Texas 2021 - 87th Regular

Texas House Bill HB3617 Compare Versions

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Version 2 (New)

Old	New		Differences
1		-	H.B. No. 3617
	1	+	By: Anchia (Senate Sponsor - Zaffirini) H.B. No. 3617
	2	+	(In the Senate - Received from the House May 3, 2021;
	3	+	May 17, 2021, read first time and referred to Committee on Business &
	4	+	Commerce; May 21, 2021, reported adversely, with favorable
	5	+	Committee Substitute by the following vote: Yeas 5, Nays 1;
	6	+	May 21, 2021, sent to printer.)
	7	+	Click here to see the committee vote
	8	+	COMMITTEE SUBSTITUTE FOR H.B. No. 3617 By: Hancock
2	9
3	10
	11	+	A BILL TO BE ENTITLED
4	12		AN ACT
5	13		relating to certain qualifications and requirements for
6	14		residential mortgage loan companies, the investment and use of
7	15		excess residential mortgage loan originator recovery fund fees, and
8	16		the creation of the mortgage grant fund; changing a fee.
9	17		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	18		SECTION 1. Section 13.016, Finance Code, is amended to read
11	19		as follows:
12	20		Sec. 13.016. RECOVERY FUND. (a) Except as provided by
13	21		Subchapter G, Chapter 156, the [The] savings and mortgage lending
14	22		commissioner shall establish, administer, and maintain one
15	23		recovery fund for the purposes of Chapters 156 and 157. The
16	24		recovery fund shall be administered and maintained under Subchapter
17	25		F, Chapter 156.
18	26		(b) The savings and mortgage lending commissioner's
19	27		authority under this section includes the authority to[:
20	28		[(1) set fee amounts under Chapters 156 and 157 for
21	29		deposit in the recovery fund; and
22	30		[(2)] enforce disciplinary action as provided by
23	31		Chapters 156 and 157 for a person's failure to comply with the
24	32		applicable provisions of those chapters relating to the recovery
25	33		fund and with applicable rules adopted under those chapters.
26	34		SECTION 2. Section 156.2041, Finance Code, is amended to
27	35		read as follows:
28	36		Sec. 156.2041. QUALIFICATIONS AND REQUIREMENTS FOR
29	37		LICENSE: MORTGAGE COMPANY. [(a)] To be issued a mortgage company
30	38		license, an applicant must:
31	39		(1) submit a completed application together with the
32	40		payment of applicable fees through the Nationwide Mortgage
33	41		Licensing System and Registry;
34	42		(2) designate control persons for the mortgage company
35	43		through the Nationwide Mortgage Licensing System and Registry;
36	44		(3) designate an individual licensed as a residential
37	45		mortgage loan originator under Chapter 157 as the company's
38	46		qualifying individual;
39	47		(4) if applicable, submit a completed branch
40	48		application through the Nationwide Mortgage Licensing System and
41	49		Registry for each branch office that engages in residential
42	50		mortgage loan activity on residential real estate located in this
43	51		state;
44	52		(5) not be in violation of this chapter, a rule adopted
45	53		under this chapter, or any order previously issued by the
46	54		commissioner to the applicant;
47	55		(6) have the company name or assumed name properly
48	56		filed with either the secretary of state or with the appropriate
49	57		county clerk's office; and
50	58		(7) [maintain a physical office in this state; and
51	59		[(8)] provide financial statements and any other
52	60		information required by the commissioner.
