Part 1.
FINANCE COMMISSION OF TEXAS
Chapter 1.
CONSUMER CREDIT REGULATION
Subchapter E. INTEREST CHARGES ON LOANS
7 TAC §1.501
The Finance Commission of Texas (the commission) proposes
an amendment to §1.501, concerning maximum interest charge. The purpose
of the amendment is to implement a technical correction to §1.501. The
correction in §1.501 subsection (c), paragraph (2), subparagraph (C)
changes the word "Subchaper" to "Subchapter."
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
rule.
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 proposed amendment will be providing clarity by correcting a misspelled
word. There is no anticipated cost to persons who are required to comply with
the amendment as proposed. There will be no adverse economic effect on small
or micro businesses. There will be no effect on individuals required to comply
with the section as proposed.
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 or by email to leslie.pettijohn@occc.state.tx.us.
The amendment are proposed under Texas Finance Code §11.304,
which authorizes the commission to adopt rules to enforce Title 4 of the Texas
Finance Code. Additionally, Texas Finance Code §342.551 authorizes the
commission to adopt rules for the enforcement of the consumer loan chapter.
The statutory provision (as currently in effect) affected by the proposed
amendment is Texas Finance Code §341.403. Subchapter E. Interest Charges
on Loans
§1.501.Maximum Interest Charge.
(a) - (b)
(No change.)
(c)
Method of calculation.
(1)
(No change.)
(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) - (B)
(No change.)
(C)
simple annual rate of eighteen percent (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
Subchapter
[
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 April 16, 2004.
TRD-200402550
Leslie L. Pettijohn
Commissioner
Finance Commission of Texas
Earliest possible date of adoption: May 30, 2004
For further information, please call: (512) 936-7640
7 TAC §1.605
The Finance Commission of Texas (the commission) proposes
an amendment to §1.605, concerning payday loans. The purpose of the amendment
is to implement a technical correction to §1.605. The correction to §1.605
subsection (f) changes the word "relatin" to "relating" in paragraph (1).
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
rule.
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 proposed amendment will be providing clarity by correcting a misspelled
word. There is no anticipated cost to persons who are required to comply with
the amendment as proposed. There will be no adverse economic effect on small
or micro businesses. There will be no effect on individuals required to comply
with the section as proposed.
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 or by email to leslie.pettijohn@occc.state.tx.us.
The amendments are proposed under Texas Finance Code §11.304,
which authorizes the commission to adopt rules to enforce Title 4 of the Texas
Finance Code. Additionally, Texas Finance Code §342.551 authorizes the
commission to adopt rules for the enforcement of the consumer loan chapter.
The statutory provision (as currently in effect) affected by the proposed
amendment is Texas Finance Code §341.403.
§1.605.Payday Loans; Deferred Presentment Transactions.
(a) - (e)
(No change.)
(f)
Conditions. A lender may accept a check to secure payment
of a payday loan if the lender complies with the following sections.
(1)
Duplicate and multiple loans. The provisions of Texas Finance
Code, §342.501 and §1.851 of this title (
relating
[
(2) - (3)
(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 April 16, 2004.
TRD-200402551
Leslie L. Pettijohn
Commissioner
Finance Commission of Texas
Earliest possible date of adoption: May 30, 2004
For further information, please call: (512) 936-7640
7 TAC §1.801
The Finance Commission of Texas (the commission) proposes
amendments to §1.801, providing definitions pertaining to gap waiver
agreement allowed by Senate Bill (SB) 1429. SB 1429 was adopted during the
78th Legislature and authorized the sale of gap waiver agreements in connection
with a Chapter 342 loan that contains an interest charge computed under §342.201(a)
or (d).
Sections 1.801(7) and (8) defines terms used in 7 TAC §1.814. This
amendment defines a gap waiver agreement and specifies the elements that may
be contained in a gap waiver agreement. The amendment also identifies charges
by the lender that are excluded from the calculation of net unpaid balance.
These exclusions are necessary because the amount of the gap waiver fee is
based upon the amount financed and the assumption that all the payments will
be made as scheduled. Additionally, the exclusions let parties know what charges
are covered by the fee and the charges for which each party is responsible.
