81R7564 CLG-D
 
  By: Solomons H.B. No. 10
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the regulation of mortgage loan originators; providing
  a penalty.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Subtitle E, Title 3, Finance Code, is amended by
  adding Chapter 180 to read as follows:
  CHAPTER 180. MORTGAGE LOAN ORIGINATORS
  SUBCHAPTER A.  GENERAL PROVISIONS
         Sec. 180.001.  SHORT TITLE. This chapter may be cited as the
  Secure and Fair Enforcement for Mortgage Licensing Act.
         Sec. 180.002.  PURPOSE. The purpose of this chapter is to
  protect consumers seeking mortgage loans and to ensure that the
  mortgage lending industry is operating without unfair, deceptive,
  or fraudulent practices by mortgage loan originators.
         Sec. 180.003.  DEFINITIONS. In this chapter:
               (1)  "Clerical or support duties," following the
  receipt of an application from a consumer, includes:
                     (A)  the receipt, collection, distribution, and
  analysis of information related to the processing or underwriting
  of a residential mortgage loan; and
                     (B)  communication with a consumer to obtain
  information necessary to process or underwrite a loan, to the
  extent that the communication does not include offering or
  negotiating loan rates or terms or counseling the consumer about
  residential mortgage loan rates or terms.
               (2)  "Depository institution" has the meaning assigned
  by Section 3, Federal Deposit Insurance Act (12 U.S.C. Section
  1813). The term includes a credit union.
               (3)  "Federal banking agency" means:
                     (A)  the Board of Governors of the Federal Reserve
  System;
                     (B)  the Office of the Comptroller of the
  Currency;
                     (C)  the Office of Thrift Supervision;
                     (D)  the National Credit Union Administration;
                     (E)  the Federal Deposit Insurance Corporation;
  or
                     (F)  the successor of any of those agencies.
               (4)  "Finance commission" means the Finance Commission
  of Texas.
               (5)  "License" means a license issued under the laws of
  this state to an individual acting as or engaged in the business of
  a mortgage loan originator.
               (6)  "Loan processor or underwriter" means an
  individual who performs clerical or support duties as an employee
  at the direction of and subject to the supervision and instruction
  of a person licensed under Chapter 156 or exempt from licensure
  under that chapter.
               (7)  "Mortgage loan originator":
                     (A)  means an individual who:
                           (i)  takes a residential mortgage loan
  application; and
                           (ii)  offers or negotiates the terms of a
  residential mortgage loan for compensation or gain; and
                     (B)  does not include:
                           (i)  an individual who performs solely
  administrative or clerical tasks on behalf of a person described by
  Paragraph (A);
                           (ii)  a person who performs only real estate
  brokerage activities and is licensed or registered by the state as a
  real estate broker or salesperson, unless the person is compensated
  by:
                                 (a)  a lender, mortgage broker, or
  other loan originator; or
                                 (b)  an agent of a lender, mortgage
  broker, or other loan originator; or
                           (iii)  a person who is involved solely in
  providing extensions of credit relating to timeshare plans, as
  defined by 11 U.S.C. Section 101(53D).
               (8)  "Nationwide Mortgage Licensing System and
  Registry" means a mortgage licensing system developed and
  maintained by the Conference of State Bank Supervisors and the
  American Association of Residential Mortgage Regulators for the
  licensing and registration of state-licensed mortgage loan
  originators.
               (9)  "Nontraditional mortgage product" means a
  mortgage product other than a 30-year fixed rate mortgage.
               (10)  "Person" means an individual, corporation,
  company, limited liability company, partnership, or association.