53	61		SECTION 3. Section 156.2042, Finance Code, is amended to
54	62		read as follows:
55	63		Sec. 156.2042. QUALIFICATIONS AND REQUIREMENTS FOR
56	64		LICENSE: CREDIT UNION SUBSIDIARY ORGANIZATION. [(a)] To be issued
57	65		a credit union subsidiary organization license, an applicant must:
58	66		(1) submit a completed application together with the
59	67		payment of applicable fees through the Nationwide Mortgage
60	68		Licensing System and Registry;
61	69		(2) designate control persons for the organization
62	70		through the Nationwide Mortgage Licensing System and Registry;
63	71		(3) designate an individual licensed as a residential
64	72		mortgage loan originator under Chapter 157 as the company's
65	73		qualifying individual;
66	74		(4) submit a completed branch application through the
67	75		Nationwide Mortgage Licensing System and Registry for each branch
68	76		office that engages in residential mortgage loan activity on
69	77		residential real estate located in this state; and
70	78		(5) not be in violation of this chapter, a rule adopted
71	79		under this chapter, or any order previously issued by the
72	80		commissioner to the applicant[; and
73	81		[(6) maintain a physical office in this state].
74	82		SECTION 4. Section 156.212, Finance Code, is amended to
75	83		read as follows:
76	84		Sec. 156.212. MAINTENANCE AND LOCATION OF OFFICES. [(a)
77	85		Each residential mortgage loan company licensed under this chapter
78	86		shall maintain a physical office in this state.
79	87		[(a-1) If a residential mortgage loan company's main office
80	88		is outside this state, the requirement of Subsection (a) is
81	89		satisfied if the company has a branch office located in this state.
82	90		[(b)] If a residential mortgage loan company maintains an
83	91		office separate and distinct from the company's main office,
84	92		whether located in this state or not, that conducts mortgage
85	93		business with consumers of this state or regarding residential real
86	94		estate in this state, the company shall apply for, pay a fee of $50
87	95		for, and obtain an additional license to be known as a branch office
88	96		license for each additional office to be maintained by the company.
89	97		SECTION 5. Sections 156.501(b) and (c), Finance Code, are
90	98		amended to read as follows:
91	99		(b) Subject to this subsection and Section 156.502(b), the
92	100		recovery fund shall be used to reimburse residential mortgage loan
93	101		applicants for actual damages incurred because of acts committed by
94	102		a residential mortgage loan originator who was licensed under
95	103		Chapter 157 when the act was committed. The use of the fund is
96	104		limited to reimbursement for out-of-pocket losses caused by an act
97	105		by a residential mortgage loan originator licensed under Chapter
98	106		157 that constitutes a violation of Section 157.024(a)(2), (3),
99	107		(5), (7), (8), (9), (10), (13), (16), (17), or (18) or 156.304(b).
100	108		(c) Amounts in the recovery fund may be invested and
101	109		reinvested in accordance with Chapter 2256, Government Code, and
102	110		under the prudent person standard described in Section 11b, Article
103	111		VII, Texas Constitution [in the same manner as funds of the
104	112		Employees Retirement System of Texas], and the interest from these
105	113		investments shall be deposited to the credit of the fund. An
106	114		investment may not be made under this subsection if the investment
107	115		will impair the necessary liquidity required to satisfy claims
108	116		[judgment payments] awarded under this subchapter.
109	117		SECTION 6. Section 156.502, Finance Code, is amended to
110	118		read as follows:
111	119		Sec. 156.502. FUNDING. (a) On an application for an
112	120		original license [or for renewal of a license] issued under Chapter
113	121		157, the applicant, in addition to paying the original application
114	122		fee [or renewal fee], shall pay a fee in the [an] amount of
115	123		[determined by the commissioner, not to exceed] $20. The fee shall
116	124		be deposited in the recovery fund.
117	125		(a-1) All or any portion of the amount of a penalty that is
118	126		collected by the commissioner under Sections 156.302, 156.303,
119	127		157.023, 157.024, 157.031, 158.105, and 180.202, as determined by
120	128		the commissioner, may be deposited to the credit of the recovery
121	129		fund at the end of each fiscal year.
122	130		(b) If the balance remaining in the recovery fund at the end
123	131		of a calendar year is more than $3.5 million, the amount of money in
124	132		excess of that amount shall be remitted by the commissioner to the
125	133		comptroller for deposit in the mortgage grant fund established
126	134		under Subchapter G [available to the commissioner to offset the
127	135		expenses of participating in and sharing information with the
128	136		Nationwide Mortgage Licensing System and Registry in accordance
129	137		with Chapter 180].
