85R5936 TSR-F
By: Buckingham S.B. No. 1916
A BILL TO BE ENTITLED
AN ACT
relating to savings and loan associations, savings banks,
residential mortgage loan originators and servicers, and other
persons or entities under the regulatory jurisdiction of the
Department of Savings and Mortgage Lending and the savings and
mortgage lending commissioner; creating an offense.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Sections 62.001(a), (b), and (d), Finance Code,
are amended to read as follows:
(a) Five or more residents of this state may apply to form
and incorporate an association by submitting to the commissioner an
application and the filing fee.
(b) An application must contain:
(1) two copies of the association's certificate of
formation [articles of incorporation] identifying:
(A) the name of the association;
(B) the location of the principal office; and
(C) the names and addresses of the initial
directors;
(2) two copies of the association's bylaws;
(3) data sufficiently detailed and comprehensive to
enable the commissioner to make a determination under Section
62.007, including statements, exhibits, and maps;
(4) other information relating to the association and
its operation that the finance commission by rule requires; and
(5) financial information about each applicant,
incorporator, director, or shareholder that the finance commission
by rule requires.
(d) The certificate of formation [articles of
incorporation] and statements of fact shall be signed and sworn to.
SECTION 2. Section 62.002(a), Finance Code, is amended to
read as follows:
(a) A capital stock association's certificate of formation
[articles of incorporation] must include a statement of:
(1) the aggregate number of shares of common stock
that the association may issue;
(2) the par value of each share or that the shares are
without par value;
(3) whether the association may issue preferred stock;
(4) the amount of stock that has been subscribed and
will be paid for before the association begins business;
(5) the name and address of each subscriber and the
amount subscribed by each; and
(6) the amount of paid-in surplus with which the
association will begin business.
SECTION 3. Section 62.003, Finance Code, is amended to read
as follows:
Sec. 62.003. ADDITIONAL INCORPORATION REQUIREMENTS FOR
MUTUAL ASSOCIATION. (a) A mutual association's certificate of
formation [articles of incorporation] must include a statement of
the amount of savings liability of the association and the amount of
the expense fund with which the association will begin business.
(b) Before approving the certificate of formation
[articles of incorporation] of a mutual association, the
commissioner may require the association to have subscriptions for
an aggregate amount of savings accounts and an expense fund in an
aggregate amount that the commissioner, under rules of the finance
commission, finds is necessary for the successful operation of the
association.
SECTION 4. Sections 62.007(a) and (b), Finance Code, are
amended to read as follows:
(a) The commissioner may approve an application to
incorporate only if the commissioner finds that:
(1) the prerequisites to incorporation required by
this chapter are satisfied;
(2) the character, responsibility, and general
fitness of each person named in the certificate of formation
[articles of incorporation] command confidence and warrant belief
that:
(A) the business of the association will be
honestly and efficiently conducted in accordance with the intent
and purpose of this subtitle; and
(B) the association will have qualified
full-time management;
(3) there is a public need for the association;
(4) the volume of business in the community in which
the association will conduct its business indicates a profitable
operation is probable; and
(5) the operation of the association will not unduly
harm an existing association.
(b) On finding that the requirements of Subsection (a) are
fulfilled, the commissioner shall:
(1) enter an order approving the application and
stating the findings required by Subsection (a);
(2) issue under official seal a certificate of
incorporation;
(3) deliver a copy of the approved certificate of
formation [articles of incorporation] and bylaws to the
incorporators; and
(4) permanently retain a copy of the certificate of
formation [articles] and bylaws.
SECTION 5. The heading to Section 62.010, Finance Code, is
amended to read as follows:
Sec. 62.010. AMENDMENT OF CERTIFICATE OF FORMATION
[ARTICLES OF INCORPORATION] OR BYLAWS.
SECTION 6. Section 62.010(a), Finance Code, is amended to
read as follows:
(a) An association may amend its certificate of formation
[articles of incorporation] or bylaws by a resolution adopted by a
majority vote of those entitled to vote attending an annual meeting
or a special meeting called for that purpose.
