Texas 2023 - 88th Regular

Texas House Bill HB264 Compare Versions

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1	1	88R400 JES-D
2	2	By: Toth, Cortez, Wilson, Schaefer, et al. H.B. No. 264
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to requirements for the physical presence of a borrower
8	8	for signing certain documents related to a home equity loan.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Section 343.002(b), Finance Code, is amended to
11	11	read as follows:
12	12	(b) Except as provided by Subchapter D, this [This] chapter
13	13	does not apply to:
14	14	(1) a reverse mortgage; or
15	15	(2) an open-end account, as defined by Section
16	16	301.002.
17	17	SECTION 2. Chapter 343, Finance Code, is amended by adding
18	18	Subchapter D to read as follows:
19	19	SUBCHAPTER D. HOME EQUITY LOANS
20	20	Sec. 343.301. DEFINITION. In this subchapter, "home equity
21	21	loan" means an extension of credit described by Section 50(a)(6),
22	22	Article XVI, Texas Constitution.
23	23	Sec. 343.302. PHYSICAL PRESENCE OF CERTAIN BORROWERS AT
24	24	CLOSING NOT REQUIRED. (a) This section applies to the closing of a
25	25	home equity loan by a borrower who:
26	26	(1) is located outside of this state at the time of the
27	27	closing and is:
28	28	(A) a member of the armed forces of the United
29	29	States who is on active duty;
30	30	(B) an officer of the Commissioned Corps of the
31	31	United States Public Health Service who is on active duty;
32	32	(C) a member of reserve components of the armed
33	33	forces of the United States not described by Paragraph (A) who is on
34	34	active duty;
35	35	(D) the spouse or surviving spouse of a person
36	36	described by Paragraph (A), (B), or (C); or
37	37	(E) a civilian employee of the federal government
38	38	employed by, serving with, or accompanying the armed forces of the
39	39	United States, if assigned to a foreign country or a vessel or unit
40	40	of the armed forces of the United States;
41	41	(2) has a disability that prohibits travel or is
42	42	quarantined to protect the borrower's health or the health of
43	43	others, as verified by a written letter from a physician; or
44	44	(3) is unable to travel to the closing because the
45	45	borrower is incarcerated or under house arrest.
46	46	(b) In lieu of closing a home equity loan in person at the
47	47	office of the lender, an attorney, or a title company, a borrower
48	48	described by Subsection (a) may close the loan:
49	49	(1) from a remote location using remote online
50	50	notarization; or
51	51	(2) through an agent who:
52	52	(A) is acting under a durable power of attorney
53	53	that expressly grants the agent the authority to engage in a home
54	54	equity loan transaction on behalf of the borrower, regardless of
55	55	where the borrower signed the power of attorney; and
56	56	(B) appears in person for the closing at the
57	57	office of the lender, attorney, or title company on behalf of the
58	58	borrower.
59	59	SECTION 3. Section 751.203(b), Estates Code, is amended to
60	60	read as follows:
61	61	(b) A certification described by Subsection (a) may be in
62	62	the following form:
63	63	CERTIFICATION OF DURABLE POWER OF ATTORNEY BY AGENT
64	64	I, ___________ (agent), certify under penalty of perjury
65	65	that:
66	66	1. I am the agent named in the power of attorney validly
67	67	executed by ___________ (principal) ("principal") on ____________
68	68	(date), and the power of attorney is now in full force and effect.
69	69	2. The principal is not deceased and is presently domiciled
70	70	in ___________ (city and state/territory or foreign country).
