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AN ACT
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relating to requirements regarding motor vehicle retail |
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installment transactions. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 348.001(3), Finance Code, is amended to |
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read as follows: |
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(3) "Holder" means a person who is: |
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(A) a retail seller; or |
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(B) the assignee or transferee of [if] a retail |
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installment contract [or the outstanding balance under the contract
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is sold or otherwise transferred, the person to whom it is sold or
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otherwise transferred]. |
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SECTION 2. Section 348.007, Finance Code, is amended by |
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amending Subsection (a) and adding Subsection (a-2) to read as |
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follows: |
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(a) Except as otherwise provided by this section, each |
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[Each] retail installment transaction is subject to this chapter. |
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(a-2) A retail installment transaction in which a retail |
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buyer purchases a commercial vehicle is only subject to the |
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following provisions of this chapter: |
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(1) Subchapter A, except Section 348.0091 or unless |
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expressly stated otherwise; |
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(2) Subchapter B, except Sections 348.102 and 348.123; |
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(3) Subchapter C, except Sections 348.204(b), |
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348.206, 348.209, and 348.210; |
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(4) Subchapter D; |
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(5) Subchapter E, except Sections 348.404(d) and |
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348.407; and |
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(6) Subchapter F, except Sections 348.504(a)(2), |
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348.514, 348.516, and 348.517. |
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SECTION 3. Subchapter A, Chapter 348, Finance Code, is |
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amended by adding Section 348.0091 to read as follows: |
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Sec. 348.0091. DISCLOSURE OF EQUITY IN TRADE-IN MOTOR |
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VEHICLE. (a) A retail seller may not accept a trade-in motor |
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vehicle for a motor vehicle sold under a retail installment |
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contract unless the retail seller provides to the retail buyer, |
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before the buyer signs the contract, a completed disclosure of |
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trade-in equity form prescribed by this section. |
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(b) The finance commission shall by rule adopt a standard |
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form for the disclosure of the equity in a retail buyer's trade-in |
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motor vehicle. |
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(c) The form adopted by the finance commission under |
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Subsection (b), at a minimum, must: |
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(1) contain: |
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(A) the name of the retail buyer; |
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(B) the name, address, and telephone number of |
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the retail seller; |
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(C) the make, model, year, and vehicle |
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identification number of the trade-in motor vehicle; |
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(D) the date of the retail installment |
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transaction; |
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(E) the amount offered by the retail seller to |
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the retail buyer for the trade-in motor vehicle; |
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(F) the amount the retail buyer owes on the |
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trade-in motor vehicle as of the date of the retail installment |
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transaction; |
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(G) a statement indicating whether the retail |
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buyer's equity in the trade-in motor vehicle is positive or |
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negative; |
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(H) a disclosure containing substantially |
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similar words to the following: "If the EQUITY amount is NEGATIVE, |
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the value the retail seller is offering you for your trade-in motor |
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vehicle is less than what you currently owe on your trade-in. The |
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amount of negative equity may be further reduced by the amount of |
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any cash down payment and manufacturer's rebate and may be included |
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in the amount financed under your retail installment contract as an |
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itemized charge."; |
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(I) the cash price of the vehicle being purchased |
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under the retail installment transaction; and |
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(J) the amount financed under the retail |
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installment contract; |
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(2) include a space for the signature of both the |
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retail seller and retail buyer and the printed name of the retail |
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seller; and |
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(3) be signed and dated by the retail seller and retail |
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buyer. |
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(d) The retail seller is solely responsible for the content |
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and delivery of the disclosure form required by Subsection (a). An |
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assignee of a retail installment contract may not be held |
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responsible for a retail seller's failure to comply with the |
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requirements of this section. |
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(e) This section does not create a private right of action. |
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The commissioner has exclusive jurisdiction to enforce this |
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section. |
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SECTION 4. Section 348.004(a), Finance Code, is amended to |
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read as follows: |
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(a) The cash price is the price at which the retail seller |
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offers in the ordinary course of business to sell for cash the goods |
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or services that are subject to the transaction. An advertised |
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price does not necessarily establish a cash price. |
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SECTION 5. Sections 348.104(b), (c), (d), and (h), Finance |
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Code, are amended to read as follows: |
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(b) The add-on charge is $7.50 per $100 per year on the |
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principal balance for[:
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[(1)] a new [domestic] motor vehicle, other than a |
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heavy commercial vehicle, designated by the manufacturer by a model |
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year that is not earlier than the year in which the sale is made[; or
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[(2)
a new foreign motor vehicle, other than a heavy
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commercial vehicle]. |
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(c) The add-on charge is $10 per $100 per year on the |
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principal balance for: |
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(1) a new [domestic] motor vehicle not covered by |
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Subsection (b); |
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(2) a used [domestic] motor vehicle designated by the |
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manufacturer by a model year that is not more than two years before |
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the year in which the sale is made; or |
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(3) [a used foreign motor vehicle that is not more than
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two years old; or
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[(4)] a new or used heavy commercial vehicle |
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designated by the manufacturer by a model year that is not more than |
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two years before the year in which the sale is made [old]. |
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(d) The add-on charge is $12.50 per $100 per year on the |
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principal balance for a used motor vehicle not covered by |
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Subsection (c) that is[:
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[(1)] a [domestic] motor vehicle designated by the |
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manufacturer by a model year that is not more than four years before |
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the year in which the sale is made[; or
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[(2)
a foreign motor vehicle that is not more than four
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years old]. |
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(h) For the purpose of a computation under this section, 16 |
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[15] or more days of a month may be considered a full month. |
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SECTION 6. Section 348.404, Finance Code, is amended by |
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amending Subsection (b) and adding Subsection (d) to read as |
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follows: |
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(b) A retail seller, in connection with a retail installment |
