81(R) HB 10 - Enrolled version

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�	H.B.�No.�10

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�	AN ACT
�	relating to the regulation of residential mortgage loan
�	originators; providing a penalty.
�	��BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
�	��SECTION�1.��Subtitle E, Title 3, Finance Code, is amended by
�	adding Chapter 180 to read as follows:
�	CHAPTER 180. RESIDENTIAL MORTGAGE LOAN ORIGINATORS
�	SUBCHAPTER A. �GENERAL PROVISIONS
�	��Sec.�180.001.��SHORT TITLE. This chapter may be cited as the
�	Texas Secure and Fair Enforcement for Mortgage Licensing Act of
�	2009.
�	��Sec.�180.002.��DEFINITIONS. In this chapter:
�	��(1)��"Clerical or support duties," following the
�	receipt of an application from a consumer, includes:
�	��(A)��the receipt, collection, distribution, and
�	analysis of information related to the processing or underwriting
�	of a residential mortgage loan; and
�	��(B)��communication with a consumer to obtain
�	information necessary to process or underwrite a loan, to the
�	extent that the communication does not include offering or
�	negotiating loan rates or terms or counseling the consumer about
�	residential mortgage loan rates or terms.
�	��(2)��"Credit union"�means a state or federal credit
�	union operating in this state.
�	��(3)��"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)��Credit Union Commission rule; or
�	��(C)��Part 712 of the National Credit Union
�	Administration's Rules and Regulations.
�	��(4)��"Depository institution" has the meaning assigned
�	by Section 3, Federal Deposit Insurance Act (12 U.S.C. Section
�	1813). The term includes a credit union but does not include a
�	credit union subsidiary organization.
�	��(5)��"Dwelling" has the meaning assigned by Section
�	103(v) of the Truth in Lending Act (15 U.S.C. Section 1602(v)).
�	��(6)��"Federal banking agency" means:
�	��(A)��the Board of Governors of the Federal Reserve
�	System;
�	��(B)��the Office of the Comptroller of the
�	Currency;
�	��(C)��the Office of Thrift Supervision;
�	��(D)��the National Credit Union Administration;
�	��(E)��the Federal Deposit Insurance Corporation;
�	or
�	��(F)��the successor of any of those agencies.
�	��(7)��"Finance commission" means the Finance Commission
�	of Texas.
�	��(8)��"Immediate family member" means the spouse, child,
�	sibling, parent, grandparent, or grandchild of an individual. The
�	term includes a stepparent, stepchild, and stepsibling and a
�	relationship established by adoption.
�	��(9)��"Individual"�means a natural person.
�	��(10)��"License" means a license issued under the laws
�	of this state to an individual acting as or engaged in the business
�	of a residential mortgage loan originator.
�	��(11)��"Loan processor or underwriter" means an
�	individual who performs clerical or support duties as an employee
�	at the direction of and subject to the supervision and instruction
�	of an individual licensed as a residential mortgage loan originator
�	or exempt from licensure under Section 180.003.
�	��(12)��"Nationwide Mortgage Licensing System and
�	Registry" means a mortgage licensing system developed and
�	maintained by the Conference of State Bank Supervisors and the
�	American Association of Residential Mortgage Regulators for the
�	licensing and registration of state residential mortgage loan
�	originators.
�	��(13)��"Nontraditional mortgage product" means a
�	mortgage product other than a 30-year fixed rate mortgage.
�	��(14)��"Person" means an individual, corporation,
�	company, limited liability company, partnership, or association.
�	��(15)��"Real estate brokerage activity" means an
�	activity that involves offering or providing real estate brokerage
�	services to the public, including:
�	��(A)��acting as a real estate broker or salesperson
�	for a buyer, seller, lessor, or lessee of real property;
�	��(B)��bringing together parties interested in the
�	sale, purchase, lease, rental, or exchange of real property;
�	��(C)��negotiating, on a party's behalf, any
�	provision of a contract relating to the sale, purchase, lease,
�	rental, or exchange of real property, other than a negotiation
�	conducted in connection with providing financing with respect to
�	such a transaction;
�	��(D)��engaging in an activity for which a person is
�	required to be registered or licensed by the state as a real estate
�	broker or salesperson; and
�	��(E)��offering to engage in an activity described
�	by Paragraphs (A) through (D) or to act in the same capacity as a
�	person described by Paragraphs (A) through (D).
�	��(16)��"Registered mortgage loan originator" means an
�	individual who:
�	��(A)��is a residential mortgage loan originator and
�	is an employee of:
�	��(i)��a depository institution;
�	��(ii)��a subsidiary that is:
�	��(a)��owned and controlled by a
�	depository institution; and
�	��(b)��regulated by a federal banking
�	agency; or
�	��(iii)��an institution regulated by the Farm
�	Credit Administration; and
�	��(B)��is registered with, and maintains a unique
�	identifier through, the Nationwide Mortgage Licensing System and
�	Registry.
�	��(17)��"Regulatory official" means:
�	��(A)��with respect to Subtitles A, F, and G of this
�	title, the banking commissioner of Texas;
�	��(B)��with respect to Chapters 156 and 157 except
�	as provided by Paragraph (D), 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 credit unions, to the
�	examination, investigation, or inspection of employees of credit
�	union subsidiary organizations licensed under Chapter 156, and to
�	the enforcement of compliance with this chapter and Chapter 156 by
�	those employees, the credit union commissioner.
�	��(18)��"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 or on residential real estate.
�	��(19)��"Residential mortgage loan originator":
�	��(A)��means an individual who for compensation or
�	gain or in the expectation of compensation or gain:
�	��(i)��takes a residential mortgage loan
�	application; or
�	��(ii)��offers or negotiates the terms of a
�	residential mortgage loan; and
�	��(B)��does not include:
�	��(i)��an individual who performs solely
�	administrative or clerical tasks on behalf of an individual
�	licensed as a residential mortgage loan originator or exempt from
�	licensure under Section 180.003, except as otherwise provided by
�	Section 180.051;
�	��(ii)��an individual who performs only real
�	estate brokerage activities and is licensed or registered by the
�	state as a real estate broker or salesperson, unless the individual
�	is compensated by:
�	��(a)��a lender, mortgage broker, or
�	other residential mortgage loan originator; or
�	��(b)��an agent of a lender, mortgage
�	broker, or other residential mortgage loan originator;
�	��(iii)��an individual licensed under Chapter
�	1201, Occupations Code, unless the individual is directly
�	compensated for arranging financing for activities regulated under
�	that chapter by:
�	��(a)��a lender, mortgage broker, or
�	other residential mortgage loan originator; or
�	��(b)��an agent of a lender, mortgage
�	broker, or other residential mortgage loan originator;
�	��(iv)��an individual who receives the same
�	benefits from a financed transaction as the individual would
�	receive if the transaction were a cash transaction; or
�	��(v)��an individual who is involved solely in
�	providing extensions of credit relating to timeshare plans, as
�	defined by 11 U.S.C. Section 101(53D).
