Texas 2017 - 85th Regular

Texas House Bill HB3367 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1		-	~~85R19328~~ TSR-F
	1	+	85R5936 TSR-F
2	2		By: Burrows H.B. No. 3367
3		-	Substitute the following for H.B. No. 3367:
4		-	By: Stephenson C.S.H.B. No. 3367
5	3
6	4
7	5		A BILL TO BE ENTITLED
8	6		AN ACT
9	7		relating to savings and loan associations, savings banks,
10	8		residential mortgage loan originators and servicers, and other
11	9		persons or entities under the regulatory jurisdiction of the
12	10		Department of Savings and Mortgage Lending and the savings and
13		-	mortgage lending commissioner; creating an offense; imposing an
14		-	administrative penalty.
	11	+	mortgage lending commissioner; creating an offense.
15	12		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
16	13		SECTION 1. Sections 62.001(a), (b), and (d), Finance Code,
17	14		are amended to read as follows:
18	15		(a) Five or more residents of this state may apply to form
19	16		and incorporate an association by submitting to the commissioner an
20	17		application and the filing fee.
21	18		(b) An application must contain:
22	19		(1) two copies of the association's certificate of
23	20		formation [articles of incorporation] identifying:
24	21		(A) the name of the association;
25	22		(B) the location of the principal office; and
26	23		(C) the names and addresses of the initial
27	24		directors;
28	25		(2) two copies of the association's bylaws;
29	26		(3) data sufficiently detailed and comprehensive to
30	27		enable the commissioner to make a determination under Section
31	28		62.007, including statements, exhibits, and maps;
32	29		(4) other information relating to the association and
33	30		its operation that the finance commission by rule requires; and
34	31		(5) financial information about each applicant,
35	32		incorporator, director, or shareholder that the finance commission
36	33		by rule requires.
37	34		(d) The certificate of formation [articles of
38	35		incorporation] and statements of fact shall be signed and sworn to.
39	36		SECTION 2. Section 62.002(a), Finance Code, is amended to
40	37		read as follows:
41	38		(a) A capital stock association's certificate of formation
42	39		[articles of incorporation] must include a statement of:
43	40		(1) the aggregate number of shares of common stock
44	41		that the association may issue;
45	42		(2) the par value of each share or that the shares are
46	43		without par value;
47	44		(3) whether the association may issue preferred stock;
48	45		(4) the amount of stock that has been subscribed and
49	46		will be paid for before the association begins business;
50	47		(5) the name and address of each subscriber and the
51	48		amount subscribed by each; and
52	49		(6) the amount of paid-in surplus with which the
53	50		association will begin business.
54	51		SECTION 3. Section 62.003, Finance Code, is amended to read
55	52		as follows:
56	53		Sec. 62.003. ADDITIONAL INCORPORATION REQUIREMENTS FOR
57	54		MUTUAL ASSOCIATION. (a) A mutual association's certificate of
58	55		formation [articles of incorporation] must include a statement of
59	56		the amount of savings liability of the association and the amount of
60	57		the expense fund with which the association will begin business.
61	58		(b) Before approving the certificate of formation
62	59		[articles of incorporation] of a mutual association, the
63	60		commissioner may require the association to have subscriptions for
64	61		an aggregate amount of savings accounts and an expense fund in an
65	62		aggregate amount that the commissioner, under rules of the finance
66	63		commission, finds is necessary for the successful operation of the
67	64		association.
68	65		SECTION 4. Sections 62.007(a) and (b), Finance Code, are
69	66		amended to read as follows:
70	67		(a) The commissioner may approve an application to
71	68		incorporate only if the commissioner finds that:
72	69		(1) the prerequisites to incorporation required by
73	70		this chapter are satisfied;
74	71		(2) the character, responsibility, and general
75	72		fitness of each person named in the certificate of formation
76	73		[articles of incorporation] command confidence and warrant belief
77	74		that:
78	75		(A) the business of the association will be
79	76		honestly and efficiently conducted in accordance with the intent
80	77		and purpose of this subtitle; and
81	78		(B) the association will have qualified
82	79		full-time management;
83	80		(3) there is a public need for the association;
84	81		(4) the volume of business in the community in which
85	82		the association will conduct its business indicates a profitable
86	83		operation is probable; and
87	84		(5) the operation of the association will not unduly
88	85		harm an existing association.
89	86		(b) On finding that the requirements of Subsection (a) are
90	87		fulfilled, the commissioner shall:
91	88		(1) enter an order approving the application and
92	89		stating the findings required by Subsection (a);
93	90		(2) issue under official seal a certificate of
94	91		incorporation;
95	92		(3) deliver a copy of the approved certificate of
96	93		formation [articles of incorporation] and bylaws to the
97	94		incorporators; and
98	95		(4) permanently retain a copy of the certificate of
99	96		formation [articles] and bylaws.
