1-1 By: Carona S.B. No. 1074
1-2 (In the Senate - Filed March 9, 1999; March 11, 1999, read
1-3 first time and referred to Committee on Economic Development;
1-4 April 9, 1999, reported adversely, with favorable Committee
1-5 Substitute by the following vote: Yeas 4, Nays 0; April 9, 1999,
1-6 sent to printer.)
1-7 COMMITTEE SUBSTITUTE FOR S.B. No. 1074 By: Carona
1-8 A BILL TO BE ENTITLED
1-9 AN ACT
1-10 relating to the licensing of mortgage brokers; providing penalties.
1-11 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-12 SECTION 1. Subchapter D, Chapter 11, Finance Code, is
1-13 amended by adding Section 11.306 to read as follows:
1-14 Sec. 11.306. MORTGAGE BROKERS. The finance commission may:
1-15 (1) review any action or rule adopted by the savings
1-16 and loan commissioner under Chapter 156; and
1-17 (2) direct the savings and loan commissioner to adopt,
1-18 repeal, or amend any rule or other action the savings and loan
1-19 commissioner may undertake under Chapter 156.
1-20 SECTION 2. Subtitle E, Title 3, Finance Code, is amended by
1-21 adding Chapter 156 to read as follows:
1-22 CHAPTER 156. MORTGAGE BROKERS
1-23 SUBCHAPTER A. GENERAL PROVISIONS
1-24 Sec. 156.001. SHORT TITLE. This chapter may be cited as the
1-25 Mortgage Broker License Act.
1-26 Sec. 156.002. DEFINITIONS. In this chapter:
1-27 (1) "Commissioner" means the savings and loan
1-28 commissioner.
1-29 (2) "Disciplinary action" means an order by the
1-30 commissioner that requires one or more of the following:
1-31 (A) suspension or revocation of a license under
1-32 this chapter;
1-33 (B) probation of a suspension or revocation of a
1-34 license under this chapter on terms and conditions that the
1-35 commissioner determines appropriate;
1-36 (C) a reprimand of a person licensed under this
1-37 chapter; or
1-38 (D) an administrative penalty imposed on a
1-39 person licensed under this chapter under Section 156.302.
1-40 (3) "Finance commission" means the Finance Commission
1-41 of Texas.
1-42 (4) "Fund" means the mortgage broker recovery fund
1-43 established by the commissioner under Subchapter F.
1-44 (5) "Loan officer" means an individual sponsored by a
1-45 licensed mortgage broker for the purposes of performing the acts of
1-46 a mortgage broker. The term does not include:
1-47 (A) an individual who performs only clerical
1-48 functions such as delivering a loan application to a mortgage
1-49 broker or mortgage banker or gathering information related to a
1-50 mortgage loan application on behalf of the prospective borrower,
1-51 mortgage broker, or mortgage banker; or
1-52 (B) an individual who performs functions of a
1-53 loan processor.
1-54 (6) "Loan processor" means an individual who works
1-55 under the instruction of a loan officer or mortgage broker and
1-56 performs only clerical functions such as gathering information,
1-57 requesting information, word processing, sending correspondence, or
1-58 assembling files.
1-59 (7) "Mortgage applicant" means a person who is
1-60 solicited to use or who uses a mortgage broker to obtain a mortgage
1-61 loan.
1-62 (8) "Mortgage banker" means a person who is:
1-63 (A) approved or authorized by the United States
1-64 Department of Housing and Urban Development as a mortgagee with
2-1 direct endorsement underwriting authority;
2-2 (B) an approved seller or servicer of the
2-3 Federal National Mortgage Association;
2-4 (C) an approved seller or servicer of the
2-5 Federal Home Loan Mortgage Association; or
2-6 (D) an approved issuer for the Governmental
2-7 National Mortgage Association.
2-8 (9) "Mortgage broker" means a person who receives an
2-9 application from a prospective borrower for the purposes of making
2-10 a mortgage loan from that person's own funds or from the funds of
2-11 another person. The term does not include:
2-12 (A) a person who performs only clerical
2-13 functions such as delivering a loan application to a mortgage
2-14 broker or mortgage banker or gathering information related to a
2-15 mortgage loan application on behalf of the prospective borrower,
2-16 mortgage broker, or mortgage banker; or
2-17 (B) a person who performs functions of a loan
2-18 processor.
2-19 (10) "Mortgage loan" means a debt against real estate
2-20 secured by a first-lien security interest against one-to-four
2-21 family residential real estate created by a deed of trust, security
2-22 deed, or other security instrument.
2-23 Sec. 156.003. SECONDARY MARKET TRANSACTIONS. This chapter
2-24 does not prohibit a mortgage broker from receiving compensation
2-25 from a party other than the mortgage applicant for the sale,
2-26 transfer, assignment, or release of rights on the closing of a
2-27 mortgage transaction.
2-28 Sec. 156.004. AFFILIATED BUSINESS ARRANGEMENTS. Unless
2-29 prohibited by federal law, this chapter may not be construed to
2-30 prevent affiliated or controlled business arrangements or loan
2-31 origination services by or between mortgage brokers and other
2-32 professionals if the mortgage broker complies with all applicable
2-33 federal laws permitting those arrangements or services.
2-34 (Sections 156.005 to 156.100 reserved for expansion
2-35 SUBCHAPTER B. ADMINISTRATION PROVISIONS
2-36 Sec. 156.101. ADMINISTRATION OF CHAPTER. (a) The
2-37 commissioner shall administer this chapter.
2-38 (b) The commissioner may hire employees as necessary to
2-39 administer this chapter. The salaries of the employees shall be
2-40 set by the commissioner in amounts not to exceed the amounts set by
2-41 the General Appropriations Act.
2-42 (c) The commissioner may employ a general counsel,
2-43 attorneys, investigators, and support staff to administer and
2-44 enforce this chapter.
2-45 Sec. 156.102. RULEMAKING AUTHORITY. (a) Subject to review
2-46 and compliance with the directives of the finance commission as
2-47 provided by Section 11.306, the commissioner may adopt and enforce
2-48 rules necessary for the intent of or to ensure compliance with this
2-49 chapter.
2-50 (b) The commissioner may adopt rules to prohibit false,
2-51 misleading, or deceptive practices by mortgage brokers and loan
2-52 officers but may not adopt any other rules restricting competitive
2-53 bidding or advertising by mortgage brokers or loan officers. When
2-54 adopting rules under this subsection, the commissioner may not
2-55 restrict:
2-56 (1) the use of any medium for an advertisement;
2-57 (2) the personal appearance of or voice of a person in
2-58 an advertisement;
2-59 (3) the size or duration of an advertisement; or
2-60 (4) a mortgage broker's or loan officer's
2-61 advertisement under a trade name.
