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A BILL TO BE ENTITLED
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AN ACT
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relating to savings and loan associations, savings banks, |
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residential mortgage loan originators and servicers, and other |
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persons or entities under the regulatory jurisdiction of the |
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Department of Savings and Mortgage Lending and the savings and |
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mortgage lending commissioner; creating an offense. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Sections 62.001(a), (b), and (d), Finance Code, |
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are amended to read as follows: |
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(a) Five or more residents of this state may apply to form |
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and incorporate an association by submitting to the commissioner an |
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|
application and the filing fee. |
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(b) An application must contain: |
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(1) two copies of the association's certificate of |
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|
formation [articles of incorporation] identifying: |
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(A) the name of the association; |
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(B) the location of the principal office; and |
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|
(C) the names and addresses of the initial |
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|
directors; |
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(2) two copies of the association's bylaws; |
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(3) data sufficiently detailed and comprehensive to |
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|
enable the commissioner to make a determination under Section |
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62.007, including statements, exhibits, and maps; |
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|
(4) other information relating to the association and |
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|
its operation that the finance commission by rule requires; and |
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(5) financial information about each applicant, |
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|
incorporator, director, or shareholder that the finance commission |
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by rule requires. |
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(d) The certificate of formation [articles of
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incorporation] and statements of fact shall be signed and sworn to. |
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SECTION 2. Section 62.002(a), Finance Code, is amended to |
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read as follows: |
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(a) A capital stock association's certificate of formation |
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[articles of incorporation] must include a statement of: |
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(1) the aggregate number of shares of common stock |
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|
that the association may issue; |
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(2) the par value of each share or that the shares are |
|
|
without par value; |
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(3) whether the association may issue preferred stock; |
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|
(4) the amount of stock that has been subscribed and |
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|
will be paid for before the association begins business; |
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|
(5) the name and address of each subscriber and the |
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|
amount subscribed by each; and |
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(6) the amount of paid-in surplus with which the |
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|
association will begin business. |
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SECTION 3. Section 62.003, Finance Code, is amended to read |
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as follows: |
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Sec. 62.003. ADDITIONAL INCORPORATION REQUIREMENTS FOR |
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MUTUAL ASSOCIATION. (a) A mutual association's certificate of |
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|
formation [articles of incorporation] must include a statement of |
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|
the amount of savings liability of the association and the amount of |
|
|
the expense fund with which the association will begin business. |
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|
(b) Before approving the certificate of formation |
|
|
[articles of incorporation] of a mutual association, the |
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|
commissioner may require the association to have subscriptions for |
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|
an aggregate amount of savings accounts and an expense fund in an |
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|
aggregate amount that the commissioner, under rules of the finance |
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|
commission, finds is necessary for the successful operation of the |
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association. |
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SECTION 4. Sections 62.007(a) and (b), Finance Code, are |
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|
amended to read as follows: |
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(a) The commissioner may approve an application to |
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|
incorporate only if the commissioner finds that: |
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|
(1) the prerequisites to incorporation required by |
|
|
this chapter are satisfied; |
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|
