| (C) permits the customer to cancel the purchase of
the contract without penalty within 30 days after the bank has mailed
the long form disclosures to the customer.
(4) Special rule for electronic election. The affirmative
election and acknowledgment may be made electronically in a manner
consistent with the requirements of the Uniform Electronic Transactions
Act, Texas Business and Commerce Code Chapter 322, and the Electronic
Signatures in Global and National Commerce Act, 15 U.S.C. 7001 et
seq.
(h) Safety and soundness. A state bank must manage
the risks associated with debt cancellation contracts and debt suspension
agreements in accordance with safe and sound banking principles. Accordingly,
a state bank must establish and maintain effective risk management
and control processes over its debt cancellation contracts and debt
suspension agreements. These processes include appropriate recognition
and financial reporting of income, expenses, assets and liabilities,
and appropriate treatment of all expected and unexpected losses associated
with the products. A bank should also assess the adequacy of its internal
control and risk mitigation activities in view of the nature and scope
of its debt cancellation contract and debt suspension agreement programs.
(i) Notwithstanding the foregoing, until further notice,
compliance with the following provisions of this section will not
be required when a state bank, in connection with closed-end consumer
credit extended by the bank (other than a residential mortgage loan),
offers a debt cancellation contract or debt suspension agreement through
an unaffiliated, non-exclusive agent:
(1) the requirement set forth in subsection (e) of
this section to offer a periodic payment option;
(2) the requirement set forth in subsection (d)(1)
of this section that a bank offering a customer a debt cancellation
contract or debt suspension agreement without a refund provision also
must offer the customer an option to purchase a comparable debt cancellation
contract or debt suspension agreement that provides for a refund;
(3) the long-form disclosure requirement set forth
in subsection (f)(2) of this section;
(4) the second short form disclosure set forth in subsection
(f)(1)(B) of this section, informing the customer that he or she has
the option to pay the fee in a single lump sum or in periodic payments;
(5) the third short form disclosure set forth in subsection
(f)(1)(C) of this section, informing the customer that he or she has
the option to purchase a debt cancellation contract or debt suspension
agreement with a refund provision;
(6) the fifth short form disclosure set forth in subsection
(f)(1)(E) of this section, indicating that the customer will receive
additional information before being required to pay for the debt cancellation
contract or debt suspension agreement; and
(7) the requirement set forth in subsection (g)(1)
of this section to obtain a customer's written acknowledgment of receipt
of disclosures.
|
| Source Note: The provisions of this §12.33 adopted to be effective May 1, 2003, 28 TexReg 3494; amended to be effective September 6, 2007, 32 TexReg 5655; amended to be effective September 9, 2010, 35 TexReg 8101; amended to be effective January 4, 2024, 48 TexReg 8329 |
