By Marchant H.B. No. 813
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the regulation of certain installment sales.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Subsection (f), Article 7.01, Title 79, Revised
1-5 Statutes (Article 5069-7.01, Vernon's Texas Civil Statutes) is
1-6 amended to read as follows:
1-7 (f) "Cash Price" means the price at which a creditor, in the
1-8 ordinary course of business, offers to sell for cash the property
1-9 or service that is the subject of the transaction. At the
1-10 creditor's option, the term may include the price of accessories,
1-11 services related to the sale, service contracts and taxes and fees
1-12 for license, title, and registration. The term does not include
1-13 any finance charge <stated in a retail installment contract for
1-14 which the seller would have sold to the buyer and the buyer would
1-15 have bought from the seller, the motor vehicle and other goods and
1-16 services which are the subject matter of such contract if such sale
1-17 had been a sale for cash. The cash price may include any taxes and
1-18 charges for delivering, servicing, repairing, altering or improving
1-19 the motor vehicle, or for installation of the motor vehicle or of
1-20 goods to the motor vehicle, and charges for accessories and goods
1-21 related to or used with the motor vehicle, if such charges are made
1-22 to both cash and credit buyers alike and may include any of the
1-23 charges described in Subsections (ii) and (iii) of Section (g) of
2-1 this Article if they are not separately itemized on the contract>.
2-2 SECTION 2. Subsection (h-1), Article 7.01, Title 79, Revised
2-3 Statutes (Article 5069-7.01, Vernon's Texas Civil Statutes) is
2-4 amended to read as follows:
2-5 (h-1) In addition to the provisions of Section (h) of this
2-6 article, "principal balance" includes a motor vehicle inspection
2-7 fee and a documentary fee for services actually rendered to, for or
2-8 on behalf of the retail buyer in preparing, handling, and
2-9 processing documents relating to the motor vehicle and the closing
2-10 of the transaction evidenced by the retail installment contract.
2-11 If a documentary fee is charged:
2-12 (i) it must be charged to both cash and credit buyers;
2-13 (ii) it may not exceed $50 <25>;
2-14 (iii) it shall be disclosed on the retail installment
2-15 contract as a separate itemized charge; and
2-16 (iv) the buyer's order and the retail installment contract
2-17 shall include in reasonable proximity to the point in the buyer's
2-18 order and retail installment contract where the documentary fee is
2-19 disclosed the amount of the documentary fee to be charged and the
2-20 following notice in type that is boldfaced, capitalized,
2-21 underlined, or otherwise set out from surrounding written material
2-22 so as to be conspicuous:
2-23 "A DOCUMENTARY FEE IS NOT AN OFFICIAL FEE. A
2-24 DOCUMENTARY FEE IS NOT REQUIRED BY LAW, BUT MAY BE
2-25 CHARGED TO BUYERS FOR HANDLING DOCUMENTS AND PERFORMING
3-1 SERVICES RELATING TO THE CLOSING OF A SALE. BUYERS MAY
3-2 AVOID PAYMENT OF THE FEE TO THE SELLER BY HANDLING THE
3-3 DOCUMENTS AND PERFORMING THE SERVICES RELATING TO THE
3-4 CLOSING OF THE SALE. A DOCUMENTARY FEE MAY NOT EXCEED
3-5 $50 <25>. THIS NOTICE IS REQUIRED BY LAW."
3-6 (v) If the language primarily used in the oral sales
3-7 presentation is not the same as that in which the retail
3-8 installment contract is written, the seller shall furnish to the
3-9 buyer a written statement containing the notice set out in
3-10 Subsection (iv) in the language primarily used in the oral sales
3-11 presentation.
3-12 SECTION 3. Section 9, Article 7.06, Title 79, Revised
3-13 Statutes (Article 5069-7.06, Vernon's Texas Civil Statutes), is
3-14 amended to read as follows:
3-15 (9) A buyer and seller may agree to include motor vehicle
3-16 property damage or bodily injury liability insurance, mechanical
3-17 breakdown insurance, or any other type of insurance coverage
3-18 relating to the seller's or holder's security interest, or a
3-19 warranty or service contract relating to the motor vehicle as a
3-20 separate charge in a contract for the sale of a motor vehicle. If
3-21 a charge is added to a contract as provided by this section, the
3-22 contract shall clearly and conspicuously disclose that fact.
