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A BILL TO BE ENTITLED
|
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AN ACT
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relating to the regulation of residential mortgage loan |
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originators; providing a penalty. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subtitle E, Title 3, Finance Code, is amended by |
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adding Chapter 180 to read as follows: |
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CHAPTER 180. RESIDENTIAL MORTGAGE LOAN ORIGINATORS |
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SUBCHAPTER A. GENERAL PROVISIONS |
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Sec. 180.001. SHORT TITLE. This chapter may be cited as the |
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Texas Secure and Fair Enforcement for Mortgage Licensing Act of |
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2009. |
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Sec. 180.002. DEFINITIONS. In this chapter: |
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(1) "Clerical or support duties," following the |
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receipt of an application from a consumer, includes: |
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(A) the receipt, collection, distribution, and |
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analysis of information related to the processing or underwriting |
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of a residential mortgage loan; and |
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(B) communication with a consumer to obtain |
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information necessary to process or underwrite a loan, to the |
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extent that the communication does not include offering or |
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negotiating loan rates or terms or counseling the consumer about |
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residential mortgage loan rates or terms. |
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(2) "Credit union" means a state or federal credit |
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union operating in this state. |
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(3) "Credit union subsidiary organization" means an |
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agency, association, or company wholly or partly owned by a credit |
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union that is designed primarily to serve or otherwise assist |
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credit union operations. The term includes a credit union service |
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organization authorized by: |
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(A) Section 124.351(a)(1); |
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(B) Credit Union Commission rule; or |
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(C) Part 712 of the National Credit Union |
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Administration's Rules and Regulations. |
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(4) "Depository institution" has the meaning assigned |
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by Section 3, Federal Deposit Insurance Act (12 U.S.C. Section |
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1813). The term includes a credit union but does not include a |
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credit union subsidiary organization. |
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(5) "Dwelling" has the meaning assigned by Section |
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103(v) of the Truth in Lending Act (15 U.S.C. Section 1602(v)). |
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(6) "Federal banking agency" means: |
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(A) the Board of Governors of the Federal Reserve |
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System; |
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(B) the Office of the Comptroller of the |
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Currency; |
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(C) the Office of Thrift Supervision; |
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(D) the National Credit Union Administration; |
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(E) the Federal Deposit Insurance Corporation; |
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or |
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(F) the successor of any of those agencies. |
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(7) "Finance commission" means the Finance Commission |
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of Texas. |
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(8) "Immediate family member" means the spouse, child, |
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sibling, parent, grandparent, or grandchild of an individual. The |
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term includes a stepparent, stepchild, and stepsibling and a |
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relationship established by adoption. |
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(9) "Individual" means a natural person. |
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(10) "License" means a license issued under the laws |
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of this state to an individual acting as or engaged in the business |
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of a residential mortgage loan originator. |
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(11) "Loan processor or underwriter" means an |
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individual who performs clerical or support duties as an employee |
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at the direction of and subject to the supervision and instruction |
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of an individual licensed as a residential mortgage loan originator |
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or exempt from licensure under Section 180.003. |
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(12) "Nationwide Mortgage Licensing System and |
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Registry" means a mortgage licensing system developed and |
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maintained by the Conference of State Bank Supervisors and the |
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American Association of Residential Mortgage Regulators for the |
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licensing and registration of state residential mortgage loan |
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originators. |
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(13) "Nontraditional mortgage product" means a |
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mortgage product other than a 30-year fixed rate mortgage. |
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(14) "Person" means an individual, corporation, |
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company, limited liability company, partnership, or association. |
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(15) "Real estate brokerage activity" means an |
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activity that involves offering or providing real estate brokerage |
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services to the public, including: |
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(A) acting as a real estate broker or salesperson |
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for a buyer, seller, lessor, or lessee of real property; |
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(B) bringing together parties interested in the |
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sale, purchase, lease, rental, or exchange of real property; |
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(C) negotiating, on a party's behalf, any |
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provision of a contract relating to the sale, purchase, lease, |
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rental, or exchange of real property, other than a negotiation |
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conducted in connection with providing financing with respect to |
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such a transaction; |
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(D) engaging in an activity for which a person is |
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required to be registered or licensed by the state as a real estate |
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broker or salesperson; and |
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(E) offering to engage in an activity described |
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by Paragraphs (A) through (D) or to act in the same capacity as a |
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person described by Paragraphs (A) through (D). |
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(16) "Registered mortgage loan originator" means an |
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individual who: |
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(A) is a residential mortgage loan originator and |
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is an employee of: |
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(i) a depository institution; |
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(ii) a subsidiary that is: |
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(a) owned and controlled by a |
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depository institution; and |
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(b) regulated by a federal banking |
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agency; or |
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(iii) an institution regulated by the Farm |
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Credit Administration; and |
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(B) is registered with, and maintains a unique |
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identifier through, the Nationwide Mortgage Licensing System and |
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Registry. |
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(17) "Regulatory official" means: |
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(A) with respect to Subtitles A, F, and G of this |
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title, the banking commissioner of Texas; |
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(B) with respect to Chapters 156 and 157 except |
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as provided by Paragraph (D), the savings and mortgage lending |