�	��(20)��"Residential real estate" means real property
�	located in this state on which a dwelling is constructed or intended
�	to be constructed.
�	��(21)��"Rulemaking authority" means:
�	��(A)��the finance commission, except as provided by
�	Paragraph (B); or
�	��(B)��with respect to credit unions and the
�	rulemaking authority granted by Section 15.4024, the Credit Union
�	Commission.
�	��(22)��"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).
�	��(23)��"Unique identifier" means a number or other
�	identifier assigned by protocols established by the Nationwide
�	Mortgage Licensing System and Registry.
�	��Sec.�180.003.��EXEMPTION. �The following persons are exempt
�	from this chapter:
�	��(1)��a registered mortgage loan originator when acting
�	for an entity described by Section 180.002(16)(A)(i), (ii), or
�	(iii);
�	��(2)��an individual who offers or negotiates terms of a
�	residential mortgage loan with or on behalf of an immediate family
�	member of the individual;
�	��(3)��a licensed attorney who negotiates the terms of a
�	residential mortgage loan on behalf of a client as an ancillary
�	matter to the attorney's representation of the client, unless the
�	attorney:
�	��(A)��takes a residential mortgage loan
�	application; and
�	��(B)��offers or negotiates the terms of a
�	residential mortgage loan;
�	��(4)��an individual who:
�	��(A)��is an exclusive agent of a registered
�	financial services company;
�	��(B)��is exempt from regulation under Chapter 156
�	as provided by Section 156.202(5); and
�	��(C)��is individually enrolled as a registered
�	mortgage loan originator with the Nationwide Mortgage Licensing
�	System and Registry;
�	��(5)��an individual who offers or negotiates terms of a
�	residential mortgage loan secured by a dwelling that serves as the
�	individual's residence; and
�	��(6)��a nonprofit organization providing self-help
�	housing that originates zero interest residential mortgage loans
�	for borrowers who have provided part of the labor to construct the
�	dwelling securing the loan.
�	��Sec.�180.004.��ADMINISTRATIVE AUTHORITY; RULEMAKING. (a) A
�	regulatory official has broad authority to administer, interpret,
�	and enforce this chapter.
�	��(b)��The finance commission may implement rules necessary to
�	comply with this chapter and as required to carry out the intentions
�	of the federal Secure and Fair Enforcement for Mortgage Licensing
�	Act of 2008 (Pub. L. No. 110-289).
�	��(c)��This chapter does not limit the authority of a
�	regulatory official to take disciplinary action against a license
�	holder for a violation of this chapter or the rules adopted by the
�	regulatory official under this chapter. A regulatory official has
�	broad authority to investigate, revoke a license, and inform the
�	proper authority when fraudulent conduct or a violation of this
�	chapter occurs.
�	��Sec.�180.005.��SEVERABILITY. The provisions of this chapter
�	or applications of those provisions are severable as provided by
�	Section 311.032(c), Government Code.
�	[Sections 180.006-180.050 reserved for expansion]
�	SUBCHAPTER B. LICENSING AND REGISTRATION REQUIREMENTS
�	��Sec.�180.051.��STATE LICENSE REQUIRED; RENEWAL. (a) Unless
�	exempted by Section 180.003, an individual may not engage in
�	business as a residential 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 156, 157, 342, 347, 348, or 351; and
�	��(2)��complies with the requirements of this chapter.
�	��(b)��Unless exempted by Section 180.003, a loan processor or
�	underwriter who is an independent contractor may not engage in the
�	activities of a loan processor or underwriter unless the
�	independent contractor loan processor or underwriter obtains and
�	maintains the appropriate residential mortgage loan originator
�	license and complies with the requirements of this chapter.
�	��(c)��The individual must renew the license annually to be
�	considered licensed for purposes of this section.
�	��(d)��Notwithstanding any provision of law listed in
�	Subsection (a)(1), the regulatory official shall provide for annual
�	renewal of licenses for individuals seeking to engage in
�	residential mortgage loan origination activities.
�	��Sec.�180.052.��ENROLLMENT OR REGISTRATION WITH NATIONWIDE
�	MORTGAGE LICENSING SYSTEM AND REGISTRY. (a) �A licensed
�	residential mortgage loan originator must enroll with and maintain
�	a valid unique identifier issued by the Nationwide Mortgage
�	Licensing System and Registry.
�	��(b)��A non-federally insured credit union that employs loan
�	originators, as defined by the S.A.F.E. Mortgage Licensing Act,
�	shall 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.
�	��(c)��Each independent contractor loan processor or
�	underwriter licensed as a residential mortgage loan originator must
�	have and maintain a valid unique identifier issued by the
�	Nationwide Mortgage Licensing System and Registry.
�	��(d)��The regulatory official who administers the law under
�	which a residential mortgage loan originator is licensed shall
�	require the residential mortgage loan originator to be enrolled
�	with the Nationwide Mortgage Licensing System and Registry.
�	��(e)��For purposes of implementing Subsection (d), the
�	regulatory official may participate in the Nationwide Mortgage
�	Licensing System and Registry.
�	��Sec.�180.053.��APPLICATION FORM. (a) �A regulatory official
�	shall prescribe application forms for a license as a residential
�	mortgage loan originator.
�	��(b)��A regulatory official may change or update an
�	application form as necessary to carry out the purposes of this
�	chapter.
�	��Sec.�180.054.��CRIMINAL AND OTHER BACKGROUND CHECKS. (a) �In
�	connection with an application for a license as a residential
�	mortgage loan originator, the applicant shall, at a minimum,
�	furnish in the form and manner prescribed by the regulatory
�	official and acceptable to the Nationwide Mortgage Licensing System
�	and Registry information concerning the applicant's identity,
�	including:
�	��(1)��fingerprints for submission to the Federal Bureau
�	of Investigation and any governmental agency or entity authorized
�	to receive the information to conduct a state, national, and
�	international criminal background check; and
�	��(2)��personal history and experience information in a
�	form prescribed by the Nationwide Mortgage Licensing System and
�	Registry, including the submission of authorization for the
�	Nationwide Mortgage Licensing System and Registry and the
�	appropriate regulatory official to obtain:
�	��(A)��an independent credit report obtained from a
�	consumer reporting agency described by Section 603(p), Fair Credit
�	Reporting Act (15 U.S.C. Section 1681a(p)); and
�	��(B)��information related to any administrative,
�	civil, or criminal findings by a governmental jurisdiction.
