Changes to Home Equity Lending Interpretations, Adopted Rule, and Other Adopted Rule Changes (Texas State-Chartered Credit Unions)
Friday, March 30, 2018 8:40 AM

The Credit Union Commission and the Finance Commission of Texas have jointly adopted revisions to 7 TAC, Part 8, Sections 153.1 (Definitions), 153.5 (Three Percent Fee Limitations), 153.14 (One Year Prohibition), 153.17 (Authorized Lenders), 153.84 (Restrictions on Devices and Methods to Obtain a HELOC Advance), and 153.86 (Maximum Principal Amount Extended under a HELOC); a new Section 153.45 (Refinance of an Equity Loan); and the repeal of Section 153.87 (Maximum Principal Amount of Additional Advances under a HELOC), concerning Home Equity Lending. The main purpose of the changes is to implement SJR 60 passed by the Texas Legislature during the 85th Regular Session and approved by the voters in the November 2017 elections. SJR 60 amends Article XVI, Section 50 of the Texas Constitution and applies to all home equity loans entered on or after January 1, 2018.

All of the amendments to the home equity interpretation, the new interpretation and the repealed interpretation are effective on March 29, 2018.

At its recent meeting, the Commission also adopted changes to the following rules:

• 7 TAC Section 91.4001 (Authority to Conduct Electronic Operations). The amendments to this rule impose a new requirement on credit unions using electronic means and facilities to employ an incident response plan, which has been subjected to reasonable testing, to minimize the impact of a data breach or other electronic incident on members while quickly restoring operations, credibility, and security.

• 7 TAC Section 91.4002 (Transactional Web Site Notice Requirements and Security). The amendment to this rule would require a credit union to review the adequacy of its web site’s security measures annually instead of once every two years.

• 7 TAC Section 91.5001 (Emergency Closing). The amendments to this rule would urge credit unions to post notice on their websites and any social media pages of an emergency closing of an office or operation.

• 7 TAC Section 91.5005 (Permanent Closing of an Office). The amendments to this rule would impose a new requirement on credit unions to post notice on its website and any social media pages of the permanent closing of an office, at least 30 days prior to the proposed closing.

The amendments to the above noted rules are effective on March 29, 2018.

At its regular meeting on March 9, 2018, the Commission also adopted a new rule (7 TAC Section 91.1010) regarding voluntary liquidations. The new rule provides guidance to credit unions considering a voluntary liquidation of their credit union.

The new rule is effective on March 29, 2018.

Source:  Texas Credit Union Department