Texas 2017 - 85th Regular

Texas House Bill HB1985 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New	Differences
1	1	85R17791 EES-F
2	2	By: Flynn H.B. No. 1985
3	3	Substitute the following for H.B. No. 1985:
4	4	By: Holland C.S.H.B. No. 1985
5	5
6	6
7	7	A BILL TO BE ENTITLED
8	8	AN ACT
9	9	relating to debt cancellation agreements offered in connection with
10	10	certain retail installment contracts and leases for vehicles.
11	11	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
12	12	SECTION 1. Subchapter B, Chapter 345, Finance Code, is
13	13	amended by adding Section 345.084 to read as follows:
14	14	Sec. 345.084. DEBT CANCELLATION AGREEMENT. A debt
15	15	cancellation agreement under Chapter 354 may be offered in
16	16	connection with a retail installment contract for a covered vehicle
17	17	to which this chapter applies. For purposes of this section,
18	18	"covered vehicle" has the meaning assigned by Section 354.001.
19	19	SECTION 2. Section 348.124(a), Finance Code, is amended to
20	20	read as follows:
21	21	(a) In connection with a retail installment transaction
22	22	under this chapter, a retail seller may offer to the retail buyer a
23	23	debt cancellation agreement, including a guaranteed asset
24	24	protection waiver or similarly named agreement. If the retail
25	25	installment transaction requires insurance coverage as part of the
26	26	retail buyer's responsibility to the holder, the debt cancellation
27	27	agreement, guaranteed asset protection waiver, or similarly named
28	28	agreement must be offered under Chapter 354. The retail seller may
29	29	not require that the purchase of a debt cancellation agreement by
30	30	the retail buyer be made in order to enter into a retail installment
31	31	transaction.
32	32	SECTION 3. Subchapter G, Chapter 348, Finance Code, is
33	33	redesignated as Chapter 354, Finance Code, and amended to read as
34	34	follows:
35	35	CHAPTER 354 [SUBCHAPTER G]. [CERTAIN] DEBT CANCELLATION AGREEMENTS
36	36	FOR CERTAIN RETAIL VEHICLE INSTALLMENT SALES
37	37	Sec. 354.001. DEFINITIONS. In this chapter:
38	38	(1) "Contract" means a retail installment contract
39	39	made under Chapter 345 or 348.
40	40	(2) "Covered vehicle" includes a self-propelled or
41	41	towed vehicle designed for personal use, including an automobile,
42	42	truck, motorcycle, recreational vehicle, all-terrain vehicle,
43	43	snowmobile, camper, boat, personal watercraft, and personal
44	44	watercraft trailer.
45	45	(3) "Debt cancellation agreement" means a contract
46	46	term or a contractual arrangement modifying a contract term under
47	47	which a retail seller or holder agrees to cancel all or part of an
48	48	obligation of the retail buyer to repay an extension of credit from
49	49	the retail seller or holder on the occurrence of the total loss or
50	50	theft of the covered vehicle that is the subject of the contract but
51	51	does not include an offer to pay a specified amount on the total
52	52	loss or theft of the covered vehicle.
53	53	(4) "Holder" means a person who is:
54	54	(A) a retail seller; or
55	55	(B) the assignee or transferee of a contract.
56	56	(5) "Retail buyer" means a person who purchases or
57	57	agrees to purchase a covered vehicle from a retail seller in a
58	58	retail installment transaction.
59	59	(6) "Retail seller" means a person in the business of
60	60	selling covered vehicles to retail buyers in retail installment
61	61	transactions.
62	62	Sec. 354.002 [348.601]. LIMITATION ON CERTAIN DEBT
63	63	CANCELLATION AGREEMENTS. (a) This chapter [subchapter] applies
64	64	only to a debt cancellation agreement that includes insurance
65	65	coverage as part of the retail buyer's responsibility to the
66	66	holder.