(2) the character, responsibility, and general |
|
|
fitness of each person named in the certificate of formation |
|
|
[articles of incorporation] command confidence and warrant belief |
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|
that: |
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(A) the business of the association will be |
|
|
honestly and efficiently conducted in accordance with the intent |
|
|
and purpose of this subtitle; and |
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|
(B) the association will have qualified |
|
|
full-time management; |
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(3) there is a public need for the association; |
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|
(4) the volume of business in the community in which |
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|
the association will conduct its business indicates a profitable |
|
|
operation is probable; and |
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|
(5) the operation of the association will not unduly |
|
|
harm an existing association. |
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(b) On finding that the requirements of Subsection (a) are |
|
|
fulfilled, the commissioner shall: |
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|
(1) enter an order approving the application and |
|
|
stating the findings required by Subsection (a); |
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|
(2) issue under official seal a certificate of |
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|
incorporation; |
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(3) deliver a copy of the approved certificate of |
|
|
formation [articles of incorporation] and bylaws to the |
|
|
incorporators; and |
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(4) permanently retain a copy of the certificate of |
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|
formation [articles] and bylaws. |
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SECTION 5. The heading to Section 62.010, Finance Code, is |
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|
amended to read as follows: |
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Sec. 62.010. AMENDMENT OF CERTIFICATE OF FORMATION |
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|
[ARTICLES OF INCORPORATION] OR BYLAWS. |
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SECTION 6. Section 62.010(a), Finance Code, is amended to |
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read as follows: |
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(a) An association may amend its certificate of formation |
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|
[articles of incorporation] or bylaws by a resolution adopted by a |
|
|
majority vote of those entitled to vote attending an annual meeting |
|
|
or a special meeting called for that purpose. |
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|
SECTION 7. Section 62.011(a), Finance Code, is amended to |
|
|
read as follows: |
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(a) Only with the prior approval of the commissioner may an |
|
|
association: |
|
|
(1) establish an office other than the principal |
|
|
office stated in the association's certificate of formation |
|
|
[articles of incorporation]; |
|
|
(2) move an office from its immediate vicinity; or |
|
|
(3) change the association's name. |
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|
SECTION 8. Section 62.051, Finance Code, is amended to read |
|
|
as follows: |
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|
Sec. 62.051. PURPOSE OF INCORPORATION. A person may apply |
|
|
to form and incorporate an association for the purpose of: |
|
|
(1) purchasing the assets, assuming the liabilities, |
|
|
excluding liability to stockholders, and continuing the business of |
|
|
an association the commissioner considers to be in an unsafe |
|
|
condition; or |
|
|
(2) acquiring an existing association by merger. |
|
|
SECTION 9. Sections 62.053(a) and (e), Finance Code, are |
|
|
amended to read as follows: |
|
|
(a) The commissioner shall approve an application under |
|
|
this subchapter if the commissioner finds that: |
|
|
(1) the business of the association that is to be |
|
|
reorganized or merged can be effectively continued under the |
|
|
certificate of formation [articles of incorporation]; and |
|
|
(2) the reorganization or merger is in the best |
|
|
interest of the general public and the savers, depositors, |
|
|
creditors, and shareholders of the association that is to be |
|
|
reorganized or merged. |
|
|
(e) In a merger, a shareholder of a capital stock |
|
|
association has the same dissenter's rights as a shareholder of a |
|
|
domestic business corporation under the Business Organizations |
|
|
Code [Texas Business Corporation Act]. |
|
|
SECTION 10. Section 62.156(c), Finance Code, is amended to |
|
|
read as follows: |
|
|
(c) An association may retire or redeem preferred stock in |
|
|
the manner provided by: |
|
|
(1) the certificate of formation [articles of
|
|
|
incorporation]; or |
|
|
(2) a resolution of the board establishing the rights |
|
|
and preferences relating to the stock. |
|
|
SECTION 11. Sections 62.157(a) and (c), Finance Code, are |
|
|
amended to read as follows: |
|
|
(a) The certificate of formation [articles of
|
|
|
incorporation] may: |
|
|
(1) authorize that shares of preferred stock be |
|
|
divided into and issued in series; and |
|
|
(2) determine the rights and preferences of each |
|
|
series or part of a series. |
|
|
(c) The certificate of formation [articles of
|
|
|
incorporation] may authorize the board by resolution to divide |
|
|
classes of preferred stock into series and to determine the rights |
|
|
and preferences of the shares of each series. A copy of the |
|
|
resolution must be submitted to the commissioner before the shares |
|
|
may be issued. The commissioner shall file the resolution in the |
|
|
commissioner's office if the resolution conforms to this subtitle. |
|
|
After the resolution is filed, it is considered an amendment of the |
|
|
association's certificate of formation [articles of
|
|
|
incorporation]. |
|
|
SECTION 12. Section 62.252(b), Finance Code, is amended to |
|
|
read as follows: |
|
|
(b) The directors shall execute [two copies of] the |
|
|
application required by Section 62.251. |
|
|
SECTION 13. Section 62.351(c), Finance Code, is amended to |
|
|
read as follows: |
|
|
