77R10944 DWS-F
By McCall, Averitt, Bosse, Chisum, Gallego H.B. No. 1636
Substitute the following for H.B. No. 1636:
By Averitt C.S.H.B. No. 1636
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to continuation and functions of the Savings and Loan
1-3 Department and the regulation of certain financial institutions and
1-4 businesses.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Section 13.010, Finance Code, is amended to read
1-7 as follows:
1-8 Sec. 13.010. CONFLICTS OF INTEREST. (a) In this section,
1-9 "Texas trade association" means a cooperative and voluntarily
1-10 joined association of business or professional competitors in this
1-11 state designed to assist its members and its industry or profession
1-12 in dealing with mutual business or professional problems and in
1-13 promoting their common interest.
1-14 (b) A person may not be a Savings and Loan Department
1-15 employee employed in a "bona fide executive, administrative, or
1-16 professional capacity," as that phrase is used for purposes of
1-17 establishing an exemption to the overtime provisions of the federal
1-18 Fair Labor Standards Act of 1938 (29 U.S.C. Section 201 et seq.),
1-19 and its subsequent amendments, if:
1-20 (1) the person is an officer, employee, or paid
1-21 consultant of a Texas trade association in a field regulated by the
1-22 Savings and Loan Department; or
1-23 (2) the person's spouse is an officer, manager, or
1-24 paid consultant of a Texas trade association in a field regulated
2-1 by the Savings and Loan Department.
2-2 (c) A person may not act as the general counsel to the
2-3 Savings and Loan Department if the person is required to register
2-4 as a lobbyist under Chapter 305, Government Code, because of the
2-5 person's activities for compensation on behalf of a profession
2-6 related to the operation of the Savings and Loan Department [An
2-7 officer or employee of the Savings and Loan Department may not be:]
2-8 [(1) an officer, employee, or paid consultant of a
2-9 trade association in the savings association industry or the
2-10 savings bank industry; or]
2-11 [(2) related within the second degree by affinity or
2-12 consanguinity, as determined under Chapter 573, Government Code, to
2-13 a person who is an officer, employee, or paid consultant of a trade
2-14 association in the savings association industry or the savings bank
2-15 industry].
2-16 (d) [(b)] Before the 11th day after the date on which an
2-17 employee begins employment with the Savings and Loan Department,
2-18 the employee shall read the conflict-of-interest statutes
2-19 applicable to employees of the Savings and Loan Department and sign
2-20 a notarized affidavit stating that the employee has read those
2-21 statutes.
2-22 SECTION 2. Section 13.011, Finance Code, is amended to read
2-23 as follows:
2-24 Sec. 13.011. CONSUMER INFORMATION AND COMPLAINTS. (a) The
2-25 savings and loan commissioner shall prepare information of consumer
2-26 interest describing:
2-27 (1) the regulatory functions of the Savings and Loan
3-1 Department; and
3-2 (2) the procedures by which consumer complaints are
3-3 filed with and resolved by the Savings and Loan Department.
3-4 (b) The information under Subsection (a) must be made
3-5 available to the public and appropriate state agencies.
3-6 (c) The Savings and Loan Department shall maintain a file on
3-7 each written complaint filed with the Savings and Loan Department.
3-8 The file must include:
3-9 (1) the name of the person who filed the complaint;
3-10 (2) the date the complaint is received by the Savings
3-11 and Loan Department;
3-12 (3) the subject matter of the complaint;
3-13 (4) the name of each person contacted in relation to
3-14 the complaint;
3-15 (5) a summary of the results of the review or
3-16 investigation of the complaint; and
3-17 (6) an explanation of the reason the file was closed,
3-18 if the agency closed the file without taking action other than to
3-19 investigate the complaint.
3-20 (d) The Savings and Loan Department shall provide to the
3-21 person filing the complaint and to each person who is a subject of
3-22 the complaint a copy of the Savings and Loan Department's policies
3-23 and procedures relating to complaint investigation and resolution.
3-24 (e) The Savings and Loan Department, at least quarterly
3-25 until final disposition of the complaint, shall notify the person
3-26 filing the complaint and each person who is a subject of the
3-27 complaint of the status of the investigation [keep an information
4-1 file about each filed complaint relating to a state savings
4-2 association or savings bank.]