71	71	3. To the best of my knowledge after diligent search and
72	72	inquiry:
73	73	a. The power of attorney has not been revoked by the
74	74	principal or suspended or terminated by the occurrence of any
75	75	event, whether or not referenced in the power of attorney;
76	76	b. At the time the power of attorney was executed, the
77	77	principal was mentally competent to transact legal matters and was
78	78	not acting under the undue influence of any other person;
79	79	c. A permanent guardian of the estate of the principal
80	80	has not qualified to serve in that capacity;
81	81	d. My powers under the power of attorney have not been
82	82	suspended by a court in a temporary guardianship or other
83	83	proceeding;
84	84	e. If I am (or was) the principal's spouse, my marriage
85	85	to the principal has not been dissolved by court decree of divorce
86	86	or annulment or declared void by a court, or the power of attorney
87	87	provides specifically that my appointment as the agent for the
88	88	principal does not terminate if my marriage to the principal has
89	89	been dissolved by court decree of divorce or annulment or declared
90	90	void by a court;
91	91	f. No proceeding has been commenced for a temporary or
92	92	permanent guardianship of the person or estate, or both, of the
93	93	principal; and
94	94	g. The exercise of my authority is not prohibited by
95	95	another agreement or instrument.
96	96	4. If under its terms the power of attorney becomes
97	97	effective on the disability or incapacity of the principal or at a
98	98	future time or on the occurrence of a contingency, the principal now
99	99	has a disability or is incapacitated or the specified future time or
100	100	contingency has occurred.
101	101	5. I am acting within the scope of my authority under the
102	102	power of attorney, and my authority has not been altered or
103	103	terminated.
104	104	6. If applicable, I am the successor to ___________
105	105	(predecessor agent), who has resigned, died, or become
106	106	incapacitated, is not qualified to serve or has declined to serve as
107	107	agent, or is otherwise unable to act. There are no unsatisfied
108	108	conditions remaining under the power of attorney that preclude my
109	109	acting as successor agent.
110	110	7. I agree not to:
111	111	a. Exercise any powers granted by the power of
112	112	attorney if I attain knowledge that the power of attorney has been
113	113	revoked, suspended, or terminated; or
114	114	b. Exercise any specific powers that have been
115	115	revoked, suspended, or terminated.
116	116	8. A true and correct copy of the power of attorney is
117	117	attached to this document.
118	118	9. If applicable and if used in connection with an extension
119	119	of credit under Section 50(a)(6), Article XVI, Texas Constitution,
120	120	the power of attorney was executed in the office of the lender, the
121	121	office of a title company, or the law office of
122	122	____________________.
123	123	Date: __________, 20__.
124	124	__________________________________ (signature of agent)
125	125	SECTION 4. Section 752.051, Estates Code, is amended to
126	126	read as follows:
127	127	Sec. 752.051. FORM. The following form is known as a
128	128	"statutory durable power of attorney":
129	129	STATUTORY DURABLE POWER OF ATTORNEY
130	130	NOTICE: THE POWERS GRANTED BY THIS DOCUMENT ARE BROAD AND SWEEPING.
131	131	THEY ARE EXPLAINED IN THE DURABLE POWER OF ATTORNEY ACT, SUBTITLE P,
132	132	TITLE 2, ESTATES CODE. IF YOU HAVE ANY QUESTIONS ABOUT THESE POWERS,
133	133	OBTAIN COMPETENT LEGAL ADVICE. THIS DOCUMENT DOES NOT AUTHORIZE
134	134	ANYONE TO MAKE MEDICAL AND OTHER HEALTH-CARE DECISIONS FOR YOU. YOU
135	135	MAY REVOKE THIS POWER OF ATTORNEY IF YOU LATER WISH TO DO SO. IF YOU
136	136	WANT YOUR AGENT TO HAVE THE AUTHORITY TO SIGN HOME EQUITY LOAN
137	137	DOCUMENTS ON YOUR BEHALF, THIS POWER OF ATTORNEY MUST BE SIGNED BY
138	138	YOU AT THE OFFICE OF THE LENDER, AN ATTORNEY AT LAW, OR A TITLE
139	139	COMPANY, UNLESS YOU QUALIFY FOR AN EXCEPTION UNDER SECTION 343.302,
140	140	FINANCE CODE.
141	141	You should select someone you trust to serve as your agent.
142	142	Unless you specify otherwise, generally the agent's authority will
143	143	continue until:
144	144	(1) you die or revoke the power of attorney;
145	145	(2) your agent resigns, is removed by court order, or
146	146	is unable to act for you; or
147	147	(3) a guardian is appointed for your estate.