67	67	(b) The amount charged for a debt cancellation agreement
68	68	made in connection with a [retail installment] contract may not
69	69	exceed five percent of the amount financed pursuant to the [retail
70	70	installment] contract. Section 348.124(c) does not apply to a debt
71	71	cancellation agreement regulated under this chapter [subchapter].
72	72	(c) The debt cancellation agreement becomes a part of or a
73	73	separate addendum to the [retail installment] contract and remains
74	74	a term of the [retail installment] contract on the assignment,
75	75	sale, or transfer by the holder.
76	76	Sec. 354.003 [348.602]. DEBT CANCELLATION AGREEMENTS
77	77	EXCLUSION LANGUAGE. (a) In addition to the provisions required by
78	78	Section 354.004 [348.603], a debt cancellation agreement must fully
79	79	disclose all provisions permitting the exclusion of loss or damage
80	80	including, if applicable:
81	81	(1) an act occurring after the original maturity date
82	82	or date of the holder's acceleration of the [retail installment]
83	83	contract;
84	84	(2) any dishonest, fraudulent, illegal, or
85	85	intentional act of any authorized driver that directly results in
86	86	the total loss of the covered [motor] vehicle;
87	87	(3) any act of gross negligence by an authorized
88	88	driver that directly results in the total loss of the covered
89	89	[motor] vehicle;
90	90	(4) conversion, embezzlement, or concealment by any
91	91	person in lawful possession of the covered [motor] vehicle;
92	92	(5) lawful confiscation by an authorized public
93	93	official;
94	94	(6) the operation, use, or maintenance of the covered
95	95	[motor] vehicle in any race or speed contest;
96	96	(7) war, whether or not declared, invasion,
97	97	insurrection, rebellion, revolution, or an act of terrorism;
98	98	(8) normal wear and tear, freezing, or mechanical or
99	99	electrical breakdown or failure;
100	100	(9) use of the covered [motor] vehicle for primarily
101	101	commercial purposes;
102	102	(10) damage that occurs after the covered [motor]
103	103	vehicle has been repossessed;
104	104	(11) damage to the covered [motor] vehicle before the
105	105	purchase of the debt cancellation agreement;
106	106	(12) unpaid insurance premiums and salvage, towing,
107	107	and storage charges relating to the covered [motor] vehicle;
108	108	(13) damage related to any personal property attached
109	109	to or within the covered [motor] vehicle;
110	110	(14) damages associated with falsification of
111	111	documents by any person not associated with the retail seller or
112	112	other person canceling the retail buyer's obligation;
113	113	(15) any unpaid debt resulting from exclusions in the
114	114	retail buyer's primary physical damage coverage not included in the
115	115	debt cancellation agreement;
116	116	(16) abandonment of the covered [motor] vehicle by the
117	117	retail buyer only if the retail buyer voluntarily discards, leaves
118	118	behind, or otherwise relinquishes possession of the covered [motor]
119	119	vehicle to the extent that the relinquishment shows intent to
120	120	forsake and desert the covered [motor] vehicle so that the covered
121	121	[motor] vehicle may be appropriated by any other person;
122	122	(17) any amounts deducted from the primary insurance
123	123	carrier's settlement due to prior damages; and
124	124	(18) any loss occurring outside the United States or
125	125	outside the United States and Canada.
126	126	(b) An exclusion of loss or damage not listed in Subsection
127	127	(a) may be included in a debt cancellation agreement only if the
128	128	exclusion is disclosed in plain, easy to read language.
