Pub. 54 2013-2014 Issue 4

30 T he Office of Consumer Credit Com- missioner closed its fiscal year 2013 regulatory activities on August 31, 2013. Fiscal year-end results showed an improvement in the compliance level of the motor vehicle sales finance industry from previous years. During the fiscal year 2013, the agency conducted 1,380 motor vehicle sales finance examinations, of which 70.36% demonstrated an acceptable level of compli- ance. Of the 1,518 examinations conducted in the previous year, 69.90% demonstrated an acceptable level of compliance. The chart to the right shows the quar- terly examination results in the 2013 fis- cal year, which displays the compliance improvement. Agency staff members made 14 presen- tations to the motor vehicle sales finance industry in this past fiscal year and have provided ongoing examiner training in motor vehicle sales finance regulation to increase the knowledge and effectiveness of our examination team. The agency is committed to providing learning situa- tions for licensees during the examination process when appropriate. I believe these factors combined have contributed to the improved compliance level of this industry. Although the compliance levels for mo- tor vehicles sales financing are increasing, some significant issues are still prevalent in motor vehicle sales finance examinations. DOCUMENTARY FEE Examiners continue to find that dealers have not met all the filing requirements to increase documentary fees, whether the in- crease is an initial increase in excess of $50 or is an additional increase since the initial filing. Dealers have provided restitution to retail buyers or paid administrative fees for failing to make the proper filing with the OCCC to increase the documentary fee. In some instances, dealers have provided the restitution and paid administrative penal- ties for failing to make the proper filings with the OCCC. Dealers licensed by the OCCC are permitted to charge documentary fees in excess of $50 only if the dealer: 1. provides written notice (through the prescribed electronic system) to the OCCC of the maxi- mum amount of the documentary fee in- tended to be charged; 2. uses a compli- ant buyer’s order/pur- chase order and retail installment contract that includes the new documentary fee no- tice; and 3. posts the pre- scribed documen- tary fee statement in each place where a vehicle sale is finalized so that it is clearly visible to the retail buyer. Documentary fees at or below $125 are considered reasonable by rule, after written notice has been provided. The agency will request additional financial information from a dealer to determine reasonableness for documentary fees above $125. POSTING OF THE DOCUMENTARY FEE NOTICE For a documentary fee to be included in the principal balance of a retail install- ment contract, requisite posting require- ments must be fulfilled. The dealer must post the prescribed documentary fee notice and ensure that it is clearly visible to consumers in the place where vehicle sales are finalized. The correct wording for the documen- tary fee notice is found in the TEXAS FINANCECODE §348.006 (c)(3)(B) and reads as follows: “A DOCUMENTARY FEE IS NOT AN OFFICIAL FEE. A DOCUMENTARY FEE IS NOT REQUIRED BY LAW, BUT MAY BE CHARGED TO BUYERS FOR HANDL I NG DOCUMENTS RELATING TO THE SALE. A DOCUMENTARY FEE MAY NOT EXCEED A REASONABLE AMOUNT AGREED TO BY THE PARTIES. THIS NOTICE IS RE- QUIRED BY LAW.” Examiners continue to find that the above required compliant documentary fee notice is not posted at all or is not posted in the proper place where vehicle sales are finalized. A dealer should cease the assess- ment of the documentary fee if the proper documentary fee notice is not posted.  OCCCRegulatoryActivitiesReport BY RUDY AGUILAR DIRECTOR OF CONSUMER PROTECTION, OCCC