Section 83.828 - Files and Records Required (Subchapter E and F Lenders)Each licensee must maintain records with respect to each loan made under Texas Finance Code, Chapter 342, Subchapters E and F, and make those records available for examination. The records required by this section may be maintained by using either a 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. 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.
(1) Loan register. Each licensee must maintain a loan register, containing the information required by subparagraphs (A) - (D) of this paragraph, for each Texas Finance Code, Chapter 342, Subchapter E and F loan made by the licensee. The loan register can be maintained either as a paper or an electronic record. If the loan register is maintained as an electronic record, the licensee must be able to sort, generate, and print, as a separate record, the loan register for each day the licensee originated or acquired Chapter 342, Subchapter E and F loans. A licensee may incorporate the loan register as part of the record of daily transactions required by paragraph (7) of this section if the loan register is a separate and distinct section of the daily report. If the loan register is maintained as a paper record, the loan register must be currently maintained. A licensee may file, in chronological order, copies of any loan document or form prepared at the time a loan is made reflecting the information provided in subparagraphs (A) - (D) of this paragraph to serve as a loan register. A loan register must contain the following information: (A) Date of loan (month, day, and year);(B) Last name of borrower;(C) Total of payments (amount of loan); and(D) Loan number. Loans may be numbered in ascending sequence as made or may bear an account number permanently assigned to one borrower with a numerical suffix reflecting the number of loans to the borrower. A permanent account number may be used in an automated system for each series of loans to a borrower; however, a consecutive suffix number must be assigned to each loan in the series to distinguish it from the others.(2) Alphabetical index of current borrowers. A current alphabetical index or report of outstanding loans showing the full name of each borrower, co-borrower, or other obligor on the loan and the loan number assigned each loan must be maintained. A licensee may maintain the alphabetical index of current borrowers either as a paper or an electronic record. If the alphabetical index of current borrowers is maintained as an electronic record, the licensee must be able to sort, generate, and print, as a separate record, the alphabetical index of current borrowers in strict alphabetical order. A licensee may maintain the alphabetical index of current borrowers by creating a rolodex of current borrowers. In lieu of creating a rolodex of current borrowers, a licensee may maintain the alphabetical index of current borrowers by filing the loan files of the borrowers or individual borrower's account records in strict alphabetical order. The manual recordkeeping system for maintaining the alphabetical index of current borrowers must be currently maintained and include a card, file, or record for each co-borrower or other obligor.(3) Borrower's account record (including payment and collection contact history). A separate paper or electronic record must be maintained for the account of each borrower. The paper or electronic borrower's account record must be readily available by reference to either a name or loan number. The borrower's account record must contain at least the following information on each loan: (A) Loan number as recorded on loan register;(B) Loan schedule and terms itemized to show: (ii) number of installments;(iii) due date of installments;(iv) amount of each installment; and(C) Name, address, and telephone number of borrower;(D) Names and addresses of co-borrowers or other obligors, if any;(E) Type or brief description of security; if none, so indicate;(F) Total of payments (amount of loan);(G) Amount financed (cash advance);(H) Total interest charges and other authorized charges itemized to show: (i) on Subchapter E loans, the base finance charge, the administrative fee, and additional days charge for irregular installments; or(ii) on Subchapter F loans, the acquisition charge and the installment account handling charge shown separately;(I) Amount of premium charges for insurance, gap waiver agreements, and authorized ancillary products itemized to show: (i) credit life insurance;(ii) credit accident and health (disability) insurance;(iii) personal property insurance;(iv) collateral protection physical damage insurance (single-interest or dual-interest coverage);(vi) credit involuntary unemployment insurance;(vii) gap waiver agreements; and(viii) automobile club services memberships authorized by Texas Finance Code, § 342.457;(J) Amount of official fees for recording, amending, or continuing a notice of security interest that is collected at the time the loan is made and which is to be disbursed within the period of 30 days as prescribed in paragraph (6)(D)(i) of this section;(K) Amount of personal property insurance when the coverage amount of insurance is not equal to the amount of