129	129	Sec. 354.004 [348.603]. REQUIRED DEBT CANCELLATION
130	130	AGREEMENT LANGUAGE. A debt cancellation agreement must state:
131	131	(1) the contact information of the retail seller, the
132	132	holder, and any administrator of the agreement;
133	133	(2) the name and address of the retail buyer;
134	134	(3) the cost and term of the debt cancellation
135	135	agreement;
136	136	(4) the procedure the retail buyer must follow to
137	137	obtain benefits under the terms of the debt cancellation agreement,
138	138	including a telephone number and address where the retail buyer may
139	139	provide notice under the debt cancellation agreement;
140	140	(5) the period during which the retail buyer is
141	141	required to notify the retail seller, the holder, or any
142	142	administrator of the agreement, of any potential loss under the
143	143	debt cancellation agreement for total loss or theft of the covered
144	144	[motor] vehicle;
145	145	(6) that in order to make a claim, the retail buyer
146	146	must provide or complete some or all of the following documents and
147	147	provide those documents to the retail seller, the holder, or any
148	148	administrator of the agreement:
149	149	(A) a debt cancellation request form;
150	150	(B) proof of loss and settlement payment from the
151	151	retail buyer's primary comprehensive, collision, or uninsured or
152	152	underinsured motorist policy or other parties' liability insurance
153	153	policy for the settlement of the insured total loss of the covered
154	154	[motor] vehicle;
155	155	(C) verification of the retail buyer's primary
156	156	insurance deductible;
157	157	(D) a copy of any police report filed in
158	158	connection with the total loss or theft of the covered [motor]
159	159	vehicle; and
160	160	(E) a copy of the damage estimate;
161	161	(7) that documentation not described by Subdivision
162	162	(6) may be [or] required by the retail seller, the holder, or any
163	163	administrator of the agreement [is not required] to substantiate
164	164	the loss or determine the amount of debt to be canceled;
165	165	(8) that notwithstanding the collection of the
166	166	documents under Subdivision (6), on reasonable advance notice the
167	167	retail seller, the holder, or any administrator of the agreement
168	168	may inspect the retail buyer's covered [motor] vehicle;
169	169	(9) that the retail seller or holder will cancel all or
170	170	part of the retail buyer's obligation as provided in the debt
171	171	cancellation agreement on the occurrence of total loss or theft of
172	172	the covered [motor] vehicle;
173	173	(10) the method to be used to calculate refunds;
174	174	(11) the method for calculating the amount to be
175	175	canceled under the debt cancellation agreement on the occurrence of
176	176	total loss or theft of a covered [motor] vehicle;
177	177	(12) that purchase of a debt cancellation agreement is
178	178	not required for the retail buyer to obtain an extension of credit
179	179	and will not be a factor in the credit approval process;
180	180	(13) that in order to cancel the debt cancellation
181	181	agreement and receive a refund, the retail buyer must provide a
182	182	written request to cancel to the retail seller, the holder, or any
183	183	administrator of the agreement;
184	184	(14) that if total loss or theft of the covered [motor]
185	185	vehicle has not occurred, the retail buyer has 30 days from the date
186	186	of the [retail installment] contract or the issuance of the debt
187	187	cancellation agreement, whichever is later, or a longer period as
188	188	provided under the debt cancellation agreement, to cancel the debt
189	189	cancellation agreement and receive a full refund;
190	190	(15) that the retail buyer may file a complaint with
191	191	the commissioner, and include the address, phone number, and
192	192	Internet website of the Office of Consumer Credit Commissioner; and
193	193	(16) that the holder will cancel certain amounts under
194	194	the debt cancellation agreement for total loss or theft of a covered
195	195	[motor] vehicle, in the following or substantially similar
196	196	language: "YOU WILL CANCEL CERTAIN AMOUNTS I OWE UNDER THIS
197	197	CONTRACT IN THE CASE OF A TOTAL LOSS OR THEFT OF THE COVERED VEHICLE
198	198	AS STATED IN THE DEBT CANCELLATION AGREEMENT."
199	199	Sec. 354.005 [348.604]. APPROVAL OF FORMS FOR DEBT
200	200	CANCELLATION AGREEMENTS. (a) Debt cancellation agreement forms
201	201	must be submitted to the commissioner for approval. Debt
202	202	cancellation agreement forms may include additional language to
203	203	supplement the terms of the debt cancellation agreement as required
204	204	by this chapter [subchapter].