�	��(b)��For purposes of this section and to reduce the points of
�	contact that the Federal Bureau of Investigation may have to
�	maintain for purposes of Subsection (a)(1), a regulatory official
�	may use the Nationwide Mortgage Licensing System and Registry as a
�	channeling agent for requesting information from and distributing
�	information to the United States Department of Justice, any
�	governmental agency, or any source at the regulatory official's
�	direction.
�	��(c)��For purposes of this section and to reduce the points of
�	contact that a regulatory official may have to maintain for
�	purposes of Subsection (a) or (b), the regulatory official may use
�	the Nationwide Mortgage Licensing System and Registry as a
�	channeling agent for requesting information from and distributing
�	information to and from any source as directed by the regulatory
�	official.
�	��Sec.�180.055.��ISSUANCE OF LICENSE. (a) �The regulatory
�	official may not issue a residential mortgage loan originator
�	license to an individual unless the regulatory official determines,
�	at a minimum, that the applicant:
�	��(1)��has not had a residential mortgage loan originator
�	license revoked in any governmental jurisdiction;
�	��(2)��has not been convicted of, or pled guilty or nolo
�	contendere to, a felony in a domestic, foreign, or military court:
�	��(A)��during the seven-year period preceding the
�	date of application; or
�	��(B)��at any time preceding the date of
�	application, if the felony involved an act of fraud, dishonesty,
�	breach of trust, or money laundering;
�	��(3)��demonstrates financial responsibility, character,
�	and general fitness so as to command the confidence of the community
�	and to warrant a determination that the individual will operate
�	honestly, fairly, and efficiently as a residential mortgage loan
�	originator within the purposes of this chapter and any other
�	appropriate regulatory law of this state;
�	��(4)��provides satisfactory evidence that the applicant
�	has completed prelicensing education courses described by Section
�	180.056;
�	��(5)��provides satisfactory evidence of having passed a
�	written test that meets the requirements of Section 180.057; and
�	��(6)��has paid a recovery fund fee or obtained a surety
�	bond as required under the appropriate state regulatory law.
�	��(b)��A revocation that has been formally vacated may not be
�	considered a license revocation for purposes of Subsection (a)(1).
�	��(c)��A conviction for which a full pardon has been granted
�	may not be considered a conviction for purposes of Subsection
�	(a)(2).
�	��(d)��For purposes of Subsection (a)(3), an individual is
�	considered not to be financially responsible if the individual has
�	shown a lack of regard in managing the individual's own financial
�	affairs or condition. A determination that an individual has not
�	shown financial responsibility may include:
�	��(1)��an outstanding judgment against the individual,
�	other than a judgment imposed solely as a result of medical
�	expenses;
�	��(2)��an outstanding tax lien or other governmental
�	liens and filings;
�	��(3)��a foreclosure during the three-year period
�	preceding the date of the license application; and
�	��(4)��a pattern of seriously delinquent accounts during
�	the three-year period preceding the date of the application.
�	��Sec.�180.056.��PRELICENSING EDUCATIONAL COURSES. (a) �An
�	applicant for a residential mortgage loan originator license must
�	complete education courses that include, at a minimum, at least the
�	minimum number of hours and type of courses required by the S.A.F.E.
�	Mortgage Licensing Act and the minimum number of hours of training
�	related to lending standards for the nontraditional mortgage
�	product marketplace required by that Act.
�	��(b)��Education courses required under this section must be
�	reviewed and approved by the Nationwide Mortgage Licensing System
�	and Registry in accordance with the S.A.F.E. Mortgage Licensing
�	Act.
�	��(c)��Nothing in this section precludes any education course
�	approved in accordance with the S.A.F.E. Mortgage Licensing Act
�	from being provided by:
�	��(1)��an applicant's employer;
�	��(2)��an entity affiliated with the applicant by an
�	agency contract; or
�	��(3)��a subsidiary or affiliate of the employer or
�	entity.
�	��(d)��Education courses required under this section may be
�	offered in a classroom, online, or by any other means approved by
�	the Nationwide Mortgage Licensing System and Registry.
�	��(e)��An individual who has successfully completed
�	prelicensing education requirements approved by the Nationwide
�	Mortgage Licensing System and Registry for another state shall be
�	given credit toward completion of the prelicensing education
�	requirements of this section.
�	��(f)��An applicant who has previously held a residential
�	mortgage loan originator license that meets the requirements of
�	this chapter and other appropriate regulatory law, before being
�	issued a new original license, must demonstrate to the appropriate
�	regulatory official that the applicant has completed all continuing
�	education requirements for the calendar year in which the license
�	was last held by the applicant.
�	��(g)��If the appropriate federal regulators and the
�	Nationwide Mortgage Licensing System and Registry establish
�	additional educational requirements for licensed residential
�	mortgage loan originators, the rulemaking authority shall adopt
�	necessary rules to implement the changes to the educational
�	requirements of this section.
�	��Sec.�180.057.��TESTING REQUIREMENTS. (a) An applicant for a
�	residential mortgage loan originator license must pass a qualified,
�	written test that:
�	��(1)��meets the standards and requirements established
�	by the S.A.F.E. Mortgage Licensing Act;
�	��(2)�is developed by the Nationwide Mortgage Licensing
�	System and Registry; and
�	��(3)��is administered by a test provider in accordance
�	with the S.A.F.E. Mortgage Licensing Act.
�	��(b)��An individual may retake the test the number of times
�	and within the period prescribed by the S.A.F.E. Mortgage Licensing
�	Act.
�	��(c)��An individual who fails to maintain a residential
�	mortgage loan originator license for at least five consecutive
�	years must retake the test.
�	��(d)��This section does not prohibit a test provider approved
�	in accordance with the S.A.F.E. Mortgage Licensing Act from
�	providing a test at the location of:
�	��(1)��the license applicant's employer;
�	��(2)��a subsidiary or affiliate of the applicant's
�	employer; or
�	��(3)��an entity with which the applicant holds an
�	exclusive arrangement to conduct the business of a residential
�	mortgage loan originator.
�	��Sec.�180.058.��RECOVERY FUND FEE OR SURETY BOND REQUIREMENT.
�	(a) �A regulatory official may not issue a residential mortgage loan
�	originator license unless the official determines that the
�	applicant meets the surety bond requirement or has paid a recovery
�	fund fee, as applicable, in accordance with the requirements of the
�	S.A.F.E. Mortgage Licensing Act.
�	��(b)��Each regulatory official shall adopt rules requiring an
�	individual licensed as a residential mortgage loan originator to
�	obtain a surety bond or pay a recovery fund fee as the official
�	determines appropriate to comply with the S.A.F.E. Mortgage
�	Licensing Act.