the total of payments (amount of loan);(L) Individual payment entries itemized to show: (i) date payment received; dual postings are acceptable if date of posting is other than date of receipt;(ii) amounts received for application to principal and interest; and(iii) amounts received for default, deferment, or other authorized charges;(M) Refunds of unearned interest, insurance charges, gap waiver agreements, and authorized ancillary products, if any. A licensee is responsible for substantiating final entries and that refunds were paid to the borrower. Refund amounts must be itemized to show: (ii) credit life, credit accident and health, credit involuntary unemployment, collateral protection interest (single-interest or dual-interest coverage), and personal property insurance charges refunded, showing separately the refund applicable to each separate insurance policy or coverage;(iii) dual motor vehicle physical damage insurance when borrower requests cancellation of the policy;(iv) gap waiver agreements; and(v) automobile club services memberships;(N) Collection contact history. A licensee must make a written or an electronic record of each and every contact made by a licensee with the borrower or any other person. The written or electronic record must also include every contact made by the borrower with the licensee. The written record must include the date, method of contact, contacted party, person initiating the contact, and a summary of the contact; and(O) Corrective entries. A licensee may make corrective entries to the borrower's account record if the corrective entry is justified. A licensee must maintain the reason and supporting documentation for each corrective entry made to the borrower's account record. The reason for the corrective entry may be recorded in the collection contact history of the borrower's account record. The supporting documentation justifying the corrective entry may be maintained in the individual borrower's account file or properly stored and indexed in a licensee's optically imaged recordkeeping system. If a licensee manually maintains the borrower's account record, the licensee must properly correct an improper entry by drawing a single line through the improper entry and entering the correct information above or below the improper entry. No erasures or other obliterations may be made on the payments received or collection contact history section of the manual borrower's account record.(4) Transfer records. A licensee must maintain transfer records, whether paper or electronic, when any Texas Finance Code, Chapter 342 loan accounts made by or acquired by the licensee are transferred from its licensed location. The records must show the name of the borrower, the account number, the date of transfer, and the location to which the accounts are transferred.(5) General business and accounting records. General business and accounting records concerning the financial transactions of the loan business must be maintained. The business and accounting records must include receipts, documents, canceled checks, or other records for each disbursement made at the borrower's direction or request on his behalf or for his benefit, including repossession, foreclosure, or legal fees applied to the borrower's account.(6) Official fees records (Subchapter E loans only). (A) Disclosure on individual borrower's account record. The amount of official fees collected at the time the loan is made and to be disbursed within the period prescribed in subparagraph (D)(i) of this paragraph must be disclosed on the individual borrower's account record.(B) Termination, continuation, or amendment fees. Information concerning fees for termination, continuation, or amendment collected at the time a loan is made but not disbursed, as prescribed by subparagraph (D)(i) of this paragraph, or collected subsequent to the making of the loan, must be entered in a record. Entries to this record must be in chronological order as to the date the fees are collected. The record must show the date each fee is collected, the amount of each fee collected, the date each fee is disbursed, and the amount of each fee disbursed. In addition, if a fee is collected in advance for the purpose of filing a UCC-3 to "continue" a notice of security interest, the record must show the date the present filing expires.(C) Multiple fees in disbursement. If more than one fee is included in a disbursement by check to the recording office, the loan number of each account to which the disbursement is related on the check copy, check stub, or voucher must be documented.(D) Disbursement procedures. (i) Fees collected at the time a loan is made for recording, amending, or continuing a notice of security interest must be disbursed to the recording agency within 30 days from the date of collection from the borrowers. If fees are not properly disbursed within 30 days, the borrower must be given credit for the fee and any filing may be made only at the licensee's expense. If filing of continuation fees may not be made during the 30 days following the date of the loan due to conflict with Texas Business and Commerce Code, § 9.515, the licensee must follow the procedure outlined in subparagraph (B) of this paragraph. (Note: Subparagraph (E)(i) of this paragraph summarizes the filing requirements of Texas Business and Commerce Code, § 9.515.)