CHAPTER 345. RETAIL INSTALLMENT SALES - Texas Statutes

FINANCE CODE

TITLE 4. REGULATION OF INTEREST, LOANS, AND FINANCED TRANSACTIONS

SUBTITLE B. LOANS AND FINANCED TRANSACTIONS

CHAPTER 345. RETAIL INSTALLMENT SALES

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 345.001. DEFINITIONS. In this chapter:

(1) "Credit card issuer" means a person who issues an

identification device, including a card or plate, that is used to

obtain goods or services under a retail credit card arrangement,

other than a person who is:

(A) a bank, savings association, or credit union;

(B) licensed to do business under Chapter 342; or

(C) regularly and principally engaged in the business of lending

money for personal, family, or household purposes.

(2) "Holder" means:

(A) for a retail installment contract:

(i) the retail seller of the goods or services under the

contract if the contract or the outstanding balance under the

contract has not been sold or otherwise transferred; or

(ii) if the contract or the outstanding balance under the

contract has been sold or otherwise transferred, the person to

whom it was transferred;

(B) for a retail charge agreement:

(i) the retail seller of the goods or services under the retail

charge agreement if the agreement or the outstanding balance

under the agreement has not been sold or otherwise transferred;

or

(ii) if the agreement or the outstanding balance under the

agreement has been sold or otherwise transferred, the person to

whom it was sold or otherwise transferred; or

(C) for a retail credit card arrangement, the credit card issuer

under the arrangement.

(3) "Retail buyer" means a person who:

(A) purchases or agrees to purchase goods from a retail seller;

or

(B) obtains services from a retail seller or agrees to have

services furnished by a retail seller.

(4) "Retail charge agreement" means one or more instruments that

prescribe the terms of retail installment transactions that may

be made under the agreement from time to time and under which a

time price differential is computed on the unpaid balance from

time to time. The term includes an instrument that prescribes the

terms of a retail credit card arrangement.

(5) "Retail credit card arrangement" means an arrangement that

is not regulated under another chapter of this code and under

which:

(A) a retail seller or credit card issuer authorizes a retail

buyer or lessee to use a credit card to purchase or lease goods

or services from:

(i) the seller or issuer, as appropriate;

(ii) a person related to the seller or issuer;

(iii) a person licensed or franchised to do business under the

seller's or issuer's business or trade name or designation; or

(iv) another person authorized to honor the card; and

(B) the debt for the purchase or lease is payable in one or more

installments.

(6) "Retail installment contract" means one or more instruments

entered into in this state that evidence a secured or unsecured

retail installment transaction. The term includes a chattel

mortgage, security agreement, and conditional sale contract and a

document that evidences a bailment or lease described by Section

345.068, but does not include:

(A) an instrument that is a retail charge agreement;

(B) an instrument reflecting a sale under a retail charge

agreement; or

(C) a rental-purchase agreement that complies with Chapter 92,

Business & Commerce Code.

(7) "Retail installment transaction" means a transaction in

which a retail buyer purchases goods or services from a retail

seller under a retail installment contract or retail charge

agreement that provides for a time price differential and under

which the buyer agrees to pay the unpaid balance and the time

price differential in one or more installments. The term includes

a transaction:

(A) made under a retail credit card arrangement; or

(B) for the sale of prepaid funeral benefits regulated under

Chapter 154.

(8) "Retail seller" means a person who regularly and

substantially engages in the business of selling goods or

services to retail buyers, other than the services of a member of

a learned profession not specifically included under Section

345.003(b).

(9) "Time price differential" means the amount paid or payable

for accepting payment in installments for goods or services

purchased, regardless of how the amount is denominated or

expressed. The term includes an amount payable to a holder as

consideration for accepting payment in installments for goods and

services charged under a retail credit card arrangement. The term

does not include an amount charged for insurance premiums,

delinquency charges, attorney's fees, court costs, or official

fees.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Amended by Acts 1999, 76th Leg., ch. 344, Sec. 2.035, eff. Sept.

1, 1999.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 2.17, eff. April 1, 2009.

Sec. 345.002. GOODS. (a) For the purposes of this chapter,

goods are tangible personal property, other than property

described by Subsection (d), that is:

(1) purchased primarily for personal, family, or household use;

and

(2) not purchased for commercial or business use.

(b) "Goods" includes property described by Subsection (a) that

is:

(1) personal property furnished for or used in the

modernization, rehabilitation, repair, alteration, improvement,

or construction of real property that is to become or becomes a

part of the real property regardless of whether the personal

property is severable from the real property;

(2) a structure, other than a mobile home, that is to be used as

a residence;

(3) a boat;

(4) a boat-trailer;

(5) a motor scooter, moped, motorcycle, trailer designed or

intended to be drawn by or to transport a motor scooter, moped,

motorcycle or all-terrain vehicle;

(6) a recreational vehicle designed for temporary living

accommodations and commonly known as a travel trailer;

(7) a camper-type trailer;

(8) a horse trailer; and

(9) a vehicle propelled or drawn exclusively by muscular power.

(c) "Goods" also includes a merchandise certificate or coupon

that is:

(1) issued by a retail seller;

(2) not redeemable in cash; and

(3) to be used in its face amount instead of cash in exchange

for other goods or services sold by the seller.

(d) This chapter does not apply to the sale of:

(1) money;

(2) a vehicle designed to run only on rails or tracks or in the

air; or

(3) a motor vehicle, other than a vehicle included under

Subsection (b), to which Chapter 348 applies or other goods that

are included in a contract under Chapter 348.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 345.003. SERVICES. (a) For the purposes of this chapter,

services include work, labor, and other services, other than

services described by Subsection (c), that are:

(1) purchased primarily for personal, family, or household use;

and

(2) not purchased for commercial or business use.

(b) "Services" includes work or labor described by Subsection

(a) and that is:

(1) a medical or dental service;

(2) a prepaid funeral benefit regulated under Chapter 154; and

(3) a maintenance or service contract or warranty.