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commissioner; |
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(C) with respect to Chapters 342, 347, 348, and |
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351, the consumer credit commissioner; and |
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(D) with respect to credit unions, to the |
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examination, investigation, or inspection of employees of credit |
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union subsidiary organizations licensed under Chapter 156, and to |
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the enforcement of compliance with this chapter and Chapter 156 by |
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those employees, the credit union commissioner. |
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(18) "Residential mortgage loan" means a loan |
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primarily for personal, family, or household use that is secured by |
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a mortgage, deed of trust, or other equivalent consensual security |
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interest on a dwelling or on residential real estate. |
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(19) "Residential mortgage loan originator": |
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(A) means an individual who for compensation or |
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gain or in the expectation of compensation or gain: |
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(i) takes a residential mortgage loan |
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application; or |
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(ii) offers or negotiates the terms of a |
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residential mortgage loan; and |
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(B) does not include: |
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(i) an individual who performs solely |
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administrative or clerical tasks on behalf of an individual |
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licensed as a residential mortgage loan originator or exempt from |
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licensure under Section 180.003, except as otherwise provided by |
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Section 180.051; |
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(ii) an individual who performs only real |
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estate brokerage activities and is licensed or registered by the |
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state as a real estate broker or salesperson, unless the individual |
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is compensated by: |
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(a) a lender, mortgage broker, or |
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other residential mortgage loan originator; or |
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(b) an agent of a lender, mortgage |
|
broker, or other residential mortgage loan originator; |
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(iii) an individual licensed under Chapter |
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1201, Occupations Code, unless the individual is directly |
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compensated for arranging financing for activities regulated under |
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that chapter by: |
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(a) a lender, mortgage broker, or |
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other residential mortgage loan originator; or |
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(b) an agent of a lender, mortgage |
|
broker, or other residential mortgage loan originator; |
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(iv) an individual who receives the same |
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benefits from a financed transaction as the individual would |
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receive if the transaction were a cash transaction; or |
|
(v) an individual who is involved solely in |
|
providing extensions of credit relating to timeshare plans, as |
|
defined by 11 U.S.C. Section 101(53D). |
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(20) "Residential real estate" means real property |
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located in this state on which a dwelling is constructed or intended |
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to be constructed. |
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(21) "Rulemaking authority" means: |
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(A) the finance commission, except as provided by |
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Paragraph (B); or |
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(B) with respect to credit unions and the |
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rulemaking authority granted by Section 15.4024, the Credit Union |
|
Commission. |
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(22) "S.A.F.E. Mortgage Licensing Act" means the |
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federal Secure and Fair Enforcement for Mortgage Licensing Act of |
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2008 (Pub. L. No. 110-289). |
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(23) "Unique identifier" means a number or other |
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identifier assigned by protocols established by the Nationwide |
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Mortgage Licensing System and Registry. |
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Sec. 180.003. EXEMPTION. The following persons are exempt |
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from this chapter: |
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(1) a registered mortgage loan originator when acting |
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for an entity described by Section 180.002(16)(A)(i), (ii), or |
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(iii); |
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(2) an individual who offers or negotiates terms of a |
|
residential mortgage loan with or on behalf of an immediate family |
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member of the individual; |
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(3) a licensed attorney who negotiates the terms of a |
|
residential mortgage loan on behalf of a client as an ancillary |
|
matter to the attorney's representation of the client, unless the |
|
attorney is compensated by: |
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(A) a lender, mortgage broker, or other |
|
residential mortgage loan originator; or |
|
(B) an agent of a lender, mortgage broker, or |
|
other residential mortgage loan originator; |
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(4) an individual who: |
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(A) is an exclusive agent of a registered |
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financial services company; |
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(B) is exempt from regulation under Chapter 156 |
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as provided by Section 156.202(5); and |
|
(C) is individually enrolled as a registered |
|
mortgage loan originator with the Nationwide Mortgage Licensing |
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System and Registry; |
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(5) an individual who offers or negotiates terms of a |
|
residential mortgage loan secured by a dwelling that serves as the |
|
individual's residence; and |
|
(6) a nonprofit organization providing self-help |
|
housing that originates zero interest residential mortgage loans |
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for borrowers who have provided part of the labor to construct the |
|
dwelling securing the loan. |
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Sec. 180.004. ADMINISTRATIVE AUTHORITY. (a) A regulatory |
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official has broad authority to administer, interpret, and enforce |
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this chapter. |
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(b) A rulemaking authority has broad authority to adopt |
|
rules to implement this chapter to carry out the legislature's |
|
intent. |
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(c) This chapter does not limit the authority of a |
|
regulatory official to take disciplinary action against a license |
|
holder for a violation of this chapter or the rules adopted by the |
|
regulatory official under this chapter. A regulatory official has |
|
broad authority to investigate, revoke a license, and inform the |
|
proper authority when fraudulent conduct or a violation of this |
|
chapter occurs. |
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Sec. 180.005. SEVERABILITY. The provisions of this chapter |
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or applications of those provisions are severable as provided by |
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Section 311.032(c), Government Code. |
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[Sections 180.006-180.050 reserved for expansion] |
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SUBCHAPTER B. LICENSING AND REGISTRATION REQUIREMENTS |
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Sec. 180.051. STATE LICENSE REQUIRED; RENEWAL. (a) Unless |
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exempted by Section 180.003, an individual may not engage in |
|
business as a residential mortgage loan originator with respect to |
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a dwelling located in this state unless the individual: |
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(1) is licensed to engage in that business under |
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Chapter 156, 157, 342, 347, 348, or 351; and |
|
(2) complies with the requirements of this chapter. |
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(b) Unless exempted by Section 180.003, a loan processor or |
|
underwriter who is an independent contractor may not engage in the |
|
activities of a loan processor or underwriter unless the |
|
independent contractor loan processor or underwriter obtains and |
|
maintains the appropriate residential mortgage loan originator |
|
license and complies with the requirements of this chapter. |
|
(c) The individual must renew the license annually to be |
|
considered licensed for purposes of this section. |
|
(d) Notwithstanding any provision of law listed in |
|
Subsection (a)(1), the regulatory official shall provide for annual |
|
renewal of licenses for individuals seeking to engage in |
