Skip to main content
Menu Icon
Close

InfoBytes Blog

Financial Services Law Insights and Observations

Texas Joint Financial Regulators issue HELOC guidance

State Issues Covid-19 Texas Banking Mortgages Consumer Credit Credit Union

State Issues

The State of Texas Joint Financial Regulatory Agencies issued guidance pertaining to HELOCs as part of the state’s broader Covid-19 emergency measures pursuant to the governor’s declaration of a state of disaster for Texas on March 13. The agencies’ statement anticipates that lenders may adjust or extend terms on HELOCs and offer new loans during the crisis period, but also clarified that all such modifications and newly-issued loans must comply with Article XVI, Section 50 of the Texas Constitution.  The guidance confirmed that modifications that lower the interest rate or amount of installment payments, but that do not satisfy or replace the original note, advance new funds, or increase obligations created by the original note, would not be a new extension of credit under Section 50(a)(6) of the constitution.  The State of Texas Joint Financial Regulatory Agencies is comprised of the Texas Department of Banking, Texas Department of Savings and Mortgage Lending, Texas Office of Consumer Credit Commissioner, and Texas Credit Union Department.