Part 1.
FINANCE COMMISSION OF TEXAS
Chapter 1.
CONSUMER CREDIT COMMISSIONER
Subchapter E. INTEREST CHARGES IN LOANS
7 TAC §§1.501, 1.504, 1.505
The Finance Commission of Texas proposes amendments to 7
TAC §§1.501, 1.504, and 1.505, concerning interest charges on loans
and refunds in precomputed loans.
The purpose of the amendments are to harmonize the provisions of Senate
Bill 272 (SB 272), 77th Legislature, with the existing rule. SB 272 established
a new alternative rate structure for Subchapter E loans and modified the appropriate
refunding method for these loans. The amendments make technical changes to
provide guidance on complying with Chapter 342, Subchapter E, as amended.
Furthermore, the rule clarifies the appropriate methods for assessing default
(late) charges in 7 TAC §1.504.
Leslie L. Pettijohn, Consumer Credit Commissioner, has determined that
for the first five-year period the rules 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 rules are in effect, the public benefit anticipated as a result
of the amended rules will be enhanced compliance with the credit laws and
consistency in credit contracts. No net economic cost will result to persons
affected by the rules. There is no adverse impact to small business. No difference
will exist between the cost of compliance for small businesses and the cost
of compliance for the largest businesses affected by the sections.
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.
The amendments are proposed under the Texas Finance Code §11.304
and §342.551, which authorizes the Finance Commission to adopt rules
to enforce Title 4 of the Texas Finance Code.
These rules affect Chapter 342, Texas Finance Code.
§1.501.Maximum Interest Charge.
(a)
Precomputed loans. An authorized lender may charge the
add-on rates authorized by §342.201(a), Texas Finance Code or the alternative
simple interest rate authorized by §342.201(d)
or (e)
, Texas
Finance Code as calculated by the scheduled installment earnings method, for
precomputed loans that are either unsecured or secured by personal property.
Prepaid interest in the form of points is not permitted, unless expressly
authorized by statute (e.g. an administrative loan fee).
(b)
Interest-bearing loans. An authorized lender may charge
any rate of interest that does not exceed the maximum rate authorized by §342.201(d)
or (e)
, Texas Finance Code as calculated by the true daily earnings
method or the scheduled installment earnings method for an interest-bearing
loan that is either unsecured or secured by personal property. Prepaid interest
in the form of points is not permitted, unless expressly authorized by statute
(e.g. an administrative loan fee).
(c)
Method of calculation.
(1)
An authorized lender making loans under §342.201(d)
or (e)
, Texas Finance Code may calculate the rate and amount of interest
by any method of calculation as long as the amount of interest charged does
not exceed the maximum rate or amount of interest set forth in §342.201(d)
or (e)
, Texas Finance Code calculated using the specified earnings methods
of §342.201, Texas Finance Code.
(2)
An authorized lender making a loan under
the provisions of §342.201(e) may contract for, charge, and receive an
amount of interest, calculated according to the scheduled installment earnings
method or true daily earnings method, not exceeding the equivalent total of
a:
(A)
simple annual rate of 30% on that portion of the unpaid
balance of the cash advance that is less than or equal to the amount computed
under Subchapter C, Chapter 341, using the reference base amount of $500;
(B)
simple annual rate of 24% on that portion of the unpaid
balance of the cash advance that is more than the amount computed for subparagraph
(A) of this paragraph but less than or equal to an amount computed under Subchapter
C, Chapter 341, using the reference base amount of $1,050; and
(C)
simple annual rate of 18% on that portion of the unpaid
balance of the cash advance that is more than the amount computed for subparagraph
(B) of this paragraph but less than or equal to an amount computed under Subchaper
C, Chapter 341, using the reference base amount of $2,500.
§1.504.Default Charges.
(a)
(No change.)
(b)
Interest-bearing loans.
Additional
[
(c)
(No change.)
(d)
Default period. A default charge may not
be assessed until the 10th day after the installment due date. For example,
if the installment due date is the 1st, a default charge may not be assessed
until the 12th.
(e)
[
(f)
[
§1.505.Deferment.
(a)-(d)
(No change.)
(e)
Computation of deferment charge for a regular transaction.
Each deferment charge on a regular loan transaction shall be computed in accordance
with the method prescribed by the loan contract. If the loan contract does
not provide for a deferment charge, then no deferment charge may be assessed
or collected. A lender may employ any of the prescribed computational methods
described herein so long as the computational method employed is consistently
utilized throughout the term of the loan.
(1)
If the first installment is to be deferred, the interest
for the deferment may be no more than the difference between the refund that
would be required for prepayment in full on the first installment due date,
if it were one month from the date of the loan, and the total interest charged,
exclusive of any charge for additional days in an irregular first installment
or an administrative loan fee assessed.
(2)
If any installment subsequent to the first installment
is deferred, the deferred installment period will be determined by dividing
the remaining precomputed balance owed on the account by the regular scheduled
installment amount. The dollar amount associated with the deferred installment
period must be rounded down to the nearest whole integer. Additionally, no
deferred installment period may have a default charge assessed against the
deferred installment period. After the determination of the deferred installment
period, the additional interest for the deferment may not exceed the difference
between the refund that would be required for prepayment in full for the determined
deferred installment and the refund that would be required for the prepayment
in full of the next succeeding installment. The resulting difference shall
be multiplied by the number of months in the deferment period. For example,
the terms of a precomputed §342.201
(e)
[
(3)
In lieu of computational methods one and two, a lender
may take the difference between the amount of the refund of unearned interest
as if a full prepayment of the loan occurred as of the date of the deferment
and the amount of the refund of unearned interest for a full prepayment of
the loan one full month prior to the date of the deferment. The results of
the computed interest for deferment charge under this subsection should be
multiplied by the number of months in the deferred installment period.
(f)-(i)
(No change.)
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 June 22, 2001.
TRD-200103583
Leslie L. Pettijohn
Commissioner
Finance Commission of Texas
Earliest possible date of adoption: August 5, 2001
For further information, please call: (512) 936-7640
7 TAC §1.503
The Finance Commission of Texas proposes a new rule 7 TAC §1.503,
concerning administrative loan fee.
The purpose of this new rule is to provide the procedures for assessing
the administrative loan fee and incorporate technical changes made by SB 272,
77th Legislature.
Leslie L. Pettijohn, Consumer Credit Commissioner has determined that for
the first five-year period the rules 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 rules are in effect, the public benefit anticipated as a result
of the new rules will be enhanced consumer disclosure and consistency in credit
contracts. No net economic cost will result to persons affected by the rules.
There is no adverse impact to small business. No difference will exist between
the cost of compliance for small businesses and the cost of compliance for
the largest businesses affected by this section.
Comments on the proposed new rules 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.
The new section is proposed under the Texas Finance Code §
11.304 and §342.551, which authorizes the Finance Commission to adopt
rules to ensure compliance with Title 4 of the Texas Finance Code.
