A licensee must maintain records for each transaction under
Texas Finance Code, Chapter 393, and make those records available
to the OCCC for examination. The records required by this section
may be maintained by using a paper or manual recordkeeping system,
electronic recordkeeping system, optically imaged recordkeeping system,
or a combination of these types of systems, unless otherwise specified.
All records must be prepared and maintained in accordance with generally
accepted accounting principles. 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) Transaction register. A licensee must maintain
a transaction register, or be able to produce this information within
a reasonable amount of time. Each record in the register must contain
the transaction number, the date of the transaction, the last name
of the consumer, the total fees payable to the licensee, the total
of payments, and the type of transaction (single payment payday loan,
single payment auto title loan, multiple payment payday loan, or multiple
payment auto title loan). Each record in the transaction register
must be retained for four years from the date of the transaction,
or two years from the date of the final entry made on the consumer's
account, whichever is later.
(2) Consumer's transaction file. A licensee must maintain
a paper or electronic transaction file for each individual transaction
under Texas Finance Code, Chapter 393, or be able to produce this
information within a reasonable amount of time. The transaction file
must contain documents that show the licensee's compliance with applicable
state and federal law, including Texas Finance Code, Chapter 393.
If a substantially equivalent electronic record for any of the following
documents exists, a paper copy of the record does not have to be included
in the transaction file if the electronic record can be accessed upon
request.
(A) The transaction file must include the following
documentation for each transaction under Texas Finance Code, Chapter
393:
(i) any agreement between the consumer and the licensee,
including the contract described by Texas Finance Code, §393.201,
with all provisions required by that section, as well as the notice
of cancellation described by Texas Finance Code, §393.202;
(ii) any agreement between the consumer and the lender,
including the promissory note;
(iii) documentation referencing which agreements between
the licensee and a third-party lender apply to the transaction, including
any guarantee or letter of credit issued by the licensee;
(iv) all legally required disclosures provided in connection
with the transaction, including:
(I) the consumer disclosure required by Texas Finance
Code, §393.223, and §83.6007 of this title (relating to
Consumer Disclosures);
(II) the credit services organization disclosure required
by Texas Finance Code, §393.105;
(III) any disclosures provided under the Truth in Lending
Act, 15 U.S.C. §§1601-1667f, and Regulation Z, 12 C.F.R.
Part 1026;
(IV) any privacy notice provided under the Gramm-Leach-Bliley
Act, 15 U.S.C. §§6801-6809, and Regulation P, 12 C.F.R.
Part 1016;
(V) any notice to cosigner provided under the Federal
Trade Commission's Credit Practices Rule, 16 C.F.R. §444.3;
(VI) any mandatory disclosure to a covered borrower
under the Department of Defense's Military Lending Act Rule, 32 C.F.R. §232.6;
(v) the consumer's credit application and any other
written or recorded information used in evaluating the application;
(vi) any document signed by a co-borrower, co-signor,
or other guarantor in connection with the transaction;
(vii) any documentation of whether the consumer is
a covered borrower under the Department of Defense's Military Lending
Act Rule, 32 C.F.R. Part 232, including any records obtained under
32 C.F.R. §232.5;
(viii) complete documentation of any ancillary products
(including insurance or an automobile club) offered to the consumer
or purchased by the consumer in connection with the transaction;
(ix) complete documentation of all payments made by
or to the licensee during the transaction and all payments made by
or to the third-party lender at the inception of the transaction (including
the amount of each payment, the source of each payment, and the recipient
of each payment);
(x) any other documentation created or obtained by
the licensee in connection with the transaction.
(B) The transaction file must include the following
documentation if the licensee services or collects a loan in connection
with a transaction under Texas Finance Code, Chapter 393, or if the
licensee otherwise obtains this documentation in the course of business:
(i) Consumer's account record. The licensee must maintain
an account record containing at least the following information:
(I) loan number or another unique number identifying
the transaction;
(II) loan schedule and terms itemized to show the number
of installments and the due date and amount of each installment, including
installments payable to the licensee;
(III) name, address, and telephone number of consumer;
(IV) names and addresses of co-borrowers, if any;
(V) principal balance;
(VI) total interest charges;
(VII) all fees paid to the licensee;
(VIII) amount of official fees for recording, amending,
or continuing a notice of security interest that are collected at
the time the loan is made;
(IX) individual payment entries for all payments described
by subparagraph (A)(ix) of this paragraph, and any other payments
made by the consumer during the transaction, itemized to show the
date payment was received (dual postings are acceptable if date of
posting is other than date of receipt), actual amounts received for
application to due amounts, and actual amounts paid for default, deferment,
or other authorized charges;
(X) any refunds of unearned charges that are required
in the event a loan is prepaid in full, including records of final
entries, and entries to substantiate that refunds due were paid to
consumers, with refund amounts itemized to show interest charges or
other amounts refunded;
(XI) collection contact history, including a written
or electronic record of each contact made by a licensee with the consumer
or any other person and each contact made by the consumer with the
licensee, in connection with amounts due, with each record including
the date, method of contact, contacted party, person initiating the
contact, and a summary of the contact;
(XII) corrective entries to the consumer's account
record, if justified, including the reason and supporting documentation
for each corrective entry.