148	148	I, __________ (insert your name and address), appoint
149	149	__________ (insert the name and address of the person appointed) as
150	150	my agent to act for me in any lawful way with respect to all of the
151	151	following powers that I have initialed below. (YOU MAY APPOINT
152	152	CO-AGENTS. UNLESS YOU PROVIDE OTHERWISE, CO-AGENTS MAY ACT
153	153	INDEPENDENTLY.)
154	154	TO GRANT ALL OF THE FOLLOWING POWERS, INITIAL THE LINE IN
155	155	FRONT OF (O) AND IGNORE THE LINES IN FRONT OF THE OTHER POWERS
156	156	LISTED IN (A) THROUGH (N).
157	157	TO GRANT A POWER, YOU MUST INITIAL THE LINE IN FRONT OF THE
158	158	POWER YOU ARE GRANTING.
159	159	TO WITHHOLD A POWER, DO NOT INITIAL THE LINE IN FRONT OF THE
160	160	POWER. YOU MAY, BUT DO NOT NEED TO, CROSS OUT EACH POWER WITHHELD.
161	161	____ (A) Real property transactions, including home equity
162	162	loan transactions;
163	163	____ (B) Tangible personal property transactions;
164	164	____ (C) Stock and bond transactions;
165	165	____ (D) Commodity and option transactions;
166	166	____ (E) Banking and other financial institution
167	167	transactions;
168	168	____ (F) Business operating transactions;
169	169	____ (G) Insurance and annuity transactions;
170	170	____ (H) Estate, trust, and other beneficiary transactions;
171	171	____ (I) Claims and litigation;
172	172	____ (J) Personal and family maintenance;
173	173	____ (K) Benefits from social security, Medicare, Medicaid,
174	174	or other governmental programs or civil or military service;
175	175	____ (L) Retirement plan transactions;
176	176	____ (M) Tax matters;
177	177	____ (N) Digital assets and the content of an electronic
178	178	communication;
179	179	____ (O) ALL OF THE POWERS LISTED IN (A) THROUGH (N). YOU DO
180	180	NOT HAVE TO INITIAL THE LINE IN FRONT OF ANY OTHER POWER IF YOU
181	181	INITIAL LINE (O).
182	182	SPECIAL INSTRUCTIONS:
183	183	Special instructions applicable to agent compensation
184	184	(initial in front of one of the following sentences to have it
185	185	apply; if no selection is made, each agent will be entitled to
186	186	compensation that is reasonable under the circumstances):
187	187	____ My agent is entitled to reimbursement of reasonable
188	188	expenses incurred on my behalf and to compensation that is
189	189	reasonable under the circumstances.
190	190	____ My agent is entitled to reimbursement of reasonable
191	191	expenses incurred on my behalf but shall receive no compensation
192	192	for serving as my agent.
193	193	Special instructions applicable to co-agents (if you have
194	194	appointed co-agents to act, initial in front of one of the following
195	195	sentences to have it apply; if no selection is made, each agent will
196	196	be entitled to act independently):
197	197	____ Each of my co-agents may act independently for me.
198	198	____ My co-agents may act for me only if the co-agents act
199	199	jointly.
200	200	____ My co-agents may act for me only if a majority of the
201	201	co-agents act jointly.
202	202	Special instructions applicable to gifts (initial in front of
203	203	the following sentence to have it apply):
204	204	____ I grant my agent the power to apply my property to make gifts
205	205	outright to or for the benefit of a person, including by the
206	206	exercise of a presently exercisable general power of appointment
207	207	held by me, except that the amount of a gift to an individual may not
208	208	exceed the amount of annual exclusions allowed from the federal
209	209	gift tax for the calendar year of the gift.
210	210	ON THE FOLLOWING LINES YOU MAY GIVE SPECIAL INSTRUCTIONS
211	211	LIMITING OR EXTENDING THE POWERS GRANTED TO YOUR AGENT.