SECTION 7. Section 62.011(a), Finance Code, is amended to
read as follows:
(a) Only with the prior approval of the commissioner may an
association:
(1) establish an office other than the principal
office stated in the association's certificate of formation
[articles of incorporation];
(2) move an office from its immediate vicinity; or
(3) change the association's name.
SECTION 8. Section 62.051, Finance Code, is amended to read
as follows:
Sec. 62.051. PURPOSE OF INCORPORATION. A person may apply
to form and incorporate an association for the purpose of:
(1) purchasing the assets, assuming the liabilities,
excluding liability to stockholders, and continuing the business of
an association the commissioner considers to be in an unsafe
condition; or
(2) acquiring an existing association by merger.
SECTION 9. Sections 62.053(a) and (e), Finance Code, are
amended to read as follows:
(a) The commissioner shall approve an application under
this subchapter if the commissioner finds that:
(1) the business of the association that is to be
reorganized or merged can be effectively continued under the
certificate of formation [articles of incorporation]; and
(2) the reorganization or merger is in the best
interest of the general public and the savers, depositors,
creditors, and shareholders of the association that is to be
reorganized or merged.
(e) In a merger, a shareholder of a capital stock
association has the same dissenter's rights as a shareholder of a
domestic business corporation under the Business Organizations
Code [Texas Business Corporation Act].
SECTION 10. Section 62.156(c), Finance Code, is amended to
read as follows:
(c) An association may retire or redeem preferred stock in
the manner provided by:
(1) the certificate of formation [articles of
incorporation]; or
(2) a resolution of the board establishing the rights
and preferences relating to the stock.
SECTION 11. Sections 62.157(a) and (c), Finance Code, are
amended to read as follows:
(a) The certificate of formation [articles of
incorporation] may:
(1) authorize that shares of preferred stock be
divided into and issued in series; and
(2) determine the rights and preferences of each
series or part of a series.
(c) The certificate of formation [articles of
incorporation] may authorize the board by resolution to divide
classes of preferred stock into series and to determine the rights
and preferences of the shares of each series. A copy of the
resolution must be submitted to the commissioner before the shares
may be issued. The commissioner shall file the resolution in the
commissioner's office if the resolution conforms to this subtitle.
After the resolution is filed, it is considered an amendment of the
association's certificate of formation [articles of
incorporation].
SECTION 12. Section 62.252(b), Finance Code, is amended to
read as follows:
(b) The directors shall execute [two copies of] the
application required by Section 62.251.
SECTION 13. Section 62.351(c), Finance Code, is amended to
read as follows:
(c) A shareholder of a capital stock association has the
same dissenter's rights as a shareholder of a domestic corporation
under the Business Organizations Code [Texas Business Corporation
Act].
SECTION 14. Section 62.405(c), Finance Code, is amended to
read as follows:
(c) A surviving association that is a domestic association
shall operate under:
(1) the certificate of formation [articles] and bylaws
of the merging or consolidating domestic association; and
(2) the laws applicable to a domestic association.
SECTION 15. Section 62.454(b), Finance Code, is amended to
read as follows:
(b) After the merger takes effect:
(1) a corporation that was merged ceases to exist;
(2) the association assumes the rights and obligations
of the corporation and owns the property of the association; and
(3) the association's certificate of formation is
[articles of incorporation are] considered amended to the extent
that a change is stated in the plan of merger.
SECTION 16. Section 66.002, Finance Code, is amended to
read as follows:
Sec. 66.002. ADOPTION OF RULES. The finance commission may
adopt rules relating to:
(1) the minimum amounts of capital stock and paid-in
surplus required for incorporation as a capital stock association;
(2) the minimum amounts of savings liability and
expense funds required for incorporation as a mutual association;
(3) the fees and procedures for processing, hearing,
and deciding applications filed with the commissioner or the
Department of Savings and Mortgage Lending under this subtitle;
(4) the books and records that an association is
required to keep and the location at which the books and records are
required to be maintained;
(5) the accounting principles and practices that an
association is required to observe;
(6) the conditions under which records may be copied
or reproduced for permanent storage before the original records are
destroyed;
(7) [the form, contents, and time of publication of
statements of condition;
[(8)] the form and contents of annual reports and
other reports that an association is required to prepare and
publish or file;
(8) [(9)] the manner in which assets, liabilities, and
transactions in general are to be described when entered in the
books of an association, so that the entry accurately describes the
subject matter of the entry; and
(9) [(10)] the conditions under which the
commissioner may require an asset to be charged off or reserves
established by transfer from surplus or paid-in capital because of
the depreciation of or overstated value of the asset.