               (11)  "Real estate brokerage activity" means an
  activity that involves offering or providing real estate brokerage
  services to the public, including:
                     (A)  acting as a real estate broker or salesperson
  for a buyer, seller, lessor, or lessee of real property;
                     (B)  bringing together parties interested in the
  sale, purchase, lease, rental, or exchange of real property;
                     (C)  negotiating, on a party's behalf, any
  provision of a contract relating to the sale, purchase, lease,
  rental, or exchange of real property, other than a negotiation
  conducted in connection with providing financing with respect to
  such a transaction;
                     (D)  engaging in an activity for which a person is
  required to be registered or licensed by the state as a real estate
  broker or salesperson; and
                     (E)  offering to engage in an activity described
  by Paragraphs (A) through (D) or to act in the same capacity as a
  person described by Paragraphs (A) through (D).
               (12)  "Registered mortgage loan originator" means an
  individual who:
                     (A)  is a mortgage loan originator and is an
  employee of:
                           (i)  a depository institution;
                           (ii)  a subsidiary that is:
                                 (a)  owned and controlled by a
  depository institution; and
                                 (b)  regulated by a federal banking
  agency; or
                           (iii)  an institution regulated by the Farm
  Credit Administration; and
                     (B)  is registered with, and maintains a unique
  identifier through, the Nationwide Mortgage Licensing System and
  Registry.
               (13)  "Regulatory official" means:
                     (A)  the commissioner of the Texas Department of
  Banking;
                     (B)  with respect to Chapters 156 and 157, the
  savings and mortgage lending commissioner;
                     (C)  with respect to Chapters 342, 347, 348, and
  351, the consumer credit commissioner; and
                     (D)  with respect to Chapter 127, the credit union
  commissioner.
               (14)  "Residential mortgage loan" means a loan
  primarily for personal, family, or household use that is secured by
  a mortgage, deed of trust, or other equivalent consensual security
  interest on a dwelling, as defined by Section 103(v) of the Truth in
  Lending Act (15 U.S.C. Section 1601 et seq.), or on residential real
  estate.
               (15)  "Residential real estate" means real property
  located in this state on which a dwelling is constructed or intended
  to be constructed.
               (16)  "Rulemaking authority" means:
                     (A)  the finance commission, except as provided by
  Paragraph (B); or
                     (B)  with respect to Chapter 127, the Credit Union
  Commission.
               (17)  "S.A.F.E. Mortgage Licensing Act" means the
  federal Secure and Fair Enforcement for Mortgage Licensing Act of
  2008 (Pub. L. No. 110-289).
               (18)  "Unique identifier" means a number or other
  identifier assigned by protocols established by the Nationwide
  Mortgage Licensing System and Registry.
         Sec. 180.004.  EXEMPTION. This chapter does not apply to 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:
               (1)  a lender, mortgage broker, or other mortgage loan
  originator; or
               (2)  an agent of a lender, mortgage broker, or other
  mortgage loan originator.
         Sec. 180.005.  ADMINISTRATIVE AUTHORITY. (a) A regulatory
  official has broad authority to administer, interpret, and enforce
  this chapter.
         (b)  A rulemaking authority has broad authority to adopt
  rules to implement this chapter to carry out the legislature's
  intent.
  [Sections 180.006-180.050 reserved for expansion]
  SUBCHAPTER B. LICENSING AND REGISTRATION REQUIREMENTS
         Sec. 180.051.  STATE LICENSE REQUIRED; RENEWAL. (a) An
  individual may not engage in business as a mortgage loan originator
  with respect to a dwelling located in this state unless the
  individual:
               (1)  is licensed to engage in that business under
  Chapter 127, 156, 157, 342, 347, 348, or 351; and
               (2)  complies with the requirements of this chapter.
         (b)  The individual must renew the license annually to be
  considered licensed for purposes of this section.
         (c)  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 mortgage
  loan origination activities.
         Sec. 180.052.  REGISTRATION WITH NATIONWIDE MORTGAGE
  LICENSING SYSTEM AND REGISTRY. (a)  A licensed mortgage loan
  originator must register 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 register 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.