|
residential mortgage loan origination activities. |
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Sec. 180.052. ENROLLMENT WITH NATIONWIDE MORTGAGE |
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LICENSING SYSTEM AND REGISTRY. (a) A licensed residential |
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mortgage loan originator must enroll with and maintain a valid |
|
unique identifier issued by the Nationwide Mortgage Licensing |
|
System and Registry. |
|
(b) A non-federally insured credit union that employs loan |
|
originators, as defined by the S.A.F.E. Mortgage Licensing Act, |
|
shall enroll those employees with the Nationwide Mortgage Licensing |
|
System and Registry by furnishing the information relating to the |
|
employees' identity set forth in Section 1507(a)(2) of the S.A.F.E. |
|
Mortgage Licensing Act. |
|
(c) Each independent contractor loan processor or |
|
underwriter licensed as a residential mortgage loan originator must |
|
have and maintain a valid unique identifier issued by the |
|
Nationwide Mortgage Licensing System and Registry. |
|
(d) The regulatory official who administers the law under |
|
which a residential mortgage loan originator is licensed shall |
|
require the residential mortgage loan originator to be enrolled |
|
with the Nationwide Mortgage Licensing System and Registry. |
|
(e) For purposes of implementing Subsection (d), the |
|
regulatory official may participate in the Nationwide Mortgage |
|
Licensing System and Registry. |
|
Sec. 180.053. APPLICATION FORM. (a) A regulatory official |
|
shall prescribe application forms for a license as a residential |
|
mortgage loan originator. |
|
(b) A regulatory official may change or update an |
|
application form as necessary to carry out the purposes of this |
|
chapter. |
|
Sec. 180.054. CRIMINAL AND OTHER BACKGROUND CHECKS. (a) In |
|
connection with an application for a license as a residential |
|
mortgage loan originator, the applicant shall, at a minimum, |
|
furnish to the Nationwide Mortgage Licensing System and Registry |
|
information concerning the applicant's identity, including: |
|
(1) fingerprints for submission to the Federal Bureau |
|
of Investigation and any governmental agency or entity authorized |
|
to receive the information to conduct a state, national, and |
|
international criminal background check; and |
|
(2) personal history and experience information in a |
|
form prescribed by the Nationwide Mortgage Licensing System and |
|
Registry, including the submission of authorization for the |
|
Nationwide Mortgage Licensing System and Registry and the |
|
appropriate regulatory official to obtain: |
|
(A) an independent credit report obtained from a |
|
consumer reporting agency described by Section 603(p), Fair Credit |
|
Reporting Act (15 U.S.C. Section 1681a(p)); and |
|
(B) information related to any administrative, |
|
civil, or criminal findings by a governmental jurisdiction. |
|
(b) For purposes of this section and to reduce the points of |
|
contact that the Federal Bureau of Investigation may have to |
|
maintain for purposes of Subsection (a)(1), a regulatory official |
|
may use the Nationwide Mortgage Licensing System and Registry as a |
|
channeling agent for requesting information from and distributing |
|
information to the United States Department of Justice, any |
|
governmental agency, or any source at the regulatory official's |
|
direction. |
|
(c) For purposes of this section and to reduce the points of |
|
contact that a regulatory official may have to maintain for |
|
purposes of Subsection (a) or (b), the regulatory official may use |
|
the Nationwide Mortgage Licensing System and Registry as a |
|
channeling agent for requesting information from and distributing |
|
information to and from any source as directed by the regulatory |
|
official. |
|
Sec. 180.055. ISSUANCE OF LICENSE. (a) The regulatory |
|
official may not issue a residential mortgage loan originator |
|
license to an individual unless the regulatory official determines, |
|
at a minimum, that the applicant: |
|
(1) has not had a residential mortgage loan originator |
|
license revoked in any governmental jurisdiction; |
|
(2) has not been convicted of, or pled guilty or nolo |
|
contendere to, a felony in a domestic, foreign, or military court: |
|
(A) during the seven-year period preceding the |
|
date of application; or |
|
(B) at any time preceding the date of |
|
application, if the felony involved an act of fraud, dishonesty, |
|
breach of trust, or money laundering; |
|
(3) demonstrates financial responsibility, character, |
|
and general fitness so as to command the confidence of the community |
|
and to warrant a determination that the individual will operate |
|
honestly, fairly, and efficiently as a residential mortgage loan |
|
originator within the purposes of this chapter and any other |
|
appropriate regulatory law of this state; |
|
(4) provides satisfactory evidence that the applicant |
|
has completed prelicensing education courses described by Section |
|
180.056; |
|
(5) provides satisfactory evidence of having passed a |
|
written test that meets the requirements of Section 180.057; and |
|
(6) has paid a recovery fund fee or obtained a surety |
|
bond as required under the appropriate state regulatory law. |
|
(b) A revocation that has been formally vacated may not be |
|
considered a license revocation for purposes of Subsection (a)(1). |
|
(c) A conviction for which a full pardon has been granted |
|
may not be considered a conviction for purposes of Subsection |
|
(a)(2). |
|
(d) For purposes of Subsection (a)(3), an individual is |
|
considered not to be financially responsible if the individual has |
|
shown a lack of regard in managing the individual's own financial |
|
affairs or condition. A determination that an individual has not |
|
shown financial responsibility may include: |
|
(1) an outstanding judgment against the individual, |
|
other than a judgment imposed solely as a result of medical |
|
expenses; |
|
(2) an outstanding tax lien or other governmental |
|
liens and filings; |
|
(3) a foreclosure during the three-year period |
|
preceding the date of the license application; and |
|
(4) a pattern of seriously delinquent accounts during |
|
the three-year period preceding the date of the application. |
|
Sec. 180.056. PRELICENSING EDUCATIONAL COURSES. (a) An |
|
applicant for a residential mortgage loan originator license must |
|
complete education courses that include, at a minimum, at least the |
|
minimum number of hours and type of courses required by the S.A.F.E. |
|
Mortgage Licensing Act and the minimum number of hours of training |
|
related to lending standards for the nontraditional mortgage |
|
product marketplace required by that Act. |
|
(b) Education courses required under this section must be |
|
reviewed and approved by the Nationwide Mortgage Licensing System |
|
and Registry in accordance with the S.A.F.E. Mortgage Licensing |
|
Act. |
|
(c) Nothing in this section precludes any education course |
|
approved in accordance with the S.A.F.E. Mortgage Licensing Act |
|
from being provided by: |
|
(1) an applicant's employer; |
|
(2) an entity affiliated with the applicant by an |
|
agency contract; or |
|
(3) a subsidiary or affiliate of the employer or |
|
entity. |
|
(d) Education courses required under this section may be |
|
offered in a classroom, online, or by any other means approved by |
|
the Nationwide Mortgage Licensing System and Registry. |
|
(e) An individual who has successfully completed |
|
prelicensing education requirements approved by the Nationwide |
|
Mortgage Licensing System and Registry for another state shall be |
|
given credit toward completion of the prelicensing education |
|
requirements of this section. |
|
(f) An applicant who has previously held a residential |
|
mortgage loan originator license that meets the requirements of |
|
this chapter and other appropriate regulatory law, before being |
|
issued a new original license, must demonstrate to the appropriate |
|
regulatory official that the applicant has completed all continuing |
|
education requirements for the calendar year in which the license |
|
was last held by the applicant. |
|
(g) If the appropriate federal regulators and the |
|
Nationwide Mortgage Licensing System and Registry establish |
|
additional educational requirements for licensed residential |
|
mortgage loan originators, the rulemaking authority shall adopt |
|
necessary rules to implement the changes to the educational |
|
requirements of this section. |
|
Sec. 180.057. TESTING REQUIREMENTS. (a) An applicant for a |
|
residential mortgage loan originator license must pass a qualified, |
|
written test that: |
|
(1) meets the standards and requirements established |
|
by the S.A.F.E. Mortgage Licensing Act; |
|
(2) is developed by the Nationwide Mortgage Licensing |
|
System and Registry; and |
|
(3) is administered by a test provider in accordance |
|
with the S.A.F.E. Mortgage Licensing Act. |
|
(b) An individual may retake the test the number of times |
|
and within the period prescribed by the S.A.F.E. Mortgage Licensing |
|
Act. |
|
(c) An individual who fails to maintain a residential |
|
mortgage loan originator license for at least five consecutive |
|
years must retake the test. |
|
(d) This section does not prohibit a test provider approved |
|
in accordance with the S.A.F.E. Mortgage Licensing Act from |
|
providing a test at the location of: |
|
(1) the license applicant's employer; |
|
(2) a subsidiary or affiliate of the applicant's |
|
employer; or |
|
(3) an entity with which the applicant holds an |
|
exclusive arrangement to conduct the business of a residential |
|
mortgage loan originator. |
|
Sec. 180.058. RECOVERY FUND FEE OR SURETY BOND REQUIREMENT. |
|
(a) A regulatory official may not issue a residential mortgage loan |
|
originator license unless the official determines that the |
|
applicant meets the surety bond requirement or has paid a recovery |
|
fund fee, as applicable, in accordance with the requirements of the |
|
S.A.F.E. Mortgage Licensing Act. |
|
(b) Each regulatory official shall adopt rules requiring an |
|
individual licensed as a residential mortgage loan originator to |
|
obtain a surety bond or pay a recovery fund fee as the official |
|
determines appropriate to comply with the S.A.F.E. Mortgage |
|
Licensing Act. |
|
Sec. 180.059. STANDARDS FOR LICENSE RENEWAL. A license to |
|
act as a residential mortgage loan originator may be renewed on or |
|
before its expiration date if the license holder: |
|
(1) continues to meet the minimum requirements for |
|
license issuance; |
|
(2) pays all required fees for the renewal of the |
|
license; and |
|
(3) provides satisfactory evidence that the license |
|
holder has completed the continuing education requirements of |
|
Section 180.060. |
|
Sec. 180.060. CONTINUING EDUCATION COURSES. (a) To renew a |
|
residential mortgage loan originator license, a license holder must |
|
annually complete the minimum number of hours and type of |
|
continuing education courses required by the S.A.F.E. Mortgage |
|
