Where can I get some good background information and training material regarding home equity lending? Thanks.

Is there any particular state in which you are interested?

Texas

Have you read the Texas forum on these threads?

TBA is a good source of information. I recently received a brochure about a seminar they're putting on in March. It will be held in three different cities. You might go to their website for more info. In addition, IBAT is a good resource. Look into the threads in the Texas forum - we've discussed this topic often, and there are some good resource links in several threads.

The Texas Bankers Association has a great handout called the Texas Home Equity Lending Guide. They are also teaching classes on March 23, 24, & 25 on the new constitutional amendment and all the recent interpretations/lawsuits/etc.

The main issue for you to pay attention to is who your supervisor is; i.e., any of the FFIEC supervisors, or are you state-chartered (with the FDIC joining the examination), or what. If your supervisor is any of the federal regulators and you come under the preemption rules, then the state regulations won't apply -- though the federal Fair Lending regulations are identical. Are you a subprime home-equity lender? If so, you want to distinguish yourself as being responsible and not a predator. Standards for acceptable FICO scores and creditworthiness, required debt-to-income ratios and proper assessment of repayment capacity, and valuation of and reliance on collateral as only a contingency source of recovery in the event of default ... these are the core principles of home-equity lending. What benefit does each borrower derive in getting the equity loan? If your institution is not experienced in this or is a johnny-come-lately, the examiners' increased knowledge and considerable targeting of home-equity lending can result in reputational risk problems if you're not very diligent.

I wouldn't be hasty and decide that the preemption rule will apply to Texas home equity laws. The jury is still decidedly out on that one.

I am very interested in seeing what portions of the Texas home equity lending laws are going to eventually be preempted by the OCC. My layperson's reading says it has the protential to be quite substantive.

I'm hoping you're right! I've asked the OCC to give me some direction on this if they get any. With all the ruckus, though - we certainly don't want to be the ones on the 'cutting edge'. Those cuts hurt!

What about the provision in the OCC preemption rule that specifically excludes homestead laws as preempted (34.4(b)(4))? This may turn on whether there was any provision in the Texas constitution prior to 9/29/94 (the date of enactment of Reigle-Neal Interstate Banking and Branching Efficiency Act) that exempts homesteads from foreclosure, forced sale, etc. I know the home equity provisions are of more recent vintage (January 1, 1998), but the statute referred to in the preemption rule (12 USC 1462a(f)) also covers amendments to constitutional provisions that were in effect on 9/29/94. Could this mean that all home equity lending in Texas escapes the preemption rule? I haven't a clue. Any thoughts?

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If your institution is federally chartered you won't need to be concerned about Texas state law;

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Until you want to relocate a branch, open a new branch, acquire a bank, etc. that may require sate approval in addition to federal approval.

Don't get me wrong, I don't have a problem with preemption but if you're going to exercise your right of preemption, then the preemption should be all or none. IOW, don't use the law that best suit your needs at the time to give you an edge over us state chartered banks.

If Texas thought their state law governing HELOCs was going to be preempted, do you think it would have gotten passed? I'm not familiar enough with the "evolution" of the HELOC in Texas to know the answer, but it makes one think.