These rules affect new Chapter 342, Texas Finance Code.
§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)
To determine the maximum amount of the administrative fee,
an authorized lender should ascertain the amount of the cash advance of the
loan. If the cash advance is more than one thousand dollars, then the authorized
lender may contract for, charge, or receive $25. If the cash advance is one
thousand dollars or less, then the authorized lender may contract for, charge,
or receive $20.
(2)
An administrative fee may not be contracted for, charged,
or received by an authorized lender directly or indirectly on a renewal or
modification of an existing obligation that has an interest charge authorized
by §342.201(e) more than once in any 365 day period. An administration
fee may not be contracted for, charged, or received by an authorized lender
directly or indirectly on a renewal or modification of an existing obligation
that has an interest charge authorized by §342.201(a) or (d) more than
once in any 180 day period. The administrative fee may be contracted for,
charged, or received in a renewal or modification if the authorized lender
did not contract for, charge, or receive the administrative fee on any previous
obligation within the appropriate period.
(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.
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 June 22, 2001.
TRD-200103590
Leslie L. Pettijohn
Commissioner
Finance Commission of Texas
Earliest possible date of adoption: August 5, 2001
For further information, please call: (512) 936-7640
7 TAC §1.706
The Finance Commission of Texas proposes an amendment to
7 TAC §1.706, concerning interest charges on loans and refunds in precomputed
loans.
The purpose of the amendment is to harmonize the provisions of Senate Bill
272 (SB 272), 77th Legislature, with the existing rule. SB 272 established
a new alternative rate structure for Subchapter E loans and modified the appropriate
refunding method for these loans. The amendment makes technical changes to
provide guidance on complying with Chapter 342, Subchapter E, as amended.
Furthermore, the rule clarifies the appropriate methods for assessing default
(late) charges in 7 TAC §1.504.
Leslie L. Pettijohn, Consumer Credit Commissioner, has determined that
for the first five-year period the rule is in effect, there will be no fiscal
implications for state or local government as a result of administering the
rule.
Commissioner Pettijohn also has determined that for each year of the first
five years the rule is in effect, the public benefit anticipated as a result
of the amended rule will be enhanced compliance with the credit laws and consistency
in credit contracts. No net economic cost will result to persons affected
by the rules. There is no adverse impact to small business. No difference
will exist between the cost of compliance for small businesses and the cost
of compliance for the largest businesses affected by this section.
Comments on the proposed amendment 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.
The amendment is proposed under the Texas Finance Code §11.304
and §342.551, which authorizes the Finance Commission to adopt rules
to enforce Title 4 of the Texas Finance Code.
The rule affects Chapter 342, Texas Finance Code.
§1.706.Amounts Authorized To Be Collected on or before Closing.
(a)
(No change.)
(b)
Administrative loan fee. An authorized lender may collect
an administrative loan fee pursuant to §342.308(a)(9), Texas Finance
Code on interest bearing and pre-computed loans.
(1)
To determine the maximum amount of the administrative fee,
an authorized lender should ascertain the amount of the cash advance of the
loan. If the cash advance is more than one thousand dollars, then the authorized
lender may contract for, charge, or receive $25. If the cash advance is one
thousand dollars or less, then the authorized lender may contract for, charge,
or receive
$20
[
(2)-(3)
(No change.)
(c)-(f)
(No change.)
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 June 22, 2001.
TRD-200103584
Leslie L. Pettijohn
Commissioner
Finance Commission of Texas
Earliest possible date of adoption: August 5, 2001
For further information, please call: (512) 936-7640
7 TAC §§1.751, 1.754, 1.755
The Finance Commission of Texas proposes an amendment to
7 TAC §§1.751, 1.754, and 1.755, concerning interest charges on
loans and refunds in precomputed loans.
The purpose of the amendments are to harmonize the provisions of Senate
Bill 272 (SB 272), 77th Legislature, with the existing rule. SB 272 established
a new alternative rate structure for Subchapter E loans and modified the appropriate
refunding method for these loans. The amendments make technical changes to
provide guidance on complying with Chapter 342, Subchapter E, as amended.
Furthermore, the rule clarifies the appropriate methods for assessing default
(late) charges in 7 TAC §1.504.
Leslie L. Pettijohn, Consumer Credit Commissioner, has determined that
for the first five-year period the rules 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 rules are in effect, the public benefit anticipated as a result
of the amended rules will be enhanced compliance with the credit laws and
consistency in credit contracts. No net economic cost will result to persons
affected by the rules. There is no adverse impact to small business. No difference
will exist between the cost of compliance for small businesses and the cost
of compliance for the largest businesses affected by this section.
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.
The amendments are proposed under the Texas Finance Code §11.304
and §342.551, which authorizes the Finance Commission to adopt rules
to enforce Title 4 of the Texas Finance Code.
These rules affect Chapter 342, Texas Finance Code.
§1.751.Scope.
(a)
Scope. This subchapter applies to all precomputed loan
transactions made pursuant to subchapters E, F, and G of Chapter 342, Texas
Finance Code. This subchapter is inapplicable to interest-bearing loans made
under
Chapter 342
[
(b)
Refund methods. The chosen method of determining refunds
must be contracted for in the loan agreement. An authorized lender may utilize
one of
the following
[
(1)
the sum of the periodic balances method; [
(2)
the installment earnings method
; or
(3)
the true daily earnings method.
(c)
Refund method for Subchapter E loans.
An authorized lender may not use the sum of the period balances method for
a Subchapter E loan.
§1.754.Refund of Precomputed Interest in Regular Subchapter E [
(a)
If prepayment in full is made by cash, renewal
,
or otherwise
after the first installment due date
, the
authorized
lender shall refund or credit to the borrower the unearned
interest by the
scheduled installment earnings
[
(b)
If prepayment is made in full before the
first installment due date, an authorized lender may retain an interest charge
for each elapsed day between the date of the loan and the date of prepayment.
The interest charge may not exceed the amount of interest allowed under the
true daily earnings method for the same time period. The authorized lender
shall refund or credit to the borrower the unearned interest.
§1.755.Refund of Precomputed Interest in Subchapter [
(a)
Regular Transactions.
(1)
If prepayment in full is made by cash, renewal, or otherwise,
the authorized lender shall refund or credit to the borrower the unearned
interest by the refund method authorized by §1.751of this title and identified
in the loan agreement as the chosen refund method. One day earned into a month
will allow the lender to earn the interest applicable to the full month.
(2)
If prepayment in full is made by cash, renewal, or otherwise,
before the first installment due date, the authorized lender shall compute
the refund as provided by this section.
(A)
If the first installment due date is 15 days or less from
the date of the loan, the lender may retain for each elapsed day between the
date of the loan and prepayment before the first installment due date 1/30
of the interest that could be retained if the first installment period were
one month and the loan was prepaid in full on the first installment due date.