         Sec. 180.053.  AUTHORITY TO REQUIRE LICENSE AND
  REGISTRATION.  (a)  The regulatory official who administers the law
  under which a mortgage loan originator is licensed shall require
  the mortgage loan originator to be registered through the
  Nationwide Mortgage Licensing System and Registry.
         (b)  For purposes of implementing Subsection (a), the
  regulatory official may participate in the Nationwide Mortgage
  Licensing System and Registry.
         Sec. 180.054.  APPLICATION FORM. (a)  A regulatory official
  shall prescribe application forms for a license as a 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. 180.055.  CRIMINAL AND OTHER BACKGROUND CHECKS. (a)  In
  connection with an application for a license as a 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.
         Sec. 180.056.  ISSUANCE OF LICENSE. (a)  The regulatory
  official may not issue a mortgage loan originator license to an
  individual unless the regulatory official determines, at a minimum,
  that the applicant:
               (1)  has not had a 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 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
  180.057;
               (5)  provides satisfactory evidence of having passed an
  examination that meets the requirements of Section 180.058; and
               (6)  has paid a recovery fund fee or 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 substantially delinquent accounts
  during the three-year period preceding the date of the application.
         Sec. 180.057.  PRELICENSING EDUCATIONAL COURSES. (a)  An
  applicant for a 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 if the regulatory official determines
  that the prelicensing education requirements the individual has
  completed are substantially equivalent to those of this state.
         (f)  An applicant who has previously held a 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 mortgage loan
  originators, the rulemaking authority shall adopt necessary rules
  to implement the changes to the educational requirements of this
  section.
         Sec. 180.058.  EXAMINATION REQUIREMENTS. (a) An applicant
  for a mortgage loan originator license must pass a qualified,
  written examination that meets the standards and requirements
  established by the S.A.F.E. Mortgage Licensing Act, is developed by
  the Nationwide Mortgage Licensing System and Registry, and is
  administered by a test provider in accordance with that Act.
         (b)  An individual may retake the examination 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 mortgage loan
  originator license for at least five consecutive years must retake
  the examination.
         (d)  This section does not prohibit a test provider approved
  in accordance with the S.A.F.E. Mortgage Licensing Act from
  providing an examination 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 mortgage loan
  originator.
         Sec. 180.059.  SURETY BOND OR RECOVERY FUND FEE REQUIREMENT.
  (a)  A regulatory official may not issue a 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 mortgage loan originator to have 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. 180.060.  STANDARDS FOR LICENSE RENEWAL.  A license to
  act as a 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; and
               (2)  provides satisfactory evidence that the license
  holder has completed the continuing education requirements of
  Section 180.061.
         Sec. 180.061.  CONTINUING EDUCATION COURSES. (a) To renew a
  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 if the regulatory official determines that the
  continuing education requirements the person has completed are
  substantially equivalent to those of this state.
         Sec. 180.062.  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; and
               (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.
  [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
  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.
  A regulatory official shall report to the Nationwide Mortgage
  Licensing System and Registry on a regular basis regarding any
  violations of this chapter, enforcement actions, and other relevant
  information.
         Sec. 180.103.  INFORMATION CHALLENGE PROCESS. The
  applicable rulemaking authority by rule shall establish a process
  by which licensed 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
         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 mortgage loan originator.
  [Sections 180.153-180.200 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 mortgage loan
  originator or other person subject to regulation under this
  chapter, if the official, after notice and opportunity for hearing,
  determines that the 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)
  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 administer and
  enforce this chapter with respect to individuals licensed under
  Chapter 127.
         (c)  The consumer credit commissioner shall administer and
  enforce this chapter with respect to individuals licensed under
  Chapter 342, 347, 348, or 351.
