Texas Administrative Code › Title 7 - BANKING AND SECURITIES › Part 5 - OFFICE OF CONSUMER CREDIT COMMISSIONER › Chapter 84 - MOTOR VEHICLE INSTALLMENT SALES › Subchapter B - RETAIL INSTALLMENT CONTRACT › Section 84.201 - Time Price Differential

Current through Reg. 49, No. 28; July 12, 2024
(a)
				  Precomputed retail installment sales contracts. A retail installment sales
				  contract may not contain a time price differential charge that exceeds both the
				  add-on rates authorized by Texas Finance Code, §
										RSA 348.104 and the
				  alternative simple time price differential rate authorized by Texas Finance
				  Code, §
										RSA 348.105 as
				  calculated by the add-on method or scheduled installment earnings method. A
				  retail installment sales contract may be in compliance with either statutory
				  rate specified in this subsection. Prepaid time price differential in the form
				  of points is not permitted.
(b)
				  Time price differential-bearing retail installment sales contracts. A retail
				  installment sales contract may not contain a time price differential charge
				  that exceeds both the maximum annualized daily rate authorized by Texas Finance
				  Code, §
										RSA 348.104 and the
				  alternative simple time price differential rate authorized by Texas Finance
				  Code, §
										RSA 348.105 as
				  calculated by the true daily earnings method. A retail installment sales
				  contract may be in compliance with either statutory rate specified in this
				  subsection. Prepaid time price differential in the form of points is not
				  permitted.
(c) Minimum time price
				  differential. In lieu of the time price differential charge specified under
				  subsections (a) and (b), a retail seller may charge a minimum time price
				  differential charge of $25.
(d)
				  Method of calculation.
(1) Regular payment
				  contract using sum of the periodic balances method. The time price differential
				  charge is computed using the add-on rates authorized by Texas Finance Code,
				  §
											RSA 348.104 or the
				  alternative time price differential rate authorized by Texas Finance Code,
				  §
											RSA 348.105 converted to
				  an equivalent add-on rate per $100 per annum.
(A) Base time price differential charge. The
				  base time price differential charge is determined by multiplying the principal
				  balance subject to a finance charge, as defined by §
												RSA
				  84.102(14) of this title
				  (regarding Definitions), by the applicable add-on rate per $100 per year for
				  the corresponding term of the contract. If the retail installment contract is
				  payable for a period that is shorter or longer than a year or is for an amount
				  that is less or greater than $100, the amount of the time price differential
				  charge is decreased or increased proportionately.
(B) Add-on rates. The applicable add-on rate
				  per $100 per year is determined by the model year designated by the
				  manufacturer of the vehicle.
(C)
				  Deferred sales tax. For usury purposes, the deferred sales tax is allocated on
				  a straight line basis. A straight line basis is calculated by dividing the
				  original gross deferred sales tax amount by the original term of the contract.
				  The allocation of the deferred sales tax for the final payment must be adjusted
				  for any rounding differences. The payment amount disclosed on the retail
				  installment sales contract must include the straight line allocation of the
				  deferred sales tax per installment.
(D) Conversion of the alternative time price
				  differential rate to an add-on rate per $100 per annum. If the maximum time
				  price differential rate is the rate specified by Texas Finance Code, §
												RSA 348.105, the maximum
				  add-on rate per $100 per annum cannot exceed the add-on rate contained in
				  Figure: 7 TAC § 84.201(d)(1)(D). The add-on rate per $100 per annum is
				  determined by converting the current maximum alternative rate authorized by
				  Texas Finance Code, §
												RSA 348.105 to an
				  equivalent add-on rate for the given monthly term of the contract. The
				  alternative simple time price differential rate authorized by Texas Finance
				  Code, §
												RSA 348.105 displayed as
				  an example in Figure: 7 TAC § 84.201(d)(1)(D) is 18% per annum. If the
				  alternative simple time price differential rate is adjusted according to Texas
				  Finance Code, Chapter 303 and is greater than 18% per annum, the add-on rates
				  shown in Figure: 7 TAC § 84.201(d)(1)(D) should be adjusted accordingly.
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