4-3 [(d) At least quarterly until final disposition of any
4-4 written complaint that is filed with the Savings and Loan
4-5 Department relating to a state savings association or savings bank,
4-6 the Savings and Loan Department shall notify the parties to the
4-7 complaint of the status of the complaint] unless the notice would
4-8 jeopardize an undercover investigation.
4-9 SECTION 3. Section 13.012, Finance Code, is amended to read
4-10 as follows:
4-11 Sec. 13.012. SUNSET PROVISION. The office of savings and
4-12 loan commissioner and the Savings and Loan Department are subject
4-13 to Chapter 325, Government Code (Texas Sunset Act). Unless
4-14 continued in existence as provided by that chapter, the office and
4-15 department are abolished September 1, 2013 [2001].
4-16 SECTION 4. Chapter 13, Finance Code, is amended by adding
4-17 Sections 13.013-13.015 to read as follows:
4-18 Sec. 13.013. STANDARDS OF CONDUCT. The savings and loan
4-19 commissioner or the savings and loan commissioner's designee shall
4-20 provide to agency employees, as often as necessary, information
4-21 regarding the requirements for office or employment under this
4-22 chapter, including information regarding a person's
4-23 responsibilities under applicable laws relating to standards of
4-24 conduct for state officers or employees.
4-25 Sec. 13.014. EQUAL EMPLOYMENT OPPORTUNITY POLICY. (a) The
4-26 savings and loan commissioner or the savings and loan
4-27 commissioner's designee shall prepare and maintain a written policy
5-1 statement that implements a program of equal employment opportunity
5-2 to ensure that all personnel decisions are made without regard to
5-3 race, color, disability, sex, religion, age, or national origin.
5-4 (b) The policy statement must include:
5-5 (1) personnel policies, including policies relating to
5-6 recruitment, evaluation, selection, training, and promotion of
5-7 personnel, that show the intent of the Savings and Loan Department
5-8 to avoid the unlawful employment practices described by Chapter 21,
5-9 Labor Code; and
5-10 (2) an analysis of the extent to which the composition
5-11 of the Savings and Loan Department's personnel is in accordance
5-12 with state and federal law and a description of reasonable methods
5-13 to achieve compliance with state and federal law.
5-14 (c) The policy statement must:
5-15 (1) be updated annually;
5-16 (2) be reviewed by the state Commission on Human
5-17 Rights for compliance with Subsection (b)(1); and
5-18 (3) be filed with the governor's office.
5-19 Sec. 13.015. EMPLOYEE INCENTIVE PROGRAM. The savings and
5-20 loan commissioner or the savings and loan commissioner's designee
5-21 shall provide to agency employees information and training on the
5-22 benefits and methods of participation in the state employee
5-23 incentive program.
5-24 SECTION 5. Section 156.206(b), Finance Code, is amended to
5-25 read as follows:
5-26 (b) The commissioner shall obtain criminal history record
5-27 information on an applicant that is maintained by the Department of
6-1 Public Safety and shall[. By rule, the commissioner may require
6-2 applicants to submit information and fingerprints necessary for the
6-3 commissioner to] obtain criminal history record [background]
6-4 information on an applicant maintained by [from] the Federal Bureau
6-5 of Investigation. The commissioner may also obtain criminal
6-6 history record information from any court or any local, state, or
6-7 national governmental agency.
6-8 SECTION 6. Section 156.207, Finance Code, is amended to read
6-9 as follows:
6-10 Sec. 156.207. ISSUANCE OF LICENSE CERTIFICATE; PROVISIONAL
6-11 LICENSE. (a) The commissioner shall issue a license certificate to
6-12 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. If the commissioner
6-24 has not received criminal history record information from the
6-25 Federal Bureau of Investigation before the 61st day after the date
6-26 the commissioner requested the information, the commissioner shall
6-27 issue a provisional license to the applicant, if the applicant
7-1 otherwise meets all requirements and conditions for a license. If
7-2 the commissioner has not received criminal history record
7-3 information from the Federal Bureau of Investigation before the
7-4 181st day after the date the commissioner requested the
7-5 information, the provisional status of the license ends and, except
7-6 as provided by Subsection (d), the license is subject to the
7-7 provisions of this chapter and other law applicable to a license
7-8 issued to an applicant who meets all requirements and conditions
7-9 for a license under this chapter.
