Texas 2019 - 86th Regular

Texas House Bill HB2639 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1		-	~~86R27878~~ ATP-F
	1	+	86R8982 ATP-F
2	2		By: Flynn H.B. No. 2639
3		-	Substitute the following for H.B. No. 2639:
4		-	By: Capriglione C.S.H.B. No. 2639
5	3
6	4
7	5		A BILL TO BE ENTITLED
8	6		AN ACT
9	7		relating to debt cancellation agreements offered in connection with
10	8		certain retail installment contracts.
11	9		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
12	10		SECTION 1. Section 354.001, Finance Code, is amended by
13	11		adding Subdivision (3-a) to read as follows:
14	12		(3-a) "Debt cancellation agreement fee" means the
15	13		amount charged for a debt cancellation agreement made in connection
16	14		with a contract.
17	15		SECTION 2. Section 354.002(b), Finance Code, is amended to
18	16		read as follows:
19	17		(b) The debt cancellation agreement fee [amount charged for
20	18		a debt cancellation agreement made in connection with a contract]
21	19		may not exceed five percent of the amount financed pursuant to the
22	20		contract. Section 348.124(c) does not apply to a debt cancellation
23	21		agreement regulated under this chapter.
24	22		SECTION 3. Section 354.004, Finance Code, is amended to
25	23		read as follows:
26	24		Sec. 354.004. REQUIRED DEBT CANCELLATION AGREEMENT
27	25		LANGUAGE. A debt cancellation agreement must state:
28	26		(1) the contact information of the retail seller, the
29	27		holder, and any administrator of the debt cancellation agreement;
30	28		(2) the name and address of the retail buyer;
31	29		(3) the cost and term of the debt cancellation
32	30		agreement;
33	31		(4) the procedure the retail buyer must follow to
34	32		obtain benefits under the terms of the debt cancellation agreement,
35	33		including a telephone number and address where the retail buyer may
36	34		provide notice under the debt cancellation agreement;
37	35		(5) the period during which the retail buyer is
38	36		required to notify the retail seller, the holder, or any
39	37		administrator of the agreement of any potential loss under the debt
40	38		cancellation agreement for total loss or theft of the covered
41	39		vehicle;
42	40		(6) that in order to make a claim, the retail buyer
43	41		must provide or complete some or all of the following documents and
44	42		provide those documents to the retail seller, the holder, or any
45	43		administrator of the agreement:
46	44		(A) a debt cancellation request form;
47	45		(B) proof of loss and settlement payment from the
48	46		retail buyer's primary comprehensive, collision, or uninsured or
49	47		underinsured motorist policy or other parties' liability insurance
50	48		policy for the settlement of the insured total loss of the covered
51	49		vehicle;
52	50		(C) verification of the retail buyer's primary
53	51		insurance deductible;
54	52		(D) a copy of any police report filed in
55	53		connection with the total loss or theft of the covered vehicle; and
56	54		(E) a copy of the damage estimate;
57	55		(7) that documentation not described by Subdivision
58	56		(6) or required by the retail seller, the holder, or any
59	57		administrator of the agreement is not required to substantiate the
60	58		loss or determine the amount of debt to be canceled;
61	59		(8) that notwithstanding the collection of the
62	60		documents under Subdivision (6), on reasonable advance notice the
63	61		retail seller, the holder, or any administrator of the agreement
64	62		may inspect the retail buyer's covered vehicle;
65	63		(9) that the retail seller or holder will cancel all or
66	64		part of the retail buyer's obligation as provided in the debt
67	65		cancellation agreement on the occurrence of total loss or theft of
68	66		the covered vehicle;
69	67		(10) the method to be used to calculate refunds;
70	68		(11) the method for calculating the amount to be
71	69		canceled under the debt cancellation agreement on the occurrence of
72	70		total loss or theft of a covered vehicle;
73	71		(12) that purchase of a debt cancellation agreement is
74	72		not required for the retail buyer to obtain an extension of credit
75	73		and will not be a factor in the credit approval process;
76	74		(13) that in order to cancel the debt cancellation
77	75		agreement and receive a refund, the retail buyer must provide a
78	76		written request to cancel to the retail seller, the holder, or any
79	77		administrator of the agreement;
80	78		(14) that if total loss or theft of the covered vehicle
81	79		has not occurred, the retail buyer has 30 days from the date of the
82	80		contract or the issuance of the debt cancellation agreement,
83	81		whichever is later, or a longer period as provided under the debt
84	82		cancellation agreement, to cancel the debt cancellation agreement
85	83		and receive a full refund of the debt cancellation agreement fee;
86	84		(15) that the retail buyer may file a complaint with
87	85		the commissioner, and include the address, phone number, and
88	86		Internet website of the Office of Consumer Credit Commissioner; and
89	87		(16) that the holder will cancel certain amounts under
90	88		the debt cancellation agreement for total loss or theft of a covered
91	89		vehicle, in the following or substantially similar language: "YOU
92	90		WILL CANCEL CERTAIN AMOUNTS I OWE UNDER THIS CONTRACT IN THE CASE OF
93	91		A TOTAL LOSS OR THEFT OF THE COVERED VEHICLE AS STATED IN THE DEBT
94	92		CANCELLATION AGREEMENT."
