The following model clauses provide the plain language equivalent
of provisions found in contracts subject to Texas Finance Code, Chapter
348.
(1) Identification of parties. This information identifies
the parties to the contract.
(A) The model identification clause lists the name
and address of the creditor, the date of the contract, and the name
and address of the buyer. At the creditor's option, a creditor may
include an account number or contract number. The model clause reads:
Attached Graphic
(B) The Buyer is referred to as "I" or "me." The Seller
is referred to as "you" or "your."
(2) Assignment of contract. The model clause regarding
assignment of contract reads: "This contract may be transferred by
the Seller."
(3) Buyer's affirmation and promise to pay. The model
clause regarding buyer's affirmation and promise to pay reads: "The
credit price is shown below as the "Total Sales Price." The "Cash
Price" is also shown below. By signing this contract, I choose to
purchase the motor vehicle on credit according to the terms of this
contract. I agree to pay you the Amount Financed, Finance Charge,
and any other charges in this contract. I agree to make payments according
to the Payment Schedule in this contract. If more than one person
signs as a buyer, I agree to keep all the promises in this agreement
even if the others do not."
(4) Inspection acknowledgment. The model clause regarding
inspection acknowledgment reads: "I have thoroughly inspected, accepted,
and approved the motor vehicle in all respects."
(5) Identification of motor vehicle. The motor vehicle
identification information provision should contain the following
information about the motor vehicle: the seller's stock number; the
manufacturer's year model; the manufacturer's make; the manufacturer's
model type or number; the vehicle identification number; the license
plate number (if applicable); a new/used designation; and the primary
purpose designation. The primary purpose designation may be used to
determine whether the vehicle was purchased primarily for commercial
purposes or primarily for personal, family or household purposes.
Unless the retail seller or holder has actual knowledge that the representation
is not true, the retail seller or holder may rely upon the representation
made in the primary purpose designation, as permitted by Texas Finance
Code, §348.0015(b). The seller's stock number and the license
number are both optional; the omission will not make a contract non-standard.
The motor vehicle identification information provision may include
additional information about the vehicle including, odometer reading,
color, the designation as a heavy commercial vehicle, and key code.
If the creditor includes this additional information about the motor
vehicle, the change will not make the provision a non-standard provision.
The model clause regarding identification of the motor vehicle reads:
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(6) Trade-in vehicle description. The model clause
regarding trade-in vehicle description reads:
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(7) Truth in Lending Act disclosure. The model clause
regarding Truth in Lending Act disclosure reads:
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(8) Itemization of amount financed. The creditor drafting
the contract is given considerable flexibility regarding the itemization
of amount financed disclosure so long as the itemization of amount
financed disclosure complies with the Truth in Lending Act. As an
example, a creditor may disclose the manufacturer's rebate either
as: a component of the downpayment; or a deduction from the cash price
of the motor vehicle. The model contract provision for the itemization
of the amount financed discloses the manufacturer's rebate as a component
of the downpayment. If the creditor elected to disclose the manufacturer's
rebate as a deduction from the cash price of the motor vehicle, the
cash price component of the itemization of amount financed would be
amended to reflect the dollar amount of the manufacturer's rebate
being deducted from the cash price of the motor vehicle.
(A) The model clause regarding itemization of amount
financed-sales tax advance reads:
Attached Graphic
(B) The model clause regarding itemization of amount
financed-sales tax deferred reads:
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(C) Plate transfer fee. Under Texas Transportation
Code, §502.453, the creditor may charge under the itemization
of amount financed a $5.00 fee for transferring license plates and
receiving new registration insignia. The creditor may document the
plate transfer fee in the Other Charges section with the following
language: "to State for Plate Transfer Fee."
(D) Compliance fee prohibited. Under Texas Transportation
Code, §503.0631(f), the creditor is prohibited from assessing
an itemized charge under the itemization of amount financed for costs
associated with complying with the temporary tag database.
(E) Inspection fee. Under Texas Transportation Code,
§548.509, at the time of registration, the Texas Department of
Motor Vehicles or a county assessor-collector will collect a portion
of the inspection fee to be remitted to the state. The creditor may
disclose the inspection fee by either of the following methods:
(i) including the entire inspection fee in the "Government
vehicle inspection fees" section, with the amounts paid to the state
and the inspector documented immediately below this section with the
following language: "to state $________" and "to inspection station
$________"; or
(ii) including the portion remitted to the state in
the "Government license and registration fees" section, and the portion
remitted to the inspection station in the "Government vehicle inspection
fees" section.
(F) Benefit under trade-in credit agreement. A benefit
provided under a trade-in credit agreement must be included in the
downpayment, and must be listed in the line labeled "other (describe),"
with a description such as "trade-in credit agreement benefit."
(G) Benefit under depreciation benefit optional member
program. A benefit provided under a depreciation benefit optional
member program must be included in the downpayment, and must be listed
in the line labeled "other (describe)," with a description such as
"depreciation benefit."
(9) Documentary fee.
(A) The following notice satisfies the requirements
of Texas Finance Code, §348.006 if printed in type that is boldfaced,
capitalized, underlined, or otherwise set out from surrounding written
material so as to be conspicuous and within reasonable proximity to
the place at which the fee is disclosed. The model clause is contained
in the Itemization of Amount Financed. The documentary fee clause
reads: "A documentary fee is not an official fee. A documentary fee
is not required by law, but may be charged to buyers for handling
documents relating to the sale. A documentary fee may not exceed a
reasonable amount agreed to by the parties. This notice is required
by law."
(B) The following notices are sufficient Spanish translations
of the documentary fee disclosure required by Texas Finance Code,
§348.006. The Spanish translation may read:
(i) "Un honorario de documentación no es un
honorario ofícial. Un honorario de documentación no
es requerido por la ley, pero puede ser cargada al comprador como
gastos de manejo de documentos relacionados con una venta. Un honorario
de documentación no puede exceder una cantidad razonable acordada
por las partes. Esta notifícación es requerida por la
ley."; or
(ii) "Un cargo documental no es un cargo ofícial.
La ley no exige que se imponga un cargo documental. Pero éste
podría cobrarse a los compradores por el manejo de la documentación
en relación con la venta. Un cargo documental no puede exceder
una cantidad razonable acordada por las partes. Esta notifícación
se exige por ley."
(10) Deferred downpayments. The creditor has considerable
flexibility in disclosing the deferred downpayments. The model provision
discloses the deferred downpayments by placing the information, the
due date and dollar amount of the deferred downpayments, in several
boxes. If a creditor uses this model provision, the creditor would
enter the due date and dollar amount of each deferred downpayment
in the appropriate boxes. As an alternative to this model provision,
a creditor may disclose the deferred downpayments in the Payment Schedule
of the Amount Financed in the federal disclosure box. If a creditor
elects this option, the due date and the dollar amount of the deferred
downpayment must be shown. If the total amount of the deferred downpayment
is not satisfied by the date of the second regularly scheduled installment,
the deferred downpayment must be included in the Payment Schedule.
As another alternative, the creditor may disclose the deferred downpayment
amount in the Payment Schedule. If the deferred downpayment amount
is disclosed in the Payment Schedule, then the dollar amount of the
deferred Cont'd... |