(ii) Each licensee should disburse, to the recording agency, termination fees collected from borrowers within 30 days from the date the loan is paid in full. If the termination fees are not disbursed within this period, the fees must be returned to the borrowers and the termination effected by the licensee and at the expense of the licensee.(E) Continuing notices of security interest. Continuation of liens will be dependent upon conformity with the following: (i) If a licensee desires to continue a notice of security interest on which a maturity date was not initially established on the financing statement, a continuation statement must be filed no later than 60 days after the maturity date and no sooner than six months prior to the maturity date. A licensee may exercise one of the following options when "continuing" a lien: (I) The cost of filing a continuation statement may be included in the official fees collected in connection with a renewal loan that has a maturity date extending past the end of the five-year period or past the initial maturity date;(II) The filing fee may be collected directly from the borrower within the period for filing prescribed by Texas Business and Commerce Code, § 9.515;(III) The borrower and the licensee may agree to charge the borrower's account for the cost of filing; or(IV) The cost of filing may be borne by the licensee.(ii) A record of fees collected under this section must be maintained as prescribed in subparagraph (A) or (B) of this paragraph.(7) Record of daily transactions. Each licensee must maintain sufficient records, paper or electronic, to adequately reflect, on an individual account basis, the business occurring during each day. The records must reflect the date on which each transaction occurred.(8) Record of loans in litigation and repossession. (A) An index of each repossession as it occurs and each legal action by or against the licensee as it is initiated must be recorded. The index must show the borrower's name, account number, and date of action. If accounts have been transferred, it must be noted in this index as well as on the record of transferred accounts as prescribed in paragraph (4) of this section.(B) All loan records, account cards, correspondence, and any other pertinent information must be maintained in the borrower's account folders or files. The file must include the following applicable items: (i) Identification of the collateral sought or acquired by the licensee;(ii) A copy of the original petition and the most current amended petition, if any;(iii) Proof of judgment if a judgment is taken and amounts awarded by the court;(iv) The date and terms of settlement if settlement is made between the borrower and the licensee before judgment;(v) Record of all payments received after judgment, properly identified and applied;(vi) When the licensee, acting as a secured party, takes possession of the collateral and disposes of it at a public or private sale as provided under Texas Business and Commerce Code, Chapter 9, and the sale is not a judicial sale, the file must include written evidence substantiating the commercial reasonableness of all aspects of the sale of the collateral, and of its preparation for sale, if any. These documents should include copies of any invoices or receipts, condition reports indicating the condition of the collateral, notice of intended disposition sent to the borrower and any other obligor or the waiver of the notice signed after default by the borrower and other obligors, and evidence of fair sale of the collateral. One means of providing evidence of fair sale or the commercial reasonableness of sale is the taking of not less than three bona fide bids. Bids must disclose: (I) names and addresses of the bidders;(II) name and address of the purchaser of the repossessed collateral; and(III) after the disposition of the collateral, a copy of any explanation of calculation of surplus or deficiency sent to the borrower.(9) Insurance loss registers. Each licensee must maintain a register, paper or electronic, reflecting information on credit life, credit accident and health, personal property, credit involuntary unemployment, and collateral protection insurance claims whether paid or denied by the insurance carrier. (A) Credit life insurance claims. The register pertaining to credit life insurance claims must show the name of the borrower, the account number, and the date of death.(B) Credit accident and health insurance claims. The register pertaining to credit accident and health insurance claims must show the name of the borrower, the account number, and the date of the initial filing of a claim for any continuous period of disability.(C) Personal property insurance claims. The register pertaining to personal property insurance claims must show the name of the borrower, the account number, the amount of insurance written on tangible personal property other than a motor vehicle, the amount of the settlement, and a notation as to whether the loss is a total or partial loss.