Licensing Act, the minimum requirements established by the |
|
Nationwide Mortgage Licensing System and Registry, and any |
|
additional requirements established by the regulatory official. |
|
(b) Continuing education courses, including the course |
|
provider, must be reviewed and approved by the Nationwide Mortgage |
|
Licensing System and Registry as required by the S.A.F.E. Mortgage |
|
Licensing Act. Course credit must be granted in accordance with |
|
that Act. |
|
(c) Nothing in this section precludes any continuing |
|
education course approved in accordance with the S.A.F.E. Mortgage |
|
Licensing Act from being provided by: |
|
(1) the employer of the license holder; |
|
(2) an entity affiliated with the license holder by an |
|
agency contract; or |
|
(3) a subsidiary or affiliate of the employer or |
|
entity. |
|
(d) A person who successfully completes continuing |
|
education requirements approved by the Nationwide Mortgage |
|
Licensing System and Registry for another state shall be given |
|
credit toward completion of the continuing education requirements |
|
of this section. |
|
Sec. 180.061. RULEMAKING AUTHORITY. A rulemaking authority |
|
may adopt rules establishing requirements as necessary for: |
|
(1) conducting background checks by obtaining: |
|
(A) criminal history information through |
|
fingerprint or other databases; |
|
(B) civil administrative records; |
|
(C) credit history information; or |
|
(D) any other information considered necessary |
|
by the Nationwide Mortgage Licensing System and Registry; |
|
(2) payment of fees to apply for or renew licenses |
|
through the Nationwide Mortgage Licensing System and Registry; |
|
(3) setting or resetting, as necessary, license |
|
renewal dates or reporting periods; |
|
(4) amending or surrendering a license or any other |
|
activity a regulatory official considers necessary for |
|
participation in the Nationwide Mortgage Licensing System and |
|
Registry; and |
|
(5) investigation and examination authority for |
|
purposes of investigating a violation or complaint arising under |
|
this chapter or for purposes of examining, reviewing, or |
|
investigating any license holder or individual subject to this |
|
chapter. |
|
Sec. 180.062. CONFIDENTIALITY OF INFORMATION. (a) Except |
|
as otherwise provided by this section, a requirement under federal |
|
or state law regarding the privacy or confidentiality of |
|
information or material provided to the Nationwide Mortgage |
|
Licensing System and Registry, and a privilege arising under |
|
federal or state law, or under the rules of a federal or state |
|
court, continue to apply to the information or material after the |
|
disclosure of the information or material to the Nationwide |
|
Mortgage Licensing System and Registry. The information and |
|
material may be shared with federal and state regulatory officials |
|
with mortgage industry oversight authority without the loss of any |
|
privilege or confidentiality protections afforded by federal or |
|
state laws. |
|
(b) Information or material subject to a privilege or |
|
confidential under Subsection (a) may not be subject to: |
|
(1) disclosure under any federal or state law |
|
governing the disclosure to the public of information held by an |
|
officer or an agency of the federal government or this state; or |
|
(2) subpoena, discovery, or admission into evidence in |
|
a private civil action or administrative proceeding. |
|
(c) A person who is the subject of information or material |
|
in the Nationwide Mortgage Licensing System and Registry may waive, |
|
wholly or partly, any privilege held by the Nationwide Mortgage |
|
Licensing System and Registry with respect to the information or |
|
material. |
|
(d) A regulatory official may enter into an agreement or |
|
sharing arrangement with another governmental agency, the |
|
Conference of State Bank Supervisors, the American Association of |
|
Residential Mortgage Regulators, or other associations |
|
representing appropriate governmental agencies as established by |
|
rule of the rulemaking authority or order issued by the regulatory |
|
official. A protection provided by Subsection (a) also applies to |
|
information and material shared under an agreement or sharing |
|
arrangement entered into under this subsection. |
|
(e) To the extent of a conflict between Subsection (a) and |
|
Chapter 552, Government Code, or another state law relating to the |
|
disclosure of confidential information or information or material |
|
described by Subsection (a), Subsection (a) controls to the extent |
|
Chapter 552, Government Code, or the other law provides less |
|
confidentiality or a weaker privilege than is provided by |
|
Subsection (a). |
|
(f) This section does not apply to information or material |
|
relating to the employment history of, and publicly adjudicated |
|
disciplinary and enforcement actions against, a residential |
|
mortgage loan originator that is included in the Nationwide |
|
Mortgage Licensing System and Registry for access by the public. |
|
[Sections 180.063-180.100 reserved for expansion] |
|
SUBCHAPTER C. REPORTING AND OTHER REQUIREMENTS REGARDING |
|
NATIONWIDE MORTGAGE LICENSING SYSTEM AND REGISTRY |
|
Sec. 180.101. MORTGAGE CALL REPORTS. Each licensed |
|
residential mortgage loan originator shall submit to the Nationwide |
|
Mortgage Licensing System and Registry a report of condition that |
|
is in the form and contains the information required by the |
|
Nationwide Mortgage Licensing System and Registry. |
|
Sec. 180.102. REPORT OF VIOLATIONS AND ENFORCEMENT ACTIONS. |
|
Subject to the confidentiality provisions of this chapter, a |
|
regulatory official shall report to the Nationwide Mortgage |
|
Licensing System and Registry on a regular basis regarding |
|
violations of, enforcement actions under, or information relevant |
|
to this chapter or the S.A.F.E. Mortgage Licensing Act under the |
|
regulatory official's licensure, regulation, or examination of a |
|
licensed residential mortgage loan originator or person registered |
|
under the S.A.F.E. Mortgage Licensing Act. |
|
Sec. 180.103. INFORMATION CHALLENGE PROCESS. The |
|
applicable rulemaking authority by rule shall establish a process |
|
by which licensed residential mortgage loan originators may dispute |
|
information submitted by the regulatory official to the Nationwide |
|
Mortgage Licensing System and Registry. |
|
[Sections 180.104-180.150 reserved for expansion] |
|
SUBCHAPTER D. BUSINESS PRACTICES; PROHIBITED ACTS |
|
Sec. 180.151. DISPLAY OF UNIQUE IDENTIFIER. The unique |
|
identifier of a person originating a residential mortgage loan must |
|
be clearly shown on each residential mortgage loan application |
|
form, solicitation, or advertisement, including business cards and |
|
websites, and any other document required by rule of the rulemaking |
|
authority. |
|
Sec. 180.152. REPRESENTATIONS. An individual who is |
|
engaged exclusively in loan processor or underwriter activities may |
|
not represent to the public, through the use of advertising, |
|
business cards, stationery, brochures, signs, rate lists, or other |
|
means, that the individual can or will perform any of the activities |
|
of a residential mortgage loan originator unless the individual is |
|
licensed as a residential mortgage loan originator. |
|
Sec. 180.153. PROHIBITED ACTS AND PRACTICES. An individual |
|
or other person subject to regulation under this chapter may not: |
|
(1) employ, directly or indirectly, a scheme, device, |
|
or artifice to defraud or mislead borrowers or lenders or to defraud |
|
a person; |
|
(2) engage in an unfair or deceptive practice toward a |
|
person; |
|
(3) obtain property by fraud or misrepresentation; |
|
(4) solicit or enter into a contract with a borrower |
|
that provides in substance that the individual or other person |
|
subject to this chapter may earn a fee or commission through "best |
|
efforts" to obtain a loan even though no loan was actually obtained |
|
for the borrower; |
|
(5) solicit, advertise, or enter into a contract for |
|
specific interest rates, points, or other financing terms unless |
|
the terms are actually available at the time of soliciting, |
|
advertising, or contracting; |
|
(6) conduct any business regulated by this chapter |
|
without holding a license as required by this chapter; |
|
(7) assist, aid, or abet an individual in the conduct |
|
of business without a license required by this chapter; |
|
(8) fail to make disclosures as required by this |
|
chapter and any other applicable state or federal law, including |
|
rules or regulations under applicable state or federal law; |
|
(9) fail to comply with this chapter or rules adopted |
|
under this chapter; |
|
(10) fail to comply with any other state or federal |
|
law, including rules or regulations adopted under that law, |
|
applicable to a business or activity regulated by this chapter; |
|
(11) make, in any manner, a false or deceptive |
|
statement or representation; |
|
(12) negligently make a false statement or knowingly |
|
or wilfully make an omission of material fact in connection with: |
|
(A) information or a report filed with a |
|
governmental agency or the Nationwide Mortgage Licensing System and |
|
Registry; or |
|
(B) an investigation conducted by the regulatory |
|
official or another governmental agency; |
|
(13) make a payment, threat, or promise, directly or |
|
indirectly, to a person for purposes of influencing the person's |
|
independent judgment in connection with a residential mortgage |
|
loan, or make a payment, threat, or promise, directly or |
|
indirectly, to an appraiser of property, for purposes of |
|
influencing the appraiser's independent judgment with respect to |
|
the property's value; |
|
(14) collect, charge, attempt to collect or charge, or |
|
use or propose an agreement purporting to collect or charge a fee |
|
prohibited by this chapter; |
|
(15) cause or require a borrower to obtain property |
|
insurance coverage in an amount that exceeds the replacement cost |
|
of the improvements as established by the property insurer; or |
|
(16) fail to truthfully account for money belonging to |
|
a party to a residential mortgage loan transaction. |
|
[Sections 180.154-180.200 reserved for expansion] |
|
SUBCHAPTER E. ENFORCEMENT PROVISIONS |
|
Sec. 180.201. ENFORCEMENT AUTHORITY. To ensure the |
|
effective supervision and enforcement of this chapter, a regulatory |
|
official may: |
|
(1) deny, suspend, revoke, condition, or decline to |
|
renew a license for a violation of this chapter, a rule adopted |
|
under this chapter, or an order or directive issued under this |
|
chapter; |
|
(2) deny, suspend, revoke, condition, or decline to |
|
renew a license if an applicant or license holder: |
|
(A) fails to meet the requirements of Subchapter |
|
B; or |
|
(B) withholds information or makes a material |
|
misstatement in an application for a license or renewal of a |
|
license; |
|
(3) order restitution against a person subject to |
|
regulation under this chapter for a violation of this chapter; |
|
(4) impose an administrative penalty on a person |
|