2-62 (c) The commissioner may adopt rules regarding books and
2-63 records that a person licensed under this chapter is required to
2-64 keep, including the location at which the books and records must be
2-65 kept.
2-66 (d) The commissioner shall consult with the mortgage broker
2-67 advisory committee when proposing and adopting rules under this
2-68 chapter.
2-69 Sec. 156.103. POWERS OF COMMISSIONER. (a) In addition to
3-1 any other action, proceeding, or remedy authorized by law, the
3-2 commissioner may institute an action in the commissioner's name to
3-3 enjoin a violation of this chapter or a rule adopted under this
3-4 chapter. To sustain an action filed under this subsection, it is
3-5 not necessary to allege or prove that an adequate remedy at law
3-6 does not exist or that substantial or irreparable damage would
3-7 result from a continued violation of this chapter.
3-8 (b) The commissioner is not required to provide an appeal
3-9 bond in any action or proceeding to enforce this chapter.
3-10 (c) The commissioner may authorize specific employees to
3-11 conduct hearings and make recommendations for final decisions in
3-12 contested cases.
3-13 Sec. 156.104. MORTGAGE BROKER ADVISORY COMMITTEE. (a) The
3-14 mortgage broker advisory committee is created to advise and assist
3-15 the commissioner.
3-16 (b) The advisory committee is composed of six members to be
3-17 appointed as follows:
3-18 (1) the commissioner shall appoint four members, each
3-19 of whom:
3-20 (A) must hold a mortgage broker license;
3-21 (B) is actively engaged in the business of
3-22 brokering loans at the time of appointment; and
3-23 (C) has been primarily engaged in the business
3-24 of brokering mortgage loans for at least two years before the
3-25 member's appointment; and
3-26 (2) the Texas Real Estate Commission shall appoint two
3-27 members, each of whom must hold a real estate broker or salesperson
3-28 license.
3-29 (c) Appointments to the advisory committee shall be made
3-30 without regard to the sex, race, color, age, disability, religion,
3-31 or national origin of the appointees.
3-32 (d) The members of the advisory committee serve for a
3-33 staggered three-year term, with the terms of two members expiring
3-34 February 1 of each year.
3-35 (e) The advisory committee shall meet at least twice a year
3-36 at the call of the commissioner.
3-37 (f) The commissioner may remove a member of the advisory
3-38 committee if:
3-39 (1) the member does not have at the time of
3-40 appointment the qualifications required by Subsection (b); or
3-41 (2) the commissioner determines that the member cannot
3-42 discharge the member's duties for a substantial part of the term
3-43 for which the member is appointed.
3-44 (g) In the event of a vacancy during a term, the appointing
3-45 entity or official shall fill the vacancy for the unexpired part of
3-46 the term with a person who meets the qualifications of the vacated
3-47 position.
3-48 (h) In addition to other powers and duties delegated to it
3-49 by the commissioner, the advisory committee shall advise the
3-50 commissioner with respect to:
3-51 (1) the proposal and adoption of rules relating to:
3-52 (A) the licensing of mortgage brokers and loan
3-53 officers;
3-54 (B) the education and experience requirements
3-55 for licensing mortgage brokers and loan officers;
3-56 (C) conduct and ethics of mortgage brokers and
3-57 loan officers;
3-58 (D) continuing education for licensed mortgage
3-59 brokers and loan officers and the types of courses acceptable as
3-60 continuing education courses under this chapter; and
3-61 (E) the granting or denying of an application or
3-62 request for renewal for a mortgage broker license or loan officer
3-63 license;
3-64 (2) the form of or format for any applications or
3-65 other documents under this chapter; and
3-66 (3) the interpretation, implementation, and
3-67 enforcement of this chapter.
3-68 (i) Each member of the advisory committee is entitled to a
3-69 per diem allowance and to reimbursement of travel expenses
4-1 necessarily incurred in performing functions as a member of the
4-2 committee, subject to any applicable limitation in the General
4-3 Appropriations Act.
4-4 (Sections 156.105 to 156.200 reserved for expansion)
4-5 SUBCHAPTER C. MORTGAGE BROKER LICENSE AND LOAN OFFICER LICENSE
4-6 Sec. 156.201. LICENSES REQUIRED. (a) A person may not act
4-7 in the capacity of, engage in the business of, or advertise or hold
4-8 that person out as engaging in or conducting the business of a
4-9 mortgage broker in this state unless the person holds an active
4-10 mortgage broker license or is exempt under Section 156.202.
4-11 (b) An individual may not act or attempt to act as a loan
4-12 officer unless the individual at the time is:
4-13 (1) sponsored by a licensed mortgage broker and acting
4-14 for the mortgage broker; or
4-15 (2) exempt under Section 156.202.
4-16 (c) Each mortgage broker licensed under this chapter is
4-17 responsible to the commissioner and members of the public for any
4-18 act or conduct performed under this chapter by the mortgage broker
4-19 or a loan officer sponsored by or acting for the mortgage broker.
4-20 Sec. 156.202. EXEMPTIONS. This chapter does not apply to:
4-21 (1) an employee of any of the following entities if
4-22 the mortgage loan is made for the employer and is funded from the
4-23 employer's own funds:
4-24 (A) a bank, savings bank, or savings and loan
4-25 association, or a subsidiary or an affiliate of a bank, savings
4-26 bank, or savings and loan association;
4-27 (B) a state or federal credit union; or
4-28 (C) a mortgage banker;
4-29 (2) an individual who makes a mortgage loan from the
4-30 individual's own funds to a spouse, former spouse, or persons in
4-31 the lineal line of consanguinity of the individual lending the
4-32 money; or
4-33 (3) an owner of real property who makes a mortgage
4-34 loan to a purchaser of the property for all or part of the purchase
4-35 price of the real estate against which the mortgage is secured.
4-36 Sec. 156.203. APPLICATION FOR A LICENSE; FEES. (a) An
4-37 application for a mortgage broker or loan officer license must be:
4-38 (1) in writing;
4-39 (2) under oath; and
4-40 (3) on the form prescribed by the commissioner.
4-41 (b) An application for a mortgage broker license must be
4-42 accompanied by:
4-43 (1) an application fee in an amount determined by the
4-44 commissioner not to exceed $375; and
4-45 (2) a recovery fund fee as provided by Section
4-46 156.502.
4-47 (c) An application for a loan officer license must be
4-48 accompanied by:
4-49 (1) an application fee in an amount determined by the
4-50 commissioner not to exceed $175; and
4-51 (2) a recovery fund fee as provided by Section
4-52 156.502.