(c) This chapter does not apply to the sale of:

(1) legal services;

(2) services of a professional person licensed by this state,

unless the services are:

(A) provided in connection with the purchase of goods; or

(B) described by Subsection (b)(1) or (2);

(3) services for which the cost is:

(A) set by law; or

(B) filed with or subject to approval by the United States, this

state, or an agency, instrumentality, or subdivision of this

state;

(4) educational services provided by:

(A) an accredited college or university; or

(B) a primary or secondary school providing education required

by this state;

(5) services provided by a kindergarten or nursery school; or

(6) services that are included in a contract under Chapter 348.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 345.004. CASH PRICE. (a) The cash price in a retail

installment transaction is the price at which the retail seller

would have sold to the retail buyer, and the buyer would have

bought from the seller, the goods or services that are subject to

the transaction if the sale had been a sale for cash.

(b) The cash price may include:

(1) the amount of taxes;

(2) the amount of charges for delivery, installation, servicing,

repair, alteration, or improvement; and

(3) an amount described by Section 345.005(1), (3), (4), or (6)

that is not separately itemized in the retail installment

contract or retail charge agreement.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 345.005. ITEMIZED CHARGE. An amount charged to a retail

buyer in a retail installment contract or retail charge agreement

is an itemized charge if the amount is not included in the cash

price and is the amount of:

(1) fees prescribed by law for filing, recording, or otherwise

perfecting, releasing, or satisfying a security interest created

in connection with a retail installment transaction or nonfiling

insurance premiums as authorized by Section 345.212;

(2) fees for registration or a certificate of title;

(3) any taxes;

(4) fees or charges prescribed by law and connected with the

sale or inspection of the goods or services subject to the

contract or agreement;

(5) premiums and other charges for insurance authorized by

Subchapter E;

(6) official fees for a construction permit or the filing or

recording of a construction permit;

(7) a documentary fee authorized under Section 345.251; and

(8) in a retail installment transaction involving modernization,

rehabilitation, repair, alteration, improvement, or construction

of real property, reasonable and necessary costs, including

amounts, paid by the holder:

(A) for title insurance or title examination and opinion that

does not exceed the amount set by the commissioner of insurance

for title insurance for the transaction;

(B) to a person who is not a salaried employee of the holder for

an appraisal or inspection or for investigating the credit

standing or creditworthiness of the retail buyer; or

(C) to an attorney who is not a salaried employee of the holder

as a legal fee for the preparation of documents in connection

with the transaction.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 345.006. TIME PRICE DIFFERENTIAL NOT INTEREST. An amount

of time price differential is not interest.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 345.007. APPLICABILITY OF CHAPTER. (a) This chapter

applies only to a retail installment transaction.

(b) This chapter does not affect or apply to a loan made or the

business of making loans under other law of this state and does

not affect a rule of law applicable to a retail installment sale

that is not a retail installment transaction.

(c) The provisions of this chapter defining specific rates and

amounts of charges and requiring certain credit disclosures to be

made control over any contrary law of this state respecting those

subjects.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 345.008. APPLICABILITY OF OTHER STATUTES TO RETAIL

INSTALLMENT TRANSACTION. (a) A loan or interest statute of this

state other than Chapter 303 does not apply to a retail

installment transaction.

(b) Except as provided by this chapter, an applicable statute,

including Title 1, Business & Commerce Code, or a principle

of common law continues to apply to a retail installment

transaction unless it is displaced by this chapter.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 345.009. DISCLOSURE REQUIREMENTS IF CONFLICT WITH FEDERAL

LAW. If a disclosure requirement of this chapter and one of a

federal law, including a regulation or an interpretation of law,

are inconsistent or conflict, federal law controls and the

inconsistent or conflicting disclosures required by this chapter

need not be given.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

SUBCHAPTER B. RETAIL INSTALLMENT CONTRACT

Sec. 345.051. RETAIL INSTALLMENT CONTRACT GENERAL REQUIREMENTS.

(a) A retail installment contract must be:

(1) in writing;

(2) dated;

(3) signed by the retail buyer; and

(4) completed as to all essential provisions, except as provided

by Section 345.064.

(b) The contract must be designated "Retail Installment

Contract."

(c) The printed or typed part of a retail installment contract,

other than instructions for completion, must be in at least

eight-point type unless a different size of type is required

under this subchapter.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 345.052. CONTENTS OF CONTRACT. (a) A retail installment

contract must contain:

(1) the name of the retail seller and the name of the retail

buyer;

(2) the place of business of the retail seller;

(3) the residence or other address of the retail buyer as

specified by the retail buyer;

(4) the cash price;

(5) the amount of the retail buyer's down payment, specifying

the amount paid in money and the amount allowed for goods traded

in; and

(6) each itemized charge.

(b) A charge for insurance authorized under Subchapter E may be

disclosed as provided by that subchapter.

(c) A retail installment contract must reasonably identify the

goods sold or services furnished under the contract. Multiple

items of goods or services may be described in a separate writing

in detail sufficient to identify them.

(d) The contract must contain substantially the following notice

printed or typed in at least 10-point type that is bold-faced,

capitalized, or underlined or otherwise conspicuously set out

from the surrounding written material:

"NOTICE TO THE BUYER. DO NOT SIGN THIS CONTRACT BEFORE YOU READ

IT OR IF IT CONTAINS BLANK SPACES. YOU ARE ENTITLED TO A COPY OF

THE CONTRACT YOU SIGN. UNDER THE LAW YOU HAVE THE RIGHT TO PAY

OFF IN ADVANCE THE FULL AMOUNT DUE AND UNDER CERTAIN CONDITIONS

MAY OBTAIN A PARTIAL REFUND OF THE FINANCE CHARGE. KEEP THIS

CONTRACT TO PROTECT YOUR LEGAL RIGHTS."

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 345.053. DISCLOSURE OF PROMISE TO COMPENSATE FOR REFERRAL.