(c) A shareholder of a capital stock association has the |
|
|
same dissenter's rights as a shareholder of a domestic corporation |
|
|
under the Business Organizations Code [Texas Business Corporation
|
|
|
Act]. |
|
|
SECTION 14. Section 62.405(c), Finance Code, is amended to |
|
|
read as follows: |
|
|
(c) A surviving association that is a domestic association |
|
|
shall operate under: |
|
|
(1) the certificate of formation [articles] and bylaws |
|
|
of the merging or consolidating domestic association; and |
|
|
(2) the laws applicable to a domestic association. |
|
|
SECTION 15. Section 62.454(b), Finance Code, is amended to |
|
|
read as follows: |
|
|
(b) After the merger takes effect: |
|
|
(1) a corporation that was merged ceases to exist; |
|
|
(2) the association assumes the rights and obligations |
|
|
of the corporation and owns the property of the association; and |
|
|
(3) the association's certificate of formation is |
|
|
[articles of incorporation are] considered amended to the extent |
|
|
that a change is stated in the plan of merger. |
|
|
SECTION 16. Section 66.002, Finance Code, is amended to |
|
|
read as follows: |
|
|
Sec. 66.002. ADOPTION OF RULES. The finance commission may |
|
|
adopt rules relating to: |
|
|
(1) the minimum amounts of capital stock and paid-in |
|
|
surplus required for incorporation as a capital stock association; |
|
|
(2) the minimum amounts of savings liability and |
|
|
expense funds required for incorporation as a mutual association; |
|
|
(3) the fees and procedures for processing, hearing, |
|
|
and deciding applications filed with the commissioner or the |
|
|
Department of Savings and Mortgage Lending under this subtitle; |
|
|
(4) the books and records that an association is |
|
|
required to keep and the location at which the books and records are |
|
|
required to be maintained; |
|
|
(5) the accounting principles and practices that an |
|
|
association is required to observe; |
|
|
(6) the conditions under which records may be copied |
|
|
or reproduced for permanent storage before the original records are |
|
|
destroyed; |
|
|
(7) [the form, contents, and time of publication of
|
|
|
statements of condition;
|
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|
[(8)] the form and contents of annual reports and |
|
|
other reports that an association is required to prepare and |
|
|
publish or file; |
|
|
(8) [(9)] the manner in which assets, liabilities, and |
|
|
transactions in general are to be described when entered in the |
|
|
books of an association, so that the entry accurately describes the |
|
|
subject matter of the entry; and |
|
|
(9) [(10)] the conditions under which the |
|
|
commissioner may require an asset to be charged off or reserves |
|
|
established by transfer from surplus or paid-in capital because of |
|
|
the depreciation of or overstated value of the asset. |
|
|
SECTION 17. Section 66.101, Finance Code, is amended to |
|
|
read as follows: |
|
|
Sec. 66.101. INTERVENTION FOR VIOLATIONS AND UNSAFE AND |
|
|
UNSOUND PRACTICES. The commissioner may intervene in the affairs |
|
|
of an association if the association or a person who participates in |
|
|
the affairs of the association or a subsidiary of the association: |
|
|
(1) engages in or is about to engage in an unsafe and |
|
|
unsound practice in conducting the affairs of the association; or |
|
|
(2) violates or is about to violate: |
|
|
(A) the certificate of formation [articles of
|
|
|
incorporation] or bylaws of the association; |
|
|
(B) a law or supervisory order applicable to the |
|
|
association; or |
|
|
(C) a condition that the commissioner or the |
|
|
finance commission has imposed on the association by written order |
|
|
or agreement. |
|
|
SECTION 18. Section 67.001(b), Finance Code, is amended to |
|
|
read as follows: |
|
|
(b) Subsection (a) does not prohibit activity that is not |
|
|
considered to be transacting business in this state under Section |
|
|
9.251, Business Organizations Code [Section B, Article 8.01, Texas
|
|
|
Business Corporation Act]. |
|
|
SECTION 19. Sections 92.051(a), (b), and (d), Finance Code, |
|
|
are amended to read as follows: |
|
|
(a) Five or more adult residents of this state may apply to |
|
|
form and incorporate a savings bank by submitting to the |
|
|
commissioner: |
|
|
(1) an application to incorporate a savings bank that |
|
|
is: |
|
|
(A) in a form specified by the commissioner; and |
|
|
(B) signed by each incorporator; and |
|
|
(2) the filing fee. |
|
|
(b) An application must contain: |
|
|
(1) two copies of the savings bank's certificate of |
|
|
formation [articles of incorporation] identifying: |
|
|
(A) the name of the savings bank; |
|
|
(B) the location of the principal office; and |
|
|
(C) the names and addresses of the initial |
|
|
directors; |
|
|
(2) two copies of the savings bank's bylaws; |
|
|
(3) data sufficiently detailed and comprehensive to |
|
|
enable the commissioner to make findings under Section 92.058, |
|
|
including statements, exhibits, and maps; |
|
|
(4) other information relating to the savings bank and |
|
|
its operation that the finance commission by rule requires; and |
|
|
(5) financial information about each applicant, |
|
|
incorporator, director, officer, or shareholder that the finance |
|
|
commission by rule requires. |
|
|
(d) The certificate of formation [articles of
|
|
|
incorporation] and statements of fact must be signed and sworn to. |
|
|
SECTION 20. Section 92.052(a), Finance Code, is amended to |
|
|
read as follows: |
|
|
(a) A capital stock savings bank's certificate of formation |
|
|
[articles of incorporation] must include a statement of: |
|
|
(1) the aggregate number of shares of common stock |
|
|
that the savings bank may issue; |
|
|
(2) the par value of each share or that the shares are |
|
|
without par value; |
|
|
(3) whether the savings bank may issue preferred |
|
|
stock; |
|
|
(4) the amount of stock that has been subscribed and |
|
|
will be paid for before the savings bank begins business; |
|
|
(5) the name and address of each subscriber and the |
|
|
amount subscribed by each; and |
|
|
(6) the amount of paid-in surplus with which the |
|
|
savings bank will begin business. |
|
|
SECTION 21. Section 92.053, Finance Code, is amended to |
|
|
read as follows: |
|
|
Sec. 92.053. ADDITIONAL REQUIREMENTS FOR MUTUAL SAVINGS |
|
|
BANK. (a) A mutual savings bank's certificate of formation |
|
|
[articles of incorporation] must include a statement of the amount |
|
|