         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 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.  Subtitle D, Title 3, Finance Code, is amended by
  adding Chapter 127 to read as follows:
  CHAPTER 127. REGULATION OF MORTGAGE LOAN ORIGINATORS EMPLOYED BY
  CREDIT UNION SUBSIDIARY ORGANIZATIONS
  SUBCHAPTER A.  GENERAL PROVISIONS
         Sec. 127.001.  DEFINITIONS. In this chapter:
               (1)  "Credit union" means a state or federal credit
  union operating in this state.
               (2)  "Credit union subsidiary organization" means an
  agency, association, or company wholly or partly owned by a credit
  union that is designed primarily to serve or otherwise assist
  credit union operations. The term includes a credit union service
  organization authorized by:
                     (A)  Section 124.351(a)(1);
                     (B)  commission rule; or
                     (C)  Part 712 of the National Credit Union
  Administration's Rules and Regulations.
               (3)  "Mortgage loan originator" has the meaning
  assigned by Section 180.003.
               (4)  "Nationwide Mortgage Licensing System and
  Registry" has the meaning assigned by Section 180.003.
         Sec. 127.002.  RULEMAKING AUTHORITY.  The commission may
  adopt and enforce reasonable rules necessary to administer and
  accomplish the purposes of this chapter, including rules
  establishing procedures for issuing, renewing, and enforcing a
  license under this chapter.
         Sec. 127.003.  AUTHORITY TO SHARE INFORMATION.  The
  commissioner may enter into agreements or share arrangements with
  other governmental agencies, the Conference of State Bank
  Supervisors, the American Association of Residential Mortgage
  Regulators, or other associations representing governmental
  agencies as established by commission rule.
  [Sections 127.004-127.050 reserved for expansion]
  SUBCHAPTER B. LICENSE REQUIREMENTS
         Sec. 127.051.  LICENSE REQUIRED. An employee of a credit
  union subsidiary organization may not act as a mortgage loan
  originator unless the employee:
               (1)  is licensed under this chapter;
               (2)  is registered through the Nationwide Mortgage
  Licensing System and Registry as required by Section 180.053; and
               (3)  complies with other applicable requirements of
  Chapter 180 and rules adopted under that chapter.
         Sec. 127.052.  APPLICATION; FEES.  (a)  An application for a
  mortgage loan originator license must be:
               (1)  in writing and under oath; and
               (2)  on the form prescribed by the commissioner.
         (b)  The application must be accompanied by an application
  fee in an amount set by the commission. The application fee is not
  refundable and may not be credited or applied to any other fee or
  indebtedness owed by the applicant or any entity paying the fee.
         Sec. 127.053.  ISSUANCE OF LICENSE. The commissioner shall
  issue a mortgage loan originator license to an applicant if the
  commissioner determines that the applicant meets the requirements
  prescribed by Section 180.056.
         Sec. 127.054.  CONFIDENTIALITY OF INFORMATION.  Section
  126.002 applies to information obtained by the department
  concerning the financial condition or business affairs of a credit
  union subsidiary organization or a mortgage loan originator.
  [Sections 127.055-127.100 reserved for expansion]
  SUBCHAPTER C. BOOKS AND RECORDS; REPORTS
         Sec. 127.101.  BOOKS AND RECORDS.  (a)  A credit union
  subsidiary organization that employs a mortgage loan originator and
  each license holder or other person subject to regulation under
  this chapter shall, on request, make books and records available to
  the commissioner for examination under Section 15.4032.
         (b)  The commissioner may interview the officers,
  principals, mortgage loan originators, employees, independent
  contractors, agents, and customers of the license holder or other
  person subject to regulation under this chapter regarding any
  mortgage loan originating activities.
         Sec. 127.102.  REPORTS AND OTHER INFORMATION.  Each credit
  union subsidiary organization that employs a mortgage loan
  originator and each license holder or other person subject to
  regulation under this chapter shall prepare or compile reports or
  provide other information as required by the commissioner.