The new definitions also address the conditions that may result in a constructive
total loss. This definition is necessary to acknowledge and provide for situations
where the cost to repair a vehicle may exceed the coverage under the gap waiver
agreement, but the vehicle may not otherwise be rendered a total loss.
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 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 proposed amendment will be the establishment of uniform definitions
of standards and guidelines for use by consumers and creditors in the sale
of gap waiver agreements. There is no anticipated cost to persons who are
required to comply with the amendment as proposed. There will be no adverse
economic effect on small or micro businesses. The effect on individuals required
to comply with the section as proposed will be that those individuals will
have clear guidelines of the charges that are covered and not covered by the
fee, and of the conditions that constitute a total loss.
Comments on the proposed amendments may be submitted in writing to Sealy
Hutchings, General Counsel, Office of Consumer Credit Commissioner, 2601 North
Lamar Boulevard, Austin, Texas 78705-4207 or by email to sealy.hutchings@occc.state.tx.us.
The amendment is proposed under the provisions of SB 1429, which
authorizes the adoption of rules implementing gap waiver agreements. This
amendment is also proposed under Section 11.308 of the Texas Finance Code.
The statutory provision (as currently in effect) affected by the proposed
amendment is Texas Finance Code §342.4021.
§1.801.Definitions.
Words and terms used in this subchapter that are defined in Texas Finance
Code, Chapter 342, have the meanings as defined in Chapter 342. The following
words and terms, shall have the following meanings unless the context clearly
indicates otherwise.
(1) - (6)
(No change.)
(7)
Gap Waiver Agreement--an agreement that
eliminates the deficiency when the proceeds from the borrower's insurance
policy do not cover the unpaid net balance after the vehicle has suffered
a total loss or constructive total loss. The unpaid net balance on the loan
does not include:
(A)
Delinquent payments (any outstanding payment that is more
than 10 days past due);
(B)
Late charges;
(C)
Unearned interest;
(D)
Unearned insurance premiums;
(E)
Fees added after the date of the loan;
(F)
Any portion of the borrower's basic comprehensive and collision
policy deductible that exceeds $1,000.
(8)
Constructive Total Loss--a loss where
the cost to repair or replace the motor vehicle covered under the gap waiver
agreement would exceed an amount equal to the actual cash value of the motor
vehicle minus any salvage value. The actual cash value will be determined
as of the date of loss. The actual cash value will be based on the "retail
value" in the National Automobile Dealer's Association (NADA) or its equivalent,
official used car guide. The licensee will consider the mileage, condition,
and optional equipment of the motor vehicle when using the NADA, or its equivalent,
official used car guide.
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 April 16, 2004.
TRD-200402552
Leslie L. Pettijohn
Commissioner
Finance Commission of Texas
Earliest possible date of adoption: May 30, 2004
For further information, please call: (512) 936-7640
7 TAC §1.814
The Finance Commission of Texas (the commission) proposes
new 7 TAC §1.814 relating to procedures for gap waiver agreements as
authorized by Senate Bill (SB) 1429. SB 1429 was adopted during the 78th Legislature
and allowed the sale of gap waiver agreements in connection with a Chapter
342 loan that contains an interest charge computed under §342.201(d).
In 2003, the 78th Texas Legislature amended Chapter 342 of the Texas Finance
Code (Senate Bill 1429) to permit the assessment, imposition, and collection
of "debt cancellation agreement" fees, "debt suspension" fees, and "gap waiver
agreement" fees on regulated loans, given certain limitations and restrictions.
The intent of this legislation was to conform Texas usury statutes to current
practices of national banks rectifying the perceived disparity between state
and national banks by removing the state law prohibition on engaging in debt
cancellation, debt suspension, and gap waiver agreements. Specifically, the
Texas Legislature added §342.4021 to the Texas Finance Code .
On June 20, 2003, Governor Perry signed the bill into law and included
the following Signature Message on Senate Bill 1429:
"...By way of this message, I am directing the Department of Banking, Savings
and Loan Department, Office of Consumer Credit Commissioner and the Credit
Union Department to be diligent and aggressive in assuring that consumer protections
are in place and that all Texas lenders conduct themselves properly in our
quest for a truly competitive market."