of deposit liability of the savings bank and the amount of the |
|
|
expense fund with which the savings bank will begin business. |
|
|
(b) Before approving the certificate of formation [articles
|
|
|
of incorporation] of a mutual savings bank, the commissioner shall |
|
|
require the savings bank to have subscriptions for an aggregate |
|
|
amount of deposit accounts and an expense fund in an aggregate |
|
|
amount the finance commission by rule establishes as necessary for |
|
|
the successful operation of a mutual savings bank. |
|
|
SECTION 22. Sections 92.058(b) and (c), Finance Code, are |
|
|
amended to read as follows: |
|
|
(b) The commissioner may approve an application to |
|
|
incorporate only if: |
|
|
(1) the prerequisites to incorporation required by |
|
|
this chapter are satisfied; |
|
|
(2) the character, responsibility, and general |
|
|
fitness of each person named in the certificate of formation |
|
|
[articles of incorporation] command confidence and warrant belief |
|
|
that: |
|
|
(A) the business of the savings bank will be |
|
|
honestly and efficiently conducted in accordance with the intent |
|
|
and purpose of this subtitle; and |
|
|
(B) the savings bank will have qualified |
|
|
full-time management; |
|
|
(3) there is a public need for the savings bank; |
|
|
(4) the volume of business in the community in which |
|
|
the savings bank will conduct its business indicates a profitable |
|
|
operation is probable; and |
|
|
(5) the operation of the savings bank will not unduly |
|
|
harm an existing savings bank or state or federal savings and loan |
|
|
association. |
|
|
(c) On finding that each requirement of Subsection (b) is |
|
|
met, the commissioner shall: |
|
|
(1) enter an order approving the application and |
|
|
stating the findings required by Subsection (b); |
|
|
(2) issue under official seal a certificate of |
|
|
incorporation; |
|
|
(3) deliver a copy of the approved certificate of |
|
|
formation [articles of incorporation] and bylaws to the |
|
|
incorporators; and |
|
|
(4) permanently retain a copy of the certificate of |
|
|
formation [articles of incorporation] and bylaws. |
|
|
SECTION 23. The heading to Section 92.062, Finance Code, is |
|
|
amended to read as follows: |
|
|
Sec. 92.062. AMENDMENT OF CERTIFICATE OF FORMATION |
|
|
[ARTICLES OF INCORPORATION] OR BYLAWS. |
|
|
SECTION 24. Section 92.062(a), Finance Code, is amended to |
|
|
read as follows: |
|
|
(a) A savings bank may amend its certificate of formation |
|
|
[articles of incorporation] or bylaws by a resolution adopted by a |
|
|
majority vote of those entitled to vote attending an annual meeting |
|
|
or a special meeting called for that purpose. |
|
|
SECTION 25. Section 92.063(a), Finance Code, is amended to |
|
|
read as follows: |
|
|
(a) Only with the prior approval of the commissioner given |
|
|
in accordance with rules of the finance commission may a savings |
|
|
bank: |
|
|
(1) establish an office other than the principal |
|
|
office stated in the savings bank's certificate of formation |
|
|
[articles of incorporation]; |
|
|
(2) move an office from its immediate vicinity; or |
|
|
(3) change the savings bank's name. |
|
|
SECTION 26. Section 92.101, Finance Code, is amended to |
|
|
read as follows: |
|
|
Sec. 92.101. PURPOSE OF INCORPORATION. A person may apply |
|
|
to form and incorporate a savings bank for the purpose of: |
|
|
(1) purchasing the assets, assuming the liabilities |
|
|
other than liability to shareholders, and continuing the business |
|
|
of a financial institution the commissioner considers to be in an |
|
|
unsafe condition; |
|
|
(2) acquiring an existing financial institution by |
|
|
merger; or |
|
|
(3) facilitating a reorganization or merger with or |
|
|
into a savings bank under rules adopted by the finance commission. |
|
|
SECTION 27. Sections 92.103(a) and (e), Finance Code, are |
|
|
amended to read as follows: |
|
|
(a) The commissioner shall approve an application under |
|
|
this subchapter if the commissioner finds that: |
|
|
(1) the business of the financial institution that is |
|
|
to be reorganized or merged can be effectively continued under the |
|
|
certificate of formation [articles of incorporation]; and |
|
|
(2) the reorganization or merger is in the best |
|
|
interest of the public and the savers, depositors, creditors, and |
|
|
shareholders of the financial institution that is to be reorganized |
|
|
or merged. |
|
|
(e) In a merger, a shareholder of a capital stock financial |
|
|
institution has the same dissenter's rights as a shareholder of a |
|
|
domestic business corporation under the Business Organizations |
|
|
Code [Texas Business Corporation Act]. |
|
|
SECTION 28. Section 92.152(b), Finance Code, is amended to |
|
|
read as follows: |
|
|
(b) The members or shareholders shall elect the board by a |
|
|
majority vote at the annual meeting. The directors may be elected |
|
|
for staggered terms of longer than one year as provided by the |
|
|
savings bank's bylaws or certificate of formation [articles of
|
|
|
incorporation]. |
|
|
SECTION 29. Section 92.158(a), Finance Code, is amended to |
|
|
read as follows: |
|
|
(a) The voting rights of a person entitled to vote at an |
|
|
annual or special meeting of a savings bank are the same as those of |
|
|
a shareholder of a domestic business corporation under the Business |
|
|
Organizations Code [Texas Business Corporation Act]. |
|
|
SECTION 30. Section 92.209(c), Finance Code, is amended to |
|
|
read as follows: |
|
|
(c) A savings bank may retire or redeem preferred stock in |
|
|
the manner provided by: |
|
|
(1) the certificate of formation [articles of
|
|
|
incorporation]; or |
|
|
(2) a resolution of the board of the savings bank |
|
|
establishing the rights and preferences relating to the stock. |
|
|
SECTION 31. Sections 92.210(a) and (c), Finance Code, are |
|
|
amended to read as follows: |
|
|
(a) The certificate of formation [articles of
|
|
|
incorporation] may: |
|
|
(1) authorize that shares of preferred stock be |
|
|
divided into and issued in series; and |
|
|
(2) determine the rights and preferences of each |
|
|
series or part of a series. |
|
|
(c) The certificate of formation [articles of
|
|
|
incorporation] may authorize the board by resolution to divide |
|
|
classes of preferred stock into series and to determine the rights |
|
|
and preferences of the shares of each series. A copy of the |
|
|
resolution must be submitted to the commissioner before the shares |
|
|
