Texas 2009 - 81st Regular

Texas House Bill HB2438 Compare Versions

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1	1	H.B. No. 2438
2	2
3	3
4	4	AN ACT
5	5	relating to requirements regarding motor vehicle retail
6	6	installment transactions.
7	7	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
8	8	SECTION 1. Section 348.001(3), Finance Code, is amended to
9	9	read as follows:
10	10	(3) "Holder" means a person who is:
11	11	(A) a retail seller; or
12	12	(B) the assignee or transferee of [if] a retail
13	13	installment contract [or the outstanding balance under the contract
14	14	is sold or otherwise transferred, the person to whom it is sold or
15	15	otherwise transferred].
16	16	SECTION 2. Section 348.007, Finance Code, is amended by
17	17	amending Subsection (a) and adding Subsection (a-2) to read as
18	18	follows:
19	19	(a) Except as otherwise provided by this section, each
20	20	[Each] retail installment transaction is subject to this chapter.
21	21	(a-2) A retail installment transaction in which a retail
22	22	buyer purchases a commercial vehicle is only subject to the
23	23	following provisions of this chapter:
24	24	(1) Subchapter A, except Section 348.0091 or unless
25	25	expressly stated otherwise;
26	26	(2) Subchapter B, except Sections 348.102 and 348.123;
27	27	(3) Subchapter C, except Sections 348.204(b),
28	28	348.206, 348.209, and 348.210;
29	29	(4) Subchapter D;
30	30	(5) Subchapter E, except Sections 348.404(d) and
31	31	348.407; and
32	32	(6) Subchapter F, except Sections 348.504(a)(2),
33	33	348.514, 348.516, and 348.517.
34	34	SECTION 3. Subchapter A, Chapter 348, Finance Code, is
35	35	amended by adding Section 348.0091 to read as follows:
36	36	Sec. 348.0091. DISCLOSURE OF EQUITY IN TRADE-IN MOTOR
37	37	VEHICLE. (a) A retail seller may not accept a trade-in motor
38	38	vehicle for a motor vehicle sold under a retail installment
39	39	contract unless the retail seller provides to the retail buyer,
40	40	before the buyer signs the contract, a completed disclosure of
41	41	trade-in equity form prescribed by this section.
42	42	(b) The finance commission shall by rule adopt a standard
43	43	form for the disclosure of the equity in a retail buyer's trade-in
44	44	motor vehicle.
45	45	(c) The form adopted by the finance commission under
46	46	Subsection (b), at a minimum, must:
47	47	(1) contain:
48	48	(A) the name of the retail buyer;
49	49	(B) the name, address, and telephone number of
50	50	the retail seller;
51	51	(C) the make, model, year, and vehicle
52	52	identification number of the trade-in motor vehicle;
53	53	(D) the date of the retail installment
54	54	transaction;
55	55	(E) the amount offered by the retail seller to
56	56	the retail buyer for the trade-in motor vehicle;
57	57	(F) the amount the retail buyer owes on the
58	58	trade-in motor vehicle as of the date of the retail installment
59	59	transaction;
60	60	(G) a statement indicating whether the retail
61	61	buyer's equity in the trade-in motor vehicle is positive or
62	62	negative;
63	63	(H) a disclosure containing substantially
64	64	similar words to the following: "If the EQUITY amount is NEGATIVE,
65	65	the value the retail seller is offering you for your trade-in motor
66	66	vehicle is less than what you currently owe on your trade-in. The
67	67	amount of negative equity may be further reduced by the amount of
68	68	any cash down payment and manufacturer's rebate and may be included
69	69	in the amount financed under your retail installment contract as an
70	70	itemized charge.";
71	71	(I) the cash price of the vehicle being purchased
72	72	under the retail installment transaction; and
73	73	(J) the amount financed under the retail
74	74	installment contract;
75	75	(2) include a space for the signature of both the
76	76	retail seller and retail buyer and the printed name of the retail
77	77	seller; and
78	78	(3) be signed and dated by the retail seller and retail
79	79	buyer.
80	80	(d) The retail seller is solely responsible for the content
81	81	and delivery of the disclosure form required by Subsection (a). An
82	82	assignee of a retail installment contract may not be held
83	83	responsible for a retail seller's failure to comply with the
84	84	requirements of this section.
85	85	(e) This section does not create a private right of action.
