(a) To calculate a period of time less than a full
month on a precomputed loan:
(1) any period before the first installment due date
that includes a part of a month longer than 15 days may be treated
as a full month for interest calculation purposes; and
(2) any period before the first installment due date
that includes a part of the month that is 15 days or less may not
be treated as a full month for interest calculation purposes. The
amount of interest for the period 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 below, 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 contract for or charge
more than the maximum rate authorized by Texas Finance Code, Chapter
303, Subchapter A in calculating the interest charge for the additional
odd days in the first installment period. 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 §83.702 adopted to be effective November 9, 2006, 31 TexReg 8994; amended to be effective November 4, 2010, 35 TexReg 9698; amended to be effective July 10, 2014, 39 TexReg 5142 |