Texas Register, Volume 37, Number 35, Pages 6819-7008, August 31, 2012 Page: 6,854
6819-7008 p. ; 28 cm.View a full description of this periodical.
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available during the investigation and examination process, it will
benefit the agency's ability to resolve complaints and other com-
pliance-related concerns.
Also in 84.707 - 84.709, updates have been made to replace
any references to the Texas Department of Transportation with
the recently created Texas Department of Motor Vehicles. The
remaining technical corrections throughout the recordkeeping
rules include the following: citations as revised by the CFPB,
more consistent references to the Texas Comptroller of Public
Accounts, form title revised by the Texas Department of Public
Safety, updated statutory and regulation references, streamlin-
ing of duplicated language, and improved grammar and punctu-
ation.
Technical corrections have been made to 84.801, Purpose;
84.802, Non-Standard Contract Filing Procedures; 84.803,
Relationship with Federal Law; and 84.805, Other Disclosures
Required by Commission Rule. In particular, these changes
provide updated federal legal citations, clarification, and im-
proved grammar and punctuation.
In 84.806, regarding the format of the model motor vehicle retail
installment contract, additional readable typefaces have been
added to subsection (b). This revision is parallel to the one pro-
posed in 84.204 and offers greater flexibility when formatting
the contracts.
Leslie L. Pettijohn, Consumer Credit Commissioner, has deter-
mined that for the first five-year period the amendments are in
effect there will be no fiscal implications for state or local govern-
ment as a result of administering the rules.
Commissioner Pettijohn also has determined that for each year
of the first five years the amendments are in effect, the public
benefit anticipated as a result of the changes from the previously
enacted version of these rules will be that the commission's rules
will be more easily understood by licensees required to comply
with the rules and will be more easily enforced. The general sub-
stance of these rules has already been in effect, as the majority
of the amendments involve clarification and reorganization. Ad-
ditionally, minor additions incorporate into rule form the actions
that licensees should already be performing in order to fulfill ex-
isting statutory requirements. Thus, there is no anticipated cost
to persons who are required to comply with the amendments as
proposed. There is no anticipated adverse economic effect on
small or micro businesses. There will be no effect on individuals
required to comply with the amendments as proposed.
Comments on the proposed amendments may be submitted
in writing to Laurie Hobbs, Assistant General Counsel, Of-
fice of Consumer Credit Commissioner, 2601 North Lamar
Boulevard, Austin, Texas 78705-4207 or by email to lau-
rie.hobbs@occc.state.tx.us. To be considered, a written
comment must be received on or before the 31st day after the
date the proposal is published in the Texas Register. At the
conclusion of the 31st day after the proposal is published in the
Texas Register, no further written comments will be considered
or accepted by the commission.
SUBCHAPTER A. GENERAL PROVISIONS
7 TAC 84.102, 84.105
The amendments are proposed under Texas Finance Code,
11.304, which authorizes the commission to adopt rules to
enforce Title 4 of the Texas Finance Code. Additionally, Texas
Finance Code, 348.513 grants the commission the authorityto adopt rules to enforce the motor vehicle installment sales
chapter.
The statutory provisions affected by the proposed amendments
are contained in Texas Finance Code, Chapter 348.
84.102. Definitions.
The following words and terms, when used in this chapter, have the
following meanings, unless the context clearly indicates otherwise:
(1) - (14) (No change.)
(15) Scheduled installment earnings method--The sched-
uled installment earnings method is a method to compute the finance
charge by applying a daily rate to the unpaid principal balance as if
each payment will be made on its scheduled installment date. A pay-
ment received before or after the due date does not affect the amount
of the scheduled reduction in the unpaid principal balance. Under this
method, a finance charge refund is calculated by deducting the earned
finance charges from the total finance charges. If prepayment in full
or demand for payment in full occurs between payment due dates, a
daily rate equal to 1/365th of the annual rate is multiplied by the unpaid
principal balance. The result is then multiplied by the actual number of
days from the date of the previous scheduled installment through the
date of prepayment or demand for payment in full to determine earned
finance charges for the abbreviated period. In addition to the earned
finance charges calculated in this paragraph, the creditor may also earn
a $25 acquisition fee so long as the total of the earned finance charges
and the acquisition fee do not exceed the finance charge disclosed in
the contract. The creditor is not required to refund unearned finance
charges if the refund is less than $1.00. The scheduled installment earn-
ings method may be used with either an irregular payment contract or
a regular payment contract. The computation of finance charges must
comply with the U.S. Rule [rule] as defined in paragraph (21) of this
section [Appendix J- f 4-2 A R Part 226 (Regutato Z)].
(16) (No change.)
(17) Sales tax deferred transaction--A retail installment
sales transaction in which a retail seller or a qualified related finance
company collects sales tax from the retail buyer and remits the tax
under Texas Tax Code, 152.047 to the Texas Comptroller of Public
Accounts.
(18) - (19) (No change.)
(20) True daily earnings method--The true daily earnings
method is a method to compute the finance charge by applying a daily
rate to the unpaid principal balance. The daily rate is 1/365th of the
equivalent contract rate. The earned finance charge is computed by
multiplying the daily rate of the finance charge by the number of days
the actual unpaid principal balance is outstanding. Payments are cred-
ited as of the time received; therefore, payments received prior to the
scheduled installment date result in a greater reduction of the unpaid
principal balance than the scheduled reduction, and payments received
after the scheduled installment date result in less than the scheduled
reduction of the unpaid principal balance. The computation of finance
charges must comply with the U.S. Rule [rule] as defined in paragraph
(21) of this section [Appendix J of 42 A; R Pa 226 (Rgutatio Z)].
(21) U.S. Rule--The ruling of the United States Supreme
Court in Story v. Livingston, 38 U.S. (13 Pet.) 359, 371 (1839) that,
in partial payments on a debt, each payment is applied first to finance
charge and any remainder reduces the principal. Under this rule, ac-
crued but unpaid finance charge cannot be added to the principal and
interest cannot be compounded. The U.S. Rule is described in Reg-
ulation Z, 12 C.F.R. Part 226, Appendix J, and 12 C.F.R. Part 1026,
Appendix J.37 TexReg 6854 August 31, 2012 Texas Register
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Texas. Secretary of State. Texas Register, Volume 37, Number 35, Pages 6819-7008, August 31, 2012, periodical, August 31, 2012; Austin, Texas. (https://texashistory.unt.edu/ark:/67531/metapth253227/m1/36/: accessed April 19, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu; crediting UNT Libraries Government Documents Department.