may be issued. The commissioner shall file the resolution in the |
|
|
commissioner's office if the resolution conforms to this subtitle. |
|
|
After the resolution is filed, it is considered an amendment of the |
|
|
savings bank's certificate of formation [articles of
|
|
|
incorporation]. |
|
|
SECTION 32. Section 92.302(b), Finance Code, is amended to |
|
|
read as follows: |
|
|
(b) The directors, or the president and secretary, shall |
|
|
execute [two copies of] an application for certificate of |
|
|
incorporation as provided by Subchapter B. |
|
|
SECTION 33. Section 92.351(c), Finance Code, is amended to |
|
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read as follows: |
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(c) A shareholder of a capital stock savings bank has the |
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same dissenter's rights as a shareholder of a domestic corporation |
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under the Business Organizations Code [Texas Business Corporation
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Act]. |
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SECTION 34. Section 92.405(c), Finance Code, is amended to |
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read as follows: |
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(c) A surviving savings bank that is a domestic savings bank |
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shall operate under: |
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(1) the certificate of formation [articles] and bylaws |
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of the merging or consolidating domestic savings bank; and |
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(2) the law applicable to a domestic savings bank. |
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SECTION 35. Section 92.454(b), Finance Code, is amended to |
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read as follows: |
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(b) After the merger takes effect: |
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(1) a corporation that was merged ceases to exist; |
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(2) the savings bank assumes the rights and |
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obligations of the corporation and owns the property of the |
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corporation; and |
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(3) the savings bank's certificate of formation is |
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[articles of incorporation are] considered amended to the extent |
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that a change is stated in the plan of merger. |
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SECTION 36. Section 94.301, Finance Code, is amended to |
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read as follows: |
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Sec. 94.301. AUTHORIZATION. With the prior approval |
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[consent] of the commissioner and subject to rules adopted by the |
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finance commission, a savings bank may invest in a subsidiary |
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corporation created under general corporation law. |
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SECTION 37. Section 96.002(a), Finance Code, is amended to |
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read as follows: |
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(a) The finance commission may adopt rules necessary to |
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supervise and regulate savings banks and to protect public |
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investment in savings banks, including rules relating to: |
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(1) the minimum amounts of capital required to |
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incorporate and operate as a savings bank, which may not be less |
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than the amounts required of corresponding national banks; |
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(2) the fees and procedures for processing, hearing, |
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and deciding applications filed with the commissioner or the |
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Department of Savings and Mortgage Lending under this subtitle; |
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(3) the books and records that a savings bank is |
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required to keep and the location at which the books and records are |
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required to be maintained; |
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(4) the accounting principles and practices that a |
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savings bank is required to observe; |
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(5) the conditions under which records may be copied |
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or reproduced for permanent storage before the originals are |
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destroyed; |
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(6) [the form, content, and time of publication of
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statements of condition;
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[(7)] the form and content of any report that a savings |
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bank is required to prepare and publish or file under this chapter; |
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(7) [(8)] the manner in which assets, liabilities, and |
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transactions in general are to be described when entered in the |
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books of a savings bank, so that the entry accurately describes the |
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subject matter of the entry; |
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(8) [(9)] the conditions under which the commissioner |
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may require an asset to be charged off or reserves established by |
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transfer from surplus or paid-in capital because of depreciation of |
