In the November 18, 2016, issue of the Texas Register (41 TexReg 9106), the Finance Commission of Texas and the Texas Credit Union Commission (the “Commissions”) jointly adopted amendments to §§153.5, 153.8, 153.13, 153.14 and 153.17 of the Home Equity Lending Interpretations. These amendments are effective as of November 24, 2016. The Commissions adopted the amendments without change to the proposed text published in the July 22, 2016, issue of the Texas Register. The text of the amended provisions of the above Home Equity Lending Interpretations are reprinted below with the amended additions identified by underlines and the amended deletions identified by strikethroughs in brackets. §153.5.Three percent fee limitation: Section 50(a)(6)(E). (3)(B) Legitimate discount points are interest and are not subject to the three percent limitation. Discount points are legitimate if the discount points truly correspond to a reduced interest rate and are not necessary to originate, evaluate, maintain, record, insure, or service the equity loan. A lender may rely on an established system of verifiable procedures to evidence that the discount points it offers are legitimate. This system may include documentation of options that the owner is offered in the course of negotiation, including a contract rate without discount points and a lower contract rate based on discount points.

Complete Memorandum