LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
March 29, 2001
TO: Honorable Kip Averitt, Chair, House Committee on
Financial Institutions
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB1493 by Wise (Relating to the regulation of mortgage
brokers.), Committee Report 1st House, Substituted
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB1493, Committee Report 1st House, Substituted: positive impact *
* of $0 through the biennium ending August 31, 2003. *
* *
* The bill would make no appropriation but could provide the legal *
* basis for an appropriation of funds to implement the provisions of *
* the bill. *
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General Revenue-Related Funds, Five-Year Impact:
****************************************************
* Fiscal Year Probable Net Positive/(Negative) *
* Impact to General Revenue Related *
* Funds *
* 2002 $0 *
* 2003 0 *
* 2004 0 *
* 2005 0 *
* 2006 0 *
****************************************************
All Funds, Five-Year Impact:
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*Fiscal Probable Probable Revenue Change in Number of *
* Year Savings/(Cost) from Gain/(Loss) from State Employees from *
* General Revenue Fund General Revenue Fund FY 2001 *
* 0001 0001 *
* 2002 $(378,169) $378,169 6.0 *
* 2003 (366,169) 366,169 6.0 *
* 2004 (366,169) 366,169 6.0 *
* 2005 (366,169) 366,169 6.0 *
* 2006 (366,169) 366,169 6.0 *
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Technology Impact
Additional laptop computers for the additional six Full-Time Equivalents
(FTEs) totaling $12,000 for fiscal year 2002.
Fiscal Analysis
The provisions of the bill require the Savings and Loan Department (SLD)
to obtain criminal background information on mortgage broker license
applicants from the Federal Bureau of Investigation (FBI). The
provisions of the bill allow the agency to inspect mortgage brokers and
to initiate investigations when reasonable cause exists.
Methodology
It is estimated that the provisions of the bill would require six
additional FTEs to conduct inspections assuming that oversight can be
achieved through examinations every four years. According to the SLD,
there are approximately 10,157 licensed individuals who are part of 2,835
mortgage broker business units. The inspections would occur on a
business unit-based approach, as opposed to an individual approach. It
is estimated that the six financial examiners would examine 708 units per
year that are based throughout the state. The license holder or
affiliate would be responsible for the expenses of any inspection
conducted.
The provisions of the bill require the SLD to obtain FBI criminal history
records for each mortgage broker license applicant. The FBI requires
that a criminal history check be first run by the Department of Public
Safety (DPS) at $15 each. Once the DPS check is completed, the FBI will
conduct its review for $24 each. The SLD estimates that there would be
1,000 new applicants per year. The total estimated cost for the criminal
history checks is $39,000 per year, which does not include an FBI
background check for renewals.
It is assumed that any additional costs to implement the provisions of
the bill would be offset with similar increase in fee revenue.
The effective date of the bill is September 1, 2001.
Local Government Impact
No fiscal implication to units of local government is anticipated.
Source Agencies: 449 Finance Commission of Texas, 405 Texas
Department of Public Safety, 450 Texas Savings and
Loan Department
LBB Staff: JK, JO, RT, DE