By: Solomons H.B. No. 10
A BILL TO BE ENTITLED
AN ACT
relating to the regulation of residential mortgage loan
originators; providing a penalty.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle E, Title 3, Finance Code, is amended by
adding Chapter 180 to read as follows:
CHAPTER 180. RESIDENTIAL MORTGAGE LOAN ORIGINATORS
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 180.001. SHORT TITLE. This chapter may be cited as the
Texas Secure and Fair Enforcement for Mortgage Licensing Act of
2009.
Sec. 180.002. DEFINITIONS. In this chapter:
(1) "Clerical or support duties," following the
receipt of an application from a consumer, includes:
(A) the receipt, collection, distribution, and
analysis of information related to the processing or underwriting
of a residential mortgage loan; and
(B) communication with a consumer to obtain
information necessary to process or underwrite a loan, to the
extent that the communication does not include offering or
negotiating loan rates or terms or counseling the consumer about
residential mortgage loan rates or terms.
(2) "Credit union" means a state or federal credit
union operating in this state.
(3) "Credit union subsidiary organization" means an
agency, association, or company wholly or partly owned by a credit
union that is designed primarily to serve or otherwise assist
credit union operations. The term includes a credit union service
organization authorized by:
(A) Section 124.351(a)(1);
(B) Credit Union Commission rule; or
(C) Part 712 of the National Credit Union
Administration's Rules and Regulations.
(4) "Depository institution" has the meaning assigned
by Section 3, Federal Deposit Insurance Act (12 U.S.C. Section
1813). The term includes a credit union but does not include a
credit union subsidiary organization.
(5) "Dwelling" has the meaning assigned by Section
103(v) of the Truth in Lending Act (15 U.S.C. Section 1602(v)).
(6) "Federal banking agency" means:
(A) the Board of Governors of the Federal Reserve
System;
(B) the Office of the Comptroller of the
Currency;
(C) the Office of Thrift Supervision;
(D) the National Credit Union Administration;
(E) the Federal Deposit Insurance Corporation;
or
(F) the successor of any of those agencies.
(7) "Finance commission" means the Finance Commission
of Texas.
(8) "Immediate family member" means the spouse, child,
sibling, parent, grandparent, or grandchild of an individual. The
term includes a stepparent, stepchild, and stepsibling and a
relationship established by adoption.
(9) "Individual" means a natural person.
(10) "License" means a license issued under the laws
of this state to an individual acting as or engaged in the business
of a residential mortgage loan originator.
(11) "Loan processor or underwriter" means an
individual who performs clerical or support duties as an employee
at the direction of and subject to the supervision and instruction
of an individual licensed as a residential mortgage loan originator
or exempt from licensure under Section 180.003.
(12) "Nationwide Mortgage Licensing System and
Registry" means a mortgage licensing system developed and
maintained by the Conference of State Bank Supervisors and the
American Association of Residential Mortgage Regulators for the
licensing and registration of state residential mortgage loan
originators.
(13) "Nontraditional mortgage product" means a
mortgage product other than a 30-year fixed rate mortgage.
(14) "Person" means an individual, corporation,
company, limited liability company, partnership, or association.
(15) "Real estate brokerage activity" means an
activity that involves offering or providing real estate brokerage
services to the public, including:
(A) acting as a real estate broker or salesperson
for a buyer, seller, lessor, or lessee of real property;
(B) bringing together parties interested in the
sale, purchase, lease, rental, or exchange of real property;
(C) negotiating, on a party's behalf, any
provision of a contract relating to the sale, purchase, lease,
rental, or exchange of real property, other than a negotiation
conducted in connection with providing financing with respect to
such a transaction;
(D) engaging in an activity for which a person is
required to be registered or licensed by the state as a real estate
broker or salesperson; and
(E) offering to engage in an activity described
by Paragraphs (A) through (D) or to act in the same capacity as a
person described by Paragraphs (A) through (D).
(16) "Registered mortgage loan originator" means an
individual who:
(A) is a residential mortgage loan originator and
is an employee of:
(i) a depository institution;
(ii) a subsidiary that is:
(a) owned and controlled by a
depository institution; and
(b) regulated by a federal banking
agency; or
(iii) an institution regulated by the Farm
Credit Administration; and
(B) is registered with, and maintains a unique
identifier through, the Nationwide Mortgage Licensing System and
Registry.
(17) "Regulatory official" means:
(A) with respect to Subtitles A, F, and G of this
title, the banking commissioner of Texas;
(B) with respect to Chapters 156 and 157 except
as provided by Paragraph (D), the savings and mortgage lending
commissioner;
(C) with respect to Chapters 342, 347, 348, and
351, the consumer credit commissioner; and
(D) with respect to credit unions, to the
examination, investigation, or inspection of employees of credit
union subsidiary organizations licensed under Chapter 156, and to
the enforcement of compliance with this chapter and Chapter 156 by
those employees, the credit union commissioner.
(18) "Residential mortgage loan" means a loan
primarily for personal, family, or household use that is secured by
a mortgage, deed of trust, or other equivalent consensual security
interest on a dwelling or on residential real estate.
(19) "Residential mortgage loan originator":
(A) means an individual who for compensation or
gain or in the expectation of compensation or gain:
(i) takes a residential mortgage loan
application; or
(ii) offers or negotiates the terms of a
residential mortgage loan; and
(B) does not include:
(i) an individual who performs solely
administrative or clerical tasks on behalf of an individual
licensed as a residential mortgage loan originator or exempt from
licensure under Section 180.003, except as otherwise provided by
Section 180.051;
(ii) an individual who performs only real
estate brokerage activities and is licensed or registered by the
state as a real estate broker or salesperson, unless the individual
is compensated by:
(a) a lender, mortgage broker, or
other residential mortgage loan originator; or
(b) an agent of a lender, mortgage
broker, or other residential mortgage loan originator;
(iii) an individual licensed under Chapter
1201, Occupations Code, unless the individual is directly
compensated for arranging financing for activities regulated under
that chapter by:
(a) a lender, mortgage broker, or
other residential mortgage loan originator; or
(b) an agent of a lender, mortgage
broker, or other residential mortgage loan originator;
(iv) an individual who receives the same
benefits from a financed transaction as the individual would
receive if the transaction were a cash transaction; or
(v) an individual who is involved solely in
providing extensions of credit relating to timeshare plans, as
defined by 11 U.S.C. Section 101(53D).
(20) "Residential real estate" means real property
located in this state on which a dwelling is constructed or intended
to be constructed.
(21) "Rulemaking authority" means:
(A) the finance commission, except as provided by
Paragraph (B); or
(B) with respect to credit unions and the
rulemaking authority granted by Section 15.4024, the Credit Union
Commission.
(22) "S.A.F.E. Mortgage Licensing Act" means the
federal Secure and Fair Enforcement for Mortgage Licensing Act of
2008 (Pub. L. No. 110-289).
(23) "Unique identifier" means a number or other
identifier assigned by protocols established by the Nationwide
Mortgage Licensing System and Registry.
