Texas 2009 - 81st Regular

Texas House Bill HB4361 Compare Versions

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1	1	81R22848 E
2	2	By: Geren, Parker, Truitt H.B. No. 4361
3	3	Substitute the following for H.B. No. 4361:
4	4	By: Veasey C.S.H.B. No. 4361
5	5
6	6
7	7	A BILL TO BE ENTITLED
8	8	AN ACT
9	9	relating to the regulation of retail installment contracts for
10	10	commercial vehicles.
11	11	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
12	12	SECTION 1. Section 307.051(f), Finance Code, is amended to
13	13	read as follows:
14	14	(f) Collateral protection insurance does not include
15	15	insurance coverage that:
16	16	(1) is purchased by the creditor for which the debtor
17	17	is not charged;
18	18	(2) is purchased at the inception of a credit
19	19	transaction in which the debtor is a party or to which the debtor
20	20	agrees, whether or not costs are included in a payment plan under
21	21	the credit transaction;
22	22	(3) is maintained by the creditor for the protection
23	23	of collateral that comes into the possession or control of the
24	24	creditor through foreclosure, repossession, or a similar event;
25	25	(4) is credit insurance, mortgage protection
26	26	insurance, insurance issued to cover the life or health of the
27	27	debtor, or any other insurance maintained to cover the inability or
28	28	failure of the debtor to make payment under the credit agreement;
29	29	(5) is title insurance; [or]
30	30	(6) is flood insurance required to be placed by
31	31	creditors under Section 102, National Flood Insurance Act of 1968
32	32	(42 U.S.C. Section 4012a); or
33	33	(7) is insurance on a commercial vehicle securing a
34	34	retail installment contract under Chapter 348.
35	35	SECTION 2. Section 341.502(a), Finance Code, is amended to
36	36	read as follows:
37	37	(a) A contract for a loan under Chapter 342, a retail
38	38	installment transaction under Chapter 348 other than a contract for
39	39	a commercial vehicle, or a home equity loan regulated by the Office
40	40	of Consumer Credit Commissioner must be:
41	41	(1) written in plain language designed to be easily
42	42	understood by the average consumer; and
43	43	(2) printed in an easily readable font and type size.
44	44	SECTION 3. Section 348.001, Finance Code, is amended by
45	45	adding Subdivision (1-a) to read as follows:
46	46	(1-a) "Commercial vehicle" means a motor vehicle that
47	47	is not used primarily for personal, family, or household use. The
48	48	term includes:
49	49	(A) a motor vehicle with a gross vehicular weight
50	50	of 10,001 pounds or more;
51	51	(B) a motor vehicle that will be owned by a
52	52	corporation, limited liability company, limited partnership, or
53	53	other business entity formed, organized, or registered in this
54	54	state, another state, or another country; and
55	55	(C) a motor vehicle that will be part of a fleet
56	56	of five or more vehicles owned by the same person.
57	57	SECTION 4. Subchapter A, Chapter 348, Finance Code, is
58	58	amended by adding Section 348.0015 to read as follows:
59	59	Sec. 348.0015. PRESUMPTION REGARDING NONCOMMERCIAL
60	60	VEHICLES; EXCEPTION. (a) A motor vehicle that is not described by
61	61	Section 348.001(1-a)(A), (B), or (C) or a motor vehicle that is of a
62	62	type typically used for personal, family, or household use, as
63	63	determined by finance commission rule, is presumed not to be a
64	64	commercial vehicle.
65	65	(b) Notwithstanding Subsection (a), if a retail buyer
66	66	represents in writing that a motor vehicle is not for personal,
67	67	family, or household use, or that the vehicle is for commercial use,
68	68	a retail seller or holder to whom the representation is made may
69	69	rely on that representation unless the retail seller or holder, as
70	70	applicable, has actual knowledge that the representation is not
71	71	true.