SECTION 17. Section 66.101, Finance Code, is amended to
read as follows:
Sec. 66.101. INTERVENTION FOR VIOLATIONS AND UNSAFE AND
UNSOUND PRACTICES. The commissioner may intervene in the affairs
of an association if the association or a person who participates in
the affairs of the association or a subsidiary of the association:
(1) engages in or is about to engage in an unsafe and
unsound practice in conducting the affairs of the association; or
(2) violates or is about to violate:
(A) the certificate of formation [articles of
incorporation] or bylaws of the association;
(B) a law or supervisory order applicable to the
association; or
(C) a condition that the commissioner or the
finance commission has imposed on the association by written order
or agreement.
SECTION 18. Section 67.001(b), Finance Code, is amended to
read as follows:
(b) Subsection (a) does not prohibit activity that is not
considered to be transacting business in this state under Section
9.251, Business Organizations Code [Section B, Article 8.01, Texas
Business Corporation Act].
SECTION 19. Sections 92.051(a), (b), and (d), Finance Code,
are amended to read as follows:
(a) Five or more adult residents of this state may apply to
form and incorporate a savings bank by submitting to the
commissioner:
(1) an application to incorporate a savings bank that
is:
(A) in a form specified by the commissioner; and
(B) signed by each incorporator; and
(2) the filing fee.
(b) An application must contain:
(1) two copies of the savings bank's certificate of
formation [articles of incorporation] identifying:
(A) the name of the savings bank;
(B) the location of the principal office; and
(C) the names and addresses of the initial
directors;
(2) two copies of the savings bank's bylaws;
(3) data sufficiently detailed and comprehensive to
enable the commissioner to make findings under Section 92.058,
including statements, exhibits, and maps;
(4) other information relating to the savings bank and
its operation that the finance commission by rule requires; and
(5) financial information about each applicant,
incorporator, director, officer, or shareholder that the finance
commission by rule requires.
(d) The certificate of formation [articles of
incorporation] and statements of fact must be signed and sworn to.
SECTION 20. Section 92.052(a), Finance Code, is amended to
read as follows:
(a) A capital stock savings bank's certificate of formation
[articles of incorporation] must include a statement of:
(1) the aggregate number of shares of common stock
that the savings bank may issue;
(2) the par value of each share or that the shares are
without par value;
(3) whether the savings bank may issue preferred
stock;
(4) the amount of stock that has been subscribed and
will be paid for before the savings bank begins business;
(5) the name and address of each subscriber and the
amount subscribed by each; and
(6) the amount of paid-in surplus with which the
savings bank will begin business.
SECTION 21. Section 92.053, Finance Code, is amended to
read as follows:
Sec. 92.053. ADDITIONAL REQUIREMENTS FOR MUTUAL SAVINGS
BANK. (a) A mutual savings bank's certificate of formation
[articles of incorporation] must include a statement of the amount
of deposit liability of the savings bank and the amount of the
expense fund with which the savings bank will begin business.
(b) Before approving the certificate of formation [articles
of incorporation] of a mutual savings bank, the commissioner shall
require the savings bank to have subscriptions for an aggregate
amount of deposit accounts and an expense fund in an aggregate
amount the finance commission by rule establishes as necessary for
the successful operation of a mutual savings bank.
SECTION 22. Sections 92.058(b) and (c), Finance Code, are
amended to read as follows:
(b) The commissioner may approve an application to
incorporate only if:
(1) the prerequisites to incorporation required by
this chapter are satisfied;
(2) the character, responsibility, and general
fitness of each person named in the certificate of formation
[articles of incorporation] command confidence and warrant belief
that:
(A) the business of the savings bank will be
honestly and efficiently conducted in accordance with the intent
and purpose of this subtitle; and
(B) the savings bank will have qualified
full-time management;
(3) there is a public need for the savings bank;
(4) the volume of business in the community in which
the savings bank will conduct its business indicates a profitable
operation is probable; and
(5) the operation of the savings bank will not unduly
harm an existing savings bank or state or federal savings and loan
association.
