May 31, 2017
TLTA Emerges From Session Victorious, Our Safe and Stable System Preserved
The 85th Session of the Texas Legislature concluded with Sine Die on Monday, May 29. TLTA had a very successful session, highlighted by the defeat of proposals to upend our Texas regulatory system and the passage of all of our affirmative agenda items, as well as some very important positive amendments to bills affecting our industry. A more in-depth and comprehensive legislative report listing all bills of interest will be published after the veto period, but here's a quick recap of the bills TLTA was following and what to expect moving forward.
Victory in Attack on Safe, Stable Title Insurance System
TLTA can now confidently announce that our industry has emerged from this long and challenging session victorious over those special interests who proposed to dismantle our Texas title system.
As reported on April 26 in Dateline Austin, the hearing on HB 4239 – a bill that proposed to upend our stable rate system – received a lineup of expert title industry witnesses, who stated that it would increase costs for Texas homeowners, reduce competition by shuttering small businesses and increase risks and claims. The hearing drew a large crowd, with 142 people signing in as witnesses, the vast majority of whom registered in opposition. After hearing almost two hours of testimony, including extensive questioning by the committee members, HB 4239 was left pending, was never brought up for a vote, and eventually died in committee.
In addition, as reported on May 17, SB 372 by Sen. Bob Hall, that proposed a file-and-use rating system, was never set for a hearing by the Senate Committee on Business and Commerce.
Finally, SB 2203 by Sen. Kelly Hancock, dealing with disclosure and reporting in title insurance, was left pending in the Senate Committee on Business and Commerce.
We are extraordinarily pleased with this outcome and very grateful for the work and support of the TLTA membership in achieving this critical victory.
TLTA's Affirmative Agenda – One Bill Becomes Law, Other Pending Governor's Signature
– a bill clarifying the lis pendens expungement statute so it can be relied upon by title agents and insurers – was signed into law on Friday, May 19. It had the honor of being one of the first 40 bills signed by Gov. Abbott. The bill was the result of a TLTA Board of Directors' decision made just a few days before the bill filing deadline in response to a case being heard in the Texas Supreme Court and concern about its potential outcome. Sen. Bryan Hughes graciously agreed to file the bill on the deadline. Rep. John Wray agreed to do the same, championing the Senate bill through the House process and helping to send it to the governor over the weekend. TLTA is extremely grateful to both of these legislators for their responsiveness and leadership.
, which relates to adverse possession amongst co-tenant heirs, passed the House on May 24 and headed to the governor's desk. This bill was drafted a few sessions ago by TLTA volunteers Richard Black and Roland Love at the behest of Sen. West who learned of the fate of many rural and inner city lower income individuals and families who could not receive Disaster Relief Assistance because they could not prove up title. After the bill failed to pass two sessions in a row on its own devices, TLTA made it a priority this session by adding it to its affirmative agenda. If the governor signs the bill, individuals and family members will now be able to adversely possess against co-tenants who are no longer in the picture. Often, property is passed down informally generation after generation and clear title is no longer possessed by a single or few individuals. Under the process outlined in the bill, clear title can now be achieved after a certain period of time. This will further bolster certainty in the Texas title system as this new mechanism becomes available and is implemented. TLTA is grateful for the leadership of Sen. West for initiating the discussion and filing the bill in the Senate and for Rep. Schofield for filing and championing the bill in the House.
Public Information Law – Major Victory in Ensuring Access to Records
HB 3107 – a bill that began as a significant threat to the title industry has resulted in a huge victory. The bill, which allows counties to create certain barriers to accessing public information through the public information process, specifically exempts the press, higher education and the title industry for the purpose of building and maintaining title plants. Public information requests are important tools for the building and maintaining of title plants. As filed, the bill could have frustrated these efforts. Fortunately, as amended, the bill sets forth a statutory recognition of the unique role and importance of abstract plants in the context of public information alongside higher education and the press. The bill passed the House on May 29 and is on its way to the governor.
Powers of Attorney – TLTA Worked to Mitigate Industry Concerns and Will Continue to Monitor
On May 18, the Senate Committee on State Affairs adopted a committee substitute on HB 1974
, incorporating TLTA's suggestions relative to the certification of durable power of attorney. This bill has been greatly improved since its initial draft, which would have dramatically reduced title industry members' treatment of powers of attorney and subjected them to significant liability. The bill, which passed the House on May 29 and is on its way to the governor, now is quite permissive and provides several avenues to give those considering the power of attorney the information they need for that decision. However, this complex piece of legislation will require some attention and evaluation during the interim by TLTA members.
TLTA staff thanks Rep. John Wray and Sen. José Rodriguez for working with the title industry to address these concerns.
Remote E-Notary Bill Signed Into Law – Title Industry Concerns Addressed in Final Legislation
, a bill establishing the framework for remote e-notarization in Texas, passed the House and Senate and was recently signed into law. As discussed in the Feb. 22
issue of Dateline Austin, the Texas Mortgage Bankers Association brought this bill and worked closely with the notary industry, the Secretary of State's office and the title industry to craft a bill that addressed the concerns of all the stakeholders. The goal was to craft a bill that could serve as a national model and address some of the problems identified with the new statutes in other states.
Shortly after learning of TMBA's desire to pass a Texas bill this session and being aware that a national conversation led by major lenders was brewing, TLTA worked with ALTA to establish a national working group and requested guidance for the Texas bill from the national title industry. This ALTA-led workgroup, which involved lenders and other professionals, put in several hours that resulted in a set of agreed principles and guidelines for any state legislation. The Texas bill incorporated these principles and the feedback of other national and state stakeholders. TLTA appreciates the special efforts of TLTA member Randy Lee who worked diligently this session to ensure that the bill worked well for the title industry and allows for Texas companies to participate in the bourgeoning national marketplace.
Home Equity Constitutional Amendment Will Be on November Ballot – TLTA Supports
As reported on May 10, both the Texas House and Senate adopted SJR 60, a proposed constitutional amendment that would take effect Jan. 1, 2018 and would apply to a home equity loan made on or after the effective date and to an existing home equity loan that is refinanced on or after the effective date.
The amendment would:
- Exclude three fees from the fee limit (including title insurance)
- Enable home equity loans to be used on homesteads designated for agricultural use
- Lower the fee limit from three percent to two percent
- Allow a "seasoned" refinance of an equity loan to be a non-home equity loan
- Change the "Notice Concerning Extensions of Credit" to include these changes
TLTA would like to thank the following organizations for supporting this piece of legislation:
- Texas Association of Realtors
- Texas Farm Bureau
- Texas Bankers Association
- Independent Bankers Association of Texas
- Texas Mortgage Bankers Association
- Texas Credit Union Association
Special thanks goes to the Texas Association of Realtors for putting together a one-pager
on the legislation and letting TLTA share it.