�	��Sec.�180.059.��STANDARDS FOR LICENSE RENEWAL. �A license to
�	act as a residential mortgage loan originator may be renewed on or
�	before its expiration date if the license holder:
�	��(1)��continues to meet the minimum requirements for
�	license issuance;
�	��(2)��pays all required fees for the renewal of the
�	license; and
�	��(3)��provides satisfactory evidence that the license
�	holder has completed the continuing education requirements of
�	Section 180.060.
�	��Sec.�180.060.��CONTINUING EDUCATION COURSES. (a) To renew a
�	residential mortgage loan originator license, a license holder must
�	annually complete the minimum number of hours and type of
�	continuing education courses required by the S.A.F.E. Mortgage
�	Licensing Act, the minimum requirements established by the
�	Nationwide Mortgage Licensing System and Registry, and any
�	additional requirements established by the regulatory official.
�	��(b)��Continuing education courses, including the course
�	provider, must be reviewed and approved by the Nationwide Mortgage
�	Licensing System and Registry as required by the S.A.F.E. Mortgage
�	Licensing Act. Course credit must be granted in accordance with
�	that Act.
�	��(c)��Nothing in this section precludes any continuing
�	education course approved in accordance with the S.A.F.E. Mortgage
�	Licensing Act from being provided by:
�	��(1)��the employer of the license holder;
�	��(2)��an entity affiliated with the license holder by an
�	agency contract; or
�	��(3)��a subsidiary or affiliate of the employer or
�	entity.
�	��(d)��A person who successfully completes continuing
�	education requirements approved by the Nationwide Mortgage
�	Licensing System and Registry for another state shall be given
�	credit toward completion of the continuing education requirements
�	of this section.
�	��Sec.�180.061.��RULEMAKING AUTHORITY. �A rulemaking authority
�	may adopt rules establishing requirements as necessary for:
�	��(1)��conducting background checks by obtaining:
�	��(A)��criminal history information through
�	fingerprint or other databases;
�	��(B)��civil administrative records;
�	��(C)��credit history information; or
�	��(D)��any other information considered necessary
�	by the Nationwide Mortgage Licensing System and Registry;
�	��(2)��payment of fees to apply for or renew licenses
�	through the Nationwide Mortgage Licensing System and Registry;
�	��(3)��setting or resetting, as necessary, license
�	renewal dates or reporting periods;
�	��(4)��amending or surrendering a license or any other
�	activity a regulatory official considers necessary for
�	participation in the Nationwide Mortgage Licensing System and
�	Registry; and
�	��(5)��investigation and examination authority for
�	purposes of investigating a violation or complaint arising under
�	this chapter or for purposes of examining, reviewing, or
�	investigating any license holder or individual subject to this
�	chapter.
�	��Sec.�180.062.��CONFIDENTIALITY OF INFORMATION. (a) Except
�	as otherwise provided by this section, a requirement under federal
�	or state law regarding the privacy or confidentiality of
�	information or material provided to the Nationwide Mortgage
�	Licensing System and Registry, and a privilege arising under
�	federal or state law, or under the rules of a federal or state
�	court, continue to apply to the information or material after the
�	disclosure of the information or material to the Nationwide
�	Mortgage Licensing System and Registry. The information and
�	material may be shared with federal and state regulatory officials
�	with mortgage industry oversight authority without the loss of any
�	privilege or confidentiality protections afforded by federal or
�	state laws.
�	��(b)��Information or material subject to a privilege or
�	confidential under Subsection (a) may not be subject to:
�	��(1)��disclosure under any federal or state law
�	governing the disclosure to the public of information held by an
�	officer or an agency of the federal government or this state; or
�	��(2)��subpoena, discovery, or admission into evidence in
�	a private civil action or administrative proceeding.
�	��(c)��A person who is the subject of information or material
�	in the Nationwide Mortgage Licensing System and Registry may waive,
�	wholly or partly, any privilege held by the Nationwide Mortgage
�	Licensing System and Registry with respect to the information or
�	material.
�	��(d)��A regulatory official may enter into an agreement or
�	sharing arrangement with another governmental agency, the
�	Conference of State Bank Supervisors, the American Association of
�	Residential Mortgage Regulators, or other associations
�	representing appropriate governmental agencies as established by
�	rule of the rulemaking authority or order issued by the regulatory
�	official. A protection provided by Subsection (a) also applies to
�	information and material shared under an agreement or sharing
�	arrangement entered into under this subsection.
�	��(e)��To the extent of a conflict between Subsection (a) and
�	Chapter 552, Government Code, or another state law relating to the
�	disclosure of confidential information or information or material
�	described by Subsection (a), Subsection (a) controls to the extent
�	Chapter 552, Government Code, or the other law provides less
�	confidentiality or a weaker privilege than is provided by
�	Subsection (a).
�	��(f)��This section does not apply to information or material
�	relating to the employment history of, and publicly adjudicated
�	disciplinary and enforcement actions against, a residential
�	mortgage loan originator that is included in the Nationwide
�	Mortgage Licensing System and Registry for access by the public.
�	[Sections 180.063-180.100 reserved for expansion]
�	SUBCHAPTER C. REPORTING AND OTHER REQUIREMENTS REGARDING
�	NATIONWIDE MORTGAGE LICENSING SYSTEM AND REGISTRY
�	��Sec.�180.101.��MORTGAGE CALL REPORTS. Each licensed
�	residential mortgage loan originator shall submit to the Nationwide
�	Mortgage Licensing System and Registry a report of condition that
�	is in the form and contains the information required by the
�	Nationwide Mortgage Licensing System and Registry.
�	��Sec.�180.102.��REPORT OF VIOLATIONS AND ENFORCEMENT ACTIONS.
�	Subject to the confidentiality provisions of this chapter, a
�	regulatory official shall report to the Nationwide Mortgage
�	Licensing System and Registry on a regular basis regarding
�	violations of, enforcement actions under, or information relevant
�	to this chapter or the S.A.F.E. Mortgage Licensing Act under the
�	regulatory official's licensure, regulation, or examination of a
�	licensed residential mortgage loan originator or person registered
�	under the S.A.F.E. Mortgage Licensing Act.
�	��Sec.�180.103.��INFORMATION CHALLENGE PROCESS. The
�	applicable rulemaking authority by rule shall establish a process
�	by which licensed residential mortgage loan originators may dispute
�	information submitted by the regulatory official to the Nationwide
�	Mortgage Licensing System and Registry.
�	[Sections 180.104-180.150 reserved for expansion]
�	SUBCHAPTER D. BUSINESS PRACTICES; PROHIBITED ACTS
�	��Sec.�180.151.��DISPLAY OF UNIQUE IDENTIFIER. The unique
�	identifier of a person originating a residential mortgage loan must
�	be clearly shown on each residential mortgage loan application
�	form, solicitation, or advertisement, including business cards and
�	websites, and any other document required by rule of the rulemaking
�	authority.