100	97		SECTION 5. The heading to Section 62.010, Finance Code, is
101	98		amended to read as follows:
102	99		Sec. 62.010. AMENDMENT OF CERTIFICATE OF FORMATION
103	100		[ARTICLES OF INCORPORATION] OR BYLAWS.
104	101		SECTION 6. Section 62.010(a), Finance Code, is amended to
105	102		read as follows:
106	103		(a) An association may amend its certificate of formation
107	104		[articles of incorporation] or bylaws by a resolution adopted by a
108	105		majority vote of those entitled to vote attending an annual meeting
109	106		or a special meeting called for that purpose.
110	107		SECTION 7. Section 62.011(a), Finance Code, is amended to
111	108		read as follows:
112	109		(a) Only with the prior approval of the commissioner may an
113	110		association:
114	111		(1) establish an office other than the principal
115	112		office stated in the association's certificate of formation
116	113		[articles of incorporation];
117	114		(2) move an office from its immediate vicinity; or
118	115		(3) change the association's name.
119	116		SECTION 8. Section 62.051, Finance Code, is amended to read
120	117		as follows:
121	118		Sec. 62.051. PURPOSE OF INCORPORATION. A person may apply
122	119		to form and incorporate an association for the purpose of:
123	120		(1) purchasing the assets, assuming the liabilities,
124	121		excluding liability to stockholders, and continuing the business of
125	122		an association the commissioner considers to be in an unsafe
126	123		condition; or
127	124		(2) acquiring an existing association by merger.
128	125		SECTION 9. Sections 62.053(a) and (e), Finance Code, are
129	126		amended to read as follows:
130	127		(a) The commissioner shall approve an application under
131	128		this subchapter if the commissioner finds that:
132	129		(1) the business of the association that is to be
133	130		reorganized or merged can be effectively continued under the
134	131		certificate of formation [articles of incorporation]; and
135	132		(2) the reorganization or merger is in the best
136	133		interest of the general public and the savers, depositors,
137	134		creditors, and shareholders of the association that is to be
138	135		reorganized or merged.
139	136		(e) In a merger, a shareholder of a capital stock
140	137		association has the same dissenter's rights as a shareholder of a
141	138		domestic business corporation under the Business Organizations
142	139		Code [Texas Business Corporation Act].
143	140		SECTION 10. Section 62.156(c), Finance Code, is amended to
144	141		read as follows:
145	142		(c) An association may retire or redeem preferred stock in
146	143		the manner provided by:
147	144		(1) the certificate of formation [articles of
148	145		incorporation]; or
149	146		(2) a resolution of the board establishing the rights
150	147		and preferences relating to the stock.
151	148		SECTION 11. Sections 62.157(a) and (c), Finance Code, are
152	149		amended to read as follows:
153	150		(a) The certificate of formation [articles of
154	151		incorporation] may:
155	152		(1) authorize that shares of preferred stock be
156	153		divided into and issued in series; and
157	154		(2) determine the rights and preferences of each
158	155		series or part of a series.
159	156		(c) The certificate of formation [articles of
160	157		incorporation] may authorize the board by resolution to divide
161	158		classes of preferred stock into series and to determine the rights
162	159		and preferences of the shares of each series. A copy of the
163	160		resolution must be submitted to the commissioner before the shares
164	161		may be issued. The commissioner shall file the resolution in the
165	162		commissioner's office if the resolution conforms to this subtitle.
166	163		After the resolution is filed, it is considered an amendment of the
167	164		association's certificate of formation [articles of
168	165		incorporation].
169		-	SECTION 12. Sections 62.252(b) and (c), Finance Code, are
170		-	amended to read as follows:
171		-	(b) The directors, or the managing officer, shall execute
172		-	[two copies of] the application required by Section 62.251.
173		-	(c) Each director, or the managing officer, [of the
174		-	association] shall sign and acknowledge the application [as a
175		-	subscriber] and the proposed bylaws [as an incorporator].
	166	+	SECTION 12. Section 62.252(b), Finance Code, is amended to
	167	+	read as follows:
	168	+	(b) The directors shall execute [two copies of] the
	169	+	application required by Section 62.251.
176	170		SECTION 13. Section 62.351(c), Finance Code, is amended to
177	171		read as follows:
178	172		(c) A shareholder of a capital stock association has the
179	173		same dissenter's rights as a shareholder of a domestic corporation
180	174		under the Business Organizations Code [Texas Business Corporation
181	175		Act].
182	176		SECTION 14. Section 62.405(c), Finance Code, is amended to
183	177		read as follows:
184	178		(c) A surviving association that is a domestic association
185	179		shall operate under:
186	180		(1) the certificate of formation [articles] and bylaws
187	181		of the merging or consolidating domestic association; and
188	182		(2) the laws applicable to a domestic association.
