7 Tex. Admin. Code § 84.707 - Files and Records Required (Retail Sellers Assigning Retail Installment Sales Contracts)
(a) Applicability.
The recordkeeping requirements of this section apply to retail sellers that
immediately assign or transfer all retail installment sales contracts to
another authorized creditor. If a retail seller collects any installments,
excluding downpayments, on a retail installment sales contract, the retail
seller must comply with the recordkeeping requirements established under §
RSA
84.708 of this title (relating to Files and
Records Required (Retail Sellers Collecting Installments on Retail Installment
Sales Contracts)). The recordkeeping requirements of this section do not apply
to motor vehicle retail installment sales transactions involving commercial
vehicles.
(b) Records required for
each retail installment sales transaction. Each licensee must maintain records
with respect to the licensee's compliance with Texas Finance Code, Chapter 348
for each motor vehicle retail installment sales contract made, acquired,
serviced, or held under Chapter 348 and make those records available for
examination. This requirement includes any conditional delivery agreement or
retail installment sales contract signed by a retail buyer for a vehicle that
has been delivered, including contracts that are subsequently voided or
canceled after a seller regains possession and ownership of the
vehicle.
(c) Recordkeeping systems.
The records required by this section may be maintained by using either a
legible paper or manual recordkeeping system, electronic recordkeeping system,
optically imaged recordkeeping system, or a combination of the preceding types
of systems, unless otherwise specified by statute or regulation. Licensees may
maintain records on one or more recordkeeping systems, so long as the licensee
is able to integrate records pertaining to an account into one or more reports
as required by this section. If federal law requirements for record retention
are different from the provisions contained in this section, the federal law
requirements prevail only to the extent of the conflict with the provisions of
this section.
(d) Records required.
(1) Retail installment sales transaction
report.
(A) General requirements. Each
licensee must maintain records sufficient to produce a retail installment sales
transaction report that contains a listing of each Texas Finance Code, Chapter
348 retail installment sales contract entered into by the licensee. The report
is only required to include those retail installment sales contracts that are
subject to the record retention period of paragraph (7) of this
subsection.
(B) Recordkeeping
systems. The retail installment sales transaction report can be maintained
either as a paper record or may be generated from an electronic system or
systems so long as the licensee can integrate the following information into a
report. If the retail installment sales transaction report is maintained under
a manual recordkeeping system, the retail installment sales transaction report
must be updated within a reasonable time from the date the contract is entered
into by the licensee.
(C) Dealer's
Motor Vehicle Inventory Tax Statement option.
(i) A licensee may utilize a copy of the
Dealer's Motor Vehicle Inventory Tax Statement (VIT Statement) submitted to the
Texas Comptroller of Public Accounts to satisfy the requirements of this
paragraph if the following two conditions are met when the VIT Statement is
provided to the commissioner's representative:
(I) on a copy of the submitted VIT Statement,
the licensee identifies (e.g., highlights, marks with abbreviations) which
transactions were cash transactions and which were retail installment sales
transactions; and
(II) the licensee
supplements the VIT Statement with the identification of all transactions in
which VIT was not charged or collected.
(ii) A licensee who assigns account numbers
and utilizes the Dealer's Motor Vehicle Inventory Tax Statement option must
provide the account numbers for all retail installment sales transactions
contained in the VIT Statement.
(D) Required information. A retail
installment sales transaction report must contain the following information:
(i) the date of contract or date of sale
(day, month, and year);
(ii) the
retail buyer's name(s);
(iii) a
method of identifying the vehicle, such as the last six digits of the vehicle
identification number or the stock number; and
(iv) the account number, if the retail seller
assigns an account number.
(2) Retail installment sales transaction
file. A licensee must maintain a paper or imaged copy of a retail installment
sales transaction file for each individual retail installment sales contract or
be able to produce the same information within a reasonable amount of time. The
retail installment sales transaction file must contain documents which show the
licensee's compliance with applicable law. The required documents must show the
licensee's compliance with Texas Finance Code, Chapter 348 and would
accordingly include applicable state and federal laws and regulations,
including the Truth in Lending Act. If a substantially equivalent electronic
record for any of the following records exists, a paper copy of the record does
not have to be included in the retail installment sales transaction file if the
electronic record can be accessed upon request. The retail installment sales
transaction file must include copies of the following records or documents,
unless otherwise specified:
(A) for all retail
installment sales transactions:
(i) the retail
installment sales contract signed by the retail buyer and the retail seller as
required by Texas Finance Code, §
RSA 348.101;
(ii) if prepared by the retail seller, the
purchase or buyer's order reflecting a written computation of the cash price of
the vehicle and itemized charges, a description of the motor vehicle being
purchased, and a description of each motor vehicle being traded in;
(iii) the credit application and any other
written or recorded information used in evaluating the application;
(iv) the Texas Department of Motor Vehicles'
Title Application Receipt (Form VTR-500-RTS) or similar document evidencing the
disbursement of the sales tax, and fees for license, title, and registration of
the vehicle;
(v) copies of other
agreements or disclosures signed by the retail buyer applicable to the retail
installment sales transaction; and
(vi) any records applicable to the retail
installment transaction outlined by subparagraphs (B) - (P) of this
paragraph.