(a) A written or oral promise of a retail seller to compensate a

retail buyer for referring customers or prospective customers to

the seller or for referring the seller to customers or

prospective customers must be disclosed in a retail installment

contract if the promise is:

(1) part of the contract;

(2) made to induce the buyer to become a party to the contract;

or

(3) made incidental to negotiations between the seller and the

buyer with respect to the sale of the goods or services that are

the subject of the contract.

(b) A contract that contains a provision required by Subsection

(a) must provide that the amount owed under the contract at any

time is reduced by the amount of compensation owed under the

promise.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 345.054. TIME PRICE DIFFERENTIAL FOR CONTRACT. A retail

installment contract may provide for:

(1) any amount of time price differential permitted under

Section 345.055, 345.056, 345.057, or 345.058; or

(2) any rate of time price differential not exceeding a yield

permitted under Section 345.055, 345.056, 345.057, or 345.058.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 345.055. TIME PRICE DIFFERENTIAL FOR CONTRACT PAYABLE IN

EQUAL MONTHLY PAYMENTS. (a) A retail installment contract that

is payable in substantially equal monthly payments beginning one

month after the date of the contract may provide for a time price

differential that does not exceed an add-on charge equal to:

(1) $12 per $100 per year on the part of the principal balance

that is less than or equal to the amount computed under

Subchapter C, Chapter 341, using the reference amount of $500;

(2) $10 per $100 per year on the part of the principal balance

that is more than the amount computed for Subdivision (1) but

less than or equal to the amount computed under Subchapter C,

Chapter 341, using the reference amount of $1,000; and

(3) $8 per $100 per year on the part of the principal balance

that is more than the amount computed for Subdivision (2).

(b) The time price differential is computed on the original

principal balance from the date of the contract until the due

date of the final installment, notwithstanding that the balance

is payable in installments.

(c) If the retail installment contract is payable for a period

that is shorter or longer than a year or is for an amount that is

less or greater than $100, the amount of the maximum time price

differential computed under this section is decreased or

increased proportionately.

(d) For the purpose of a computation under this section, 15 or

more days of a month may be considered a full month.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 345.056. USE OF OPTIONAL CEILING. As an alternative to the

maximum rate or amount authorized for a time price differential

under Section 345.055 or 345.057, a retail installment contract

may provide for a rate or amount of time price differential that

does not exceed the rate or amount authorized by Chapter 303.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 345.057. TIME PRICE DIFFERENTIAL FOR OTHER CONTRACTS. A

retail installment contract that is payable other than in

substantially equal successive monthly payments or the first

installment of which is not payable one month from the date of

the contract may provide for a time price differential that does

not exceed an amount that provides the same effective return as

if the contract were payable in substantially equal successive

monthly installments beginning one month from the date of the

contract.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 345.058. MINIMUM TIME PRICE DIFFERENTIAL FOR CONTRACT.

Notwithstanding Section 345.055, 345.056, or 345.057:

(1) a retail installment contract with an initial principal

balance of $75 or more may provide for a minimum time price

differential that does not exceed $12;

(2) a retail installment contract with an initial principal

balance of more than $25 and less than $75 may provide for a

minimum time price differential that does not exceed $9; and

(3) a retail installment contract with an initial principal

balance of $25 or less may provide for a minimum time price

differential that does not exceed $6.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 345.059. PRINCIPAL BALANCE COMPUTATION. The principal

balance of a retail installment contract is computed by:

(1) adding the cash price subject to the contract and the total

of the contract's itemized charges, including a documentary fee

authorized under Section 345.251; and

(2) subtracting the amount of the retail buyer's down payment in

money and goods from the amount computed under Subdivision (1).

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 345.060. CHARGES FOR DEFAULT IN PAYMENT OF INSTALLMENT.

(a) A retail installment contract may provide that if an

installment remains unpaid after the 10th day after the maturity

of the installment the retail seller may collect:

(1) a delinquency charge that is not more than five percent of

an installment or $5, whichever is less; or

(2) interest on the amount of the installment accruing after the

maturity of the installment at a rate that does not exceed the

maximum rate authorized for the contract.

(b) Only one delinquency charge may be collected under

Subsection (a) on an installment regardless of the duration of

the default.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 345.061. CHARGES FOR COLLECTING DEBT. A retail installment

contract may provide for the payment of:

(1) an attorney's reasonable fees if the contract is referred

for collection to an attorney who is not a salaried employee of

the holder; and

(2) court costs and disbursements.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 345.062. ACCELERATION OF DEBT MATURITY. A retail

installment contract or retail charge agreement may not authorize

the holder to accelerate the maturity of all or a part of the

amount owed under the contract or agreement unless:

(1) the retail buyer is in default in the performance of any of

the buyer's obligations; or

(2) the holder believes in good faith that the prospect of the

buyer's payment or performance is impaired.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 345.063. REQUIREMENTS FOR CONTRACT THAT IS MORE THAN ONE

DOCUMENT. (a) A retail installment contract may be more than

one document.

(b) One of the retail installment contract documents must:

(1) provide that it applies to purchases of goods or services to

be made by the retail buyer from time to time; and

(2) be signed by the retail buyer.

(c) For each purchase, the document described by Subsection (b)

and a written statement relating to the purchase, including a

sales slip or account book, together must set forth all of the

information required by this subchapter. The document described

by Subsection (a) and the written statement under this subsection

are the retail installment contract.

(d) If the retail seller elects, a written statement described

by Subsection (c) satisfies the statement requirements of Section

345.082 for a purchase to which the statement applies.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 345.064. COMPLETION OF CONTRACT. (a) A person may not

sign a retail installment contract that contains a blank space

for an item that is an essential provision of the transaction.

