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#60749 - 02/12/03 02:50 PM TX - change in terms law
straw Offline
Power Poster
Joined: Nov 2002
Posts: 9,121
Does anyone know if Texas has a law which requires the consumer be given an opt out of a rate increase when an open-end credit plan's rate is increased via a change in terms?

Assuming Texas has this law, does the law require the account to be closed to retain the rate, or can the account remain open and if the card is ever used, the rate would increase.

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#60750 - 02/12/03 04:23 PM Re: TX - change in terms law

I am new to Texas and cannot give you a definite answer. But, here are a couple of places to start. I believe that there are two Finance Code provisions which could apply, and I really don't know how you decide which will apply - it may depend on your contract with the customer. One is 303.103, which does contain an opt-out feature, and if the rate is rejected by the consumer, the consumer is entitled to pay off the balance at the rate in effect before the proposed change and under the same terms that existed before the proposed change. The other Finance Code provision which could apply is 346.204. This provision provides for a unilateral change by the creditor by giving 90 days prior notice and does not contain an opt-out feature. Again, I do not know how to determine which section will apply to a particular account. You may need to go to outside counsel on this one or maybe one of the guru's can respond. Hope this helps!

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