�	��Sec.�180.152.��REPRESENTATIONS. �An individual who is
�	engaged exclusively in loan processor or underwriter activities may
�	not represent to the public, through the use of advertising,
�	business cards, stationery, brochures, signs, rate lists, or other
�	means, that the individual can or will perform any of the activities
�	of a residential mortgage loan originator unless the individual is
�	licensed as a residential mortgage loan originator.
�	��Sec.�180.153.��PROHIBITED ACTS AND PRACTICES. An individual
�	or other person subject to regulation under this chapter may not:
�	��(1)��employ, directly or indirectly, a scheme, device,
�	or artifice to defraud or mislead borrowers or lenders or to defraud
�	a person;
�	��(2)��engage in an unfair or deceptive practice toward a
�	person;
�	��(3)��obtain property by fraud or misrepresentation;
�	��(4)��solicit or enter into a contract with a borrower
�	that provides in substance that the individual or other person
�	subject to this chapter may earn a fee or commission through "best
�	efforts" to obtain a loan even though no loan was actually obtained
�	for the borrower;
�	��(5)��solicit, advertise, or enter into a contract for
�	specific interest rates, points, or other financing terms unless
�	the terms are actually available at the time of soliciting,
�	advertising, or contracting;
�	��(6)��conduct any business regulated by this chapter
�	without holding a license as required by this chapter;
�	��(7)��assist, aid, or abet an individual in the conduct
�	of business without a license required by this chapter;
�	��(8)��fail to make disclosures as required by this
�	chapter and any other applicable state or federal law, including
�	rules or regulations under applicable state or federal law;
�	��(9)��fail to comply with this chapter or rules adopted
�	under this chapter;
�	��(10)��fail to comply with any other state or federal
�	law, including rules or regulations adopted under that law,
�	applicable to a business or activity regulated by this chapter;
�	��(11)��make, in any manner, a false or deceptive
�	statement or representation;
�	��(12)��negligently make a false statement or knowingly
�	or wilfully make an omission of material fact in connection with:
�	��(A)��information or a report filed with a
�	governmental agency or the Nationwide Mortgage Licensing System and
�	Registry; or
�	��(B)��an investigation conducted by the regulatory
�	official or another governmental agency;
�	��(13)��make a payment, threat, or promise, directly or
�	indirectly, to a person for purposes of influencing the person's
�	independent judgment in connection with a residential mortgage
�	loan, or make a payment, threat, or promise, directly or
�	indirectly, to an appraiser of property, for purposes of
�	influencing the appraiser's independent judgment with respect to
�	the property's value;
�	��(14)��collect, charge, attempt to collect or charge, or
�	use or propose an agreement purporting to collect or charge a fee
�	prohibited by this chapter;
�	��(15)��cause or require a borrower to obtain property
�	insurance coverage in an amount that exceeds the replacement cost
�	of the improvements as established by the property insurer; or
�	��(16)��fail to truthfully account for money belonging to
�	a party to a residential mortgage loan transaction.
�	[Sections 180.154-180.200 reserved for expansion]
�	SUBCHAPTER E. ENFORCEMENT PROVISIONS
�	��Sec.�180.201.��ENFORCEMENT AUTHORITY. To ensure the
�	effective supervision and enforcement of this chapter, a regulatory
�	official may:
�	��(1)��deny, suspend, revoke, condition, or decline to
�	renew a license for a violation of this chapter, a rule adopted
�	under this chapter, or an order or directive issued under this
�	chapter;
�	��(2)��deny, suspend, revoke, condition, or decline to
�	renew a license if an applicant or license holder:
�	��(A)��fails to meet the requirements of Subchapter
�	B; or
�	��(B)��withholds information or makes a material
�	misstatement in an application for a license or renewal of a
�	license;
�	��(3)��order restitution against a person subject to
�	regulation under this chapter for a violation of this chapter;
�	��(4)��impose an administrative penalty on a person
�	subject to regulation under this chapter, subject to Section
�	180.202; or
�	��(5)��issue orders or directives as provided by Section
�	180.203.
�	��Sec.�180.202.��ADMINISTRATIVE PENALTY. (a) A regulatory
�	official may impose an administrative penalty on a residential
�	mortgage loan originator or other person subject to regulation
�	under this chapter, if the official, after notice and opportunity
�	for hearing, determines that the residential mortgage loan
�	originator or other person subject to regulation under this chapter
�	has violated or failed to comply with:
�	��(1)��this chapter;
�	��(2)��a rule adopted under this chapter; or
�	��(3)��an order issued under this chapter.
�	��(b)��The penalty may not exceed $25,000 for each violation.
�	��(c)��The amount of the penalty shall be based on:
�	��(1)��the seriousness of the violation, including the
�	nature, circumstances, extent, and gravity of the violation;
�	��(2)��the economic harm to property caused by the
�	violation;
�	��(3)��the history of previous violations;
�	��(4)��the amount necessary to deter a future violation;
�	��(5)��efforts to correct the violation; and
�	��(6)��any other matter that justice may require.
�	��Sec.�180.203.��CEASE AND DESIST ORDERS. A regulatory
�	official may:
�	��(1)��order or direct a person subject to regulation
�	under this chapter to cease and desist from conducting business,
�	including issuing an immediate temporary order to cease and desist
�	from conducting business;
�	��(2)��order or direct a person subject to regulation
�	under this chapter to cease a violation of this chapter or a harmful
�	activity in violation of this chapter, including issuing an
�	immediate temporary order to cease and desist;
�	��(3)��enter immediate temporary orders against a person
�	subject to regulation under this chapter to cease engaging in
�	business under a license if the regulatory official determines that
�	the license was erroneously granted or the license holder is in
�	violation of this chapter; and
�	��(4)��order or direct other affirmative action as the
�	regulatory official considers necessary.
�	[Sections 180.204-180.250 reserved for expansion]
�	SUBCHAPTER F. DUTIES OF REGULATORY OFFICIALS
�	��Sec.�180.251.��GENERAL DUTIES OF REGULATORY OFFICIALS. (a)
�	Except as provided by Subsection (b), the savings and mortgage
�	lending commissioner shall administer and enforce this chapter with
�	respect to individuals licensed under Chapter 156 or 157.
�	��(b)��The credit union commissioner shall:
�	��(1)��examine, inspect, or investigate employees of
�	credit union subsidiary organizations who are licensed to act as
�	residential mortgage loan originators under Chapter 156; and
�	��(2)��enforce compliance by employees of credit union
�	subsidiary organizations described by Subdivision (1) with the
�	applicable requirements of Chapter 156 and this chapter and any
�	applicable rules adopted under Section 15.4024.
