TBA Texas Legislative Update

I had the privilege of attending the Texas Bankers Association’s 2017 Legislative Update at the Brook Hollow Country Club in Dallas this morning. This very informative presentation on recent Texas and federal banking legislation was led by Celeste Embrey, John Heasley, and Eric Sandberg of TBA. For those who were not able to attend, below is a brief recap of some of the highlights.

  • Home equity reform (SJR 60): The Texas Legislature passed a joint resolution proposing a constitutional amendment that would make home equity lending more feasible for community banks. The primary relief this amendment would provide includes: (a) exclusion of third-party fees (e.g., title, survey, appraisal, etc.) from the 2% fee cap; (b) permitting borrowers to refinance a home equity loan to a traditional mortgage; and (c) raising the maximum loan-to-value ratio from 50% to 80%. There will be a statewide vote on the constitutional amendment on November 7, 2017.
  • Account holds relating to financial abuse (HB 3921): This law will allow banks to implement a 10-day account hold in the case of suspected elder financial abuse. It also provides for immunity from liability for placing such a hold (or, vice versa, for declining to place such a hold), as long as the bank acts in good faith.
  • Account disclosure forms (SB 714): This legislation amends the statutory new account forms by removing the requirement for a customer to initial every line relating to POD/survivorship designations.
  • Power of attorney requirements rewritten (HB 1974): This is a rewrite of the Texas power of attorney statute, including the elements and requirements of a durable power of attorney. The most relevant change for banks is a requirement for mandatory acceptance of powers of attorney by third parties, absent certain statutory exceptions .
  • Tax lien legislation (HB 2832): This legislation was NOT passed. It was aimed at protecting banks from tax liens that take priority without the original lender’s knowledge or consent. Because this legislation has not been passed despite several attempts, TBA recommends escrowing taxes for all loans, both residential and commercial.
  • CHOICE Act: This federal legislation aimed at scaling back parts of Dodd-Frank (which I wrote about here) passed the House but has not gotten out of the Senate.

Thank you to the Texas Bankers Association for putting on this great program. And if you happen to be in one of the cities where TBA has not yet stopped (San Antonio, Austin, and Waco, among others), I encourage you to visit TBA’s website to sign up.

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