| (a) Purpose. Under Texas Finance Code, §348.006(e),
before a retail seller charges a documentary fee greater than $150,
the seller must provide the OCCC with a written notification of the
maximum amount of the documentary fee the seller intends to charge.
The OCCC may review the amount of the documentary fee for reasonableness.
This section describes the requirements for the notification and cost
analysis.
(b) General requirements.
(1) $150 or less. A seller is not required to provide
a notification or cost analysis to the OCCC before charging a documentary
fee of $150 or less. A documentary fee of $150 or less is presumed
reasonable under Texas Finance Code, §348.006(f).
(2) Over $150. Before charging a documentary fee greater
than $150, a seller must provide a notification and a cost analysis
to the OCCC.
(c) Notification.
(1) Generally. Before charging a documentary fee greater
than $150, a seller must provide a written notification to the OCCC,
stating the amount of the maximum documentary fee that the seller
intends to charge.
(2) Notification for each location. A seller must provide
a notification for each licensed location or registered office at
which motor vehicles are sold. If a seller has more than one license
or registered office in the same physical space, then it must provide
a notification for each license or registered office under which it
sells vehicles. For example, if a seller has two registered offices
at the same location and does business under the names of both registered
offices, then it must provide a notification for each of the two registered
offices.
(3) Form. The notification must be provided on a form
prescribed by the OCCC for receiving notifications of documentary
fee amounts. A notification is not effective until the OCCC receives
a complete form.
(4) Transfer of ownership. In the event of a transfer
of ownership described by §84.604 of this title (relating to
Transfer of License; New License Application on Transfer of Ownership),
if the transferee intends to charge a documentary fee greater than
$150, then the transferee must provide a documentary fee notification
for each licensed location or registered office that the transferee
will operate. The transferee must provide the notification no later
than the 30th calendar day following the transfer of ownership. If
the transferee has not filed a notification on or before the 30th
calendar day following the transfer of ownership, then it must cease
charging a documentary fee greater than $150. The transferee may not
charge a greater amount than the amount described in the transferor's
previous notification until the transferee has provided a complete
notification listing the amount that the transferee intends to charge.
If the transferor did not previously provide a documentary fee notification,
then the transferee may not charge a documentary fee greater than
$150 until it has provided a complete notification listing the amount
it intends to charge.
(5) Failure to provide notification. A seller violates
this subsection if the seller:
(A) charges a documentary fee greater than $150 without
first providing a complete notification to the OCCC; or
(B) provides a notification to the OCCC and charges
a documentary fee greater than the amount described in the notification.
(6) Restitution and order to lower documentary fee.
If a seller violates this subsection, then the OCCC may take an action,
including ordering the seller to do one or more of the following:
(A) provide restitution to affected buyers;
(B) lower its documentary fee prospectively;
(C) provide a complete, accurate notification to the
OCCC;
(D) cease charging a documentary fee greater than $150
for a specified period of time.
(7) Restitution amount. If a seller does not provide
a complete notification to the OCCC, then the amount of restitution
for violating this subsection will not exceed the amount of the documentary
fee the seller charged or received minus $150 (for each buyer). If
the seller provides a notification but charges a documentary fee greater
than the amount described in the notification, then the restitution
for violating this subsection will not exceed the amount of the documentary
fee the seller charged or received minus the amount of its filing
(for each buyer).
(d) Cost analysis.
(1) Generally. Before charging a documentary fee greater
than $150, a seller must submit a cost analysis showing that the documentary
fee is reasonable. The seller has the burden of showing that the documentary
fee is reasonable, and that all included costs are reasonable, specified,
and supported by adequate documentation. This subsection does not
require the OCCC's approval of a documentary fee before a seller charges
it. However, the OCCC may order restitution under subsection (d)(6)
if a seller charges a documentary fee over $150 that is not supported
by a complete cost analysis, or if the documentary fee includes costs
that are not reasonable.
(2) Reasonableness requirements. In order to be reasonable,
a documentary fee must reflect costs actually incurred by the seller
in preparing and processing documents for a motor vehicle sale. All
included costs must comply with the following reasonableness requirements.
(A) Directly related and allocable. Costs must directly
relate to the seller's preparation and processing of documents for
a motor vehicle sale. Costs must be allocable (i.e., chargeable or
assignable) to the objective of preparing and processing documents.
Costs must be incurred by the seller. A seller may not increase any
authorized charge imposed by a third party.
(B) Allowable. Costs must relate to activities required
to comply with local, state, or federal law concerning motor vehicle
sales. Costs related to ancillary or optional products may not be
included. Costs must be determined in accordance with generally accepted
accounting principles.
(C) Prudent business person. Costs must comply with
the prudent-business-person standard. This means that costs are limited
to what a prudent business person would pay in a competitive marketplace.
For example, hiring a limousine to deliver documents does not comply
with the prudent-business-person standard. In determining whether
a given cost is prudent, consideration will be given to the following:
(i) whether the cost is of a type generally recognized
as ordinary, customary, and necessary for preparing and processing
documents for a motor vehicle sale;
(ii) the restraints or requirements imposed by sound
business practices, arm's-length bargaining, and applicable laws and
regulations;
(iii) market prices for comparable goods or services;
and
(iv) the necessity of the cost.
(D) Timing.
(i) Costs must be incurred either concurrently with
or after the seller's preparation of at least one of the following:
a buyer's order, bill of sale, purchase agreement, or retail installment
sales contract. Any costs incurred before the preparation of the earliest
of these documents may not be included. This clause does not apply
to the costs of purchasing or printing forms specifically listed in
subsection (d)(3)(B)(ii).
(ii) Costs must be incurred before the title of the
purchased motor vehicle is actually transferred, or when title is
legally required to have been transferred, whichever is earlier.
(iii) Costs relating to a trade-in motor vehicle must
be incurred before the title of the trade-in motor vehicle is actually
transferred, or when the title is legally required to have been transferred,
whichever is earlier.
(E) No finance charge. The documentary fee may not
include any amount that would be considered a finance charge under
the Truth in Lending Act, 15 U.S.C. §§1601-1667f. All included
costs must be incurred uniformly in cash and credit transactions.
(i) The documentary fee may not include any cost associated
with the negotiation or assignment of the retail installment sales
contract to another financial institution or a related finance company.
(ii) The documentary fee may not include any cost associated
with the evaluation of the buyer's creditworthiness. A seller may
include the cost of obtaining a credit report, if the seller incurs
this cost in a substantial number of transactions where credit is
not extended, and the cost complies with the other requirements described
in this subsection (e.g., the cost of obtaining a credit report to
ensure compliance with the USA PATRIOT Act, 31 U.S.C. §5318(l)(2)(C)).
(iii) The documentary fee may not include the cost
of preparing any disclosure or contractual provision that is used
only in credit transactions. In particular, the documentary fee may
not include the cost of preparing a Truth in Lending disclosure statement.
(F) Other prohibitions. The documentary fee may not
include costs associated with any of the following:
(i) advertising;
Cont'd... |