�	��(c)��The consumer credit commissioner shall administer and
�	enforce this chapter with respect to individuals licensed under
�	Chapter 342, 347, 348, or 351.
�	��(d)��To the extent permitted or required by this chapter and
�	as reasonably necessary for the implementation and enforcement of
�	the S.A.F.E. Mortgage Licensing Act, the banking commissioner of
�	Texas may administer and enforce this chapter with respect to a
�	person otherwise under the commissioner's jurisdiction under
�	Subtitle A, F, or G of this title.
�	��Sec.�180.252.��AUTHORITY OF REGULATORY OFFICIALS TO
�	ESTABLISH RELATIONSHIP WITH NATIONWIDE MORTGAGE LICENSING SYSTEM
�	AND REGISTRY; CONTRACTING AUTHORITY. To fulfill the purposes of
�	this chapter, a regulatory official may establish a relationship
�	with or contract with the Nationwide Mortgage Licensing System and
�	Registry or an entity designated by the Nationwide Mortgage
�	Licensing System and Registry to collect and maintain records and
�	process transaction fees or other fees related to licensed
�	residential mortgage loan originators or other persons subject to
�	regulation under this chapter.
�	��SECTION�2.��Section 14.107(b), Finance Code, is amended to
�	read as follows:
�	��(b)��The finance commission by rule shall set the fees for
�	licensing and examination under Chapter 342, 347, 348, 351, or 371
�	at amounts or rates necessary to recover the costs of administering
�	those chapters. The rules may provide that the amount of a fee
�	charged to a license holder is based on the volume of the license
�	holder's regulated business and other key factors. The
�	commissioner may provide for collection of a single annual fee from
�	a person licensed under Chapter 342, 347, 348, 351, or 371 to
�	include amounts due for both licensing and examination.
�	��SECTION�3.��Subchapter E, Chapter 15, Finance Code, is
�	amended by adding Section 15.4024 to read as follows:
�	��Sec.�15.4024.��RULES RELATING TO CERTAIN EMPLOYEES OF CREDIT
�	UNION SUBSIDIARY ORGANIZATIONS. (a) In this section, "credit union
�	subsidiary organization" has the meaning assigned by Section
�	180.002.
�	��(b)��The commission may adopt and enforce rules necessary for
�	the commissioner to:
�	��(1)��examine, inspect, or investigate employees of
�	credit union subsidiary organizations who are licensed to act as
�	residential mortgage loan originators under Chapter 156; and
�	��(2)��enforce compliance by employees of credit union
�	subsidiary organizations described by Subdivision (1) with the
�	applicable requirements of Chapters 156 and 180.
�	��SECTION�4.��Section 156.101, Finance Code, is amended by
�	amending Subsection (a) and adding Subsections (a-1) and (a-2) to
�	read as follows:
�	��(a)��Except as provided by Subsection (a-2), the [~~The~~]
�	commissioner shall administer this chapter.
�	��(a-1)��The commissioner shall perform all duties relating to
�	the issuance and renewal of licenses under Section 156.2015 for
�	employees of credit union subsidiary organizations who act as
�	residential mortgage loan originators.
�	��(a-2)��The credit union commissioner is responsible for:
�	��(1)��the examination, inspection, or investigation of
�	employees of credit union subsidiary organizations who are licensed
�	to act as residential mortgage loan originators under this chapter;
�	and
�	��(2)��the enforcement of compliance by employees of
�	credit union subsidiary organizations described by Subdivision (1)
�	with the applicable requirements of this chapter and Chapter 180.
�	��SECTION�5.��Section 156.102(a), Finance Code, is amended to
�	read as follows:
�	��(a)��The finance commission may adopt and enforce rules
�	necessary for the intent of or to ensure compliance with this
�	chapter, except as provided by Section 15.4024 with respect to
�	employees of credit union subsidiary organizations subject to
�	regulation under Section 156.2015.
�	��SECTION�6.��Subchapter C, Chapter 156, Finance Code, is
�	amended by adding Section 156.2015 to read as follows:
�	��Sec.�156.2015.��RESIDENTIAL MORTGAGE LOAN ORIGINATION
�	ACTIVITIES. (a) In this section, "credit union subsidiary
�	organization,"�"Nationwide Mortgage Licensing System and
�	Registry," and "residential mortgage loan originator" have the
�	meanings assigned by Section 180.002.
�	��(b)��An individual required to be licensed under this chapter
�	may not act as a residential mortgage loan originator unless:
�	��(1)��the individual's license under this chapter
�	otherwise authorizes the individual to act as a residential
�	mortgage loan originator;
�	��(2)��the individual is enrolled with the Nationwide
�	Mortgage Licensing System and Registry as required by Section
�	180.052; and
�	��(3)��the individual complies with other applicable
�	requirements of Chapter 180 and rules adopted under that chapter.
�	��(c)��An employee of a credit union subsidiary organization
�	may not act as a residential mortgage loan originator unless the
�	employee:
�	��(1)��is licensed under this chapter;
�	��(2)��is enrolled with the Nationwide Mortgage Licensing
�	System and Registry as required by Section 180.052; and
�	��(3)��complies with other applicable requirements of
�	Chapter 180 and rules adopted under that chapter.
�	��(d)��The finance commission may adopt rules under this
�	chapter as required to carry out the intentions of the federal
�	Secure and Fair Enforcement for Mortgage Licensing Act of 2008
�	(Pub. L. No. 110-289).
�	��SECTION�7.��Sections 156.214(b) and (f), Finance Code, as
�	added by Chapter 228 (H.B. 1716), Acts of the 80th Legislature,
�	Regular Session, 2007, are amended to read as follows:
�	��(b)��To be eligible to register as a registered financial
�	services company, a person must:
�	��(1)��be a depository institution exempt from this
�	chapter under Section 156.202(1)(A) or (B) and chartered and
�	regulated by the Office of Thrift Supervision or the Office of the
�	Comptroller of the Currency, or be a subsidiary [~~or affiliate~~] of
�	the institution;
�	��(2)��provide the commissioner with satisfactory
�	evidence of an undertaking of accountability in a form acceptable
�	to the commissioner, supported by a surety bond equal to $1 million
�	to cover the person's responsibility for mortgage broker activities
�	of each exclusive agent;
�	��(3)��provide a business plan satisfactory to the
�	commissioner that sets forth the person's plan to provide education
�	to its exclusive agents, handle consumer complaints relating to its
�	exclusive agents, and supervise the mortgage origination [~~broker~~]
�	activities of its exclusive agents;
�	��(4)��pay an annual registration fee of the lesser of:
�	��(A)��one-half of the license fee for a loan
�	officer under Section 156.203(c)(1), multiplied by the number of
�	exclusive agents under contract to act for the person in this state;
�	or
�	��(B)��$200,000; and
�	��(5)��designate an officer of the person to be
�	responsible for the activities of the exclusive agents.
