Relating to the regulation of certain lending and loan origination practices in connection with home loans.
Impact
This bill amends the Finance Code significantly, impacting statutes governing subprime and high-cost loans. By requiring lenders to ensure that a subprime loan provides a reasonable net benefit to borrowers, the bill seeks to prevent situations where consumers are trapped in unfavorable loan conditions. It also emphasizes the importance of a borrower's ability to repay the loan, mandating that lenders verify the borrower's financial situation adequately. This regulation intends to foster greater financial stability and protect consumers from predatory lending practices.
Summary
Senate Bill 1167 is designed to regulate certain lending and loan origination practices pertaining to subprime home loans in Texas. The bill defines 'subprime home loan' and sets forth criteria that lenders must adhere to when issuing these types of loans. It mandates that mortgage brokers act in the best interest of the borrower and make adequate disclosures regarding loan fees and terms. Furthermore, the bill prohibits the inclusion of prepayment penalties in subprime home loans and restricts the practices of mortgage brokers to ensure fair dealings with consumers.
Contention
Points of contention surrounding SB 1167 primarily center on the balance between consumer protection and market freedom. Proponents argue that the bill is necessary to safeguard vulnerable consumers from exploitative lending practices, particularly in the aftermath of financial crises linked to subprime lending. Critics, however, may argue that overly stringent regulations could limit access to credit for individuals who may legitimately need loans but fall into the subprime category. The debate reflects broader tensions within legislative discussions about the best approaches to regulate the financial services industry.
Proposing a constitutional amendment to remove the requirement that a home equity loan be closed only at the office of the lender, an attorney at law, or a title company.
Proposing a constitutional amendment authorizing the legislature to provide for exceptions to the requirement that a home equity loan be closed only at the office of the lender, an attorney at law, or a title company.
Relating to the protection of minors from harmful, deceptive, or unfair trade practices in connection with the use of certain digital services and electronic devices, including the use and transfer of electronic devices to students by a public school.