78R11948 DWS-F
By: Carona S.B. No. 1577
Substitute the following for S.B. No. 1577:
By: Flynn C.S.S.B. No. 1577
A BILL TO BE ENTITLED
AN ACT
relating to the effect of a criminal conviction on licensing and
regulation of a mortgage broker or loan officer.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 156.204, Finance Code, is amended by
amending Subsections (a) and (c) and adding Subsection (d) to read
as follows:
(a) To be eligible to be licensed as a mortgage broker a
person must:
(1) be an individual who is at least 18 years of age;
(2) be a citizen of the United States or a lawfully
admitted alien;
(3) maintain a physical office in this state and
designate that office in the application;
(4) provide the commissioner with satisfactory
evidence that the applicant satisfies one of the following:
(A) the person has received a bachelor's degree
in an area relating to finance, banking, or business administration
from an accredited college or university and has 18 months of
experience in the mortgage or lending field as evidenced by
documentary proof of full-time employment as a mortgage broker or
loan officer with a mortgage broker or a person exempt under Section
156.202;
(B) the person is licensed in this state as:
(i) an active real estate broker under The
Real Estate License Act (Article 6573a, Vernon's Texas Civil
Statutes);
(ii) an active attorney; or
(iii) a local recording agent or insurance
solicitor or agent for a legal reserve life insurance company under
Chapter 21, Insurance Code, or holds an equivalent license under
Chapter 21, Insurance Code; or
(C) the person has three years of experience in
the mortgage lending field as evidenced by documentary proof of
full-time employment as a loan officer with a mortgage broker or a
person exempt under Section 156.202;
(5) demonstrate evidence of compliance with the
financial requirements of this chapter; [and]
(6) not have been convicted of a criminal offense that
the commissioner determines directly relates to the occupation of a
mortgage broker as provided by [under] Chapter 53, Occupations
Code;
(7) satisfy the commissioner as to the individual's
good moral character, including the individual's honesty,
trustworthiness, and integrity; and
(8) not be in violation of this chapter, a rule adopted
under this chapter, or any order previously issued to the
individual by the commissioner.
(c) To be eligible to be licensed as a loan officer a person
must:
(1) be an individual who is at least 18 years of age;
(2) be a citizen of the United States or a lawfully
admitted alien;
(3) designate in the application the name of the
mortgage broker sponsoring the loan officer;
(4) provide the commissioner with satisfactory
evidence that the applicant satisfies one of the following:
(A) the person meets one of the requirements
described by Subsection (a)(4);
(B) the person has successfully completed 15
hours of education courses approved by the commissioner under this
section;
(C) the person has 18 months of experience as a
loan officer as evidenced by documentary proof of full-time
employment as a loan officer with a mortgage broker or a person
exempt under Section 156.202; or
(D) for applications received prior to January 1,
2000, the mortgage broker that will sponsor the applicant provides
a certification under oath that the applicant has been provided
necessary and appropriate education and training regarding all
applicable state and federal law and regulations relating to
mortgage loans; [and]
(5) not have been convicted of a criminal offense that
the commissioner determines directly relates to the occupation of a
loan officer as provided by [under] Chapter 53, Occupations Code;
(6) satisfy the commissioner as to the individual's
good moral character, including the individual's honesty,
trustworthiness, and integrity; and
(7) not be in violation of this chapter, a rule adopted
under this chapter, or any order previously issued to the
individual by the commissioner.
(d) For the purposes of Subsections (a)(6) and (c)(5), a
person is considered convicted if a sentence is imposed on the
person, the person receives community supervision, including
deferred adjudication community supervision, or the court defers
final disposition of the person's case.
SECTION 2. Section 156.208, Finance Code, is amended by
amending Subsections (a) and (b) and adding Subsection (h) to read
as follows:
(a) A mortgage broker license issued under this chapter is
valid for two years and may be renewed on or before its expiration
date if the mortgage broker:
(1) pays to the commissioner a renewal fee in an amount
determined by the commissioner not to exceed $375 and a recovery
fund fee provided by Section 156.502;
(2) has not been convicted of a criminal offense
[felony] the commissioner determines is directly related to the
occupation of a mortgage broker as provided by [under] Chapter 53,
Occupations Code; and
(3) provides the commissioner with satisfactory
evidence that the mortgage broker:
(A) has attended, during the term of the current
license, 15 hours of continuing education courses that the
commissioner, in accordance with the rules adopted by the finance
commission under this section, has approved as continuing education
courses; or
(B) maintains an active license in this state as:
(i) a real estate broker;
(ii) a real estate salesperson;
(iii) an attorney; or
(iv) a local recording agent or insurance
solicitor or agent for a legal reserve life insurance company under
Chapter 21, Insurance Code, or an equivalent license under Chapter
21, Insurance Code.
