Credit unions in the Lone Star State, fresh off an historic victory in a voter referendum, are preparing to offer their members home equity lines of credit.
"We've already started preapproving people and we're ready to go, just as soon as the vote is certified," said John Tippets, president of American Airlines FCU, of the voter initiative to amend the state's constitution to allow for HELOCs.
The initiative, approved earlier this month by 65% of the voters, will make Texas the last state in the nation to allow lenders to offer home equity lines of credit. Texas became the final state in 1998 to allow home equity lending, but the open-ended lines of credit were not permitted under that provision.
"It's a very positive thing," said Tippets, who led a broad-based lender coalition, the Texas Conference for Homeowners Rights, that lobbied the state legislature to put the initiative to the voters. "I've always believed that a home equity line is one of the best products a consumer can have because of the low rates and because it's tax deductible."
The state's largest credit union has already begun preapproving members for HELOCs and is just waiting for official certification of the ballot before issuing the credit lines, said Tippets. "We'll be ready as soon as the election is certified," he said.
Texas credit unions helped push the measure over the top with statement stuffers and inserts mailed to members urging a "yes" vote on the initiative. Credit unions provided 1.5 million statement inserts about the amendment, as well as push cards, posters and campaign buttons. Credit union tellers and employees across the state wore "Vote Yes on Prop. 16" buttons and provided members with educational information about the benefits of home equity lines of credit (HELOC).
"Credit unions were successful in mobilizing their efforts, educating members about the vote and putting together a strong force that will result in homeowners saving significant dollars for their families" said Dick Ensweiler, president of the Texas CU League. "This constitutional amendment will help Texas credit union members enjoy the same cost-saving advantages appreciated by homeowners in other parts of the country."
The ballot initiative, according to Tippets, is not only good for Texas consumers and lenders, but was also a good example of how credit unions and banks can work together for a common goal.