Sec. 180.003. EXEMPTION. The following persons are exempt
from this chapter:
(1) a registered mortgage loan originator when acting
for an entity described by Section 180.002(16)(A)(i), (ii), or
(iii);
(2) an individual who offers or negotiates terms of a
residential mortgage loan with or on behalf of an immediate family
member of the individual;
(3) a licensed attorney who negotiates the terms of a
residential mortgage loan on behalf of a client as an ancillary
matter to the attorney's representation of the client, unless the
attorney is compensated by:
(A) a lender, mortgage broker, or other
residential mortgage loan originator; or
(B) an agent of a lender, mortgage broker, or
other residential mortgage loan originator;
(4) an individual who:
(A) is an exclusive agent of a registered
financial services company;
(B) is exempt from regulation under Chapter 156
as provided by Section 156.202(5); and
(C) is individually enrolled as a registered
mortgage loan originator with the Nationwide Mortgage Licensing
System and Registry;
(5) an individual who offers or negotiates terms of a
residential mortgage loan secured by a dwelling that serves as the
individual's residence; and
(6) a nonprofit organization providing self-help
housing that originates zero interest residential mortgage loans
for borrowers who have provided part of the labor to construct the
dwelling securing the loan.
Sec. 180.004. ADMINISTRATIVE AUTHORITY. (a) A regulatory
official has broad authority to administer, interpret, and enforce
this chapter.
(b) A rulemaking authority has broad authority to adopt
rules to implement this chapter to carry out the legislature's
intent.
(c) This chapter does not limit the authority of a
regulatory official to take disciplinary action against a license
holder for a violation of this chapter or the rules adopted by the
regulatory official under this chapter. A regulatory official has
broad authority to investigate, revoke a license, and inform the
proper authority when fraudulent conduct or a violation of this
chapter occurs.
Sec. 180.005. SEVERABILITY. The provisions of this chapter
or applications of those provisions are severable as provided by
Section 311.032(c), Government Code.
[Sections 180.006-180.050 reserved for expansion]
SUBCHAPTER B. LICENSING AND REGISTRATION REQUIREMENTS
Sec. 180.051. STATE LICENSE REQUIRED; RENEWAL. (a) Unless
exempted by Section 180.003, an individual may not engage in
business as a residential mortgage loan originator with respect to
a dwelling located in this state unless the individual:
(1) is licensed to engage in that business under
Chapter 156, 157, 342, 347, 348, or 351; and
(2) complies with the requirements of this chapter.
(b) Unless exempted by Section 180.003, a loan processor or
underwriter who is an independent contractor may not engage in the
activities of a loan processor or underwriter unless the
independent contractor loan processor or underwriter obtains and
maintains the appropriate residential mortgage loan originator
license and complies with the requirements of this chapter.
(c) The individual must renew the license annually to be
considered licensed for purposes of this section.
(d) Notwithstanding any provision of law listed in
Subsection (a)(1), the regulatory official shall provide for annual
renewal of licenses for individuals seeking to engage in
residential mortgage loan origination activities.
Sec. 180.052. ENROLLMENT WITH NATIONWIDE MORTGAGE
LICENSING SYSTEM AND REGISTRY. (a) A licensed residential
mortgage loan originator must enroll with and maintain a valid
unique identifier issued by the Nationwide Mortgage Licensing
System and Registry.
(b) A non-federally insured credit union that employs loan
originators, as defined by the S.A.F.E. Mortgage Licensing Act,
shall enroll those employees with the Nationwide Mortgage Licensing
System and Registry by furnishing the information relating to the
employees' identity set forth in Section 1507(a)(2) of the S.A.F.E.
Mortgage Licensing Act.
(c) Each independent contractor loan processor or
underwriter licensed as a residential mortgage loan originator must
have and maintain a valid unique identifier issued by the
Nationwide Mortgage Licensing System and Registry.
(d) The regulatory official who administers the law under
which a residential mortgage loan originator is licensed shall
require the residential mortgage loan originator to be enrolled
with the Nationwide Mortgage Licensing System and Registry.
(e) For purposes of implementing Subsection (d), the
regulatory official may participate in the Nationwide Mortgage
Licensing System and Registry.
Sec. 180.053. APPLICATION FORM. (a) A regulatory official
shall prescribe application forms for a license as a residential
mortgage loan originator.
(b) A regulatory official may change or update an
application form as necessary to carry out the purposes of this
chapter.
Sec. 180.054. CRIMINAL AND OTHER BACKGROUND CHECKS. (a) In
connection with an application for a license as a residential
mortgage loan originator, the applicant shall, at a minimum,
furnish to the Nationwide Mortgage Licensing System and Registry
information concerning the applicant's identity, including:
(1) fingerprints for submission to the Federal Bureau
of Investigation and any governmental agency or entity authorized
to receive the information to conduct a state, national, and
international criminal background check; and
(2) personal history and experience information in a
form prescribed by the Nationwide Mortgage Licensing System and
Registry, including the submission of authorization for the
Nationwide Mortgage Licensing System and Registry and the
appropriate regulatory official to obtain:
(A) an independent credit report obtained from a
consumer reporting agency described by Section 603(p), Fair Credit
Reporting Act (15 U.S.C. Section 1681a(p)); and
(B) information related to any administrative,
civil, or criminal findings by a governmental jurisdiction.
(b) For purposes of this section and to reduce the points of
contact that the Federal Bureau of Investigation may have to
maintain for purposes of Subsection (a)(1), a regulatory official
may use the Nationwide Mortgage Licensing System and Registry as a
channeling agent for requesting information from and distributing
information to the United States Department of Justice, any
governmental agency, or any source at the regulatory official's
direction.
(c) For purposes of this section and to reduce the points of
contact that a regulatory official may have to maintain for
purposes of Subsection (a) or (b), the regulatory official may use
the Nationwide Mortgage Licensing System and Registry as a
channeling agent for requesting information from and distributing
information to and from any source as directed by the regulatory
official.
Sec. 180.055. ISSUANCE OF LICENSE. (a) The regulatory
official may not issue a residential mortgage loan originator
license to an individual unless the regulatory official determines,
at a minimum, that the applicant:
(1) has not had a residential mortgage loan originator
license revoked in any governmental jurisdiction;
(2) has not been convicted of, or pled guilty or nolo
contendere to, a felony in a domestic, foreign, or military court:
(A) during the seven-year period preceding the
date of application; or
(B) at any time preceding the date of
application, if the felony involved an act of fraud, dishonesty,
breach of trust, or money laundering;
(3) demonstrates financial responsibility, character,
and general fitness so as to command the confidence of the community
and to warrant a determination that the individual will operate
honestly, fairly, and efficiently as a residential mortgage loan
originator within the purposes of this chapter and any other
appropriate regulatory law of this state;
(4) provides satisfactory evidence that the applicant
has completed prelicensing education courses described by Section
180.056;
(5) provides satisfactory evidence of having passed a
written test that meets the requirements of Section 180.057; and
(6) has paid a recovery fund fee or obtained a surety
bond as required under the appropriate state regulatory law.
(b) A revocation that has been formally vacated may not be
considered a license revocation for purposes of Subsection (a)(1).
(c) A conviction for which a full pardon has been granted
may not be considered a conviction for purposes of Subsection
(a)(2).
(d) For purposes of Subsection (a)(3), an individual is
considered not to be financially responsible if the individual has
shown a lack of regard in managing the individual's own financial
affairs or condition. A determination that an individual has not
shown financial responsibility may include:
(1) an outstanding judgment against the individual,
other than a judgment imposed solely as a result of medical
expenses;
(2) an outstanding tax lien or other governmental
liens and filings;
(3) a foreclosure during the three-year period
preceding the date of the license application; and
(4) a pattern of seriously delinquent accounts during
the three-year period preceding the date of the application.
Sec. 180.056. PRELICENSING EDUCATIONAL COURSES. (a) An
applicant for a residential mortgage loan originator license must
complete education courses that include, at a minimum, at least the
minimum number of hours and type of courses required by the S.A.F.E.
