Plain Language Project
| Plain Language Contracts and Rules | The Plain Language Concept | |
| ˜ Submittal Form for Contract Review | ˜ What is plain language? | |
| ˜ Plain Language Site Links | ||
| Contracts and Rules by Loan Type | ||
| ˜ Secured installment loans (TX Fin Code §342.E) | ||
| ˜ Signature loans (TX Fin Code §342.F) | ||
| ˜ Home equity loans, second lien (TX Fin Code §342.G) | ||
| ˜ Home improvement loans, second lien (TX Fin Code §342.G) | ||
| ˜ Purchase money loans, second lien (TX Fin Code §342.G) | ||
| ˜ Motor vehicle sales financing (TX Fin Code Chapter 348) | ||
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What is plain language?
The term “plain language” describes reader-focused text that is easily understood by the average person. Converting a finance contract from traditional language to plain language means replacing the legalese with consumer-friendly words and phrases. “Consumers who enter into plain language contracts are in a much better position to make sound financial decisions,” notes Consumer Credit Commissioner Leslie Pettijohn.
Here's an example from the OCCC's new signature loan contract: If I break any of my promises in this document, you can demand that I immediately pay all that I owe. In contrast, the traditional version of that clause reads: Upon any such default, and at any time thereafter, Secured Party may declare the entire balance of the indebtedness secured hereby, plus any other sums owed hereunder, immediately due and payable without demand or notice, less any refund due, and Secured Party shall have all the remedies of the Uniform Commercial Code.
For more before-and-after comparisons, see the samples from our other contracts.
Filing Procedures
Licensees need to either use the contract models prepared for the loans they arrange or submit their own version of plain language contracts to the Consumer Credit Commissioner for review. Submission of these non-standard contracts is not required until the model contract provisions have been adopted by rule. To submit a non-standard plain language contract for review, please send an electronic copy (in Microsoft Word preferably) via e-mail or on disk to 2601 N. Lamar Blvd., Austin TX 78705. Note: your contract submittal needs to be accompanied by a submission form (available as a PDF). If you have already sent in your contracts for review but did not include a submission form, please complete and return a form to us as soon as possible.
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Signature loans (TX Fin Code §342.F): non-standard contracts were not required to be filed before May 1, 2002.
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Secured consumer installment loans (TX Fin Code §342.E): non-standard contracts were not required to be filed until September 1, 2002.
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Second lien home equity loans (TX Fin Code §342.G): non-standard contracts were not required to be filed before February 1, 2003.
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Second lien purchase money loans (TX Fin Code §342.G): non-standard contracts were not required to be filed before May 1, 2003.
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Second lien home improvement loans (TX Fin Code §342.G): non-standard contracts were not required to be filed before September 1, 2003.
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Motor vehicle sales financing (TX Fin Code Chapter 348): non-standard contracts are not required to be filed before March 1, 2004.
Adopted Contracts and Rules
Signature Loans (TFC §342.F)
Rules: 7 TAC §90, Subchapter C
Model Contract Promissory Note
Model Contract Security Agreeement
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Rules: 7 TAC §90, Subchapter B
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Model Contract Promissory Note for contracts using the scheduled installment earnings method
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Model Contract Promissory Note for contracts using the true daily earnings method
Model Contract Security Agreement
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Rules: 7 TAC §90, Subchapter D
Model Contract Note
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Model Contract Security Document
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Rules: 7 TAC §90, Subchapter E
Model Contract Note
Model Contract Security Document
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Rules: 7 TAC §90, Subchapter F
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Rules: 7 TAC §84, Subchapter H
Model Motor Vehicle Retail Installment Sales Contract
- The OCCC is providing a list of contracts and addendums that meet plain language requirements for motor vehicle retail installment contracts. These contracts may be used instead of the model provided in the plain language rule. Also available is a list of contracts that have been submitted for review.
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