(b) If delivery of the goods is not made at the time the

contract is executed, the identifying numbers or marks of the

goods or similar information and the due date of the first

installment may be inserted by the retail seller in the seller's

counterpart of the contract after the contract has been signed by

the retail buyer.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 345.065. DELIVERY OF COPY OF CONTRACT. The retail seller

shall:

(1) deliver to the retail buyer a copy of the retail installment

contract as accepted by the retail seller; or

(2) mail to the retail buyer at the address shown on the

contract a copy of the retail installment contract as accepted by

the retail seller.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 345.066. BUYER'S RIGHT TO RESCIND CONTRACT. Until a retail

seller complies with Section 345.065, a retail buyer who has not

received delivery of the goods or services is entitled to:

(1) rescind the contract;

(2) receive a refund of all payments made under or in

contemplation of the contract; and

(3) receive the return of all goods traded in to the seller

under or in contemplation of the contract or, if those goods

cannot be returned, receive the trade-in allowance of those

goods.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 345.067. BUYER'S ACKNOWLEDGMENT OF DELIVERY OF CONTRACT

COPY. (a) Any retail buyer's acknowledgment of delivery of a

copy of a retail installment contract must:

(1) be in at least 10-point type that is bold-faced,

capitalized, or underlined or otherwise conspicuously set out

from the surrounding written material; and

(2) appear directly above the buyer's signature if the

acknowledgment is contained in the contract.

(b) Any retail buyer's acknowledgment conforming to this section

of the delivery of a copy of the retail installment contract is,

in any action or proceeding:

(1) presumptive proof of the delivery of a copy of the contract

and compliance with any requirement relating to the completion of

the contract before execution of the contract by the buyer; or

(2) conclusive proof of the delivery of a copy of the contract

and compliance with any requirement relating to the completion of

the contract before execution of the contract by the buyer if the

holder purchased the contract without knowledge to the contrary.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 345.068. BAILMENT OR LEASE AS RETAIL INSTALLMENT

TRANSACTION. A bailment or lease is a retail installment

transaction if the bailee or lessee:

(1) contracts to pay as compensation for the use of goods an

amount that substantially equals or exceeds the value of those

goods; and

(2) on full compliance with the bailment or lease is bound to

become the owner of the goods or has the option to become the

owner of the goods for no or nominal additional consideration.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 345.069. DEFERMENT OF INSTALLMENT. (a) A holder of a

retail installment contract, on request of the retail buyer, may

agree to defer the scheduled due date of all or part of one or

more installments.

(b) A holder may collect from the retail buyer for deferment of

an installment:

(1) a charge that is a part of the time price differential and

computed on the amount deferred for the period of deferment at

the monthly rate of 15 cents for each $10; and

(2) the amount of the additional cost to the holder for:

(A) premiums for continuing in force any insurance provided for

by the contract; and

(B) additional necessary official fees.

(c) The minimum charge under Subsection (b)(1) is $1.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 345.070. AMENDMENT OF CONTRACT. (a) On request of the

retail buyer, the holder of a retail installment contract may:

(1) amend the contract to renew, restate, or reschedule the

unpaid balance of the contract; and

(2) collect an amount computed on the principal balance of the

amended contract for the term of the amended contract at the

applicable rate under Section 345.055, 345.056, 345.057, or

345.058.

(b) The principal balance of the amended contract is computed

by:

(1) adding:

(A) the amount of the unpaid balance on the date of the

amendment;

(B) the cost of insurance;

(C) the amount of each additional necessary official fee; and

(D) the amount of each accrued delinquency charge; and

(2) subtracting from the total computed under Subdivision (1) an

amount equal to the minimum refund credit that would be required

under Section 345.075 or 345.076 for prepayment in full on the

date of the amendment.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 345.071. CONFIRMATION OF AMENDMENT. An amendment to a

retail installment contract must be confirmed in a writing signed

by the retail buyer. The holder shall deliver a copy of the

confirmation to the buyer at the time it is executed.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 345.072. CONTRACT AFTER AMENDMENT. After amendment a

retail installment contract is the original contract and each

amendment to the original contract.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 345.073. PREPAYMENT OF CONTRACT. A retail buyer may prepay

the unpaid time balance of a retail installment contract in full

at any time before the contract's final due date.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 345.074. REFUND CREDIT ON PREPAYMENT. If a retail buyer

prepays a retail installment contract in full or if the holder

demands payment of the unpaid balance of the contract in full

before the contract's final installment is due, the buyer is

entitled to receive a refund credit as provided by Section

345.075 or 345.076, as applicable.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 345.075. AMOUNT OF REFUND CREDIT FOR MONTHLY INSTALLMENT

CONTRACT. (a) The minimum amount of a refund credit on

prepayment of a contract that is payable in substantially equal

successive monthly installments beginning one month after the

date of the contract is computed by:

(1) subtracting an amount equal to the minimum charge authorized

by this chapter for that contract from the original time price

differential; and

(2) multiplying the amount computed under Subdivision (1) by the

percentage computed by dividing the sum of all of the monthly

balances under the contract's schedule of payments into the sum

of the unpaid monthly balances under the contract's schedule of

payments beginning on:

(A) the first day, after the date of the prepayment or demand

for payment in full, that is the date of a month that corresponds

to the date of the month that the first installment is due under

the contract; or

(B) if the prepayment or demand for payment in full is made

before the first installment date under the contract, the next

monthly anniversary date of the contract occurring after

prepayment or demand.

(b) A refund credit is not required if the amount of the refund

credit is less than $1.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 345.076. AMOUNT OF REFUND CREDIT FOR OTHER CONTRACTS. The

refund credit on a contract to which Section 345.075 does not

apply shall be computed in a manner proportionate to the method

set out by that section, having due regard for:

(1) the amount of each installment; and

(2) the irregularity of the installment periods.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 345.077. REINSTATEMENT OF CONTRACT. After a demand for

payment in full under a retail installment contract, the retail

buyer and holder may agree to reinstate the contract and may

amend the contract under Section 345.070.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 345.078. CONSOLIDATION OF CONTRACTS. (a) If a retail

buyer purchases goods or services in a retail installment

transaction from a retail seller from whom the buyer has

previously purchased goods or services under one or more retail

installment contracts and the amounts under those contracts have

not been paid in full, the seller may consolidate the subsequent

purchase with one or more of the contracts.