         Sec. 127.103.  REPORTS TO NATIONWIDE LICENSING SYSTEM AND
  REGISTRY.  Each credit union subsidiary organization that employs
  mortgage loan originators shall submit to the Nationwide Mortgage
  Licensing System and Registry reports of condition that are in the
  form and contain the information required by the registry.
         Sec. 127.104.  WITHHOLDING RECORDS PROHIBITED.  A credit
  union subsidiary organization that employs a mortgage loan
  originator or a license holder or other person subject to
  regulation under this chapter may not withhold, abstract, remove,
  mutilate, or destroy any books, records, computer records, or other
  information related to mortgage loan origination activities.
  [Sections 127.105-127.150 reserved for expansion]
  SUBCHAPTER D.  ENFORCEMENT
         Sec. 127.151.  CEASE AND DESIST ORDERS.  If the commissioner
  makes a finding listed in Section 122.255 and determines that an
  order to cease and desist is necessary and in the best interest of
  the credit union subsidiary organization involved, the
  commissioner may serve on the credit union subsidiary organization
  an order to cease and desist from a violation or practice specified
  in the order as authorized by Section 122.257.
         SECTION 4.  Subchapter C, Chapter 156, Finance Code, is
  amended by adding Section 156.2015 to read as follows:
         Sec. 156.2015.  MORTGAGE LOAN ORIGINATION ACTIVITIES. (a)
  In this section, "mortgage loan originator" and "Nationwide
  Mortgage Licensing System and Registry" have the meanings assigned
  by Section 180.003.
         (b)  An individual subject to regulation under this chapter
  may not act as a mortgage loan originator unless:
               (1)  the individual's license under this chapter
  otherwise authorizes the individual to act as a mortgage loan
  originator;
               (2)  the individual is registered through the
  Nationwide Mortgage Licensing System and Registry as required by
  Section 180.053; and
               (3)  the individual complies with other applicable
  requirements of Chapter 180 and rules adopted under that chapter.
         (c)  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 5.  Chapter 157, Finance Code, is amended by adding
  Section 157.0035 to read as follows:
         Sec. 157.0035.  MORTGAGE LOAN ORIGINATION ACTIVITIES. (a)
  In this section, "mortgage loan originator" and "Nationwide
  Mortgage Licensing System and Registry" have the meanings assigned
  by Section 180.003.
         (b)  An individual subject to regulation under this chapter
  may not act as a mortgage loan originator unless the individual:
               (1)   is licensed and registered through the Nationwide
  Mortgage Licensing System and Registry as required by Section
  180.053; and
               (2)  complies with other applicable requirements of
  Chapter 180 and rules adopted under that chapter.
         SECTION 6.  Subchapter B, Chapter 342, Finance Code, is
  amended by adding Section 342.0515 to read as follows:
         Sec. 342.0515.  MORTGAGE LOAN ORIGINATOR ACTIVITIES.  (a)  
  In this section, "mortgage loan originator" and "Nationwide
  Mortgage Licensing System and Registry" have the meanings assigned
  by Section 180.003.
         (b)  An individual who acts as a mortgage loan originator in
  the making, transacting, or negotiating of a loan subject to this
  chapter must:
               (1)  be licensed to engage in that activity under this
  chapter;
               (2)  be registered through the Nationwide Mortgage
  Licensing System and Registry as required by Section 180.053; 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 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 180.056;
               (2)  the minimum eligibility requirements for renewal
  of a license are the same as the requirements of Section 180.060;
  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 7.  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 mortgage loan originator, as defined by
  Section 180.003, 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 8.  The heading to Subchapter J, Chapter 347,
  Finance Code, is amended to read as follows:
  SUBCHAPTER J.  RIGHTS AND DUTIES OF CREDITOR AND MORTGAGE LOAN
  ORIGINATOR
         SECTION 9.  Section 347.451, Finance Code, is amended by
  adding Subsection (b-1) to read as follows:
         (b-1)  A registered creditor must meet the surety bond
  requirement of the creditor's mortgage loan originator under
  Section 180.059.
