This section sets rules for debt cancellation agreements, including delivery of a copy, timing, a single-payment sale requirement, reporting and forwarding money, fiduciary handling of funds, and document retention/cooperation duties.
Sec. 354.006. ADDITIONAL REQUIREMENTS FOR DEBT CANCELLATION AGREEMENTS. (a) If a retail buyer purchases a debt cancellation agreement, the retail seller must provide to the retail buyer a true and correct copy of the agreement not later than the 10th day after the date of the contract. (b) A holder must comply with the terms of a debt cancellation agreement not later than the 60th day after the date of receipt of all necessary information required by the holder or administrator of the agreement to process the request. (c) A debt cancellation agreement may not knowingly be offered by a retail seller if: (1) the contract is already protected by gap insurance; or (2) the purchase of the debt cancellation agreement is required for the retail buyer to obtain the extension of credit. (d) This section does not apply to a debt cancellation agreement offered in connection with the purchase of a commercial vehicle. (e) The sale of a debt cancellation agreement must be for a single payment. (f) A holder that offers a debt cancellation agreement must report the sale of and forward money received on all such agreements to any designated party as prescribed in any applicable administrative services agreement, contractual liability policy, other insurance policy, or other specified program documents. (g) Money received or held by a holder or any administrator of a debt cancellation agreement and belonging to an insurance company, holder, or administrator under the terms of a written agreement must be held by the holder or administrator in a fiduciary capacity. (h) A retail seller that negotiates a debt cancellation agreement and subsequently assigns the contract shall: (1) maintain documents relating to the agreement that come into the retail seller's possession; and (2) on request of the Office of Consumer Credit Commissioner, cooperate in requesting and obtaining access to documents relating to the agreement not in the retail seller's possession. Redesignated and amended from Finance Code, Subchapter G, Chapter 348 by Acts 2017, 85th Leg., R.S., Ch. 183 (S.B. 1052), Sec. 6, eff. September 1, 2017.