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.
Last modified: September 28, 2016