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transaction, may: |
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(1) advance money to retire: |
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(A) an amount owed against a motor vehicle used |
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as a trade-in or a motor vehicle owned by the buyer that has been |
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declared a total loss by the buyer's insurer; or |
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(B) the retail buyer's outstanding obligation |
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under a motor vehicle lease contract, a credit transaction for the |
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purchase of a motor vehicle, or another retail installment |
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transaction; and |
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(2) finance repayment of that money in a retail |
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installment contract. |
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(d) A retail seller may include money advanced under |
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Subsection (b) in the retail installment contract only if it is |
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included as an itemized charge and may disclose money advanced |
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under Subsection (b) in any manner permitted by 12 C.F.R. Part 226 |
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(Regulation Z) adopted under the Truth in Lending Act (15 U.S.C. |
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Section 1601 et seq.). Section 349.003 does not apply to this |
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subsection. This subsection does not create a private right of |
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action. The commissioner has exclusive jurisdiction to enforce |
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this subsection. |
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SECTION 7. Section 348.408, Finance Code, is amended by |
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adding Subsection (c) to read as follows: |
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(c) A retail seller must pay in full the outstanding balance |
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of a vehicle traded in not later than the 25th day after the date |
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that: |
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(1) the retail installment contract is signed by the |
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retail buyer and the retail buyer receives delivery of the motor |
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vehicle; and |
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(2) the retail seller receives delivery of the motor |
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vehicle traded in and the necessary and appropriate documents to |
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transfer title from the buyer. |
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SECTION 8. Section 348.501, Finance Code, is amended by |
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amending Subsection (b) and adding Subsection (c) to read as |
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follows: |
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(b) A person who is required to hold a license under this |
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chapter must ensure that each office at which retail installment |
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transactions are made, serviced, held, or collected under this |
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chapter is licensed or otherwise authorized to make, service, hold, |
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or collect retail installment transactions in accordance with this |
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chapter and rules implementing this chapter. |
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(c) A person may not use any device, subterfuge, or pretense |
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to evade the application of this section. |
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SECTION 9. Section 348.513(a), Finance Code, is amended to |
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read as follows: |
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(a) The finance commission may adopt rules to: |
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(1) enforce this chapter; or |
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(2) modify the standard form as required by Section |
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348.0091 to: |
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(A) conform to the provisions of the Truth in |
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Lending Act (15 U.S.C. Section 1601 et seq.) or a regulation issued |
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under authority of that Act; |
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(B) address any official commentary or other |
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interpretation by a federal agency relating to the Truth in Lending |
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Act (15 U.S.C. Section 1601 et seq.) or a regulation issued under |
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authority of that Act; or |
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(C) address a judicial interpretation by a state |
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or federal court relating to the Truth in Lending Act (15 U.S.C. |
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Section 1601 et seq.) or a regulation issued under authority of that |
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Act. |
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SECTION 10. Sections 348.514(c) and (d), Finance Code, are |
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amended to read as follows: |
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(c) During an examination or investigation the commissioner |
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or the commissioner's representative may administer oaths and |
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examine any person under oath on any subject pertinent to a matter |
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that the commissioner is authorized or required to consider, |
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investigate, or secure information about under this chapter. |
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(d) All information relating to the examination or |
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investigation process [Information obtained under this section] is |
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confidential, including: |
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(1) information obtained from the license holder; |
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(2) the examination report; |
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(3) instructions and attachments; and |
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(4) correspondence between the license holder and the |
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commissioner or the commissioner's representative relating to an |
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examination or investigation of the license holder. |
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SECTION 11. The heading to Section 348.517, Finance Code, |
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is amended to read as follows: |
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Sec. 348.517. LICENSE HOLDER'S RECORDS; DOCUMENT RETENTION |
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REQUIREMENTS. |
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SECTION 12. Section 348.517(b), Finance Code, is amended to |
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read as follows: |
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(b) A license holder shall keep the record until the later |
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of: |
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(1) the fourth [third] anniversary of the date of the |
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[last payment was made on the] retail installment transaction; or |
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(2) the second anniversary of the date on which the |
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final entry is made in the record. |
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SECTION 13. (a) As soon as practicable after the effective |
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date of this Act, the Finance Commission of Texas shall adopt the |
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form required by Section 348.0091, Finance Code, as added by this |
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Act. |
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(b) Notwithstanding Section 348.0091, Finance Code, as |
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added by this Act, a retail seller is not required to comply with |
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that section until the Finance Commission of Texas prescribes the |
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form required by that section. |
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SECTION 14. (a) Except as provided by Subsection (b) of |
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this section, this Act takes effect September 1, 2009. |
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(b) Section 348.007, Finance Code, as amended by this Act, |
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takes effect only if House Bill 4361 or Senate Bill 1965, proposed |
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by the 81st Legislature, Regular Session, 2009, relating to the |
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regulation of retail installment contracts for commercial |
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vehicles, is passed and becomes law. If neither bill becomes law, |
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the change in law made by this Act to Section 348.007, Finance Code, |
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has no effect. |
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______________________________ |
______________________________ |
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President of the Senate |
Speaker of the House |
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I certify that H.B. No. 2438 was passed by the House on May |
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11, 2009, by the following vote: Yeas 144, Nays 0, 3 present, not |
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voting; and that the House concurred in Senate amendments to H.B. |
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No. 2438 on May 29, 2009, by the following vote: Yeas 142, Nays 0, |
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2 present, not voting. |
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______________________________ |
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Chief Clerk of the House |
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I certify that H.B. No. 2438 was passed by the Senate, with |
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amendments, on May 27, 2009, by the following vote: Yeas 31, Nays |
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0. |
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______________________________ |
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Secretary of the Senate |
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APPROVED: __________________ |
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Date |
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__________________ |
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Governor |