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A BILL TO BE ENTITLED
|
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AN ACT
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relating to the regulation of mortgage loan originators; providing |
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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. 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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Secure and Fair Enforcement for Mortgage Licensing Act. |
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Sec. 180.002. PURPOSE. The purpose of this chapter is to |
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protect consumers seeking mortgage loans and to ensure that the |
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mortgage lending industry is operating without unfair, deceptive, |
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or fraudulent practices by mortgage loan originators. |
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Sec. 180.003. 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 |
|
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 |
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residential mortgage loan rates or terms. |
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(2) "Depository institution" has the meaning assigned |
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by Section 3, Federal Deposit Insurance Act (12 U.S.C. Section |
|
1813). The term includes a credit union. |
|
(3) "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 |
|
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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(4) "Finance commission" means the Finance Commission |
|
of Texas. |
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(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. |
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(6) "Loan processor or underwriter" means an |
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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. |
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(7) "Mortgage loan originator": |
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(A) means an individual who: |
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(i) takes a residential mortgage loan |
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application; and |
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(ii) offers or negotiates the terms of a |
|
residential mortgage loan for compensation or gain; and |
|
(B) does not include: |
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(i) an individual who performs solely |
|
administrative or clerical tasks on behalf of a person described by |
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Paragraph (A); |
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(ii) a person who performs only real estate |
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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 |
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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-licensed mortgage loan |
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originators. |
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(9) "Nontraditional mortgage product" means a |
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mortgage product other than a 30-year fixed rate mortgage. |
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(10) "Person" means an individual, corporation, |
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company, limited liability company, partnership, or association. |
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(11) "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 |
|
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; |
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(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; |
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(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). |
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(12) "Registered mortgage loan originator" means an |
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individual who: |
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(A) is a mortgage loan originator and is an |
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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 |
|
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. |
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(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. |
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(15) "Residential real estate" means real property |
|
located in this state on which a dwelling is constructed or intended |
|
to be constructed. |
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(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). |
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(18) "Unique identifier" means a number or other |
|
identifier assigned by protocols established by the Nationwide |
|
Mortgage Licensing System and Registry. |
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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. |
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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] |
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SUBCHAPTER B. LICENSING AND REGISTRATION REQUIREMENTS |
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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. |
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Sec. 180.052. REGISTRATION WITH NATIONWIDE MORTGAGE |
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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. |