(B) for a
vehicle titled in Texas, a copy of the completed Texas Department of Motor
Vehicles'/Texas Comptroller of Public Accounts' Application for Texas
Certificate of Title (Form 130-U) signed by the retail buyer and seller that
was filed with the appropriate county tax assessor-collector.
(C) for a vehicle titled outside of Texas, a
copy of the application for certificate of title for the buyer or the properly
assigned evidence of ownership to the buyer including the Texas Comptroller of
Public Accounts' Texas Motor Vehicle Sales Tax Exemption Certificate (Form
14-312).
(D) for a retail
installment sales transaction in which a power of attorney is necessary to
transfer title to the buyer, a copy of the Texas Department of Motor Vehicles'
Power of Attorney to Transfer a Motor Vehicle (Form VTR-271) or any other
similar document used as a power of attorney.
(E) for a retail installment sales
transaction involving a downpayment, a copy of any document relating to the
downpayment including:
(i) receipts for cash
downpayments;
(ii) promissory notes
or other documents evidencing the retail buyer's agreement to pay the cash
downpayment over time;
(iii)
documents or forms signed by the retail buyer relating to a manufacturer's or
distributor's rebate as permitted by the Texas Finance Code, §
RSA
348.404(a); and
(iv) documents or forms evidencing the payoff
of any trade-in vehicle shown on the retail installment sales contract as
required by Texas Finance Code, §
RSA
348.408(c).
(F) for a retail installment sales
transaction involving a trade-in motor vehicle, a copy of the Texas Disclosure
of Equity in Trade-In Motor Vehicle required by Texas Finance Code, §
348.0091 and §
84.204 of this title (relating to
Disclosure of Equity in Retail Buyer's Trade-in Motor Vehicle).
(G) for a retail installment sales
transaction involving the disbursement of funds for money advanced pursuant to
Texas Finance Code, §
348.404(b) and
(c), a copy of any document relating to the
disbursement of funds for money advanced.
(H) for a retail installment sales
transaction in which the licensee issues a certificate of insurance regarding
insurance policies issued by or through the licensee in connection with the
retail installment sales transaction, copies of the certificates of
insurance.
(I) for a retail
installment sales transaction in which the licensee issues a debt cancellation
agreement, a complete copy of the debt cancellation agreement provided to the
retail buyer, documentation of disbursement of the debt cancellation agreement
fee to the retail seller or a third-party administrator, any written
instruction from a holder to make a full or partial refund of the debt
cancellation agreement fee, and documentation of any refund provided upon
cancellation or termination of the debt cancellation agreement. As an
alternative to maintaining a complete copy of the debt cancellation agreement
in the retail installment sales transaction file, the licensee may maintain all
of the following:
(i) in the retail
installment sales transaction file, a copy of any page of the debt cancellation
agreement with a signature, a transaction-specific term, the cost of the debt
cancellation agreement, or any blank space that has been filled in;
(ii) in the licensee's general business
files, a complete master copy of each debt cancellation agreement form used by
the licensee during the period described by paragraph (7) of this
subsection;
(iii) in the licensee's
general business files, policies and procedures that show a verifiable method
for ensuring that the master copy of the debt cancellation agreement accurately
reflects the debt cancellation agreement used in each individual
transaction.
(J) for a
retail installment sales transaction in which the licensee issues a certificate
of coverage regarding ancillary products issued by or through the licensee in
connection with the retail installment sales transaction, records of the
ancillary products (motor vehicle theft protection plans, service contracts,
maintenance agreements, identity recovery service contracts, etc.) including
all certificates of coverage.
(K)
for a retail installment sales transaction where separate disclosures are
required by federal or state law including the following:
(i) a transaction where disclosures required
by the Truth in Lending Act are not incorporated into the text of the retail
installment sales contract and the credit was extended for primarily for
personal, family, or household purposes, a copy of the Truth in Lending
statement required by Regulation Z, Truth in Lending,
RSA
226.18;
(ii) a transaction involving a cosigner, the
notice to cosigner required by the Federal Trade Commission's Credit Practices
Trade regulation,
RSA
444.3.
(L) for a retail installment sales contract
that has an itemized charge for the inspection of a used motor vehicle, access
to a copy of the work order, inspection receipt, or other verifiable evidence
that reflects that the inspection was performed including the date and cost of
the inspection.