95	93		SECTION 4. Sections 354.006(a), (b), (f), (g), and (h),
96	94		Finance Code, are amended to read as follows:
97	95		(a) If a retail buyer purchases a debt cancellation
98	96		agreement, the retail seller must provide to the retail buyer a true
99	97		and correct copy of the debt cancellation agreement not later than
100	98		the 10th day after the date of the contract.
101	99		(b) A holder must comply with the terms of a debt
102	100		cancellation agreement not later than the 60th day after the date of
103	101		receipt of all necessary information required by the holder or
104	102		administrator of the debt cancellation agreement to process the
105	103		request.
106	104		(f) A retail seller [holder] that offers a debt cancellation
107	105		agreement must report the sale [of] and forward the debt
108	106		cancellation agreement fee [money received on all such agreements]
109	107		to the [any] designated party as prescribed in any applicable debt
110	108		cancellation agreement [administrative services agreement,
111	109		contractual liability policy, other insurance policy, or other
112	110		specified] program documents.
113	111		(g) Until the debt cancellation agreement fee has been
114	112		forwarded to the designated party as prescribed in any applicable
115	113		debt cancellation agreement program documents, the debt
116	114		cancellation agreement fee [Money] received or held by a retail
117	115		seller [holder] or any administrator of a debt cancellation
118	116		agreement and belonging to an administrator or any insurance
119	117		company[, holder, or administrator] under the terms of a written
120	118		agreement must be held by the retail seller [holder] or
121	119		administrator in a fiduciary capacity.
122	120		(h) A retail seller that negotiates a debt cancellation
123	121		agreement and subsequently assigns the contract shall:
124	122		(1) maintain documents relating to the debt
125	123		cancellation agreement that come into the retail seller's
126	124		possession; and
127	125		(2) on request of the Office of Consumer Credit
128	126		Commissioner, cooperate in requesting and obtaining access to
129	127		documents relating to the debt cancellation agreement not in the
130	128		retail seller's possession.
131	129		SECTION 5. The heading to Section 354.007, Finance Code, is
132	130		amended to read as follows:
133	131		Sec. 354.007. REFUND OR CREDIT FOR DEBT CANCELLATION
134	132		AGREEMENTS.
135		-	SECTION 6. Section 354.007, Finance Code, is amended by
136		-	amending Subsections (b), (c), (e), and (g) and adding Subsection
137		-	(e-1) to read as follows:
	133	+	SECTION 6. Sections 354.007(b), (c), (e), and (g), Finance
	134	+	Code, are amended to read as follows:
138	135		(b) The refund or credit for the debt cancellation agreement
139	136		fee can be rounded to the nearest whole dollar. A refund or credit
140	137		of the debt cancellation agreement fee is not required if the amount
141	138		of the refund or credit calculated is less than $5.
142	139		(c) If total loss or theft has not occurred, the retail
143	140		buyer may cancel the debt cancellation agreement not later than the
144	141		30th day after the date of the contract or the issuance of the debt
145	142		cancellation agreement, whichever is later, or a later date as
146	143		provided under the debt cancellation agreement. On cancellation of
147		-	the debt cancellation agreement, the ~~[holder or any]~~ ~~administrator~~
148		-	of the ~~agreement shall refund or cause to be refunded the entire~~
149		-	debt cancellation agreement fee ~~to the retail buyer or forward to~~
150		-	the holder the entire debt cancellation agreement fee ~~to be applied~~
151		-	as a credit under the contract [the entire debt ~~cancellation~~
152		-	agreement fee]. A retail buyer may not cancel the debt ~~cancellation~~
153		-	agreement and subsequently receive any benefits under ~~the debt~~
154		-	cancellation agreement.