Mortgage Licensing Act and the minimum number of hours of training
related to lending standards for the nontraditional mortgage
product marketplace required by that Act.
(b) Education courses required under this section must be
reviewed and approved by the Nationwide Mortgage Licensing System
and Registry in accordance with the S.A.F.E. Mortgage Licensing
Act.
(c) Nothing in this section precludes any education course
approved in accordance with the S.A.F.E. Mortgage Licensing Act
from being provided by:
(1) an applicant's employer;
(2) an entity affiliated with the applicant by an
agency contract; or
(3) a subsidiary or affiliate of the employer or
entity.
(d) Education courses required under this section may be
offered in a classroom, online, or by any other means approved by
the Nationwide Mortgage Licensing System and Registry.
(e) An individual who has successfully completed
prelicensing education requirements approved by the Nationwide
Mortgage Licensing System and Registry for another state shall be
given credit toward completion of the prelicensing education
requirements of this section.
(f) An applicant who has previously held a residential
mortgage loan originator license that meets the requirements of
this chapter and other appropriate regulatory law, before being
issued a new original license, must demonstrate to the appropriate
regulatory official that the applicant has completed all continuing
education requirements for the calendar year in which the license
was last held by the applicant.
(g) If the appropriate federal regulators and the
Nationwide Mortgage Licensing System and Registry establish
additional educational requirements for licensed residential
mortgage loan originators, the rulemaking authority shall adopt
necessary rules to implement the changes to the educational
requirements of this section.
Sec. 180.057. TESTING REQUIREMENTS. (a) An applicant for a
residential mortgage loan originator license must pass a qualified,
written test that:
(1) meets the standards and requirements established
by the S.A.F.E. Mortgage Licensing Act;
(2) is developed by the Nationwide Mortgage Licensing
System and Registry; and
(3) is administered by a test provider in accordance
with the S.A.F.E. Mortgage Licensing Act.
(b) An individual may retake the test the number of times
and within the period prescribed by the S.A.F.E. Mortgage Licensing
Act.
(c) An individual who fails to maintain a residential
mortgage loan originator license for at least five consecutive
years must retake the test.
(d) This section does not prohibit a test provider approved
in accordance with the S.A.F.E. Mortgage Licensing Act from
providing a test at the location of:
(1) the license applicant's employer;
(2) a subsidiary or affiliate of the applicant's
employer; or
(3) an entity with which the applicant holds an
exclusive arrangement to conduct the business of a residential
mortgage loan originator.
Sec. 180.058. RECOVERY FUND FEE OR SURETY BOND REQUIREMENT.
(a) A regulatory official may not issue a residential mortgage loan
originator license unless the official determines that the
applicant meets the surety bond requirement or has paid a recovery
fund fee, as applicable, in accordance with the requirements of the
S.A.F.E. Mortgage Licensing Act.
(b) Each regulatory official shall adopt rules requiring an
individual licensed as a residential mortgage loan originator to
obtain a surety bond or pay a recovery fund fee as the official
determines appropriate to comply with the S.A.F.E. Mortgage
Licensing Act.
Sec. 180.059. STANDARDS FOR LICENSE RENEWAL. A license to
act as a residential mortgage loan originator may be renewed on or
before its expiration date if the license holder:
(1) continues to meet the minimum requirements for
license issuance;
(2) pays all required fees for the renewal of the
license; and
(3) provides satisfactory evidence that the license
holder has completed the continuing education requirements of
Section 180.060.
Sec. 180.060. CONTINUING EDUCATION COURSES. (a) To renew a
residential mortgage loan originator license, a license holder must
annually complete the minimum number of hours and type of
continuing education courses required by the S.A.F.E. Mortgage
Licensing Act, the minimum requirements established by the
Nationwide Mortgage Licensing System and Registry, and any
additional requirements established by the regulatory official.
(b) Continuing education courses, including the course
provider, must be reviewed and approved by the Nationwide Mortgage
Licensing System and Registry as required by the S.A.F.E. Mortgage
Licensing Act. Course credit must be granted in accordance with
that Act.
(c) Nothing in this section precludes any continuing
education course approved in accordance with the S.A.F.E. Mortgage
Licensing Act from being provided by:
(1) the employer of the license holder;
(2) an entity affiliated with the license holder by an
agency contract; or
(3) a subsidiary or affiliate of the employer or
entity.
(d) A person who successfully completes continuing
education requirements approved by the Nationwide Mortgage
Licensing System and Registry for another state shall be given
credit toward completion of the continuing education requirements
of this section.
Sec. 180.061. RULEMAKING AUTHORITY. A rulemaking authority
may adopt rules establishing requirements as necessary for:
(1) conducting background checks by obtaining:
(A) criminal history information through
fingerprint or other databases;
(B) civil administrative records;
(C) credit history information; or
(D) any other information considered necessary
by the Nationwide Mortgage Licensing System and Registry;
(2) payment of fees to apply for or renew licenses
through the Nationwide Mortgage Licensing System and Registry;
(3) setting or resetting, as necessary, license
renewal dates or reporting periods;
(4) amending or surrendering a license or any other
activity a regulatory official considers necessary for
participation in the Nationwide Mortgage Licensing System and
Registry; and
(5) investigation and examination authority for
purposes of investigating a violation or complaint arising under
this chapter or for purposes of examining, reviewing, or
investigating any license holder or individual subject to this
chapter.
Sec. 180.062. CONFIDENTIALITY OF INFORMATION. (a) Except
as otherwise provided by this section, a requirement under federal
or state law regarding the privacy or confidentiality of
information or material provided to the Nationwide Mortgage
Licensing System and Registry, and a privilege arising under
federal or state law, or under the rules of a federal or state
court, continue to apply to the information or material after the
disclosure of the information or material to the Nationwide
Mortgage Licensing System and Registry. The information and
material may be shared with federal and state regulatory officials
with mortgage industry oversight authority without the loss of any
privilege or confidentiality protections afforded by federal or
state laws.
(b) Information or material subject to a privilege or
confidential under Subsection (a) may not be subject to:
(1) disclosure under any federal or state law
governing the disclosure to the public of information held by an
officer or an agency of the federal government or this state; or
(2) subpoena, discovery, or admission into evidence in
a private civil action or administrative proceeding.
(c) A person who is the subject of information or material
in the Nationwide Mortgage Licensing System and Registry may waive,
wholly or partly, any privilege held by the Nationwide Mortgage
Licensing System and Registry with respect to the information or
material.
(d) A regulatory official may enter into an agreement or
sharing arrangement with another governmental agency, the
Conference of State Bank Supervisors, the American Association of
Residential Mortgage Regulators, or other associations
representing appropriate governmental agencies as established by
rule of the rulemaking authority or order issued by the regulatory
official. A protection provided by Subsection (a) also applies to
information and material shared under an agreement or sharing
arrangement entered into under this subsection.
(e) To the extent of a conflict between Subsection (a) and
Chapter 552, Government Code, or another state law relating to the
disclosure of confidential information or information or material
described by Subsection (a), Subsection (a) controls to the extent
Chapter 552, Government Code, or the other law provides less
confidentiality or a weaker privilege than is provided by
Subsection (a).
(f) This section does not apply to information or material
relating to the employment history of, and publicly adjudicated
disciplinary and enforcement actions against, a residential
mortgage loan originator that is included in the Nationwide
Mortgage Licensing System and Registry for access by the public.