(D) Credit involuntary unemployment insurance claims. The register pertaining to credit involuntary unemployment insurance claims must show the name of the borrower, the account number, and the date of the initial filing of the claim.(E) Collateral protection insurance claims. The register pertaining to collateral protection insurance claims must show the name of the borrower, the account number, the amount of the insurance written on the motor vehicle, the amount of the settlement, and a notation as to the basis of the settlement (actual cash value, repair, or the remaining outstanding balance).(10) Loan records and documents file. (A) Generally. A licensee must maintain a loan records and documents file for each individual borrower. The loan records and documents file must contain all necessary records and documents to evidence compliance with applicable state and federal laws and regulations, including the Equal Credit Opportunity Act and the Truth in Lending Act. The loan records and documents file must include copies of the following records or documents: (i) promissory notes including disclosures required by the Truth in Lending Act;(ii) security agreements that describe the collateral in detail sufficient to identify each individual item taken (including any separate valuation sheets reporting the replacement value of the personal property items);(iii) loan applications and any other written or recorded information used in evaluating the application;(iv) financing statements;(v) certificates of title for motor vehicles securing the loan and applications for certificate of titles;(vi) records of insurance policies issued by or through the licensee in connection with the loan, including certificate of insurances;(vii) if a motor vehicle physical damage insurance policy is required, a copy of the policy or insurance application and other pertinent records relating to the rating of the policy as finally issued;(viii) supplemental insurance records;(ix) supplemental gap waiver agreement records;(x) any written or recorded records relating to repossessions, legal actions, or foreclosure actions regarding the borrower or the borrower's collateral securing the loan;(xi) any record maintained under the Department of Defense's Military Lending Act Rule, RSA 232.5, regarding whether the borrower is a covered borrower; and(xii)any separate disclosures that are required by federal or state law, such as the notice to cosigner required by the Federal Trade Commission's Credit Practices Rule, RSA 444.3, or any mandatory disclosure to a covered borrower under the Department of Defense's Military Lending Act Rule, RSA 232.6.(B) Supplemental insurance records. Each licensee must maintain in the borrower's file supplemental records supporting the settlement or denials of claims reported in the registers. If the reason for the denial of a credit life insurance or a credit accident and health insurance claim is based upon the medical records of the borrower, supplemental records supporting the denial of the claim must be forwarded to the commissioner upon request. (i) Credit life insurance claims. The supplemental insurance records for credit life insurance claims must include the death certificate or other written records relating to the death of the borrower; proof of loss or claim form that discloses the amount of indebtedness at the time of death; check copies or electronic payment receipts that reflect the gross amount of the claim paid, including the amount of insurance benefits paid to beneficiaries other than the licensee which is in excess of the net amount necessary to pay the indebtedness; and the amount that is paid to beneficiaries other than the licensee.(ii) Credit accident and health insurance claims. The supplemental insurance records for credit accident and health insurance claims must include any written records relating to the disability, including statements from the physician, employer, and borrower; the proof of loss or claim form filed by the borrower; and copies of the checks or electronic payment receipts reflecting disability payments paid by the insurance carrier.(iii) Personal property insurance claims. The supplemental insurance records for personal property insurance claims must include the law enforcement report, fire department report, or other written record reflecting the loss or destruction of any covered item; the proof of loss or claim form filed by the borrower; copies of the checks or electronic payment receipts reflecting the payment of the claim by the insurance carrier; and any other pertinent written record relating to the personal property insurance claim. In the case of property insurance claims, these supplemental insurance records must clearly indicate whether the amount of the settlement on each individual item is based on the replacement value or based on the cost of repair.(iv) Credit involuntary unemployment insurance claims. The supplemental insurance records for credit involuntary unemployment insurance claims must include any written document relating to the termination, layoff, or dismissal of the borrower; the proof of loss or claim form filed by the borrower; copies of the checks or electronic payment receipts reflecting the payment of the claim by the insurance carrier; and any other pertinent written record relating to the credit involuntary unemployment insurance claim.