7-10 (d) The commissioner may revoke a [provisional] license
7-11 issued under Subsection (c), regardless of whether the license is
7-12 provisional, [this subsection] on a ground listed under Section
7-13 156.303 or on any ground that the commissioner could have denied
7-14 issuance of the license on the application.
7-15 SECTION 7. Subchapter C, Chapter 156, Finance Code, is
7-16 amended by adding Section 156.2071 to read as follows:
7-17 Sec. 156.2071. PERSON LICENSED IN OTHER JURISDICTION. (a)
7-18 The commissioner may waive any prerequisite to obtaining a license
7-19 for an applicant after reviewing the applicant's credentials and
7-20 determining that the applicant holds a license issued by another
7-21 jurisdiction that has licensing requirements substantially
7-22 equivalent to those of this state.
7-23 (b) The commissioner may issue a provisional license to an
7-24 applicant currently licensed in another jurisdiction who seeks a
7-25 license in this state and who:
7-26 (1) has been licensed in good standing as a mortgage
7-27 broker or loan officer for at least two years in another
8-1 jurisdiction, including a foreign country, that has licensing
8-2 requirements substantially equivalent to the requirements of this
8-3 chapter;
8-4 (2) has passed a national or other examination
8-5 recognized by the commissioner relating to mortgage brokers or loan
8-6 officers; and
8-7 (3) is sponsored by a person licensed under this
8-8 chapter with whom the provisional license holder will practice
8-9 during the time the person holds a provisional license.
8-10 (c) The commissioner may waive the requirement of Subsection
8-11 (b)(3) for an applicant if the commissioner determines that
8-12 compliance with that subsection would be a hardship to the
8-13 applicant.
8-14 (d) A provisional license under this section is valid until
8-15 the date the commissioner approves or denies the provisional
8-16 license holder's application for a license. The commissioner shall
8-17 issue a license under this chapter to the provisional license
8-18 holder if:
8-19 (1) the provisional license holder is eligible to be
8-20 licensed under Subsection (a); or
8-21 (2) the commissioner verifies that the provisional
8-22 license holder meets the academic and experience requirements for a
8-23 license under this chapter and the provisional license holder
8-24 satisfies any other licensing requirements under this chapter.
8-25 (e) The commissioner must approve or deny a provisional
8-26 license holder's application for a license not later than the 180th
8-27 day after the date the provisional license is issued.
9-1 (f) The finance commission may establish a fee for
9-2 provisional licenses under this section in an amount reasonable and
9-3 necessary to cover the cost of issuing the license.
9-4 SECTION 8. Subchapter C, Chapter 156, Finance Code, is
9-5 amended by adding Section 156.2081 to read as follows:
9-6 Sec. 156.2081. RENEWAL AFTER EXPIRATION; NOTICE. (a) A
9-7 person whose license has expired may not engage in activities that
9-8 require a license until the license has been renewed.
9-9 (b) A person whose license has been expired for 90 days or
9-10 less but who is otherwise eligible to renew a license may renew the
9-11 license by paying to the commissioner a renewal fee that is equal
9-12 to 1-1/2 times the normally required renewal fee.
9-13 (c) A person whose license has been expired for more than 90
9-14 days but less than one year but who is otherwise eligible to renew
9-15 a license may renew the license by paying to the commissioner a
9-16 renewal fee that is equal to two times the normally required
9-17 renewal fee.
9-18 (d) A person whose license has been expired for one year or
9-19 more may not renew the license. The person may obtain a new
9-20 license by complying with the requirements and procedures for
9-21 obtaining an original license.
9-22 (e) A person who was licensed in this state, moved to
9-23 another state, and is currently licensed and has been in practice
9-24 in the other state for the two years preceding the date of
9-25 application may obtain a new license by paying to the commissioner
9-26 a fee that is equal to two times the normally required renewal fee
9-27 for the license.