subject to regulation under this chapter, subject to Section |
|
180.202; or |
|
(5) issue orders or directives as provided by Section |
|
180.203. |
|
Sec. 180.202. ADMINISTRATIVE PENALTY. (a) A regulatory |
|
official may impose an administrative penalty on a residential |
|
mortgage loan originator or other person subject to regulation |
|
under this chapter, if the official, after notice and opportunity |
|
for hearing, determines that the residential mortgage loan |
|
originator or other person subject to regulation under this chapter |
|
has violated or failed to comply with: |
|
(1) this chapter; |
|
(2) a rule adopted under this chapter; or |
|
(3) an order issued under this chapter. |
|
(b) The penalty may not exceed $25,000 for each violation. |
|
(c) The amount of the penalty shall be based on: |
|
(1) the seriousness of the violation, including the |
|
nature, circumstances, extent, and gravity of the violation; |
|
(2) the economic harm to property caused by the |
|
violation; |
|
(3) the history of previous violations; |
|
(4) the amount necessary to deter a future violation; |
|
(5) efforts to correct the violation; and |
|
(6) any other matter that justice may require. |
|
Sec. 180.203. CEASE AND DESIST ORDERS. A regulatory |
|
official may: |
|
(1) order or direct a person subject to regulation |
|
under this chapter to cease and desist from conducting business, |
|
including issuing an immediate temporary order to cease and desist |
|
from conducting business; |
|
(2) order or direct a person subject to regulation |
|
under this chapter to cease a violation of this chapter or a harmful |
|
activity in violation of this chapter, including issuing an |
|
immediate temporary order to cease and desist; |
|
(3) enter immediate temporary orders against a person |
|
subject to regulation under this chapter to cease engaging in |
|
business under a license if the regulatory official determines that |
|
the license was erroneously granted or the license holder is in |
|
violation of this chapter; and |
|
(4) order or direct other affirmative action as the |
|
regulatory official considers necessary. |
|
[Sections 180.204-180.250 reserved for expansion] |
|
SUBCHAPTER F. DUTIES OF REGULATORY OFFICIALS |
|
Sec. 180.251. GENERAL DUTIES OF REGULATORY OFFICIALS. (a) |
|
Except as provided by Subsection (b), the savings and mortgage |
|
lending commissioner shall administer and enforce this chapter with |
|
respect to individuals licensed under Chapter 156 or 157. |
|
(b) The credit union commissioner shall: |
|
(1) examine, inspect, or investigate employees of |
|
credit union subsidiary organizations who are licensed to act as |
|
residential mortgage loan originators under Chapter 156; and |
|
(2) enforce compliance by employees of credit union |
|
subsidiary organizations described by Subdivision (1) with the |
|
applicable requirements of Chapter 156 and this chapter and any |
|
applicable rules adopted under Section 15.4024. |
|
(c) The consumer credit commissioner shall administer and |
|
enforce this chapter with respect to individuals licensed under |
|
Chapter 342, 347, 348, or 351. |
|
(d) To the extent permitted or required by this chapter and |
|
as reasonably necessary for the implementation and enforcement of |
|
the S.A.F.E. Mortgage Licensing Act, the banking commissioner of |
|
Texas may administer and enforce this chapter with respect to a |
|
person otherwise under the commissioner's jurisdiction under |
|
Subtitle A, F, or G of this title. |
|
Sec. 180.252. AUTHORITY OF REGULATORY OFFICIALS TO |
|
ESTABLISH RELATIONSHIP WITH NATIONWIDE MORTGAGE LICENSING SYSTEM |
|
AND REGISTRY; CONTRACTING AUTHORITY. To fulfill the purposes of |
|
this chapter, a regulatory official may establish a relationship |
|
with or contract with the Nationwide Mortgage Licensing System and |
|
Registry or an entity designated by the Nationwide Mortgage |
|
Licensing System and Registry to collect and maintain records and |
|
process transaction fees or other fees related to licensed |
|
residential mortgage loan originators or other persons subject to |
|
regulation under this chapter. |
|
SECTION 2. Section 14.107(b), Finance Code, is amended to |
|
read as follows: |
|
(b) The finance commission by rule shall set the fees for |
|
licensing and examination under Chapter 342, 347, 348, 351, or 371 |
|
at amounts or rates necessary to recover the costs of administering |
|
those chapters. The rules may provide that the amount of a fee |
|
charged to a license holder is based on the volume of the license |
|
holder's regulated business and other key factors. The |
|
commissioner may provide for collection of a single annual fee from |
|
a person licensed under Chapter 342, 347, 348, 351, or 371 to |
|
include amounts due for both licensing and examination. |
|
SECTION 3. Subchapter E, Chapter 15, Finance Code, is |
|
amended by adding Section 15.4024 to read as follows: |
|
Sec. 15.4024. RULES RELATING TO CERTAIN EMPLOYEES OF CREDIT |
|
UNION SUBSIDIARY ORGANIZATIONS. (a) In this section, "credit union |
|
subsidiary organization" has the meaning assigned by Section |
|
180.002. |
|
(b) The commission may adopt and enforce rules necessary for |
|
the commissioner to: |
|
(1) examine, inspect, or investigate employees of |
|
credit union subsidiary organizations who are licensed to act as |
|
residential mortgage loan originators under Chapter 156; and |
|
(2) enforce compliance by employees of credit union |
|
subsidiary organizations described by Subdivision (1) with the |
|
applicable requirements of Chapters 156 and 180. |
|
SECTION 4. Section 156.101, Finance Code, is amended by |
|
amending Subsection (a) and adding Subsections (a-1) and (a-2) to |
|
read as follows: |
|
(a) Except as provided by Subsection (a-2), the [The] |
|
commissioner shall administer this chapter. |
|
(a-1) The commissioner shall perform all duties relating to |
|
the issuance and renewal of licenses under Section 156.2015 for |
|
employees of credit union subsidiary organizations who act as |
|
residential mortgage loan originators. |
|
(a-2) The credit union commissioner is responsible for: |
|
(1) the examination, inspection, or investigation of |
|
employees of credit union subsidiary organizations who are licensed |
|
to act as residential mortgage loan originators under this chapter; |
|
and |
|
(2) the enforcement of compliance by employees of |
|
credit union subsidiary organizations described by Subdivision (1) |
|
with the applicable requirements of this chapter and Chapter 180. |
|
SECTION 5. Section 156.102(a), Finance Code, is amended to |
|
read as follows: |
|
(a) The finance commission may adopt and enforce rules |
|
necessary for the intent of or to ensure compliance with this |
|
chapter, except as provided by Section 15.4024 with respect to |
|
employees of credit union subsidiary organizations subject to |
|
regulation under Section 156.2015. |
|
SECTION 6. Subchapter C, Chapter 156, Finance Code, is |
|
amended by adding Section 156.2015 to read as follows: |
|
Sec. 156.2015. RESIDENTIAL MORTGAGE LOAN ORIGINATION |
|
ACTIVITIES. (a) In this section, "credit union subsidiary |
|
organization," "Nationwide Mortgage Licensing System and |
|
Registry," and "residential mortgage loan originator" have the |
|
meanings assigned by Section 180.002. |
|
(b) An individual required to be licensed under this chapter |
|
may not act as a residential mortgage loan originator unless: |
|
(1) the individual's license under this chapter |
|
otherwise authorizes the individual to act as a residential |
|
mortgage loan originator; |
|
(2) the individual is enrolled with the Nationwide |
|
Mortgage Licensing System and Registry as required by Section |
|
180.052; and |
|
(3) the individual complies with other applicable |
|
requirements of Chapter 180 and rules adopted under that chapter. |
|
(c) An employee of a credit union subsidiary organization |
|
may not act as a residential mortgage loan originator unless the |
|
employee: |
|
(1) is licensed under this chapter; |
|
(2) is enrolled with the Nationwide Mortgage Licensing |
|
System and Registry as required by Section 180.052; and |
|
(3) complies with other applicable requirements of |
|
Chapter 180 and rules adopted under that chapter. |
|
(d) The finance commission by rule may waive or modify, |
|
wholly or partly, any requirement of this chapter and establish new |
|
requirements as reasonably necessary to enable the commissioner to |
|
participate in and individuals to register through the Nationwide |
|
Mortgage Licensing System and Registry for purposes of this section |
|
and Chapter 180. |
|
SECTION 7. Sections 156.214(b) and (f), Finance Code, as |
|
added by Chapter 228 (H.B. 1716), Acts of the 80th Legislature, |
|
Regular Session, 2007, are amended to read as follows: |
|
(b) To be eligible to register as a registered financial |
|
services company, a person must: |
|
(1) be a depository institution exempt from this |
|
chapter under Section 156.202(1)(A) or (B) and chartered and |
|
regulated by the Office of Thrift Supervision or the Office of the |
|
Comptroller of the Currency, or be a subsidiary [or affiliate] of |
|
the institution; |
|
(2) provide the commissioner with satisfactory |
|
evidence of an undertaking of accountability in a form acceptable |
|
to the commissioner, supported by a surety bond equal to $1 million |
|
to cover the person's responsibility for mortgage broker activities |
|
of each exclusive agent; |
|
(3) provide a business plan satisfactory to the |
|
commissioner that sets forth the person's plan to provide education |
|
to its exclusive agents, handle consumer complaints relating to its |
|
exclusive agents, and supervise the mortgage origination [broker] |
|
activities of its exclusive agents; |
|
(4) pay an annual registration fee of the lesser of: |
|
(A) one-half of the license fee for a loan |
|
officer under Section 156.203(c)(1), multiplied by the number of |
|
exclusive agents under contract to act for the person in this state; |
|
or |
|
(B) $200,000; and |
|
(5) designate an officer of the person to be |
|
responsible for the activities of the exclusive agents. |
|
(f) Prior to permitting an exclusive agent to solicit, |
|
process, negotiate, or place a mortgage loan, the registered |
|
financial services company shall submit to the commissioner such |
|
information as the commissioner may require relating to the |
|
exclusive agent, and the exclusive agent must have enrolled with |
|
the Nationwide Mortgage Licensing System and Registry as a |
|
registered residential mortgage loan originator and provided to the |
|
commissioner the exclusive agent's unique identifier. In this |
|
subsection, "Nationwide Mortgage Licensing System and Registry," |
|
"residential mortgage loan originator," and "unique identifier" |
|
have the meanings assigned by Section 180.002 [person together with
|
|
a fingerprint imprint of the person.
The commissioner shall obtain
|
|
criminal history record information as provided in Section
|
|
156.206(b).
The commissioner may assess a fee in an amount
|
|
determined by the finance commission to cover the cost of the
|
|
criminal background check.
