Texas 2021 - 87th Regular

Texas House Bill HB3472 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
	1	+	87R18914 JES-F
1	2		By: Deshotel H.B. No. 3472
	3	+	Substitute the following for H.B. No. 3472:
	4	+	By: Perez C.S.H.B. No. 3472
2	5
3	6
4	7		A BILL TO BE ENTITLED
5	8		AN ACT
6	9		relating to the investment and use of excess residential mortgage
7	10		loan originator recovery fund fees and to the creation of the
8	11		mortgage grant fund; changing a fee.
9	12		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	13		SECTION 1. Section 13.016, Finance Code, is amended to read
11	14		as follows:
12	15		Sec. 13.016. RECOVERY FUND. (a) Except as provided by
13	16		Subchapter G, Chapter 156, the [The] savings and mortgage lending
14	17		commissioner shall establish, administer, and maintain one
15	18		recovery fund for the purposes of Chapters 156 and 157. The
16	19		recovery fund shall be administered and maintained under Subchapter
17	20		F, Chapter 156.
18	21		(b) The savings and mortgage lending commissioner's
19	22		authority under this section includes the authority to[:
20	23		[(1) set fee amounts under Chapters 156 and 157 for
21	24		deposit in the recovery fund; and
22	25		[(2)] enforce disciplinary action as provided by
23	26		Chapters 156 and 157 for a person's failure to comply with the
24	27		applicable provisions of those chapters relating to the recovery
25	28		fund and with applicable rules adopted under those chapters.
26	29		SECTION 2. Sections 156.501(b) and (c), Finance Code, are
27	30		amended to read as follows:
28	31		(b) Subject to this subsection and Section 156.502(b), the
29	32		recovery fund shall be used to reimburse residential mortgage loan
30	33		applicants for actual damages incurred because of acts committed by
31	34		a residential mortgage loan originator who was licensed under
32	35		Chapter 157 when the act was committed. The use of the fund is
33	36		limited to reimbursement for out-of-pocket losses caused by an act
34	37		by a residential mortgage loan originator licensed under Chapter
35	38		157 that constitutes a violation of Section 157.024(a)(2), (3),
36	39		(5), (7), (8), (9), (10), (13), (16), (17), or (18) or 156.304(b).
37	40		(c) Amounts in the recovery fund may be invested and
38	41		reinvested in accordance with Chapter 2256, Government Code, and
39	42		under the prudent person standard described in Section 11b, Article
40	43		VII, Texas Constitution [in the same manner as funds of the
41	44		Employees Retirement System of Texas], and the interest from these
42	45		investments shall be deposited to the credit of the fund. An
43	46		investment may not be made under this subsection if the investment
44	47		will impair the necessary liquidity required to satisfy claims
45	48		[judgment payments] awarded under this subchapter.
46	49		SECTION 3. Section 156.502, Finance Code, is amended to
47	50		read as follows:
48	51		Sec. 156.502. FUNDING. (a) On an application for an
49	52		original license [or for renewal of a license] issued under Chapter
50	53		157, the applicant, in addition to paying the original application
51	54		fee [or renewal fee], shall pay a fee in the [an] amount of
52	55		[determined by the commissioner, not to exceed] $20. The fee shall
53	56		be deposited in the recovery fund.
54	57		(a-1) All or any portion of the amount of a penalty that is
55		-	collected ~~by the commissioner~~ under Sections 156.302, 156.303,
56		-	~~157.023, 157.024,~~ 157.031, 158.105, and 180.202, as determined by
57		-	~~the commissioner,~~ may be deposited to the credit of the recovery
58		-	~~fund at the end of~~ each fiscal year.
	58	+	collected under Sections 156.302, 156.303, 157.023, 157.024,
	59	+	157.031, 158.105, and 180.202, as determined by the commissioner,
	60	+	may be deposited to the credit of the recovery fund at the end of
	61	+	each fiscal year.
59	62		(b) If the balance remaining in the recovery fund at the end
60	63		of a calendar year is more than $3.5 million, the amount of money in
61	64		excess of that amount shall be remitted by the commissioner to the
62	65		comptroller for deposit in the mortgage grant fund established
63	66		under Subchapter G [available to the commissioner to offset the
64	67		expenses of participating in and sharing information with the
65	68		Nationwide Mortgage Licensing System and Registry in accordance
66	69		with Chapter 180].
67	70		SECTION 4. Chapter 156, Finance Code, is amended by adding
68	71		Subchapter G to read as follows:
69	72		SUBCHAPTER G. MORTGAGE GRANT FUND
70	73		Sec. 156.551. MORTGAGE GRANT FUND. (a) The commissioner
71	74		shall establish, administer, and maintain a mortgage grant fund as
72	75		provided by this subchapter. The amounts received by the
73	76		commissioner for deposit in the fund shall be held by the
74	77		commissioner in trust for carrying out the purposes of the fund.
75	78		(b) All or any portion of the amount of a penalty that is
76		-	collected ~~by the commissioner~~ under Sections 156.302, 156.303,
77		-	~~157.023, 157.024,~~ 157.031, 158.105, and 180.202, as determined by
78		-	~~the commissioner,~~ may be deposited to the credit of the mortgage
79		-	~~grant fund at the end~~ of each fiscal year.