[Sections 180.063-180.100 reserved for expansion]
SUBCHAPTER C. REPORTING AND OTHER REQUIREMENTS REGARDING
NATIONWIDE MORTGAGE LICENSING SYSTEM AND REGISTRY
Sec. 180.101. MORTGAGE CALL REPORTS. Each licensed
residential mortgage loan originator shall submit to the Nationwide
Mortgage Licensing System and Registry a report of condition that
is in the form and contains the information required by the
Nationwide Mortgage Licensing System and Registry.
Sec. 180.102. REPORT OF VIOLATIONS AND ENFORCEMENT ACTIONS.
Subject to the confidentiality provisions of this chapter, a
regulatory official shall report to the Nationwide Mortgage
Licensing System and Registry on a regular basis regarding
violations of, enforcement actions under, or information relevant
to this chapter or the S.A.F.E. Mortgage Licensing Act under the
regulatory official's licensure, regulation, or examination of a
licensed residential mortgage loan originator or person registered
under the S.A.F.E. Mortgage Licensing Act.
Sec. 180.103. INFORMATION CHALLENGE PROCESS. The
applicable rulemaking authority by rule shall establish a process
by which licensed residential mortgage loan originators may dispute
information submitted by the regulatory official to the Nationwide
Mortgage Licensing System and Registry.
[Sections 180.104-180.150 reserved for expansion]
SUBCHAPTER D. BUSINESS PRACTICES; PROHIBITED ACTS
Sec. 180.151. DISPLAY OF UNIQUE IDENTIFIER. The unique
identifier of a person originating a residential mortgage loan must
be clearly shown on each residential mortgage loan application
form, solicitation, or advertisement, including business cards and
websites, and any other document required by rule of the rulemaking
authority.
Sec. 180.152. REPRESENTATIONS. An individual who is
engaged exclusively in loan processor or underwriter activities may
not represent to the public, through the use of advertising,
business cards, stationery, brochures, signs, rate lists, or other
means, that the individual can or will perform any of the activities
of a residential mortgage loan originator unless the individual is
licensed as a residential mortgage loan originator.
Sec. 180.153. PROHIBITED ACTS AND PRACTICES. An individual
or other person subject to regulation under this chapter may not:
(1) employ, directly or indirectly, a scheme, device,
or artifice to defraud or mislead borrowers or lenders or to defraud
a person;
(2) engage in an unfair or deceptive practice toward a
person;
(3) obtain property by fraud or misrepresentation;
(4) solicit or enter into a contract with a borrower
that provides in substance that the individual or other person
subject to this chapter may earn a fee or commission through "best
efforts" to obtain a loan even though no loan was actually obtained
for the borrower;
(5) solicit, advertise, or enter into a contract for
specific interest rates, points, or other financing terms unless
the terms are actually available at the time of soliciting,
advertising, or contracting;
(6) conduct any business regulated by this chapter
without holding a license as required by this chapter;
(7) assist, aid, or abet an individual in the conduct
of business without a license required by this chapter;
(8) fail to make disclosures as required by this
chapter and any other applicable state or federal law, including
rules or regulations under applicable state or federal law;
(9) fail to comply with this chapter or rules adopted
under this chapter;
(10) fail to comply with any other state or federal
law, including rules or regulations adopted under that law,
applicable to a business or activity regulated by this chapter;
(11) make, in any manner, a false or deceptive
statement or representation;
(12) negligently make a false statement or knowingly
or wilfully make an omission of material fact in connection with:
(A) information or a report filed with a
governmental agency or the Nationwide Mortgage Licensing System and
Registry; or
(B) an investigation conducted by the regulatory
official or another governmental agency;
(13) make a payment, threat, or promise, directly or
indirectly, to a person for purposes of influencing the person's
independent judgment in connection with a residential mortgage
loan, or make a payment, threat, or promise, directly or
indirectly, to an appraiser of property, for purposes of
influencing the appraiser's independent judgment with respect to
the property's value;
(14) collect, charge, attempt to collect or charge, or
use or propose an agreement purporting to collect or charge a fee
prohibited by this chapter;
(15) cause or require a borrower to obtain property
insurance coverage in an amount that exceeds the replacement cost
of the improvements as established by the property insurer; or
(16) fail to truthfully account for money belonging to
a party to a residential mortgage loan transaction.
[Sections 180.154-180.200 reserved for expansion]
SUBCHAPTER E. ENFORCEMENT PROVISIONS
Sec. 180.201. ENFORCEMENT AUTHORITY. To ensure the
effective supervision and enforcement of this chapter, a regulatory
official may:
(1) deny, suspend, revoke, condition, or decline to
renew a license for a violation of this chapter, a rule adopted
under this chapter, or an order or directive issued under this
chapter;
(2) deny, suspend, revoke, condition, or decline to
renew a license if an applicant or license holder:
(A) fails to meet the requirements of Subchapter
B; or
(B) withholds information or makes a material
misstatement in an application for a license or renewal of a
license;
(3) order restitution against a person subject to
regulation under this chapter for a violation of this chapter;
(4) impose an administrative penalty on a person
subject to regulation under this chapter, subject to Section
180.202; or
(5) issue orders or directives as provided by Section
180.203.
Sec. 180.202. ADMINISTRATIVE PENALTY. (a) A regulatory
official may impose an administrative penalty on a residential
mortgage loan originator or other person subject to regulation
under this chapter, if the official, after notice and opportunity
for hearing, determines that the residential mortgage loan
originator or other person subject to regulation under this chapter
has violated or failed to comply with:
(1) this chapter;
(2) a rule adopted under this chapter; or
(3) an order issued under this chapter.
(b) The penalty may not exceed $25,000 for each violation.
(c) The amount of the penalty shall be based on:
(1) the seriousness of the violation, including the
nature, circumstances, extent, and gravity of the violation;
(2) the economic harm to property caused by the
violation;
(3) the history of previous violations;
(4) the amount necessary to deter a future violation;
(5) efforts to correct the violation; and
(6) any other matter that justice may require.
Sec. 180.203. CEASE AND DESIST ORDERS. A regulatory
official may:
(1) order or direct a person subject to regulation
under this chapter to cease and desist from conducting business,
including issuing an immediate temporary order to cease and desist
from conducting business;
(2) order or direct a person subject to regulation
under this chapter to cease a violation of this chapter or a harmful
activity in violation of this chapter, including issuing an
immediate temporary order to cease and desist;
(3) enter immediate temporary orders against a person
subject to regulation under this chapter to cease engaging in
business under a license if the regulatory official determines that
the license was erroneously granted or the license holder is in
violation of this chapter; and
(4) order or direct other affirmative action as the
regulatory official considers necessary.
[Sections 180.204-180.250 reserved for expansion]
SUBCHAPTER F. DUTIES OF REGULATORY OFFICIALS
Sec. 180.251. GENERAL DUTIES OF REGULATORY OFFICIALS. (a)
Except as provided by Subsection (b), the savings and mortgage
lending commissioner shall administer and enforce this chapter with
respect to individuals licensed under Chapter 156 or 157.
(b) The credit union commissioner shall:
(1) examine, inspect, or investigate employees of
credit union subsidiary organizations who are licensed to act as
residential mortgage loan originators under Chapter 156; and
(2) enforce compliance by employees of credit union
subsidiary organizations described by Subdivision (1) with the
applicable requirements of Chapter 156 and this chapter and any
applicable rules adopted under Section 15.4024.
(c) The consumer credit commissioner shall administer and
enforce this chapter with respect to individuals licensed under
Chapter 342, 347, 348, or 351.