One of the principal consumer protections in the law was that the amount
charged for the "gap waiver" fee must be reasonable; the rule establishes
the maximum reasonable fee accompanied by certain limitations that may be
addressed within a gap waiver agreement.
Section 1.814(a) explains the disclosure requirements of a gap waiver agreement.
Section 1.814(b) clarifies the provisions that are permissible in a gap
waiver agreement.
Section 1.814(c) discusses the content and timing requirements providing
a certificate of coverage to the borrower.
Section 1.814(d) explains the allowable fees that can be charged for a
gap waiver as well as the financing of that fee.
Section 1.814(e) discusses the refund of unearned gap waiver agreement
fee. It explains the refunding and calculation methods and provides that a
borrower may not receive a complete refund for the gap waiver fee if the gap
agreement is cancelled within 60 days from the date of the loan and a settlement
has occurred within that timeframe.
Section 1.814(f) explains that a licensee has 60 days to comply with the
payment terms of a gap waiver agreement after a complete claim form has been
received by the lender.
Section 1.814(g) delineates the allowable methods of calculating the settlement
amount.
Section 1.814(h) discusses the proper calculations of insurance and interest
refunds on prepaid gap waiver agreement settlements after a total loss or
total constructive loss.
Section 1.814(i) delineates the practices that are prohibited by licensees
providing gap waiver agreements.
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 proposed rule will be the increased stability in the industry by offering
uniform guidelines and standards which can have the effect of lowering the
cost of credit. Because the rule implements the "reasonable" standard in the
statute, lenders will have more confidence in offering gap waiver agreements.
The rule allows borrowers the option of choosing to protect themselves against
financial losses not covered by insurance.
The licensees will have the option of not providing a gap waiver agreement,
in which case, there will be no fiscal implications for the licensee. If a
licensee opts to provide a gap waiver agreement the fees charged in conjunction
with the agreement should cover the costs associated with the agreement. There
will be no adverse economic effect on small or micro businesses.
Comments on the proposed rules may be submitted in writing to Sealy Hutchings,
General Counsel, Office of Consumer Credit Commissioner, 2601 North Lamar
Boulevard, Austin, Texas 78705-4207 or by email to sealy.hutchings@occc.state.tx.us.
The rules are proposed under the provisions of SB 1429 which
authorizes the adoption of rules implementing gap waiver agreements. This
rule is also proposed under Texas Finance Code, §11.308.
The statutory provision (as currently in effect) affected by the proposed
new rule is Texas Finance Code, §342.4021.
§1.814.Gap Waiver Agreement.
(a)
Disclosure Required by Section 342.4021(d).
(1)
A lender must provide the borrower with the gap waiver
agreement disclosure before presenting the borrower with the terms of the
gap waiver agreement. The disclosure must not be in the loan agreement and
must state that the borrower is not required to purchase the gap waiver agreement
in order to obtain the loan. A lender may request that the borrower authenticate
the gap waiver agreement disclosure acknowledging applicant's timely receipt
of the disclosure. A licensee may rely upon verifiable procedure to show that
the gap waiver agreement disclosure was provided to an applicant.
(2)
Multiple Applicants. In the case of multiple applicants,
it is only necessary for the licensee to deliver the gap waiver agreement
disclosure to one applicant.
(b)
Authorized Gap Waiver Agreement Provisions. The gap waiver
agreement may include a provision that:
(1)
limits the calculation of the unpaid net balance;
(2)
limits the scope of the gap waiver agreement to loans which
require the borrower to make a balloon payment between 24 and 48 months or
to loans which are repayable in 48 months or more;
(3)
excludes loss or damage as a result of:
(A)
An act occurring prior to the date of the loan;
(B)
Any dishonest, fraudulent, criminal, or illegal act resulting
in a felony conviction of the borrower;
(C)
A mechanical or electrical breakdown or failure of the
motor vehicle;
(D)
Conversion, embezzlement, or secretion by any person in
lawful possession of the motor vehicle;
(E)
Confiscation; and
(F)
The operation, use, or maintenance of the motor vehicle
in any race, speed contest, or other contest.
