Tex. Finance Code § 397.004
LIMITATION ON CERTAIN DEBT CANCELLATION AGREEMENTS
Texas · Texas Finance Code · Status: effective
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- Citation
- Tex. Finance Code § 397.004, LIMITATION ON CERTAIN DEBT CANCELLATION AGREEMENTS, Texas, version 1 as recorded 2026-07-09, yourstate.us, https://yourstate.us/provision/648078
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Full text
(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.