Anon asked in another forum,

In reply to:

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Is there a some rule that prohibits advancing-type open-end credit in Texas to a consumer (not credit card)? Can someone point me to that rule if this is a correct statement.

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No. It is just a less commonly used credit facility. 346 of the Finance Code addresses revolvers. From that link you can back into the rest of the Finance Code for additional research.

Andy, why do you think this isn't used much in Texas? Was it against the credit code at some point?

Our loan operations people got really, really nervous when I told them they could do these loans several years ago - they didn't even think the doc software would do them. I've always wondered why.

I don't think many systems are set up to handle them (Reg. Z disclosures plus individual state requirements) without additional programming and they are of limited use to consumers compared to widely accepted credit cards. It was cheaper to outsource a credit card program than build necessary infrastructure.

Where you do find these products, are revolving lines accessed by special check. We have such a product but have the minimum line set at $30M to keep it over the Reg. Z coverage. (This may get messed up though if a proposal I read about passes. It wants to raise that $75M or some higher number as I recall.)

Thanks for the info. I had some recollection about the rules changing sometime back, but wanted to make sure before I argued the point. As usual Andy, you have all the right answers. Thanks for taking the time to do this. I certainly appreciate this website and the great info provided. Have learned a lot from it. P.S. I took your advise and posted on the Texas thread not realizing you had already responded to the question. Please ignore the second posting.