86	86	The commissioner has exclusive jurisdiction to enforce this
87	87	section.
88	88	SECTION 4. Section 348.004(a), Finance Code, is amended to
89	89	read as follows:
90	90	(a) The cash price is the price at which the retail seller
91	91	offers in the ordinary course of business to sell for cash the goods
92	92	or services that are subject to the transaction. An advertised
93	93	price does not necessarily establish a cash price.
94	94	SECTION 5. Sections 348.104(b), (c), (d), and (h), Finance
95	95	Code, are amended to read as follows:
96	96	(b) The add-on charge is $7.50 per $100 per year on the
97	97	principal balance for[:
98	98	[(1)] a new [domestic] motor vehicle, other than a
99	99	heavy commercial vehicle, designated by the manufacturer by a model
100	100	year that is not earlier than the year in which the sale is made[; or
101	101	[(2) a new foreign motor vehicle, other than a heavy
102	102	commercial vehicle].
103	103	(c) The add-on charge is $10 per $100 per year on the
104	104	principal balance for:
105	105	(1) a new [domestic] motor vehicle not covered by
106	106	Subsection (b);
107	107	(2) a used [domestic] motor vehicle designated by the
108	108	manufacturer by a model year that is not more than two years before
109	109	the year in which the sale is made; or
110	110	(3) [a used foreign motor vehicle that is not more than
111	111	two years old; or
112	112	[(4)] a new or used heavy commercial vehicle
113	113	designated by the manufacturer by a model year that is not more than
114	114	two years before the year in which the sale is made [old].
115	115	(d) The add-on charge is $12.50 per $100 per year on the
116	116	principal balance for a used motor vehicle not covered by
117	117	Subsection (c) that is[:
118	118	[(1)] a [domestic] motor vehicle designated by the
119	119	manufacturer by a model year that is not more than four years before
120	120	the year in which the sale is made[; or
121	121	[(2) a foreign motor vehicle that is not more than four
122	122	years old].
123	123	(h) For the purpose of a computation under this section, 16
124	124	[15] or more days of a month may be considered a full month.
125	125	SECTION 6. Section 348.404, Finance Code, is amended by
126	126	amending Subsection (b) and adding Subsection (d) to read as
127	127	follows:
128	128	(b) A retail seller, in connection with a retail installment
129	129	transaction, may:
130	130	(1) advance money to retire:
131	131	(A) an amount owed against a motor vehicle used
132	132	as a trade-in or a motor vehicle owned by the buyer that has been
133	133	declared a total loss by the buyer's insurer; or
134	134	(B) the retail buyer's outstanding obligation
135	135	under a motor vehicle lease contract, a credit transaction for the
136	136	purchase of a motor vehicle, or another retail installment
137	137	transaction; and
138	138	(2) finance repayment of that money in a retail
139	139	installment contract.
140	140	(d) A retail seller may include money advanced under
141	141	Subsection (b) in the retail installment contract only if it is
142	142	included as an itemized charge and may disclose money advanced
143	143	under Subsection (b) in any manner permitted by 12 C.F.R. Part 226
144	144	(Regulation Z) adopted under the Truth in Lending Act (15 U.S.C.
145	145	Section 1601 et seq.). Section 349.003 does not apply to this
146	146	subsection. This subsection does not create a private right of
147	147	action. The commissioner has exclusive jurisdiction to enforce
148	148	this subsection.
149	149	SECTION 7. Section 348.408, Finance Code, is amended by
150	150	adding Subsection (c) to read as follows:
151	151	(c) A retail seller must pay in full the outstanding balance
152	152	of a vehicle traded in not later than the 25th day after the date
153	153	that:
154	154	(1) the retail installment contract is signed by the
155	155	retail buyer and the retail buyer receives delivery of the motor
156	156	vehicle; and
157	157	(2) the retail seller receives delivery of the motor
158	158	vehicle traded in and the necessary and appropriate documents to
159	159	transfer title from the buyer.
160	160	SECTION 8. Section 348.501, Finance Code, is amended by
161	161	amending Subsection (b) and adding Subsection (c) to read as
162	162	follows:
163	163	(b) A person who is required to hold a license under this
164	164	chapter must ensure that each office at which retail installment
165	165	transactions are made, serviced, held, or collected under this
166	166	chapter is licensed or otherwise authorized to make, service, hold,
167	167	or collect retail installment transactions in accordance with this
168	168	chapter and rules implementing this chapter.