All interest in excess of such amount shall be refunded or credited to the
borrower.
(B)
If the first installment due date is 16 days or greater,
but less than one month, from the date of the loan, the lender may retain
for each elapsed day between the date of the loan and prepayment before the
first installment due date 1/30 of the interest which could be retained if
the first installment period were one month and the loan was prepaid in full
on the first installment due date.
(C)
If the first installment due date is more than one month
from the contract date, the lender may retain for each elapsed day between
the date of the loan and prepayment, 1/30 of the interest which could be retained
if the first installment period were one month and the loan was prepaid in
full on the first installment due date. The daily charge is multiplied by
the number of elapsed days up until the first installment due date.
(b)
Irregular transactions or transactions
with a term of greater than sixty months.
(1)
If prepayment in full is made by cash,
renewal, or otherwise, after the first installment due date, the authorized
lender shall refund or credit to the borrower the unearned interest by the
refund method authorized by §1.751of this title and identified in the
loan agreement as the chosen refund method. The amount of interest which may
be retained by the lender as earned shall be determined by use of the scheduled
installment earnings method as authorized by §342.352, Texas Finance
Code. If prepayment in full or demand for payment in full occurs during an
installment period, the lender may retain an interest charge for previous
elapsed periods and the number of days beginning after the installment due
date and ending on the date of the prepayment or demand in full.
(2)
If prepayment is made in full before the
first installment due date, an
[
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 June 22, 2001.
TRD-200103585
Leslie L. Pettijohn
Commissioner
Finance Commission of Texas
Earliest possible date of adoption: August 5, 2001
For further information, please call: (512) 936-7640
7 TAC §§1.753, 1.756, 1.757
(Editor's note: The text of the following sections proposed for
repeal will not be published. The sections may be examined in the offices
of the Finance Commission of Texas or in the Texas Register office, Room 245,
James Earl Rudder Building, 1019 Brazos Street, Austin.)
The Finance Commission of Texas proposes the repeal
of §1.753 and §§1.756-1.757. This repeal is necessary because
the sections have been rewritten and incorporated into proposed amendments
to §1.754 and §1.755. The passage of SB 272, 77th Legislature required
modification of all the provisions of §§1.753- 1.757.
Leslie L. Pettijohn, Consumer Credit Commissioner, has determined that
for the first five-year period of the repeal as proposed will be in effect,
there will be no fiscal implications for state or local government as a result
of administering or enforcing the repeal.
Ms. Pettijohn also has determined that for each year of the first five-year
period the repeal as proposed will be in effect, the public benefit anticipated
as a result of the repeal is the removal of unenforceable and obsolete regulations
which will provide space for replacement rules. 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 on the proposed repeal may be submitted in writing to Leslie L.
Pettijohn, Consumer Credit Commissioner, 2601 North Lamar Boulevard, Austin,
Texas 78705- 4207.
The repeal is proposed under Texas Finance Code, §11.304,
which authorizes the Finance Commission to adopt rules to enforce Title 4
of the Texas Finance Code. Additionally, Texas Finance Code, §342.551
authorizes the Finance Commission to adopt rules for the enforcement of the
consumer loan chapter.
The statutory provisions (as currently in effect) affected by the proposed
repeal are Subchapter E and G of Chapter 342, Texas Finance Code and the rest
of Title 4.
§1.753.Refund of Precomputed Interest in Regular Subchapter E and G Loans; Prepayment in Full before the First Installment Due Date.
§1.756.Refund of Precomputed Interest in Regular Subchapter E and G Loans with the Term of the Loan More Than Sixty Months; Prepayment in Full after the First Installment Due Date and before the Final Installment Due Date.
§1.757.Refund of Precomputed Interest in Irregular Subchapter E and G Loans.
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 June 22, 2001.
TRD-200103589
Leslie L. Pettijohn
Commissioner
Finance Commission of Texas
Earliest possible date of adoption: August 5, 2001
For further information, please call: (512) 936-7640
7 TAC §1.758
The Finance Commission of Texas proposes an amendment to
7 TAC §1.758, concerning specific application to Subchapter F loans.
The purpose of the amendment is to harmonize the rule with the new language
as enacted in House Bill 198, 77th Legislature. This legislative enactment
provides that the acquisition charge on loans of $100 or more is earned at
the time the loan is made and is not subject to refund.
Leslie L. Pettijohn, Consumer Credit Commissioner, has determined that
for the first five-year period the rule is in effect, there will be no fiscal
implications for state or local government as a result of administering the
rule.
Commissioner Pettijohn also has determined that for each year of the first
five years the rule is in effect, the public benefit anticipated as a result
of the amended rule will be enhanced compliance with the credit laws and consistency
in credit contracts. No net economic cost will result to persons affected
by the rule. There is no adverse impact to small business. No difference will
exist between the cost of compliance for small businesses and the cost of
compliance for the largest businesses affected by this section.
Comments on the proposed amendment 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.
The amendment is proposed under the Texas Finance Code §11.304
and §342.551, which authorizes the Finance Commission to adopt rules
to enforce Title 4 of the Texas Finance Code.
The rule affects Chapter 342, Texas Finance Code.
§1.758.Specific Application to Subchapter F Loans.
(a)
Items subject to refund. The
installment account handling
charge is
[
[(1)
Installment account handling charge;
and]
[(2)
Acquisition charge in which the cash
advance is more than $100. ]
(b)
Items not subject to refund. An acquisition 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 June 22, 2001.
TRD-200103586
Leslie L. Pettijohn
Commissioner
Finance Commission of Texas
Earliest possible date of adoption: August 5, 2001
For further information, please call: (512) 936-7640
7 TAC §1.807
The Finance Commission of Texas proposes an amendment to
7 TAC §1.807, concerning collateral protection insurance on loans authorized
by Chapter 342.
The purpose of the amendment is to harmonize the rule with the new provisions
of SB 707, 77th Legislature. SB 707 repealed the former provisions of the
Credit Title relating to collateral protection insurance and replaced them
with new provisions in Chapter 307. The amendment corrects the statutory reference.
Leslie L. Pettijohn, Consumer Credit Commissioner has determined that for
the first five-year period the rules 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 rules are in effect, the public benefit anticipated as a result
of the new rules will be enhanced compliance with the credit laws and consistency
in credit contracts. No net economic cost will result to persons affected
by the rules. There is no adverse impact to small business. No difference
will exist between the cost of compliance for small businesses and the cost
of compliance for the largest businesses affected by this section.
Comments on the proposed amendment 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.
The amendment is proposed under the Texas Finance Code §
11.304 and §342.551, which authorizes the Finance Commission to adopt
rules to enforce Title 4 of the Texas Finance Code.
These rules affect Chapter 342, Texas Finance Code.
§1.807.Single-interest Insurance.