189	183		SECTION 15. Section 62.454(b), Finance Code, is amended to
190	184		read as follows:
191	185		(b) After the merger takes effect:
192	186		(1) a corporation that was merged ceases to exist;
193	187		(2) the association assumes the rights and obligations
194	188		of the corporation and owns the property of the association; and
195	189		(3) the association's certificate of formation is
196	190		[articles of incorporation are] considered amended to the extent
197	191		that a change is stated in the plan of merger.
198	192		SECTION 16. Section 66.002, Finance Code, is amended to
199	193		read as follows:
200	194		Sec. 66.002. ADOPTION OF RULES. The finance commission may
201	195		adopt rules relating to:
202	196		(1) the minimum amounts of capital stock and paid-in
203	197		surplus required for incorporation as a capital stock association;
204	198		(2) the minimum amounts of savings liability and
205	199		expense funds required for incorporation as a mutual association;
206	200		(3) the fees and procedures for processing, hearing,
207	201		and deciding applications filed with the commissioner or the
208	202		Department of Savings and Mortgage Lending under this subtitle;
209	203		(4) the books and records that an association is
210	204		required to keep and the location at which the books and records are
211	205		required to be maintained;
212	206		(5) the accounting principles and practices that an
213	207		association is required to observe;
214	208		(6) the conditions under which records may be copied
215	209		or reproduced for permanent storage before the original records are
216	210		destroyed;
217	211		(7) [the form, contents, and time of publication of
218	212		statements of condition;
219	213		[(8)] the form and contents of annual reports and
220	214		other reports that an association is required to prepare and
221	215		publish or file;
222	216		(8) [(9)] the manner in which assets, liabilities, and
223	217		transactions in general are to be described when entered in the
224	218		books of an association, so that the entry accurately describes the
225	219		subject matter of the entry; and
226	220		(9) [(10)] the conditions under which the
227	221		commissioner may require an asset to be charged off or reserves
228	222		established by transfer from surplus or paid-in capital because of
229	223		the depreciation of or overstated value of the asset.
230	224		SECTION 17. Section 66.101, Finance Code, is amended to
231	225		read as follows:
232	226		Sec. 66.101. INTERVENTION FOR VIOLATIONS AND UNSAFE AND
233	227		UNSOUND PRACTICES. The commissioner may intervene in the affairs
234	228		of an association if the association or a person who participates in
235	229		the affairs of the association or a subsidiary of the association:
236	230		(1) engages in or is about to engage in an unsafe and
237	231		unsound practice in conducting the affairs of the association; or
238	232		(2) violates or is about to violate:
239	233		(A) the certificate of formation [articles of
240	234		incorporation] or bylaws of the association;
241	235		(B) a law or supervisory order applicable to the
242	236		association; or
243	237		(C) a condition that the commissioner or the
244	238		finance commission has imposed on the association by written order
245	239		or agreement.
246	240		SECTION 18. Section 67.001(b), Finance Code, is amended to
247	241		read as follows:
248	242		(b) Subsection (a) does not prohibit activity that is not
249	243		considered to be transacting business in this state under Section
250	244		9.251, Business Organizations Code [Section B, Article 8.01, Texas
251	245		Business Corporation Act].
252	246		SECTION 19. Sections 92.051(a), (b), and (d), Finance Code,
253	247		are amended to read as follows:
254	248		(a) Five or more adult residents of this state may apply to
255	249		form and incorporate a savings bank by submitting to the
256	250		commissioner:
257	251		(1) an application to incorporate a savings bank that
258	252		is:
259	253		(A) in a form specified by the commissioner; and
260	254		(B) signed by each incorporator; and
261	255		(2) the filing fee.
262	256		(b) An application must contain:
263	257		(1) two copies of the savings bank's certificate of
264	258		formation [articles of incorporation] identifying:
265	259		(A) the name of the savings bank;
266	260		(B) the location of the principal office; and
267	261		(C) the names and addresses of the initial
268	262		directors;
269	263		(2) two copies of the savings bank's bylaws;
270	264		(3) data sufficiently detailed and comprehensive to
271	265		enable the commissioner to make findings under Section 92.058,
272	266		including statements, exhibits, and maps;
273	267		(4) other information relating to the savings bank and
274	268		its operation that the finance commission by rule requires; and
275	269		(5) financial information about each applicant,
276	270		incorporator, director, officer, or shareholder that the finance
277	271		commission by rule requires.
278	272		(d) The certificate of formation [articles of
279	273		incorporation] and statements of fact must be signed and sworn to.
280	274		SECTION 20. Section 92.052(a), Finance Code, is amended to
281	275		read as follows:
282	276		(a) A capital stock savings bank's certificate of formation
283	277		[articles of incorporation] must include a statement of:
284	278		(1) the aggregate number of shares of common stock
285	279		that the savings bank may issue;
286	280		(2) the par value of each share or that the shares are
287	281		without par value;
288	282		(3) whether the savings bank may issue preferred
289	283		stock;
290	284		(4) the amount of stock that has been subscribed and
291	285		will be paid for before the savings bank begins business;
292	286		(5) the name and address of each subscriber and the
293	287		amount subscribed by each; and
294	288		(6) the amount of paid-in surplus with which the
295	289		savings bank will begin business.
