Texas Senate Bill SB1956

Texas 2015 - 84th Regular

Caption

Relating to property tax lenders and property tax loans.

Impact

This legislation significantly impacts state laws regarding property tax lending by introducing clearer definitions and regulations governing property tax lenders and imposed liens. By establishing a licensing requirement under the Finance Code, the bill seeks to protect homeowners from predatory lending practices, ensuring that they are informed of potential costs associated with such loans. Additionally, it revises the conditions under which lenders can foreclose on properties, particularly emphasizing the rights of property owners and clarifying processes around lien transfer and management.

Summary

SB1956 modifies the regulations surrounding property tax lenders and property tax loans in Texas. The bill aims to streamline the processes involved in the lending system related to property taxes, particularly focusing on the creation, transfer, and management of liens associated with these loans. Key provisions include clarification on the definition of property tax lenders, requirements for licensing, and restrictions on the fees that lenders can charge post-closing. The goal is to enhance consumer protection while ensuring more transparent lending practices.

Contention

Notably, the bill touches on contentious issues such as the allowable interest rates on property tax loans, which cannot exceed 18% annually, and the conditions under which parties involved can initiate foreclosure proceedings. Critics may argue that while the bill enhances regulation, it may inadvertently limit access to necessary funding for residents who are struggling to pay property taxes. Moreover, repealing certain sections of the tax code has raised concerns among some stakeholders regarding the continuity of existing contracts and agreements, especially for prior lien transfers made before the bill's enactment.