If a lender arranges for single-interest insurance and assesses a charge
for the insurance to the borrower, the lender must comply with the provisions
of Texas Finance Code
, Chapter 307
[
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 June 22, 2001.
TRD-200103587
Leslie L. Pettijohn
Commissioner
Finance Commission of Texas
Earliest possible date of adoption: August 5, 2001
For further information, please call: (512) 936-7640
7 TAC §4.3
The Finance Commission of Texas (the commission) proposes
to amend §4.3 concerning reporting and recordkeeping requirements applicable
to currency transmission licensees under Finance Code, Chapter 153.
Currently, §4.3(a) includes within "currency exchange" a transaction
in which a currency transmitter accepts currency of one government for transmission
from Texas to another location and pays at the destination in the currency
of another government. As proposed, amended §4.3(a) will implement the
agency's determination that currency transmission transactions involving the
receipt of the currency of one government and payment in the currency of another
government are not currency exchange transactions.
Section 4.3(e)(2) currently requires that certain information be maintained
for currency transmission transactions that exceed $1,000. The proposed amendment
will increase the threshold limit to $3,000, the same as the threshold amount
imposed under the federal Bank Secrecy Act, 31 United States Code, §5313,
and 31 Code of Federal Regulations, Part 103.
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 adoption of this section will be a reduction in regulatory burden through
better consistency between state and federal requirements applicable to the
same transaction. 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 on the proposed amendment may be submitted to Steven L. Martin,
Assistant General Counsel, Texas Department of Banking, 2601 North Lamar Boulevard,
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, §153.002,
which authorizes the commission to adopt rules necessary to enforce and administer
Finance Code, Chapter 153, including rules relating to recordkeeping requirements.
Finance Code, Chapter 153, is affected by the proposed amendment.
§4.3.Reporting and Recordkeeping.
(a)
For purposes of this section, a "currency business" refers
to a person that engages in or has engaged in currency exchange or currency
transmission transactions, whether the person is licensed under the Finance
Code, Chapter 153, or is exempt from licensing under the Finance Code, §153.117(a)(2).
[
(b)-(d)
(No change.)
(e)
In addition to the records required to be maintained under
subsections (b), (c), and (d) of this section, currency businesses shall keep
the following records:
(1)
(No change.)
(2)
Currency Transmission.
(A)
No currency business authorized to engage in currency transmission
may enter into a currency transmission transaction
of $3,000 or more
in [
(i)-(x)
(No change.)
(B)
In addition, in connection with all transactions
of $3,000 or more
in [
(C)
Contemporaneous currency transmission transactions initiated
by or on behalf of the same person or received by or on behalf of the same
person totaling
$3,000 or more
[
(3)
(No change.)
(f)-(j)
(No change.)
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 June 22, 2001.
TRD-200103536
Everette D. Jobe
Certifying Official
Finance Commission of Texas
Proposed date of adoption: August 17, 2001
For further information, please call: (512) 475-1300
7 TAC §4.12
The Finance Commission of Texas (the commission) proposes
to amend §4.12 concerning processing times for currency exchange license
applications submitted to the Texas Department of Banking (department).
Section 4.12 implements the requirements of Government Code, §2005.003,
pertaining to permit processing periods. During the past 12 months, the department's
minimum, maximum, and median time for processing a currency exchange license
application was 63 days, 228 days, and 114 days, respectively. Processing
time is measured from the date the department received an initial application
to the date of the final license decision. Disclosure of the minimum, maximum,
and median processing time for an application is required by Government Code, §2005.003.
The proposed amendment will provide a more efficient, equitable, and predictable
application process by clarifying the time for review of applications and
conforming the processing times to the actual times required to review and
evaluate an application. The proposed amendment will also provide for a finding
of abandonment for applications not timely pursued. Subsections (a) and (b)
are proposed to be amended, and subsections (d) and (e) are proposed to be
renumbered as (g) and (h) to permit insertion of proposed new subsections
(d)-(f).
The amendment to §4.12(a) clarifies that the banking commissioner,
in investigating and evaluating an application, may require additional information
to the extent necessary to reach an informed decision.
The amendment to §4.12(b) will change the time from 10 days to 15
days for the department to notify the applicant that the application is complete
or that additional information is required.
Proposed new §4.12(d) requires that all required information must
be provided to the department on or before the 61st day after initial submission
of an application. The purpose of this requirement is to enable the banking
commissioner to determine that an application is either complete and accepted
for filing or abandoned and not subject to further processing. An extension
of this period may be granted upon written request.
Proposed new §4.12(e) will permit the banking commissioner to determine
an application to be abandoned, without prejudice to re-filing, if all required
information is not received within the time period specified by subsection
(d). The banking commissioner may also determine an application to be abandoned
if the required fees are not paid within 30 days after receipt of the application.
Proposed new §4.12(f) will require the banking commissioner to give
an applicant written notice of a determination of abandonment. Notice of abandonment
is effective upon 10 days after mailing. Fees paid related to an abandoned
filing are non-refundable.
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 adoption of this section will be an efficient, equitable, and predictable
application process. 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 on the proposed amendment may be submitted to Steven L. Martin,
Assistant General Counsel, Texas Department of Banking, 2601 North Lamar Boulevard,
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, §153.002,
which authorizes the commission to adopt rules necessary to enforce and administer
Finance Code, Chapter 153, including rules relating to issuance of a license.
Additional authority and applicable requirements are provided by Government
Code, §2005.003.
Finance Code, Chapter 153, is affected by the proposed amendment.
§4.12.Currency Exchange License Applications; Notices to Applicants; Application Processing Times; Abandoned Filings; Appeals.
(a)
Form of application. An initial application for a currency
exchange license under the Finance Code, §153.103, must be filed on a
form prepared and prescribed by the banking commissioner.
The banking
commissioner may investigate and evaluate facts related to a submitted or
accepted application to the extent necessary to reach an informed decision.
The banking commissioner may require any person connected with the matter
to which the submitted or accepted application pertains to submit additional
information, including an opinion of counsel with respect to a matter of law
or an opinion, review, or compilation prepared by a certified public accountant.
(b)
Notice to applicant.
On or before the 15th day after
initial submission of an application, the
[
(c)
(No change.)
(d)
Time limit for providing required information.
Unless otherwise provided in applicable law, all required information necessary
for the banking commissioner to declare that an application is accepted must
be provided to the department on or before the 61st day after the date of
the initial submission of the application. A person may request an automatic
30-day extension of time to submit required information if the request is
in writing and is received by the department prior to the end of the initial
60-day period. An additional extension may be requested in writing if a request
for extension is received prior to the expiration of the automatic extension.
The additional extension will be granted only if the banking commissioner
in the exercise of discretion finds good and sufficient cause for the extension.
The banking commissioner shall mail notice of the decision to the person seeking
the extension within ten days of receipt of the request by the department.