205	205	(b) If a debt cancellation agreement form is provided to the
206	206	commissioner for approval, the commissioner has 45 days to approve
207	207	the form or deny approval of the form. If after the 45th day the
208	208	commissioner does not deny the form, the form is considered
209	209	approved.
210	210	(c) If the debt cancellation agreement form is approved by
211	211	the commissioner or considered approved as provided by Subsection
212	212	(b), the terms of the debt cancellation agreement are considered to
213	213	be in compliance with this chapter [subchapter].
214	214	(d) The commissioner may deny approval of a form only if the
215	215	form excludes the language required by Sections 354.003 [348.602]
216	216	and 354.004 [348.603] or contains any inconsistent or misleading
217	217	provisions. All form denials may be appealed to the finance
218	218	commission.
219	219	(e) If after approval of a form the Office of Consumer
220	220	Credit Commissioner discovers that approval could have been denied
221	221	under Subsection (d), the commissioner may order a retail seller,
222	222	any administrator of the debt cancellation agreement, or a holder
223	223	to submit a corrected form for approval. Beginning as soon as
224	224	reasonably practicable after approval of the corrected form, the
225	225	retail seller, administrator, or holder shall use the corrected
226	226	form for all sales.
227	227	(f) A debt cancellation agreement form that has been
228	228	approved by the commissioner is public information subject to
229	229	disclosure under Chapter 552, Government Code. Section 552.110,
230	230	Government Code, does not apply to a form approved under this
231	231	chapter [subchapter].
232	232	Sec. 354.006 [348.605]. ADDITIONAL REQUIREMENTS FOR DEBT
233	233	CANCELLATION AGREEMENTS. (a) If a retail buyer purchases a debt
234	234	cancellation agreement, the retail seller must provide to the
235	235	retail buyer a true and correct copy of the agreement not later than
236	236	the 10th day after the date of the [retail installment] contract.
237	237	(b) A holder must comply with the terms of a debt
238	238	cancellation agreement not later than the 60th day after the date of
239	239	receipt of all necessary information required by the holder or
240	240	administrator of the agreement to process the request.
241	241	(c) A debt cancellation agreement may not knowingly be
242	242	offered by a retail seller if:
243	243	(1) the [retail installment] contract is already
244	244	protected by gap insurance; or
245	245	(2) the purchase of the debt cancellation agreement is
246	246	required for the retail buyer to obtain the extension of credit.
247	247	(d) This section does not apply to a debt cancellation
248	248	agreement offered in connection with the purchase of a commercial
249	249	vehicle.
250	250	(e) The sale of a debt cancellation agreement must be for a
251	251	single payment.
252	252	(f) A holder that offers a debt cancellation agreement must
253	253	report the sale of and forward money received on all such agreements
254	254	to any designated party as prescribed in any applicable
255	255	administrative services agreement, contractual liability policy,
256	256	other insurance policy, or other specified program documents.
257	257	(g) Money received or held by a holder or any administrator
258	258	of a debt cancellation agreement and belonging to an insurance
259	259	company, holder, or administrator under the terms of a written
260	260	agreement must be held by the holder or administrator in a fiduciary
261	261	capacity.
262	262	(h) A retail seller that negotiates a debt cancellation
263	263	agreement and subsequently assigns the contract shall:
264	264	(1) maintain documents or data relating to the
265	265	agreement that come into the retail seller's possession; and
266	266	(2) on request of the Office of Consumer Credit
267	267	Commissioner, cooperate in requesting and obtaining access to
268	268	documents or data relating to the agreement not in the retail
269	269	seller's possession.
270	270	Sec. 354.007 [348.606]. REFUND FOR DEBT CANCELLATION
271	271	AGREEMENTS. (a) A refund or credit of the debt cancellation
272	272	agreement fee must be based on the earliest date of:
273	273	(1) the prepayment of the [retail installment]
274	274	contract in full before the original maturity date;
275	275	(2) a demand by the holder for payment in full of the
276	276	unpaid balance or acceleration;
277	277	(3) a request by the retail buyer for cancellation of
278	278	the debt cancellation agreement; or
279	279	(4) the total denial of a debt cancellation request
280	280	based on one of the exclusions listed in Section 354.003 [348.602],
281	281	except in the case of a partial loss of the covered [motor] vehicle.