296	290		SECTION 21. Section 92.053, Finance Code, is amended to
297	291		read as follows:
298	292		Sec. 92.053. ADDITIONAL REQUIREMENTS FOR MUTUAL SAVINGS
299	293		BANK. (a) A mutual savings bank's certificate of formation
300	294		[articles of incorporation] must include a statement of the amount
301	295		of deposit liability of the savings bank and the amount of the
302	296		expense fund with which the savings bank will begin business.
303	297		(b) Before approving the certificate of formation [articles
304	298		of incorporation] of a mutual savings bank, the commissioner shall
305	299		require the savings bank to have subscriptions for an aggregate
306	300		amount of deposit accounts and an expense fund in an aggregate
307	301		amount the finance commission by rule establishes as necessary for
308	302		the successful operation of a mutual savings bank.
309	303		SECTION 22. Sections 92.058(b) and (c), Finance Code, are
310	304		amended to read as follows:
311	305		(b) The commissioner may approve an application to
312	306		incorporate only if:
313	307		(1) the prerequisites to incorporation required by
314	308		this chapter are satisfied;
315	309		(2) the character, responsibility, and general
316	310		fitness of each person named in the certificate of formation
317	311		[articles of incorporation] command confidence and warrant belief
318	312		that:
319	313		(A) the business of the savings bank will be
320	314		honestly and efficiently conducted in accordance with the intent
321	315		and purpose of this subtitle; and
322	316		(B) the savings bank will have qualified
323	317		full-time management;
324	318		(3) there is a public need for the savings bank;
325	319		(4) the volume of business in the community in which
326	320		the savings bank will conduct its business indicates a profitable
327	321		operation is probable; and
328	322		(5) the operation of the savings bank will not unduly
329	323		harm an existing savings bank or state or federal savings and loan
330	324		association.
331	325		(c) On finding that each requirement of Subsection (b) is
332	326		met, the commissioner shall:
333	327		(1) enter an order approving the application and
334	328		stating the findings required by Subsection (b);
335	329		(2) issue under official seal a certificate of
336	330		incorporation;
337	331		(3) deliver a copy of the approved certificate of
338	332		formation [articles of incorporation] and bylaws to the
339	333		incorporators; and
340	334		(4) permanently retain a copy of the certificate of
341	335		formation [articles of incorporation] and bylaws.
342	336		SECTION 23. The heading to Section 92.062, Finance Code, is
343	337		amended to read as follows:
344	338		Sec. 92.062. AMENDMENT OF CERTIFICATE OF FORMATION
345	339		[ARTICLES OF INCORPORATION] OR BYLAWS.
346	340		SECTION 24. Section 92.062(a), Finance Code, is amended to
347	341		read as follows:
348	342		(a) A savings bank may amend its certificate of formation
349	343		[articles of incorporation] or bylaws by a resolution adopted by a
350	344		majority vote of those entitled to vote attending an annual meeting
351	345		or a special meeting called for that purpose.
352	346		SECTION 25. Section 92.063(a), Finance Code, is amended to
353	347		read as follows:
354	348		(a) Only with the prior approval of the commissioner given
355	349		in accordance with rules of the finance commission may a savings
356	350		bank:
357	351		(1) establish an office other than the principal
358	352		office stated in the savings bank's certificate of formation
359	353		[articles of incorporation];
360	354		(2) move an office from its immediate vicinity; or
361	355		(3) change the savings bank's name.
362	356		SECTION 26. Section 92.101, Finance Code, is amended to
363	357		read as follows:
364	358		Sec. 92.101. PURPOSE OF INCORPORATION. A person may apply
365	359		to form and incorporate a savings bank for the purpose of:
366	360		(1) purchasing the assets, assuming the liabilities
367	361		other than liability to shareholders, and continuing the business
368	362		of a financial institution the commissioner considers to be in an
369	363		unsafe condition;
370	364		(2) acquiring an existing financial institution by
371	365		merger; or
372	366		(3) facilitating a reorganization or merger with or
373	367		into a savings bank under rules adopted by the finance commission.
374	368		SECTION 27. Sections 92.103(a) and (e), Finance Code, are
375	369		amended to read as follows:
376	370		(a) The commissioner shall approve an application under
377	371		this subchapter if the commissioner finds that:
378	372		(1) the business of the financial institution that is
379	373		to be reorganized or merged can be effectively continued under the
380	374		certificate of formation [articles of incorporation]; and
381	375		(2) the reorganization or merger is in the best
382	376		interest of the public and the savers, depositors, creditors, and
383	377		shareholders of the financial institution that is to be reorganized
384	378		or merged.
