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Texas Legislative Update: Bills Heard and Considered in the House
Monday, April 6, 2015 6:55 AM

Action to Protect Financial Institutions from Being Compelled to Produce Records without Payment

The House Investments and Financial Services committee has favorably voted out HB 2394 by Rep. Drew Darby (R-San Angelo). The bill would protect a financial institution during the discovery process from having to produce customer records if the requesting party has not paid for them, nor can it be penalized for failure to do so. The bill provides that a court may not order the FI to produce the record, nor can the FI be held in contempt of court for failing to produce the record. 

HB 2394 would amend the Finance Code to clarify that a financial institution cannot be forced to respond to a records request if the requesting party has not paid the reasonable costs associated with the request.

Bills on Prize-Linked Savings Accounts and Fines for Debit/Stored Value Card Surcharges

On Wednesday, April 1, the Texas House Investments and Financial Services (IFS) Committee took testimony on HB 1628 by Rep. Eric Johnson (D-Dallas), which would authorize credit unions and banks to conduct savings promotional raffles in which depositors are eligible to win prizes for deposits in designated accounts. The author told the committee that the bill is designed to support increased savings levels and has been successful in other states. While several witnesses testified in support of the bill, there was no testimony opposing it.

HB 3442 by Rep. John Raney (R-Bryan) was also heard in the IFS hearing. The bill would prohibit a surcharge on the use of debit cards or stored-value cards and adds a $1,000 fine for each violation. The Texas Retailers Association testified in opposition to the bill.

The Texas Credit Union Association registered in support of both bills. The bills were left pending.

Home Equity 3 Percent Fee Cap Bill

The Texas House of Representatives’ Investments and Financial Services Committee will hear HJR 131 by Rep. Richard Raymond (D-Laredo). The 3 percent fee cap on home equity loans is in the state constitution so any changes to the cap require a constitutional amendment. 

HJR 131 specifies that the 3 percent fee cap applies only to fees that are paid to the lender or originator of the loan. This would exclude fees paid to a third party. Therefore, certified appraisals now required under CFPB rules on higher priced mortgage loans, filing fees, and document preparation fees paid to an outside lawyer would no longer count toward the 3 percent cap if the amendment is adopted. 

Kelly Mitchell, president and CEO of TEXAR Federal Credit Union in Texarkana, will appear before the committee to testify in support of the bill Wednesday afternoon, April 8.

For further information, contact Jeff Huffman, president, Texas Credit Union Association, at (469) 385-6488 or jhuffman@txcua.coop.