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or overstated value of the asset; |
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(9) [(10)] the change of control of a savings bank; |
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(10) [(11)] the conduct, management, and operation of |
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a savings bank; |
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(11) [(12)] the withdrawable accounts, bonuses, |
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plans, and contracts for savings programs; |
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(12) [(13)] the merger, consolidation, |
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reorganization, conversion, and liquidation of a savings bank; |
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(13) [(14)] the establishment of an additional office |
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or the change of office location or name of a savings bank; |
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(14) [(15)] the requirements for a savings bank's |
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holding companies, including those relating to: |
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(A) registration and periodic reporting of a |
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holding company with the commissioner; and |
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(B) transactions between a holding company, an |
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affiliate of a holding company, or a savings bank; and |
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(15) [(16)] the powers of a savings bank to make loans |
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and investments that contain provisions reasonably necessary to |
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ensure that a loan made by a savings bank is consistent with sound |
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lending practices and that the savings bank's investment will |
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promote the purposes of this subtitle, including provisions |
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governing: |
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(A) the type of loans and the conditions under |
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which a savings bank may originate, make, or sell loans; |
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(B) the conditions under which a savings bank may |
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purchase or participate in a loan made by another lender; |
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(C) the conditions for the servicing of a loan |
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for another lender; |
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(D) the conditions under which a savings bank may |
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lend money on the security of a loan made by another person; |
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(E) the conditions under which a savings bank may |
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pledge loans held by it as collateral for borrowing by the savings |
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bank; |
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(F) the conditions under which a savings bank may |
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invest in securities and debt instruments; |
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(G) the documentation that a savings bank must |
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have in its files at the time of funding or purchase of a loan, an |
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investment, or a participation in a loan; |
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(H) the form and content of statements of |
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expenses and fees and other charges that are paid by a borrower or |
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that a borrower is obligated to pay; |
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(I) the title information that must be |
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maintained; |
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(J) the borrower's insurance coverage of |
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property securing a loan; |
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(K) an appraisal report; |
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(L) the financial statement of a borrower; |
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(M) the fees or other compensation that may be |
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paid to a person in connection with obtaining a loan for a savings |
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bank, including an officer, director, employee, affiliated person, |
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consultant, or third party; |
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(N) the conditions under which the savings bank |
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may advance money to pay a tax, assessment, insurance premium, or |
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other similar charge for the protection of the savings bank's |
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interest in property securing the savings bank's loans; |
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(O) the terms under which a savings bank may |
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acquire and deal in real property; |
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(P) the valuation on a savings bank's books of |
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real property held by the savings bank; |
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(Q) the terms governing the investment by a |
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savings bank in a subsidiary, the powers that may be exercised by a |
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subsidiary, and the activities that may be engaged in by a |
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subsidiary; and |
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(R) any other matter considered necessary to |
