(i) a notice provision regarding how notice may be
given or delivered by either party under the debt cancellation agreement;
(ii) a severability provision;
(iii) an arbitration provision;
(iv) any contract provision approved in writing by
the commissioner.
(d) Copy of debt cancellation agreement for total loss
or theft of ordinary vehicle provided to retail buyer. If a retail
buyer purchases a debt cancellation agreement for total loss or theft
of an ordinary vehicle, the retail seller must provide the retail
buyer, within a reasonable amount of time not to exceed 10 days from
the date of the retail installment sales contract, a true and correct
copy of the agreement that clearly sets forth:
(1) the name of the retail buyer, and the name, address,
and telephone number of the place where requests for debt cancellation
are processed;
(2) the amount and term of the debt cancellation agreement
for total loss or theft of an ordinary vehicle;
(3) the cost of the debt cancellation agreement for
total loss or theft of an ordinary vehicle;
(4) the terms, including the limitations, exclusions
and restrictions; and
(5) a statement that the holder will cancel certain
amounts under the debt cancellation agreement for total loss or theft
of an ordinary vehicle substantially similar to the following: "YOU
WILL CANCEL CERTAIN AMOUNTS I OWE UNDER THIS CONTRACT IN THE CASE
OF A TOTAL LOSS OR THEFT OF THE VEHICLE AS STATED IN THE DEBT CANCELLATION
AGREEMENT."
(e) Fee or rate for debt cancellation agreement for
total loss or theft of an ordinary vehicle. The amount of the fee
is based upon the amount financed. The fee for a debt cancellation
agreement can be adjusted to the nearest whole dollar. The fee may
be included in the amount financed and a finance charge may be charged
on the fee. The minimum fee for a debt cancellation agreement under
this subsection is $50.
(1) Debt cancellation agreement for total loss or theft
of ordinary vehicle in which holder bears complete responsibility
for canceling the debt after total loss or theft. The following figure
contains a rate schedule of maximum fees that are deemed to be reasonable
for debt cancellation agreements for total loss or theft of an ordinary
vehicle that are in compliance with subsection (c)(1) of this section.
Attached Graphic
(2) Debt cancellation agreement for total loss or theft
of used ordinary vehicle with a cash price of $15,000 or less in which
the retail seller does not assign the retail installment sales contract
to any party other than a related finance company as defined by Texas
Tax Code, §152.0475(a), and in which the retail seller bears
complete responsibility for canceling the debt after total loss or
theft whether the retail buyer elects to obtain property insurance.
The following figure contains a rate schedule of maximum fees that
are deemed to be reasonable for debt cancellation agreements for total
loss or theft of an ordinary vehicle that are in compliance with subsection
(c)(2) of this section.
Attached Graphic
(f) Refund or credit of unearned debt cancellation
agreement fee.
(1) Notification of cancellation triggering refund
or credit. A holder may require that the retail buyer notify the holder,
retail seller, or any administrator appointed by the holder in writing
should the retail buyer decide to cancel the debt cancellation agreement.
(2) Refunding method. Upon termination of a debt cancellation
agreement prior to the scheduled maturity date of a retail installment
sales contract, the holder or administrator will provide the retail
buyer a refund or credit calculated using a method that is at least
as favorable to the buyer as the Rule of 78s. In the event of a canceled
debt under the debt cancellation agreement, the fee paid for the debt
cancellation agreement is fully earned and no refund or credit is
due.
(3) Cancellation date. The refund or credit of the
debt cancellation agreement fee, if any, must be based upon the earlier
date of:
(A) the prepayment of the retail installment sales
contract in full prior to the original maturity date;
(B) a demand by the holder for payment in full of the
unpaid balance or acceleration;
(C) a request by the retail buyer for cancellation
of the debt cancellation agreement; or
(D) the total denial of a debt cancellation request
based on one of the exclusions contained in subsection (c)(1)(B) or
(2)(B) of this section, except in the case of a partial loss of the
covered motor vehicle.
(4) Rounding of unearned debt cancellation agreement
fee. The refund or credit for the unearned debt cancellation agreement
fee can be rounded to the nearest whole dollar.
(5) Refund or credit less than $1.00 not required.
A refund or credit is not required if the amount of the refund or
credit is less than $1.00.
(6) Flat cancellation within 30 days. If no total loss
or theft has occurred, the retail buyer may cancel the debt cancellation
agreement within 30 days from the date of the retail installment sales
contract or the issuance of the debt cancellation agreement, whichever
is later, or such later day as may be provided under the debt cancellation
agreement. Upon such cancellation, the holder or administrator will
refund or credit the entire debt cancellation agreement fee. A retail
buyer may not cancel the debt cancellation agreement and then receive
any benefits under the agreement.
(g) Prompt cancellation under debt cancellation agreement.
A holder must comply with the terms of a debt cancellation agreement
within 60 days of receiving a debt cancellation request form and all
necessary information needed by the holder or administrator to process
the request. If the administrator has all of the information that
a retail buyer would provide in the completion of a debt cancellation
request form, the administrator must comply with the terms of the
debt cancellation agreement within 60 days of receipt of all the necessary
information needed by the holder or administrator to process the request.
(h) Calculation of amount to be cancelled under debt
cancellation agreement for total loss or theft of ordinary vehicle.
The calculation of the amount to be canceled under this section will
be figured in compliance with one of the following methods:
(1) Debt cancellation agreement for total loss or theft
of ordinary vehicle in which holder bears complete responsibility
for canceling the debt after total loss or theft. The amount currently
owed by the retail buyer on the date of total loss or theft of the
motor vehicle on the retail installment sales contract will be the
amount canceled under the debt cancellation agreement for total loss
or theft of an ordinary vehicle.
(2) Debt cancellation agreement for total loss or theft
of used ordinary vehicle with a cash price of $15,000 or less in which
the retail seller does not assign the retail installment sales contract
to any party other than a related finance company as defined by Texas
Tax Code, §152.0475(a), and in which the retail seller bears
complete responsibility for canceling the debt after total loss or
theft whether the retail buyer elects to obtain property insurance.
(A) If the retail buyer did not have property insurance
at the time of the total loss or theft of the motor vehicle or the
total loss of the vehicle was not covered by another responsible party's
liability insurance policy, the amount to be canceled will be the
amount currently owed by the retail buyer as of the date of total
loss or theft of the motor vehicle.
(B) If the retail buyer had property insurance at the
time of the total loss or theft of the motor vehicle or the total
loss of the vehicle was covered by another responsible party's liability
insurance policy, the retail seller or related finance company will
calculate the amount to be canceled by determining:
(i) the current balance owed by the retail buyer as
of the date of total loss or theft of the motor vehicle;
(ii) subtracting the total loss payment made by the
primary insurance carrier or other responsible party's liability insurance
carrier; and
(iii) subtracting any refunds received by the retail
seller or related finance company as of the date of total loss or
theft of the motor vehicle.
(i) Prepayment of retail installment sales contract
by debt cancellation agreement. If the debt cancellation agreement
is triggered by the total loss or theft of the motor vehicle, all
refunds should be calculated as of the date of loss.
Cont'd... |