(b) If a purchase is consolidated with a retail installment

contract under this section, the retail seller may prepare a

written memorandum of the subsequent purchase instead of

executing a retail installment contract for the purchase.

Sections 345.051, 345.052, 345.053, 345.065, 345.066, and 345.067

do not apply to the memorandum. The seller shall deliver a copy

of the memorandum to the retail buyer before the date on which

the first installment under the consolidated contract is due.

(c) Each subsequent purchase that is consolidated with a retail

installment contract is a separate retail installment contract

under this chapter. The provisions of this chapter relating to a

retail installment contract apply to the subsequent purchase

except as provided by Subsection (b).

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 345.079. ALLOCATION OF PAYMENTS ON CONSOLIDATION OF

CONTRACTS. (a) If a subsequent purchase is consolidated with a

contract and the retail seller retains title or takes a security

interest, including a lien, in any of the goods purchased under

one of the contracts:

(1) the total of all payments made before the subsequent

purchase is considered to have been applied to the previous

purchases; and

(2) each payment made on the consolidated contract after the

subsequent purchase is considered to be allocated to each

purchase in the same ratio as the original cash price of the

purchase bears to the total of the original cash prices of all

purchases under the contract.

(b) All of a down payment on a subsequent purchase shall be

allocated to that purchase.

(c) If the amount of installment payments is increased after a

subsequent purchase, the retail seller may elect to allocate:

(1) an amount of the payment equal to the original periodic

payment to the previous purchase; and

(2) the remainder of the payment to the subsequent purchase.

(d) This section does not apply if the previous and subsequent

purchases involve:

(1) goods, including equipment or parts, attached or affixed to

goods previously purchased and for which full payment has not

been made; or

(2) services rendered by the retail seller at the retail buyer's

request in connection with goods described by Subdivision (1).

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 345.080. OBLIGATION UNDER MORE THAN ONE CONTRACT. (a) A

retail seller may not induce a person or a husband and wife to

become obligated at substantially the same time under more than

one retail installment contract with the same seller for the

deliberate purpose of obtaining a greater amount of time price

differential than is permitted under this chapter for one retail

installment contract.

(b) A contract made by a retail buyer and retail seller after

the 30th day after the date of a contract between that buyer and

seller is presumed not to violate this section.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 345.081. CERTIFICATE OF COMPLETION OR SATISFACTION OF

CONTRACT. (a) A retail seller who has entered into a retail

installment transaction under a retail installment contract to

perform services or install goods for the modernization,

rehabilitation, repair, alteration, improvement, or construction

of improvements on real property shall obtain a certificate of

completion or certificate of satisfaction signed by the retail

buyer when all of the services have been performed or goods have

been installed as required under the contract. A certificate is

required regardless of whether a guaranty or warranty of the

services or goods remains in force.

(b) A certificate of completion or certificate of satisfaction

must be a separate writing and must have at the top in at least

10-point type that is bold-faced, capitalized, or underlined or

otherwise conspicuously set out from the surrounding written

material:

WARNING TO BUYER--DO NOT SIGN THIS CERTIFICATE UNTIL ALL SERVICES

HAVE BEEN SATISFACTORILY PERFORMED AND MATERIALS SUPPLIED OR

GOODS RECEIVED AND FOUND SATISFACTORY.

(c) The retail seller shall keep the signed certificate or a

copy of the signed certificate until the second anniversary of

the date of the certificate's execution.

(d) If performance of the services or installation of the goods

required by the retail installment contract is not complete, a

retail seller may not knowingly:

(1) induce a retail buyer to sign a certificate; or

(2) take or accept from the retail buyer an executed

certificate.

(e) Execution of a certificate by the retail buyer is not a

waiver of any guaranty or warranty made by the retail seller or a

manufacturer or supplier.

(f) A retail buyer's failure or refusal to execute a

certificate, without good cause, does not affect the validity of

the retail installment contract.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 345.082. STATEMENT OF PAYMENTS AND AMOUNT DUE UNDER

CONTRACT. (a) On written request of a retail buyer, the holder

of a retail installment contract shall give or send to the buyer

a written statement of the dates and amounts of installment

payments and the total amount unpaid under the contract.

(b) A retail buyer is entitled to one statement without charge

during a six-month period. The charge for each additional

requested statement during the period may not exceed $1.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 345.083. RECEIPT FOR CASH PAYMENT. A holder of a retail

installment contract shall give to the retail buyer a written

receipt for each cash payment.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

SUBCHAPTER C. RETAIL CHARGE AGREEMENT

Sec. 345.101. MAKING RETAIL CHARGE AGREEMENT. On the request of

a retail buyer or prospective buyer, a retail seller or credit

card issuer may establish a retail charge agreement.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 345.102. AGREEMENT GENERAL REQUIREMENTS. (a) A retail

charge agreement must be in writing and signed by the retail

buyer.

(b) An agreement must contain substantially the following notice

printed or typed in at least 10-point type that is bold-faced,

capitalized, underlined, or otherwise conspicuously set out from

the surrounding written material:

"NOTICE TO THE BUYER--DO NOT SIGN THIS AGREEMENT BEFORE YOU READ

IT OR IF IT CONTAINS BLANK SPACES. YOU ARE ENTITLED TO A COPY OF

THE AGREEMENT YOU SIGN. KEEP THIS AGREEMENT TO PROTECT YOUR LEGAL

RIGHTS."

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 345.103. TIME PRICE DIFFERENTIAL FOR AGREEMENT. (a)

Notwithstanding any other law a retail charge agreement may

provide for a time price differential for the payment in

installments under the agreement.

