| (1) Insurance refunds and other cancelable items. Examples
of refunds that should be calculated as of the date of loss include
credit life premium, credit accident and health insurance premium,
credit involuntary unemployment insurance premium, collateral protection
insurance premium, and service contract refunds. The retail installment
sales contract may permit an administrator or provider to receive
any refunds that are received by the holder after the settlement of
the debt cancellation agreement, if those refunds were included in
the amount received by the holder from the administrator. Refunds
that were not part of the amount received by the holder from the administrator
must be either applied to the retail buyer's account or given to the
retail buyer.
(2) Time price differential refund. If the retail installment
sales contract uses the scheduled installment earnings method or is
a regular payment contract using the sum of the periodic balances
method, the time price differential refund should be calculated as
of the date of loss. If the retail installment sales contract uses
the true daily earnings method, the holder should not earn any time
price differential charge after the date of loss.
(j) Assignment and delegation.
(1) The retail seller or subsequent holder of a retail
installment sales contract may not assign any of its rights under
a debt cancellation agreement unless the retail seller or subsequent
holder assigns the retail installment sales contract that the debt
cancellation agreement modifies. The retail seller or subsequent holder
of the retail installment sales contract may delegate its duties under
a debt cancellation agreement, but the delegating party remains liable
for the performance it delegated and the conduct of the persons to
whom the duties are delegated.
(2) Good faith reliance. A holder may in good faith
rely on a computation by the administrator of the balance waived,
unless the holder has knowledge that the computation is not correct.
If a computation by the administrator of the balance waived is not
correct, the holder must, within a reasonable time of learning that
the computation is incorrect, make the necessary corrections or cause
the corrections to be made to the retail buyer's account. This section
does not prevent the holder from obtaining reimbursement from the
administrator or others responsible for the debt cancellation agreement
or computation.
(3) For any documents relating to the creation, processing,
or resolution of a debt cancellation agreement, the licensee must:
(A) maintain documents that come into its possession;
and
(B) upon request by the agency, cooperate in requesting
and obtaining access to documents not in its possession.
(4) Paragraph (3) of this subsection also applies to
a retail seller who negotiates a debt cancellation agreement and subsequently
assigns the retail installment sales contract.
(k) Prohibited practices. A debt cancellation agreement
cannot be offered if:
(1) the retail installment sales contract is already
protected by gap insurance;
(2) the purchase of the debt cancellation agreement
is required for the retail buyer to obtain the extension of credit.
|
| Source Note: The provisions of this §84.308 adopted to be effective March 14, 2010, 35 TexReg 1959; amended to be effective November 4, 2010, 35 TexReg 9708; amended to be effective September 8, 2011, 36 TexReg 5671; amended to be effective November 8, 2012, 37 TexReg 8780; amended to be effective September 7, 2017, 42 TexReg 4462 |
