(a) For a precomputed loan using the earnings method
specified under Texas Finance Code, §342.201(a), an authorized
lender may consider:
(1) any period before the first installment date that
includes a part of a month longer than 15 days as a full month for
interest calculation purposes; and
(2) any period before the first installment date that
includes a part of a month that is 15 days or less as additional odd
days for interest calculation purposes. The amount of interest for
the additional odd days of 15 days or less must be calculated under
the true daily earnings method. This amount may be added to the first
installment or, alternatively, it may be allocated among all of the
installments.
(b) An authorized lender may use one of the methods
listed in paragraphs (1) and (2) of this subsection in a regular transaction,
when counting additional odd days in a first installment period, so
long as the method utilized is consistently applied to all applicable
loan transactions initiated by the authorized lender.
(1) Texas Credit Title method. Under this method, the
odd days are determined by counting the number of days beyond one
month from the date of the loan to the scheduled installment due date;
or
(2) Regulation Z method. Under this method, the odd
days should be determined in accordance with Regulation Z - Truth
in Lending, 12 C.F.R. Part 1026, Appendix J. The odd days are determined
by first ascertaining the one-month anniversary date preceding the
first scheduled installment due date. After determining the one-month
anniversary date preceding the first scheduled installment due date,
the odd days are determined by counting the number of days between
the date of the loan and the one-month anniversary date.
(c) An authorized lender may not charge more than the
maximum effective rate authorized by Texas Finance Code, §342.201(a),
(d), or (e) for calculating the interest charge for the additional
odd days. An authorized lender may not charge more than the authorized
lender contracted for in the loan.
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Source Note: The provisions of this §83.502 adopted to be effective November 9, 2006, 31 TexReg 8989; amended to be effective November 4, 2010, 35 TexReg 9698; amended to be effective July 10, 2014, 39 TexReg 5142 |