-877/276-5554 (toll free)
[
78705-4294 Telephone No.: 877/276-5554
Fax No.: 512/475-1288 Website:
] www.banking.state.tx.us
For consumers who are not given privacy
notices, you
] must give the required notice when the consumer first
obtains a product or service from you.
This may be accomplished by including
the required notice in all prepaid funeral benefits contract forms in compliance
with §25.3(j) of this title (relating to What Requirements Apply to a
Non-Model Contract and Waiver).
Chapter 26.
PERPETUAL CARE CEMETERIES
The (your name) is certificated under the laws of the State of Texas and by
state law is subject to regulatory oversight by the Texas Department of Banking.
Any consumer wishing to file a complaint against the (your name) should contact
the Texas Department of Banking through one of the means indicated below:
] [
In Person or U.S. Mail:
] 2601 North Lamar Boulevard, [
Suite 300,
] Austin, Texas
78705 1-877/276-5554 (toll free)
[
78705-4294 Telephone No.: 877/276-5554 Fax No.: 512/475-1288 Website:
] www.banking.state.tx.us
For consumers who are not given privacy
notices, you
] must give the required notice when the consumer first
obtains a product or service from you
by including the required notice
in the perpetual care cemetery purchase agreement
. [
This may be
accomplished by including the required notice in a purchase agreement.
]
Part 5.
OFFICE OF CONSUMER CREDIT COMMISSIONER