(e)
Abandoned application. The banking commissioner
may determine any submitted or accepted application to be abandoned, without
prejudice to the right to re-file, if the information required by applicable
law or additional requested information is not received within the time period
specified by subsection (d) of this section or as otherwise requested by the
banking commissioner in writing to the person making the submission. In addition,
the banking commissioner may determine an application to be abandoned if applicable
fees are not paid within 30 days after initial submission of the application.
(f)
Notice. The banking commissioner shall
give written notice of a determination that an application is considered to
be abandoned. Notice of abandonment is effective upon mailing by the department.
Fees paid related to an abandoned filing are non-refundable.
(g)
[
(h)
[
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 June 22, 2001.
TRD-200103537
Everette D. Jobe
Certifying Official
Finance Commission of Texas
Proposed date of adoption: August 17, 2001
For further information, please call: (512) 475-1300
7 TAC §5.1
The Finance Commission of Texas proposes a new rule 7 TAC §5.1,
concerning required disclosures in connection with certain home loans.
The purpose of this section is to establish the required disclosures mandated
in SB 1581, 77th Legislature, and to provide the means by which lenders may
comply with the notice requirements of the Texas Finance Code, Section 343.102.
SB 1581 primarily restricts certain mortgage lending practices or requires
enhanced disclosure in connection with certain triggering events. There was
a general agreement among the parties involved with SB 1581 that the interim
period between the 77th and 78th Legislature would be used to study mortgage
lending practices with an emphasis on identifying any types of pattern or
practice that might require future legislative action. One benefit of the
disclosure required by the rule is that it provides a source for consumers
to contact state regulatory agencies to report complaints as well as providing
an avenue for general information, housing counseling, and education. The
state regulatory agencies may then collect and analyze data related to consumer
contacts and complaints and report to the 78th Legislature regarding the effectiveness
of the disclosure or identification of potential pattern or practices of concern.
By statute the requirement to provide the notice on covered loans expires
September 1, 2003. Compliance with this section is deemed compliance with
these notice requirements.
The rule describes the applicability of the notice requirements, the actual
content requirements of the notices, provisions relating to timing of delivery
of the notice, and provisions relating to record retention.
Subsection (b)(1) prescribes the content of the notice. The agencies have
received preliminary comment regarding the wording of the first or introductory
paragraph. The agencies are concerned that the paragraph is accurate, yet
drafted in plain language to aid in the comprehension of applicants who receive
the notice. As an alternative the agencies may consider the following language
in lieu of the first sentence:
"TEXAS LAW (Section 343.102, Finance Code) requires that a lender who makes
a home loan with an interest rate of 12% or greater give a notice regarding
high cost home loans and the value of housing counseling to an applicant for
that loan."
The agencies specifically request comment on the language used in the first
paragraph of the notice and on the alternative presented above.
The agencies also specifically request comment on the requirement for the
applicant's signature on the notice. The agencies expect that many lenders
may desire to distribute the notice in a way that does not involve in-person
contact with the applicant, and thus, makes obtaining the applicant's signature
more difficult. The agencies may consider as an alternative to the requirement
for a signature a provision stating that a signature is not required if the
lender establishes a routine procedure that demonstrates that notices are
delivered to applicants whose home loans are covered by the section. The agencies
specifically request comment on this alternative.
Leslie L. Pettijohn, Consumer Credit Commissioner has determined that for
the first five-year period the rules 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 rules are in effect, the public benefit anticipated as a result
of the new rules will be enhanced consumer disclosure and consistency in credit
contracts. The net economic cost to persons affected by the rules will be
the distribution of an additional disclosure in connection with each covered
mortgage loan. That economic cost is expected to be minimal and should not
pose an adverse impact on affected businesses. No difference will exist between
the cost of compliance for small businesses and the cost of compliance for
the largest businesses affected by this section.
Comments on the proposed new rules 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.
The new section is proposed under the Texas Finance Code §11.304,
which authorizes the Finance Commission to adopt rules to ensure compliance
with Title 4 of the Texas Finance Code.
These rules affect new Chapter 343, Texas Finance Code.
§5.1.Required Disclosures in Connection with Certain Home Loans.
(a)
Purpose and Applicability.
(1)
The purpose of this section is to provide the means by
which lenders may comply with the notice requirements of the Finance Code,
Section 343.102. Compliance with this section is deemed compliance with these
notice requirements.
(2)
This section applies to any mortgage application received
on or after September 1, 2001.
(3)
A lender shall provide an applicant with an official notice
for each home loan with a rate of interest of 12 percent or greater. The notice
must appear on a full, separate page with no text other than that provided
in this section. The form of the notice shall be as provided by subsection
(b) of this section.
(b)
Notice Requirements.
(1)
Prescribed content.
Figure: 7 TAC §5.1(b)
(2)
Acknowledgment. A lender shall obtain the applicant's signature
acknowledging receipt of the notice.
(3)
List of housing counseling agencies. A lender must provide
the applicant with a list of the housing counseling agencies approved by the
United States Department of Housing and Urban Development that are located
in Texas.
(4)
Spanish translation. A Spanish translation of the notice
is required if the transaction is conducted primarily in Spanish.
(c)
Timing of delivery of notice.
(1)
The notice shall be delivered on the earlier of:
(A)
the date required for the delivery of the Good Faith Estimate
under the Real Estate Settlement Procedures Act; or
(B)
within three business days after application if the Real
Estate Settlement Procedures Act does not apply to the covered mortgage loan.
(2)
If upon initial evaluation and delivery of required disclosures
a mortgage applicant does not receive the required notice because the lender
indicates that the applicant's anticipated interest rate will not be covered
by this section, then upon further evaluation it is determined that the mortgage
loan will meet the threshold test of this section, the notice shall be delivered
to the applicant within three business days from the time that it is determined
that the rate on the loan will be covered by this section. The notice must
be delivered to an applicant at least one business day prior to closing.
(3)
For purposes of this section, application means the submission
of a borrower's financial information in anticipation of a credit decision,
whether written or computer-generated. If the submission does not state or
identify a specific property, the submission is not an application for the
purposes of this section.
(4)
Electronic delivery. A creditor may provide the required
disclosure by electronic communication in compliance with state and federal
law governing electronic signatures and electronic transactions (15 U.S.C. §7.001
(A)
send the disclosure to the consumer's electronic address;
or
(B)
make the disclosure available at another location such
as an Internet website; and
(i)
alert the consumer of the disclosure's availability by
sending a notice to the consumer's electronic address. The notice shall identify
the account involved and the address of the Internet website or other location
where the disclosure is available; and
(ii)
make the disclosure available for at least 90 days from
the date the disclosure first becomes available or from the date of the notice
alerting the consumer of the disclosure, whichever comes later.
(d)
Record retention. A lender shall retain a copy of the notice
signed by the applicant for a period of 25 months after the date that the
notice is delivered.