(d) To the extent permitted or required by this chapter and
as reasonably necessary for the implementation and enforcement of
the S.A.F.E. Mortgage Licensing Act, the banking commissioner of
Texas may administer and enforce this chapter with respect to a
person otherwise under the commissioner's jurisdiction under
Subtitle A, F, or G of this title.
Sec. 180.252. AUTHORITY OF REGULATORY OFFICIALS TO
ESTABLISH RELATIONSHIP WITH NATIONWIDE MORTGAGE LICENSING SYSTEM
AND REGISTRY; CONTRACTING AUTHORITY. To fulfill the purposes of
this chapter, a regulatory official may establish a relationship
with or contract with the Nationwide Mortgage Licensing System and
Registry or an entity designated by the Nationwide Mortgage
Licensing System and Registry to collect and maintain records and
process transaction fees or other fees related to licensed
residential mortgage loan originators or other persons subject to
regulation under this chapter.
SECTION 2. Section 14.107(b), Finance Code, is amended to
read as follows:
(b) The finance commission by rule shall set the fees for
licensing and examination under Chapter 342, 347, 348, 351, or 371
at amounts or rates necessary to recover the costs of administering
those chapters. The rules may provide that the amount of a fee
charged to a license holder is based on the volume of the license
holder's regulated business and other key factors. The
commissioner may provide for collection of a single annual fee from
a person licensed under Chapter 342, 347, 348, 351, or 371 to
include amounts due for both licensing and examination.
SECTION 3. Subchapter E, Chapter 15, Finance Code, is
amended by adding Section 15.4024 to read as follows:
Sec. 15.4024. RULES RELATING TO CERTAIN EMPLOYEES OF CREDIT
UNION SUBSIDIARY ORGANIZATIONS. (a) In this section, "credit union
subsidiary organization" has the meaning assigned by Section
180.002.
(b) The commission may adopt and enforce rules necessary for
the commissioner to:
(1) examine, inspect, or investigate employees of
credit union subsidiary organizations who are licensed to act as
residential mortgage loan originators under Chapter 156; and
(2) enforce compliance by employees of credit union
subsidiary organizations described by Subdivision (1) with the
applicable requirements of Chapters 156 and 180.
SECTION 4. Section 156.101, Finance Code, is amended by
amending Subsection (a) and adding Subsections (a-1) and (a-2) to
read as follows:
(a) Except as provided by Subsection (a-2), the [The]
commissioner shall administer this chapter.
(a-1) The commissioner shall perform all duties relating to
the issuance and renewal of licenses under Section 156.2015 for
employees of credit union subsidiary organizations who act as
residential mortgage loan originators.
(a-2) The credit union commissioner is responsible for:
(1) the examination, inspection, or investigation of
employees of credit union subsidiary organizations who are licensed
to act as residential mortgage loan originators under this chapter;
and
(2) the enforcement of compliance by employees of
credit union subsidiary organizations described by Subdivision (1)
with the applicable requirements of this chapter and Chapter 180.
SECTION 5. Section 156.102(a), Finance Code, is amended to
read as follows:
(a) The finance commission may adopt and enforce rules
necessary for the intent of or to ensure compliance with this
chapter, except as provided by Section 15.4024 with respect to
employees of credit union subsidiary organizations subject to
regulation under Section 156.2015.
SECTION 6. Subchapter C, Chapter 156, Finance Code, is
amended by adding Section 156.2015 to read as follows:
Sec. 156.2015. RESIDENTIAL MORTGAGE LOAN ORIGINATION
ACTIVITIES. (a) In this section, "credit union subsidiary
organization," "Nationwide Mortgage Licensing System and
Registry," and "residential mortgage loan originator" have the
meanings assigned by Section 180.002.
(b) An individual required to be licensed under this chapter
may not act as a residential mortgage loan originator unless:
(1) the individual's license under this chapter
otherwise authorizes the individual to act as a residential
mortgage loan originator;
(2) the individual is enrolled with the Nationwide
Mortgage Licensing System and Registry as required by Section
180.052; and
(3) the individual complies with other applicable
requirements of Chapter 180 and rules adopted under that chapter.
(c) An employee of a credit union subsidiary organization
may not act as a residential mortgage loan originator unless the
employee:
(1) is licensed under this chapter;
(2) is enrolled with the Nationwide Mortgage Licensing
System and Registry as required by Section 180.052; and
(3) complies with other applicable requirements of
Chapter 180 and rules adopted under that chapter.
(d) The finance commission by rule may waive or modify,
wholly or partly, any requirement of this chapter and establish new
requirements as reasonably necessary to enable the commissioner to
participate in and individuals to register through the Nationwide
Mortgage Licensing System and Registry for purposes of this section
and Chapter 180.
SECTION 7. Sections 156.214(b) and (f), Finance Code, as
added by Chapter 228 (H.B. 1716), Acts of the 80th Legislature,
Regular Session, 2007, are amended to read as follows:
(b) To be eligible to register as a registered financial
services company, a person must:
(1) be a depository institution exempt from this
chapter under Section 156.202(1)(A) or (B) and chartered and
regulated by the Office of Thrift Supervision or the Office of the
Comptroller of the Currency, or be a subsidiary [or affiliate] of
the institution;
(2) provide the commissioner with satisfactory
evidence of an undertaking of accountability in a form acceptable
to the commissioner, supported by a surety bond equal to $1 million
to cover the person's responsibility for mortgage broker activities
of each exclusive agent;
(3) provide a business plan satisfactory to the
commissioner that sets forth the person's plan to provide education
to its exclusive agents, handle consumer complaints relating to its
exclusive agents, and supervise the mortgage origination [broker]
activities of its exclusive agents;
(4) pay an annual registration fee of the lesser of:
(A) one-half of the license fee for a loan
officer under Section 156.203(c)(1), multiplied by the number of
exclusive agents under contract to act for the person in this state;
or
(B) $200,000; and
(5) designate an officer of the person to be
responsible for the activities of the exclusive agents.
(f) Prior to permitting an exclusive agent to solicit,
process, negotiate, or place a mortgage loan, the registered
financial services company shall submit to the commissioner such
information as the commissioner may require relating to the
exclusive agent, and the exclusive agent must have enrolled with
the Nationwide Mortgage Licensing System and Registry as a
registered residential mortgage loan originator and provided to the
commissioner the exclusive agent's unique identifier. In this
subsection, "Nationwide Mortgage Licensing System and Registry,"
"residential mortgage loan originator," and "unique identifier"
have the meanings assigned by Section 180.002 [person together with
a fingerprint imprint of the person. The commissioner shall obtain
criminal history record information as provided in Section
156.206(b). The commissioner may assess a fee in an amount
determined by the finance commission to cover the cost of the
criminal background check. This section does not apply to a person
who is licensed as a mortgage broker or loan officer under Chapter
156 at the time he becomes an exclusive agent of a registered
financial services company].
SECTION 8. Chapter 157, Finance Code, is amended by adding
Section 157.0035 to read as follows:
Sec. 157.0035. RESIDENTIAL MORTGAGE LOAN ORIGINATION
ACTIVITIES. (a) In this section, "Nationwide Mortgage Licensing
System and Registry" and "residential mortgage loan originator"
have the meanings assigned by Section 180.002.
(b) An individual originating a residential mortgage loan
on behalf of an entity subject to regulation under this chapter may
not act as a residential mortgage loan originator unless the
individual:
(1) is licensed and enrolled with the Nationwide
Mortgage Licensing System and Registry as required by Section
180.052; and
(2) complies with other applicable requirements of
Chapter 180 and rules adopted by the finance commission under that
chapter.
