Resolution of The Credit Union Commission of Texas and The Finance Commission of Texas

Whereas, the Credit Union Commission of Texas and the Finance Commission of Texas (“Commissions”) have been delegated the authority to interpret the home equity lending provisions of Article XVII, Section 50 of the Texas Constitution (Article XVII, Section 50), by Article XVII, Section 50(u), and §11.308 and §15.413 of the Texas Finance Code; and

Whereas, the Commissions have carefully considered and adopted interpretations of Article XVI, Section 50, in good faith and in accordance with the plain language of the Constitution and the perceived intent of the Legislature and people of the State of Texas; and

Whereas, some inherent ambiguities in the language of Article XVI, Section 50, have created uncertainty for the Commissions about the intent of the framers of the Constitution regarding certain issues of home equity lending; and

Whereas, these ambiguities render the Commissions’ rulemaking on certain issues of home equity lending vulnerable to litigation as well as criticism from representatives of both industry and consumers; and

Whereas, the Commissions believe further amendment of Article XVI, Section 50 could more clearly state the intent of the legislature and people of Texas concerning home equity lending in Texas and the increased clarity and certainty would best serve the interests of the citizens of this state.

Now, Therefore, Be It Resolved, that the Credit Union Commission of Texas and the Finance Commission of Texas do hereby request that the 80th Legislature consider clarifying amendments to Article XVI, Section 50 of the Texas Constitution to improve clarity and provide additional guidance regarding home equity lending and the Commissions’ interpretive authority.