This page describes plain language contract requirements for Chapter 342 loans, Chapter 348 retail installment contracts, and home equity loans. Under Section 341.502 of the Texas Finance Code, these contracts must be written in plain language.
The Finance Commission of Texas adopted model plain language contracts. The model plain language contract provisions are found under Title 7, Part 5, Chapter 84, Subchapter H (Chapter 348 motor vehicle retail installment contracts), and Title 7, Part 5, Chapter 90 (Chapter 342 consumer loans).
Submitting a Non-Standard Contract
If a licensee uses a contract that contains any non-standard provisions, the licensee must submit the contract to the OCCC for review. Non-standard contracts will be reviewed to determine that the contract is written in plain language. A non-standard contract must: (1) be drafted in plain language; (2) meet minimum font type and font size requirements under 7 Texas Administrative Code §§84.806 and 90.103, and (3) have a Flesch-Kincaid score that does not exceed the following:
|Maximum Flesch-Kincaid Grade Level by Contract Type|
|Type of Contract||Maximum Flesh-Kincaid Grade Level|
|Chapter 342-E – consumer loan||9.0|
|Chapter 342-F – consumer loan||8.0|
|Chapter 342-G secondary mortgage loan||10.00|
|Chapter 348 motor vehicle retail installment contract||11.00|
To submit a non-standard contract, email the following information to firstname.lastname@example.org.
1. A completed “Plain Language Contract Submission Form” (click link to access this fillable PDF form);
2. A copy of the non-standard contract in an Adobe Acrobat text-searchable PDF format so that the OCCC can review the contract in its entirety as presented to borrowers or retail buyers. The PDF may not be locked or restricted in any way that prohibits comparison of different versions of the contract; and
3. A copy of the non-standard contract in a Microsoft Word format (.doc or .docx) that is reviewable using the Microsoft Word readability statistics function.
For further questions about the initiative and contract submission, please submit your questions to email@example.com.