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 June 22, 2001.
TRD-200103591
Leslie L. Pettijohn
Commissioner
Finance Commission of Texas
Earliest possible date of adoption: August 5, 2001
For further information, please call: (512) 936-7640
Chapter 27.
APPLICATIONS
7 TAC §27.1
The Finance Commission of Texas (the commission) proposes
to amend §27.1 concerning application processing times and notices to
applicants. The amendment removes sale of checks licenses from the application
of this section. A new rule regarding sale of checks license applications
is proposed in this issue of the
Texas Register
.
This change will place the sale of checks rule in the same chapter as other
rules pertaining to sale of checks.
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 adoption of this section will be convenient and consistent placement
of rules. 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 on the proposed amendment may be submitted to Steven L. Martin,
Assistant General Counsel, Texas Department of Banking, 2601 North Lamar Boulevard,
Austin, Texas 78705-4294, or by email to: steve.martin@banking.state.tx.us.
The amendment is proposed pursuant to rule-making authority under
Finance Code, §152.102(a), which authorizes the commission to adopt rules
necessary to enforce and administer Finance Code, Chapter 152 "including rules
relating to an application of a license." Additional authority and applicable
requirements are provided by Government Code, §2005.003.
Finance Code, Chapter 152, is affected by the proposed amendment.
§27.1.Notices to Applicants; Application Processing Times; Appeals.
(a)
An application for prepaid funeral sellers permit
or
[
(1)
prepaid funeral seller's permits: 10 days;
and
(2)
perpetual care cemetery certificates of authority: 10 days[
[
sale of checks licenses: 10
days].
(b)
The commissioner shall determine whether to deny or approve
an application within the following periods and in the following manner after
a complete application has been accepted for filing:
(1)
prepaid funeral seller's permits: 45 days;
and
(2)
perpetual care cemetery certificates of authority: 45 days[
[
sale of checks licenses: 45
days].
(c)-(d)
(No change.)
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 June 22, 2001.
TRD-200103538
Everette D. Jobe
Certifying Official
Texas Department of Banking
Proposed date of adoption: August 17, 2001
For further information, please call: (512) 475-1300
7 TAC §29.4
The Finance Commission of Texas (the commission) proposes
new §29.4 concerning processing times for sale of checks license applications
submitted to the Texas Department of Banking (department).
Section 29.4 will implement the requirements of Government Code, §2005.003,
pertaining to permit processing periods under the Sale of Checks Act, Finance
Code, Chapter 152. An existing rule, §27.1, presently addresses these
requirements but is proposed to be amended in this issue of the
Texas Register
to remove processing parameters for sale of checks licenses
in order to permit placing the sale of checks provision in the same chapter
as other rules pertaining to sale of checks. During the past 12 months, the
department's minimum, maximum, and median time for processing a sale of checks
license application was 28 days, 92 days, and 67 days, respectively. Processing
time is measured from the date the department received an initial application
to the date of the final license decision. Disclosure of the minimum, maximum,
and median processing time for an application is required by Government Code, §2005.003.
Proposed §29.4 will provide sale of checks license applicants an efficient,
equitable, and predictable application process by specifying the time for
review of applications and conforming the processing times to the actual times
required to review and evaluate an application. The proposed section will
also provide for a finding of abandonment for applications not timely pursued.
Proposed §29.4(b), as compared to existing §27.1, will change
the time from 10 days to 15 days for the department to notify the applicant
that the application is complete or that additional information is required.
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 adopted is in effect, the public benefit anticipated as a result
of the adoption of this section will be an efficient, equitable, and predictable
application process. 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 on proposed §29.4 may be submitted to Steven L. Martin, Assistant
General Counsel, Texas Department of Banking, 2601 North Lamar Boulevard,
Austin, Texas 78705-4294, or by email to: steve.martin@banking.state.tx.us.
Section 29.4 is proposed under the authority of Finance Code, §152.102,
which authorizes the commission to adopt rules necessary to enforce and administer
Finance Code, Chapter 152, including rules relating to issuance of a license.
Additional authority and applicable requirements are provided by Government
Code, §2005.003.
Finance Code, Chapter 152, is affected by proposed §29.4.
§29.4.Sale of Checks License Applications; Notices to Applicants; Application Processing Times; Abandoned Filings; Appeals.
(a)
Form of application. An initial application for a sale
of checks license under the Finance Code, §152.201, must be filed on
a form prepared and prescribed by the banking commissioner. The banking commissioner
may investigate and evaluate facts related to a submitted or accepted application
to the extent necessary to reach an informed decision. The banking commissioner
may require any person connected with the matter to which the submitted or
accepted application pertains to submit additional information, including
an opinion of counsel with respect to a matter of law or an opinion, review,
or compilation prepared by a certified public accountant.
(b)
Notice to applicant. On or before the 15th day after initial
submission of an application, the department of banking shall issue a written
notice informing the applicant either that all filing fees have been paid
and the initial application is complete and accepted for filing, or that the
initial application is deficient and specific fees or additional information
is required.
(c)
Action on license applications. Once a completed sale of
checks license initial application has been accepted for filing, the banking
commissioner shall determine whether to approve or deny the initial application
within 45 days; provided that if, within that time period, the banking commissioner
determines there should be a hearing on the initial application, a hearing
will be set to take evidence on the matter.
(d)
Time limit for providing required information. Unless otherwise
provided in applicable law, all required information necessary for the banking
commissioner to declare that an application is accepted must be provided to
the department on or before the 61st day after the date of the initial submission
of the application. A person may request an automatic 30-day extension of
time to submit required information if the request is in writing and is received
by the department prior to the end of the initial 60-day period. An additional
extension may be requested in writing if a request is received prior to the
expiration of the automatic extension. The additional extension will be granted
only if the banking commissioner in the exercise of discretion finds good
and sufficient cause for the extension. The banking commissioner shall mail
notice of the decision to the person seeking the extension within ten days
of receipt of the request by the department.
(e)
Abandoned application. The banking commissioner may determine
any submitted or accepted application to be abandoned, without prejudice to
the right to re-file, if the information required by applicable law or additional
requested information is not received within the time period specified by
subsection (d) of this section or as otherwise requested by the banking commissioner
in writing to the person making the submission. In addition, the banking commissioner
may determine an application to be abandoned if applicable fees are not paid
within 30 days after initial submission of the application.
(f)
Notice. The banking commissioner shall give written notice
of a determination that an application is considered to be abandoned. Notice
of abandonment is effective upon mailing by the department. Fees paid related
to an abandoned filing are non-refundable.
(g)
Violation of notice and processing times. An applicant
may appeal directly to the banking commissioner for a timely resolution of
a dispute arising from a violation of the periods set forth in this section.
An applicant shall perfect an appeal by filing with the department a written
request for appeal within 30 days of the date a decision is made on the application,
requesting review by the banking commissioner to determine whether the established
period for the granting or denying of the initial application has been exceeded.