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administer each type of transaction. |
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SECTION 38. Section 96.101(a), Finance Code, is amended to |
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read as follows: |
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(a) The commissioner may intervene in the affairs of a |
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savings bank if the savings bank or a person who participates in the |
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affairs of the savings bank or a subsidiary or holding company of |
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the savings bank: |
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(1) engages in or is about to engage in an unsafe and |
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unsound practice in conducting the affairs of the savings bank; or |
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(2) violates or is about to violate: |
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(A) the certificate of formation [articles of
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incorporation] or bylaws of the savings bank; |
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(B) a law or supervisory order applicable to the |
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savings bank; or |
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(C) a condition that the commissioner or the |
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finance commission has imposed on the savings bank by written |
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order, directive, or agreement. |
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SECTION 39. Section 97.052, Finance Code, is amended to |
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read as follows: |
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Sec. 97.052. APPLICATION FOR APPROVAL OF REORGANIZATION. |
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The application for approval of reorganization must contain: |
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(1) a brief statement summarizing a reorganization |
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plan; |
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(2) two copies of the proposed certificate of |
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formation [articles of incorporation] of the subsidiary savings |
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bank acknowledged by the incorporators of the subsidiary savings |
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bank; |
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(3) two copies of the proposed bylaws of the savings |
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bank; |
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(4) a statement that the plan of reorganization was |
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advised, authorized, and approved by the savings bank in the manner |
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and by the vote required by its charter and the laws of this state; |
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and |
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(5) a statement of the manner of approval. |
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SECTION 40. Section 98.001(b), Finance Code, is amended to |
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|
read as follows: |
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(b) Subsection (a) does not prohibit activity that is not |
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|
considered to be transacting business in this state under Section |
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9.251, Business Organizations Code [Section B, Article 8.01, Texas
|
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Business Corporation Act]. |
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|
SECTION 41. Section 119.101(c), Finance Code, is amended to |
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|
read as follows: |
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(c) A stockholder of a capital stock savings bank has the |
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|
same right to examine the relevant books and records of a savings |
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|
bank as a shareholder of a business corporation under the Business |
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|
Organizations Code [Texas Business Corporation Act]. |
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SECTION 42. Section 156.004(a), Finance Code, is amended to |
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|
read as follows: |
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(a) At the time a residential mortgage loan [an] applicant |
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submits an application to a residential mortgage loan originator |
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sponsored by and conducting business for a licensed or registered |
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|
residential mortgage loan company under this chapter, the |
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residential mortgage loan originator shall provide to the applicant |
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a disclosure form. The form must [that specifies]: |
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(1) include the name, address, and toll-free telephone |
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number for the department [the nature of the relationship between
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the applicant and the residential mortgage loan originator]; and |
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(2) contain information on how to file a complaint or |
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recovery fund claim [the duties the residential mortgage loan
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originator has to the applicant; and
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[(3)
how the residential mortgage loan originator will
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be compensated]. |
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SECTION 43. Section 157.0021(b), Finance Code, is amended |
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|
to read as follows: |