72	72	SECTION 5. Subchapter A, Chapter 348, Finance Code, is
73	73	amended by adding Section 348.0051 to read as follows:
74	74	Sec. 348.0051. CONTRACTS FOR COMMERCIAL VEHICLES;
75	75	ADDITIONAL CHARGES PERMITTED. (a) Notwithstanding Sections
76	76	348.004 and 348.005 and in addition to the amounts allowed under
77	77	those sections, the following amounts may be included as an
78	78	itemized charge or in the cash price in a retail installment
79	79	contract for a commercial vehicle:
80	80	(1) any fees prescribed by law;
81	81	(2) any amounts charged by a titling or registration
82	82	service relating to the sale;
83	83	(3) any other amount agreed to by the retail buyer and
84	84	retail seller, including amounts payable to the retail seller or
85	85	another person for the provision of goods or services relating to:
86	86	(A) the commercial vehicle;
87	87	(B) the sale or use of the commercial vehicle; or
88	88	(C) the retail buyer's business in which the
89	89	commercial vehicle will be used; and
90	90	(4) an amount paid to the retail seller or other person
91	91	as consideration for the agreement of the holder of the retail
92	92	installment contract to waive:
93	93	(A) all or part of the difference between the
94	94	amount owed under a retail installment contract and the amount paid
95	95	under a physical damage insurance policy maintained by the retail
96	96	buyer or its assign, in the event the vehicle is a total loss;
97	97	(B) all or part of the amount owed under the
98	98	retail installment contract, in the event of the death of the retail
99	99	buyer; or
100	100	(C) one or more payments owed under the retail
101	101	installment contract, in the event of the disability of the retail
102	102	buyer.
103	103	(b) If a charge under Subsection (a)(4) is included in the
104	104	contract, the contract and the agreement to waive must each
105	105	disclose conspicuously that the waiver is optional.
106	106	(c) Notwithstanding any other law, the amount described by
107	107	Subsection (a)(4) is not a charge for insurance, and the sale,
108	108	provision, or the waiving of a balance owed or other action relating
109	109	to a waiver of all or part of the amount owed under a retail
110	110	installment contract for a commercial vehicle is not considered
111	111	insurance or engaging in the business of insurance.
112	112	SECTION 6. Sections 348.006(c) and (d), Finance Code, are
113	113	amended to read as follows:
114	114	(c) For a documentary fee to be included in the principal
115	115	balance of a retail installment contract:
116	116	(1) the retail seller must charge the documentary fee
117	117	to cash buyers and credit buyers;
118	118	(2) the documentary fee may not exceed:
119	119	(A) $50 for a motor vehicle retail installment
120	120	contract; or
121	121	(B) an [a reasonable] amount agreed to in writing
122	122	by the retail seller and retail buyer for a [heavy] commercial
123	123	vehicle retail installment contract; and
124	124	(3) the buyer's order and the retail installment
125	125	contract must include:
126	126	(A) a statement of the amount of the documentary
127	127	fee; and
128	128	(B) except for a buyer's order or retail
129	129	installment contract for a commercial vehicle, in reasonable
130	130	proximity to the place in each where the amount of the documentary
131	131	fee is disclosed, the following notice in type that is bold-faced,
132	132	capitalized, underlined, or otherwise conspicuously set out from
133	133	surrounding written material:
134	134	"A DOCUMENTARY FEE IS NOT AN OFFICIAL FEE. A DOCUMENTARY FEE
135	135	IS NOT REQUIRED BY LAW, BUT MAY BE CHARGED TO BUYERS FOR HANDLING
136	136	DOCUMENTS AND PERFORMING SERVICES RELATING TO THE CLOSING OF A
137	137	SALE. A DOCUMENTARY FEE MAY NOT EXCEED $50 FOR A MOTOR VEHICLE
138	138	CONTRACT [OR A REASONABLE AMOUNT AGREED TO BY THE PARTIES FOR A
139	139	HEAVY COMMERCIAL VEHICLE CONTRACT]. THIS NOTICE IS REQUIRED BY
140	140	LAW."
141	141	(d) Except for a retail installment contract for a
142	142	commercial vehicle, if [If] the language primarily used in an oral
143	143	sales presentation is not the same as the language in which the
144	144	retail installment contract is written, the retail seller shall
145	145	furnish to the retail buyer a written statement containing the
146	146	notice set out in Subsection (c)(3)(B) in the language primarily
147	147	used in the oral sales presentation.