169	169	(c) A person may not use any device, subterfuge, or pretense
170	170	to evade the application of this section.
171	171	SECTION 9. Section 348.513(a), Finance Code, is amended to
172	172	read as follows:
173	173	(a) The finance commission may adopt rules to:
174	174	(1) enforce this chapter; or
175	175	(2) modify the standard form as required by Section
176	176	348.0091 to:
177	177	(A) conform to the provisions of the Truth in
178	178	Lending Act (15 U.S.C. Section 1601 et seq.) or a regulation issued
179	179	under authority of that Act;
180	180	(B) address any official commentary or other
181	181	interpretation by a federal agency relating to the Truth in Lending
182	182	Act (15 U.S.C. Section 1601 et seq.) or a regulation issued under
183	183	authority of that Act; or
184	184	(C) address a judicial interpretation by a state
185	185	or federal court relating to the Truth in Lending Act (15 U.S.C.
186	186	Section 1601 et seq.) or a regulation issued under authority of that
187	187	Act.
188	188	SECTION 10. Sections 348.514(c) and (d), Finance Code, are
189	189	amended to read as follows:
190	190	(c) During an examination or investigation the commissioner
191	191	or the commissioner's representative may administer oaths and
192	192	examine any person under oath on any subject pertinent to a matter
193	193	that the commissioner is authorized or required to consider,
194	194	investigate, or secure information about under this chapter.
195	195	(d) All information relating to the examination or
196	196	investigation process [Information obtained under this section] is
197	197	confidential, including:
198	198	(1) information obtained from the license holder;
199	199	(2) the examination report;
200	200	(3) instructions and attachments; and
201	201	(4) correspondence between the license holder and the
202	202	commissioner or the commissioner's representative relating to an
203	203	examination or investigation of the license holder.
204	204	SECTION 11. The heading to Section 348.517, Finance Code,
205	205	is amended to read as follows:
206	206	Sec. 348.517. LICENSE HOLDER'S RECORDS; DOCUMENT RETENTION
207	207	REQUIREMENTS.
208	208	SECTION 12. Section 348.517(b), Finance Code, is amended to
209	209	read as follows:
210	210	(b) A license holder shall keep the record until the later
211	211	of:
212	212	(1) the fourth [third] anniversary of the date of the
213	213	[last payment was made on the] retail installment transaction; or
214	214	(2) the second anniversary of the date on which the
215	215	final entry is made in the record.
216	216	SECTION 13. (a) As soon as practicable after the effective
217	217	date of this Act, the Finance Commission of Texas shall adopt the
218	218	form required by Section 348.0091, Finance Code, as added by this
219	219	Act.
220	220	(b) Notwithstanding Section 348.0091, Finance Code, as
221	221	added by this Act, a retail seller is not required to comply with
222	222	that section until the Finance Commission of Texas prescribes the
223	223	form required by that section.
224	224	SECTION 14. (a) Except as provided by Subsection (b) of
225	225	this section, this Act takes effect September 1, 2009.
226	226	(b) Section 348.007, Finance Code, as amended by this Act,
227	227	takes effect only if House Bill 4361 or Senate Bill 1965, proposed
228	228	by the 81st Legislature, Regular Session, 2009, relating to the
229	229	regulation of retail installment contracts for commercial
230	230	vehicles, is passed and becomes law. If neither bill becomes law,
231	231	the change in law made by this Act to Section 348.007, Finance Code,
232	232	has no effect.
233	233	______________________________ ______________________________
234	234	President of the Senate Speaker of the House
235	235	I certify that H.B. No. 2438 was passed by the House on May
236	236	11, 2009, by the following vote: Yeas 144, Nays 0, 3 present, not
237	237	voting; and that the House concurred in Senate amendments to H.B.
238	238	No. 2438 on May 29, 2009, by the following vote: Yeas 142, Nays 0,
239	239	2 present, not voting.
240	240	______________________________
241	241	Chief Clerk of the House
242	242	I certify that H.B. No. 2438 was passed by the Senate, with
243	243	amendments, on May 27, 2009, by the following vote: Yeas 31, Nays
244	244	0.
245	245	______________________________
246	246	Secretary of the Senate
247	247	APPROVED: __________________
248	248	Date
249	249	__________________
250	250	Governor