Finance Code § 342.457

An authorized lender may offer and finance an automobile club membership with a loan, but the lender cannot require the purchase. The borrower must give written acknowledgment, and the lender must give written notice of the no-requirement rule and the borrower's right to cancel for a full refund within 31 days. The com

Jurisdiction: United States — Texas
Instrument: Code
Version: Undated source snapshot
Language: en
Official source: View official record ↗

lending loan disclosures membership charges

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Provisions of Finance Code § 342.457

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342.457
Finance Code § 342.457
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An authorized lender may offer and finance an automobile club membership with a loan, but the lender cannot require the purchase. The borrower must give written acknowledgment, and the lender must give written notice of the no-requirement rule and the borrower's right to cancel for a full refund within 31 days. The commissioner must adopt Spanish disclosure rules and a disclosure form, and the membership charge must be reasonable.

Sec. 342.457. AUTOMOBILE CLUB MEMBERSHIP OFFERED IN CONNECTION WITH A LOAN. (a) An authorized lender may, at the time or after a loan under Subchapter E is made, offer to sell to the borrower and finance in the loan contract a charge for an automobile club membership. (b) The lender may not require the purchase of the membership authorized under Subsection (a) as a condition for approval of the loan. (c) The borrower shall provide the lender with written acknowledgment of the borrower's intent to purchase the membership. (d) The lender shall give the borrower written notice at the time the loan is made that the borrower: (1) is not required to purchase the membership as a condition for approval of the loan; and (2) is entitled to cancel the transaction and receive a full refund of the purchase price of the membership before the 31st day after the date the loan is made. (e) The commissioner shall: (1) adopt a rule providing for disclosure in Spanish of the information required by Subsection (d); and (2) establish a form for the disclosure of the information required by Subsection (d) that conforms to the plain language and readability requirements applicable to loan contracts under Section 341.502. (f) The amount charged for a membership as authorized by Subsection (a) must be reasonable. Added by Acts 2005, 79th Leg., Ch. 252 (H.B. 1088), Sec. 2, eff. September 1, 2005. SUBCHAPTER K. LIMITATIONS ON AUTHORIZED LENDER

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Finance Code § 342.457

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Provisions of Finance Code § 342.457

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