10-1 (f) Not later than the 30th day before the date a person's
10-2 license is scheduled to expire, the commissioner shall send written
10-3 notice of the impending expiration to the person at the person's
10-4 last known address according to the records of the Savings and Loan
10-5 Department.
10-6 SECTION 9. Subchapter C, Chapter 156, Finance Code, is
10-7 amended by adding Section 156.213 to read as follows:
10-8 Sec. 156.213. ANNUAL REPORT. (a) Each licensed mortgage
10-9 broker shall file an annual report with the Savings and Loan
10-10 Department. The report must include:
10-11 (1) data on loan originations in this state for the
10-12 mortgage broker;
10-13 (2) information on each loan officer sponsored by the
10-14 mortgage broker; and
10-15 (3) any other information required by finance
10-16 commission rule.
10-17 (b) Trade information, including information used to
10-18 determine statistical entries in the report related to loan
10-19 origination volume, is confidential and may not be disclosed by the
10-20 Savings and Loan Department.
10-21 SECTION 10. Section 156.301, Finance Code, is amended to read
10-22 as follows:
10-23 Sec. 156.301. INSPECTIONS; [COMPLAINTS AND] INVESTIGATIONS.
10-24 (a) The commissioner may conduct inspections of a person licensed
10-25 under this chapter as the commissioner determines necessary to
10-26 determine whether the person is complying with this chapter and
10-27 applicable rules. The inspections may include inspection of the
11-1 books, records, documents, operations, and facilities of the person
11-2 and access to any documents required under rules adopted under this
11-3 chapter. The commissioner may share evidence of criminal activity
11-4 gathered during an inspection or investigation with any state or
11-5 federal law enforcement agency.
11-6 (b) On the signed written complaint of a person, the
11-7 commissioner shall investigate the actions and records of a person
11-8 licensed under this chapter if the complaint, or the complaint and
11-9 documentary or other evidence presented in connection with the
11-10 complaint, provides reasonable cause. The commissioner, before
11-11 commencing an investigation, shall notify a mortgage broker or loan
11-12 officer in writing of the complaint and that the commissioner
11-13 intends to investigate the matter.
11-14 (c) For reasonable cause, [(b) Except as provided by
11-15 Subsection (a),] the commissioner at any time may investigate [not
11-16 initiate an investigation or other action against] a person
11-17 licensed under this chapter to determine whether the person is
11-18 complying with this chapter and applicable rules [on the basis of
11-19 an anonymous complaint regardless of whether the complaint is in
11-20 writing].
11-21 (d) The commissioner may conduct an undercover or covert
11-22 investigation only if the commissioner, after due consideration of
11-23 the circumstances, determines that the investigation is necessary
11-24 to prevent immediate harm and to carry out the purposes of this
11-25 chapter.
11-26 (e) The finance commission by rule shall provide guidelines
11-27 to govern an inspection or an investigation, including rules to:
12-1 (1) determine the information and records to which the
12-2 commissioner may demand access during an inspection or an
12-3 investigation; and
12-4 (2) establish what constitutes reasonable cause for an
12-5 investigation.
12-6 (f) Information obtained by the commissioner during an
12-7 inspection or an investigation is confidential unless disclosure of
12-8 the information is permitted or required by other law. [(c) The
12-9 commissioner may authorize an employee of the commissioner to file
12-10 a signed written complaint against a person licensed under this
12-11 chapter and to conduct an investigation if:]
12-12 [(1) a judgment against the person has been paid from
12-13 a recovery fund established under this chapter;]
12-14 [(2) the person holds a provisional license issued
12-15 under Section 156.207(c);]
12-16 [(3) the person is convicted of a criminal offense
12-17 that may constitute grounds for the suspension or revocation of the
12-18 license; or]
12-19 [(4) the person fails to honor a check issued to the
12-20 commissioner.]
12-21 SECTION 11. Section 156.302(e), Finance Code, is amended to
12-22 read as follows:
12-23 (e) An appeal of an administrative [A proceeding to impose
12-24 the] penalty under this section is considered to be a contested
12-25 case under Chapter 2001, Government Code.
12-26 SECTION 12. This Act takes effect September 1, 2001.