148	148	SECTION 7. Section 348.007, Finance Code, is amended by
149	149	amending Subsection (a) and adding Subsection (a-2) to read as
150	150	follows:
151	151	(a) Except as otherwise provided by this section, each
152	152	[Each] retail installment transaction is subject to this chapter.
153	153	(a-2) A retail installment transaction in which a retail
154	154	buyer purchases a commercial vehicle is only subject to the
155	155	following provisions of this chapter:
156	156	(1) Subchapter A, unless expressly stated otherwise;
157	157	(2) Subchapter B, except Sections 348.102 and 348.123;
158	158	(3) Subchapter C, except Sections 348.204(b),
159	159	348.206, 348.209, and 348.210;
160	160	(4) Subchapter D;
161	161	(5) Subchapter E, except Section 348.407; and
162	162	(6) Subchapter F, except Sections 348.504(a)(2),
163	163	348.514, 348.516, and 348.517.
164	164	SECTION 8. Section 348.102(c), Finance Code, is amended to
165	165	read as follows:
166	166	(c) A retail installment contract that provides for a
167	167	variable contract rate must set out the method by which the rate is
168	168	computed. [A contract for a heavy commercial vehicle is not
169	169	required to set out the total amount of the time price
170	170	differential.]
171	171	SECTION 9. Section 348.109, Finance Code, is amended to
172	172	read as follows:
173	173	Sec. 348.109. ACCELERATION OF DEBT MATURITY. A retail
174	174	installment contract may not authorize the holder to accelerate the
175	175	maturity of all or a part of the amount owed under the contract
176	176	unless:
177	177	(1) the retail buyer is in default in the performance
178	178	of any of the buyer's obligations; [or]
179	179	(2) the holder believes in good faith that the
180	180	prospect of buyer's payment or performance is impaired; or
181	181	(3) if the retail installment contract is for a
182	182	commercial vehicle, the retail buyer or an affiliate of the retail
183	183	buyer is in default in its obligations under another financing
184	184	agreement or leasing agreement held by the same holder or an
185	185	affiliate of the holder.
186	186	SECTION 10. Section 348.208, Finance Code, is amended by
187	187	adding Subsections (d), (e), and (f) to read as follows:
188	188	(d) In addition to a charge for insurance coverage under
189	189	Subsection (a) or (b), a retail installment contract for a
190	190	commercial vehicle may include a charge for insurance coverage
191	191	relating to:
192	192	(1) the commercial vehicle;
193	193	(2) the use of the commercial vehicle; or
194	194	(3) the retail installment contract.
195	195	(e) Insurance coverage under Subsection (d) may be provided
196	196	only by:
197	197	(1) an insurer authorized under the Insurance Code to
198	198	engage in the business of insurance in this state; or
199	199	(2) if permitted under the Insurance Code, a surplus
200	200	lines insurer eligible to provide the insurance under Chapter 981,
201	201	Insurance Code.
202	202	(f) A retail installment contract for a commercial vehicle
203	203	must set forth the amount of each charge for insurance coverage
204	204	under Subsection (d) and the type of the coverage provided for that
205	205	charge.
206	206	SECTION 11. Section 348.213(b), Finance Code, is amended to
207	207	read as follows:
208	208	(b) A policy of insurance described by Subsection (a) must
209	209	comply with the applicable requirements of Sections 348.201,
210	210	348.203, and 348.208, and, except if the policy relates to a retail
211	211	installment contract for a commercial vehicle, Section 348.209.
212	212	SECTION 12. The changes in law provided by this Act apply
213	213	only to a retail installment contract entered into on or after the
214	214	effective date of this Act. A retail installment contract entered
215	215	into before the effective date of this Act is governed by the law in
216	216	effect on the date the contract was entered into, and the former law
217	217	remains in effect for that purpose.
218	218	SECTION 13. This Act takes effect September 1, 2009.