(c) On finding that each requirement of Subsection (b) is
met, the commissioner shall:
(1) enter an order approving the application and
stating the findings required by Subsection (b);
(2) issue under official seal a certificate of
incorporation;
(3) deliver a copy of the approved certificate of
formation [articles of incorporation] and bylaws to the
incorporators; and
(4) permanently retain a copy of the certificate of
formation [articles of incorporation] and bylaws.
SECTION 23. The heading to Section 92.062, Finance Code, is
amended to read as follows:
Sec. 92.062. AMENDMENT OF CERTIFICATE OF FORMATION
[ARTICLES OF INCORPORATION] OR BYLAWS.
SECTION 24. Section 92.062(a), Finance Code, is amended to
read as follows:
(a) A savings bank may amend its certificate of formation
[articles of incorporation] or bylaws by a resolution adopted by a
majority vote of those entitled to vote attending an annual meeting
or a special meeting called for that purpose.
SECTION 25. Section 92.063(a), Finance Code, is amended to
read as follows:
(a) Only with the prior approval of the commissioner given
in accordance with rules of the finance commission may a savings
bank:
(1) establish an office other than the principal
office stated in the savings bank's certificate of formation
[articles of incorporation];
(2) move an office from its immediate vicinity; or
(3) change the savings bank's name.
SECTION 26. Section 92.101, Finance Code, is amended to
read as follows:
Sec. 92.101. PURPOSE OF INCORPORATION. A person may apply
to form and incorporate a savings bank for the purpose of:
(1) purchasing the assets, assuming the liabilities
other than liability to shareholders, and continuing the business
of a financial institution the commissioner considers to be in an
unsafe condition;
(2) acquiring an existing financial institution by
merger; or
(3) facilitating a reorganization or merger with or
into a savings bank under rules adopted by the finance commission.
SECTION 27. Sections 92.103(a) and (e), Finance Code, are
amended to read as follows:
(a) The commissioner shall approve an application under
this subchapter if the commissioner finds that:
(1) the business of the financial institution that is
to be reorganized or merged can be effectively continued under the
certificate of formation [articles of incorporation]; and
(2) the reorganization or merger is in the best
interest of the public and the savers, depositors, creditors, and
shareholders of the financial institution that is to be reorganized
or merged.
(e) In a merger, a shareholder of a capital stock financial
institution has the same dissenter's rights as a shareholder of a
domestic business corporation under the Business Organizations
Code [Texas Business Corporation Act].
SECTION 28. Section 92.152(b), Finance Code, is amended to
read as follows:
(b) The members or shareholders shall elect the board by a
majority vote at the annual meeting. The directors may be elected
for staggered terms of longer than one year as provided by the
savings bank's bylaws or certificate of formation [articles of
incorporation].
SECTION 29. Section 92.158(a), Finance Code, is amended to
read as follows:
(a) The voting rights of a person entitled to vote at an
annual or special meeting of a savings bank are the same as those of
a shareholder of a domestic business corporation under the Business
Organizations Code [Texas Business Corporation Act].
SECTION 30. Section 92.209(c), Finance Code, is amended to
read as follows:
(c) A savings bank may retire or redeem preferred stock in
the manner provided by:
(1) the certificate of formation [articles of
incorporation]; or
(2) a resolution of the board of the savings bank
establishing the rights and preferences relating to the stock.
SECTION 31. Sections 92.210(a) and (c), Finance Code, are
amended to read as follows:
(a) The certificate of formation [articles of
incorporation] may:
(1) authorize that shares of preferred stock be
divided into and issued in series; and
(2) determine the rights and preferences of each
series or part of a series.
(c) The certificate of formation [articles of
incorporation] may authorize the board by resolution to divide
classes of preferred stock into series and to determine the rights
and preferences of the shares of each series. A copy of the
resolution must be submitted to the commissioner before the shares
may be issued. The commissioner shall file the resolution in the
commissioner's office if the resolution conforms to this subtitle.