282	282	(b) The refund or credit for the debt cancellation agreement
283	283	can be rounded to the nearest whole dollar. A refund or credit is
284	284	not required if the amount of the refund or credit calculated is
285	285	less than $5.
286	286	(c) If total loss or theft has not occurred, the retail
287	287	buyer may cancel the debt cancellation agreement not later than the
288	288	30th day after the date of the [retail installment] contract or the
289	289	issuance of the debt cancellation agreement, whichever is later, or
290	290	a later date as provided under the debt cancellation agreement. On
291	291	cancellation, the holder or any administrator of the agreement
292	292	shall refund or credit the entire debt cancellation agreement fee.
293	293	A retail buyer may not cancel the debt cancellation agreement and
294	294	subsequently receive any benefits under the agreement.
295	295	(d) A holder may in good faith rely on a computation by any
296	296	administrator of the agreement of the balance waived, unless the
297	297	holder has knowledge that the computation is not correct. If a
298	298	computation by the administrator of the balance waived is not
299	299	correct, the holder must within a reasonable time of learning that
300	300	the computation is incorrect make the necessary corrections or
301	301	cause the corrections to be made to the retail buyer's account.
302	302	This subsection does not prevent the holder from obtaining
303	303	reimbursement from the administrator or another responsible for the
304	304	debt cancellation agreement or computation.
305	305	(e) If the debt cancellation agreement terminates due to the
306	306	early termination of the contract, the holder shall, not later than
307	307	the 60th day after the date the debt cancellation agreement
308	308	terminates:
309	309	(1) refund or credit an appropriate amount of the debt
310	310	cancellation agreement fee; or
311	311	(2) cause to be refunded or credited an appropriate
312	312	amount of the debt cancellation agreement fee by providing written
313	313	instruction to the appropriate person.
314	314	(f) The holder shall maintain records of any refund or
315	315	credit of an amount of a debt cancellation agreement fee made under
316	316	Subsection (e) and provide electronic access to those records until
317	317	the later of the fourth anniversary of the date of the contract or
318	318	the second anniversary of the date of the refund or credit.
319	319	SECTION 4. Title 5, Finance Code, is amended by adding
320	320	Chapter 397 to read as follows:
321	321	CHAPTER 397. DEBT CANCELLATION AGREEMENTS FOR CERTAIN VEHICLE
322	322	LEASES
323	323	Sec. 397.001. DEFINITIONS. In this chapter:
324	324	(1) "Covered vehicle" includes a self-propelled or
325	325	towed vehicle designed for personal use, including an automobile,
326	326	truck, motorcycle, recreational vehicle, all-terrain vehicle,
327	327	snowmobile, camper, boat, personal watercraft, and personal
328	328	watercraft trailer.
329	329	(2) "Debt cancellation agreement" means a lease term
330	330	or a contractual arrangement modifying a lease term under which a
331	331	lessor or holder agrees to cancel all or part of an obligation of
332	332	the lessee to pay the lessor or holder on the occurrence of the
333	333	total loss or theft of the covered vehicle that is the subject of
334	334	the lease but does not include an offer to pay a specified amount on
335	335	the total loss or theft of the covered vehicle.
336	336	(3) "Holder" means a person who is:
337	337	(A) a lessor; or
338	338	(B) the assignee or transferee of a lease.
339	339	(4) "Lease" means a lease for a covered vehicle.
340	340	Sec. 397.002. APPLICABILITY. This chapter does not apply
341	341	to a lease that is a retail installment transaction under Section
342	342	345.068 or 348.002.
343	343	Sec. 397.003. RELATIONSHIP TO INSURANCE. A debt
344	344	cancellation agreement to which this chapter applies is not
345	345	insurance.
