| (5) General business and accounting records. General
business and accounting records concerning the financial transactions
of the loan business must be maintained. The business and accounting
records must include receipts, documents, canceled checks, or other
records for each disbursement made at the borrower's direction or
request on his behalf or for his benefit, including repossession,
foreclosure, or legal fees applied to the borrower's account.
(6) Official fees records (Subchapter E loans only).
(A) Disclosure on individual borrower's account record.
The amount of official fees collected at the time the loan is made
and to be disbursed within the period prescribed in subparagraph (D)(i)
of this paragraph must be disclosed on the individual borrower's account
record.
(B) Termination, continuation, or amendment fees. Information
concerning fees for termination, continuation, or amendment collected
at the time a loan is made but not disbursed, as prescribed by subparagraph
(D)(i) of this paragraph, or collected subsequent to the making of
the loan, must be entered in a record. Entries to this record must
be in chronological order as to the date the fees are collected. The
record must show the date each fee is collected, the amount of each
fee collected, the date each fee is disbursed, and the amount of each
fee disbursed. In addition, if a fee is collected in advance for the
purpose of filing a UCC-3 to "continue" a notice of security interest,
the record must show the date the present filing expires.
(C) Multiple fees in disbursement. If more than one
fee is included in a disbursement by check to the recording office,
the loan number of each account to which the disbursement is related
on the check copy, check stub, or voucher must be documented.
(D) Disbursement procedures.
(i) Fees collected at the time a loan is made for recording,
amending, or continuing a notice of security interest must be disbursed
to the recording agency within 30 days from the date of collection
from the borrowers. If fees are not properly disbursed within 30 days,
the borrower must be given credit for the fee and any filing may be
made only at the licensee's expense. If filing of continuation fees
may not be made during the 30 days following the date of the loan
due to conflict with Texas Business and Commerce Code, §9.515,
the licensee must follow the procedure outlined in subparagraph (B)
of this paragraph. (Note: Subparagraph (E)(i) of this paragraph summarizes
the filing requirements of Texas Business and Commerce Code, §9.515.)
(ii) Each licensee should disburse, to the recording
agency, termination fees collected from borrowers within 30 days from
the date the loan is paid in full. If the termination fees are not
disbursed within this period, the fees must be returned to the borrowers
and the termination effected by the licensee and at the expense of
the licensee.
(E) Continuing notices of security interest. Continuation
of liens will be dependent upon conformity with the following:
(i) If a licensee desires to continue a notice of security
interest on which a maturity date was not initially established on
the financing statement, a continuation statement must be filed no
later than 60 days after the maturity date and no sooner than six
months prior to the maturity date. A licensee may exercise one of
the following options when "continuing" a lien:
(I) The cost of filing a continuation statement may
be included in the official fees collected in connection with a renewal
loan that has a maturity date extending past the end of the five-year
period or past the initial maturity date;
(II) The filing fee may be collected directly from
the borrower within the period for filing prescribed by Texas Business
and Commerce Code, §9.515;
(III) The borrower and the licensee may agree to charge
the borrower's account for the cost of filing; or
(IV) The cost of filing may be borne by the licensee.
(ii) A record of fees collected under this section
must be maintained as prescribed in subparagraph (A) or (B) of this
paragraph.
(7) Record of daily transactions. Each licensee must
maintain sufficient records, paper or electronic, to adequately reflect,
on an individual account basis, the business occurring during each
day. The records must reflect the date on which each transaction occurred.
(8) Record of loans in litigation and repossession.
(A) An index of each repossession as it occurs and
each legal action by or against the licensee as it is initiated must
be recorded. The index must show the borrower's name, account number,
and date of action. If accounts have been transferred, it must be
noted in this index as well as on the record of transferred accounts
as prescribed in paragraph (4) of this section.
(B) All loan records, account cards, correspondence,
and any other pertinent information must be maintained in the borrower's
account folders or files. The file must include the following applicable
items:
(i) Identification of the collateral sought or acquired
by the licensee;
(ii) A copy of the original petition and the most current
amended petition, if any;
(iii) Proof of judgment if a judgment is taken and
amounts awarded by the court;
(iv) The date and terms of settlement if settlement
is made between the borrower and the licensee before judgment;
(v) Record of all payments received after judgment,
properly identified and applied;
(vi) When the licensee, acting as a secured party,
takes possession of the collateral and disposes of it at a public
or private sale as provided under Texas Business and Commerce Code,
Chapter 9, and the sale is not a judicial sale, the file must include
written evidence substantiating the commercial reasonableness of all
aspects of the sale of the collateral, and of its preparation for
sale, if any. These documents should include copies of any invoices
or receipts, condition reports indicating the condition of the collateral,
notice of intended disposition sent to the borrower and any other
obligor or the waiver of the notice signed after default by the borrower
and other obligors, and evidence of fair sale of the collateral. One
means of providing evidence of fair sale or the commercial reasonableness
of sale is the taking of not less than three bona fide bids. Bids
must disclose:
(I) names and addresses of the bidders;
(II) name and address of the purchaser of the repossessed
collateral; and
(III) after the disposition of the collateral, a copy
of any explanation of calculation of surplus or deficiency sent to
the borrower.
(9) Insurance loss registers. Each licensee must maintain
a register, paper or electronic, reflecting information on credit
life, credit accident and health, personal property, credit involuntary
unemployment, and collateral protection insurance claims whether paid
or denied by the insurance carrier.
(A) Credit life insurance claims. The register pertaining
to credit life insurance claims must show the name of the borrower,
the account number, and the date of death.
(B) Credit accident and health insurance claims. The
register pertaining to credit accident and health insurance claims
must show the name of the borrower, the account number, and the date
of the initial filing of a claim for any continuous period of disability.
(C) Personal property insurance claims. The register
pertaining to personal property insurance claims must show the name
of the borrower, the account number, the amount of insurance written
on tangible personal property other than a motor vehicle, the amount
of the settlement, and a notation as to whether the loss is a total
or partial loss.
(D) Credit involuntary unemployment insurance claims.
The register pertaining to credit involuntary unemployment insurance
claims must show the name of the borrower, the account number, and
the date of the initial filing of the claim.
(E) Collateral protection insurance claims. The register
pertaining to collateral protection insurance claims must show the
name of the borrower, the account number, the amount of the insurance
written on the motor vehicle, the amount of the settlement, and a
notation as to the basis of the settlement (actual cash value, repair,
or the remaining outstanding balance).
(10) Loan records and documents file.
(A) Generally. A licensee must maintain a loan records
and documents file for each individual borrower. The loan records
and documents file must contain all necessary records and documents
to evidence compliance with applicable state and federal laws and
regulations, including the Equal Credit Opportunity Act and the Truth
in Lending Act. The loan records and documents file must include copies
of the following records or documents:
(i) promissory notes including disclosures required
by the Truth in Lending Act;
Cont'd... |
