| (a) Definition. A "deferment charge" means a charge
to defer the payment date of a scheduled payment or partial payment
on a contract. A deferment charge prescribed by this section may occur
in a retail installment transaction that employs the precomputed add-on
method for regular payment contracts using the sum of the periodic
balances or the scheduled installment earnings method. This section
applies only to an amendment relating to the deferment of all or a
part of one or more installments, and does not apply to amendments
relating to renewing, restating, or rescheduling the unpaid balance
under a retail installment sales contract. This section does not apply
to an amendment described by Texas Finance Code, §348.114(c),
to defer all or part of one or more payments for a retail installment
transaction that employs the true daily earnings method. The parties
to a retail installment sales contract may agree to modify the terms
of the transaction as long as the amendment conforms to the requirements
of Texas Finance Code, Chapter 348, Subchapter B.
(b) Written deferment agreement.
(1) General requirements. A retail buyer and a holder
may mutually agree to defer all or a part of one or more scheduled
installments. A deferment agreement must be in writing and must be
noted in the account record at the time the deferment is made. The
written deferment agreement must include all of the following:
(A) the name of the holder;
(B) the name of the retail buyer;
(C) the account number of the retail buyer;
(D) the date of the deferment;
(E) the installment or installments being deferred;
(F) the deferment period;
(G) the total amount of any deferment charge and any
authorized additional deferment cost;
(H) the date and amount of the next installment due;
and
(I) any other conditions of deferment.
(2) Signature and delivery. A deferment agreement is
an amendment to the retail installment sales contract that must be
confirmed in a writing signed by the retail buyer and delivered to
the retail buyer, as provided by Texas Finance Code, §348.116.
The retail buyer's written agreement to the bilateral or mutual deferment
may be confirmed by an email signature, an electronic signature, a
facsimile signature, a written notation made by the retail buyer on
a signed check, or some other writing signed by the retail buyer.
(3) Disaster exception. A holder must deliver the deferment
agreement to the retail buyer, but is not required to obtain the retail
buyer's signature, if the following conditions are met:
(A) The retail buyer resides in an area designated
as a state of disaster under Texas Government Code, §418.014;
and
(B) The deferment occurs before the state of disaster
has been terminated:
(i) by executive order; or
(ii) by expiration as described in Texas Government
Code, §418.014(c).
(c) Limitation of number of installments being deferred
per amendment. A holder may only defer the equivalent of three monthly
installments per amendment. This limitation applies to the number
of whole or partial installments that can be deferred, not the length
of time an installment can be deferred.
(d) Computation of deferment charge. A holder of a
retail installment sales contract under Texas Finance Code, Chapter
348 may calculate the deferment charge by any method of calculation
as long as the deferment charge does not exceed the maximum amount
permitted by Texas Finance Code, §348.114 and this section.
(1) Regular payment contract using sum of the periodic
balances method.
(A) Base deferment charge. For a regular payment contract
employing the add-on method and the refunding method of the sum of
the periodic balances, a holder may assess, charge, and collect a
base deferment charge computed by:
(i) Multiplying the amount of the installment or installments
being deferred by either:
(I) the maximum effective rate authorized for a regular
payment contract for the monthly term; or
(II) a lower rate agreed to by the parties;
(ii) dividing the results of clause (i) of this subparagraph
by 12; and
(iii) multiplying the results of clause (ii) of this
subparagraph by the number of months the installment or installments
are being deferred.
(B) Additional deferment costs. In addition to the
base deferment charge authorized by this section, the holder of a
retail installment sales contract may collect from the retail buyer
the amount of the additional cost to the holder for:
(i) premiums for continuing in force any insurance
coverages provided by the retail installment contract; and
(ii) any additional necessary official fees.
(C) Minimum deferment charge. The minimum deferment
charge authorized under this paragraph is $1.00.
(D) Application of payments. For a regular payment
contract employing the add-on method and the refunding method of the
sum of the periodic balances, if a payment is submitted from which
a deferment charge is taken, any excess of the amount paid over the
amount necessary to bring the account current must be applied to the
remaining balance of the retail installment sales contract.
(E) Time price differential not included. For a regular
payment contract employing the add-on method and the refunding method
of the sum of the periodic balances, the deferment charge does not
include time price differential agreed upon in the retail installment
sales contract.
(2) Scheduled installment earnings method.
(A) Base deferment charge. For a regular or an irregular
payment contract employing the scheduled installment earnings method,
a holder may assess, charge, and collect a base deferment charge computed
by:
(i) Multiplying the amount of the installment or installments
being deferred by either of the following rates computed on a daily
basis using a 365-day calendar year:
(I) the maximum annualized daily rate authorized for
the contract, as described by Figure: 7 TAC §84.201(d)(2)(B)(iii);
or
(II) a lower rate agreed to by the parties, which may
be the contract rate; and
(ii) multiplying the results of clause (i) of this
subparagraph by the actual number of days the installment or installments
are being deferred.
(B) Additional deferment costs. In addition to the
base deferment charge authorized by this section, the holder of a
retail installment sales contract may collect from the retail buyer
the amount of the additional cost to the holder for:
(i) premiums for continuing in force any insurance
coverages provided by the retail installment contract; and
(ii) any additional necessary official fees.
(C) Minimum deferment charge. The minimum deferment
charge authorized under this paragraph is $1.00.
(D) Application of payments. For a contract using the
scheduled installment earnings method, if a payment is submitted from
which a deferment charge is taken, any excess of the amount paid over
the amount necessary to bring the account current must be applied
to the remaining balance of the retail installment sales contract.
However, any difference that exceeds $3.00 must be returned to the
retail buyer if the retail buyer requests the refund within 30 days
of the payment.
(E) Time price differential not included. For a contract
using the scheduled installment earnings method, the deferment charge
does not include time price differential agreed upon in the retail
installment sales contract.
(e) Noncompliance. Deferment fees not assessed or collected
in accordance with the requirements of this section are subject to
refund to the retail buyer. In the event deferment fees are refunded
to the retail buyer, no rescheduling of the retail installment sales
contract is permitted.
(f) False, misleading, or deceptive representation.
A holder may not make a false, misleading, or deceptive representation
relating to a deferment charge. If a holder makes a false, misleading,
or deceptive representation regarding a deferment charge, then the
deferment charge is subject to refunding under subsection (e).
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| Source Note: The provisions of this §84.203 adopted to be effective November 6, 2008, 33 TexReg 8913; amended to be effective November 8, 2012, 37 TexReg 8780; amended to be effective May 5, 2016, 41 TexReg 3120; amended to be effective September 7, 2017, 42 TexReg 4462 |