This section does not apply to a person
|
|
who is licensed as a mortgage broker or loan officer under Chapter
|
|
156 at the time he becomes an exclusive agent of a registered
|
|
financial services company]. |
|
SECTION 8. Chapter 157, Finance Code, is amended by adding |
|
Section 157.0035 to read as follows: |
|
Sec. 157.0035. RESIDENTIAL MORTGAGE LOAN ORIGINATION |
|
ACTIVITIES. (a) In this section, "Nationwide Mortgage Licensing |
|
System and Registry" and "residential mortgage loan originator" |
|
have the meanings assigned by Section 180.002. |
|
(b) An individual originating a residential mortgage loan |
|
on behalf of an entity subject to regulation under this chapter may |
|
not act as a residential mortgage loan originator unless the |
|
individual: |
|
(1) is licensed and enrolled with the Nationwide |
|
Mortgage Licensing System and Registry as required by Section |
|
180.052; and |
|
(2) complies with other applicable requirements of |
|
Chapter 180 and rules adopted by the finance commission under that |
|
chapter. |
|
(c) The finance commission by rule may waive or modify, |
|
wholly or partly, any requirement of this chapter and may establish |
|
new requirements as reasonably necessary to enable the commissioner |
|
to participate in and individuals to enroll with the Nationwide |
|
Mortgage Licensing System and Registry for purposes of this section |
|
and Chapter 180. |
|
SECTION 9. Chapter 341, Finance Code, is amended by adding |
|
Subchapter G to read as follows: |
|
SUBCHAPTER G. STATE-LICENSED RESIDENTIAL MORTGAGE LOAN |
|
ORIGINATOR RECOVERY FUND |
|
Sec. 341.601. DEFINITION. In this subchapter, "fund" means |
|
the state-licensed residential mortgage loan originator recovery |
|
fund. |
|
Sec. 341.602. STATE-LICENSED RESIDENTIAL MORTGAGE LOAN |
|
ORIGINATOR RECOVERY FUND. (a) The commissioner under Chapter 180 |
|
shall establish, administer, and maintain a state-licensed |
|
residential mortgage loan originator recovery fund as provided by |
|
this subchapter. The amounts received by the commissioner for |
|
deposit in the fund shall be held by the commissioner in trust for |
|
carrying out the purposes of the fund. |
|
(b) Subject to this subsection, the fund shall be used to |
|
reimburse residential mortgage loan applicants for actual damages |
|
incurred because of acts committed by a state-licensed residential |
|
mortgage loan originator who was licensed under Chapter 342, 347, |
|
348, or 351 when the act was committed. The use of the fund is |
|
limited to reimbursement for out-of-pocket losses caused by an act |
|
that constitutes a violation of Chapter 180 or this subtitle. |
|
Payments from the fund may not be made to a lender who makes a |
|
residential mortgage loan originated by the state-licensed |
|
residential mortgage loan originator or who acquires a residential |
|
mortgage loan originated by the state-licensed residential |
|
mortgage loan originator. |
|
(c) The fund may be used at the discretion of the |
|
commissioner to reimburse expenses incurred to secure and destroy |
|
residential mortgage loan documents that have been abandoned by a |
|
current or former state-licensed residential mortgage loan |
|
originator under the regulatory authority of the agency. |
|
(d) Payments from the fund shall be reduced by the amount of |
|
any recovery from the state-licensed residential mortgage loan |
|
originator or from any surety, insurer, or other person or entity |
|
making restitution to the applicant on behalf of the originator. |
|
(e) The commissioner, as manager of the fund, is entitled to |
|
reimbursement for reasonable and necessary costs and expenses |
|
incurred in the management of the fund, including costs and |
|
expenses incurred with regard to applications filed under Section |
|
341.605. |
|
(f) Amounts in the fund may be invested and reinvested in |
|
the same manner as funds of the Employees Retirement System of |
|
Texas, and the interest from those investments shall be deposited |
|
to the credit of the fund. An investment may not be made under this |
|
subsection if the investment will impair the necessary liquidity |
|
required to satisfy payment of judgments awarded under this |
|
subchapter. |
|
Sec. 341.603. FUNDING. (a) An applicant for an original |
|
residential mortgage loan originator license issued under Chapter |
|
342, 347, 348, or 351 or for renewal of a residential mortgage loan |
|
originator license issued under Chapter 342, 347, 348, or 351 |
|
shall, in addition to paying the original application fee or |
|
renewal fee, pay a fee in an amount determined by the commissioner. |
|
The fee shall be deposited in the fund. |
|
(b) If the balance remaining in the fund at the end of a |
|
calendar year is more than $2.5 million, the amount of money in |
|
excess of that amount shall be available to the commissioner to |
|
offset the expenses of participating in and sharing information |
|
with the Nationwide Mortgage Licensing System and Registry in |
|
accordance with Chapter 180. |
|
Sec. 341.604. STATUTE OF LIMITATIONS. (a) An application |
|
for the recovery of actual damages from the fund under Section |
|
341.605 may not be filed after the second anniversary of the date of |
|
the alleged act or omission causing the actual damages or the date |
|
the act or omission should reasonably have been discovered. |
|
(b) This section does not apply to a subrogation claim |
|
brought by the commissioner for recovery of money paid out of the |
|
fund. |
|
Sec. 341.605. PROCEDURE FOR RECOVERY. (a) To recover from |
|
the fund, a residential mortgage loan applicant must file a written |
|
sworn application with the commissioner in the form prescribed by |
|
the commissioner. A person who knowingly makes a false statement in |
|
connection with applying for money out of the fund may be subject to |
|
criminal prosecution under Section 37.10, Penal Code. |
|
(b) The residential mortgage loan applicant is required to |
|
show: |
|
(1) that the applicant's claim is based on facts |
|
allowing recovery under Section 341.602; and |
|
(2) that the applicant: |
|
(A) is not a spouse of the state-licensed |
|
residential mortgage loan originator; |
|
(B) is not a child, parent, grandchild, |
|
grandparent, or sibling, including relationships by adoption, of |
|
the state-licensed residential mortgage loan originator; |
|
(C) is not a person sharing living quarters with |
|
the state-licensed residential mortgage loan originator or a |
|
current or former employer, employee, or associate of the |
|
originator; |
|
(D) is not a person who has aided, abetted, or |
|
participated other than as a victim with the state-licensed |
|
residential mortgage loan originator in any activity that is |
|
illegal under this subtitle or Chapter 180 or is not the personal |
|
representative of a state-licensed residential mortgage loan |
|
originator; and |
|
(E) is not licensed as a state-licensed |
|
residential mortgage loan originator who is seeking to recover any |
|
compensation in the transaction or transactions for which the |
|
application for payment is made. |
|
(c) On receipt of the verified application, the |
|
commissioner's staff shall: |
|
(1) notify each appropriate license holder and the |
|
issuer of any surety bond issued in connection with their licenses; |
|
and |
|
(2) investigate the application and issue a |
|
preliminary determination, giving the applicant, the license |
|
holder, and any surety an opportunity to resolve the matter by |
|
agreement or to dispute the preliminary determination. |
|
(d) If the preliminary determination under Subsection |
|
(c)(2) is not otherwise resolved by agreement and is not disputed by |
|
written notice to the commissioner before the 31st day after the |
|
notification date, the preliminary determination automatically |
|
becomes final and the commissioner shall make payment from the |
|
fund, subject to the limits of Section 341.606. |
|
(e) If the preliminary determination under Subsection |
|
(c)(2) is disputed by the applicant, license holder, or any surety |
|
by written notice to the commissioner before the 31st day after the |
|
notification date, the matter shall be set for a hearing governed by |
|
Chapter 2001, Government Code, and the hearing rules of the finance |
|
commission. |
|
Sec. 341.606. RECOVERY LIMITS. (a) A person entitled to |
|
receive payment out of the fund is entitled to receive |
|
reimbursement of actual, out-of-pocket damages as provided by this |
|
section. |
|
(b) A payment from the fund may be made as provided by |
|
Section 341.605 and this section. A payment for claims: |
|
(1) arising out of the same transaction, including |
|
interest, is limited in the aggregate to $25,000, regardless of the |
|
number of claimants; and |
|
(2) against a single person licensed as a residential |
|
mortgage loan originator under Chapter 342, 347, 348, or 351 is |
|
limited in the aggregate to $50,000 until the fund has been |
|
reimbursed for all amounts paid. |
|
(c) In the event there are concurrent claims under |
|
Subsections (b)(1) and (2) that exceed the amounts available under |
|
the fund, the commissioner shall prorate recovery based on the |
|
amount of damage suffered by each claimant. |
|
Sec. 341.607. REVOCATION OF LICENSE FOR PAYMENT FROM FUND. |
|
(a) The commissioner may revoke a residential mortgage loan |
|
originator license issued under this subtitle on proof that the |
|
commissioner has made a payment from the fund of any amount toward |
|