385	379		(e) In a merger, a shareholder of a capital stock financial
386	380		institution has the same dissenter's rights as a shareholder of a
387	381		domestic business corporation under the Business Organizations
388	382		Code [Texas Business Corporation Act].
389	383		SECTION 28. Section 92.152(b), Finance Code, is amended to
390	384		read as follows:
391	385		(b) The members or shareholders shall elect the board by a
392	386		majority vote at the annual meeting. The directors may be elected
393	387		for staggered terms of longer than one year as provided by the
394	388		savings bank's bylaws or certificate of formation [articles of
395	389		incorporation].
396	390		SECTION 29. Section 92.158(a), Finance Code, is amended to
397	391		read as follows:
398	392		(a) The voting rights of a person entitled to vote at an
399	393		annual or special meeting of a savings bank are the same as those of
400	394		a shareholder of a domestic business corporation under the Business
401	395		Organizations Code [Texas Business Corporation Act].
402	396		SECTION 30. Section 92.209(c), Finance Code, is amended to
403	397		read as follows:
404	398		(c) A savings bank may retire or redeem preferred stock in
405	399		the manner provided by:
406	400		(1) the certificate of formation [articles of
407	401		incorporation]; or
408	402		(2) a resolution of the board of the savings bank
409	403		establishing the rights and preferences relating to the stock.
410	404		SECTION 31. Sections 92.210(a) and (c), Finance Code, are
411	405		amended to read as follows:
412	406		(a) The certificate of formation [articles of
413	407		incorporation] may:
414	408		(1) authorize that shares of preferred stock be
415	409		divided into and issued in series; and
416	410		(2) determine the rights and preferences of each
417	411		series or part of a series.
418	412		(c) The certificate of formation [articles of
419	413		incorporation] may authorize the board by resolution to divide
420	414		classes of preferred stock into series and to determine the rights
421	415		and preferences of the shares of each series. A copy of the
422	416		resolution must be submitted to the commissioner before the shares
423	417		may be issued. The commissioner shall file the resolution in the
424	418		commissioner's office if the resolution conforms to this subtitle.
425	419		After the resolution is filed, it is considered an amendment of the
426	420		savings bank's certificate of formation [articles of
427	421		incorporation].
428		-	SECTION 32. Sections 92.302(b) and (c), Finance Code, are
429		-	amended to read as follows:
430		-	(b) The directors, or the managing officer [president and
431		-	secretary], shall execute the [two copies of an] application
432		-	required by Section 92.301 [for certificate of incorporation as
433		-	provided by Subchapter B].
434		-	(c) Each director, or the managing officer [president and
435		-	secretary], shall sign and acknowledge the application [for
436		-	certificate of incorporation as a subscriber] and [shall sign and
437		-	acknowledge] the proposed bylaws [as an incorporator].
	422	+	SECTION 32. Section 92.302(b), Finance Code, is amended to
	423	+	read as follows:
	424	+	(b) The directors, or the president and secretary, shall
	425	+	execute [two copies of] an application for certificate of
	426	+	incorporation as provided by Subchapter B.
438	427		SECTION 33. Section 92.351(c), Finance Code, is amended to
439	428		read as follows:
440	429		(c) A shareholder of a capital stock savings bank has the
441	430		same dissenter's rights as a shareholder of a domestic corporation
442	431		under the Business Organizations Code [Texas Business Corporation
443	432		Act].
444	433		SECTION 34. Section 92.405(c), Finance Code, is amended to
445	434		read as follows:
446	435		(c) A surviving savings bank that is a domestic savings bank
447	436		shall operate under:
448	437		(1) the certificate of formation [articles] and bylaws
449	438		of the merging or consolidating domestic savings bank; and
450	439		(2) the law applicable to a domestic savings bank.
451	440		SECTION 35. Section 92.454(b), Finance Code, is amended to
452	441		read as follows:
453	442		(b) After the merger takes effect:
454	443		(1) a corporation that was merged ceases to exist;
455	444		(2) the savings bank assumes the rights and
456	445		obligations of the corporation and owns the property of the
457	446		corporation; and
458	447		(3) the savings bank's certificate of formation is
459	448		[articles of incorporation are] considered amended to the extent
460	449		that a change is stated in the plan of merger.
461	450		SECTION 36. Section 94.301, Finance Code, is amended to
462	451		read as follows:
463	452		Sec. 94.301. AUTHORIZATION. With the prior approval
464	453		[consent] of the commissioner and subject to rules adopted by the
465	454		finance commission, a savings bank may invest in a subsidiary
466	455		corporation created under general corporation law.