4-53 (d) An application fee under this section is not refundable.
4-54 Sec. 156.204. QUALIFICATIONS. (a) To be eligible to be
4-55 licensed as a mortgage broker a person must:
4-56 (1) be an individual who is at least 18 years of age;
4-57 (2) be a citizen of the United States or a lawfully
4-58 admitted alien;
4-59 (3) maintain a physical office in this state and
4-60 designate that office in the application;
4-61 (4) provide the commissioner with satisfactory
4-62 evidence that the applicant satisfies one of the following:
4-63 (A) the person has received a bachelor's degree
4-64 in an area relating to finance, banking, or business administration
4-65 from an accredited college or university and has 18 months of
4-66 experience in the mortgage or lending field as evidenced by
4-67 documentary proof of full-time employment as a mortgage broker or
4-68 loan officer with a mortgage broker or a person exempt under
4-69 Section 156.202;
5-1 (B) the person is licensed in this state as:
5-2 (i) an active real estate broker under The
5-3 Real Estate License Act (Article 6573a, Vernon's Texas Civil
5-4 Statutes); or
5-5 (ii) an active attorney; or
5-6 (C) the person has three years of experience in
5-7 the mortgage lending field as evidenced by documentary proof of
5-8 full-time employment as a loan officer with a mortgage broker or a
5-9 person exempt under Section 156.202;
5-10 (5) demonstrate evidence of compliance with the
5-11 financial requirements of this chapter; and
5-12 (6) not have been convicted of a criminal offense that
5-13 the commissioner determines directly relates to the occupation of a
5-14 mortgage broker under Article 6252-13c, Revised Statutes.
5-15 (b) A mortgage broker may conduct business under a corporate
5-16 structure, partnership, or any other business form. Before
5-17 conducting mortgage broker activities through a corporation,
5-18 partnership, or other business entity, a mortgage broker must
5-19 notify the commissioner, in writing, of any corporate name,
5-20 partnership name, assumed name, or any other name under which the
5-21 mortgage broker conducts activities for which a license is required
5-22 under this chapter. The commissioner shall require proof of
5-23 compliance with this subsection at the time the mortgage broker
5-24 applies for and renews a license.
5-25 (c) To be eligible to be licensed as a loan officer a person
5-26 must:
5-27 (1) be an individual who is at least 18 years of age;
5-28 (2) be a citizen of the United States or a lawfully
5-29 admitted alien;
5-30 (3) designate in the application the name of the
5-31 mortgage broker sponsoring the loan officer;
5-32 (4) provide the commissioner with satisfactory
5-33 evidence that the applicant satisfies one of the following:
5-34 (A) the person meets one of the requirements
5-35 described by Subsection (a)(4);
5-36 (B) the person has successfully completed 15
5-37 hours of education courses approved by the commissioner under this
5-38 section; or
5-39 (C) the person has 18 months of experience as a
5-40 loan officer as evidenced by documentary proof of full-time
5-41 employment as a loan officer with a mortgage broker or a person
5-42 exempt under Section 156.202; and
5-43 (5) not have been convicted of a criminal offense that
5-44 the commissioner determines directly relates to the occupation of a
5-45 loan officer under Article 6252-13c, Revised Statutes.
5-46 Sec. 156.205. FINANCIAL REQUIREMENTS FOR A MORTGAGE BROKER.
5-47 (a) In this section, "net assets" means the difference between
5-48 total assets and total liabilities, as determined by generally
5-49 acceptable accounting principles.
5-50 (b) A mortgage broker must maintain net assets of at least
5-51 $25,000 or a surety bond in the amount of at least $50,000. The
5-52 term of the surety bond must coincide with the term of the license.
5-53 (c) The commissioner shall require proof of compliance with
5-54 this section at the time the mortgage broker applies for or renews
5-55 a license.
5-56 Sec. 156.206. CRIMINAL BACKGROUND CHECK. (a) On receipt of
5-57 an application for a mortgage broker license or a loan officer
5-58 license, the commissioner shall conduct a criminal background check
5-59 of the applicant.
5-60 (b) The commissioner shall obtain criminal history record
5-61 information on an applicant that is maintained by the Department of
5-62 Public Safety. By rule, the commissioner may require applicants to
5-63 submit information and fingerprints necessary for the commissioner
5-64 to obtain criminal background information from the Federal Bureau
5-65 of Investigation. The commissioner may also obtain criminal
5-66 history record information from any court or any local, state, or
5-67 national governmental agency.
5-68 (c) The commissioner shall keep confidential any criminal
5-69 background information obtained under this subsection and may not
6-1 release or disclose the information unless:
6-2 (1) the information is a public record at the time the
6-3 commissioner obtains the information; or
6-4 (2) the commissioner releases the information:
6-5 (A) under order from a court;
6-6 (B) with the permission of the applicant;
6-7 (C) to a person through whom the applicant is
6-8 conducting or will conduct business; or
6-9 (D) to a governmental agency.
6-10 Sec. 156.207. ISSUANCE OF LICENSE CERTIFICATE; PROVISIONAL
6-11 LICENSE. (a) The commissioner shall issue a license certificate
6-12 to an applicant for a mortgage broker license if the commissioner
6-13 finds that the applicant meets all requirements and conditions for
6-14 the license.
6-15 (b) When an applicant for a loan officer license has met all
6-16 requirements and conditions for the license, the commissioner shall
6-17 issue a license certificate to the mortgage broker sponsoring the
6-18 loan officer.
6-19 (c) In accordance with any rules adopted under this
6-20 subsection, the commissioner may issue a provisional license to an
6-21 applicant if a significant delay is necessary to process the
6-22 application, review information related to the application, or
6-23 obtain information related to the application. The commissioner
6-24 may revoke a provisional license issued under this subsection on a
6-25 ground listed under Section 156.303 or on any ground that the
6-26 commissioner could have denied issuance of the license on the
6-27 application.
6-28 Sec. 156.208. RENEWALS. (a) A mortgage broker license
6-29 issued under this chapter is valid for two years and may be renewed
6-30 on or before its expiration date if the mortgage broker:
6-31 (1) pays to the commissioner a renewal fee in an
6-32 amount determined by the commissioner not to exceed $375 and a
6-33 recovery fund fee provided by Section 156.502;
6-34 (2) has not been convicted of a felony the
6-35 commissioner determines is directly related to the occupation of a
6-36 mortgage broker under Article 6252-13c, Revised Statutes; and
6-37 (3) provides the commissioner with satisfactory
6-38 evidence that the mortgage broker:
6-39 (A) has attended, during the term of the current
6-40 license, 15 hours of continuing education courses that the
6-41 commissioner, in accordance with the rules adopted under this
6-42 section, has approved as continuing education courses; or
6-43 (B) maintains an active license in this state as
6-44 a real estate broker, real estate salesperson, or attorney.
