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2025 Texas Statutes
Finance Code
Title 5 - Protection of Consumers of Financial Services
Chapter 397 - Debt Cancellation Agreements for Certain Vehicle Leases
Section 397.004. Limitation on Certain Debt Cancellation Agreements
Universal Citation:
TX Fin Code § 397.004 (2025)
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Sec. 397.004. LIMITATION ON CERTAIN DEBT CANCELLATION AGREEMENTS. (a) This chapter applies only to a debt cancellation agreement, including a gap waiver agreement or other similarly named agreement, that includes insurance coverage as part of the lessee's responsibility to the holder.
(b) The amount charged for a debt cancellation agreement made in connection with a lease may not exceed five percent of the adjusted capitalized cost financed pursuant to the lease.
(c) The debt cancellation agreement becomes a part of or a separate addendum to the lease and remains a term of the lease on the assignment, sale, or transfer by the holder.
Added by Acts 2017, 85th Leg., R.S., Ch. 183 (S.B. 1052), Sec. 7, eff. September 1, 2017.
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