467	456		SECTION 37. Section 96.002(a), Finance Code, is amended to
468	457		read as follows:
469	458		(a) The finance commission may adopt rules necessary to
470	459		supervise and regulate savings banks and to protect public
471	460		investment in savings banks, including rules relating to:
472	461		(1) the minimum amounts of capital required to
473	462		incorporate and operate as a savings bank, which may not be less
474	463		than the amounts required of corresponding national banks;
475	464		(2) the fees and procedures for processing, hearing,
476	465		and deciding applications filed with the commissioner or the
477	466		Department of Savings and Mortgage Lending under this subtitle;
478	467		(3) the books and records that a savings bank is
479	468		required to keep and the location at which the books and records are
480	469		required to be maintained;
481	470		(4) the accounting principles and practices that a
482	471		savings bank is required to observe;
483	472		(5) the conditions under which records may be copied
484	473		or reproduced for permanent storage before the originals are
485	474		destroyed;
486	475		(6) [the form, content, and time of publication of
487	476		statements of condition;
488	477		[(7)] the form and content of any report that a savings
489	478		bank is required to prepare and publish or file under this chapter;
490	479		(7) [(8)] the manner in which assets, liabilities, and
491	480		transactions in general are to be described when entered in the
492	481		books of a savings bank, so that the entry accurately describes the
493	482		subject matter of the entry;
494	483		(8) [(9)] the conditions under which the commissioner
495	484		may require an asset to be charged off or reserves established by
496	485		transfer from surplus or paid-in capital because of depreciation of
497	486		or overstated value of the asset;
498	487		(9) [(10)] the change of control of a savings bank;
499	488		(10) [(11)] the conduct, management, and operation of
500	489		a savings bank;
501	490		(11) [(12)] the withdrawable accounts, bonuses,
502	491		plans, and contracts for savings programs;
503	492		(12) [(13)] the merger, consolidation,
504	493		reorganization, conversion, and liquidation of a savings bank;
505	494		(13) [(14)] the establishment of an additional office
506	495		or the change of office location or name of a savings bank;
507	496		(14) [(15)] the requirements for a savings bank's
508	497		holding companies, including those relating to:
509	498		(A) registration and periodic reporting of a
510	499		holding company with the commissioner; and
511	500		(B) transactions between a holding company, an
512	501		affiliate of a holding company, or a savings bank; and
513	502		(15) [(16)] the powers of a savings bank to make loans
514	503		and investments that contain provisions reasonably necessary to
515	504		ensure that a loan made by a savings bank is consistent with sound
516	505		lending practices and that the savings bank's investment will
517	506		promote the purposes of this subtitle, including provisions
518	507		governing:
519	508		(A) the type of loans and the conditions under
520	509		which a savings bank may originate, make, or sell loans;
521	510		(B) the conditions under which a savings bank may
522	511		purchase or participate in a loan made by another lender;
523	512		(C) the conditions for the servicing of a loan
524	513		for another lender;
525	514		(D) the conditions under which a savings bank may
526	515		lend money on the security of a loan made by another person;
527	516		(E) the conditions under which a savings bank may
528	517		pledge loans held by it as collateral for borrowing by the savings
529	518		bank;
530	519		(F) the conditions under which a savings bank may
531	520		invest in securities and debt instruments;
532	521		(G) the documentation that a savings bank must
533	522		have in its files at the time of funding or purchase of a loan, an
534	523		investment, or a participation in a loan;
535	524		(H) the form and content of statements of
536	525		expenses and fees and other charges that are paid by a borrower or
537	526		that a borrower is obligated to pay;
538	527		(I) the title information that must be
539	528		maintained;
540	529		(J) the borrower's insurance coverage of
541	530		property securing a loan;
542	531		(K) an appraisal report;
543	532		(L) the financial statement of a borrower;
544	533		(M) the fees or other compensation that may be
545	534		paid to a person in connection with obtaining a loan for a savings
546	535		bank, including an officer, director, employee, affiliated person,
547	536		consultant, or third party;
548	537		(N) the conditions under which the savings bank
549	538		may advance money to pay a tax, assessment, insurance premium, or
550	539		other similar charge for the protection of the savings bank's
551	540		interest in property securing the savings bank's loans;
552	541		(O) the terms under which a savings bank may
553	542		acquire and deal in real property;
554	543		(P) the valuation on a savings bank's books of
555	544		real property held by the savings bank;
556	545		(Q) the terms governing the investment by a
557	546		savings bank in a subsidiary, the powers that may be exercised by a
558	547		subsidiary, and the activities that may be engaged in by a
559	548		subsidiary; and
560	549		(R) any other matter considered necessary to
561	550		administer each type of transaction.
562	551		SECTION 38. Section 96.101(a), Finance Code, is amended to
563	552		read as follows:
564	553		(a) The commissioner may intervene in the affairs of a
565	554		savings bank if the savings bank or a person who participates in the
566	555		affairs of the savings bank or a subsidiary or holding company of
567	556		the savings bank:
568	557		(1) engages in or is about to engage in an unsafe and
569	558		unsound practice in conducting the affairs of the savings bank; or
570	559		(2) violates or is about to violate:
571	560		(A) the certificate of formation [articles of
572	561		incorporation] or bylaws of the savings bank;
573	562		(B) a law or supervisory order applicable to the
574	563		savings bank; or
575	564		(C) a condition that the commissioner or the
576	565		finance commission has imposed on the savings bank by written
577	566		order, directive, or agreement.