�	��(f)��Prior to permitting an exclusive agent to solicit,
�	process, negotiate, or place a mortgage loan, the registered
�	financial services company shall submit to the commissioner such
�	information as the commissioner may require relating to the
�	exclusive agent, and the exclusive agent must have enrolled with
�	the Nationwide Mortgage Licensing System and Registry as a
�	registered residential mortgage loan originator and provided to the
�	commissioner the exclusive agent's unique identifier. �In this
�	subsection, "Nationwide Mortgage Licensing System and Registry,"
�	"residential mortgage loan originator," and "unique identifier"
�	have the meanings assigned by Section 180.002 [~~person together with~~
�	~~a fingerprint imprint of the person.~~ � ~~The commissioner shall obtain~~
�	~~criminal history record information as provided in Section~~
�	~~156.206(b).~~ � ~~The commissioner may assess a fee in an amount~~
�	~~determined by the finance commission to cover the cost of the~~
�	~~criminal background check.~~ � ~~This section does not apply to a person~~
�	~~who is licensed as a mortgage broker or loan officer under Chapter~~
�	~~156 at the time he becomes an exclusive agent of a registered~~
�	~~financial services company~~].
�	��SECTION�8.��Chapter 157, Finance Code, is amended by adding
�	Section 157.012 to read as follows:
�	��Sec.�157.012.��LICENSE REQUIRED FOR CERTAIN EMPLOYEES OF
�	MORTGAGE BANKERS. (a) In this section, "Nationwide Mortgage
�	Licensing System and Registry" and "residential mortgage loan
�	originator" have the meanings assigned by Section 180.002.
�	��(b)��An employee of a mortgage banker may not act in the
�	capacity of a residential mortgage loan originator unless the
�	employee:
�	��(1)��is licensed under this chapter and enrolled with
�	the Nationwide Mortgage Licensing System and Registry as required
�	by Section 180.052; and
�	��(2)��complies with other applicable requirements of
�	Chapter 180 and rules adopted by the finance commission under that
�	chapter.
�	��(c)��The finance commission may adopt rules under this
�	chapter as required to carry out the intentions of the federal
�	Secure and Fair Enforcement for Mortgage Licensing Act of 2008
�	(Pub. L. No. 110-289).
�	��(d)��To be eligible to be licensed as a residential mortgage
�	loan originator, an employee of a mortgage banker, in addition to
�	the requirements of Subsection (b), must:
�	��(1)��satisfy the commissioner as to the employee's good
�	moral character, including the employee's honesty,
�	trustworthiness, and integrity;
�	��(2)��not be in violation of this chapter or a rule
�	adopted under this chapter; and
�	��(3)��provide the commissioner with satisfactory
�	evidence that the employee meets the qualifications provided by
�	Chapter 180.
�	��SECTION�9.��Chapter 341, Finance Code, is amended by adding
�	Subchapter G to read as follows:
�	SUBCHAPTER�G.��STATE-LICENSED RESIDENTIAL MORTGAGE LOAN
�	ORIGINATOR RECOVERY FUND
�	��Sec.�341.601.��DEFINITION. �In this subchapter, "fund" means
�	the state-licensed residential mortgage loan originator recovery
�	fund.
�	��Sec.�341.602.��STATE-LICENSED RESIDENTIAL MORTGAGE LOAN
�	ORIGINATOR RECOVERY FUND. �(a) �The commissioner under Chapter 180
�	shall establish, administer, and maintain a state-licensed
�	residential mortgage loan originator recovery fund as provided by
�	this subchapter. �The amounts received by the commissioner for
�	deposit in the fund shall be held by the commissioner in trust for
�	carrying out the purposes of the fund.
�	��(b)��Subject to this subsection, the fund shall be used to
�	reimburse residential mortgage loan applicants for actual damages
�	incurred because of acts committed by a state-licensed residential
�	mortgage loan originator who was licensed under Chapter 342, 347,
�	348, or 351 when the act was committed. �The use of the fund is
�	limited to reimbursement for out-of-pocket losses caused by an act
�	that constitutes a violation of Chapter 180 or this subtitle. �
�	Payments from the fund may not be made to a lender who makes a
�	residential mortgage loan originated by the state-licensed
�	residential mortgage loan originator or who acquires a residential
�	mortgage loan originated by the state-licensed residential
�	mortgage loan originator.
�	��(c)��The fund may be used at the discretion of the
�	commissioner to reimburse expenses incurred to secure and destroy
�	residential mortgage loan documents that have been abandoned by a
�	current or former state-licensed residential mortgage loan
�	originator under the regulatory authority of the agency.
�	��(d)��Payments from the fund shall be reduced by the amount of
�	any recovery from the state-licensed residential mortgage loan
�	originator or from any surety, insurer, or other person or entity
�	making restitution to the applicant on behalf of the originator.
�	��(e)��The commissioner, as manager of the fund, is entitled to
�	reimbursement for reasonable and necessary costs and expenses
�	incurred in the management of the fund, including costs and
�	expenses incurred with regard to applications filed under Section
�	341.605.
�	��(f)��Amounts in the fund may be invested and reinvested in
�	the same manner as funds of the Employees Retirement System of
�	Texas, and the interest from those investments shall be deposited
�	to the credit of the fund. An investment may not be made under this
�	subsection if the investment will impair the necessary liquidity
�	required to satisfy payment of judgments awarded under this
�	subchapter.
�	��Sec.�341.603.��FUNDING. �(a) �An applicant for an original
�	residential mortgage loan originator license issued under Chapter
�	342, 347, 348, or 351 or for renewal of a residential mortgage loan
�	originator license issued under Chapter 342, 347, 348, or 351
�	shall, in addition to paying the original application fee or
�	renewal fee, pay a fee in an amount determined by the commissioner. �
�	The fee shall be deposited in the fund.
�	��(b)��If the balance remaining in the fund at the end of a
�	calendar year is more than $2.5 million, the amount of money in
�	excess of that amount shall be available to the commissioner to
�	offset the expenses of participating in and sharing information
�	with the Nationwide Mortgage Licensing System and Registry in
�	accordance with Chapter 180.
�	��Sec.�341.604.��STATUTE OF LIMITATIONS. �(a) �An application
�	for the recovery of actual damages from the fund under Section
�	341.605 may not be filed after the second anniversary of the date of
�	the alleged act or omission causing the actual damages or the date
�	the act or omission should reasonably have been discovered.
�	��(b)��This section does not apply to a subrogation claim
�	brought by the commissioner for recovery of money paid out of the
�	fund.
