| (a) Non-standard contracts. A non-standard contract
is a contract that uses clauses other than the model contract provisions.
Before a licensee uses a non-standard contract, the contract must
be submitted to the OCCC for review under Texas Finance Code, §341.502(c).
A non-standard contract:
(1) must be written in plain language designed to be
easily understood by the average consumer, as required by Texas Finance
Code, §341.502(a);
(2) must be printed in an easily readable font and
type size, as required by Texas Finance Code, §341.502(a) and §90.103
of this title (relating to Format);
(3) must be consistent with Texas law and federal law;
(4) must include a notice with the OCCC's contact information,
as required by Texas Finance Code, §14.104 and §90.105 of
this title (relating to OCCC notice);
(5) must comply with the requirements described in
subsection (c) of this section, including the maximum Flesch-Kincaid
Grade Level score; and
(6) must be accompanied by a complete submission form
containing the information required by subsection (d) of this section.
(b) Disapproval. If a non-standard contract filing
fails to comply with one or more of the requirements listed in subsection
(a) of this section, then the OCCC may disapprove the filing under
Texas Finance Code, §341.502(c). A licensee must cease using
a disapproved contract immediately after an order of disapproval takes
effect, as provided by Texas Finance Code, §341.502(d).
(c) Contract filing requirements. Copies of the loan
contract must be submitted in accordance with the OCCC's instructions
and the following requirements:
(1) Microsoft Word format. One copy must be submitted
in a Microsoft Word format with the document having either a .doc
or .docx extension. The Flesch-Kincaid Grade Level score of the contract
must be based on the Microsoft Word readability statistics function
for the Microsoft Word version of the contract.
(2) PDF format. One copy must be submitted in a text-searchable
PDF format so that the contract may be visually reviewed in its entirety.
The page size must be 8.5 inches by 11 inches or 8.5 inches by 14
inches. The PDF may not be locked or restricted in a way that prohibits
comparison of different versions of the contract.
(3) No other formats permitted. The OCCC will not accept
paper filings or any other unlisted formats for non-standard contract
filings.
(4) Maximum Flesch-Kincaid score. The maximum Flesch-Kincaid
Grade Level scores for Chapter 342 contract filings are:
(A) grade 8 for Subchapter F (signature loans);
(B) grade 9 for Subchapter E (secured installment loans);
(C) grade 10 for Subchapter G, computed by scoring
the note and security document in one continuous Microsoft Word document
(home equity loans, second lien purchase money loans, and second lien
home improvement contracts).
(d) Submission form. A non-standard contract must be
accompanied by a written submission form prescribed by the OCCC. The
submission form must be completed in accordance with the OCCC's instructions
and the following requirements:
(1) Transaction subchapter. The submission form must
identify the subchapter of Texas Finance Code, Chapter 342 under which
the contract will be used (Subchapter E, Subchapter F, or Subchapter
G).
(2) Contact person. The submission form must identify
an individual as the contact person for the contract filing, and must
include the individual's name, address, phone number, and email address.
If a contract is submitted by a person other than a licensee, then
the contract must be accompanied by a dated letter that contains a
description of the anticipated users of the contract, and designates
the legal counsel or other designated contact person for that filing.
(3) Certification of readability. The submission form
must include a certification signed by an officer of the licensee
or the entity submitting the form on behalf of the licensee. The certification
must state that the contract is written in plain language and that
the contract can be easily understood by the average consumer. The
certification must also state that the contract is printed in an easily
readable font and type size, including a list of the typefaces used
in the contract, the font sizes used in the contract, and the Flesch-Kincaid
Grade Level score of the contract. The OCCC will prescribe the form
of the certification.
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| Source Note: The provisions of this §90.104 adopted to be effective August 31, 2006, 31 TexReg 6671; amended to be effective September 9, 2010, 35 TexReg 8104; amended to be effective November 5, 2015, 40 TexReg 7635; amended to be effective July 9, 2020, 45 TexReg 4501; amended to be effective January 5, 2023, 47 TexReg 8982 |