(4)
requires the borrower to notify the licensee of any potential
loss under the gap waiver agreement; or
(5)
requests the borrower to provide or complete the following
documents:
(A)
A gap waiver agreement claim form;
(B)
Proof of loss and settlement check from the borrower's
basic comprehensive, collision, or uninsured/underinsured motorist policy
or other parties' liability insurance policy for the settlement of the insured
total loss of the motor vehicle;
(C)
Verification of the borrower's primary insurance deductible;
and
(D)
A copy of the police report, if any, filed in connection
with the total loss to the motor vehicle.
(c)
Certificate of Coverage. If a borrower purchases a gap
waiver agreement, the licensee must provide the borrower, within a reasonable
amount of time not to exceed 10 days from the date of the loan, a certificate
or similar form that clearly sets forth:
(1)
the name, address, and telephone number of the borrower
and the lender;
(2)
the coverage amount and term of the gap waiver agreement;
(3)
the cost of the gap waiver agreement; and
(4)
the terms, including the limitations, exclusions and restrictions.
(d) Premium or Rate for Gap Waiver Agreement. A licensee may
charge a reasonable gap waiver agreement fee that does not exceed the rates
contained in the chart in Exhibit 1. The amount of the fee is based upon the
amount financed. The fee for the gap waiver agreement can be adjusted to the
nearest whole dollar. The fee may be included in the amount financed and a
finance charge may be charged on the fee.
(e) Refund of Unearned Gap Waiver Agreement Fee.
(1) Refunding Method. Upon termination of a gap waiver agreement
prior to the scheduled maturity date of a loan, the licensee shall provide
the borrower a refund or credit calculated using the pro rata method. The
refund must be given upon prepayment of the loan or if the lender demands
payment in full of the unpaid balance. The pro rata method of making refunds
involves computing a factor to apply to the total premium to determine the
unearned portion. The factor is determined by dividing the term remaining
on the loan by the total loan term.
(2)
The refund credit for the gap waiver agreement can be rounded
to the nearest whole dollar.
(3)
A refund credit is not required if the amount of the refund
credit is less than $1.
(4)
If the borrower cancels the gap waiver agreement within
sixty days from the date of the loan, the licensee will refund the entire
gap waiver agreement fee. A borrower may not cancel the gap waiver agreement
and then receive any benefits under the agreement.
(f)
Prompt Payment of Claims. A licensee must comply with the
payment terms of the gap waiver agreement within 60 days of receiving a completed
gap waiver agreement claim form. If the licensee has all of the information
that a borrower would provide in the completion of a gap waiver agreement
claim form, the licensee must comply with the payment terms of the gap waiver
agreement within 60 days of receipt of all of the information.
(g)
Calculation of Settlement Amount. The calculation of the
settlement amount will be calculated under one of the following methods:
(1)
If the loan uses the scheduled installment earnings method,
the licensee will calculate the settlement amount by adding the remaining
original scheduled installments together and then subtracting any refunds
due as of the date of total loss or constructive total loss.
(2)
If the loan uses the true daily earnings method, the licensee
will calculate the settlement amount by determining the scheduled principal
balance due of the date of total loss or constructive total loss.
(h)
Prepayment of Loan by Gap Waiver Agreement. If the gap
waiver agreement is triggered by the total loss or the constructive total
loss of the vehicle all refunds should be calculated as of the date of loss.
(1)
Insurance Refunds. Examples of refunds include credit life,
credit accident and health insurance premium, credit involuntary unemployment
insurance premium, single-interest insurance premium, and personal property
insurance premium.
(2)
Interest Refund. If the loan uses the scheduled installment
earnings method, the interest refund should be calculated as of the date of
loss. If the loan uses the true daily earnings method, the licensee should
not earn any interest after the date of loss.
(i)
Prohibited Practices. A licensee cannot offer a gap waiver
agreement if:
(1)
the loan is unsecured, secured by personal property other
than a motor vehicle, or real property;
(2)
the interest charge on the loan is calculated under Section
342.201(a) and (e) of the Texas Finance Code;
(3)
the loan is already protected by gap insurance;
(4)
the licensee has not provided the disclosure required by
Section 342.4021(d) of the Texas Finance Code;
(5)
the purchase of the gap waiver agreement is required for
the borrower to obtain the extension of credit;
(6)
the original term of the loan is less than 48 months, unless
the loan contracts for a balloon payment; and
(7)
the agreement includes any exclusions or limitations other
than those listed in Section 1.814.