346	346	Sec. 397.004. LIMITATION ON CERTAIN DEBT CANCELLATION
347	347	AGREEMENTS. (a) This chapter applies only to a debt cancellation
348	348	agreement, including a gap waiver agreement or other similarly
349	349	named agreement, that includes insurance coverage as part of the
350	350	lessee's responsibility to the holder.
351	351	(b) The amount charged for a debt cancellation agreement
352	352	made in connection with a lease may not exceed five percent of the
353	353	amount financed pursuant to the lease.
354	354	(c) The debt cancellation agreement becomes a part of or a
355	355	separate addendum to the lease and remains a term of the lease on
356	356	the assignment, sale, or transfer by the holder.
357	357	Sec. 397.005. DEBT CANCELLATION AGREEMENTS EXCLUSION
358	358	LANGUAGE. (a) In addition to the provisions required by Section
359	359	397.006, a debt cancellation agreement must fully disclose all
360	360	provisions permitting the exclusion of loss or damage including, if
361	361	applicable:
362	362	(1) an act occurring after the original maturity date
363	363	or date of the holder's acceleration of the lease;
364	364	(2) any dishonest, fraudulent, illegal, or
365	365	intentional act of any authorized driver that directly results in
366	366	the total loss of the covered vehicle;
367	367	(3) any act of gross negligence by an authorized
368	368	driver that directly results in the total loss of the covered
369	369	vehicle;
370	370	(4) conversion, embezzlement, or concealment by any
371	371	person in lawful possession of the covered vehicle;
372	372	(5) lawful confiscation by an authorized public
373	373	official;
374	374	(6) the operation, use, or maintenance of the covered
375	375	vehicle in any race or speed contest;
376	376	(7) war, whether or not declared, invasion,
377	377	insurrection, rebellion, revolution, or an act of terrorism;
378	378	(8) normal wear and tear, freezing, or mechanical or
379	379	electrical breakdown or failure;
380	380	(9) use of the covered vehicle for primarily
381	381	commercial purposes;
382	382	(10) damage that occurs after the covered vehicle has
383	383	been repossessed;
384	384	(11) damage to the covered vehicle before the purchase
385	385	of the debt cancellation agreement;
386	386	(12) unpaid insurance premiums and salvage, towing,
387	387	and storage charges relating to the covered vehicle;
388	388	(13) damage related to any personal property attached
389	389	to or within the covered vehicle;
390	390	(14) damages associated with falsification of
391	391	documents by any person not associated with the lessor or other
392	392	person canceling the lessee's obligation;
393	393	(15) any unpaid debt resulting from exclusions in the
394	394	lessee's primary physical damage coverage not included in the debt
395	395	cancellation agreement;
396	396	(16) abandonment of the covered vehicle by the lessee
397	397	only if the lessee voluntarily discards, leaves behind, or
398	398	otherwise relinquishes possession of the covered vehicle to the
399	399	extent that the relinquishment shows intent to forsake and desert
400	400	the covered vehicle so that the covered vehicle may be appropriated
401	401	by any other person;
402	402	(17) any amounts deducted from the primary insurance
403	403	carrier's settlement due to prior damages; and
404	404	(18) any loss occurring outside the United States or
405	405	outside the United States and Canada.
406	406	(b) An exclusion of loss or damage not listed in Subsection
407	407	(a) may be included in a debt cancellation agreement only if the
408	408	exclusion is disclosed in plain, easy to read language.