The decision on the appeal shall be based on the written appeal by the applicant
and any response by the department and, if the banking commissioner deems
necessary, a hearing may be set to take evidence on the matter.
(h)
Decision on appeal. The banking commissioner shall decide
the appeal in the applicant's favor if the banking commissioner determines
that the time periods established in this section have been exceeded and the
department has failed to establish good cause for the delay. The banking commissioner
shall issue a written decision to the applicant within 60 days of the filing
of an appeal. If an appeal is decided in an applicant's favor, the applicant
will be reimbursed all of its application fees. A decision in favor of the
applicant under this subsection does not affect any decision to grant or deny
an application for a sale of checks license, which shall be based on applicable
substantive law without regard to whether the application was timely processed.
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 June 22, 2001.
TRD-200103539
Everette D. Jobe
Certifying Official
Texas Department of Banking
Proposed date of adoption: August 17, 2001
For further information, please call: (512) 475-1300
Chapter 97.
COMMISSION POLICIES AND ADMINISTRATIVE RULES
Subchapter A. GENERAL PROVISIONS
7 TAC §97.101
The Texas Credit Union Commission proposes amendments to §97.101
pertaining to meetings. The rule as it currently exists addresses the time,
place and minutes of meetings of the Commission only. The first amendment
would expand the rule to also address meetings of the Commission's committees.
Another amendment states that the minutes of the meetings of the Commission
and its committees are available to any person to examine during the Credit
Union Department's regular office hours. The last amendment states that notice
of any upcoming meetings of the Commission or its committees shall be posted
in accordance with Government Code, Chapter 551.
Section 2001.039 of the Government Code requires each state agency to review
a rule not later than the fourth anniversary of the date on which the rule
takes effect and every four years after that date. The review must include
an assessment of whether the reasons for initially adopting the rule continue
to exist. The previous review of this rule occurred in 1998, and notice of
the rule's readoption by the Commission without change was published in the
October 30, 1998, issue of the
Texas Register
(23 TexReg 11174).
Notice of the Commission's intent to review this rule was published in
the March 30, 2001, issue of the
Texas Register
(26 TexReg 2547). No comments were received. However, after conducting a preliminary
review, the Commission has determined that the above-described amendments
are necessary and appropriate.
Lynette Pool, Deputy Commissioner, has determined that for the first five-year
period the amended rule is in effect, there will be no fiscal implications
for state or local government as a result of enforcing or administering the
rule.
Ms. Pool has also determined that for each year of the first five years
the amended rule is in effect, the public benefit anticipated will be that
the continued assurance that notices of Commission meetings and meetings of
its committee will be properly posted and that the public will have another
source of access to the minutes of those meetings. There will be no effect
on small businesses as a result of adopting this section. There is no anticipated
impact on local employment.
Written comments on the proposed amendments must be submitted within 30
days after its publication in the
Texas Register
to Lynette Pool, Deputy Commissioner, Credit Union Department, 914
East Anderson Lane, Austin, Texas 78752-1699.
The amendments are proposed under the provisions of Finance Code §15.209.
The Commission interprets this section as authorizing it to adopt rules governing
meetings, including the time and place and the form of the minutes.
The specific section affected by the proposed amendments to this rule is
Finance Code §15.209 pertaining to meetings of the Commission.
§97.101.Meetings.
The time
[
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 June 19, 2001.
TRD-200103474
Harold E. Feeney
Commissioner
Credit Union Department
Earliest possible date of adoption: August 5, 2001
For further information, please call: (512) 837-9236
7 TAC §97.105
The Texas Credit Union Commission proposes an amendment to §97.105
pertaining to frequency of examination. The amendment, if adopted, would authorize
the Commissioner to accept examinations conducted by other credit union supervisory
agencies or insuring organizations in lieu of conducting an examination required
by this rule.
Section 2001.039 of the Government Code requires each state agency to review
a rule not later than the fourth anniversary of the date on which the rule
takes effect and every four years after that date. The review must include
an assessment of whether the reasons for initially adopting the rule continue
to exist. The previous review of this rule occurred in 1998, and notice of
the rule's readoption by the Commission without change was published in the
October 30, 1998, issue of the
Texas Register
(23 TexReg 11174).
Notice of the Commission's intent to review this rule was published in
the March 30, 2001, issue of the
Texas Register
(26 TexReg 2547). No comments were received. However, after conducting a preliminary
review, the Commission has determined that the above-described amendments
are necessary and appropriate.
Lynette Pool, Deputy Commissioner, has determined that for the first five-year
period the amended rule is in effect, there will be no fiscal implications
for state or local government as a result of enforcing or administering the
rule.
Ms. Pool has also determined that for each year of the first five years
the amended rule is in effect, the public benefit anticipated will be a reduced
burden on credit unions that may otherwise receive multiple examinations or
audits by regulatory and/or insuring entities within a specific time period.
There will be no effect on small businesses as a result of adopting this section.
There is no anticipated impact on local employment.
Written comments on the proposed amendment must be submitted within 30
days after its publication in the
Texas Register
to Lynette Pool, Deputy Commissioner, Credit Union Department, 914
East Anderson Lane, Austin, Texas 78752-1699.
The amendment is proposed under the provisions of Finance Code §15.402.
The Commission interprets this section as authorizing it to adopt rules necessary
for administering Subtitle D, Title 3, of the Finance Code, which includes §126.051
pertaining to the examination of credit unions.
The specific section affected by the proposed amendment to this rule is
Finance Code §126.051 pertaining to examinations.
§97.105.Frequency of Examination.
The department shall perform an examination of each credit union authorized
to do business under the Act at least once each year. Intervals between examinations
shall not exceed 18 months, unless a longer interval is authorized in writing
by the commission.
In lieu of conducting an examination required by this
rule, the commissioner in the exercise of discretion may accept examinations
or reports from other credit union supervisory agencies or insuring organizations.
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 June 19, 2001.
TRD-200103469
Harold E. Feeney
Commissioner
Credit Union Department
Earliest possible date of adoption: August 5, 2001
For further information, please call: (512) 837-9236
No
additional
] interest for default may be charged on an interest-bearing
Subchapter E
loan
as authorized under §342.203 or §342.206
[
made pursuant to §342.201
], Texas Finance Code [
except for a loan contracted for on a scheduled installment earnings method
].
(d)
] Missed payment covered by insurance.
When any payment or partial payment in default is later paid by some form
of insurance such as credit disability insurance, unemployment insurance,
or collateral protection insurance, any prior assessment of additional interest
for default must be waived.
(e)
] Pyramiding prohibited. An authorized
lender seeking to assess additional interest for default in a precomputed
loan under §342.203 or §342.206, Texas Finance Code must comply
with the prohibition on the pyramiding of late charges set forth in the Federal
Trade Commission Credit Practices Rule at 16 C.F.R. §444.4
or in
Regulation AA, 12 C.F.R. Part 227, promulgated by the Board of Governors of
the Federal Reserve Board, as applicable
.