212	212	________________________________________________________________
213	213	________________________________________________________________
214	214	________________________________________________________________
215	215	________________________________________________________________
216	216	________________________________________________________________
217	217	________________________________________________________________
218	218	________________________________________________________________
219	219	________________________________________________________________
220	220	________________________________________________________________
221	221	UNLESS YOU DIRECT OTHERWISE BELOW, THIS POWER OF ATTORNEY IS
222	222	EFFECTIVE IMMEDIATELY AND WILL CONTINUE UNTIL IT TERMINATES.
223	223	CHOOSE ONE OF THE FOLLOWING ALTERNATIVES BY CROSSING OUT THE
224	224	ALTERNATIVE NOT CHOSEN:
225	225	(A) This power of attorney is not affected by my subsequent
226	226	disability or incapacity.
227	227	(B) This power of attorney becomes effective upon my
228	228	disability or incapacity.
229	229	YOU SHOULD CHOOSE ALTERNATIVE (A) IF THIS POWER OF ATTORNEY
230	230	IS TO BECOME EFFECTIVE ON THE DATE IT IS EXECUTED.
231	231	IF NEITHER (A) NOR (B) IS CROSSED OUT, IT WILL BE ASSUMED THAT
232	232	YOU CHOSE ALTERNATIVE (A).
233	233	If Alternative (B) is chosen and a definition of my
234	234	disability or incapacity is not contained in this power of
235	235	attorney, I shall be considered disabled or incapacitated for
236	236	purposes of this power of attorney if a physician certifies in
237	237	writing at a date later than the date this power of attorney is
238	238	executed that, based on the physician's medical examination of me,
239	239	I am mentally incapable of managing my financial affairs. I
240	240	authorize the physician who examines me for this purpose to
241	241	disclose my physical or mental condition to another person for
242	242	purposes of this power of attorney. A third party who accepts this
243	243	power of attorney is fully protected from any action taken under
244	244	this power of attorney that is based on the determination made by a
245	245	physician of my disability or incapacity.
246	246	I agree that any third party who receives a copy of this
247	247	document may act under it. Termination of this durable power of
248	248	attorney is not effective as to a third party until the third party
249	249	has actual knowledge of the termination. I agree to indemnify the
250	250	third party for any claims that arise against the third party
251	251	because of reliance on this power of attorney. The meaning and
252	252	effect of this durable power of attorney is determined by Texas law.
253	253	If any agent named by me dies, becomes incapacitated,
254	254	resigns, refuses to act, or is removed by court order, or if my
255	255	marriage to an agent named by me is dissolved by a court decree of
256	256	divorce or annulment or is declared void by a court (unless I
257	257	provided in this document that the dissolution or declaration does
258	258	not terminate the agent's authority to act under this power of
259	259	attorney), I name the following (each to act alone and
260	260	successively, in the order named) as successor(s) to that agent:
261	261	__________.
262	262	Signed this ______ day of __________, _____________
263	263	___________________________
264	264	(your signature)
265	265	State of _______________________
266	266	County of ______________________
267	267	This document was acknowledged before me on ____________(date) by
268	268	________________________
269	269	(name of principal)
270	270	____________________________
271	271	(signature of notarial officer)
272	272	(Seal, if any, of notary) ______________________________________
273	273	(printed name)
274	274	My commission expires: __________
275	275	IMPORTANT INFORMATION FOR AGENT
276	276	Agent's Duties
277	277	When you accept the authority granted under this power of
278	278	attorney, you establish a "fiduciary" relationship with the
279	279	principal. This is a special legal relationship that imposes on you
280	280	legal duties that continue until you resign or the power of attorney
281	281	is terminated, suspended, or revoked by the principal or by
282	282	operation of law. A fiduciary duty generally includes the duty to:
283	283	(1) act in good faith;
284	284	(2) do nothing beyond the authority granted in this
285	285	power of attorney;
286	286	(3) act loyally for the principal's benefit;
287	287	(4) avoid conflicts that would impair your ability to
288	288	act in the principal's best interest; and
289	289	(5) disclose your identity as an agent when you act for
