Finance Commission of Texas v. Norwood
Fin. Comm'n of Tex. v. Norwood, 418 S.W.3d 566 (Tex. 2013)
- Court
- Supreme Court of Texas
- Decided
- 2013-06-21
- Docket
- 10-0121
- Cited by later opinions
- 238
What happened
Homeowners challenged state agency interpretations of the home-equity rules, including what counts toward the 3% cap on fees.
What the court decided
The Texas Supreme Court held that courts, not agencies, have the final say on the constitution's meaning, and decided several interpretations. It held that the "interest" excluded from the 3% fee cap means charges computed by applying a rate to principal (such as per-diem interest and legitimate discount points); other fees count toward the cap even if called interest. Some agency readings were upheld and others were not.
Why it may matter to you
If your closing papers show large fees, this case helps you understand what counts toward the 3% limit — one of the rules that makes a Texas home-equity lien valid.
Why it might not apply
The fee cap was later lowered to 2% by constitutional amendment for newer loans, and lenders can often cure an overcharge by refunding it. Your closing date matters.
Most useful when
- Your home-equity loan charged fees you think went over the 3% cap
How to cite it
The full citation for the first time you mention it, a short form for later, and a sample sentence you can adapt.
Fin. Comm'n of Tex. v. Norwood, 418 S.W.3d 566 (Tex. 2013)Short formNorwood, 418 S.W.3d 566Draft — check it with free legal aid before you file or say it in court.
In Fin. Comm'n of Tex. v. Norwood, 418 S.W.3d 566 (Tex. 2013), the court held that the "interest" excluded from the Texas home-equity 3% fee cap means charges computed by applying a rate to principal, not other fees labeled as interest, and courts have the final word on the constitution's meaning. Here, [say in one sentence what happened in your case]
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