	144	+	the debt cancellation agreement, the recipient of the debt
	145	+	cancellation agreement fee [holder or any administrator of the
	146	+	agreement] shall refund the entire debt cancellation agreement fee
	147	+	or forward to the holder the entire debt cancellation agreement fee
	148	+	to be applied as a credit under the contract [the entire debt
	149	+	cancellation agreement fee]. A retail buyer may not cancel the debt
	150	+	cancellation agreement and subsequently receive any benefits under
	151	+	the debt cancellation agreement.
155	152		(e) If the debt cancellation agreement terminates due to the
156		-	early termination of the contract, the administrator of the
157		-	agreement [holder] shall, not later than the 60th day after the date
158		-	the debt cancellation agreement terminates, [:
159		-	[(1)] refund or cause to be refunded an appropriate
160		-	amount of the debt cancellation agreement fee to the retail buyer or
161		-	forward to the holder [credit] an appropriate amount of the debt
162		-	cancellation agreement fee to be applied as a credit under the
163		-	contract [; or
	153	+	early termination of the contract, the recipient of the debt
	154	+	cancellation agreement fee [holder] shall, not later than the 60th
	155	+	day after the date the debt cancellation agreement terminates, [:
	156	+	[(1)] refund an appropriate amount of the debt
	157	+	cancellation agreement fee to the retail buyer or forward to the
	158	+	holder [credit] an appropriate amount of the debt cancellation
	159	+	agreement fee to be applied as a credit under the contract [; or
164	160		[(2) cause to be refunded or credited an appropriate
165	161		amount of the debt cancellation agreement fee by providing written
166	162		instruction to the appropriate person].
167		-	(e-1) If a refund or credit of the debt cancellation
168		-	agreement fee is based on Subsection (a)(1) or (2) or on a request
169		-	by the retail buyer to the holder for cancellation of the debt
170		-	cancellation agreement, the holder shall notify the administrator
171		-	of the agreement in writing, including by electronic means, of the
172		-	early termination of the debt cancellation agreement not later than
173		-	the 30th day after the date of the occurrence described by
174		-	Subsection (a)(1) or (2) or of the request for cancellation by the
175		-	retail buyer. If the holder provides notice under this subsection
176		-	within the 30-day period, the holder's liability to any person for a
177		-	refund of the debt cancellation agreement fee, or any part of the
178		-	fee, is terminated.
179		-	(g) The administrator of the debt cancellation agreement
180		-	[holder] shall maintain or cause to be maintained records of any
181		-	refund or credit of an amount of a debt cancellation agreement fee
182		-	made under Subsection (e) and provide electronic access to those
183		-	records until the later of the fourth anniversary of the date of the
184		-	contract or the second anniversary of the date of the refund or
185		-	credit.
	163	+	(g) The recipient of the debt cancellation agreement fee
	164	+	[holder] shall maintain records of any refund or credit of an amount
	165	+	of a debt cancellation agreement fee made under Subsection (e) and
	166	+	provide electronic access to those records until the later of the
	167	+	fourth anniversary of the date of the contract or the second
	168	+	anniversary of the date of the refund or credit.
186	169		SECTION 7. Chapter 354, Finance Code, is amended by adding
187	170		Section 354.008 to read as follows:
188	171		Sec. 354.008. RECORDKEEPING. The holder shall maintain
189	172		records of a debt cancellation agreement until the fourth
190	173		anniversary of the date of the contract.
191	174		SECTION 8. Sections 354.007(d) and (f), Finance Code, are
192	175		repealed.
193	176		SECTION 9. Section 354.008, Finance Code, as added by this
194	177		Act, applies only to a retail installment contract entered into on
195	178		or after the effective date of this Act. A retail installment
196	179		contract entered into before the effective date of this Act is
197	180		governed by the law in effect on the date the contract was entered
198	181		into, and the former law is continued in effect for that purpose.
199	182		SECTION 10. This Act takes effect September 1, 2019.