6-45 (b) A loan officer license issued under this chapter is
6-46 valid for two years and may be renewed on or before its expiration
6-47 date if the loan officer:
6-48 (1) pays to the commissioner a renewal fee in an
6-49 amount determined by the commissioner not to exceed $175 and a
6-50 recovery fund fee provided by Section 156.502;
6-51 (2) has not been convicted of a felony the
6-52 commissioner determines is directly related to the occupation of a
6-53 loan officer under Article 6252-13c, Revised Statutes; and
6-54 (3) provides the commissioner with satisfactory
6-55 evidence that the loan officer:
6-56 (A) has attended, during the term of the current
6-57 license, 15 hours of continuing education courses that the
6-58 commissioner, in accordance with the rules adopted under this
6-59 section, has approved as continuing education courses; or
6-60 (B) maintains an active license in this state as
6-61 a real estate broker, real estate salesperson, or attorney.
6-62 (c) The commissioner may require mortgage brokers or loan
6-63 officers to submit requests for renewal on a form prescribed by the
6-64 commissioner.
6-65 (d) On receipt of a request for a renewal of a license
6-66 issued under this subchapter, the commissioner may conduct a
6-67 criminal background check under Section 156.206.
6-68 (e) A renewal fee is not refundable.
6-69 (f) The commissioner by rule may adopt a system under which
7-1 licenses expire on a date or dates other than December 31. If a
7-2 system is adopted under this subsection, dates relating to
7-3 expiration and issuance of licenses shall be adjusted accordingly.
7-4 For the biennium in which the license expiration date is changed,
7-5 license fees shall be prorated on a monthly basis so that each
7-6 license holder pays only that portion of the license fee that is
7-7 allocable to the number of months during which the license is
7-8 valid. On renewal of the license on the new expiration date, the
7-9 total license renewal fee is payable.
7-10 Sec. 156.209. DENIAL OF APPLICATIONS AND RENEWALS. (a) If
7-11 the commissioner declines or fails to issue or renew a license, the
7-12 commissioner shall promptly give written notice to the applicant or
7-13 the person requesting the renewal that the application or renewal,
7-14 as appropriate, was denied.
7-15 (b) Before the applicant or person requesting the renewal
7-16 may appeal to a district court as provided by Section 156.401, the
7-17 applicant or person must file with the commissioner, not later than
7-18 the 10th day after the date on which notice under Subsection (a) is
7-19 received, an appeal of the ruling requesting a time and place for a
7-20 hearing before a hearings officer designated by the commissioner.
7-21 (c) The designated hearings officer shall set the time and
7-22 place for a hearing requested under Subsection (b) not later than
7-23 the 30th day after the date on which the appeal is received. The
7-24 hearings officer shall provide at least 10 days' notice of the
7-25 hearing to the applicant or person requesting the renewal. The
7-26 time of the hearing may be continued periodically with the consent
7-27 of the applicant or person requesting the renewal. After the
7-28 hearing, the commissioner shall enter an order from the findings of
7-29 fact, conclusions of law, and recommendations of the hearings
7-30 officer.
7-31 (d) If an applicant or person requesting the renewal fails
7-32 to request a hearing under this section, the commissioner's refusal
7-33 to issue or renew a license is final and may not be subject to
7-34 review by the courts.
7-35 (e) A hearing held under this section is governed by Chapter
7-36 2001, Government Code. An appeal of a final order issued under
7-37 this section may be made in accordance with Section 156.401.
7-38 Sec. 156.210. PROBATIONARY LICENSE. The commissioner may
7-39 issue a probationary license. The commissioner by rule shall adopt
7-40 reasonable terms and conditions for a probationary license.
7-41 Sec. 156.211. CHANGE OF ADDRESS OR SPONSORSHIP; MODIFICATION
7-42 OF LICENSE. (a) Before the 10th day preceding the effective date
7-43 of an address change, a mortgage broker shall notify the
7-44 commissioner in writing of the new address accompanied by a change
7-45 of address fee of $25. A new license certificate must be obtained
7-46 before the mortgage broker may conduct business at the new
7-47 location.
7-48 (b) A loan officer may act only for the mortgage broker
7-49 sponsoring the loan officer. A loan officer may be sponsored by
7-50 only one mortgage broker at a time. When the sponsorship of a loan
7-51 officer is terminated, the loan officer and the mortgage broker
7-52 shall immediately notify the commissioner and the mortgage broker
7-53 shall return the loan officer license to the commissioner. The
7-54 loan officer's license then becomes inactive. The loan officer
7-55 license may be activated if, before the license expires, a mortgage
7-56 broker files a request, accompanied by a $25 fee, notifying the
7-57 commissioner that the mortgage broker will sponsor the loan officer
7-58 and will assume responsibility for the actions of the loan officer.
7-59 (c) A fee under this section is not refundable.
7-60 Sec. 156.212. MAINTENANCE AND LOCATION OF OFFICES; DISPLAY
7-61 OF LICENSE CERTIFICATES. (a) Each mortgage broker licensed under
7-62 this chapter shall maintain a physical office in this state. The
7-63 address of the office shall be designated on the license
7-64 certificate.
7-65 (b) If a mortgage broker maintains more than one place of
7-66 business in this state, the mortgage broker shall apply for, pay a
7-67 fee of $50 for, and obtain an additional license certificate to be
7-68 known as a branch office license for each additional office to be
7-69 maintained by the mortgage broker.
8-1 (c) The license certificate of a mortgage broker shall be at
8-2 all times prominently displayed in the mortgage broker's place of
8-3 business. The branch office certificate shall be at all times
8-4 prominently displayed in the mortgage broker's branch office.
8-5 (d) A loan officer license certificate shall be at all times
8-6 prominently displayed in the office of the mortgage broker for whom
8-7 the loan officer primarily conducts business.
8-8 (Sections 156.213 to 156.300 reserved for expansion
8-9 SUBCHAPTER D. LICENSE REVOCATION AND SUSPENSION AND OTHER ACTIONS
8-10 AGAINST LICENSE HOLDER
8-11 Sec. 156.301. COMPLAINTS AND INVESTIGATIONS. (a) On the
8-12 signed written complaint of a person, the commissioner shall
8-13 investigate the actions and records of a person licensed under this
8-14 chapter if the complaint, or the complaint and documentary or other
8-15 evidence presented in connection with the complaint, provides
8-16 reasonable cause. The commissioner, before commencing an
8-17 investigation, shall notify a mortgage broker or loan officer in
8-18 writing of the complaint and that the commissioner intends to
8-19 investigate the matter.