(b) The time price differential may not be more than the amount

computed on the unpaid amount under the retail charge agreement

at a rate equal to:

(1) 15 cents per $10 per month on the part of the unpaid balance

that is equal to or less than the amount computed under

Subchapter C, Chapter 341, using the reference amount of $500;

and

(2) 10 cents per $10 per month on the part of the unpaid balance

that is more than the amount computed for Subdivision (1).

(c) If the amount computed under Subsection (b) for any month

for which a balance is due is less than 75 cents, the time price

differential for that month may be 75 cents.

(d) If the period between installment payments is not a month,

the time price differential shall be computed proportionately.

(e) The time price differential may be computed for all unpaid

balances within a $10 range by applying the amount of the time

price differential for the median amount within the range to

those unpaid balances.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 345.104. USE OF OPTIONAL CEILING. (a) As an alternative

to the maximum rate or amount authorized for a time price

differential under Section 345.103, a retail charge agreement may

provide for a rate or amount of time price differential that does

not exceed the rate or amount authorized by Chapter 303.

(b) The provisions of Chapter 303 applicable to open-end

accounts apply to a retail charge agreement to which this section

applies.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Amended by:

Acts 2005, 79th Leg., Ch.

1018, Sec. 2.16, eff. September 1, 2005.

Sec. 345.105. CHARGES FOR COLLECTION OF PAYMENT OF AGREEMENT. A

retail charge agreement may provide for the payment of:

(1) an attorney's reasonable fee if the agreement is referred

for collection to an attorney who is not a salaried employee of

the holder; and

(2) court costs and disbursements.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 345.106. PROCESSING FEE FOR RETURNED CHECK. A retail

charge agreement may provide that the holder of the agreement

may:

(1) charge the retail buyer, on return of a dishonored check

given in payment under the agreement, a reasonable processing fee

that is not more than $15; and

(2) add the fee to the unpaid balance under the agreement.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 345.107. PROHIBITED FEES. An annual, membership, or

participation fee may not be charged to or collected from a

retail buyer in connection with a retail charge agreement.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 345.108. PROHIBITION ON SIGNING OF AGREEMENT WITH BLANK

SPACES. A retail buyer may not sign a retail charge agreement

that contains blank spaces.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 345.109. DELIVERY OF COPY OF AGREEMENT. (a) A retail

seller or credit card issuer shall deliver or mail a copy of the

executed retail charge agreement to the retail buyer before the

date on which the first payment under the agreement is due.

(b) If a copy of the retail charge agreement is not retained by

the retail seller, a notation in the seller's permanent record

showing that the agreement was mailed and the date of mailing is

presumptive proof of the mailing.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 345.110. BUYER'S ACKNOWLEDGMENT OF DELIVERY OF AGREEMENT

COPY. (a) Any retail buyer's acknowledgment of delivery of a

copy of a retail charge agreement that is contained in the body

of the agreement must:

(1) be in at least 10-point type that is bold-faced,

capitalized, or underlined or otherwise conspicuously set out

from the surrounding written material; and

(2) appear directly above the buyer's signature.

(b) A retail buyer's acknowledgment, conforming to this section,

of delivery of a copy of the agreement is, in an action or

proceeding, presumptive proof that:

(1) the copy was delivered to the buyer; and

(2) the agreement did not contain a blank space when it was

signed by the buyer.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 345.111. STATEMENT OF CASH PRICE. The cash price in a

retail installment transaction under a retail charge agreement

shall be stated in a sales slip or other memorandum furnished by

a retail seller to a retail buyer under or in connection with the

agreement.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 345.112. AGREEMENT BALANCE STATEMENT. (a) At the end of

each statement period of a retail charge agreement in which an

unpaid balance exists, the retail seller shall provide to the

retail buyer a statement of the unpaid balance.

(b) The statement must set out that the retail buyer at any time

may pay all or any part of the unpaid balance.

(c) In this section, "statement period" means a monthly period,

which is not required to be a calendar month. The term may

include a regular period, other than a monthly period, to which

the retail charge agreement parties agree in writing.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 345.113. COMPLIANCE WITH FEDERAL LAW CONSIDERED COMPLIANCE

WITH CHAPTER'S DISCLOSURE REQUIREMENTS. A retail charge

agreement that complies with the applicable disclosure provisions

of the Consumer Credit Protection Act (15 U.S.C. Section 1601 et

seq.) is considered to comply with the disclosure requirements of

Section 345.112.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

SUBCHAPTER D. MARKET COMPETITIVE RATE CEILING

Sec. 345.153. PUBLICATION AND EFFECTIVE DATE OF CEILING. The

commissioner shall send to the secretary of state the market

competitive rate ceiling determined under Section 345.152 for

publication in the first publication of the Texas Register after

September 1 of each year. The market competitive rate ceiling

takes effect on the following October 1.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 345.155. TIME PRICE DIFFERENTIAL COMPUTATION AND AMOUNT.

(a) A time price differential authorized under this subchapter

shall be computed using the average daily balance method.

(b) If the amount of a time price differential otherwise

authorized under this subchapter for a billing cycle in which a

balance is due is less than 75 cents a month, the holder may

charge an amount that does not exceed 75 cents a month.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 345.156. WHEN CHARGING OF TIME PRICE DIFFERENTIAL

PROHIBITED. A time price differential may not be charged for a

billing cycle of a retail charge agreement that provides for a

time price differential under this subchapter if:

(1) the payments received for the agreement and amounts credited

during the billing cycle that are attributable to amounts

included in the balance owed at the end of the preceding billing

cycle equal or exceed the balance owed under the agreement at the

end of the preceding billing cycle; or

(2) a balance is not owed at the end of the preceding billing

cycle.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 345.157. DELINQUENCY CHARGE. (a) A retail charge

agreement that implements the market competitive rate ceiling may

provide for the payment of:

(1) a delinquency charge on each installment that is in default

for a period that is longer than 21 days;

(2) an attorney's reasonable fee if the agreement is referred

for collection to an attorney who is not a salaried employee of

the holder; and

(3) court costs and disbursements.

