SECTION 200.12. Procedure for Making a Claim for Reimbursement for Charging Off of an Enrolled Loan

(a) If a PFI charges off all or part of an Enrolled Loan because of a default by the Borrower, the PFI may claim reimbursement for all or part of the Loss incurred by requesting reimbursement for the charged off loan through the Program Website and providing all information and documentation required by the Office. The Office may notify the PFI of any deficiencies in the PFI's claim for reimbursement.

(b) The PFI must make the claim:

(1) only after exercising due care and diligent efforts to liquidate the loan collateral, realize the personal or other financial guarantees, or otherwise recover on the loan;

(2) on or before the 180th day after charging off the loan; and

(3) not before the first anniversary of the PFI's enrollment of the loan in the Program.

(c) Subject to subsection (b)(1) of this section, a PFI may make a claim for reimbursement of a Loss prior to the liquidation of collateral, realization on personal or other financial guarantees, or otherwise recovering on the loan.

(d) Notwithstanding subsection (b)(2) of this section, the Office may authorize the PFI to submit a claim after the 180th day after charging off the Enrolled Loan if, in the Office's sole discretion:

(1) the PFI demonstrates it has consistently and actively undertaken activities to recover on the Enrolled Loan; or

(2) shows other good cause.

(e) The PFI shall retain documentation in its files substantiating all claims for a term commensurate with standard banking records retention practices but not less than seven years after the date that the Enrolled Loan is terminated.

Source Note: The provisions of this §200.12 adopted to be effective June 25, 2023, 48 TexReg 3217