8-20 (b) Except as provided by Subsection (a), the commissioner
8-21 may not initiate an investigation or other action against a person
8-22 licensed under this chapter on the basis of an anonymous complaint
8-23 regardless of whether the complaint is in writing. The
8-24 commissioner may conduct an undercover or covert investigation only
8-25 if the commissioner, after due consideration of the circumstances,
8-26 determines that the investigation is necessary to prevent immediate
8-27 harm and to carry out the purposes of this chapter.
8-28 (c) The commissioner may authorize an employee of the
8-29 commissioner to file a signed written complaint against a person
8-30 licensed under this chapter and to conduct an investigation if:
8-31 (1) a judgment against the person has been paid from a
8-32 recovery fund established under this chapter;
8-33 (2) the person holds a provisional license issued
8-34 under Section 156.207(c);
8-35 (3) the person is convicted of a criminal offense that
8-36 may constitute grounds for the suspension or revocation of the
8-37 license; or
8-38 (4) the person fails to honor a check issued to the
8-39 commissioner.
8-40 Sec. 156.302. ADMINISTRATIVE PENALTY. (a) The commissioner
8-41 may impose an administrative penalty on a person licensed under
8-42 this chapter who violates this chapter or a rule or order adopted
8-43 under this chapter.
8-44 (b) The amount of the penalty may not exceed $2,500, and
8-45 each day a violation continues or occurs is a separate violation
8-46 for the purpose of imposing a penalty. The amount shall be based
8-47 on:
8-48 (1) the seriousness of the violation, including the
8-49 nature, circumstances, extent, and gravity of the violation;
8-50 (2) the history of previous violations;
8-51 (3) the amount necessary to deter a future violation;
8-52 (4) efforts to correct the violation; and
8-53 (5) any other matter that justice may require.
8-54 (c) The enforcement of the penalty may be stayed during the
8-55 time the order is under judicial review if the person pays the
8-56 penalty to the clerk of the court or files a supersedeas bond with
8-57 the court in the amount of the penalty. A person who cannot afford
8-58 to pay the penalty or file the bond may stay the enforcement by
8-59 filing an affidavit in the manner required by the Texas Rules of
8-60 Civil Procedure for a party who cannot afford to file security for
8-61 costs, subject to the right of the commissioner to contest the
8-62 affidavit as provided by those rules.
8-63 (d) The attorney general may sue to collect the penalty.
8-64 (e) A proceeding to impose the penalty is considered to be a
8-65 contested case under Chapter 2001, Government Code.
8-66 Sec. 156.303. DISCIPLINARY ACTION; CEASE AND DESIST ORDER.
8-67 (a) The commissioner may order disciplinary action against a
8-68 licensed mortgage broker or a licensed loan officer when the
8-69 commissioner, after a hearing, has determined that the person:
9-1 (1) obtained a license under this chapter through a
9-2 false or fraudulent representation or made a material
9-3 misrepresentation in an application for a license under this
9-4 chapter;
9-5 (2) published or caused to be published an
9-6 advertisement related to the business of a mortgage broker or loan
9-7 officer that:
9-8 (A) is misleading;
9-9 (B) is likely to deceive the public;
9-10 (C) in any manner tends to create a misleading
9-11 impression;
9-12 (D) fails to identify as a mortgage broker or
9-13 loan officer the person causing the advertisement to be published;
9-14 or
9-15 (E) violates federal or state law;
9-16 (3) while performing an act for which a license under
9-17 this chapter is required, engaged in conduct that constitutes
9-18 improper, fraudulent, or dishonest dealings;
9-19 (4) failed to notify the commissioner not later than
9-20 the 30th day after the date of the final conviction if the person,
9-21 in a court of this or another state or in a federal court, has been
9-22 convicted of or entered a plea of guilty or nolo contendere to a
9-23 felony or a criminal offense involving fraud;
9-24 (5) failed to use a fee collected in advance of
9-25 closing of a mortgage loan for a purpose for which the fee was
9-26 paid;
9-27 (6) charged or received, directly or indirectly, a fee
9-28 for assisting a mortgage applicant in obtaining a mortgage loan
9-29 before all of the services that the person agreed to perform for
9-30 the mortgage applicant are completed, and the proceeds of the
9-31 mortgage loan have been disbursed to or on behalf of the mortgage
9-32 applicant, except as provided by Section 156.304;
9-33 (7) failed within a reasonable time to honor a check
9-34 issued to the commissioner after the commissioner has mailed a
9-35 request for payment by certified mail to the person's last known
9-36 business address as reflected by the commissioner's records;
9-37 (8) paid compensation to a person who is not licensed
9-38 or exempt under this chapter for acts for which a license under
9-39 this chapter is required;
9-40 (9) induced or attempted to induce a party to a
9-41 contract to breach the contract so the person may make a mortgage
9-42 loan;
9-43 (10) published or circulated an unjustified or
9-44 unwarranted threat of legal proceedings in matters related to the
9-45 person's actions or services as a mortgage broker or loan officer,
9-46 as applicable;
9-47 (11) established an association, by employment or
9-48 otherwise, with a person not licensed or exempt under this chapter
9-49 who was expected or required to act as a mortgage broker or loan
9-50 officer;
9-51 (12) aided, abetted, or conspired with a person to
9-52 circumvent the requirements of this chapter;
9-53 (13) acted in the dual capacity of a mortgage broker
9-54 or loan officer and real estate broker, salesperson, or attorney
9-55 in a transaction without the knowledge and written consent of the
9-56 mortgage applicant or in violation of applicable requirements under
9-57 federal law;
9-58 (14) discriminated against a prospective borrower on
9-59 the basis of race, color, religion, sex, national origin, ancestry,
9-60 familial status, or a disability;
9-61 (15) failed or refused on demand to:
9-62 (A) produce a document, book, or record
9-63 concerning a mortgage loan transaction conducted by the mortgage
9-64 broker or loan officer for inspection by the commissioner or the
9-65 commissioner's authorized personnel or representative;
9-66 (B) give the commissioner or the commissioner's
9-67 authorized personnel or representative free access to the books or
9-68 records relating to the person's business kept by an officer,
9-69 agent, or employee of the person or any business entity through
10-1 which the person conducts mortgage brokerage activities, including
10-2 a subsidiary or holding company affiliate; or
10-3 (C) provide information requested by the
10-4 commissioner as a result of a formal or informal complaint made to
10-5 the commissioner;
10-6 (16) failed without just cause to surrender, on
10-7 demand, a copy of a document or other instrument coming into the
10-8 person's possession that was provided to the person by another
10-9 person making the demand or that the person making the demand is
10-10 under law entitled to receive; or
10-11 (17) disregarded or violated this chapter or a rule
10-12 adopted by the commissioner under this chapter.