(M) for a retail
installment sales transaction involving the sale of a trade-in credit agreement
under Texas Finance Code, §
348.125:
(i) a copy of the trade-in credit agreement
and any written notice or disclosure provided to the retail buyer;
(ii) evidence of the contractual liability
reimbursement policy in effect at the time of the trade-in credit agreement, as
required by Texas Finance Code, §
RSA
348.125(c); and
(iii) documentation of any refund provided
upon cancellation of a trade-in credit agreement.
(N) for a retail installment sales
transaction in which a retail buyer requests or receives a benefit under a
trade-in credit agreement under Texas Finance Code, §
348.125:
(i) a copy of the trade-in credit
agreement;
(ii) evidence of the
amount of any credit applied under the trade-in credit agreement; and
(iii) any documentation used to process a
claim, including:
(I) any proof of insurance
settlement documents obtained from the retail buyer;
(II) any accident record or vehicle condition
report obtained to process a claim; and
(III) any supplemental claim records
supporting the approval or denial of the claim.
(O) for a retail installment sales
transaction in which a retail buyer requests or receives a benefit under a
depreciation benefit optional member program under Texas Occupations Code,
§
1304.003(a)(2)(C):
(i) evidence of the amount of any credit
applied under the depreciation benefit optional member program; and
(ii) any documentation obtained by the
licensee to process the benefit.
(P) any conditional delivery agreement signed
by the retail buyer or provided to the retail buyer.
(3) Assignment information.
(A) Required information. Assignment
information must cover any Texas Finance Code, Chapter 348 retail installment
sales contract made by or acquired by the licensee that is assigned from its
licensed or registered location. The assignment information must show the name
of the retail buyer, the account number or other unique number given to the
retail buyer, the date of assignment, and the name and address to which the
accounts are assigned.
(B)
Electronic recordkeeping systems. If a licensee is able to produce an
assignment report containing the required information provided in subparagraph
(A) of this paragraph electronically without any additional programming costs,
the licensee must produce the report upon request. If the licensee's software
programs are unable to produce an assignment report containing the required
information provided in subparagraph (A) of this paragraph, the licensee may
maintain assignment information for each individual retail installment sales
transaction in the retail installment sales transaction file. A licensee must
be able to access assignment information for a specific transaction as
requested by the commissioner's representative.
(C) Manual recordkeeping systems. If a
licensee is not able to produce an assignment report as provided in
subparagraph (B) of this paragraph, the licensee may maintain assignment
information for each individual retail installment sales transaction in the
retail installment sales transaction file. A licensee must be able to access
assignment information for a specific transaction as requested by the
commissioner's representative.
(4) General business and accounting records.
General business and accounting records concerning retail installment sales
transactions must be maintained. The licensee is not required to produce
information protected under the attorney-client privilege or work product
privilege. The business and accounting records must include receipts,
documents, or other records for each disbursement made by the licensee at the
retail buyer's direction or request, on his behalf, or for his benefit, that is
charged to the retail buyer, including:
(A)
Texas Comptroller of Public Accounts' Dealer Motor Vehicle Inventory Tax
Statement (Form 50-246); and
(B)
Texas Comptroller of Public Accounts' Texas Motor Vehicle Seller-Financed Sales
Tax Report (Form 14-117).
(5) Adverse action records. Each licensee
must maintain adverse action records regarding all applications relating to
Texas Finance Code, Chapter 348 retail installment sales transactions. Adverse
action records must be maintained according to the record retention
requirements contained in Regulation B, Equal Credit Opportunity Act,
RSA
1002.12(b). The current
retention periods are 25 months for consumer credit and 12 months for business
credit.
(6) Trade-in credit
agreement records. Each licensee that enters a trade-in credit agreement or
provides a benefit in connection with a trade-in credit agreement must:
(A) maintain a copy of any contractual
liability reimbursement policy related to the trade-in credit agreement, as
required by Texas Finance Code, §
RSA
348.125(c); and
(B) maintain a register or be able to
generate a report, paper or electronic, that reflects agreements that were
either satisfied or denied. This register or report must show the name of the
retail buyer, the account number, and the date of satisfaction or
denial.
(7) Retention and
availability of records. All books and records required by this subsection must
be available for inspection at any time by Office of Consumer Credit
Commissioner staff, and must be retained for a period of four years from the
date of the contract, two years from the date of the final entry made thereon
by the licensee, whichever is later, or a different period of time if required
by federal law. For licensees who assign retail installment sales contracts,
the final entry may be the date of the assignment if the licensee makes no
other entries on the account after the assignment. Upon notification of an
examination pursuant to Texas Finance Code, §
RSA
348.514(f), the licensee
must be able to produce or access required books and records within a
reasonable time at the licensed location or registered office specified on the
license. The records required by this subsection must be available or
accessible at an office in the state designated by the licensee except when the
retail installment sales transactions are transferred under an agreement which
gives the commissioner access to the documents. Documents may be maintained out
of state if the licensee has in writing acknowledged responsibility for either
making the records available within the state for examination or by
acknowledging responsibility for additional examination costs associated with
examinations conducted out of state.
Notes
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