(c) The finance commission by rule may waive or modify,
wholly or partly, any requirement of this chapter and may establish
new requirements as reasonably necessary to enable the commissioner
to participate in and individuals to enroll with the Nationwide
Mortgage Licensing System and Registry for purposes of this section
and Chapter 180.
SECTION 9. Chapter 341, Finance Code, is amended by adding
Subchapter G to read as follows:
SUBCHAPTER G. STATE-LICENSED RESIDENTIAL MORTGAGE LOAN
ORIGINATOR RECOVERY FUND
Sec. 341.601. DEFINITION. In this subchapter, "fund" means
the state-licensed residential mortgage loan originator recovery
fund.
Sec. 341.602. STATE-LICENSED RESIDENTIAL MORTGAGE LOAN
ORIGINATOR RECOVERY FUND. (a) The commissioner under Chapter 180
shall establish, administer, and maintain a state-licensed
residential mortgage loan originator recovery fund as provided by
this subchapter. The amounts received by the commissioner for
deposit in the fund shall be held by the commissioner in trust for
carrying out the purposes of the fund.
(b) Subject to this subsection, the fund shall be used to
reimburse residential mortgage loan applicants for actual damages
incurred because of acts committed by a state-licensed residential
mortgage loan originator who was licensed under Chapter 342, 347,
348, or 351 when the act was committed. The use of the fund is
limited to reimbursement for out-of-pocket losses caused by an act
that constitutes a violation of Chapter 180 or this subtitle.
Payments from the fund may not be made to a lender who makes a
residential mortgage loan originated by the state-licensed
residential mortgage loan originator or who acquires a residential
mortgage loan originated by the state-licensed residential
mortgage loan originator.
(c) The fund may be used at the discretion of the
commissioner to reimburse expenses incurred to secure and destroy
residential mortgage loan documents that have been abandoned by a
current or former state-licensed residential mortgage loan
originator under the regulatory authority of the agency.
(d) Payments from the fund shall be reduced by the amount of
any recovery from the state-licensed residential mortgage loan
originator or from any surety, insurer, or other person or entity
making restitution to the applicant on behalf of the originator.
(e) The commissioner, as manager of the fund, is entitled to
reimbursement for reasonable and necessary costs and expenses
incurred in the management of the fund, including costs and
expenses incurred with regard to applications filed under Section
341.605.
(f) Amounts in the fund may be invested and reinvested in
the same manner as funds of the Employees Retirement System of
Texas, and the interest from those investments shall be deposited
to the credit of the fund. An investment may not be made under this
subsection if the investment will impair the necessary liquidity
required to satisfy payment of judgments awarded under this
subchapter.
Sec. 341.603. FUNDING. (a) An applicant for an original
residential mortgage loan originator license issued under Chapter
342, 347, 348, or 351 or for renewal of a residential mortgage loan
originator license issued under Chapter 342, 347, 348, or 351
shall, in addition to paying the original application fee or
renewal fee, pay a fee in an amount determined by the commissioner.
The fee shall be deposited in the fund.
(b) If the balance remaining in the fund at the end of a
calendar year is more than $2.5 million, the amount of money in
excess of that amount shall be available to the commissioner to
offset the expenses of participating in and sharing information
with the Nationwide Mortgage Licensing System and Registry in
accordance with Chapter 180.
Sec. 341.604. STATUTE OF LIMITATIONS. (a) An application
for the recovery of actual damages from the fund under Section
341.605 may not be filed after the second anniversary of the date of
the alleged act or omission causing the actual damages or the date
the act or omission should reasonably have been discovered.
(b) This section does not apply to a subrogation claim
brought by the commissioner for recovery of money paid out of the
fund.
Sec. 341.605. PROCEDURE FOR RECOVERY. (a) To recover from
the fund, a residential mortgage loan applicant must file a written
sworn application with the commissioner in the form prescribed by
the commissioner. A person who knowingly makes a false statement in
connection with applying for money out of the fund may be subject to
criminal prosecution under Section 37.10, Penal Code.
(b) The residential mortgage loan applicant is required to
show:
(1) that the applicant's claim is based on facts
allowing recovery under Section 341.602; and
(2) that the applicant:
(A) is not a spouse of the state-licensed
residential mortgage loan originator;
(B) is not a child, parent, grandchild,
grandparent, or sibling, including relationships by adoption, of
the state-licensed residential mortgage loan originator;
(C) is not a person sharing living quarters with
the state-licensed residential mortgage loan originator or a
current or former employer, employee, or associate of the
originator;
(D) is not a person who has aided, abetted, or
participated other than as a victim with the state-licensed
residential mortgage loan originator in any activity that is
illegal under this subtitle or Chapter 180 or is not the personal
representative of a state-licensed residential mortgage loan
originator; and
(E) is not licensed as a state-licensed
residential mortgage loan originator who is seeking to recover any
compensation in the transaction or transactions for which the
application for payment is made.
(c) On receipt of the verified application, the
commissioner's staff shall:
(1) notify each appropriate license holder and the
issuer of any surety bond issued in connection with their licenses;
and
(2) investigate the application and issue a
preliminary determination, giving the applicant, the license
holder, and any surety an opportunity to resolve the matter by
agreement or to dispute the preliminary determination.
(d) If the preliminary determination under Subsection
(c)(2) is not otherwise resolved by agreement and is not disputed by
written notice to the commissioner before the 31st day after the
notification date, the preliminary determination automatically
becomes final and the commissioner shall make payment from the
fund, subject to the limits of Section 341.606.
(e) If the preliminary determination under Subsection
(c)(2) is disputed by the applicant, license holder, or any surety
by written notice to the commissioner before the 31st day after the
notification date, the matter shall be set for a hearing governed by
Chapter 2001, Government Code, and the hearing rules of the finance
commission.
Sec. 341.606. RECOVERY LIMITS. (a) A person entitled to
receive payment out of the fund is entitled to receive
reimbursement of actual, out-of-pocket damages as provided by this
section.
(b) A payment from the fund may be made as provided by
Section 341.605 and this section. A payment for claims:
(1) arising out of the same transaction, including
interest, is limited in the aggregate to $25,000, regardless of the
number of claimants; and
(2) against a single person licensed as a residential
mortgage loan originator under Chapter 342, 347, 348, or 351 is
limited in the aggregate to $50,000 until the fund has been
reimbursed for all amounts paid.
(c) In the event there are concurrent claims under
Subsections (b)(1) and (2) that exceed the amounts available under
the fund, the commissioner shall prorate recovery based on the
amount of damage suffered by each claimant.
Sec. 341.607. REVOCATION OF LICENSE FOR PAYMENT FROM FUND.
(a) The commissioner may revoke a residential mortgage loan
originator license issued under this subtitle on proof that the
commissioner has made a payment from the fund of any amount toward
satisfaction of a claim against a state-licensed residential
mortgage loan originator under this subchapter.
(b) The commissioner may seek to collect from a
state-licensed residential mortgage loan originator the amount
paid from the fund on behalf of the originator and any costs
associated with investigating and processing the claim against the
fund or with collection of reimbursement for payments from the
fund, plus interest at the current legal rate until the amount has
been repaid in full. Any amount, including interest, recovered by
the commissioner shall be deposited to the credit of the fund.
(c) The commissioner may probate an order revoking a license
under this section.
(d) A state-licensed residential mortgage loan originator
on whose behalf payment was made from the fund is not eligible to
receive a new license until the originator has repaid in full, plus
interest at the current legal rate, the amount paid from the fund on
the originator's behalf and any costs associated with investigating
and processing the claim against the fund or with collection of
reimbursement from the fund.