After the resolution is filed, it is considered an amendment of the
savings bank's certificate of formation [articles of
incorporation].
SECTION 32. Section 92.302(b), Finance Code, is amended to
read as follows:
(b) The directors, or the president and secretary, shall
execute [two copies of] an application for certificate of
incorporation as provided by Subchapter B.
SECTION 33. Section 92.351(c), Finance Code, is amended to
read as follows:
(c) A shareholder of a capital stock savings bank has the
same dissenter's rights as a shareholder of a domestic corporation
under the Business Organizations Code [Texas Business Corporation
Act].
SECTION 34. Section 92.405(c), Finance Code, is amended to
read as follows:
(c) A surviving savings bank that is a domestic savings bank
shall operate under:
(1) the certificate of formation [articles] and bylaws
of the merging or consolidating domestic savings bank; and
(2) the law applicable to a domestic savings bank.
SECTION 35. Section 92.454(b), Finance Code, is amended to
read as follows:
(b) After the merger takes effect:
(1) a corporation that was merged ceases to exist;
(2) the savings bank assumes the rights and
obligations of the corporation and owns the property of the
corporation; and
(3) the savings bank's certificate of formation is
[articles of incorporation are] considered amended to the extent
that a change is stated in the plan of merger.
SECTION 36. Section 94.301, Finance Code, is amended to
read as follows:
Sec. 94.301. AUTHORIZATION. With the prior approval
[consent] of the commissioner and subject to rules adopted by the
finance commission, a savings bank may invest in a subsidiary
corporation created under general corporation law.
SECTION 37. Section 96.002(a), Finance Code, is amended to
read as follows:
(a) The finance commission may adopt rules necessary to
supervise and regulate savings banks and to protect public
investment in savings banks, including rules relating to:
(1) the minimum amounts of capital required to
incorporate and operate as a savings bank, which may not be less
than the amounts required of corresponding national banks;
(2) the fees and procedures for processing, hearing,
and deciding applications filed with the commissioner or the
Department of Savings and Mortgage Lending under this subtitle;
(3) the books and records that a savings bank is
required to keep and the location at which the books and records are
required to be maintained;
(4) the accounting principles and practices that a
savings bank is required to observe;
(5) the conditions under which records may be copied
or reproduced for permanent storage before the originals are
destroyed;
(6) [the form, content, and time of publication of
statements of condition;
[(7)] the form and content of any report that a savings
bank is required to prepare and publish or file under this chapter;
(7) [(8)] the manner in which assets, liabilities, and
transactions in general are to be described when entered in the
books of a savings bank, so that the entry accurately describes the
subject matter of the entry;
(8) [(9)] the conditions under which the commissioner
may require an asset to be charged off or reserves established by
transfer from surplus or paid-in capital because of depreciation of
or overstated value of the asset;
(9) [(10)] the change of control of a savings bank;
(10) [(11)] the conduct, management, and operation of
a savings bank;
(11) [(12)] the withdrawable accounts, bonuses,
plans, and contracts for savings programs;
(12) [(13)] the merger, consolidation,
reorganization, conversion, and liquidation of a savings bank;
(13) [(14)] the establishment of an additional office
or the change of office location or name of a savings bank;
(14) [(15)] the requirements for a savings bank's
holding companies, including those relating to:
(A) registration and periodic reporting of a
holding company with the commissioner; and
(B) transactions between a holding company, an
affiliate of a holding company, or a savings bank; and
(15) [(16)] the powers of a savings bank to make loans
and investments that contain provisions reasonably necessary to
ensure that a loan made by a savings bank is consistent with sound
lending practices and that the savings bank's investment will
promote the purposes of this subtitle, including provisions
governing:
(A) the type of loans and the conditions under
which a savings bank may originate, make, or sell loans;
(B) the conditions under which a savings bank may
purchase or participate in a loan made by another lender;
(C) the conditions for the servicing of a loan
for another lender;