	79	+	collected under Sections 156.302, 156.303, 157.023, 157.024,
	80	+	157.031, 158.105, and 180.202, as determined by the commissioner,
	81	+	may be deposited to the credit of the mortgage grant fund at the end
	82	+	of each fiscal year.
80	83		Sec. 156.552. FUNDING. The mortgage grant fund consists
81	84		of:
82	85		(1) penalties collected by the commissioner and
83	86		deposited to the credit of the fund in accordance with Section
84	87		156.551(b); and
85	88		(2) excess amounts transferred from the recovery fund
86	89		under Section 156.502(b).
87	90		Sec. 156.553. MANAGEMENT OF FUND. (a) The commissioner, as
88	91		manager of the mortgage grant fund, shall:
89	92		(1) subject to Subsection (b), invest and reinvest the
90	93		assets of the fund;
91	94		(2) make disbursements from the fund in accordance
92	95		with Section 156.554;
93	96		(3) advise the finance commission regarding the fund;
94	97		(4) maintain books and records for the fund as
95	98		required by the finance commission; and
96	99		(5) appear at hearings or judicial proceedings related
97	100		to the fund.
98	101		(b) Amounts in the mortgage grant fund may be invested and
99	102		reinvested in accordance with Chapter 2256, Government Code, and
100	103		under the prudent person standard described in Section 11b, Article
101	104		VII, Texas Constitution.
102	105		Sec. 156.554. DISBURSEMENT FROM FUND. (a) The
103	106		commissioner shall approve each disbursement from the mortgage
104	107		grant fund, which must be for a purpose authorized by Subsection
105	108		(b).
106	109		(b) The commissioner:
107	110		(1) to the extent the commissioner determines the fund
108	111		has sufficient assets available, shall provide a grant in an amount
109	112		of not less than $100,000 each year to an auxiliary mortgage loan
110	113		activity company or another statewide nonprofit organization that
111	114		supports organizations described by Section 156.202(a-1)(1) for
112	115		the purposes of:
113	116		(A) providing statewide training and technical
114	117		assistance to entities described by Section 156.202(a-1);
115	118		(B) servicing third-party mortgage loans;
116	119		(C) providing financial education to consumers
117	120		that relates to mortgage loans; and
118	121		(D) administering disaster repair programs and
119	122		preparedness resources for consumers with mortgage loans;
120	123		(2) shall make disbursements from the fund to pay
121	124		claims made under Section 156.555 that meet the requirements for
122	125		payment under that section; and
123	126		(3) may make disbursements from the fund to:
124	127		(A) provide support for statewide financial
125	128		education, activities, and programs specifically related to
126	129		mortgage loans for consumers, including activities and programs
127	130		described by Section 393.628(c); and
128	131		(B) if a governor's declaration of a state of
129	132		disaster under Section 418.014, Government Code, is in effect, a
130	133		governmental or nonprofit organization providing mortgage payment
131	134		assistance for residence homesteads, as defined by Section 11.13,
132	135		Tax Code, as needed due to the disaster.
133	136		Sec. 156.555. PAYMENT OF CLAIMS FOR FRAUDULENT UNLICENSED
134	137		ACTIVITY. (a) A residential mortgage loan applicant may make a
135	138		claim on and receive payment from the mortgage grant fund for the
136	139		recovery of the applicant's actual, out-of-pocket damages incurred
137	140		because of fraud committed by an individual who acted as a
138	141		residential mortgage loan originator but who did not hold the
139	142		required license issued under Chapter 157 at the time the
140	143		individual committed the fraudulent act.
141	144		(b) The eligibility and procedural requirements for a claim
142	145		made under Section 156.504 and the statute of limitations under
143	146		Section 156.503 apply to a residential mortgage loan applicant who
144	147		makes a claim under this section.
145	148		(c) Payments made from the mortgage grant fund to a
146	149		residential mortgage loan applicant under this section are subject
147	150		to the limits provided by Section 156.505.
148	151		Sec. 156.556. RULES. The finance commission shall adopt
149	152		rules to administer this subchapter, including rules governing
150	153		implementation of Section 156.554 that:
151	154		(1) ensure a grant awarded under that section is used
152	155		for a public purpose described by that section; and
153	156		(2) provide a means of recovering money awarded that
154	157		is not used in compliance with that section.
155	158		SECTION 5. Section 157.013(b), Finance Code, is amended to
156	159		read as follows:
157	160		(b) An application for a residential mortgage loan
158	161		originator license must be accompanied by:
159	162		(1) an application fee in an amount determined by the
160	163		commissioner, not to exceed $500; and
161	164		(2) for an original license, a recovery fund fee in the
162	165		[an] amount of [determined by the commissioner, not to exceed] $20.
163	166		SECTION 6. Sections 156.501(d) and (f), Finance Code, are
164	167		repealed.
165	168		SECTION 7. Section 156.501(c), Finance Code, as amended by
166	169		this Act, applies only to an investment made on or after the
167	170		effective date of this Act. An investment made before the effective
168	171		date of this Act is governed by the law as it existed immediately
169	172		before that date, and that law is continued in effect for that
170	173		purpose.
171	174		SECTION 8. This Act takes effect September 1, 2021.