(a)
], Texas
Finance Code loan are as follows
(with no administrative loan fee)
:
Date of loan: 09/01/
1999
[
1997
]; First payment due date:
10/01/
1999
[
1997
]; Cash Advance:
$2,356.21
[
$2,576.61
]; Finance Charge:
$1,243.79
[
$1,023.39
]; Total of Payments: $3,600.00; Term: 36 months; Monthly Installment:
$100; Refunding method:
Scheduled Installment Earnings Method
[
Sum of the periodic balances
]; Annual Percentage Rate:
30.00%
[
23.1935%
]. Assume a deferment is agreed to roughly six months
into the contract, and at that time the remaining precomputed balance owed
on the account was $3,095.00 and the regular scheduled installment amount
was $100.00. The nearest whole integer for the dollar amount associated with
the deferred time period would be 30 ($3,095.00 divided by $100 = 30.95; rounded
down to the nearest whole integer = 30). If a default charge had already been
assessed on the 30th remaining installment, the nearest whole integer would
be 29. Assuming no default charge had been assessed on the 30th remaining
installment, the additional interest charge for the deferment would be the
difference between the interest refund of the 30th and the 29th installments.
This difference would be
$53.28
[
$46.10 (Interest refund as
of the 30th installment = $714.53; interest refund as of the 29th installment
= $668.43; $714.53 - $668.43 = $46.10). A scheduled installment earnings refund
method would yield a slightly different result of $44.49
].
Subchapter G. INTEREST AND OTHER CHARGES ON SECONDARY MORTGAGE LOANS
$10
].
Subchapter H. REFUNDS IN PRECOMPUTED LOANS
the same subchapters
].
two
] methods of determining the
amount of a refund:
or
]
and G Loans with the Term of the Loan Sixty Months or Less; Prepayment in Full after the First Installment Due Date and before the Final Installment Due Date ].
refund
]
method authorized by [
7 TAC
] §1.751[
(b)
]
of this title
and identified in the loan agreement as the chosen refund
method.
If prepayment in full or demand for payment in full occurs during
an installment period, the lender may retain an interest charge for previous
elapsed periods and the number of days beginning after the installment due
date and ending on the date of the prepayment or demand in full.
[
One day earned into a month will allow the lender to earn the interest applicable
to the full month.
]
Regular Subchapter E and ] G Loans [ with the Term of the Loan More Than Sixty Months; Prepayment in Full before the First Installment Due Date ].
An
] authorized lender may
retain an interest charge for each elapsed day between the date of the loan
and the date of prepayment. The interest charge may not exceed the amount
of interest allowed under the true daily earnings method for the same time
period.
following charges in Subchapter F loans are
] subject
to refund[
:
]
in a loan in which the cash advance is $100 or less
] is not subject
to refund, as the charge is considered to be earned at the time the loan is
made.
Subchapter I. INSURANCE
§§341.302
].
Chapter 4.
CURRENCY EXCHANGE
As used in this section, "currency exchange" includes transactions wherein
currency transmitters accept for transmission in Texas the currency of one
government and pay at another location in the currency of another government.
]
an
] amount [
in excess of $1,000
] unless the
currency business issues sequentially numbered receipts or receipts bearing
a unique identification or transaction number for each of those transactions.
The receipt must bear the date and time of day of the transaction, the amount
of the transmission in United States dollars, the rate of exchange (if applicable),
and the applicable fee or commission for the transaction. The receipt also
must indicate whether the transaction initiated or terminated the currency
transmission. The currency business also must maintain a record of each such
transaction that includes the identifying receipt number as well as the following
information:
an
] amount [
in excess of $1,000
], the currency business shall verify the customer's identity by examination
of a document, preferably one that contains the name, address, and photograph
of the customer and is customarily acceptable within the banking community
as a means of identification when cashing checks for nondepositors, and shall
record the specific identifying information on the receipt or in the log entry
related to the transaction (e.g., state of issuance and number of driver's
license).
in excess of $1,000
]
must be treated as one transaction. Multiple transactions initiated by or
on behalf of the same person or received by or on behalf of the same person
during one or more business days totaling
$3,000 or more
[
in excess of $1,000
] must be treated as one transaction if made by such
person for the purpose of evading the reporting requirements under this section
and an individual employee, director, officer, or partner of the currency
business knew or should have known that the transactions occurred.
The
] department
of banking shall issue a written notice [
within 10 days of receipt
]
informing
the
[
each
] applicant
either
that
all filing fees have been paid and
the initial application is complete
and accepted for filing, or that the initial application is deficient and
specific
fees or
additional information is required.
(d)
] Violation of notice and processing
times. An applicant may appeal directly to the banking commissioner for a
timely resolution of a dispute arising from a violation of the periods set
forth in this section. An applicant shall perfect an appeal by filing with
the department a written request for appeal within 30 days of the date a decision
is made on the application, requesting review by the banking commissioner
to determine whether the established period for the granting or denying of
the initial application has been exceeded. The decision on the appeal shall
be based on the written appeal by the applicant and any response by the department
and, if the banking commissioner deems necessary, a hearing may be set to
take evidence on the matter.
(e)
] Decision on appeal. The banking
commissioner shall decide the appeal in the applicant's favor if the banking
commissioner determines that the time periods established in this section
have been exceeded and the department has failed to establish good cause for
the delay. The banking commissioner shall issue a written decision to the
applicant within 60 days of the filing of an appeal. If an appeal is decided
in an applicant's favor, the applicant will be reimbursed all of its application
fees. A decision in favor of the applicant under this subsection does not
affect any decision to grant or deny an application for a currency exchange
license, which shall be based on applicable substantive law without regard
to whether the application was timely processed.
Chapter 5.
HOME LOANS
Part 2.
TEXAS DEPARTMENT OF BANKING
,
] perpetual care cemetery certificate of authority[
, or sale of checks license
] granted by the commissioner must be filed
on a form or in a manner approved by the banking commissioner. The department
shall issue a written notice informing each applicant either that the application
is complete and accepted for filing, or that the application is deficient
and that specific additional information is required. The department shall
issue the notice to the applicant within the period indicated for the following:
; and
]
(3)
; and
]
(3)
Chapter 29.
SALE OF CHECKS ACT
Part 6.
CREDIT UNION DEPARTMENT
Time
] and place of regular and special
meetings of the [
Credit Union
] Commission
and its committees
shall be
determined
[
set
] by the
applicable
chair
and posted in accordance with the Open Meetings Act (Government
Code, Chapter 551)
. The minutes
of each meeting
shall be
in writing
and available to any person to examine during the Department's
regular office hours
.
Subchapter B. FEES