         SECTION 10.  Subchapter J, Chapter 347, Finance Code, is
  amended by adding Section 347.4515 to read as follows:
         Sec. 347.4515.  MORTGAGE LOAN ORIGINATOR LICENSE REQUIRED.  
  (a)  In this section, "mortgage loan originator" and "Nationwide
  Mortgage Licensing System and Registry" have the meanings assigned
  by Section 180.003.
         (b)  An individual who acts as a mortgage loan originator in
  the making, transacting, or negotiating of an extension of credit
  subject to this chapter must:
               (1)  be licensed to engage in that activity under this
  chapter;
               (2)  be registered through the Nationwide Mortgage
  Licensing System and Registry as required by Section 180.053; 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 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 180.056;
               (2)  the minimum eligibility requirements for renewal
  of a license are the same as the requirements of Section 180.060;
  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 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 requirements of the holder's mortgage loan
  originator under Section 180.059.
         SECTION 12.  Subchapter F, Chapter 348, Finance Code, is
  amended by adding Section 348.5015 to read as follows:
         Sec. 348.5015.  MORTGAGE LOAN ORIGINATOR LICENSE REQUIRED.  
  (a)  In this section, "mortgage loan originator" and "Nationwide
  Mortgage Licensing System and Registry" have the meanings assigned
  by Section 180.003.
         (b)  An individual who acts as a 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 registered through the Nationwide Mortgage
  Licensing System and Registry as required by Section 180.053; 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 180.056;
               (2)  the minimum eligibility requirements for renewal
  of a license are the same as the requirements of Section 180.060;
  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 13.  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.  MORTGAGE LOAN ORIGINATOR LICENSE REQUIRED.  
  (a)  In this section, "mortgage loan originator" and "Nationwide
  Mortgage Licensing System and Registry" have the meanings assigned
  by Section 180.003.
         (b)  An individual who acts as a mortgage loan originator in
  the making, transacting, or negotiating of a property tax loan for a
  principal dwelling must:
               (1)  be licensed to engage in that activity under this
  chapter;
               (2)  be registered through the Nationwide Mortgage
  Licensing System and Registry as required by Section 180.053; 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 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 180.056;
               (2)  the minimum eligibility requirements for renewal
  of a license are the same as the requirements of Section 180.060;
  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 14.  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 requirement of the holder's
  mortgage loan originator under Section 180.059.
         SECTION 15.  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 mortgage loan originator, as defined by
  Section 180.003, 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 16.  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 17.  Section 411.1407(a), Government Code, is
  amended to read as follows:
         (a)  The credit union commissioner is entitled to obtain from
  the department criminal history record information maintained by
  the department that relates to a person who is:
               (1)  an individual who applies to incorporate a credit
  union under Subtitle D, Title 3, Finance Code;
               (2)  a board member of a credit union incorporated
  under Subtitle D, Title 3, Finance Code;
               (3)  an applicant for employment by the credit union
  department; [or]
               (4)  an employee of the credit union department; or
               (5)  an applicant for a mortgage loan originator
  license under Chapter 127, Finance Code.
         SECTION 18.  For purposes of implementing an orderly and
  efficient process for licensing and registering 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), Chapters 127 and 180, 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 and the credit
  union commissioner, as soon as practicable after the effective date
  of this Act, may adopt rules and establish interim procedures for
  licensing persons engaging in or conducting the business of a
  mortgage loan originator in this state and for the approval or
  denial of applications for licenses authorizing persons to engage
  in business as a mortgage loan originator.  For individuals or other
  persons authorized by state law to engage in 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 19.  (a) Except as provided by Subsection (b) of
  this section, an individual is not required to comply with Chapters
  127 and 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 mortgage loan
  origination activities in this state as of July 31, 2009, is not
  required to comply with Chapters 127 and 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 20.  This Act takes effect September 1, 2009.