78R2558 ATP-F

By:  Wise                                                         H.B. No. 1079



A BILL TO BE ENTITLED

AN ACT

relating to certain exemptions from the regulation of mortgage 
brokers.     
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Sections 156.002(5) and (9), Finance Code, are 
amended to read as follows:
		(5)  "Loan officer" means an individual sponsored by a 
licensed mortgage broker for the purposes of performing the acts of 
a mortgage broker.  The term does not include:
			(A)  an individual who performs only clerical 
functions such as delivering a loan application to a mortgage 
broker [or mortgage banker] or gathering information related to a 
mortgage loan application on behalf of the prospective borrower 
or[,] mortgage broker[, or mortgage banker];  or
			(B)  an individual who performs functions of a 
loan processor.             
		(9)  "Mortgage broker" means a person who receives an 
application from a prospective borrower for the purposes of making 
a mortgage loan from that person's own funds or from the funds of 
another person.  The term does not include:
			(A)  a person who performs only clerical functions 
such as delivering a loan application to a mortgage broker [or 
mortgage banker] or gathering information related to a mortgage 
loan application on behalf of the prospective borrower or[,]
mortgage broker[, or mortgage banker];  or
			(B)  a person who performs functions of a loan 
processor.                  
	SECTION 2.  Section 156.202, Finance Code, is amended to 
read as follows:    
	Sec. 156.202.  EXEMPTIONS.  This chapter does not apply to:                    
		(1)  any of the following entities or an employee of any 
of the following entities provided the employee is acting for the 
benefit of the employer:
			(A)  a bank, savings bank, or savings and loan 
association, or a subsidiary or an affiliate of a bank, savings 
bank, or savings and loan association;
			(B)  a state or federal credit union;                                        
			(C)  an insurance company licensed or authorized 
to do business in this state under the Insurance Code;
			(D)  [a mortgage banker;                                    
			[(E)]  an organization that qualifies for an 
exemption from state franchise and sales tax as a 501(c)(3) 
organization;  or
			(E) [(F)]  a Farm Credit System institution;         
		(2)  an individual who makes a mortgage loan from the 
individual's own funds to a spouse, former spouse, or persons in the 
lineal line of consanguinity of the individual lending the money;
		(3)  an owner of real property who makes a mortgage loan 
to a purchaser of the property for all or part of the purchase price 
of the real estate against which the mortgage is secured;  or
		(4)  an individual who:                                                       
			(A)  makes a mortgage loan from the individual's 
own funds;                
			(B)  is not an authorized lender under Chapter 
342, Finance Code;  and     
			(C)  does not regularly engage in the business of 
making or brokering mortgage loans.
	SECTION 3.  Section 156.002(8), Finance Code, is repealed.                     
	SECTION 4.  This Act takes effect September 1, 2003.