1-1 By: McCall, et al. (Senate Sponsor - Sibley) H.B. No. 1636
1-2 (In the Senate - Received from the House April 19, 2001;
1-3 April 20, 2001, read first time and referred to Committee on
1-4 Business and Commerce; May 7, 2001, reported favorably by the
1-5 following vote: Yeas 5, Nays 0; May 7, 2001, sent to printer.)
1-6 A BILL TO BE ENTITLED
1-7 AN ACT
1-8 relating to continuation and functions of the Savings and Loan
1-9 Department and the regulation of certain financial institutions and
1-10 businesses.
1-11 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-12 SECTION 1. Section 13.010, Finance Code, is amended to read
1-13 as follows:
1-14 Sec. 13.010. CONFLICTS OF INTEREST. (a) In this section,
1-15 "Texas trade association" means a cooperative and voluntarily
1-16 joined association of business or professional competitors in this
1-17 state designed to assist its members and its industry or profession
1-18 in dealing with mutual business or professional problems and in
1-19 promoting their common interest.
1-20 (b) A person may not be a Savings and Loan Department
1-21 employee employed in a "bona fide executive, administrative, or
1-22 professional capacity," as that phrase is used for purposes of
1-23 establishing an exemption to the overtime provisions of the federal
1-24 Fair Labor Standards Act of 1938 (29 U.S.C. Section 201 et seq.),
1-25 and its subsequent amendments, if:
1-26 (1) the person is an officer, employee, or paid
1-27 consultant of a Texas trade association in a field regulated by the
1-28 Savings and Loan Department; or
1-29 (2) the person's spouse is an officer, manager, or
1-30 paid consultant of a Texas trade association in a field regulated
1-31 by the Savings and Loan Department.
1-32 (c) A person may not act as the general counsel to the
1-33 Savings and Loan Department if the person is required to register
1-34 as a lobbyist under Chapter 305, Government Code, because of the
1-35 person's activities for compensation on behalf of a profession
1-36 related to the operation of the Savings and Loan Department [An
1-37 officer or employee of the Savings and Loan Department may not be:]
1-38 [(1) an officer, employee, or paid consultant of a
1-39 trade association in the savings association industry or the
1-40 savings bank industry; or]
1-41 [(2) related within the second degree by affinity or
1-42 consanguinity, as determined under Chapter 573, Government Code, to
1-43 a person who is an officer, employee, or paid consultant of a trade
1-44 association in the savings association industry or the savings bank
1-45 industry].
1-46 (d) [(b)] Before the 11th day after the date on which an
1-47 employee begins employment with the Savings and Loan Department,
1-48 the employee shall read the conflict-of-interest statutes
1-49 applicable to employees of the Savings and Loan Department and sign
1-50 a notarized affidavit stating that the employee has read those
1-51 statutes.
1-52 SECTION 2. Section 13.011, Finance Code, is amended to read
1-53 as follows:
1-54 Sec. 13.011. CONSUMER INFORMATION AND COMPLAINTS. (a) The
1-55 savings and loan commissioner shall prepare information of consumer
1-56 interest describing:
1-57 (1) the regulatory functions of the Savings and Loan
1-58 Department; and
1-59 (2) the procedures by which consumer complaints are
1-60 filed with and resolved by the Savings and Loan Department.
1-61 (b) The information under Subsection (a) must be made
1-62 available to the public and appropriate state agencies.
1-63 (c) The Savings and Loan Department shall maintain a file on
1-64 each written complaint filed with the Savings and Loan Department.
2-1 The file must include:
2-2 (1) the name of the person who filed the complaint;
2-3 (2) the date the complaint is received by the Savings
2-4 and Loan Department;
2-5 (3) the subject matter of the complaint;
2-6 (4) the name of each person contacted in relation to
2-7 the complaint;
2-8 (5) a summary of the results of the review or
2-9 investigation of the complaint; and
2-10 (6) an explanation of the reason the file was closed,
2-11 if the agency closed the file without taking action other than to
2-12 investigate the complaint.
2-13 (d) The Savings and Loan Department shall provide to the
2-14 person filing the complaint and to each person who is a subject of
2-15 the complaint a copy of the Savings and Loan Department's policies
2-16 and procedures relating to complaint investigation and resolution.
