| (D) the total denial of a debt cancellation request
based on one of the exclusions contained in subsection (c)(1)(B) or
(2)(B) of this section, except in the case of a partial loss of the
covered motor vehicle.
(4) Rounding of unearned debt cancellation agreement
fee. The refund or credit for the unearned debt cancellation agreement
fee can be rounded to the nearest whole dollar.
(5) Refund or credit less than $1.00 not required.
A refund or credit is not required if the amount of the refund or
credit is less than $1.00.
(6) Flat cancellation within 30 days. If no total loss
or theft has occurred, the retail buyer may cancel the debt cancellation
agreement within 30 days from the date of the retail installment sales
contract or the issuance of the debt cancellation agreement, whichever
is later, or such later day as may be provided under the debt cancellation
agreement. Upon such cancellation, the holder or administrator will
refund or credit the entire debt cancellation agreement fee. A retail
buyer may not cancel the debt cancellation agreement and then receive
any benefits under the agreement.
(g) Prompt cancellation under debt cancellation agreement.
A holder must comply with the terms of a debt cancellation agreement
within 60 days of receiving a debt cancellation request form and all
necessary information needed by the holder or administrator to process
the request. If the administrator has all of the information that
a retail buyer would provide in the completion of a debt cancellation
request form, the administrator must comply with the terms of the
debt cancellation agreement within 60 days of receipt of all the necessary
information needed by the holder or administrator to process the request.
(h) Calculation of amount to be cancelled under debt
cancellation agreement for total loss or theft of ordinary vehicle.
The calculation of the amount to be canceled under this section will
be figured in compliance with one of the following methods:
(1) Debt cancellation agreement for total loss or theft
of ordinary vehicle in which holder bears complete responsibility
for canceling the debt after total loss or theft. The amount currently
owed by the retail buyer on the date of total loss or theft of the
motor vehicle on the retail installment sales contract will be the
amount canceled under the debt cancellation agreement for total loss
or theft of an ordinary vehicle.
(2) Debt cancellation agreement for total loss or theft
of used ordinary vehicle with a cash price of $15,000 or less in which
the retail seller does not assign the retail installment sales contract
to any party other than a related finance company as defined by Texas
Tax Code, §152.0475(a), and in which the retail seller bears
complete responsibility for canceling the debt after total loss or
theft whether the retail buyer elects to obtain property insurance.
(A) If the retail buyer did not have property insurance
at the time of the total loss or theft of the motor vehicle or the
total loss of the vehicle was not covered by another responsible party's
liability insurance policy, the amount to be canceled will be the
amount currently owed by the retail buyer as of the date of total
loss or theft of the motor vehicle.
(B) If the retail buyer had property insurance at the
time of the total loss or theft of the motor vehicle or the total
loss of the vehicle was covered by another responsible party's liability
insurance policy, the retail seller or related finance company will
calculate the amount to be canceled by determining:
(i) the current balance owed by the retail buyer as
of the date of total loss or theft of the motor vehicle;
(ii) subtracting the total loss payment made by the
primary insurance carrier or other responsible party's liability insurance
carrier; and
(iii) subtracting any refunds received by the retail
seller or related finance company as of the date of total loss or
theft of the motor vehicle.
(i) Prepayment of retail installment sales contract
by debt cancellation agreement. If the debt cancellation agreement
is triggered by the total loss or theft of the motor vehicle, all
refunds should be calculated as of the date of loss.
(1) Insurance refunds and other cancelable items. Examples
of refunds that should be calculated as of the date of loss include
credit life premium, credit accident and health insurance premium,
credit involuntary unemployment insurance premium, collateral protection
insurance premium, and service contract refunds. The retail installment
sales contract may permit an administrator or provider to receive
any refunds that are received by the holder after the settlement of
the debt cancellation agreement, if those refunds were included in
the amount received by the holder from the administrator. Refunds
that were not part of the amount received by the holder from the administrator
must be either applied to the retail buyer's account or given to the
retail buyer.
(2) Time price differential refund. If the retail installment
sales contract uses the scheduled installment earnings method or is
a regular payment contract using the sum of the periodic balances
method, the time price differential refund should be calculated as
of the date of loss. If the retail installment sales contract uses
the true daily earnings method, the holder should not earn any time
price differential charge after the date of loss.
(j) Assignment and delegation.
(1) The retail seller or subsequent holder of a retail
installment sales contract may not assign any of its rights under
a debt cancellation agreement unless the retail seller or subsequent
holder assigns the retail installment sales contract that the debt
cancellation agreement modifies. The retail seller or subsequent holder
of the retail installment sales contract may delegate its duties under
a debt cancellation agreement, but the delegating party remains liable
for the performance it delegated and the conduct of the persons to
whom the duties are delegated.
(2) Good faith reliance. A holder may in good faith
rely on a computation by the administrator of the balance waived,
unless the holder has knowledge that the computation is not correct.
If a computation by the administrator of the balance waived is not
correct, the holder must, within a reasonable time of learning that
the computation is incorrect, make the necessary corrections or cause
the corrections to be made to the retail buyer's account. This section
does not prevent the holder from obtaining reimbursement from the
administrator or others responsible for the debt cancellation agreement
or computation.
(3) For any documents relating to the creation, processing,
or resolution of a debt cancellation agreement, the licensee must:
(A) maintain documents that come into its possession;
and
(B) upon request by the agency, cooperate in requesting
and obtaining access to documents not in its possession.
(4) Paragraph (3) of this subsection also applies to
a retail seller who negotiates a debt cancellation agreement and subsequently
assigns the retail installment sales contract.
(k) Prohibited practices. A debt cancellation agreement
cannot be offered if:
(1) the retail installment sales contract is already
protected by gap insurance;
(2) the purchase of the debt cancellation agreement
is required for the retail buyer to obtain the extension of credit.
|
| Source Note: The provisions of this §84.308 adopted to be effective March 14, 2010, 35 TexReg 1959; amended to be effective November 4, 2010, 35 TexReg 9708; amended to be effective September 8, 2011, 36 TexReg 5671; amended to be effective November 8, 2012, 37 TexReg 8780; amended to be effective September 7, 2017, 42 TexReg 4462 |
