99 Acura Integra Overdrive slippage?

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I have a 99 Acura Integra LS AT and a few months ago my Overdrive (D4) started to fail on me. After going past 40MPH, in 3rd gear I'm guessing, the car fails to downshift when slowing down or stopping.. red lights, stop signs. The gears just grid down and the transmission just makes a very loud electrical grinding noise for about 3 seconds and the finally stops.

I was told this is the Overdrive band slipping. I've been running the car out of over drive for the past few months and the car runs fine, if not better. Just sucks up a little more gas which is typical with my driving habits. Is it Ok to just normally drive the car in D3 with no issues later on or should I be looking into transmission asap?

Aslo my only reason for asking is in Dec I need to renew my state inspection, I Live in Texas.. will an overdrive band slipping cause a fault in the test?
 
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