290	290	the principal by writing or printing the name of the principal and
291	291	signing your own name as "agent" in the following manner:
292	292	(Principal's Name) by (Your Signature) as Agent
293	293	In addition, the Durable Power of Attorney Act (Subtitle P,
294	294	Title 2, Estates Code) requires you to:
295	295	(1) maintain records of each action taken or decision
296	296	made on behalf of the principal;
297	297	(2) maintain all records until delivered to the
298	298	principal, released by the principal, or discharged by a court; and
299	299	(3) if requested by the principal, provide an
300	300	accounting to the principal that, unless otherwise directed by the
301	301	principal or otherwise provided in the Special Instructions, must
302	302	include:
303	303	(A) the property belonging to the principal that
304	304	has come to your knowledge or into your possession;
305	305	(B) each action taken or decision made by you as
306	306	agent;
307	307	(C) a complete account of receipts,
308	308	disbursements, and other actions of you as agent that includes the
309	309	source and nature of each receipt, disbursement, or action, with
310	310	receipts of principal and income shown separately;
311	311	(D) a listing of all property over which you have
312	312	exercised control that includes an adequate description of each
313	313	asset and the asset's current value, if known to you;
314	314	(E) the cash balance on hand and the name and
315	315	location of the depository at which the cash balance is kept;
316	316	(F) each known liability;
317	317	(G) any other information and facts known to you
318	318	as necessary for a full and definite understanding of the exact
319	319	condition of the property belonging to the principal; and
320	320	(H) all documentation regarding the principal's
321	321	property.
322	322	Termination of Agent's Authority
323	323	You must stop acting on behalf of the principal if you learn
324	324	of any event that terminates or suspends this power of attorney or
325	325	your authority under this power of attorney. An event that
326	326	terminates this power of attorney or your authority to act under
327	327	this power of attorney includes:
328	328	(1) the principal's death;
329	329	(2) the principal's revocation of this power of
330	330	attorney or your authority;
331	331	(3) the occurrence of a termination event stated in
332	332	this power of attorney;
333	333	(4) if you are married to the principal, the
334	334	dissolution of your marriage by a court decree of divorce or
335	335	annulment or declaration that your marriage is void, unless
336	336	otherwise provided in this power of attorney;
337	337	(5) the appointment and qualification of a permanent
338	338	guardian of the principal's estate unless a court order provides
339	339	otherwise; or
340	340	(6) if ordered by a court, your removal as agent
341	341	(attorney in fact) under this power of attorney. An event that
342	342	suspends this power of attorney or your authority to act under this
343	343	power of attorney is the appointment and qualification of a
344	344	temporary guardian unless a court order provides otherwise.
345	345	Liability of Agent
346	346	The authority granted to you under this power of attorney is
347	347	specified in the Durable Power of Attorney Act (Subtitle P, Title 2,
348	348	Estates Code). If you violate the Durable Power of Attorney Act or
349	349	act beyond the authority granted, you may be liable for any damages
350	350	caused by the violation or subject to prosecution for
351	351	misapplication of property by a fiduciary under Chapter 32 of the
352	352	Texas Penal Code.
353	353	THE AGENT, BY ACCEPTING OR ACTING UNDER THE APPOINTMENT,
354	354	ASSUMES THE FIDUCIARY AND OTHER LEGAL RESPONSIBILITIES OF AN AGENT.
355	355	SECTION 5. The changes in law made by this Act apply only to
356	356	a durable power of attorney executed on or after the effective date
357	357	of this Act. A durable power of attorney executed before the
358	358	effective date of this Act is governed by the law in effect on the
359	359	date the power of attorney was executed, and that law continues in
360	360	effect for that purpose.
361	361	SECTION 6. This Act takes effect January 1, 2024, but only
362	362	if the constitutional amendment proposed by the 88th Legislature,
363	363	Regular Session, 2023, authorizing the legislature to provide for
364	364	exceptions to the requirement that a home equity loan be closed only
365	365	at the office of the lender, an attorney at law, or a title company
366	366	is approved by the voters. If that proposed constitutional
367	367	amendment is not approved by the voters, this Act has no effect.