10-13 (b) In addition to disciplinary action by the commissioner
10-14 authorized under Subsection (a), the commissioner, if the
10-15 commissioner has reasonable cause to believe that a person licensed
10-16 under this chapter has or is about to violate this section, may
10-17 issue without notice and hearing an order to cease and desist from
10-18 continuing a particular action or an order to take affirmative
10-19 action, or both, to enforce compliance with this chapter.
10-20 (c) An order issued under Subsection (b) must contain a
10-21 reasonably detailed statement of the facts on which the order is
10-22 made. If a person against whom the order is made requests a
10-23 hearing, the commissioner shall set and give notice of a hearing
10-24 before the commissioner or a hearings officer. The hearing shall
10-25 be governed by Chapter 2001, Government Code. Based on the
10-26 findings of fact, conclusions of law, and recommendations of the
10-27 hearings officer, the commissioner by order may find a violation
10-28 has occurred or not occurred.
10-29 (d) If a hearing is not requested under Subsection (c) not
10-30 later than the 30th day after the date on which an order is made,
10-31 the order is considered final and not appealable.
10-32 (e) The commissioner, after giving notice, may impose
10-33 against a person who violates a cease and desist order an
10-34 administrative penalty in an amount not to exceed $1,000 for each
10-35 day of the violation. In addition to any other remedy provided by
10-36 law, the commissioner may institute in district court a suit for
10-37 injunctive relief and to collect the administrative penalty. A
10-38 bond is not required of the commissioner with respect to injunctive
10-39 relief granted under this subsection. A penalty collected under
10-40 this subsection shall be deposited in the fund.
10-41 Sec. 156.304. FEE ASSESSMENT AND DISCLOSURE. (a) Before
10-42 the completion of all services to be performed, a mortgage broker
10-43 may charge and receive, unless prohibited by law, the following
10-44 fees for services in assisting a mortgage applicant to obtain a
10-45 mortgage:
10-46 (1) a fee to obtain a credit report;
10-47 (2) a fee for the appraisal of the real estate;
10-48 (3) a fee for processing a mortgage application;
10-49 (4) a fee for taking a mortgage application;
10-50 (5) a fee for automated underwriting;
10-51 (6) a fee for a courier service;
10-52 (7) a fee to issue a loan commitment; or
10-53 (8) subject to Subsection (b), a fee for locking in an
10-54 interest rate.
10-55 (b) A mortgage broker or loan officer may not charge or
10-56 receive a fee for locking in an interest rate unless there is a
10-57 written agreement signed by the mortgage applicant and mortgage
10-58 broker that contains a statement of whether the fee to lock in the
10-59 interest rate is refundable and, if so, the terms and conditions
10-60 necessary to obtain the refund.
10-61 (Sections 156.305 to 156.400 reserved for expansion
10-62 SUBCHAPTER E. HEARINGS; JUDICIAL REVIEW; CIVIL ACTIONS; UNLICENSED
10-63 ACTIVITY
10-64 Sec. 156.401. HEARINGS AND JUDICIAL REVIEW. (a) The
10-65 commissioner may employ an enforcement staff to investigate and
10-66 prosecute complaints made against persons licensed under this
10-67 chapter. The commissioner may employ a hearings officer to conduct
10-68 hearings under this section.
10-69 (b) If the commissioner proposes to suspend or revoke a
11-1 license issued under this chapter or if the commissioner refuses to
11-2 issue or renew a license to an applicant for a license or person
11-3 requesting a renewal of a license under this chapter, the applicant
11-4 or license holder is entitled to a hearing before the commissioner
11-5 or a hearings officer who shall make a proposal for decision to the
11-6 commissioner. The commissioner or hearings officer shall prescribe
11-7 the time and place of the hearing. The hearing is governed by
11-8 Chapter 2001, Government Code.
11-9 (c) The commissioner or hearings officer may issue subpoenas
11-10 for the attendance of witnesses and the production of records or
11-11 documents. Process issued by the commissioner or hearings officer
11-12 may extend to all parts of the state and may be served by any
11-13 person designated by the commissioner or hearings officer.
11-14 (d) An individual aggrieved by a ruling, order, or decision
11-15 of the commissioner has the right to appeal to a district court in
11-16 the county in which the hearing was held. An appeal under this
11-17 subsection is governed by Chapter 2001, Government Code.
11-18 Sec. 156.402. CIVIL ACTIONS AND INJUNCTIVE RELIEF. (a) A
11-19 mortgage applicant injured by a violation of this chapter may bring
11-20 an action for recovery of actual monetary damages and reasonable
11-21 attorney's fees and court costs.
11-22 (b) The commissioner, the attorney general, or a mortgage
11-23 applicant may bring an action to enjoin a violation of this
11-24 chapter.
11-25 (c) A remedy provided by this section is in addition to any
11-26 other remedy provided by law.
11-27 Sec. 156.403. BURDEN OF PROOF TO ESTABLISH AN EXEMPTION.
11-28 The burden of proving an exemption in a proceeding or action
11-29 brought under this chapter is on the person claiming the benefit of
11-30 the exemption.
11-31 Sec. 156.404. RELIANCE ON WRITTEN NOTICES FROM COMMISSIONER.
11-32 A person does not violate this chapter with respect to an action
11-33 taken or omission made in reliance on a written notice, written
11-34 interpretation, or written report from the commissioner, unless a
11-35 subsequent amendment to this chapter or a rule adopted under this
11-36 chapter affects the commissioner's notice, interpretation, or
11-37 report.
11-38 Sec. 156.405. COMPLETION OF MORTGAGE BROKER SERVICES.
11-39 (a) On disbursement of mortgage proceeds to or on behalf of the
11-40 mortgage applicant, the mortgage broker and loan officer who
11-41 assisted the mortgage applicant in obtaining the mortgage loan are
11-42 considered to have completed the performance of the mortgage
11-43 broker's and loan officer's services for the mortgage applicant and
11-44 owe no additional duties or obligations to the mortgage applicant
11-45 with respect to the mortgage loan.
11-46 (b) This section does not limit or preclude the liability of
11-47 a mortgage broker or loan officer for:
11-48 (1) failing to comply with this chapter or a rule
11-49 adopted under this chapter;
11-50 (2) failing to comply with a provision of or duty
11-51 arising under an agreement with a mortgage applicant or lender
11-52 under this chapter; or
11-53 (3) violating any other state or federal law.