(D) the conditions under which a savings bank may
lend money on the security of a loan made by another person;
(E) the conditions under which a savings bank may
pledge loans held by it as collateral for borrowing by the savings
bank;
(F) the conditions under which a savings bank may
invest in securities and debt instruments;
(G) the documentation that a savings bank must
have in its files at the time of funding or purchase of a loan, an
investment, or a participation in a loan;
(H) the form and content of statements of
expenses and fees and other charges that are paid by a borrower or
that a borrower is obligated to pay;
(I) the title information that must be
maintained;
(J) the borrower's insurance coverage of
property securing a loan;
(K) an appraisal report;
(L) the financial statement of a borrower;
(M) the fees or other compensation that may be
paid to a person in connection with obtaining a loan for a savings
bank, including an officer, director, employee, affiliated person,
consultant, or third party;
(N) the conditions under which the savings bank
may advance money to pay a tax, assessment, insurance premium, or
other similar charge for the protection of the savings bank's
interest in property securing the savings bank's loans;
(O) the terms under which a savings bank may
acquire and deal in real property;
(P) the valuation on a savings bank's books of
real property held by the savings bank;
(Q) the terms governing the investment by a
savings bank in a subsidiary, the powers that may be exercised by a
subsidiary, and the activities that may be engaged in by a
subsidiary; and
(R) any other matter considered necessary to
administer each type of transaction.
SECTION 38. Section 96.101(a), Finance Code, is amended to
read as follows:
(a) The commissioner may intervene in the affairs of a
savings bank if the savings bank or a person who participates in the
affairs of the savings bank or a subsidiary or holding company of
the savings bank:
(1) engages in or is about to engage in an unsafe and
unsound practice in conducting the affairs of the savings bank; or
(2) violates or is about to violate:
(A) the certificate of formation [articles of
incorporation] or bylaws of the savings bank;
(B) a law or supervisory order applicable to the
savings bank; or
(C) a condition that the commissioner or the
finance commission has imposed on the savings bank by written
order, directive, or agreement.
SECTION 39. Section 97.052, Finance Code, is amended to
read as follows:
Sec. 97.052. APPLICATION FOR APPROVAL OF REORGANIZATION.
The application for approval of reorganization must contain:
(1) a brief statement summarizing a reorganization
plan;
(2) two copies of the proposed certificate of
formation [articles of incorporation] of the subsidiary savings
bank acknowledged by the incorporators of the subsidiary savings
bank;
(3) two copies of the proposed bylaws of the savings
bank;
(4) a statement that the plan of reorganization was
advised, authorized, and approved by the savings bank in the manner
and by the vote required by its charter and the laws of this state;
and
(5) a statement of the manner of approval.
SECTION 40. Section 98.001(b), Finance Code, is amended to
read as follows:
(b) Subsection (a) does not prohibit activity that is not
considered to be transacting business in this state under Section
9.251, Business Organizations Code [Section B, Article 8.01, Texas
Business Corporation Act].
SECTION 41. Section 119.101(c), Finance Code, is amended to
read as follows:
(c) A stockholder of a capital stock savings bank has the
same right to examine the relevant books and records of a savings
bank as a shareholder of a business corporation under the Business
Organizations Code [Texas Business Corporation Act].
SECTION 42. Section 156.004(a), Finance Code, is amended to
read as follows:
(a) At the time a residential mortgage loan [an] applicant
submits an application to a residential mortgage loan originator
sponsored by and conducting business for a licensed or registered
residential mortgage loan company under this chapter, the
residential mortgage loan originator shall provide to the applicant
a disclosure form. The form must [that specifies]:
(1) include the name, address, and toll-free telephone
number for the department [the nature of the relationship between
the applicant and the residential mortgage loan originator]; and
(2) contain information on how to file a complaint or
recovery fund claim [the duties the residential mortgage loan
originator has to the applicant; and
[(3) how the residential mortgage loan originator will
be compensated].
