The Finance Commission of Texas has adopted previously proposed rules to amend its regulations concerning the loans subject to Chapter 342 of Texas’ Finance Code (aka Texas “Plain Language” loans), primarily promulgating revisions to the model promissory notes and security instruments for such loans (see 40 Tex. Reg. 5621 & 7635  for details; regulations are set forth in 7 Tex. Admin. Code ch. 90).
We have revised the following copies of these model documents accordingly:
- TX Plain Language 2nd Purchase Money Closed End Note (Cx9422)
- TX Plain Language 2nd Purchase Money Closed End Security Instrument (Cx9423)
- TX Home Equity Plain Language Closed End 2nd Note (Cx9420)
- TX Home Equity Plain Language Closed End 2nd Security Instrument (CX9421)
- TX Plain Language 2nd Home Improvement Note (Cx19174)
- TX Plain Language 2nd Home Improvement Deed of Trust (Cx19173)
In addition to revising the model documents, these new regulations modify Ibid. § 90.604(a)(3), which used to require a modified, Spanish-language version of the TIL Disclosures to be provided for Chapter 342, Subchapter G loans (“secondary mortgage loans”; Tex. Fin. Code §§ 342.301 through 342.308). We provided Cx19328 (“TX Spanish Plain Language Truth-in-Lending Statement”) for this requirement.
Now, the modified regulation requires a Spanish-language version of the Loan Estimate and Closing Disclosure to be provided, based on the model forms set forth in 12 CFR Pt. 1026, App. H, for which we provide Cx18990 (“Spanish Loan Estimate”) and Cx18991 (“Spanish Closing Disclosure”). Because Cx19328 is no longer required, we will “retire” it.
Finally, these amendments also change the language of the instructions to be disclosed to consumers concerning how to file complaints against a lender with the Office of Consumer Credit Commissioner. We have updated both the English and Spanish versions of this notice on the model notes, as well as on Cx10735 (“TX Complaint Notice”).
We would also like to note that these new regulations require the text of the notes and security instruments to “be set in an easily readable typeface. Typefaces considered to be readable include: Arial, Calibri, Caslon, Century Schoolbook, Garamond, Helvetica, Scala, and Times New Roman.” (7 Tex. Admin. Code § 90.103[b]). The primary text of our documents is in Times New Roman. Our “field text,” however, is in Courier. However, we believe that Courier – while not explicitly listed – would be considered “an easily readable typeface” and thus, no changes will be made to the font.
These changes will be in effect on February 21, 2017. If you have any questions or concerns about this change, please contact Client Support at 1.800.497.3584.