(b) A loan officer license issued under this chapter is
valid for two years and may be renewed on or before its expiration
date if the loan officer:
(1) pays to the commissioner a renewal fee in an amount
determined by the commissioner not to exceed $175 and a recovery
fund fee provided by Section 156.502;
(2) has not been convicted of a criminal offense
[felony] the commissioner determines is directly related to the
occupation of a loan officer as provided by [under] Chapter 53,
Occupations Code; and
(3) provides the commissioner with satisfactory
evidence that the loan officer:
(A) has attended, during the term of the current
license, 15 hours of continuing education courses that the
commissioner, in accordance with the rules adopted by the finance
commission under this section, has approved as continuing education
courses, including courses provided by or through the licensed
mortgage broker with whom the loan officer is associated after
submission to and approval by the commission; or
(B) maintains an active license in this state as:
(i) a real estate broker;
(ii) a real estate salesperson;
(iii) an attorney; or
(iv) a local recording agent or insurance
solicitor or agent for a legal reserve life insurance company under
Chapter 21, Insurance Code, or an equivalent license under Chapter
21, Insurance Code.
(h) For the purposes of Subsections (a)(2) and (b)(2), a
person is considered convicted if a sentence is imposed on the
person, the person receives community supervision, including
deferred adjudication community supervision, or the court defers
final disposition of the person's case.
SECTION 3. Section 156.303(a), Finance Code, is amended to
read as follows:
(a) The commissioner may order disciplinary action against
a licensed mortgage broker or a licensed loan officer when the
commissioner, after a hearing, has determined that the person:
(1) obtained a license under this chapter through a
false or fraudulent representation or made a material
misrepresentation in an application for a license under this
chapter;
(2) published or caused to be published an
advertisement related to the business of a mortgage broker or loan
officer that:
(A) is misleading;
(B) is likely to deceive the public;
(C) in any manner tends to create a misleading
impression;
(D) fails to identify as a mortgage broker or
loan officer the person causing the advertisement to be published;
or
(E) violates federal or state law;
(3) while performing an act for which a license under
this chapter is required, engaged in conduct that constitutes
improper, fraudulent, or dishonest dealings;
(4) failed to notify the commissioner not later than
the 30th day after the date of the final conviction if the person,
in a court of this or another state or in a federal court, has been
convicted of or entered a plea of guilty or nolo contendere to a
felony or a criminal offense involving fraud;
(5) failed to use a fee collected in advance of closing
of a mortgage loan for a purpose for which the fee was paid;
(6) charged or received, directly or indirectly, a fee
for assisting a mortgage applicant in obtaining a mortgage loan
before all of the services that the person agreed to perform for the
mortgage applicant are completed, and the proceeds of the mortgage
loan have been disbursed to or on behalf of the mortgage applicant,
except as provided by Section 156.304;
(7) failed within a reasonable time to honor a check
issued to the commissioner after the commissioner has mailed a
request for payment by certified mail to the person's last known
business address as reflected by the commissioner's records;
(8) paid compensation to a person who is not licensed
or exempt under this chapter for acts for which a license under this
chapter is required;
(9) induced or attempted to induce a party to a
contract to breach the contract so the person may make a mortgage
loan;
(10) published or circulated an unjustified or
unwarranted threat of legal proceedings in matters related to the
person's actions or services as a mortgage broker or loan officer,
as applicable;
(11) established an association, by employment or
otherwise, with a person not licensed or exempt under this chapter
who was expected or required to act as a mortgage broker or loan
officer;
(12) aided, abetted, or conspired with a person to
circumvent the requirements of this chapter;
(13) acted in the dual capacity of a mortgage broker or
loan officer and real estate broker, salesperson, or attorney in a
transaction without the knowledge and written consent of the
mortgage applicant or in violation of applicable requirements under
federal law;
(14) discriminated against a prospective borrower on
the basis of race, color, religion, sex, national origin, ancestry,
familial status, or a disability;
(15) failed or refused on demand to:
(A) produce a document, book, or record
concerning a mortgage loan transaction conducted by the mortgage
broker or loan officer for inspection by the commissioner or the
commissioner's authorized personnel or representative;
(B) give the commissioner or the commissioner's
authorized personnel or representative free access to the books or
records relating to the person's business kept by an officer,
agent, or employee of the person or any business entity through
which the person conducts mortgage brokerage activities, including
a subsidiary or holding company affiliate; or
(C) provide information requested by the
commissioner as a result of a formal or informal complaint made to
the commissioner;
(16) failed without just cause to surrender, on
demand, a copy of a document or other instrument coming into the
person's possession that was provided to the person by another
person making the demand or that the person making the demand is
under law entitled to receive; or
(17) disregarded or violated this chapter, [or] a rule
adopted by the finance commission under this chapter, or an order
issued by the commissioner under this chapter.
SECTION 4. This Act takes effect September 1, 2003.