SECTION 43. Section 157.0021(b), Finance Code, is amended
to read as follows:
(b) A mortgage banker that indicates in its registration
that it acts as a residential mortgage loan servicer shall provide
to the borrower of each residential mortgage loan that it services
and that is secured by a lien on residential real estate located in
this state the following notice not later than the 30th day after
the date the mortgage banker commences servicing the loan:
"COMPLAINTS REGARDING THE SERVICING OF YOUR TEXAS MORTGAGE
SHOULD BE SENT TO THE DEPARTMENT OF SAVINGS AND MORTGAGE LENDING,
______________________________ (street address of the Department
of Savings and Mortgage Lending). A TOLL-FREE CONSUMER HOTLINE IS
AVAILABLE AT _______________ (telephone number of the Department of
Savings and Mortgage Lending's toll-free consumer hotline)."
SECTION 44. The heading to Subchapter C, Chapter 158,
Finance Code, is amended to read as follows:
SUBCHAPTER C. INVESTIGATIONS;[,] COMPLAINTS[,] AND ACTIONS
AGAINST REGISTRANT
SECTION 45. Section 158.101, Finance Code, is amended to
read as follows:
Sec. 158.101. DISCLOSURE STATEMENT. A registrant shall
provide to the borrower of each residential mortgage loan that it
services and that is secured by a lien on residential real estate
located in this state the following notice not later than the 30th
day after the registrant commences servicing the loan:
"COMPLAINTS REGARDING THE SERVICING OF YOUR TEXAS MORTGAGE
SHOULD BE SENT TO THE DEPARTMENT OF SAVINGS AND MORTGAGE LENDING,
______________________________ (street address of the Department
of Savings and Mortgage Lending). A TOLL-FREE CONSUMER HOTLINE IS
AVAILABLE AT _______________ (telephone number of the Department of
Savings and Mortgage Lending's toll-free consumer hotline)."
SECTION 46. The heading to Section 158.102, Finance Code,
is amended to read as follows:
Sec. 158.102. INSPECTIONS; INVESTIGATIONS [INVESTIGATION
OF COMPLAINTS AGAINST REGISTRANT]; SURCHARGE.
SECTION 47. Section 158.102, Finance Code, is amended by
adding Subsections (a-1), (a-2), and (e) to read as follows:
(a-1) The commissioner may conduct an inspection of a
registrant as the commissioner determines necessary to determine
whether the registrant is complying with this chapter and
applicable rules. The inspection under this subsection may include
an inspection of the books, records, documents, operations, and
facilities of the registrant.
(a-2) For reasonable cause, the commissioner at any time may
investigate a registrant to determine whether the registrant is
complying with this chapter and applicable rules.
(e) The commissioner may conduct an undercover or covert
investigation only if the commissioner, after due consideration of
the circumstances, determines that the investigation is necessary
to prevent immediate harm and to carry out the purposes of this
chapter.
SECTION 48. Subchapter C, Chapter 158, Finance Code, is
amended by adding Section 158.107 to read as follows:
Sec. 158.107. UNREGISTERED ACTIVITY; OFFENSE. (a) An
individual who is not exempt under this chapter or other applicable
law and who acts as a residential mortgage loan servicer without
first obtaining a registration as required under this chapter
commits an offense.
(b) An offense under this section is a Class B misdemeanor.
A second or subsequent conviction for an offense under this section
is a Class A misdemeanor.
SECTION 49. The Finance Commission of Texas shall adopt
rules to implement Section 156.004(a), Finance Code, as amended by
this Act, not later than January 1, 2018.
SECTION 50. Section 156.004(a), Finance Code, as amended by
this Act, applies only to an application for a residential mortgage
loan that is submitted on or after January 1, 2018. An application
for a residential mortgage loan that is submitted before January 1,
2018, is governed by the law in effect on the date the application
was submitted, and the former law is continued in effect for that
purpose.
SECTION 51. Section 157.0021(b), Finance Code, as amended
by this Act, and Section 158.101, Finance Code, as amended by this
Act, apply only to a residential mortgage loan that is made on or
after the effective date of this Act. A residential mortgage loan
that is made before the effective date of this Act is governed by
the law in effect on the date the residential mortgage loan was
made, and the former law is continued in effect for that purpose.
SECTION 52. (a) Except as otherwise provided by this
section, this Act takes effect September 1, 2017.
(b) Section 156.004(a), Finance Code, as amended by this
Act, takes effect January 1, 2018.