(ii) Payday loan records. For a payday loan, the transaction
file must include documentation relating to the personal check or
authorization to debit a deposit account accepted in connection with
the loan.
(iii) Auto title loan records. For an auto title loan,
the transaction file must include all documentation relating to the
attachment and perfection of a security interest in the motor vehicle,
including any of the following documentation obtained by the licensee:
(I) the security agreement;
(II) if obtained by the licensee or the third-party
lender, the original certificate of title to the vehicle, a certified
copy of the negotiable certificate of title, or a copy of the front
and back of either the original or certified copy of the title;
(III) if executed by the licensee or the third-party
lender, an application for certificate of title (Texas Department
of Motor Vehicles Form 130-U for Texas vehicles);
(IV) if obtained by the licensee or the third-party
lender, a title application receipt (Texas Department of Motor Vehicles
Form VTR-500-RTS for Texas vehicles), or a similar document evidencing
the filing of the application for certificate of title and payment
of required fees and taxes.
(iv) Repossession records. The transaction file must
include complete documentation of any repossession initiated by the
licensee, including:
(I) any condition report indicating the condition of
the collateral, if prepared by the licensee, the licensee's agent,
or any independent contractor hired to perform the repossession;
(II) any invoices or receipts for any reasonable and
authorized out-of-pocket expenses that are assessed to the consumer
and incurred in connection with the repossession or sequestration
of the vehicle including cost of storing, reconditioning, and reselling
the vehicle;
(III) for a vehicle disposed of in a public or private
sale as permitted by the Texas Business and Commerce Code, §9.610,
the following documents:
(-a-) one of the following notices:
(-1-) a copy of the notification of disposition as
sent to the consumer and other obligors as required by Texas Business
and Commerce Code, §9.614; or
(-2-) a copy of the waiver of the notice of intended
disposition prescribed by subitem (-1-) of this item, as applicable,
signed by the consumer and other obligors after default;
(-b-) copies of evidence of the type or manner of private
sale that was conducted. These records must show that the manner of
the disposition was commercially reasonable, such as circumstances
surrounding a dealer-only auction, internet sale, or other type of
private disposition;
(-c-) copies of evidence of the type or manner of public
sale that was conducted. These records must show that the manner of
the disposition was commercially reasonable, such as documentation
of the date, place, manner of sale of the vehicle, and amounts received
for disposition of the vehicle;
(-d-) the bill of sale showing the name and address
of the purchaser of the repossessed collateral and the purchase price
of the vehicle;
(-e-) for a disposition or sale of collateral creating
a surplus balance, a copy of the check representing the payment of
the surplus balance paid to the consumer or other person entitled
to the surplus;
(-f-) for a disposition or sale of collateral resulting
in a surplus or deficiency, a copy of the explanation of calculation
of surplus or deficiency, if required by Texas Business and Commerce
Code, §9.616;
(-g-) a copy of the waiver of the deficiency letter
if the licensee elects to waive the deficiency balance in lieu of
sending the explanation of calculation of surplus or deficiency form,
if applicable;
(IV) for a vehicle disposed of using the strict foreclosure
method permitted by the Texas Business and Commerce Code, §9.620
and §9.621, the following documents:
(-a-) one of the two following notices:
(-1-) a copy of the proposal to accept collateral in
full satisfaction of the obligation; or
(-2-) for a transaction where 60% or more of the principal
balance has been paid, a copy of the debtor or obligor's waiver of
compulsory disposition of collateral signed by the consumer and other
obligors after default;
(-b-) for a transaction where the consumer rejects
the offer under item (-a-)(-1-) or (-2-) of this subclause, a copy
of the consumer's signed objection to retention of the collateral;
(-c-) copies of the records reflecting the total satisfaction
of the obligation.
(v) Litigation records. The transaction file must include
complete documentation of any litigation filed by a licensee against
a consumer, or by a consumer against the licensee, including all pleadings,
the terms of settlement (if a settlement was entered), documentation
of any mediation or arbitration, the final judgment (if the court
entered a final judgment), and records of all payments received after
judgment, properly identified and applied. If the licensee maintains
the complete documentation of litigation at a centralized location
other than the licensed location or branch office, then the licensee's
transaction file may include a written summary of the status of the
litigation, rather than complete documentation of the litigation.
However, upon the OCCC's request, the licensee must have the ability
to promptly obtain or access copies of the complete documentation
so that the OCCC can examine it.
(vi) Criminal charge records. The transaction file
must include complete documentation of any threat of criminal prosecution
against a consumer, and must include complete documentation of any
criminal referral, charge, or complaint filed by a licensee against
a consumer, showing the licensee's compliance with Texas Finance Code, §393.201(c)(3).
This must include any written statement threatening criminal prosecution,
a written summary of any oral statement threatening criminal prosecution,
any written evidence of criminal conduct, any information submitted
to law enforcement relating to alleged criminal conduct by a consumer,
a written summary of any oral statement submitted to law enforcement,
any police report, and any court records obtained by the licensee.
Cont'd... |