409	409	Sec. 397.006. REQUIRED DEBT CANCELLATION AGREEMENT
410	410	LANGUAGE. A debt cancellation agreement must state:
411	411	(1) the contact information of the lessor, the holder,
412	412	and any administrator of the agreement;
413	413	(2) the name and address of the lessee;
414	414	(3) the cost and term of the debt cancellation
415	415	agreement;
416	416	(4) the procedure the lessee must follow to obtain
417	417	benefits under the terms of the debt cancellation agreement,
418	418	including a telephone number and address where the lessee may
419	419	provide notice under the debt cancellation agreement;
420	420	(5) the period during which the lessee is required to
421	421	notify the lessor, the holder, or any administrator of the
422	422	agreement, of any potential loss under the debt cancellation
423	423	agreement for total loss or theft of the covered vehicle;
424	424	(6) that in order to make a claim, the lessee must
425	425	provide or complete some or all of the following documents and
426	426	provide those documents to the lessor, the holder, or any
427	427	administrator of the agreement:
428	428	(A) a debt cancellation request form;
429	429	(B) proof of loss and settlement payment from the
430	430	lessee's primary comprehensive, collision, or uninsured or
431	431	underinsured motorist policy or other parties' liability insurance
432	432	policy for the settlement of the insured total loss of the covered
433	433	vehicle;
434	434	(C) verification of the lessee's primary
435	435	insurance deductible;
436	436	(D) a copy of any police report filed in
437	437	connection with the total loss or theft of the covered vehicle; and
438	438	(E) a copy of the damage estimate;
439	439	(7) that documentation not described by Subdivision
440	440	(6) may be required by the lessor, the holder, or any administrator
441	441	of the agreement to substantiate the loss or determine the amount of
442	442	debt to be canceled;
443	443	(8) that notwithstanding the collection of the
444	444	documents under Subdivision (6), on reasonable advance notice the
445	445	lessor, the holder, or any administrator of the agreement may
446	446	inspect the lessee's covered vehicle;
447	447	(9) that the lessor or holder will cancel all or part
448	448	of the lessee's obligation as provided in the debt cancellation
449	449	agreement on the occurrence of total loss or theft of the covered
450	450	vehicle;
451	451	(10) the method to be used to calculate refunds;
452	452	(11) the method for calculating the amount to be
453	453	canceled under the debt cancellation agreement on the occurrence of
454	454	total loss or theft of a covered vehicle;
455	455	(12) that purchase of a debt cancellation agreement is
456	456	not required for the lessee to obtain an extension of credit and
457	457	will not be a factor in the credit approval process;
458	458	(13) that in order to cancel the debt cancellation
459	459	agreement and receive a refund, the lessee must provide a written
460	460	request to cancel to the lessor, the holder, or any administrator of
461	461	the agreement;
462	462	(14) that if total loss or theft of the covered vehicle
463	463	has not occurred, the lessee has 30 days from the date of the lease
464	464	or the issuance of the debt cancellation agreement, whichever is
465	465	later, or a longer period as provided under the debt cancellation
466	466	agreement, to cancel the debt cancellation agreement and receive a
467	467	full refund; and
468	468	(15) that the lessor will cancel certain amounts under
469	469	the debt cancellation agreement for total loss or theft of a covered
470	470	vehicle, in the following or substantially similar language: "YOU
471	471	WILL CANCEL CERTAIN AMOUNTS I OWE UNDER THIS LEASE IN THE CASE OF A
472	472	TOTAL LOSS OR THEFT OF THE COVERED VEHICLE AS STATED IN THE DEBT
473	473	CANCELLATION AGREEMENT."
474	474	Sec. 397.007. ADDITIONAL REQUIREMENTS FOR DEBT
475	475	CANCELLATION AGREEMENTS. (a) If a lessee purchases a debt
476	476	cancellation agreement, the lessor must provide to the lessee a
477	477	true and correct copy of the agreement not later than the 10th day
478	478	after the date of the lease.
479	479	(b) A holder must comply with the terms of a debt
480	480	cancellation agreement not later than the 60th day after the date of
481	481	receipt of all necessary information required by the holder or
482	482	administrator of the agreement to process the request.
483	483	(c) A debt cancellation agreement may not knowingly be
484	484	offered by a lessor if:
485	485	(1) the lease is already protected by gap insurance;
486	486	or
487	487	(2) the purchase of the debt cancellation agreement is
488	488	required for the lessee to obtain the extension of credit.
