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RULE §5.11Charges for Dishonored Checks

(a) Purpose. Business and Commerce Code, Section 3.506, authorizes the holder of a dishonored check seeking collection of the face value of the check to charge the drawer or endorser of the check a processing fee in an amount authorized by that section. This section prescribes policies and procedures for the processing of dishonored checks made payable to the department and the collection of fees because of the dishonor of a check made payable to the department.

(b) Definitions. The following words and terms, when used in this section, shall have the following meanings, unless the context clearly indicates otherwise.

  (1) Department--The Texas Department of Transportation.

  (2) Dishonored check--A check, draft, order, or other instrument that is drawn or made upon a bank or other financial institution, and that is not honored upon presentment because the account upon which the instrument has been drawn or made does not exist or is closed, or does not have sufficient funds or credit for payment of the instrument in full.

(c) Processing of dishonored checks. Upon receipt of notice from a bank or other financial institution of refusal to honor a check made payable to the department, the department will process the returned check using the following procedures.

  (1) The department will send a written notice by certified mail, return receipt requested, to the drawer or endorser at the drawer or endorser's address as shown on:

    (A) the dishonored check;

    (B) the records of the bank or other financial institution; or

    (C) the records of the department.

  (2) The written notice will notify the drawer or endorser of the dishonored check and will request payment of the face amount of the check and a processing fee no later than 10 days after the date of receipt of the notice. The written notice will also contain the statement required by Penal Code, §32.41(c)(3).

  (3) The face amount of the check and the processing fee must be paid to the department:

    (A) with a cashier's check or money order, made payable to the Texas Department of Transportation; or

    (B) with a valid credit card issued by a financial institution chartered by a state or the United States.

  (4) Payments made by credit card must include the fee required by §5.43(c) of this chapter (relating to Methods of Payment).

  (5) If payment is not received within 10 days after the date of receipt of the notice, the obligation will be considered delinquent and will be processed in accordance with §5.10 of this subchapter (relating to Collection of Debts).

(d) Supplemental collection procedures. In addition to the procedures described in §5.10 of this subchapter, the department may notify appropriate credit bureaus or agencies if the drawer or endorser fails to pay the face amount of a dishonored check and the processing fee, or may refer the matter for criminal prosecution.

Source Note: The provisions of this §5.11 adopted to be effective December 5, 2001, 26 TexReg 9914; amended to be effective April 16, 2014, 39 TexReg 2957

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