satisfaction of a claim against a state-licensed residential |
|
mortgage loan originator under this subchapter. |
|
(b) The commissioner may seek to collect from a |
|
state-licensed residential mortgage loan originator the amount |
|
paid from the fund on behalf of the originator and any costs |
|
associated with investigating and processing the claim against the |
|
fund or with collection of reimbursement for payments from the |
|
fund, plus interest at the current legal rate until the amount has |
|
been repaid in full. Any amount, including interest, recovered by |
|
the commissioner shall be deposited to the credit of the fund. |
|
(c) The commissioner may probate an order revoking a license |
|
under this section. |
|
(d) A state-licensed residential mortgage loan originator |
|
on whose behalf payment was made from the fund is not eligible to |
|
receive a new license until the originator has repaid in full, plus |
|
interest at the current legal rate, the amount paid from the fund on |
|
the originator's behalf and any costs associated with investigating |
|
and processing the claim against the fund or with collection of |
|
reimbursement from the fund. |
|
(e) This section does not limit the authority of the |
|
commissioner to take disciplinary action against a state-licensed |
|
residential mortgage loan originator for a violation of the chapter |
|
under which the license was issued or the rules adopted by the |
|
finance commission under that chapter. The repayment in full to the |
|
fund of all obligations of a state-licensed residential mortgage |
|
loan originator does not nullify or modify the effect of any other |
|
disciplinary proceeding. |
|
Sec. 341.608. SUBROGATION. When the commissioner has paid |
|
an applicant an amount from the fund under Section 341.605, the |
|
commissioner is subrogated to all of the rights of the applicant to |
|
the extent of the amount paid. The applicant shall assign the |
|
applicant's right, title, and interest in any subsequent judgment |
|
against the state-licensed residential mortgage loan originator up |
|
to the amount paid by the commissioner. Any amount, including |
|
interest, recovered by the commissioner on the assignment shall be |
|
deposited to the credit of the fund. |
|
Sec. 341.609. FAILURE TO COMPLY WITH SUBCHAPTER OR RULE |
|
ADOPTED BY FINANCE COMMISSION. The failure of an applicant under |
|
Section 341.605 to comply with a provision of this subchapter or a |
|
rule adopted by the finance commission relating to the fund |
|
constitutes a waiver of any rights under this subchapter. |
|
Sec. 341.610. RULEMAKING. The finance commission may adopt |
|
rules on the commissioner's recommendation to promote a fair and |
|
orderly administration of the fund consistent with the purposes of |
|
this subchapter. |
|
SECTION 10. Subchapter B, Chapter 342, Finance Code, is |
|
amended by adding Section 342.0515 to read as follows: |
|
Sec. 342.0515. RESIDENTIAL MORTGAGE LOAN ORIGINATOR |
|
ACTIVITIES. (a) In this section, "Nationwide Mortgage Licensing |
|
System and Registry" and "residential mortgage loan originator" |
|
have the meanings assigned by Section 180.002. |
|
(b) Unless exempt under Section 180.003, an individual who |
|
acts as a residential mortgage loan originator in the making, |
|
transacting, or negotiating of a loan subject to this chapter must: |
|
(1) be individually licensed to engage in that |
|
activity under this chapter; |
|
(2) be enrolled with the Nationwide Mortgage Licensing |
|
System and Registry as required by Section 180.052; and |
|
(3) comply with other applicable requirements of |
|
Chapter 180 and rules adopted under that chapter. |
|
(c) The finance commission shall adopt rules establishing |
|
procedures for issuing, renewing, and enforcing an individual |
|
license under this section. In adopting rules under this |
|
subsection, the finance commission shall ensure that: |
|
(1) the minimum eligibility requirements for issuance |
|
of an individual license are the same as the requirements of Section |
|
180.055; |
|
(2) the minimum eligibility requirements for renewal |
|
of an individual license are the same as the requirements of Section |
|
180.059; and |
|
(3) the applicant pays: |
|
(A) an investigation fee in a reasonable amount |
|
determined by the commissioner; and |
|
(B) an annual license fee in an amount determined |
|
as provided by Section 14.107. |
|
(d) The finance commission by rule may waive or modify, |
|
wholly or partly, any requirement of this chapter and establish new |
|
requirements as reasonably necessary to enable the commissioner to |
|
participate in the Nationwide Mortgage Licensing System and |
|
Registry for purposes of this section and Chapter 180. |
|
SECTION 11. Section 342.156, Finance Code, is amended to |
|
read as follows: |
|
Sec. 342.156. LICENSE SUSPENSION OR REVOCATION. After |
|
notice and a hearing the commissioner may suspend or revoke a |
|
license if the commissioner finds that: |
|
(1) the license holder failed to pay the annual |
|
license fee, an examination fee, an investigation fee, or another |
|
charge imposed by the commissioner under this chapter; |
|
(2) the license holder, knowingly or without the |
|
exercise of due care, violated this chapter or a rule adopted or |
|
order issued under this chapter; [or] |
|
(3) a fact or condition exists that, if it had existed |
|
or had been known to exist at the time of the original application |
|
for the license, clearly would have justified the commissioner's |
|
denial of the application; or |
|
(4) the license holder has failed to ensure that an |
|
individual acting as a residential mortgage loan originator, as |
|
defined by Section 180.002, in the making, transacting, or |
|
negotiating of a loan subject to this chapter is licensed under this |
|
chapter in accordance with Section 342.0515. |
|
SECTION 12. The heading to Subchapter J, Chapter 347, |
|
Finance Code, is amended to read as follows: |
|
SUBCHAPTER J. RIGHTS AND DUTIES OF CREDITOR AND RESIDENTIAL |
|
MORTGAGE LOAN ORIGINATOR |
|
SECTION 13. Section 347.451, Finance Code, is amended by |
|
adding Subsection (b-1) to read as follows: |
|
(b-1) A registered creditor that engages in the activity of |
|
originating a residential mortgage loan must meet the surety bond |
|
or recovery fund fee requirement, as applicable, of the creditor's |
|
residential mortgage loan originator under Section 180.058. |
|
SECTION 14. Subchapter J, Chapter 347, Finance Code, is |
|
amended by adding Section 347.4515 to read as follows: |
|
Sec. 347.4515. RESIDENTIAL MORTGAGE LOAN ORIGINATOR |
|
LICENSE REQUIRED. (a) In this section, "Nationwide Mortgage |
|
Licensing System and Registry" and "residential mortgage loan |
|
originator" have the meanings assigned by Section 180.002. |
|
(b) Unless exempt under Section 180.003, an individual who |
|
acts as a residential mortgage loan originator in the making, |
|
transacting, or negotiating of an extension of credit subject to |
|
this chapter must: |
|
(1) be individually licensed to engage in that |
|
activity under this chapter; |
|
(2) be enrolled with the Nationwide Mortgage Licensing |
|
System and Registry as required by Section 180.052; and |
|
(3) comply with other applicable requirements of |
|
Chapter 180 and rules adopted under that chapter. |
|
(c) The finance commission shall adopt rules establishing |
|
procedures for issuing, renewing, and enforcing an individual |
|
license under this section. In adopting rules under this |
|
subsection, the finance commission shall ensure that: |
|
(1) the minimum eligibility requirements for issuance |
|
of an individual license are the same as the requirements of Section |
|
180.055; |
|
(2) the minimum eligibility requirements for renewal |
|
of an individual license are the same as the requirements of Section |
|
180.059; and |
|
(3) the applicant pays: |
|
(A) an investigation fee in a reasonable amount |
|
determined by the commissioner; and |
|
(B) an annual license fee in an amount determined |
|
as provided by Section 14.107. |
|
(d) The finance commission by rule may waive or modify, |
|
wholly or partly, any requirement of this chapter and establish new |
|
requirements as reasonably necessary to enable the commissioner to |
|
participate in the Nationwide Mortgage Licensing System and |
|
Registry for purposes of this section and Chapter 180. |
|
SECTION 15. Section 348.501, Finance Code, is amended by |
|
adding Subsection (c) to read as follows: |
|
(c) A license holder under this chapter who engages in the |
|
sale of a motor vehicle to be used as a principal dwelling must meet |
|
the surety bond or recovery fund fee requirements, as applicable, |
|
of the holder's residential mortgage loan originator under Section |
|
180.058. |
|
SECTION 16. Subchapter F, Chapter 348, Finance Code, is |
|
amended by adding Section 348.5015 to read as follows: |
|
Sec. 348.5015. RESIDENTIAL MORTGAGE LOAN ORIGINATOR |
|
LICENSE REQUIRED. (a) In this section, "Nationwide Mortgage |
|
Licensing System and Registry" and "residential mortgage loan |
|
originator" have the meanings assigned by Section 180.002. |
|
(b) Unless exempt under Section 180.003, an individual who |
|
acts as a residential mortgage loan originator in the sale of a |
|
motor vehicle to be used as a principal dwelling must: |
|
(1) be licensed to engage in that activity under this |
|
chapter; |
|
(2) be enrolled with the Nationwide Mortgage Licensing |
|
System and Registry as required by Section 180.052; and |
|