(e) This section does not limit the authority of the
commissioner to take disciplinary action against a state-licensed
residential mortgage loan originator for a violation of the chapter
under which the license was issued or the rules adopted by the
finance commission under that chapter. The repayment in full to the
fund of all obligations of a state-licensed residential mortgage
loan originator does not nullify or modify the effect of any other
disciplinary proceeding.
Sec. 341.608. SUBROGATION. When the commissioner has paid
an applicant an amount from the fund under Section 341.605, the
commissioner is subrogated to all of the rights of the applicant to
the extent of the amount paid. The applicant shall assign the
applicant's right, title, and interest in any subsequent judgment
against the state-licensed residential mortgage loan originator up
to the amount paid by the commissioner. Any amount, including
interest, recovered by the commissioner on the assignment shall be
deposited to the credit of the fund.
Sec. 341.609. FAILURE TO COMPLY WITH SUBCHAPTER OR RULE
ADOPTED BY FINANCE COMMISSION. The failure of an applicant under
Section 341.605 to comply with a provision of this subchapter or a
rule adopted by the finance commission relating to the fund
constitutes a waiver of any rights under this subchapter.
Sec. 341.610. RULEMAKING. The finance commission may adopt
rules on the commissioner's recommendation to promote a fair and
orderly administration of the fund consistent with the purposes of
this subchapter.
SECTION 10. Subchapter B, Chapter 342, Finance Code, is
amended by adding Section 342.0515 to read as follows:
Sec. 342.0515. RESIDENTIAL MORTGAGE LOAN ORIGINATOR
ACTIVITIES. (a) In this section, "Nationwide Mortgage Licensing
System and Registry" and "residential mortgage loan originator"
have the meanings assigned by Section 180.002.
(b) Unless exempt under Section 180.003, an individual who
acts as a residential mortgage loan originator in the making,
transacting, or negotiating of a loan subject to this chapter must:
(1) be individually licensed to engage in that
activity under this chapter;
(2) be enrolled with the Nationwide Mortgage Licensing
System and Registry as required by Section 180.052; and
(3) comply with other applicable requirements of
Chapter 180 and rules adopted under that chapter.
(c) The finance commission shall adopt rules establishing
procedures for issuing, renewing, and enforcing an individual
license under this section. In adopting rules under this
subsection, the finance commission shall ensure that:
(1) the minimum eligibility requirements for issuance
of an individual license are the same as the requirements of Section
180.055;
(2) the minimum eligibility requirements for renewal
of an individual license are the same as the requirements of Section
180.059; and
(3) the applicant pays:
(A) an investigation fee in a reasonable amount
determined by the commissioner; and
(B) an annual license fee in an amount determined
as provided by Section 14.107.
(d) The finance commission by rule may waive or modify,
wholly or partly, any requirement of this chapter and establish new
requirements as reasonably necessary to enable the commissioner to
participate in the Nationwide Mortgage Licensing System and
Registry for purposes of this section and Chapter 180.
SECTION 11. Section 342.156, Finance Code, is amended to
read as follows:
Sec. 342.156. LICENSE SUSPENSION OR REVOCATION. After
notice and a hearing the commissioner may suspend or revoke a
license if the commissioner finds that:
(1) the license holder failed to pay the annual
license fee, an examination fee, an investigation fee, or another
charge imposed by the commissioner under this chapter;
(2) the license holder, knowingly or without the
exercise of due care, violated this chapter or a rule adopted or
order issued under this chapter; [or]
(3) a fact or condition exists that, if it had existed
or had been known to exist at the time of the original application
for the license, clearly would have justified the commissioner's
denial of the application; or
(4) the license holder has failed to ensure that an
individual acting as a residential mortgage loan originator, as
defined by Section 180.002, in the making, transacting, or
negotiating of a loan subject to this chapter is licensed under this
chapter in accordance with Section 342.0515.
SECTION 12. The heading to Subchapter J, Chapter 347,
Finance Code, is amended to read as follows:
SUBCHAPTER J. RIGHTS AND DUTIES OF CREDITOR AND RESIDENTIAL
MORTGAGE LOAN ORIGINATOR
SECTION 13. Section 347.451, Finance Code, is amended by
adding Subsection (b-1) to read as follows:
(b-1) A registered creditor that engages in the activity of
originating a residential mortgage loan must meet the surety bond
or recovery fund fee requirement, as applicable, of the creditor's
residential mortgage loan originator under Section 180.058.
SECTION 14. Subchapter J, Chapter 347, Finance Code, is
amended by adding Section 347.4515 to read as follows:
Sec. 347.4515. RESIDENTIAL MORTGAGE LOAN ORIGINATOR
LICENSE REQUIRED. (a) In this section, "Nationwide Mortgage
Licensing System and Registry" and "residential mortgage loan
originator" have the meanings assigned by Section 180.002.
(b) Unless exempt under Section 180.003, an individual who
acts as a residential mortgage loan originator in the making,
transacting, or negotiating of an extension of credit subject to
this chapter must:
(1) be individually licensed to engage in that
activity under this chapter;
(2) be enrolled with the Nationwide Mortgage Licensing
System and Registry as required by Section 180.052; and
(3) comply with other applicable requirements of
Chapter 180 and rules adopted under that chapter.
(c) The finance commission shall adopt rules establishing
procedures for issuing, renewing, and enforcing an individual
license under this section. In adopting rules under this
subsection, the finance commission shall ensure that:
(1) the minimum eligibility requirements for issuance
of an individual license are the same as the requirements of Section
180.055;
(2) the minimum eligibility requirements for renewal
of an individual license are the same as the requirements of Section
180.059; and
(3) the applicant pays:
(A) an investigation fee in a reasonable amount
determined by the commissioner; and
(B) an annual license fee in an amount determined
as provided by Section 14.107.
(d) The finance commission by rule may waive or modify,
wholly or partly, any requirement of this chapter and establish new
requirements as reasonably necessary to enable the commissioner to
participate in the Nationwide Mortgage Licensing System and
Registry for purposes of this section and Chapter 180.
SECTION 15. Section 348.501, Finance Code, is amended by
adding Subsection (c) to read as follows:
(c) A license holder under this chapter who engages in the
sale of a motor vehicle to be used as a principal dwelling must meet
the surety bond or recovery fund fee requirements, as applicable,
of the holder's residential mortgage loan originator under Section
180.058.
SECTION 16. Subchapter F, Chapter 348, Finance Code, is
amended by adding Section 348.5015 to read as follows:
Sec. 348.5015. RESIDENTIAL MORTGAGE LOAN ORIGINATOR
LICENSE REQUIRED. (a) In this section, "Nationwide Mortgage
Licensing System and Registry" and "residential mortgage loan
originator" have the meanings assigned by Section 180.002.
(b) Unless exempt under Section 180.003, an individual who
acts as a residential mortgage loan originator in the sale of a
motor vehicle to be used as a principal dwelling must:
(1) be licensed to engage in that activity under this
chapter;
(2) be enrolled with the Nationwide Mortgage Licensing
System and Registry as required by Section 180.052; and
(3) comply with other applicable requirements of
Chapter 180 and rules adopted under that chapter.
(c) The finance commission shall adopt rules establishing
procedures for applying for issuing, renewing, and enforcing a
license under this section. In adopting rules under this
subsection, the finance commission shall ensure that:
(1) the minimum eligibility requirements for issuance
of a license are the same as the requirements of Section 180.055;
(2) the minimum eligibility requirements for renewal
of a license are the same as the requirements of Section 180.059;
and
(3) the applicant pays:
(A) an investigation fee in a reasonable amount
determined by the commissioner; and
(B) an annual license fee in an amount determined
as provided by Section 14.107.