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 April 16, 2004.
TRD-200402554
Leslie L. Pettijohn
Commissioner
Finance Commission of Texas
Earliest possible date of adoption: May 30, 2004
For further information, please call: (512) 936-7640
7 TAC §§1.1206, 1.1207, 1.1216, 1.1217, 1.1226, 1.1227, 1.1236, 1.1237, 1.1246, 1.1247
The Finance Commission of Texas (the commission) proposes
an amendment to Chapter 1, Subchapter Q, concerning model clauses and permissible
changes. The purpose of the proposed amendments is to make technical changes
to increase the maximum permissible dishonored check fee from $25 to $30 as
enacted by the 78th Legislature, Regular Session. Also, the amendments are
to implement a technical correction to change the zip code from "78750" to
"78705" in §1.1217(a)(7) and §1.1217(a)(8).
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
rule.
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 proposed amendment will be providing clarity by ensuring that the model
forms conform to recent legislative amendments. There is no anticipated cost
to persons who are required to comply with the amendment as proposed. There
will be no adverse economic effect on small or micro businesses. There will
be no effect on individuals required to comply with the section as proposed.
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 or by email to leslie.pettijohn@occc.state.tx.us.
The amendment is proposed under Texas Finance Code §11.304,
which authorizes the commission to adopt rules to enforce Title 4 of the Texas
Finance Code. Additionally, Texas Finance Code §342.551 authorizes the
commission to adopt rules for the enforcement of the consumer loan chapter.
The statutory provision (as currently in effect) affected by the proposed
amendment is Texas Finance Code §341.403.
§1.1206.Model Clauses.
(a) - (i)
(No change.)
(j)
Fee for Dishonored Check Clause.
The model clause
specifies the maximum allowable dishonored check fee. The lender may always
choose a lesser amount.
The fee for dishonored check model clause reads:
"I agree to pay you a reasonable fee of up to
$30
[
(k) - (u )
(No change.)
§1.1207.Permissible Changes.
(a)
An authorized lender may consider making the following
types of changes to the model clauses:
(1) - (6)
(No change.)
(7)
A sample model contract is presented in the following example.
Figure: 7 TAC §1.1207(a)(7) (.pdf)
(8)
(No change.)
(b)
(No change.)
§1.1216.Model Clauses.
(a) - (h)
(No change.)
(i)
Fee for Dishonored Check Clause.
The model clause
specifies the maximum allowable dishonored check fee. An authorized lender
may always choose a lesser amount.
The fee for dishonored check model
clause reads: "I agree to pay you a fee of up to
$30
[
(j) - (aa)
(No change.)
§1.1217.Permissible Changes.
(a)
A licensed lender may consider making the following types
of changes to the model clauses:
(1) - (6)
(No change.)
(7)
A sample model contract using the scheduled installment
earnings method is presented in the following example.
Figure: 7 TAC §1.1217(a)(7) (.pdf)
(8)
A sample model contract using the true daily earnings method
is presented in the following example.
Figure: 7 TAC §1.1217(a)(8) (.pdf)
(9)
(No change.)
(b)
(No change.)
§1.1226.Model Clauses.
(a)
(No change.)
(b)
For a Chapter 342, Subchapter G second lien home equity
loan contract:
(1) - (8)
(No change.)
(9)
Dishonored Check Fee.
The model clause specifies the
maximum allowable dishonored check fee. A licensed lender may always choose
a lesser amount.
The model dishonored check fee provision reads: "I
agree to pay you a fee of up to
$30
[
(10) - (25)
(No change.)
(c)
(No change.)
§1.1227.Permissible Changes.
(a)
A licensed lender may consider making the following types
of changes to the model clauses:
(1) - (6)
(No change.)
(7)
A sample model note is presented in the following example.
Figure: 7 TAC §1.1227(a)(7) (.pdf)
(8)
(No change.)