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(b) A mortgage banker that indicates in its registration |
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|
that it acts as a residential mortgage loan servicer shall provide |
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|
to the borrower of each residential mortgage loan that it services |
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|
and that is secured by a lien on residential real estate located in |
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this state the following notice not later than the 30th day after |
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|
the date the mortgage banker commences servicing the loan: |
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"COMPLAINTS REGARDING THE SERVICING OF YOUR TEXAS MORTGAGE |
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SHOULD BE SENT TO THE DEPARTMENT OF SAVINGS AND MORTGAGE LENDING, |
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______________________________ (street address of the Department |
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of Savings and Mortgage Lending). A TOLL-FREE CONSUMER HOTLINE IS |
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AVAILABLE AT _______________ (telephone number of the Department of |
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Savings and Mortgage Lending's toll-free consumer hotline)." |
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SECTION 44. The heading to Subchapter C, Chapter 158, |
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|
Finance Code, is amended to read as follows: |
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SUBCHAPTER C. INVESTIGATIONS;[,] COMPLAINTS[,] AND ACTIONS |
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AGAINST REGISTRANT |
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SECTION 45. Section 158.101, Finance Code, is amended to |
|
|
read as follows: |
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|
Sec. 158.101. DISCLOSURE STATEMENT. A registrant shall |
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|
provide to the borrower of each residential mortgage loan that it |
|
|
services and that is secured by a lien on residential real estate |
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|
located in this state the following notice not later than the 30th |
|
|
day after the registrant commences servicing the loan: |
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"COMPLAINTS REGARDING THE SERVICING OF YOUR TEXAS MORTGAGE |
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|
SHOULD BE SENT TO THE DEPARTMENT OF SAVINGS AND MORTGAGE LENDING, |
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|
______________________________ (street address of the Department |
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|
of Savings and Mortgage Lending). A TOLL-FREE CONSUMER HOTLINE IS |
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AVAILABLE AT _______________ (telephone number of the Department of |
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|
Savings and Mortgage Lending's toll-free consumer hotline)." |
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SECTION 46. The heading to Section 158.102, Finance Code, |
|
|
is amended to read as follows: |
|
|
Sec. 158.102. INSPECTIONS; INVESTIGATIONS [INVESTIGATION
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OF COMPLAINTS AGAINST REGISTRANT]; SURCHARGE. |
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|
SECTION 47. Section 158.102, Finance Code, is amended by |
|
|
adding Subsections (a-1), (a-2), and (e) to read as follows: |
|
|
(a-1) The commissioner may conduct an inspection of a |
|
|
registrant as the commissioner determines necessary to determine |
|
|
whether the registrant is complying with this chapter and |
|
|
applicable rules. The inspection under this subsection may include |
|
|
an inspection of the books, records, documents, operations, and |
|
|
facilities of the registrant. |
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|
(a-2) For reasonable cause, the commissioner at any time may |
|
|
investigate a registrant to determine whether the registrant is |
|
|
complying with this chapter and applicable rules. |
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|
(e) The commissioner may conduct an undercover or covert |
|
|
investigation only if the commissioner, after due consideration of |
|
|
the circumstances, determines that the investigation is necessary |
|
|
to prevent immediate harm and to carry out the purposes of this |
|
|
chapter. |
|
|
SECTION 48. Subchapter C, Chapter 158, Finance Code, is |
|
|
amended by adding Section 158.107 to read as follows: |
|
|
Sec. 158.107. UNREGISTERED ACTIVITY; OFFENSE. (a) An |
|
|
individual who is not exempt under this chapter or other applicable |
|
|
law and who acts as a residential mortgage loan servicer without |
|
|
first obtaining a registration as required under this chapter |
|
|
commits an offense. |
|
|
(b) An offense under this section is a Class B misdemeanor. |
|
|
A second or subsequent conviction for an offense under this section |
|
|
is a Class A misdemeanor. |
|
|
SECTION 49. The Finance Commission of Texas shall adopt |
|
|
rules to implement Section 156.004(a), Finance Code, as amended by |
|
|
this Act, not later than January 1, 2018. |
|
|
SECTION 50. Section 156.004(a), Finance Code, as amended by |
|
|
this Act, applies only to an application for a residential mortgage |
|
|
loan that is submitted on or after January 1, 2018. An application |
|
|
for a residential mortgage loan that is submitted before January 1, |
|
|
2018, is governed by the law in effect on the date the application |
|
|
was submitted, and the former law is continued in effect for that |
|
|
purpose. |
|
|
SECTION 51. Section 157.0021(b), Finance Code, as amended |
|
|
by this Act, and Section 158.101, Finance Code, as amended by this |
|
|
Act, apply only to a residential mortgage loan that is made on or |
|
|
after the effective date of this Act. A residential mortgage loan |
|
|
that is made before the effective date of this Act is governed by |
|
|
the law in effect on the date the residential mortgage loan was |
|
|
made, and the former law is continued in effect for that purpose. |
|
|
SECTION 52. (a) Except as otherwise provided by this |
|
|
section, this Act takes effect September 1, 2017. |
|
|
(b) Section 156.004(a), Finance Code, as amended by this |
|
|
Act, takes effect January 1, 2018. |