(d) The finance commission by rule may waive or modify,
wholly or partly, any requirement of this chapter and establish new
requirements as reasonably necessary to enable the commissioner to
participate in the Nationwide Mortgage Licensing System and
Registry for purposes of this section and Chapter 180.
SECTION 17. Subchapter B, Chapter 351, Finance Code, as
added by Chapter 1220 (H.B. 2138), Acts of the 80th Legislature,
Regular Session, 2007, is amended by adding Section 351.0515 to
read as follows:
Sec. 351.0515. RESIDENTIAL MORTGAGE LOAN ORIGINATOR
LICENSE REQUIRED. (a) In this section, "Nationwide Mortgage
Licensing System and Registry" and "residential mortgage loan
originator" have the meanings assigned by Section 180.002.
(b) Unless exempt under Section 180.003, an individual who
acts as a residential mortgage loan originator in the making,
transacting, or negotiating of a property tax loan for a principal
dwelling must:
(1) be individually licensed to engage in that
activity under this chapter;
(2) be enrolled with the Nationwide Mortgage Licensing
System and Registry as required by Section 180.052; and
(3) comply with other applicable requirements of
Chapter 180 and rules adopted under that chapter.
(c) The finance commission shall adopt rules establishing
procedures for issuing, renewing, and enforcing an individual
license under this section. In adopting rules under this
subsection, the finance commission shall ensure that:
(1) the minimum eligibility requirements for issuance
of an individual license are the same as the requirements of Section
180.055;
(2) the minimum eligibility requirements for renewal
of an individual license are the same as the requirements of Section
180.059; and
(3) the applicant pays:
(A) an investigation fee in a reasonable amount
determined by the commissioner; and
(B) an annual license fee in an amount determined
as provided by Section 14.107.
(d) The finance commission by rule may waive or modify,
wholly or partly, any requirement of this chapter and establish new
requirements as reasonably necessary to enable the commissioner to
participate in the Nationwide Mortgage Licensing System and
Registry for purposes of this section and Chapter 180.
SECTION 18. Section 351.102, Finance Code, as added by
Chapter 1220 (H.B. 2138), Acts of the 80th Legislature, Regular
Session, 2007, is amended by adding Subsection (e) to read as
follows:
(e) A license holder engaged in the business of making,
transacting, or negotiating a property tax loan for a principal
dwelling must meet the surety bond or recovery fund fee
requirement, as applicable, of the holder's residential mortgage
loan originator under Section 180.058.
SECTION 19. Section 351.156, Finance Code, as added by
Chapter 1220 (H.B. 2138), Acts of the 80th Legislature, Regular
Session, 2007, is amended to read as follows:
Sec. 351.156. LICENSE SUSPENSION OR REVOCATION. After
notice and a hearing the commissioner may suspend or revoke a
license if the commissioner finds that:
(1) the license holder failed to pay the annual
license fee, an examination fee, an investigation fee, or another
charge imposed by the commissioner under this chapter;
(2) the license holder, knowingly or without the
exercise of due care, violated this chapter or Section 32.06 or
32.065, Tax Code, or a rule adopted or an order issued under this
chapter or Section 32.06 or 32.065, Tax Code; [or]
(3) a fact or condition exists that, if it had existed
or had been known to exist at the time of the original application
for the license, clearly would have justified the commissioner's
denial of the application; or
(4) the license holder has failed to ensure that an
individual acting as a residential mortgage loan originator, as
defined by Section 180.002, in the making, transacting, or
negotiating of a property tax loan for a principal dwelling is
licensed under this chapter in accordance with Section 351.0515.
SECTION 20. Section 411.095, Government Code, is amended to
read as follows:
Sec. 411.095. ACCESS TO CRIMINAL HISTORY RECORD
INFORMATION: CONSUMER CREDIT COMMISSIONER. [(a)] The consumer
credit commissioner is entitled to obtain from the department
criminal history record information that relates to a person who is
an applicant for or holder of a license under Chapter 342, 347, 348,
351, or 371, Finance Code.
SECTION 21. For purposes of implementing an orderly and
efficient process for licensing and registering residential
mortgage loan originators that meets the requirements of the
federal Secure and Fair Enforcement for Mortgage Licensing Act of
2008 (Pub. L. No. 110-289), Chapter 180, Finance Code, as added by
this Act, Section 15.4024, Finance Code, as added by this Act, and
Chapters 156, 157, 342, 347, 348, and 351, Finance Code, as amended
by this Act, the Finance Commission of Texas, as soon as practicable
after the effective date of this Act, may adopt rules and establish
interim procedures for licensing individuals engaging in or
conducting the business of a residential mortgage loan originator
in this state and for the approval or denial of applications for
licenses authorizing individuals to engage in business as a
residential mortgage loan originator. For individuals authorized
by state law to engage in residential mortgage loan origination
activities immediately before the effective date of this Act, the
Finance Commission of Texas may establish expedited review and
licensing procedures.
SECTION 22. (a) In this section, "Nationwide Mortgage
Licensing System and Registry," "regulatory official,"
"residential mortgage loan originator," and "unique identifier"
have the meanings assigned by Section 180.002, Finance Code, as
added by this Act.
(b) On application by a person for a license, registration,
and unique identifier as a residential mortgage loan originator
with the Nationwide Mortgage Licensing System and Registry, the
regulatory official may determine that the applicant meets the
prelicensing education courses and written test requirements of
Sections 180.056 and 180.057, Finance Code, as added by this Act, if
the applicant, on the effective date of this Act, is acting as a
state-licensed residential mortgage loan originator in this state
under Chapter 156, Finance Code. The applicant must be in good
standing with the regulatory official to obtain an exemption under
this subsection.
(c) The regulatory official may determine an exemption
under Subsection (b) of this section by rule of the Finance
Commission of Texas.
(d) This section does not grant a residential mortgage loan
originator a waiver from the continuing education requirements
prescribed by the regulatory official and the federal Secure and
Fair Enforcement for Mortgage Licensing Act of 2008 (Pub. L. No.
110-289).
SECTION 23. (a) Except as provided by Subsection (b) of
this section, an individual is not required to comply with Chapter
180, Finance Code, as added by this Act, and Chapters 156, 157, 342,
347, 348, and 351, Finance Code, as amended by this Act, until the
later of:
(1) July 31, 2010; or
(2) a subsequent date that is approved by the
secretary of the United States Department of Housing and Urban
Development under the authority granted under the federal Secure
and Fair Enforcement for Mortgage Licensing Act of 2008 (Pub. L. No.
110-289).
(b) An individual authorized to engage in residential
mortgage loan origination activities in this state as of July 31,
2009, is not required to comply with Chapter 180, Finance Code, as
added by this Act, and Chapters 156, 157, 342, 347, 348, and 351,
Finance Code, as amended by this Act, until the later of:
(1) July 31, 2011; or
(2) a subsequent date approved by the secretary of the
United States Department of Housing and Urban Development under the
authority granted under the federal Secure and Fair Enforcement for
Mortgage Licensing Act of 2008 (Pub. L. No. 110-289).
SECTION 24. This Act takes effect immediately if it
receives a vote of two-thirds of all the members elected to each
house, as provided by Section 39, Article III, Texas Constitution.
If this Act does not receive the vote necessary for immediate
effect, this Act takes effect September 1, 2009.