3-23 SECTION 4. Article 7.09, Title 79, Revised Statutes (Article
3-24 5069-7.09, Vernon's Texas Civil Statutes), is amended to read as
3-25 follows:
4-1 Article 7.09. Application. None of the provisions of this
4-2 Chapter shall affect or apply to any loans or to the business of
4-3 making loans under or in accordance with the laws of this State,
4-4 nor shall any of the provisions of the loan or interest statutes of
4-5 this State affect or apply to any retail installment transaction.
4-6 Nor shall any seller pay, promise to pay, or otherwise tender cash
4-7 to any buyer as a part of any transaction made pursuant to this
4-8 Chapter unless otherwise specifically authorized by this Chapter.
4-9 A seller may pay, promise to pay, or tender cash or other thing of
4-10 value to the manufacturer, distributor or buyer of the product if
4-11 the payment, promise, or tender is made in order to participate in
4-12 a financial incentive program offered by the manufacturer or
4-13 distributor of the product to the retail purchaser. Nothing in
4-14 this Chapter shall be construed to impair or in any way affect any
4-15 rule of law applicable to, or governing retail installment sales
4-16 not otherwise subject hereto. This Chapter shall apply exclusively
4-17 to all retail installment transactions as defined in Article 7.01.
4-18 The provisions of this Chapter defining specific rates and
4-19 amounts of charges requiring certain credit disclosures to be made
4-20 shall be deemed to control over any contrary Texas law respecting
4-21 those subjects. Except as displaced by the particular provisions
4-22 of this Chapter, the Uniform Commercial Code as adopted in Texas,
4-23 other applicable statutes, and the principles of the common law
4-24 shall remain applicable to transactions hereunder to the extent
4-25 they are applicable.
5-1 SECTION 5. Article 7.11, Title 79, Revised Statutes (Article
5-2 5069-7.11, Vernon's Texas Civil Statutes), is amended to read as
5-3 follows"
5-4 Article 7.11. Registration. (1) Each holder governed by
5-5 this chapter who is not a credit union or an authorized lender
5-6 under Chapter 3 of this title shall register with the Office of
5-7 Consumer Credit Commissioner. Each holder shall pay an annual fee
5-8 of $10 for each location at which credit transactions subject to
5-9 this chapter are originated, serviced, or collected. The
5-10 commissioner by rule may establish procedures to facilitate the
5-11 registration and collection of fees, including rules staggering the
5-12 due dates of the fees throughout the year.
5-13 (2) The commissioner may impose a penalty not to exceed $50
5-14 for failure to register as required by this Article. That is the
5-15 sole and exclusive penalty for a violation of this Article. The
5-16 fact that a holder or seller was not registered as required by this
5-17 Article at the time of execution of a contract does not render
5-18 invalid or unenforceable a contract otherwise valid and enforceable
5-19 and does not subject an unregistered holder to liability to the
5-20 state or to any person under Article 8.01 of this Subtitle or any
5-21 other provision of this Subtitle or other law or at common law,
5-22 other than that liability established by this subsection.
5-23 SECTION 6. Section (b), Article 8.01, Title 79, Revised
5-24 Statutes (Article 5069-8.01, Vernon's Texas Civil Statutes), is
5-25 amended to read as follows:
6-1 (b) Except as otherwise provided by a provision of this
6-2 Subtitle, a <Any> person who violates this Subtitle <or Chapter 14
6-3 of this Title> by (i) failing to perform any duty or requirement
6-4 specifically imposed on him by any provision of this Subtitle <or
6-5 Chapter 14 of this Title>, or by (ii) committing any act or
6-6 practice prohibited by this Subtitle <or Chapter 14 of this Title>,
6-7 shall be liable to the obligor for a penalty in an amount equal to
6-8 twice the actual economic loss suffered by the obligor as a result
6-9 of the violation, and, on a showing that the violation was
6-10 committed knowingly and wilfully, a penalty of not less than $100
6-11 and not more than $1000, together with <the time price differential
6-12 or interest contracted for, charged, or received but not to exceed
6-13 $2000 in a transaction in which the amount financed is $5000 or
6-14 less, and not to exceed $4000 in a transaction in which the amount
6-15 financed is in excess of $5000 and> reasonable attorneys' fees
6-16 fixed by the court.