11-54 Sec. 156.406. UNLICENSED ACTIVITY. (a) A person who is not
11-55 exempt under this chapter and who acts as a mortgage broker or loan
11-56 officer without first obtaining a license required under this
11-57 chapter commits an offense. An offense under this subsection is a
11-58 Class B misdemeanor. A second or subsequent conviction for an
11-59 offense under this subsection shall be punished as a Class A
11-60 misdemeanor.
11-61 (b) A person who received money, or the equivalent of money,
11-62 as a fee or profit because of or in consequence of the person
11-63 acting as a mortgage broker or loan officer without an active
11-64 license or being exempt under this chapter is liable for damages in
11-65 an amount that is not less than the amount of the fee or profit
11-66 received and not to exceed three times the amount of the fee or
11-67 profit received, as may be determined by the court. An aggrieved
11-68 person may recover damages under this subsection in a court.
11-69 (c) If the commissioner has reasonable cause to believe that
12-1 a person who is not licensed or exempt under this chapter has
12-2 engaged, or is about to engage, in an act or practice for which a
12-3 license is required under this chapter, the commissioner may issue
12-4 without notice and hearing an order to cease and desist from
12-5 continuing a particular action or an order to take affirmative
12-6 action, or both, to enforce compliance with this chapter. The
12-7 order shall contain a reasonably detailed statement of the facts on
12-8 which the order is made. If a person against whom the order is
12-9 made requests a hearing, the commissioner shall set and give notice
12-10 of a hearing before the commissioner or a hearings officer. The
12-11 hearing shall be governed by Chapter 2001, Government Code. Based
12-12 on the findings of fact, conclusions of law, and recommendations of
12-13 the hearings officer, the commissioner by order may find a
12-14 violation has occurred or not occurred.
12-15 (d) If a hearing has not been requested under Subsection (c)
12-16 not later than the 30th day after the date the order is made, the
12-17 order is considered final and not appealable. The commissioner,
12-18 after giving notice, may impose against a person who violates a
12-19 cease and desist order, an administrative penalty in an amount not
12-20 to exceed $1,000 for each day of a violation. In addition to any
12-21 other remedy provided by law, the commissioner may institute in
12-22 district court a suit for injunctive relief and to collect the
12-23 administrative penalty. A bond is not required of the commissioner
12-24 with respect to injunctive relief granted under this section. A
12-25 penalty collected under this subsection shall be deposited in the
12-26 fund.
12-27 (Sections 156.407 to 156.500 reserved for expansion
12-28 SUBCHAPTER F. MORTGAGE BROKER RECOVERY FUND
12-29 Sec. 156.501. MORTGAGE BROKER RECOVERY FUND. (a) The
12-30 commissioner shall establish and maintain a mortgage broker
12-31 recovery fund as provided by this subchapter. The amounts received
12-32 by the commissioner for deposit in the fund shall be held by the
12-33 commissioner in trust for carrying out the purposes of the fund.
12-34 (b) The fund shall be used to reimburse aggrieved persons to
12-35 whom a court awards actual damages because of certain acts
12-36 committed by a mortgage broker or loan officer who was licensed
12-37 under this chapter when the act was committed. The use of the fund
12-38 is limited to an act that constitutes a violation of Section
12-39 156.303(a)(2), (3), (5), (6), (8), (9), (10), (11), (12), (13), or
12-40 (16) or 156.304.
12-41 (c) Amounts in the fund may be invested and reinvested in
12-42 the same manner as funds of the Texas State Employees Retirement
12-43 System, and the interest from these investments shall be deposited
12-44 to the credit of the fund. An investment may not be made under
12-45 this subsection if the investment will impair the necessary
12-46 liquidity required to satisfy judgment payments awarded under this
12-47 subchapter.
12-48 Sec. 156.502. FUNDING. (a) On an application for an
12-49 original license or for renewal of a license issued under this
12-50 chapter, the applicant, in addition to paying the original
12-51 application fee or renewal fee, shall pay a $20 fee. The fee shall
12-52 be deposited in the fund.
12-53 (b) If the balance remaining in the fund at the end of a
12-54 calendar year after 2010 is less than $500,000, each mortgage
12-55 broker and loan officer licensed under this chapter, on the next
12-56 renewal of the license, shall pay, in addition to any other
12-57 required fees, the lesser of a $10 fee or a pro rata share of the
12-58 amount necessary to bring the fund to $1 million. The fee shall be
12-59 deposited in the fund.
12-60 (c) If the balance remaining in the mortgage broker recovery
12-61 fund at the end of a calendar year is more than the greater of $3.5
12-62 million or the total amount of claims paid from the fund during the
12-63 previous four fiscal years, the amount of money in excess of the
12-64 greater amount shall be transferred to the general revenue fund.
12-65 Sec. 156.503. STATUTE OF LIMITATIONS. An action for a
12-66 judgment that subsequently results in an order for collection from
12-67 the fund may not be instituted after the second anniversary of the
12-68 date on which the cause of action accrues.
12-69 Sec. 156.504. PROCEDURE FOR RECOVERY. (a) An aggrieved
13-1 person who recovers against a mortgage broker or loan officer
13-2 licensed under this chapter a valid court judgment for conduct
13-3 described by Section 156.501 that occurred on or after January 1,
13-4 2000, after final judgment has been entered, execution returned
13-5 nulla bona, and a judgment lien perfected, may file a verified
13-6 claim in the court in which the judgment was entered and, on 20
13-7 days' written notice to the commissioner and to the judgment
13-8 debtor, may apply to the court for an order directing payment from
13-9 the fund of any unpaid judgment amount, subject to Section 156.503.
13-10 (b) On the hearing on the application, the aggrieved person
13-11 is required to show:
13-12 (1) that the judgment is based on facts allowing
13-13 recovery under Section 156.501;
13-14 (2) that the person is not a spouse of the debtor, or
13-15 the personal representative of the spouse, and that the person is
13-16 not licensed as a mortgage broker or loan officer under this
13-17 chapter who is seeking to recover any compensation in the
13-18 transaction or transactions for which the application for payment
13-19 is made;
13-20 (3) that based on the best available information, the
13-21 judgment debtor lacks sufficient attachable assets in this state or
13-22 any other state to satisfy the judgment and the surety bond
13-23 required by Section 156.205 is not sufficient to satisfy the
13-24 judgment; and
13-25 (4) the amount that may be realized from the sale of
13-26 property or other assets liable to be sold or applied in
13-27 satisfaction of the judgment and the balance remaining due on the
13-28 judgment after application of the amount that may be realized.