130	138		SECTION 7. Chapter 156, Finance Code, is amended by adding
131	139		Subchapter G to read as follows:
132	140		SUBCHAPTER G. MORTGAGE GRANT FUND
133	141		Sec. 156.551. MORTGAGE GRANT FUND. (a) The commissioner
134	142		shall establish, administer, and maintain a mortgage grant fund as
135	143		provided by this subchapter. The amounts received by the
136	144		commissioner for deposit in the fund shall be held by the
137	145		commissioner in trust for carrying out the purposes of the fund.
138		-	(b) Subject to Subsection (c), all or any portion of the
139		-	amount of a penalty that is collected by the commissioner under
140		-	Sections 156.302, 156.303, 157.023, 157.024, 157.031, 158.105, and
141		-	180.202, as determined by the commissioner, may be deposited to the
142		-	credit of the mortgage grant fund at the end of each fiscal year.
143		-	(c) The balance of the mortgage grant fund may not at any
144		-	time exceed $300,000.
	146	+	(b) All or any portion of the amount of a penalty that is
	147	+	collected by the commissioner under Sections 156.302, 156.303,
	148	+	157.023, 157.024, 157.031, 158.105, and 180.202, as determined by
	149	+	the commissioner, may be deposited to the credit of the mortgage
	150	+	grant fund at the end of each fiscal year.
145	151		Sec. 156.552. FUNDING. The mortgage grant fund consists
146	152		of:
147	153		(1) penalties collected by the commissioner and
148	154		deposited to the credit of the fund in accordance with Section
149	155		156.551(b); and
150	156		(2) excess amounts transferred from the recovery fund
151	157		under Section 156.502(b).
152	158		Sec. 156.553. MANAGEMENT OF FUND. (a) The commissioner, as
153	159		manager of the mortgage grant fund, shall:
154	160		(1) subject to Subsection (b), invest and reinvest the
155	161		assets of the fund;
156	162		(2) make disbursements from the fund in accordance
157	163		with Section 156.554;
158	164		(3) advise the finance commission regarding the fund;
159	165		(4) maintain books and records for the fund as
160	166		required by the finance commission; and
161	167		(5) appear at hearings or judicial proceedings related
162	168		to the fund.
163	169		(b) Amounts in the mortgage grant fund may be invested and
164	170		reinvested in accordance with Chapter 2256, Government Code, and
165	171		under the prudent person standard described in Section 11b, Article
166	172		VII, Texas Constitution.
167	173		Sec. 156.554. DISBURSEMENT FROM FUND. (a) The
168	174		commissioner shall approve each disbursement from the mortgage
169	175		grant fund, which must be for a purpose authorized by Subsection
170	176		(b).
171	177		(b) The commissioner:
172		-	(1) may provide grants in an aggregate amount of not
173		-	more than $100,000 each year to an auxiliary mortgage loan activity
174		-	company or another nonprofit organization for the purposes of:
175		-	(A) providing to consumers financial education
176		-	relating to mortgage loans; and
177		-	(B) providing to other nonprofit organizations
178		-	training in order for those organizations to provide to consumers
179		-	financial education relating to mortgage loans;
	178	+	(1) to the extent the commissioner determines the fund
	179	+	has sufficient assets available, shall provide a grant in an amount
	180	+	of not less than $100,000 each year to an auxiliary mortgage loan
	181	+	activity company or another statewide nonprofit organization that
	182	+	supports organizations described by Section 156.202(a-1)(1) for
	183	+	the purposes of:
	184	+	(A) providing statewide training and technical
	185	+	assistance to entities described by Section 156.202(a-1);
	186	+	(B) servicing third-party mortgage loans;
	187	+	(C) providing financial education to consumers
	188	+	that relates to mortgage loans; and
	189	+	(D) administering disaster repair programs and
	190	+	preparedness resources for consumers with mortgage loans;
180	191		(2) shall make disbursements from the fund to pay
181	192		claims made under Section 156.555 that meet the requirements for
182	193		payment under that section; and
183		-	(3) may make disbursements from the fund to provide
184		-	support for statewide financial education, activities, and
185		-	programs specifically related to mortgage loans for consumers,
186		-	including activities and programs described by Section 393.628(c).