578	567		SECTION 39. Section 97.052, Finance Code, is amended to
579	568		read as follows:
580	569		Sec. 97.052. APPLICATION FOR APPROVAL OF REORGANIZATION.
581	570		The application for approval of reorganization must contain:
582	571		(1) a brief statement summarizing a reorganization
583	572		plan;
584	573		(2) two copies of the proposed certificate of
585	574		formation [articles of incorporation] of the subsidiary savings
586	575		bank acknowledged by the incorporators of the subsidiary savings
587	576		bank;
588	577		(3) two copies of the proposed bylaws of the savings
589	578		bank;
590	579		(4) a statement that the plan of reorganization was
591	580		advised, authorized, and approved by the savings bank in the manner
592	581		and by the vote required by its charter and the laws of this state;
593	582		and
594	583		(5) a statement of the manner of approval.
595	584		SECTION 40. Section 98.001(b), Finance Code, is amended to
596	585		read as follows:
597	586		(b) Subsection (a) does not prohibit activity that is not
598	587		considered to be transacting business in this state under Section
599	588		9.251, Business Organizations Code [Section B, Article 8.01, Texas
600	589		Business Corporation Act].
601	590		SECTION 41. Section 119.101(c), Finance Code, is amended to
602	591		read as follows:
603	592		(c) A stockholder of a capital stock savings bank has the
604	593		same right to examine the relevant books and records of a savings
605	594		bank as a shareholder of a business corporation under the Business
606	595		Organizations Code [Texas Business Corporation Act].
607	596		SECTION 42. Section 156.004(a), Finance Code, is amended to
608	597		read as follows:
609	598		(a) At the time a residential mortgage loan [an] applicant
610	599		submits an application to a residential mortgage loan originator
611	600		sponsored by and conducting business for a licensed or registered
612	601		residential mortgage loan company under this chapter, the
613	602		residential mortgage loan originator shall provide to the applicant
614	603		a disclosure form. The form must [that specifies]:
615	604		(1) include the name, address, and toll-free telephone
616	605		number for the department [the nature of the relationship between
617	606		the applicant and the residential mortgage loan originator]; and
618	607		(2) contain information on how to file a complaint or
619	608		recovery fund claim [the duties the residential mortgage loan
620	609		originator has to the applicant; and
621	610		[(3) how the residential mortgage loan originator will
622	611		be compensated].
623	612		SECTION 43. Section 157.0021(b), Finance Code, is amended
624	613		to read as follows:
625	614		(b) A mortgage banker that indicates in its registration
626	615		that it acts as a residential mortgage loan servicer shall provide
627	616		to the borrower of each residential mortgage loan that it services
628	617		and that is secured by a lien on residential real estate located in
629	618		this state the following notice not later than the 30th day after
630	619		the date the mortgage banker commences servicing the loan:
631	620		"COMPLAINTS REGARDING THE SERVICING OF YOUR TEXAS MORTGAGE
632	621		SHOULD BE SENT TO THE DEPARTMENT OF SAVINGS AND MORTGAGE LENDING,
633	622		______________________________ (street address of the Department
634	623		of Savings and Mortgage Lending). A TOLL-FREE CONSUMER HOTLINE IS
635	624		AVAILABLE AT _______________ (telephone number of the Department of
636	625		Savings and Mortgage Lending's toll-free consumer hotline)."
637	626		SECTION 44. The heading to Subchapter C, Chapter 158,
638	627		Finance Code, is amended to read as follows:
639	628		SUBCHAPTER C. INVESTIGATIONS;[,] COMPLAINTS[,] AND ACTIONS
640	629		AGAINST REGISTRANT
641	630		SECTION 45. Section 158.101, Finance Code, is amended to
642	631		read as follows:
643	632		Sec. 158.101. DISCLOSURE STATEMENT. A registrant shall
644	633		provide to the borrower of each residential mortgage loan that it
645	634		services and that is secured by a lien on residential real estate
646	635		located in this state the following notice not later than the 30th
647	636		day after the registrant commences servicing the loan:
648	637		"COMPLAINTS REGARDING THE SERVICING OF YOUR TEXAS MORTGAGE
649	638		SHOULD BE SENT TO THE DEPARTMENT OF SAVINGS AND MORTGAGE LENDING,
650	639		______________________________ (street address of the Department
651	640		of Savings and Mortgage Lending). A TOLL-FREE CONSUMER HOTLINE IS
652	641		AVAILABLE AT _______________ (telephone number of the Department of
653	642		Savings and Mortgage Lending's toll-free consumer hotline)."
