HBA-JLV H.B. 1493 77(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 1493 By: Wise Financial Institutions 2/28/2001 Introduced BACKGROUND AND PURPOSE The Texas Savings and Loan Department (department) protects the depositors of Texas by ensuring the sage and sound operation of state-chartered savings institutions. In 1999, the legislature also gave the department the responsibility for licensing mortgage brokers. House Bill 1493 amends the Mortgage Broker License Act regarding provisional licenses for and routine on-site inspection of mortgage brokers and loan officers. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority is expressly delegated to the savings and loan commissioner in SECTION 4 (Section 156.207, Finance Code), and in SECTION 6 (Section 156.301, Finance Code) of this bill. ANALYSIS House Bill 1493 amends the Finance Code to modify provisions relating to the regulation of mortgage brokers. The bill modifies the list of exemptions from regulations of mortgage brokers to specify that only full-time employees of certain institutions are exempt from the regulations (Sec. 156.202). The bill requires the savings and loan commissioner (commissioner) to obtain criminal history record information on each applicant from the Federal Bureau of Investigation (FBI) and to require applicants for a mortgage broker or loan officer license (license) to submit information and fingerprints (Sec. 156.206). The bill provides that if 61 days after the commissioner requested the information, the FBI has not submitted the criminal history record information, the commissioner is required to issue a provisional license to the applicant, with an expiration date of not later than 60 days after the date of issuance. The bill provides for the renewal of the provisional license pending receipt of the criminal history record information. The bill requires the commissioner to issue a license to the applicant if the commissioner has not received the requested information from the FBI after the 181st day from the date the information was requested. The bill requires the commissioner to adopt rules for the administration of these provisions (Sec. 156.207). The bill requires each licensed mortgage broker to file a confidential annual report with the commissioner on a form prescribed by the commissioner with certain requirements (Sec. 156.213). The bill authorizes the commissioner to investigate the actions and records of a licensed mortgage broker if the commissioner has reasonable cause to believe that a violation of the provisions regulating mortgage brokers or any rule has occurred or is about to occur. The bill requires the commissioner to adopt rules specifying the criteria to be used in determining reasonable cause. The bill authorizes the commissioner to conduct routine on-site inspections of licensed mortgage brokers and loan officers. An affiliate of a licensee is subject to routine inspections by the commissioner only if reports issued in connection with a routine inspection of a license holder provide documented evidence of unlawful activity between a license holder and an affiliate. The bill authorizes the commissioner to cooperate and share information with or authorize an inspection or examination to be conducted by an agency of this state, an agency of the federal government, another state, or an agency of another state. The bill requires the commissioner to adopt rules to implement provisions relating to complaints, investigations, and routine inspections (Sec. 156.301). EFFECTIVE DATE September 1, 2001.