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House Bill 2931 |
House Author: Woolley |
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Effective: 9-1-11 |
Senate Sponsor: Van de Putte |
House Bill 2931 amends the Finance Code to establish provisions applicable exclusively to a debt cancellation agreement that includes insurance coverage as part of the retail buyer's responsibility to the holder. The bill requires the amount charged for such a debt cancellation agreement made in connection with a retail installment contract to be created in good faith and be commercially reasonable, requires a debt cancellation agreement to fully disclose all provisions that permit the exclusion of a loss or damage, and lists certain applicable exclusions. The bill establishes required statements in a debt cancellation agreement and sets out provisions relating to debt cancellation agreement forms and their approval.
House Bill 2931, among additional requirements relating to a debt cancellation agreement, requires a retail seller to provide to the retail buyer a copy of the purchased debt cancellation agreement within a specified period and requires a holder to comply with the terms of a debt cancellation agreement within a specified period. The bill prohibits a retail seller from knowingly offering a debt cancellation agreement if the retail installment contract is already protected by gap insurance or if the purchase of the agreement is required for the retail buyer to obtain the extension of credit. The bill exempts an agreement offered in connection with the purchase of a commercial vehicle from the additional requirements of the bill for a debt cancellation agreement.
House Bill 2931 specifies the earliest dates on which a refund or credit of a debt cancellation agreement must be based, specifies the date on which an agreement may be canceled if total loss or theft has not occurred, requires the holder or any administrator of the agreement to refund or credit the entire debt cancellation agreement fee on cancellation, and prohibits a retail buyer from receiving any benefits after an agreement has been canceled. The bill provides the applicable actions by a holder if a computation by the administrator of a waived balance is not correct.