AUSTIN, Texas – Texas credit unions have good reason to pat themselves on the back for a job well done. After working to ensure passage of two home equity loan-related amendments, Texas voters passed both amendments on Sept. 13, setting the stage for credit union members to be able to take advantage of similar home equity loan advantages enjoyed by members in other states. By a margin of 65.4 to 34.6%, Texas voters on Sept. 13 approved Proposition 16, a constitutional amendment that authorizes home equity lines of credit, bi-monthly payments, and interpretive authority by the Texas Credit Union Commission. They also passed Proposition 6, a separate amendment that enables older homeowners to refinance their home equity loans with reverse mortgages. Credit unions were actively involved in ensuring passage of the amendments, through communication efforts with their collective memberships and through their representation on the Texas Conference for Homeowners Rights, the organization of mortgage lenders that spearheaded home equity reform. With the Texas Credit Union League's assistance, credit unions displayed push cards and posters in their lobbies and distributed to their members approximately 1.5 million statement inserts about the amendment, early voting and the special election date. Employees wore "Vote Yes on Prop. 16″ campaign buttons. "TCUL commends credit unions across the state for their efforts in passing this beneficial amendment," said Dick Ensweiler, president of TCUL. "Credit unions were successful in mobilizing their efforts, educating members about the vote and putting together a strong force that will result in homeowners saving significant dollars for their families. This constitutional amendment will help Texas credit union members enjoy the same cost-saving advantages appreciated by homeowners in other parts of the country." To help familiarize credit union employees with new procedures and requirements, TCUL is conducting Home Equity Line of Credit (HELOC) seminars over the next three weeks in 10 locations across the state. Anticipating passage of Proposition 16, Capitol Credit Union here has been preparing for home equity lines of credit, which will become available to homeowners in early October. "At Texas Credit Union League's recent Leadership Conference, we attended everything they had on the home equity topic," said President Anne Boatright. "It won't be news to our members. Most are state employees, and they are involved in what goes on in the legislature. Some moved here from other states, where they were already accustomed to home equity lines of credit." Lines of credit may offer borrowers significant savings over the lump-sum-style home equity loans. For example, money for college tuition, home improvements and small business expenditures can now be withdrawn in small amounts as needed up to an individual's credit limit, rather than in one large amount. Interest charges will be assessed only on the amount withdrawn. With the passage of Proposition 6, homeowners at least 62 years old can use a reverse mortgage to refinance a home equity loan. A reverse mortgage allows a homeowner to receive periodic loan advances based on the equity in their home, but typically repayment does not begin until the homeowner no longer occupies the homestead or the homestead is transferred to another owner. John Tippets, president of American Airlines Federal Credit Union and chair of the Texas Conference for Homeowners Rights, said home equity lines of credit will benefit credit union members by consolidating and reducing their costs. "It is a right product for Texans. It will help us do for our members what credit unions everywhere else in the country have been doing for their members." Tippets applauded financial institutions for cooperating to ensure home equity reforms were passed. "It was a great experience having credit unions, banks and other financial institutions working together toward this goal. Banks might have been able to do this on their own, but working together ensured the success of these much-needed reforms." -

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