2023 Texas Statutes › Finance Code › Title 4 - Regulation of Interest, Loans, and Financed Transactions › Subtitle B - Loans and Financed Transactions › Chapter 348 - Motor Vehicle Installment Sales › Subchapter A. General Provisions › Section 348.006. Principal Balance; Inclusion of Documentary Fee

Sec. 348.006.  PRINCIPAL BALANCE;  INCLUSION OF DOCUMENTARY FEE.  (a)  The principal balance under a retail installment contract is computed by:
(1)  adding:
(A)  the cash price of the motor vehicle;
(B)  each amount included in the retail installment contract for an itemized charge; and
(C)  subject to Subsection (c), a documentary fee for services rendered for or on behalf of the retail buyer in handling and processing documents relating to the motor vehicle sale; and
(2)  subtracting from the results under Subdivision (1) the amount of the retail buyer's down payment in money, goods, or both.
(b)  The computation of the principal balance may include an amount authorized under Section 348.404(b).
(c)  For a documentary fee to be included in the principal balance of a retail installment contract:
(1)  the retail seller must charge the documentary fee to cash buyers and credit buyers;
(2)  the documentary fee may not exceed a reasonable amount agreed to by the retail seller and retail buyer for the documentary services; and
(3)  the buyer's order and the retail installment contract must include:
(A)  a statement of the amount of the documentary fee; and
(B)  in reasonable proximity to the place in each where the amount of the documentary fee is disclosed, the following notice in type that is bold-faced, capitalized, underlined, or otherwise conspicuously set out from surrounding written material:
"A DOCUMENTARY FEE IS NOT AN OFFICIAL FEE.  A DOCUMENTARY FEE IS NOT REQUIRED BY LAW, BUT MAY BE CHARGED TO BUYERS FOR HANDLING DOCUMENTS RELATING TO THE SALE.  A DOCUMENTARY FEE MAY NOT EXCEED A REASONABLE AMOUNT AGREED TO BY THE PARTIES.  THIS NOTICE IS REQUIRED BY LAW."
(d)  A retail seller shall post the documentary fee notice prescribed in Subsection (c) so that it is clearly visible in each place where a vehicle sale is finalized.  If the language primarily used in an oral sales presentation is not the same as the language in which the retail installment contract is written, the retail seller shall furnish to the retail buyer a written statement containing the notice set out in Subsection (c)(3)(B) in the language primarily used in the oral sales presentation.
(e)  Prior to increasing the maximum amount of the documentary fee the retail seller charges, a retail seller shall provide written notice to the commissioner of the maximum amount of the documentary fee the retail seller intends to charge unless the maximum amount intended to be charged is considered reasonable as provided by Subsection (f).  The commissioner may review the amount of a documentary fee a retail seller intends to charge for reasonableness if the retail seller is required to provide written notice of the fee increase under this subsection.  In determining whether a fee charged by a retail seller is reasonable, the commissioner may consider the resources required by the retail seller to perform the retail seller's duties under state and federal law with respect to the handling and processing of documents relating to the sale and financing of a motor vehicle.  If the commissioner determines that a documentary fee charged is not reasonable, the commissioner may require that the documentary fee charged be reduced or suspended.
(e-1)  Except as provided by Subsections (e-2) and (e-3), the following information and documents are confidential and not subject to disclosure:
(1)  all information provided by a retail seller to the commissioner under Subsection (e), including the maximum documentary fee a retail seller intends to charge, the written notice of an increased documentary fee, and any financial information submitted with the notice; and
(2)  all correspondence between a retail seller and the commissioner or the commissioner's representative relating to the notice of an increased documentary fee under Subsection (e) and a review for reasonableness of the amount of the documentary fee to be charged.
(e-2)  The commissioner may disclose information or documents that are confidential under Subsection (e-1) if:
(1)  the commissioner determines that release of the information or documents is required for an administrative hearing;
(2)  the retail seller consents to the release of the information or documents; or
(3)  the disclosure is required by a court order.
(e-3)  The commissioner or the commissioner's representative may disclose whether a retail seller has filed written notice of an increased documentary fee and the proposed amount of the increased fee to:
(1)  a holder that provides written proof, signed by the retail seller, that the retail seller has agreed to assign or transfer one or more retail installment contracts to the holder; or
(2)  a prospective retail buyer that provides to the commissioner:
(A)  a buyer's order executed by the prospective buyer and the retail seller;
(B)  a draft of a retail installment contract provided by the retail seller to the prospective buyer; or
(C)  a written statement by the retail seller acknowledging that the person is a prospective buyer of a motor vehicle from the retail seller.
(f)  A documentary fee charged in accordance with this section is considered reasonable for purposes of this section if the amount is less than or equal to the amount of the documentary fee presumed reasonable as established by rule of the finance commission.
(g)  This section does not:
(1)  create a private right of action; or
(2)  require that the commissioner approve a specific documentary fee amount before a retail seller charges the fee.
(h)  The finance commission may adopt rules, including rules relating to the standards for a reasonableness determination or disclosures, necessary to enforce this section.  A rule adopted under this subsection may not require a retail seller to submit to the commissioner for prior approval the amount of a documentary fee that the retail seller intends to charge under this section.
(i)  The commissioner has exclusive jurisdiction to enforce this section.
(j)  Repealed by Acts 2011, 82nd Leg., R.S., Ch. 117, Sec. 26(3), eff. September 1, 2011.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.  Amended by Acts 1999, 76th Leg., ch. 800, Sec. 1, eff. Sept. 1, 1999.
Amended by:
Acts 2009, 81st Leg., R.S., Ch. 1327 (H.B. 3621), Sec. 1, eff. September 1, 2009.
Acts 2011, 82nd Leg., R.S., Ch. 117 (H.B. 2559), Sec. 9, eff. September 1, 2011.
Acts 2011, 82nd Leg., R.S., Ch. 117 (H.B. 2559), Sec. 26(3), eff. September 1, 2011.
Acts 2011, 82nd Leg., R.S., Ch. 1182 (H.B. 3453), Sec. 10, eff. September 1, 2011.
Acts 2017, 85th Leg., R.S., Ch. 875 (H.B. 2949), Sec. 1, eff. September 1, 2017.