(b) The amount of a delinquency charge may not exceed $15.

(c) Only one delinquency charge may be collected on an

installment regardless of the duration of the default.

(d) The holder shall remit 50 cents of each delinquency charge

in excess of $10 collected under this section to the comptroller,

in the time and manner established by the comptroller, for

deposit to the credit of an account in the general revenue fund.

One-half of the money in the account may be appropriated only to

finance research conducted by the finance commission under

Section 11.305 and the other one-half of the money in the account

may be appropriated only to finance educational activities and

counseling services under Section 394.001.

(e) A customer's monthly statement must contain the following

notice printed or typed in at least 10-point type that is

boldfaced, capitalized, underlined, or otherwise conspicuously

set out from the surrounding written material: "A DELINQUENCY

CHARGE OF $15 MAY BE ASSESSED FOR A PAYMENT THAT IS IN DEFAULT

FOR A PERIOD THAT IS LONGER THAN 21 DAYS."

(f) If the commissioner determines that a retail seller or

creditor that was operating under this subchapter on September 1,

1999, and that charges a delinquency charge in excess of $10,

moved its credit operations out of this state after September 1,

1999, in a manner that results in the retail seller's or

creditor's retail charge agreements not being subject to this

subchapter, the commissioner shall collect from the retail seller

or creditor an amount equal to 25 cents for each delinquency

charge in excess of $10 collected during the 12-month period

preceding the date of the move.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Amended by Acts 1999, 76th Leg., ch. 1348, Sec. 4, eff. Sept. 1,

1999.

Sec. 345.158. RETAIL CHARGE AGREEMENT TO WHICH SUBCHAPTER DOES

NOT APPLY. This subchapter does not apply to a retail charge

agreement that:

(1) is a home solicitation transaction that is subject to

Chapter 601, Business & Commerce Code;

(2) is secured by a lien on the obligor's homestead; and

(3) provides for credit that is extended by the retail seller or

the seller's owner, subsidiary, or corporate affiliate.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 2.18, eff. April 1, 2009.

SUBCHAPTER E. INSURANCE

Sec. 345.201. PROPERTY INSURANCE. (a) A holder may request or

require a retail buyer to insure the property purchased or

improved under a retail installment transaction, including the

purchase of title insurance on real property that is involved in

the retail installment contract or retail charge agreement and

that is subject to a security interest of the holder, including a

lien.

(b) If the property is a boat that may be enrolled or licensed

as a yacht with the United States Coast Guard and subject to the

maritime laws of the United States, a holder may also require a

retail buyer to provide in connection with the boat:

(1) protection and indemnity insurance;

(2) longshoremen's and harbor worker's compensation insurance;

and

(3) medical payments insurance.

(c) The insurance and the premiums or charges for the insurance

must bear a reasonable relationship to:

(1) the amount, term, and conditions of the retail installment

contract or retail charge agreement;

(2) the existing hazards or risk of loss, damage, or

destruction; or

(3) the potential liability.

(d) The insurance may not:

(1) cover unusual or exceptional risks; or

(2) provide coverage not ordinarily included in policies issued

to the public.

(e) The holder may include the cost of insurance provided under

this section as a separate charge in the contract or agreement.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 345.202. CREDIT LIFE, CREDIT HEALTH AND ACCIDENT, AND

CREDIT INVOLUNTARY UNEMPLOYMENT INSURANCE. (a) As additional

protection for the contract or agreement, a holder may:

(1) request or require a retail buyer to provide credit life

insurance and credit health and accident insurance; and

(2) request or allow a retail buyer to provide credit

involuntary unemployment insurance.

(b) A holder may include the cost of insurance provided under

Subsection (a) as a separate charge in the contract or agreement.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 345.203. MAXIMUM AMOUNT OF INSURANCE COVERAGE. (a) At any

time the total amount of the policies of credit life insurance in

force on one retail buyer on one retail installment contract or

retail charge agreement may not exceed:

(1) the total amount repayable under the contract or agreement;

and

(2) the greater of the scheduled or actual amount of unpaid

indebtedness if the indebtedness is repayable in substantially

equal installments.

(b) At any time the total amount of the policies of credit

health and accident insurance or credit involuntary unemployment

insurance in force on one retail buyer on one retail installment

contract or retail charge agreement may not exceed the total

amount repayable under the contract or agreement, and the amount

of each periodic indemnity payment may not exceed the scheduled

periodic payment on the indebtedness.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 345.204. INSURANCE STATEMENT. (a) If insurance is

required in connection with a retail installment contract or

retail charge agreement, the holder shall give to the retail

buyer a statement that clearly and conspicuously states that:

(1) insurance is required in connection with the contract or

agreement; and

(2) the buyer as an option may furnish the insurance through:

(A) an existing policy of insurance owned or controlled by the

buyer; or

(B) an insurance policy obtained from an insurance company

authorized to do business in this state.

(b) If requested or required insurance is sold or obtained by

the holder and the retail installment contract or retail charge

agreement includes a premium or rate of charge that is not fixed

or approved by the commissioner of insurance, the holder shall

deliver or mail to the retail buyer a written statement that

includes that fact.

(c) A statement under Subsection (a) or (b) may be provided with

or as part of the retail installment contract or the retail

charge agreement, as appropriate, or separately.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 345.205. INSURANCE MAY BE FURNISHED BY BUYER. (a) If

insurance is requested or required in connection with a retail

installment contract or retail charge agreement and the retail

installment contract or retail charge agreement includes a

premium or rate of charge that is not fixed or approved by the

commissioner of insurance, the retail buyer is entitled to

furnish the insurance coverage not later than the 10th day after

the date of the contract or agreement or the delivery or mailing

of the written statement required under Section 345.204, as

appropriate, through:

(1) an existing insurance policy owned or controlled by the

buyer; or

(2) an insurance policy obtained from an insurance company

authorized to do business in this state.

