Section 84.203 - Deferment Charge(a) Definition. A "deferment charge" means a charge to defer the payment date of a scheduled payment or partial payment on a contract. A deferment charge prescribed by this section may occur in a retail installment transaction that employs the precomputed add-on method for regular payment contracts using the sum of the periodic balances or the scheduled installment earnings method. This section applies only to an amendment relating to the deferment of all or a part of one or more installments, and does not apply to amendments relating to renewing, restating, or rescheduling the unpaid balance under a retail installment sales contract. This section does not apply to an amendment described by Texas Finance Code, § RSA 348.114(c), to defer all or part of one or more payments for a retail installment transaction that employs the true daily earnings method. The parties to a retail installment sales contract may agree to modify the terms of the transaction as long as the amendment conforms to the requirements of Texas Finance Code, Chapter 348, Subchapter B.(b) Written deferment agreement. (1) General requirements. A retail buyer and a holder may mutually agree to defer all or a part of one or more scheduled installments. A deferment agreement must be in writing and must be noted in the account record at the time the deferment is made. The written deferment agreement must include all of the following: (A) the name of the holder;(B) the name of the retail buyer;(C) the account number of the retail buyer;(D) the date of the deferment;(E) the installment or installments being deferred;(F) the deferment period;(G) the total amount of any deferment charge and any authorized additional deferment cost;(H) the date and amount of the next installment due; and(I) any other conditions of deferment.(2) Signature and delivery. A deferment agreement is an amendment to the retail installment sales contract that must be confirmed in a writing signed by the retail buyer and delivered to the retail buyer, as provided by Texas Finance Code, § RSA 348.116. The retail buyer's written agreement to the bilateral or mutual deferment may be confirmed by an email signature, an electronic signature, a facsimile signature, a written notation made by the retail buyer on a signed check, or some other writing signed by the retail buyer.(3) Disaster exception. A holder must deliver the deferment agreement to the retail buyer, but is not required to obtain the retail buyer's signature, if the following conditions are met: (A) The retail buyer resides in an area designated as a state of disaster under Texas Government Code, § RSA 418.014; and(B) The deferment occurs before the state of disaster has been terminated: (i) by executive order; or(ii) by expiration as described in Texas Government Code, § RSA 418.014(c).(c) Limitation of number of installments being deferred per amendment. A holder may only defer the equivalent of three monthly installments per amendment. This limitation applies to the number of whole or partial installments that can be deferred, not the length of time an installment can be deferred.(d) Computation of deferment charge. A holder of a retail installment sales contract under Texas Finance Code, Chapter 348 may calculate the deferment charge by any method of calculation as long as the deferment charge does not exceed the maximum amount permitted by Texas Finance Code, § RSA 348.114 and this section. (1) Regular payment contract using sum of the periodic balances method. (A) Base deferment charge. For a regular payment contract employing the add-on method and the refunding method of the sum of the periodic balances, a holder may assess, charge, and collect a base deferment charge computed by: (i) Multiplying the amount of the installment or installments being deferred by either: (I) the maximum effective rate authorized for a regular payment contract for the monthly term; or(II) a lower rate agreed to by the parties;(ii) dividing the results of clause (i) of this subparagraph by 12; and(iii) multiplying the results of clause (ii) of this subparagraph by the number of months the installment or installments are being deferred.(B) Additional deferment costs. In addition to the base deferment charge authorized by this section, the holder of a retail installment sales contract may collect from the retail buyer the amount of the additional cost to the holder for: (i) premiums for continuing in force any insurance coverages provided by the retail installment contract; and(ii) any additional necessary official fees.(C) Minimum deferment charge. The minimum deferment charge authorized under this paragraph is $1.00.(D) Application of payments. For a regular payment contract employing the add-on method and the refunding method of the sum of the periodic balances, if a payment is submitted from which a deferment charge is taken, any excess of the amount paid over the amount necessary to bring the account current must be applied to the remaining balance of the retail installment sales contract.(E) Time price differential not included. For a regular payment contract employing the add-on method and the refunding method of the sum of the periodic balances, the deferment charge does not include time price differential agreed upon in the retail installment sales contract.(2) Scheduled installment earnings method. (A) Base deferment charge. For a regular or an irregular payment contract employing the scheduled installment earnings method, a holder may assess, charge, and collect a base deferment charge computed by: (i) Multiplying the amount of the installment or installments being deferred by either of the following rates computed on a daily basis using a 365-day calendar year: (I) the maximum annualized daily rate authorized for the contract, as described by Figure: 7 TAC § RSA 84.201(d)(2)(B)(iii); or(II) a lower rate agreed to by the parties, which may be the contract rate; and(ii) multiplying the results of clause (i) of this subparagraph by the actual number of days the installment or installments are being deferred.(B) Additional deferment costs. In addition to the base deferment charge authorized by this section, the holder of a retail installment sales contract may collect from the retail buyer the amount of the additional cost to the holder for: (i) premiums for continuing in force any insurance coverages provided by the retail installment contract; and(ii) any additional necessary official fees.(C) Minimum deferment charge. The minimum deferment charge authorized under this paragraph is $1.00.(D) Application of payments. For a contract using the scheduled installment earnings method, if a payment is submitted from which a deferment charge is taken, any excess of the amount paid over the amount necessary to bring the account current must be applied to the remaining balance of the retail installment sales contract. However, any difference that exceeds $3.00 must be returned to the retail buyer if the retail buyer requests the refund within 30 days of the payment.(E) Time price differential not included. For a contract using the scheduled installment earnings method, the deferment charge does not include time price differential agreed upon in the retail installment sales contract.(e) Noncompliance. Deferment fees not assessed or collected in accordance with the requirements of this section are subject to refund to the retail buyer. In the event deferment fees are refunded to the retail buyer, no rescheduling of the retail installment sales contract is permitted.(f) False, misleading, or deceptive representation. A holder may not make a false, misleading, or deceptive representation relating to a deferment charge. If a holder makes a false, misleading, or deceptive representation regarding a deferment charge, then the deferment charge is subject to refunding under subsection (e).7 Tex. Admin. Code § 84.203
The provisions of this §84.203 adopted to be effective November 6, 2008, 33 TexReg 8913; amended to be effective November 8, 2012, 37 TexReg 8780; Amended by Texas Register, Volume 41, Number 18, April 29, 2016, TexReg 3129, eff. 5/5/2016; Amended by Texas Register, Volume 42, Number 35, September 1, 2017, TexReg 4464, eff. 9/7/2017