(v) Collateral protection insurance claims. The supplemental insurance records for collateral protection insurance claims must include the law enforcement report, fire department report, or other written record reflecting the loss or destruction of any covered motor vehicle; the proof of loss or claim form filed by the borrower; copies of the checks or electronic payment receipts reflecting the payment of the claim by the insurance carrier; and any other pertinent written record relating to the collateral protection insurance claim.(C) Supplemental gap waiver agreement records. Each licensee must maintain in the borrower's individual file records supporting the settlements or denials of gap waiver agreement claims reported in the gap waiver agreement register. The records must include, if applicable: (i) the gap waiver agreement claim form;(ii) proof of loss and settlement check from the borrower's basic comprehensive, collision, or uninsured/underinsured policy or other parties' liability insurance policy for the settlement of the insured total loss of the motor vehicle;(iii) documents that provide verification of the borrower's primary insurance deductible;(iv) if the accident was investigated by a law enforcement officer, a copy of the offense or police report filed in connection with the total loss of the motor vehicle;(v) if the accident was not investigated by a law enforcement officer, a copy of the Texas Department of Public Safety "Driver's Crash Report" (Form CR-2) filed in connection with the total loss of the motor vehicle; and(vi) copies of the checks reflecting the settlement amount paid by the licensee for the gap waiver agreement claim.(11) Advertising records. (A) Required information and record retention. Each licensee must maintain, either at the licensed office or at a principal Texas office, so designated to the commissioner, complete records of all written and electronic communications soliciting loans (including scripts of radio and television broadcasts, and reproductions of billboards and signs not at the licensed place of business) for a period of not less than one year from the date of use or until the next examination by OCCC staff. The date or period of use of each solicitation or advertisement must be indicated.(B) Translation required for non-English advertisements. If any language other than English is used in any advertising material, a true and correct translation must appear along with the advertising material.(12) Adverse action records. Each licensee must maintain adverse action records regarding all applications relating to Texas Finance Code, Chapter 342 loans. 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. These records include the loan application; any written or recorded information used in evaluating the application; the adverse action notice, if required; notice of incompleteness, if applicable; and counteroffer notice, if applicable.(13) Compliance file. Each licensee must maintain a separate file for all communications from the OCCC and for copies of correspondence and reports addressed to the OCCC. This file must include, at a minimum, electronic or paper copies of the current Texas Finance Code, Chapter 342, the last three examination reports, correspondence relating to compliance issued in the last two years, and current rules issued by the commissioner. A licensee will be considered to have maintained copies of the Texas Finance Code and current rules by having access to the websites containing the official versions of the current Texas Finance Code and the current Texas Administrative Code. A licensee will be considered to have maintained copies of some or all of the last three examination reports if those reports were issued electronically by the OCCC.(14) Retention and availability of records. All required books and records must be available for inspection at any time by OCCC staff, and must be retained for a period of four years from the date of the loan, or two years from the date of the final entry made thereon, whichever is later. All obligations authenticated by the borrower, including promissory notes and security agreements, must be kept at an office in the state designated by the licensee or made available in the state, except when transferred under an agreement that gives the OCCC access to the documents. Copies of loan documents, financing statements, loan applications, records of insurance policies issued by or through the licensee in connection with the loan, and books and records required by this section must be maintained at the licensed location or be made available at some location in the state designated by the licensee in writing to the OCCC. 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.7 Tex. Admin. Code § 83.828
The provisions of this §83.828 adopted to be effective November 9, 2006, 31 TexReg 9006; amended to be effective November 4, 2010, 35 TexReg 9698; amended to be effective July 10, 2014, 39 TexReg 5142; Amended by Texas Register, Volume 41, Number 36, September 2, 2016, TexReg 6682, eff. 9/8/2016; Amended by Texas Register, Volume 43, Number 44, November 2, 2018, TexReg 7342, eff. 11/8/2018