2-17 (e) The Savings and Loan Department, at least quarterly
2-18 until final disposition of the complaint, shall notify the person
2-19 filing the complaint and each person who is a subject of the
2-20 complaint of the status of the investigation [keep an information
2-21 file about each filed complaint relating to a state savings
2-22 association or savings bank.]
2-23 [(d) At least quarterly until final disposition of any
2-24 written complaint that is filed with the Savings and Loan
2-25 Department relating to a state savings association or savings bank,
2-26 the Savings and Loan Department shall notify the parties to the
2-27 complaint of the status of the complaint] unless the notice would
2-28 jeopardize an undercover investigation.
2-29 SECTION 3. Section 13.012, Finance Code, is amended to read
2-30 as follows:
2-31 Sec. 13.012. SUNSET PROVISION. The office of savings and
2-32 loan commissioner and the Savings and Loan Department are subject
2-33 to Chapter 325, Government Code (Texas Sunset Act). Unless
2-34 continued in existence as provided by that chapter, the office and
2-35 department are abolished September 1, 2013 [2001].
2-36 SECTION 4. Chapter 13, Finance Code, is amended by adding
2-37 Sections 13.013-13.015 to read as follows:
2-38 Sec. 13.013. STANDARDS OF CONDUCT. The savings and loan
2-39 commissioner or the savings and loan commissioner's designee shall
2-40 provide to agency employees, as often as necessary, information
2-41 regarding the requirements for office or employment under this
2-42 chapter, including information regarding a person's
2-43 responsibilities under applicable laws relating to standards of
2-44 conduct for state officers or employees.
2-45 Sec. 13.014. EQUAL EMPLOYMENT OPPORTUNITY POLICY. (a) The
2-46 savings and loan commissioner or the savings and loan
2-47 commissioner's designee shall prepare and maintain a written policy
2-48 statement that implements a program of equal employment opportunity
2-49 to ensure that all personnel decisions are made without regard to
2-50 race, color, disability, sex, religion, age, or national origin.
2-51 (b) The policy statement must include:
2-52 (1) personnel policies, including policies relating to
2-53 recruitment, evaluation, selection, training, and promotion of
2-54 personnel, that show the intent of the Savings and Loan Department
2-55 to avoid the unlawful employment practices described by Chapter 21,
2-56 Labor Code; and
2-57 (2) an analysis of the extent to which the composition
2-58 of the Savings and Loan Department's personnel is in accordance
2-59 with state and federal law and a description of reasonable methods
2-60 to achieve compliance with state and federal law.
2-61 (c) The policy statement must:
2-62 (1) be updated annually;
2-63 (2) be reviewed by the state Commission on Human
2-64 Rights for compliance with Subsection (b)(1); and
2-65 (3) be filed with the governor's office.
2-66 Sec. 13.015. EMPLOYEE INCENTIVE PROGRAM. The savings and
2-67 loan commissioner or the savings and loan commissioner's designee
2-68 shall provide to agency employees information and training on the
2-69 benefits and methods of participation in the state employee
3-1 incentive program.
3-2 SECTION 5. Section 156.206(b), Finance Code, is amended to
3-3 read as follows:
3-4 (b) The commissioner shall obtain criminal history record
3-5 information on an applicant that is maintained by the Department of
3-6 Public Safety and shall[. By rule, the commissioner may require
3-7 applicants to submit information and fingerprints necessary for the
3-8 commissioner to] obtain criminal history record [background]
3-9 information on an applicant maintained by [from] the Federal Bureau
3-10 of Investigation. The commissioner may also obtain criminal
3-11 history record information from any court or any local, state, or
3-12 national governmental agency.
3-13 SECTION 6. Section 156.207, Finance Code, is amended to read
3-14 as follows:
3-15 Sec. 156.207. ISSUANCE OF LICENSE CERTIFICATE; PROVISIONAL
3-16 LICENSE. (a) The commissioner shall issue a license certificate to
3-17 an applicant for a mortgage broker license if the commissioner
3-18 finds that the applicant meets all requirements and conditions for
3-19 the license.
3-20 (b) When an applicant for a loan officer license has met all
3-21 requirements and conditions for the license, the commissioner shall
3-22 issue a license certificate to the mortgage broker sponsoring the
3-23 loan officer.