489	489	(d) This section does not apply to a debt cancellation
490	490	agreement offered in connection with the lease of a commercial
491	491	vehicle.
492	492	(e) The sale of a debt cancellation agreement must be for a
493	493	single payment.
494	494	(f) A holder that offers a debt cancellation agreement must
495	495	report the sale of and forward money received on all such agreements
496	496	to any designated party as prescribed in any applicable
497	497	administrative services agreement, contractual liability policy,
498	498	other insurance policy, or other specified program documents.
499	499	(g) Money received or held by a holder or any administrator
500	500	of a debt cancellation agreement and belonging to an insurance
501	501	company, holder, or administrator under the terms of a written
502	502	agreement must be held by the holder or administrator in a fiduciary
503	503	capacity.
504	504	(h) A lessor that negotiates a debt cancellation agreement
505	505	and subsequently assigns the lease shall maintain documents or data
506	506	relating to the agreement that come into the lessor's possession.
507	507	Sec. 397.008. REFUND FOR DEBT CANCELLATION AGREEMENTS. (a)
508	508	A refund or credit of the debt cancellation agreement fee must be
509	509	based on the earliest date of:
510	510	(1) the prepayment of the lease in full before the
511	511	original maturity date;
512	512	(2) a demand by the holder for payment in full of the
513	513	unpaid balance or acceleration;
514	514	(3) a request by the lessee for cancellation of the
515	515	debt cancellation agreement; or
516	516	(4) the total denial of a debt cancellation request
517	517	based on one of the exclusions listed in Section 397.005, except in
518	518	the case of a partial loss of the covered vehicle.
519	519	(b) The refund or credit for the debt cancellation agreement
520	520	can be rounded to the nearest whole dollar. A refund or credit is
521	521	not required if the amount of the refund or credit calculated is
522	522	less than $5.
523	523	(c) If total loss or theft has not occurred, the lessee may
524	524	cancel the debt cancellation agreement not later than the 30th day
525	525	after the date of the lease or the issuance of the debt cancellation
526	526	agreement, whichever is later, or a later date as provided under the
527	527	debt cancellation agreement. On cancellation, the holder or any
528	528	administrator of the agreement shall refund or credit the entire
529	529	debt cancellation agreement fee. A lessee may not cancel the debt
530	530	cancellation agreement and subsequently receive any benefits under
531	531	the agreement.
532	532	(d) A holder may in good faith rely on a computation by any
533	533	administrator of the agreement of the balance waived, unless the
534	534	holder has knowledge that the computation is not correct. If a
535	535	computation by the administrator of the balance waived is not
536	536	correct, the holder must within a reasonable time of learning that
537	537	the computation is incorrect make the necessary corrections or
538	538	cause the corrections to be made to the lessee's account. This
539	539	subsection does not prevent the holder from obtaining reimbursement
540	540	from the administrator or another responsible for the debt
541	541	cancellation agreement or computation.
542	542	(e) If the debt cancellation agreement terminates due to the
543	543	early termination of the lease, the holder shall, not later than the
544	544	60th day after the date the debt cancellation agreement terminates:
545	545	(1) refund or credit an appropriate amount of the debt
546	546	cancellation agreement fee; or
547	547	(2) cause to be refunded or credited an appropriate
548	548	amount of the debt cancellation agreement fee by providing written
549	549	instruction to the appropriate person.
550	550	(f) The holder shall maintain records of any refund or
551	551	credit of an amount of a debt cancellation agreement fee made under
552	552	Subsection (e) and provide electronic access to those records until
553	553	the later of the fourth anniversary of the date of the lease or the
554	554	second anniversary of the date of the refund or credit.
555	555	Sec. 397.009. REMEDY. If the attorney general reasonably
556	556	believes that a person is violating or is about to violate this
557	557	chapter, the attorney general may bring an action in the name of
558	558	this state against the person to restrain or enjoin the person from
559	559	violating this chapter.
560	560	SECTION 5. This Act takes effect September 1, 2017.