A HELOC is a form of an open-end account that may be debited from time to time, under which credit may be extended from time to time and under which an owner is prohibited from using a credit card, debit card, preprinted solicitation check, or similar device to obtain a HELOC advance.

1. (1) A lender may offer one or more non-prohibited devices or methods for use by the owner to request an advance. Permissible methods include contacting the lender directly for an advance, telephonic fund transfers, and electronic fund transfers. Examples of devices that are not prohibited similar devices include prearranged drafts, convenience checks, or written transfer instructions. Regardless of the permissible method or device used to obtain a HELOC advance, the amount of the advance must comply with:

   1. (A) the advance requirements in Section 50(t)(2);
   2. (B) the loan to value limits in Section 50(t)(5); and
   3. (C) the debit or advance limits in Section 50(t)(6).
2. (2) An owner may, but is not required to, make in-person contact with the lender to obtain a HELOC advance.
3. (3) A credit card, which is a prohibited device under Section 50(t)(3), is a card that may be used for personal, family, or household use to debit an open-end account.

4. (4) A preprinted solicitation check, which is a prohibited device under Section 50(t)(3), is a check that:

   1. (A) is provided to an owner for the purpose of originating a HELOC or to a borrower for the purpose of soliciting additional advances on an existing HELOC;
   2. (B) contains at least one preprinted key payment term, such as the amount or payee; and
   3. (C) is not requested by the borrower or owner.

Source Note:The provisions of this §153.84 adopted to be effective March 11, 2004, 29 TexReg 2306.