Each licensee must maintain records with respect to each loan
made under Texas Finance Code, Chapter 342, Subchapters E and F, and
make those records available for examination. The records required
by this section may be maintained by using either a paper or manual
recordkeeping system, electronic recordkeeping system, optically imaged
recordkeeping system, or a combination of the preceding types of systems,
unless otherwise specified by statute or regulation. If federal law
requirements for record retention are different from the provisions
contained in this section, the federal law requirements prevail only
to the extent of the conflict with the provisions of this section.
(1) Loan register. Each licensee must maintain a loan
register, containing the information required by subparagraphs (A)
- (D) of this paragraph, for each Texas Finance Code, Chapter 342,
Subchapter E and F loan made by the licensee. The loan register can
be maintained either as a paper or an electronic record. If the loan
register is maintained as an electronic record, the licensee must
be able to sort, generate, and print, as a separate record, the loan
register for each day the licensee originated or acquired Chapter
342, Subchapter E and F loans. A licensee may incorporate the loan
register as part of the record of daily transactions required by paragraph
(7) of this section if the loan register is a separate and distinct
section of the daily report. If the loan register is maintained as
a paper record, the loan register must be currently maintained. A
licensee may file, in chronological order, copies of any loan document
or form prepared at the time a loan is made reflecting the information
provided in subparagraphs (A) - (D) of this paragraph to serve as
a loan register. A loan register must contain the following information:
(A) Date of loan (month, day, and year);
(B) Last name of borrower;
(C) Total of payments (amount of loan); and
(D) Loan number. Loans may be numbered in ascending
sequence as made or may bear an account number permanently assigned
to one borrower with a numerical suffix reflecting the number of loans
to the borrower. A permanent account number may be used in an automated
system for each series of loans to a borrower; however, a consecutive
suffix number must be assigned to each loan in the series to distinguish
it from the others.
(2) Alphabetical index of current borrowers. A current
alphabetical index or report of outstanding loans showing the full
name of each borrower, co-borrower, or other obligor on the loan and
the loan number assigned each loan must be maintained. A licensee
may maintain the alphabetical index of current borrowers either as
a paper or an electronic record. If the alphabetical index of current
borrowers is maintained as an electronic record, the licensee must
be able to sort, generate, and print, as a separate record, the alphabetical
index of current borrowers in strict alphabetical order. A licensee
may maintain the alphabetical index of current borrowers by creating
a rolodex of current borrowers. In lieu of creating a rolodex of current
borrowers, a licensee may maintain the alphabetical index of current
borrowers by filing the loan files of the borrowers or individual
borrower's account records in strict alphabetical order. The manual
recordkeeping system for maintaining the alphabetical index of current
borrowers must be currently maintained and include a card, file, or
record for each co-borrower or other obligor.
(3) Borrower's account record (including payment and
collection contact history). A separate paper or electronic record
must be maintained for the account of each borrower. The paper or
electronic borrower's account record must be readily available by
reference to either a name or loan number. The borrower's account
record must contain at least the following information on each loan:
(A) Loan number as recorded on loan register;
(B) Loan schedule and terms itemized to show:
(i) date of loan;
(ii) number of installments;
(iii) due date of installments;
(iv) amount of each installment; and
(v) maturity date;
(C) Name, address, and telephone number of borrower;
(D) Names and addresses of co-borrowers or other obligors,
if any;
(E) Type or brief description of security; if none,
so indicate;
(F) Total of payments (amount of loan);
(G) Amount financed (cash advance);
(H) Total interest charges and other authorized charges
itemized to show:
(i) on Subchapter E loans, the base finance charge,
the administrative fee, and additional days charge for irregular installments;
or
(ii) on Subchapter F loans, the acquisition charge
and the installment account handling charge shown separately;
(I) Amount of premium charges for insurance, gap waiver
agreements, and authorized ancillary products itemized to show:
(i) credit life insurance;
(ii) credit accident and health (disability) insurance;
(iii) personal property insurance;
(iv) collateral protection physical damage insurance
(single-interest or dual-interest coverage);
(v) nonfiling insurance;
(vi) credit involuntary unemployment insurance;
(vii) gap waiver agreements; and
(viii) automobile club services memberships authorized
by Texas Finance Code, §342.457;
(J) Amount of official fees for recording, amending,
or continuing a notice of security interest that is collected at the
time the loan is made and which is to be disbursed within the period
of 30 days as prescribed in paragraph (6)(D)(i) of this section;
(K) Amount of personal property insurance when the
coverage amount of insurance is not equal to the amount of the total
of payments (amount of loan);
(L) Individual payment entries itemized to show:
(i) date payment received; dual postings are acceptable
if date of posting is other than date of receipt;
(ii) amounts received for application to principal
and interest; and
(iii) amounts received for default, deferment, or other
authorized charges;
(M) Refunds of unearned interest, insurance charges,
gap waiver agreements, and authorized ancillary products, if any.
A licensee is responsible for substantiating final entries and that
refunds were paid to the borrower. Refund amounts must be itemized
to show:
(i) interest refunded;
(ii) credit life, credit accident and health, credit
involuntary unemployment, collateral protection interest (single-interest
or dual-interest coverage), and personal property insurance charges
refunded, showing separately the refund applicable to each separate
insurance policy or coverage;
(iii) dual motor vehicle physical damage insurance
when borrower requests cancellation of the policy;
(iv) gap waiver agreements; and
(v) automobile club services memberships;
(N) Collection contact history. A licensee must make
a written or an electronic record of each and every contact made by
a licensee with the borrower or any other person. The written or electronic
record must also include every contact made by the borrower with the
licensee. The written record must include the date, method of contact,
contacted party, person initiating the contact, and a summary of the
contact; and
(O) Corrective entries. A licensee may make corrective
entries to the borrower's account record if the corrective entry is
justified. A licensee must maintain the reason and supporting documentation
for each corrective entry made to the borrower's account record. The
reason for the corrective entry may be recorded in the collection
contact history of the borrower's account record. The supporting documentation
justifying the corrective entry may be maintained in the individual
borrower's account file or properly stored and indexed in a licensee's
optically imaged recordkeeping system. If a licensee manually maintains
the borrower's account record, the licensee must properly correct
an improper entry by drawing a single line through the improper entry
and entering the correct information above or below the improper entry.
No erasures or other obliterations may be made on the payments received
or collection contact history section of the manual borrower's account
record.
(4) Transfer records. A licensee must maintain transfer
records, whether paper or electronic, when any Texas Finance Code,
Chapter 342 loan accounts made by or acquired by the licensee are
transferred from its licensed location. The records must show the
name of the borrower, the account number, the date of transfer, and
the location to which the accounts are transferred.
Cont'd... |
