Constitutional amendments address home equity refinancing, charity raffles

STAFF WRITER CONNIE SWINNEY

AUSTIN — If passed, two state constitutional amendments on the ballot in November would ease the burden on those trying to refinance home equity, while a third proposed amendment would allow more sports-related charitable foundations to conduct fundraising raffles.

Early voting is now through Nov. 3. The election is Nov. 7.

Proposition 2 reads as follows:

“The constitutional amendment to establish a lower amount for expenses that can be charged to a borrower and removing certain financing expense limitations for a home equity loan, establishing certain authorized lenders to make a home equity loan, changing certain options for the refinancing for home equity loans, changing the threshold for an advance of a home equity line of credit, and allowing home equity loans on agricultural homesteads.”

Among some of the features of the amendment: greater ease for homeowners to refinance property while also lowering the fee cap from 3 percent to 2 percent.

“We are very supportive of Prop 2,” said Celeste Embrey, assistant general counsel for the Texas Bankers Association. “We view it as the first chance for meaningful home equity reform.”

Home equity lending was first approved by Texas voters in 1997 but carried with it conservative regulations.

“Consumer protections that were built in were very restrictive but kept people from taking advantage of refinancing under low interest rate or for general needs,” said John Easley, general counsel for the Texas Bankers Association.

In another finance-related amendment, banking institutions would expand the ability to woo customers, but within a narrow category of service.

Proposition 7 reads as follows:

“The constitutional amendment relating to legislative authority to permit credit unions and other financial institutions to award prizes by lot to promote savings.”

In 2015, Texas Gov. Gregg Abbott vetoed a bill that would have allowed such institutions to use raffles in this way.

Opponents contend that games of chance amounted to gambling, which the state constitution prohibits by for-profit ventures, unless approved by the state legislature or voters.

“When you incentivize people to save, people who otherwise would not be saving, it increases their likelihood they will save long-term,” Embrey said.

Another fundraising-related proposition — Proposition 5 — would expand the types of sports organizations able to raise foundation money through raffles.

Proposition 5 reads as follows:

“The constitutional amendment on professional sports teams’ charitable foundations conducting charitable raffles.”

Instead of just “major” professional sports teams, the definition would include minor league sports team foundations, motorsports racing teams, and professional golf association events as well as allow for raffle tickets to be purchased using debit cards rather than just paper money.

connie@thepicayune.com

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