	194	+	(3) may make disbursements from the fund to:
	195	+	(A) provide support for statewide financial
	196	+	education, activities, and programs specifically related to
	197	+	mortgage loans for consumers, including activities and programs
	198	+	described by Section 393.628(c); and
	199	+	(B) if a governor's declaration of a state of
	200	+	disaster under Section 418.014, Government Code, is in effect, a
	201	+	governmental or nonprofit organization providing mortgage payment
	202	+	assistance for residence homesteads, as defined by Section 11.13,
	203	+	Tax Code, as needed due to the disaster.
187	204		Sec. 156.555. PAYMENT OF CLAIMS FOR FRAUDULENT UNLICENSED
188	205		ACTIVITY. (a) A residential mortgage loan applicant may make a
189	206		claim on and receive payment from the mortgage grant fund for the
190	207		recovery of the applicant's actual, out-of-pocket damages incurred
191	208		because of fraud committed by an individual who acted as a
192	209		residential mortgage loan originator but who did not hold the
193	210		required license issued under Chapter 157 at the time the
194	211		individual committed the fraudulent act.
195	212		(b) The eligibility and procedural requirements for a claim
196	213		made under Section 156.504 and the statute of limitations under
197	214		Section 156.503 apply to a residential mortgage loan applicant who
198	215		makes a claim under this section.
199	216		(c) Payments made from the mortgage grant fund to a
200	217		residential mortgage loan applicant under this section are subject
201	218		to the limits provided by Section 156.505.
202	219		Sec. 156.556. RULES. The finance commission shall adopt
203	220		rules to administer this subchapter, including rules governing
204	221		implementation of Section 156.554 that:
205	222		(1) ensure a grant awarded under that section is used
206	223		for a public purpose described by that section; and
207	224		(2) provide a means of recovering money awarded that
208	225		is not used in compliance with that section.
209	226		SECTION 8. Section 157.013(b), Finance Code, is amended to
210	227		read as follows:
211	228		(b) An application for a residential mortgage loan
212	229		originator license must be accompanied by:
213	230		(1) an application fee in an amount determined by the
214	231		commissioner, not to exceed $500; and
215	232		(2) for an original license, a recovery fund fee in the
216	233		[an] amount of [determined by the commissioner, not to exceed] $20.
217	234		SECTION 9. Sections 156.501(d) and (f), Finance Code, are
218	235		repealed.
219	236		SECTION 10. Section 156.501(c), Finance Code, as amended by
220	237		this Act, applies only to an investment made on or after the
221	238		effective date of this Act. An investment made before the effective
222	239		date of this Act is governed by the law as it existed immediately
223	240		before that date, and that law is continued in effect for that
224	241		purpose.
225	242		SECTION 11. This Act takes effect September 1, 2021.
226		-	______________________________ ______________________________
227		-	President of the Senate Speaker of the House
228		-	I certify that H.B. No. 3617 was passed by the House on April
229		-	30, 2021, by the following vote: Yeas 133, Nays 8, 2 present, not
230		-	voting; and that the House concurred in Senate amendments to H.B.
231		-	No. 3617 on May 28, 2021, by the following vote: Yeas 99, Nays 49,
232		-	1 present, not voting.
233		-	______________________________
234		-	Chief Clerk of the House
235		-	I certify that H.B. No. 3617 was passed by the Senate, with
236		-	amendments, on May 24, 2021, by the following vote: Yeas 25, Nays
237		-	5.
238		-	______________________________
239		-	Secretary of the Senate
240		-	APPROVED: __________________
241		-	Date
242		-	__________________
243		-	Governor
	243	+	* * * * *