Consumer bankers in Texas are hoping the state's Democratic lawmakers end their much-publicized walkout soon.
Just when the Legislature seemed poised to approve the biggest item on bankers' agenda - a bill allowing home equity lines of credit - more than 50 members of the Texas House of Representatives went into voluntary exile at a Holiday Inn in Ardmore, Okla. That left the House without a quorum.
The absentee legislators - all Democrats - are vowing to stay in Ardmore until Republicans drop a hotly contested redistricting plan that could add as many as seven Republicans to the state's congressional delegation. The walkout left the fate of a Texas-size heap of legislation, including the state's budget and a tort reform bill, up in the air.
Bankers, though, care most about the home equity bill. Texas is the only state in the country that prohibits home equity lines.
John Heasley, the executive vice president and general counsel of the Texas Bankers Association, said he believes the Democrats will return to the Statehouse in Austin after today, which is the deadline for the House to consider the redistricting bill.
But even if they do, there is no guarantee the home equity bill would be considered, according to Mr. Heasley. About 5,000 bills are awaiting action, and the home equity measure could easily get lost in the shuffle, he said. If that happens, bankers would have to wait until 2005, when the Legislature next meets, to reintroduce it.
Before the House Democrats went AWOL, Mr. Heasley said he gave the bill a 60% chance of passing. "Now it's a toss-up," he says.
The Senate, which is still in session, is expected to pass the bill today, according to Karen Neely, the general counsel for the Independent Bankers Association of Texas.
It is the only one of eight bills on the trade group's agenda still awaiting action by the House.
Texas banned home equity loans altogether until 1998, and its laws governing them are by far the strictest in the country. In addition to forbidding home equity lines of credit, they impose a 12-day wait between approval and closing of a home equity loan, and they bar prepayment penalties.
Loosening those regulations is an issue "of vast importance to banks," said Mr. Heasley.
Like the other 49 states, Texas redistricted after the 2000 Census was released, but that was when the Democrats controlled the Legislature. In November, Republicans captured control of the Statehouse for the first time in 130 years, and they want a crack at setting the boundaries of the state's 32 seats in the U.S. House of Representatives.