654	643		SECTION 46. The heading to Section 158.102, Finance Code,
655	644		is amended to read as follows:
656		-	Sec. 158.102. INVESTIGATIONS [INVESTIGATION ~~OF COMPLAINTS~~
657		-	AGAINST REGISTRANT]; SURCHARGE.
	645	+	Sec. 158.102. INSPECTIONS; INVESTIGATIONS [INVESTIGATION
	646	+	OF COMPLAINTS AGAINST REGISTRANT]; SURCHARGE.
658	647		SECTION 47. Section 158.102, Finance Code, is amended by
659		-	adding Subsections (a-1) and (e) to read as follows:
660		-	(a-1) For reasonable cause, the commissioner at any time may
	648	+	adding Subsections (a-1), (a-2), and (e) to read as follows:
	649	+	(a-1) The commissioner may conduct an inspection of a
	650	+	registrant as the commissioner determines necessary to determine
	651	+	whether the registrant is complying with this chapter and
	652	+	applicable rules. The inspection under this subsection may include
	653	+	an inspection of the books, records, documents, operations, and
	654	+	facilities of the registrant.
	655	+	(a-2) For reasonable cause, the commissioner at any time may
661	656		investigate a registrant to determine whether the registrant is
662	657		complying with this chapter and applicable rules.
663	658		(e) The commissioner may conduct an undercover or covert
664	659		investigation only if the commissioner, after due consideration of
665	660		the circumstances, determines that the investigation is necessary
666	661		to prevent immediate harm and to carry out the purposes of this
667	662		chapter.
668		-	SECTION 48. ~~The heading to Section~~ 158~~.105~~, Finance Code,
669		-	is amended to read as follows:
670		-	Sec. 158.~~105~~. UNREGISTERED ACTIVITY; ~~CEASE AND DESIST~~
671		-	~~ORDER.~~
672		-	~~SECTION 49.~~ ~~Section 158.105(b), Finance Code,~~ ~~is amended to~~
673		-	~~read~~ as ~~follows:~~
674		-	~~(b)~~ An ~~order issued under Subsection (a) must contain a~~
675		-	~~reasonably detailed statement of the facts on which the order~~ is
676		-	~~made [issued]. The order may assess~~ an ~~administrative penalty in an~~
677		-	~~amount not to exceed $1,000 per day for each violation~~.
678		-	SECTION 50. The Finance Commission of Texas shall adopt
	663	+	SECTION 48. Subchapter C, Chapter 158, Finance Code, is
	664	+	amended by adding Section 158.107 to read as follows:
	665	+	Sec. 158.107. UNREGISTERED ACTIVITY; OFFENSE. (a) An
	666	+	individual who is not exempt under this chapter or other applicable
	667	+	law and who acts as a residential mortgage loan servicer without
	668	+	first obtaining a registration as required under this chapter
	669	+	commits an offense.
	670	+	(b) An offense under this section is a Class B misdemeanor.
	671	+	A second or subsequent conviction for an offense under this section
	672	+	is a Class A misdemeanor.
	673	+	SECTION 49. The Finance Commission of Texas shall adopt
679	674		rules to implement Section 156.004(a), Finance Code, as amended by
680	675		this Act, not later than January 1, 2018.
681		-	SECTION 51. Section 156.004(a), Finance Code, as amended by
	676	+	SECTION 50. Section 156.004(a), Finance Code, as amended by
682	677		this Act, applies only to an application for a residential mortgage
683	678		loan that is submitted on or after January 1, 2018. An application
684	679		for a residential mortgage loan that is submitted before January 1,
685	680		2018, is governed by the law in effect on the date the application
686	681		was submitted, and the former law is continued in effect for that
687	682		purpose.
688		-	SECTION 52. Section 157.0021(b), Finance Code, as amended
	683	+	SECTION 51. Section 157.0021(b), Finance Code, as amended
689	684		by this Act, and Section 158.101, Finance Code, as amended by this
690	685		Act, apply only to a residential mortgage loan that is made on or
691	686		after the effective date of this Act. A residential mortgage loan
692	687		that is made before the effective date of this Act is governed by
693	688		the law in effect on the date the residential mortgage loan was
694	689		made, and the former law is continued in effect for that purpose.
695		-	SECTION 53. Section 158.105(b), Finance Code, as amended by
696		-	this Act, applies only to a violation committed on or after
697		-	September 1, 2017. A violation committed before September 1, 2017,
698		-	is governed by the law in effect on the date the violation was
699		-	committed, and the former law is continued in effect for that
700		-	purpose. For purposes of this section, a violation was committed
701		-	before September 1, 2017, if any element of the violation occurred
702		-	before that date.
703		-	SECTION 54. (a) Except as otherwise provided by this
	690	+	SECTION 52. (a) Except as otherwise provided by this
704	691		section, this Act takes effect September 1, 2017.
705	692		(b) Section 156.004(a), Finance Code, as amended by this
706	693		Act, takes effect January 1, 2018.