3-24 (c) In accordance with any rules adopted under this
3-25 subsection, the commissioner may issue a provisional license to an
3-26 applicant if a significant delay is necessary to process the
3-27 application, review information related to the application, or
3-28 obtain information related to the application. If the commissioner
3-29 has not received criminal history record information from the
3-30 Federal Bureau of Investigation before the 61st day after the date
3-31 the commissioner requested the information, the commissioner shall
3-32 issue a provisional license to the applicant, if the applicant
3-33 otherwise meets all requirements and conditions for a license. If
3-34 the commissioner has not received criminal history record
3-35 information from the Federal Bureau of Investigation before the
3-36 181st day after the date the commissioner requested the
3-37 information, the provisional status of the license ends and, except
3-38 as provided by Subsection (d), the license is subject to the
3-39 provisions of this chapter and other law applicable to a license
3-40 issued to an applicant who meets all requirements and conditions
3-41 for a license under this chapter.
3-42 (d) The commissioner may revoke a [provisional] license
3-43 issued under Subsection (c), regardless of whether the license is
3-44 provisional, [this subsection] on a ground listed under Section
3-45 156.303 or on any ground that the commissioner could have denied
3-46 issuance of the license on the application.
3-47 SECTION 7. Subchapter C, Chapter 156, Finance Code, is
3-48 amended by adding Section 156.2071 to read as follows:
3-49 Sec. 156.2071. PERSON LICENSED IN OTHER JURISDICTION. (a)
3-50 The commissioner may waive any prerequisite to obtaining a license
3-51 for an applicant after reviewing the applicant's credentials and
3-52 determining that the applicant holds a license issued by another
3-53 jurisdiction that has licensing requirements substantially
3-54 equivalent to those of this state.
3-55 (b) The commissioner may issue a provisional license to an
3-56 applicant currently licensed in another jurisdiction who seeks a
3-57 license in this state and who:
3-58 (1) has been licensed in good standing as a mortgage
3-59 broker or loan officer for at least two years in another
3-60 jurisdiction, including a foreign country, that has licensing
3-61 requirements substantially equivalent to the requirements of this
3-62 chapter;
3-63 (2) has passed a national or other examination
3-64 recognized by the commissioner relating to mortgage brokers or loan
3-65 officers; and
3-66 (3) is sponsored by a person licensed under this
3-67 chapter with whom the provisional license holder will practice
3-68 during the time the person holds a provisional license.
3-69 (c) The commissioner may waive the requirement of Subsection
4-1 (b)(3) for an applicant if the commissioner determines that
4-2 compliance with that subsection would be a hardship to the
4-3 applicant.
4-4 (d) A provisional license under this section is valid until
4-5 the date the commissioner approves or denies the provisional
4-6 license holder's application for a license. The commissioner shall
4-7 issue a license under this chapter to the provisional license
4-8 holder if:
4-9 (1) the provisional license holder is eligible to be
4-10 licensed under Subsection (a); or
4-11 (2) the commissioner verifies that the provisional
4-12 license holder meets the academic and experience requirements for a
4-13 license under this chapter and the provisional license holder
4-14 satisfies any other licensing requirements under this chapter.
4-15 (e) The commissioner must approve or deny a provisional
4-16 license holder's application for a license not later than the 180th
4-17 day after the date the provisional license is issued.
4-18 (f) The finance commission may establish a fee for
4-19 provisional licenses under this section in an amount reasonable and
4-20 necessary to cover the cost of issuing the license.
4-21 SECTION 8. Subchapter C, Chapter 156, Finance Code, is
4-22 amended by adding Section 156.2081 to read as follows:
4-23 Sec. 156.2081. RENEWAL AFTER EXPIRATION; NOTICE. (a) A
4-24 person whose license has expired may not engage in activities that
4-25 require a license until the license has been renewed.
4-26 (b) A person whose license has been expired for 90 days or
4-27 less but who is otherwise eligible to renew a license may renew the
4-28 license by paying to the commissioner a renewal fee that is equal
4-29 to 1-1/2 times the normally required renewal fee.
4-30 (c) A person whose license has been expired for more than 90
4-31 days but less than one year but who is otherwise eligible to renew
4-32 a license may renew the license by paying to the commissioner a
4-33 renewal fee that is equal to two times the normally required
4-34 renewal fee.
4-35 (d) A person whose license has been expired for one year or
4-36 more may not renew the license. The person may obtain a new
4-37 license by complying with the requirements and procedures for
4-38 obtaining an original license.