13-29 (c) A recovery on the judgment against a single defendant
13-30 made before payment from the fund shall be applied first by the
13-31 creditor to actual damages.
13-32 (d) The court shall make an order directed to the
13-33 commissioner requiring payment from the fund of the amount the
13-34 court finds to be payable on the claim, pursuant to and in
13-35 accordance with the limitations contained in this subchapter, if
13-36 the court is satisfied, on the hearing, of the truth of all matters
13-37 required to be shown by the aggrieved person under Subsection (b)
13-38 and that the aggrieved person has satisfied all of the requirements
13-39 of this section.
13-40 (e) When the commissioner receives notice of entry of a
13-41 final judgment and a hearing is scheduled under this section, the
13-42 commissioner may notify the attorney general of the commissioner's
13-43 desire to enter an appearance, file a response, appear at the court
13-44 hearing, defend the action, or to take any other appropriate
13-45 action. In taking any action described by this subsection, the
13-46 commissioner and the attorney general shall act only to protect the
13-47 fund from spurious or unjust claims or to ensure compliance with
13-48 the requirements for recovery under this subchapter.
13-49 (f) The commissioner may relitigate any issue material and
13-50 relevant in the hearing on the application that was determined in
13-51 the underlying action on which the judgment in favor of the
13-52 applicant was based.
13-53 (g) If the court finds that the aggregate amount of claims
13-54 against a licensed mortgage broker or loan officer exceeds the
13-55 limits contained in Section 156.505, the court shall reduce
13-56 proportionately the amount the court finds payable on the claim.
13-57 Sec. 156.505. RECOVERY LIMITS. (a) A person entitled to
13-58 receive payment out of the fund is entitled to receive
13-59 reimbursement of actual, out-of-pocket damages, reasonable
13-60 attorney's fees, and court costs as determined by the court as
13-61 provided by this section.
13-62 (b) A payment from the fund may be made only pursuant to a
13-63 court order as provided by Section 156.504. A payment for claims:
13-64 (1) arising out of the same transaction, including
13-65 attorney's fees, interest, and court costs, is limited in the
13-66 aggregate to $25,000, regardless of the number of claimants; and
13-67 (2) based on judgments against a single person
13-68 licensed as a mortgage broker or loan officer under this chapter is
13-69 limited in the aggregate to $50,000 until the fund has been
14-1 reimbursed for all amounts paid.
14-2 Sec. 156.506. REVOCATION OF LICENSE FOR PAYMENT FROM FUND.
14-3 (a) The commissioner may revoke a license issued under this
14-4 chapter on proof that the commissioner has made a payment from the
14-5 fund of any amount toward satisfaction of a judgment against a
14-6 person licensed as a mortgage broker or loan officer under this
14-7 chapter.
14-8 (b) The commissioner may probate an order revoking a license
14-9 under this section.
14-10 (c) A person on whose behalf payment was made from the fund
14-11 is not eligible to receive a new license under this chapter until
14-12 the person has repaid in full, plus interest at the current legal
14-13 rate, the amount paid from the fund on the person's behalf.
14-14 (d) This section does not limit the authority of the
14-15 commissioner to take disciplinary action against a mortgage broker
14-16 or loan officer for a violation of this chapter or the rules
14-17 adopted by the commissioner under this chapter. The repayment in
14-18 full to the fund of all obligations of a mortgage broker or loan
14-19 officer does not nullify or modify the effect of any other
14-20 disciplinary proceeding brought under this chapter.
14-21 Sec. 156.507. SUBROGATION. When the commissioner has paid a
14-22 judgment creditor an amount from the fund as directed by the court,
14-23 the commissioner is subrogated to all of the rights of the judgment
14-24 creditor to the extent of the amount paid. The judgment creditor
14-25 shall assign all of the creditor's right, title, and interest in
14-26 the judgment up to the amount paid by the commissioner, and that
14-27 amount has priority for repayment in the event of any subsequent
14-28 recovery on the judgment. Any amount, including interest,
14-29 recovered by the commissioner on the judgment shall be deposited to
14-30 the credit of the fund.
14-31 Sec. 156.508. FAILURE TO COMPLY WITH SUBCHAPTER. The
14-32 failure of an aggrieved person to comply with a provision of this
14-33 subchapter relating to the fund constitutes a waiver of any rights
14-34 under this subchapter.
14-35 SECTION 3. Subsection (a), Section 393.002, Finance Code, is
14-36 amended to read as follows:
14-37 (a) This chapter does not apply to:
14-38 (1) a person:
14-39 (A) authorized to make a loan or grant an
14-40 extension of consumer credit under the laws of this state or the
14-41 United States; and
14-42 (B) subject to regulation and supervision by
14-43 this state or the United States;
14-44 (2) a lender approved by the United States secretary
14-45 of housing and urban development for participation in a mortgage
14-46 insurance program under the National Housing Act (12 U.S.C. Section
14-47 1701 et seq.);
14-48 (3) a bank or savings and loan association the
14-49 deposits or accounts of which are eligible to be insured by the
14-50 Federal Deposit Insurance Corporation or a subsidiary of the bank
14-51 or association;
14-52 (4) a credit union doing business in this state;
14-53 (5) a nonprofit organization exempt from taxation
14-54 under Section 501(c)(3), Internal Revenue Code of 1986 (26 U.S.C.
14-55 Section 501(c)(3));
14-56 (6) a real estate broker or salesman licensed under
14-57 The Real Estate License Act (Article 6573a, Vernon's Texas Civil
14-58 Statutes) who is acting within the course and scope of that
14-59 license;
14-60 (7) an individual licensed to practice law in this
14-61 state who is acting within the course and scope of the individual's
14-62 practice as an attorney;
14-63 (8) a broker-dealer registered with the Securities and
14-64 Exchange Commission or the Commodity Futures Trading Commission
14-65 acting within the course and scope of that regulation;
14-66 (9) a consumer reporting agency; [or]
14-67 (10) a person whose primary business is making loans
14-68 secured by liens on real property; or
14-69 (11) a mortgage broker or loan officer licensed under
15-1 Chapter 156, Finance Code, who is acting within the course and
15-2 scope of that license.
15-3 SECTION 4. (a) This Act takes effect September 1, 1999.
15-4 (b) A person is not required to be licensed under Chapter
15-5 156, Finance Code, as added by this Act, before January 1, 2000.
15-6 SECTION 5. The importance of this legislation and the
15-7 crowded condition of the calendars in both houses create an
15-8 emergency and an imperative public necessity that the
15-9 constitutional rule requiring bills to be read on three several
15-10 days in each house be suspended, and this rule is hereby suspended.
15-11 * * * * *