(3) comply with other applicable requirements of |
|
Chapter 180 and rules adopted under that chapter. |
|
(c) The finance commission shall adopt rules establishing |
|
procedures for applying for issuing, renewing, and enforcing a |
|
license under this section. In adopting rules under this |
|
subsection, the finance commission shall ensure that: |
|
(1) the minimum eligibility requirements for issuance |
|
of a license are the same as the requirements of Section 180.055; |
|
(2) the minimum eligibility requirements for renewal |
|
of a license are the same as the requirements of Section 180.059; |
|
and |
|
(3) the applicant pays: |
|
(A) an investigation fee in a reasonable amount |
|
determined by the commissioner; and |
|
(B) an annual license fee in an amount determined |
|
as provided by Section 14.107. |
|
(d) The finance commission by rule may waive or modify, |
|
wholly or partly, any requirement of this chapter and establish new |
|
requirements as reasonably necessary to enable the commissioner to |
|
participate in the Nationwide Mortgage Licensing System and |
|
Registry for purposes of this section and Chapter 180. |
|
SECTION 17. Subchapter B, Chapter 351, Finance Code, as |
|
added by Chapter 1220 (H.B. 2138), Acts of the 80th Legislature, |
|
Regular Session, 2007, is amended by adding Section 351.0515 to |
|
read as follows: |
|
Sec. 351.0515. RESIDENTIAL MORTGAGE LOAN ORIGINATOR |
|
LICENSE REQUIRED. (a) In this section, "Nationwide Mortgage |
|
Licensing System and Registry" and "residential mortgage loan |
|
originator" have the meanings assigned by Section 180.002. |
|
(b) Unless exempt under Section 180.003, an individual who |
|
acts as a residential mortgage loan originator in the making, |
|
transacting, or negotiating of a property tax loan for a principal |
|
dwelling must: |
|
(1) be individually licensed to engage in that |
|
activity under this chapter; |
|
(2) be enrolled with the Nationwide Mortgage Licensing |
|
System and Registry as required by Section 180.052; and |
|
(3) comply with other applicable requirements of |
|
Chapter 180 and rules adopted under that chapter. |
|
(c) The finance commission shall adopt rules establishing |
|
procedures for issuing, renewing, and enforcing an individual |
|
license under this section. In adopting rules under this |
|
subsection, the finance commission shall ensure that: |
|
(1) the minimum eligibility requirements for issuance |
|
of an individual license are the same as the requirements of Section |
|
180.055; |
|
(2) the minimum eligibility requirements for renewal |
|
of an individual license are the same as the requirements of Section |
|
180.059; and |
|
(3) the applicant pays: |
|
(A) an investigation fee in a reasonable amount |
|
determined by the commissioner; and |
|
(B) an annual license fee in an amount determined |
|
as provided by Section 14.107. |
|
(d) The finance commission by rule may waive or modify, |
|
wholly or partly, any requirement of this chapter and establish new |
|
requirements as reasonably necessary to enable the commissioner to |
|
participate in the Nationwide Mortgage Licensing System and |
|
Registry for purposes of this section and Chapter 180. |
|
SECTION 18. Section 351.102, Finance Code, as added by |
|
Chapter 1220 (H.B. 2138), Acts of the 80th Legislature, Regular |
|
Session, 2007, is amended by adding Subsection (e) to read as |
|
follows: |
|
(e) A license holder engaged in the business of making, |
|
transacting, or negotiating a property tax loan for a principal |
|
dwelling must meet the surety bond or recovery fund fee |
|
requirement, as applicable, of the holder's residential mortgage |
|
loan originator under Section 180.058. |
|
SECTION 19. Section 351.156, Finance Code, as added by |
|
Chapter 1220 (H.B. 2138), Acts of the 80th Legislature, Regular |
|
Session, 2007, is amended to read as follows: |
|
Sec. 351.156. LICENSE SUSPENSION OR REVOCATION. After |
|
notice and a hearing the commissioner may suspend or revoke a |
|
license if the commissioner finds that: |
|
(1) the license holder failed to pay the annual |
|
license fee, an examination fee, an investigation fee, or another |
|
charge imposed by the commissioner under this chapter; |
|
(2) the license holder, knowingly or without the |
|
exercise of due care, violated this chapter or Section 32.06 or |
|
32.065, Tax Code, or a rule adopted or an order issued under this |
|
chapter or Section 32.06 or 32.065, Tax Code; [or] |
|
(3) a fact or condition exists that, if it had existed |
|
or had been known to exist at the time of the original application |
|
for the license, clearly would have justified the commissioner's |
|
denial of the application; or |
|
(4) the license holder has failed to ensure that an |
|
individual acting as a residential mortgage loan originator, as |
|
defined by Section 180.002, in the making, transacting, or |
|
negotiating of a property tax loan for a principal dwelling is |
|
licensed under this chapter in accordance with Section 351.0515. |
|
SECTION 20. Section 411.095, Government Code, is amended to |
|
read as follows: |
|
Sec. 411.095. ACCESS TO CRIMINAL HISTORY RECORD |
|
INFORMATION: CONSUMER CREDIT COMMISSIONER. [(a)] The consumer |
|
credit commissioner is entitled to obtain from the department |
|
criminal history record information that relates to a person who is |
|
an applicant for or holder of a license under Chapter 342, 347, 348, |
|
351, or 371, Finance Code. |
|
SECTION 21. For purposes of implementing an orderly and |
|
efficient process for licensing and registering residential |
|
mortgage loan originators that meets the requirements of the |
|
federal Secure and Fair Enforcement for Mortgage Licensing Act of |
|
2008 (Pub. L. No. 110-289), Chapter 180, Finance Code, as added by |
|
this Act, Section 15.4024, Finance Code, as added by this Act, and |
|
Chapters 156, 157, 342, 347, 348, and 351, Finance Code, as amended |
|
by this Act, the Finance Commission of Texas, as soon as practicable |
|
after the effective date of this Act, may adopt rules and establish |
|
interim procedures for licensing individuals engaging in or |
|
conducting the business of a residential mortgage loan originator |
|
in this state and for the approval or denial of applications for |
|
licenses authorizing individuals to engage in business as a |
|
residential mortgage loan originator. For individuals authorized |
|
by state law to engage in residential mortgage loan origination |
|
activities immediately before the effective date of this Act, the |
|
Finance Commission of Texas may establish expedited review and |
|
licensing procedures. |
|
SECTION 22. (a) In this section, "Nationwide Mortgage |
|
Licensing System and Registry," "regulatory official," |
|
"residential mortgage loan originator," and "unique identifier" |
|
have the meanings assigned by Section 180.002, Finance Code, as |
|
added by this Act. |
|
(b) On application by a person for a license, registration, |
|
and unique identifier as a residential mortgage loan originator |
|
with the Nationwide Mortgage Licensing System and Registry, the |
|
regulatory official may determine that the applicant meets the |
|
prelicensing education courses and written test requirements of |
|
Sections 180.056 and 180.057, Finance Code, as added by this Act, if |
|
the applicant, on the effective date of this Act, is acting as a |
|
state-licensed residential mortgage loan originator in this state |
|
under Chapter 156, Finance Code. The applicant must be in good |
|
standing with the regulatory official to obtain an exemption under |
|
this subsection. |
|
(c) The regulatory official may determine an exemption |
|
under Subsection (b) of this section by rule of the Finance |
|
Commission of Texas. |
|
(d) This section does not grant a residential mortgage loan |
|
originator a waiver from the continuing education requirements |
|
prescribed by the regulatory official and the federal Secure and |
|
Fair Enforcement for Mortgage Licensing Act of 2008 (Pub. L. No. |
|
110-289). |
|
SECTION 23. (a) Except as provided by Subsection (b) of |
|
this section, an individual is not required to comply with Chapter |
|
180, Finance Code, as added by this Act, and Chapters 156, 157, 342, |
|
347, 348, and 351, Finance Code, as amended by this Act, until the |
|
later of: |
|
(1) July 31, 2010; or |
|
(2) a subsequent date that is approved by the |
|
secretary of the United States Department of Housing and Urban |
|
Development under the authority granted under the federal Secure |
|
and Fair Enforcement for Mortgage Licensing Act of 2008 (Pub. L. No. |
|
110-289). |
|
(b) An individual authorized to engage in residential |
|
mortgage loan origination activities in this state as of July 31, |
|
2009, is not required to comply with Chapter 180, Finance Code, as |
|
added by this Act, and Chapters 156, 157, 342, 347, 348, and 351, |
|
Finance Code, as amended by this Act, until the later of: |
|
(1) July 31, 2011; or |
|
(2) a subsequent date approved by the secretary of the |
|
United States Department of Housing and Urban Development under the |
|
authority granted under the federal Secure and Fair Enforcement for |
|
Mortgage Licensing Act of 2008 (Pub. L. No. 110-289). |
|
SECTION 24. This Act takes effect immediately if it |
|
receives a vote of two-thirds of all the members elected to each |
|
house, as provided by Section 39, Article III, Texas Constitution. |
|
If this Act does not receive the vote necessary for immediate |
|
effect, this Act takes effect September 1, 2009. |