6-17 SECTION 7. Subsection (3), Section (c), Article 8.01, Title
6-18 79, Revised Statutes (Article 5069-8.01, Vernon's Texas Civil
6-19 Statutes), is amended to read as follows:
6-20 (3) If, subsequent to the times specified in Article
6-21 8.01(c)(1) and (2) of this Act but prior to the obligor having
6-22 given written notice of or having filed an action alleging a
6-23 violation for which a penalty is provided in Article 8.01(b) of
6-24 this Act, such violation is corrected as to such obligor by
6-25 performing the required duty or act and written notice of such
7-1 violation is given to such obligor, then the liability of any
7-2 person to such obligor shall be limited in each transaction to a
7-3 penalty in an amount equal to the actual economic loss suffered by
7-4 the obligor as a result of the violation <time price differential
7-5 or interest contracted for, charged, or received but not to exceed
7-6 $2000> and reasonable attorneys' fees fixed by the court.
7-7 SECTION 8. The amendments to Articles 7.11 and 8.01, Title
7-8 79, Revised Statutes (Article 5069-7.11 and Article 5069-8.01,
7-9 Vernon's Texas Civil Statutes), made by this Act apply only to
7-10 claims made after the effective date of this Act.
7-11 SECTION 9. The importance of this legislation and the
7-12 crowded condition of the calendars in both houses create an
7-13 emergency and an imperative public necessity that the
7-14 constitutional rule requiring bills to be read on three several
7-15 days in each house be suspended, and this rule is hereby suspended,
7-16 and that this Act take effect and be in force from and after its
7-17 passage, and it is so enacted.
7-18 COMMITTEE AMENDMENT NO. 1
7-19 H.B. 813 is amended as follows:
7-20 (1) On page 5, line 4, delete "$10" and insert the following
7-21 after the word "of": "<$10> $25".
7-22 (2) Insert the following after the period following the word
7-23 "year" on page 5, line 8: "If a holder or seller fails to renew
7-24 the holder or seller's registration, the commissioner shall, not
7-25 later than 30 days after the expiration of the registration, notify
8-1 the holder or seller of the expiration, and of the procedures
8-2 applicable to renewal. A registration renewal is timely if filed
8-3 with the commissioner, together with the annual registration fee,
8-4 not later than 30 days after receipt of notice of expiration. A
8-5 holder or seller who fails to renew timely as required by this
8-6 section is subject to the penalties set forth in Section (2) of
8-7 this Article."
8-8 (3) Delete the words "That is" after the period following
8-9 the word "Article" on page 5, line 10, and insert the following
8-10 after the period following the word "Article" on page 5, line
8-11 10: "The commissioner may impose a penalty not to exceed $250 for
8-12 failure of the holder to renew the holder's existing registration
8-13 and submit the appropriate fee as required by this Article. The
8-14 penalties provided by this section are".
8-15 (4) On page 5, line 11, delete the word "penalty" after the
8-16 word "exclusive" and insert the word "penalties" after the word
8-17 "exclusive".
8-18 (4) Insert the following after the period following the word
8-19 "Act" on page 7, line 4: "The fee increase provided by Section 5
8-20 of this bill is effective September 1, 1993. The remainder of the
8-21 bill is effective as provided by Section 9 of the bill."
8-22 Giddings
8-23 COMMITTEE AMENDMENT NO. 2
8-24 Amend H.B. 813 as follows:
8-25 (1) On page 3, delete the following language beginning on
9-1 page 3, line 15, and ending on page 3, line 16: "or any other type
9-2 of insurance coverage relating to the seller's or holder's security
9-3 interest,".
9-4 (2) Insert the following after the comma following the word
9-5 "insurance" on page 3, line 15: "motor vehicle theft protection
9-6 plans, insurance to reimburse the buyer the difference, if any,
9-7 between the proceeds of the buyer's basic collision policy on the
9-8 vehicle and the amount owed on the vehicle, in the event that the
9-9 vehicle has been rendered a total loss,".
9-10 Gutierrez
9-11 COMMITTEE AMENDMENT NO. 3
9-12 H.B. 813 is amended as follows:
9-13 (1) On page 6, line 3, delete the words "equal to twice"
9-14 and insert the following after the word "amount": "<equal to
9-15 twice> not to exceed three times".
9-16 (2) On page 6, line 6, delete the following: "not less than
9-17 $100 and".
9-18 Romo