By: Staples S.B. No. 252
A BILL TO BE ENTITLED
AN ACT
relating to the registration of mortgage bankers.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle E, Title 3, Finance Code, is amended by
adding Chapter 157 to read as follows:
CHAPTER 157. REGISTRATION OF MORTGAGE BANKERS
Sec. 157.001. SHORT TITLE. This chapter may be cited as the
Mortgage Banker Registration Act.
Sec. 157.002. DEFINITIONS. In this chapter:
(1) "Commissioner" means the savings and loan
commissioner.
(2) "Mortgage banker" means a person who:
(A) accepts an application for a mortgage loan or
makes a mortgage loan; and
(B) is an approved or authorized:
(i) mortgagee with direct endorsement
underwriting authority granted by the United States Department of
Housing and Urban Development;
(ii) seller or servicer of the Federal
National Mortgage Association or the Federal Home Loan Mortgage
Corporation; or
(iii) issuer for the Government National
Mortgage Association.
(3) "Mortgage loan" means a debt secured by a first
lien on residential real property designed principally for
occupancy by one to four families that is created by a deed of
trust, security deed, or other security instrument.
Sec. 157.003. REGISTRATION REQUIRED. (a) A person must
register under this chapter before the person may conduct the
business of a mortgage banker in this state, unless the person is
exempt under this section or Section 157.004.
(b) To register under this chapter, a mortgage banker shall
file with the commissioner a statement that contains:
(1) the name and address of the mortgage banker;
(2) the name, address, and telephone number of the
representative of the mortgage banker to be contacted regarding a
written complaint; and
(3) a list of the locations in this state at which the
person conducts the business of a mortgage banker.
(c) An employee of a mortgage banker is not required to
register under this chapter.
(d) The commissioner may not require a mortgage banker to
provide information other than information contained in the
registration statement.
(e) The registration of a mortgage banker is valid until
withdrawn or revoked. Periodic renewal of the registration is not
required.
Sec. 157.004. EXEMPTIONS. This chapter does not apply to:
(1) a federally insured bank, savings bank, savings
and loan association, or credit union;
(2) an affiliate or subsidiary of a federally insured
bank, savings bank, savings and loan association, or credit union;
(3) a person licensed as a mortgage broker under
Chapter 156; or
(4) an authorized lender licensed under Chapter 342
if:
(A) the authorized lender includes with an
application for a mortgage loan a notice that is substantially
similar to the notice required by Section 157.007 and provides the
method of submitting complaints to the consumer credit
commissioner;
(B) the authorized lender uses the forms adopted
by the Finance Commission of Texas under Section 157.011(b); and
(C) the Finance Commission of Texas determines by
rule that the consumer credit commissioner may suspend or revoke a
license issued under Chapter 342 if the authorized lender engages
in unlawful or unfair practices while making a mortgage loan.
Sec. 157.005. UPDATE OF REGISTRATION STATEMENT. A mortgage
banker shall update information contained in the registration
statement not later than the 30th day after the date the information
changes.
Sec. 157.006. REGISTRATION AND ADMINISTRATION FEE. The
commissioner may charge a mortgage banker a reasonable fee to cover
the costs of filing the registration statement and administering
this chapter. The fee may not exceed $500 a year.
Sec. 157.007. DISCLOSURE STATEMENT. A mortgage banker
shall include the following notice to a mortgage loan applicant
with an application for a mortgage loan:
"COMPLAINTS REGARDING MORTGAGE BANKERS SHOULD BE SENT TO THE
SAVINGS AND LOAN DEPARTMENT, _________________________ (street
address of the Savings and Loan Department). A TOLL-FREE CONSUMER
HOTLINE IS AVAILABLE AT ____________________ (telephone number of
the Savings and Loan Department's toll-free consumer hotline)."
Sec. 157.008. COMPLAINTS. (a) If the Savings and Loan
Department receives a signed written complaint from a person
concerning a mortgage banker, the commissioner shall notify the
representative designated by the mortgage banker under Section
157.003(b) in writing of the complaint and provide a copy of the
complaint to the representative.
(b) The commissioner may request documentary and other
evidence considered by the commissioner as necessary to effectively
evaluate the complaint, including correspondence, loan documents,
and disclosures. A mortgage banker shall promptly provide any
evidence requested by the commissioner.
(c) The commissioner may require the mortgage banker to
resolve the complaint or to provide the commissioner with a
response to the complaint. The commissioner may direct the
mortgage banker in writing to take specific action to resolve the
complaint.
Sec. 157.009. TERMINATION OF REGISTRATION. (a) A mortgage
banker may withdraw the mortgage banker's registration at any time.
(b) The commissioner may revoke the registration of a
mortgage banker if the mortgage banker fails to pay the
registration and administration fee and fails to cure the default
before the 30th day after the date the mortgage banker receives
notice of the default from the commissioner.
(c) The commissioner may revoke the registration of a
mortgage banker if the mortgage banker fails or refuses to comply
with the commissioner's written request for a response to a
complaint.
(d) The commissioner may revoke the registration of a
mortgage banker after considering a complaint filed under this
chapter if the commissioner concludes that the mortgage banker has
engaged in an intentional course of conduct to violate federal or
state law or has engaged in an intentional course of conduct that
constitutes improper, fraudulent, or dishonest dealings. The
commissioner shall recite the basis of the decision in an order
revoking the registration.
(e) If the commissioner proposes to revoke a registration
under Subsection (c) or (d), the mortgage banker is entitled to a
hearing before the commissioner or a hearings officer, who shall
propose a decision to the commissioner. The commissioner or
hearings officer shall prescribe the time and place of the hearing.
The hearing is governed by Chapter 2001, Government Code.
(f) A mortgage banker aggrieved by a ruling, order, or
decision of the commissioner is entitled to appeal to a district
court in the county in which the hearing was held. An appeal under
this subsection is governed by Chapter 2001, Government Code.
Sec. 157.010. REREGISTRATION. (a) A mortgage banker whose
registration is revoked by the commissioner may register again only
after receiving the authorization of the commissioner. The
commissioner shall authorize the registration if the commissioner
concludes that the mortgage banker will comply with state and
federal law and will not engage in improper, fraudulent, or
dishonest dealings.
(b) A mortgage banker who seeks registration under this
section may request and is entitled to a hearing before the
commissioner or a hearings officer, who shall propose a decision to
the commissioner. The hearing is governed by Chapter 2001,
Government Code.
(c) If the commissioner denies authorization for the
registration of a mortgage banker under this section, the
commissioner shall recite the basis of the decision in an order
denying the authorization.
(d) If the commissioner denies authorization for the
registration of a mortgage banker under this section, the mortgage
banker is entitled to appeal to a district court in Travis County.
An appeal brought under this subsection is governed by Chapter
2001, Government Code.
Sec. 157.011. RULEMAKING AUTHORITY. (a) The Finance
Commission of Texas may adopt rules necessary to implement or
fulfill the purpose of this chapter.
(b) The Finance Commission of Texas may by rule adopt
standard forms for, and require the use of the forms by, a mortgage
banker who represents that an applicant for a loan is preapproved or
has prequalified for the loan.
SECTION 2. A person serving as a public member of the
Finance Commission of Texas immediately before the effective date
of this Act who is the spouse of a mortgage banker required to
register under Chapter 157, Finance Code, as added by this Act, may
complete the person's term, notwithstanding Subsection (d),
Section 11.102, Finance Code.
SECTION 3. This Act takes effect January 1, 2004.