(b)
(No change.)
§1.1236.Model Clauses.
(a)
(No change.)
(b)
For a Chapter 342, Subchapter G second lien purchase money
loan contract:
(1) - (8)
(No change.)
(9)
Dishonored Check Fee.
The model clause specifies the
maximum allowable dishonored check fee. A creditor may always choose a lesser
amount.
The model dishonored check fee provision reads: "I agree to
pay you a fee of up to
$30
[
(10) - (25)
(No change.)
(c)
(No change.)
§1.1237.Permissible Changes.
(a)
A licensee may consider making the following types of changes
to the model clauses:
(1) - (6)
(No change.)
(7)
A sample model note is presented in the following example.
Figure: 7 TAC §1.1237(a)(7) (.pdf)
(8) (No change.)
(b) (No change.)
§1.1246.Model Clauses.
(a) - (b)
(No change.)
(c)
For a Chapter 342, Subchapter G second lien home improvement
loan promissory note for use in a transaction that does not allow for withdrawals
or multiple advances:
(1) - (11)
(No change.)
(12)
Dishonored Check Fee.
The model clause specifies
the maximum allowable dishonored check fee. A creditor may always choose a
lesser amount.
The model dishonored check fee provision reads: "I agree
to pay you a fee of up to
$30
[
(13) - (29)
(No change.)
(d)
(No change.)
(e)
For a Chapter 342, Subchapter G second lien home improvement
loan promissory note for use in a transaction that allows for withdrawals
or multiple advances:
(1) - (11)
(No change.)
(12)
Dishonored Check Fee.
The model clause specifies
the maximum allowable dishonored check fee. A creditor may always choose a
lesser amount.
The model dishonored check fee provision reads: "I agree
to pay you a fee of up to
$30
[
(13) - (30)
(No change.)
(f)
(No change.)
§1.1247.Permissible Changes.
(a)
A licensee may consider making the following types of changes
to the model clauses:
(1) - (12) (No change.)
(13)
A sample model promissory note that does not allow for
withdrawals or multiple advances reads:
Figure: 7 TAC §1.1247(a)(13) (.pdf)
(14) (No change.)
(15)
A sample model promissory note that allows for withdrawals
or multiple advances reads:
Figure: 7 TAC §1.1247(a)(15) (.pdf)
(16) (No change.)
(b)
(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 April 16, 2004.
TRD-200402553
Leslie L. Pettijohn
Commissioner
Finance Commission of Texas
Earliest possible date of adoption: May 30, 2004
For further information, please call: (512) 936-7640
Subchaper
] C, Chapter 341,
using the reference base amount of $2,500.
Subchapter F. ALTERNATE CHARGES FOR CONSUMER LOANS
relatin
] to Duplication of Loans) apply to loans made under the authority
of this section. In accordance with Texas Finance Code, §342.501 a lender
and a borrower may renew a loan, but the loan must be converted from a single
payment balloon loan to a declining balance installment note. Alternatively,
the payday loan or deferred presentment transaction may be renewed without
limitation to the number of renewals where the effect of the total amount
of charge would not exceed the total amount authorized by §342.252 having
due regard for the amount of the cash advance and the time the cash advance
is outstanding. The result is that the acquisition charge may only be earned
once in a month and the installment account handling charge may continue to
be earned on a equivalent daily charge basis in accordance with the limitations
of Subchapter F. In lieu of a renewal, a lender and a borrower may agree to
extend the maturity date of the existing payday loan or deferred presentment
transaction.
Subchapter I. INSURANCE
Subchapter Q. CHAPTER 342, PLAIN LANGUAGE CONTRACT PROVISIONS
$25
]
for a returned check. You can add the fee to the amount I owe under this agreement
or collect it separately."
$25
] for a returned check. You can add the fee to the amount I owe or collect
it separately."
$25
] for a returned
check. You may add the fee to the amount I owe or collect it separately."
$25
] for a returned check.
You may add the fee to the amount I owe or collect it separately."
$25
] for a returned check.
You may add the fee to the amount I owe or collect it separately."
$25
] for a returned check.
You may add the fee to the amount I owe or collect it separately."