4-39 (e) A person who was licensed in this state, moved to
4-40 another state, and is currently licensed and has been in practice
4-41 in the other state for the two years preceding the date of
4-42 application may obtain a new license by paying to the commissioner
4-43 a fee that is equal to two times the normally required renewal fee
4-44 for the license.
4-45 (f) Not later than the 30th day before the date a person's
4-46 license is scheduled to expire, the commissioner shall send written
4-47 notice of the impending expiration to the person at the person's
4-48 last known address according to the records of the Savings and Loan
4-49 Department.
4-50 SECTION 9. Subchapter C, Chapter 156, Finance Code, is
4-51 amended by adding Section 156.213 to read as follows:
4-52 Sec. 156.213. ANNUAL REPORT. (a) Each licensed mortgage
4-53 broker shall file an annual report with the Savings and Loan
4-54 Department. The report must include:
4-55 (1) data on loan originations in this state for the
4-56 mortgage broker;
4-57 (2) information on each loan officer sponsored by the
4-58 mortgage broker; and
4-59 (3) any other information required by finance
4-60 commission rule.
4-61 (b) Trade information, including information used to
4-62 determine statistical entries in the report related to loan
4-63 origination volume, is confidential and may not be disclosed by the
4-64 Savings and Loan Department.
4-65 SECTION 10. Section 156.301, Finance Code, is amended to read
4-66 as follows:
4-67 Sec. 156.301. INSPECTIONS; [COMPLAINTS AND] INVESTIGATIONS.
4-68 (a) The commissioner may conduct inspections of a person licensed
4-69 under this chapter as the commissioner determines necessary to
5-1 determine whether the person is complying with this chapter and
5-2 applicable rules. The inspections may include inspection of the
5-3 books, records, documents, operations, and facilities of the person
5-4 and access to any documents required under rules adopted under this
5-5 chapter. The commissioner may share evidence of criminal activity
5-6 gathered during an inspection or investigation with any state or
5-7 federal law enforcement agency.
5-8 (b) On the signed written complaint of a person, the
5-9 commissioner shall investigate the actions and records of a person
5-10 licensed under this chapter if the complaint, or the complaint and
5-11 documentary or other evidence presented in connection with the
5-12 complaint, provides reasonable cause. The commissioner, before
5-13 commencing an investigation, shall notify a mortgage broker or loan
5-14 officer in writing of the complaint and that the commissioner
5-15 intends to investigate the matter.
5-16 (c) For reasonable cause, [(b) Except as provided by
5-17 Subsection (a),] the commissioner at any time may investigate [not
5-18 initiate an investigation or other action against] a person
5-19 licensed under this chapter to determine whether the person is
5-20 complying with this chapter and applicable rules [on the basis of
5-21 an anonymous complaint regardless of whether the complaint is in
5-22 writing].
5-23 (d) The commissioner may conduct an undercover or covert
5-24 investigation only if the commissioner, after due consideration of
5-25 the circumstances, determines that the investigation is necessary
5-26 to prevent immediate harm and to carry out the purposes of this
5-27 chapter.
5-28 (e) The finance commission by rule shall provide guidelines
5-29 to govern an inspection or an investigation, including rules to:
5-30 (1) determine the information and records to which the
5-31 commissioner may demand access during an inspection or an
5-32 investigation; and
5-33 (2) establish what constitutes reasonable cause for an
5-34 investigation.
5-35 (f) Information obtained by the commissioner during an
5-36 inspection or an investigation is confidential unless disclosure of
5-37 the information is permitted or required by other law. [(c) The
5-38 commissioner may authorize an employee of the commissioner to file
5-39 a signed written complaint against a person licensed under this
5-40 chapter and to conduct an investigation if:]
5-41 [(1) a judgment against the person has been paid from
5-42 a recovery fund established under this chapter;]
5-43 [(2) the person holds a provisional license issued
5-44 under Section 156.207(c);]
5-45 [(3) the person is convicted of a criminal offense
5-46 that may constitute grounds for the suspension or revocation of the
5-47 license; or]
5-48 [(4) the person fails to honor a check issued to the
5-49 commissioner.]
5-50 SECTION 11. Section 156.302(e), Finance Code, is amended to
5-51 read as follows:
5-52 (e) An appeal of an administrative [A proceeding to impose
5-53 the] penalty under this section is considered to be a contested
5-54 case under Chapter 2001, Government Code.
5-55 SECTION 12. This Act takes effect September 1, 2001.
5-56 * * * * *