(b) When a retail installment contract or retail charge

agreement is executed, the retail buyer is entitled to purchase

the insurance described by Section 345.201, 345.202, or 345.207

and select:

(1) the agent or broker; and

(2) an insurance company acceptable to the holder.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 345.206. BUYER'S FAILURE TO PROVIDE EVIDENCE OF INSURANCE.

(a) If the retail buyer fails to present to the holder

reasonable evidence that the buyer has obtained or maintained a

coverage required by the retail installment contract or retail

charge agreement, the holder may:

(1) obtain substitute insurance coverage that is substantially

equivalent to or more limited than the coverage required; and

(2) add the amount of the premium advanced for the substitute

coverage to the unpaid balance of the contract or agreement.

(b) Substitute insurance coverage under Subsection (a)(1):

(1) may be limited to coverage only of the interest of the

holder or the interest of the holder and the buyer; and

(2) must be written at lawful rates and in accordance with the

Insurance Code by a company authorized to do business in this

state.

(c) If substitute insurance is obtained by the holder under

Subsection (a), the amendment adding the premium or rescheduling

the contract is not required to be signed by the retail buyer.

The holder shall deliver to the buyer or send to the buyer's most

recent address shown in the records of the holder specific

written notice that the holder has obtained substitute insurance.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 345.207. CHARGES FOR OTHER INSURANCE INCLUDED IN RETAIL

INSTALLMENT CONTRACT. A retail buyer and retail seller may agree

in a retail installment contract to include charges for insurance

coverage that is:

(1) for risk of loss or liability reasonably related to:

(A) the goods or services sold;

(B) the anticipated use of the goods or services sold; or

(C) goods or services that:

(i) are related to the goods or services sold; and

(ii) may be insured with the goods and services sold;

(2) written on policies or endorsement forms prescribed or

approved by the commissioner of insurance; and

(3) ordinarily offered in policies or endorsements offered to

the public.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 345.208. REQUIREMENTS FOR INCLUDING INSURANCE CHARGE IN

CONTRACT OR AGREEMENT. (a) For insurance to be included as an

itemized charge in a retail installment contract or a retail

charge agreement:

(1) the insurance must be written:

(A) at lawful rates;

(B) in accordance with the Insurance Code; and

(C) by a company authorized to do business in this state; and

(2) the disclosure requirements of this section must be

satisfied.

(b) If the insurance is described by Section 345.201, 345.202,

or 345.207, the retail installment contract or retail charge

agreement, or a separate written statement or specimen copy of a

certificate or policy of insurance that is given to the retail

buyer, must identify the:

(1) type of the coverage;

(2) term of the coverage; and

(3) amount of the premium for the coverage.

(c) If the insurance is described by Section 345.207, the retail

installment contract must also clearly indicate that the coverage

is optional.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 345.209. DELIVERY OF INSURANCE DOCUMENT TO BUYER. A holder

who obtains insurance shall, not later than the 45th day after

the date of the delivery of goods or the furnishing of services

under a retail installment contract or retail charge agreement,

deliver, mail, or cause to be mailed to the retail buyer at the

buyer's address specified in the contract or agreement a policy

or certificate of insurance that clearly sets forth:

(1) the amount of the premium;

(2) the kind of insurance provided;

(3) the coverage of the insurance; and

(4) all terms, including options, limitations, restrictions, and

conditions, of the policy.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 345.210. HOLDER'S DUTY IF INSURANCE IS ADJUSTED OR

TERMINATED. (a) If insurance for which a charge is included in

or added to a retail installment contract or retail charge

agreement is canceled, adjusted, or terminated, the holder shall,

at the holder's option:

(1) apply the amount of the refund for unearned insurance

premiums received by the holder to replace required insurance

coverage; or

(2) credit the refund to the final maturing installments of the

retail installment contract or retail charge agreement.

(b) If the amount to be applied or credited under Subsection (a)

is more than the amount unpaid on the retail installment contract

or retail charge agreement, the holder shall refund to the retail

buyer the difference between those amounts.

(c) A cash refund is not required under this section if the

amount of the refund is less than $1.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 345.211. GAIN OR ADVANTAGE FROM INSURANCE NOT ADDITIONAL

CHARGE. Any gain or advantage to the holder or the holder's

employee, officer, director, agent, general agent, affiliate, or

associate from insurance or the provision or sale of insurance

under this subchapter is not an additional charge or additional

time price differential in connection with a retail installment

contract or retail sales agreement made under this chapter except

as specifically provided by this chapter.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 345.212. NONFILING INSURANCE. (a) Instead of charging

fees for the filing, recording, and releasing of documents for

the perfection of a security interest created in connection with

a retail installment transaction, the holder may include in the

retail installment contract or retail charge agreement a charge

for a nonfiling insurance premium.

(b) The amount of a charge under Subsection (a) may not exceed

the amount of fees authorized for filing and recording an

original financing statement in the standard form prescribed by

the secretary of state.

(c) A holder may receive a charge authorized by this section

only if the holder purchases nonfiling insurance in connection

with the retail installment transaction.

(d) A holder is not required to furnish to a retail buyer a

policy or certificate of insurance evidencing nonfiling

insurance.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 345.213. INCLUSION OF INSURANCE PREMIUMS. A retail seller

may include any type of insurance premium in the billing of its

accounts if:

(1) a charge, other than the premium, is not made to the retail

buyer in connection with that inclusion; and

(2) a charge is not made and a premium is not charged under a

retail credit agreement when there is no monthly balance or the

monthly balances are paid in full.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 345.214. ADDING TO RETAIL INSTALLMENT CONTRACT PREMIUMS FOR

INSURANCE ACQUIRED AFTER TRANSACTION. (a) A retail buyer and

holder may agree to add to the unpaid balance of a retail

installment contract premiums for insurance policies covering

goods or services sold in a prior retail installment transaction

under the contract or goods or services related to those goods or

services, including premiums for the renewal of a policy included

in the c