�	��Sec.�341.605.��PROCEDURE FOR RECOVERY. �(a) �To recover from
�	the fund, a residential mortgage loan applicant must file a written
�	sworn application with the commissioner in the form prescribed by
�	the commissioner. �A person who knowingly makes a false statement in
�	connection with applying for money out of the fund may be subject to
�	criminal prosecution under Section 37.10, Penal Code.
�	��(b)��The residential mortgage loan applicant is required to
�	show:
�	��(1)��that the applicant's claim is based on facts
�	allowing recovery under Section 341.602; and
�	��(2)��that the applicant:
�	��(A)��is not a spouse of the state-licensed
�	residential mortgage loan originator;
�	��(B)��is not a child, parent, grandchild,
�	grandparent, or sibling, including relationships by adoption, of
�	the state-licensed residential mortgage loan originator;
�	��(C)��is not a person sharing living quarters with
�	the state-licensed residential mortgage loan originator or a
�	current or former employer, employee, or associate of the
�	originator;
�	��(D)��is not a person who has aided, abetted, or
�	participated other than as a victim with the state-licensed
�	residential mortgage loan originator in any activity that is
�	illegal under this subtitle or Chapter 180 or is not the personal
�	representative of a state-licensed residential mortgage loan
�	originator; and
�	��(E)��is not licensed as a state-licensed
�	residential mortgage loan originator who is seeking to recover any
�	compensation in the transaction or transactions for which the
�	application for payment is made.
�	��(c)��On receipt of the verified application, the
�	commissioner's staff shall:
�	��(1)��notify each appropriate license holder and the
�	issuer of any surety bond issued in connection with their licenses;
�	and
�	��(2)��investigate the application and issue a
�	preliminary determination, giving the applicant, the license
�	holder, and any surety an opportunity to resolve the matter by
�	agreement or to dispute the preliminary determination.
�	��(d)��If the preliminary determination under Subsection
�	(c)(2) is not otherwise resolved by agreement and is not disputed by
�	written notice to the commissioner before the 31st day after the
�	notification date, the preliminary determination automatically
�	becomes final and the commissioner shall make payment from the
�	fund, subject to the limits of Section 341.606.
�	��(e)��If the preliminary determination under Subsection
�	(c)(2) is disputed by the applicant, license holder, or any surety
�	by written notice to the commissioner before the 31st day after the
�	notification date, the matter shall be set for a hearing governed by
�	Chapter 2001, Government Code, and the hearing rules of the finance
�	commission.
�	��Sec.�341.606.��RECOVERY LIMITS. �(a) �A person entitled to
�	receive payment out of the fund is entitled to receive
�	reimbursement of actual, out-of-pocket damages as provided by this
�	section.
�	��(b)��A payment from the fund may be made as provided by
�	Section 341.605 and this section. A payment for claims:
�	��(1)��arising out of the same transaction, including
�	interest, is limited in the aggregate to $25,000, regardless of the
�	number of claimants; and
�	��(2)��against a single person licensed as a residential
�	mortgage loan originator under Chapter 342, 347, 348, or 351 is
�	limited in the aggregate to $50,000 until the fund has been
�	reimbursed for all amounts paid.
�	��(c)��In the event there are concurrent claims under
�	Subsections (b)(1) and (2) that exceed the amounts available under
�	the fund, the commissioner shall prorate recovery based on the
�	amount of damage suffered by each claimant.
�	��Sec.�341.607.��REVOCATION OF LICENSE FOR PAYMENT FROM FUND. �
�	(a) �The commissioner may revoke a residential mortgage loan
�	originator license issued under this subtitle on proof that the
�	commissioner has made a payment from the fund of any amount toward
�	satisfaction of a claim against a state-licensed residential
�	mortgage loan originator under this subchapter.
�	��(b)��The commissioner may seek to collect from a
�	state-licensed residential mortgage loan originator the amount
�	paid from the fund on behalf of the originator and any costs
�	associated with investigating and processing the claim against the
�	fund or with collection of reimbursement for payments from the
�	fund, plus interest at the current legal rate until the amount has
�	been repaid in full. Any amount, including interest, recovered by
�	the commissioner shall be deposited to the credit of the fund.
�	��(c)��The commissioner may probate an order revoking a license
�	under this section.
�	��(d)��A state-licensed residential mortgage loan originator
�	on whose behalf payment was made from the fund is not eligible to
�	receive a new license until the originator has repaid in full, plus
�	interest at the current legal rate, the amount paid from the fund on
�	the originator's behalf and any costs associated with investigating
�	and processing the claim against the fund or with collection of
�	reimbursement from the fund.
�	��(e)��This section does not limit the authority of the
�	commissioner to take disciplinary action against a state-licensed
�	residential mortgage loan originator for a violation of the chapter
�	under which the license was issued or the rules adopted by the
�	finance commission under that chapter. �The repayment in full to the
�	fund of all obligations of a state-licensed residential mortgage
�	loan originator does not nullify or modify the effect of any other
�	disciplinary proceeding.
�	��Sec.�341.608.��SUBROGATION. �When the commissioner has paid
�	an applicant an amount from the fund under Section 341.605, the
�	commissioner is subrogated to all of the rights of the applicant to
�	the extent of the amount paid. �The applicant shall assign the
�	applicant's right, title, and interest in any subsequent judgment
�	against the state-licensed residential mortgage loan originator up
�	to the amount paid by the commissioner. �Any amount, including
�	interest, recovered by the commissioner on the assignment shall be
�	deposited to the credit of the fund.
�	��Sec.�341.609.��FAILURE TO COMPLY WITH SUBCHAPTER OR RULE
�	ADOPTED BY FINANCE COMMISSION. �The failure of an applicant under
�	Section 341.605 to comply with a provision of this subchapter or a
�	rule adopted by the finance commission relating to the fund
�	constitutes a waiver of any rights under this subchapter.
�	��Sec.�341.610.��RULEMAKING. The finance commission may adopt
�	rules on the commissioner's recommendation to promote a fair and
�	orderly administration of the fund consistent with the purposes of
�	this subchapter.
�	��SECTION�10.��Subchapter B, Chapter 342, Finance Code, is
�	amended by adding Section 342.0515 to read as follows:
�	��Sec.�342.0515.��RESIDENTIAL MORTGAGE LOAN ORIGINATOR
�	ACTIVITIES. �(a) �In this section, "Nationwide Mortgage Licensing
�	System and Registry" and "residential mortgage loan originator"
�	have the meanings assigned by Section 180.002.
�	��(b)��Unless exempt under Section 180.003, an individual who
�	acts as a residential mortgage loan originator in the making,
�	transacting, or negotiating of a loan subject to this chapter must:
�	��(1)��be individually licensed to engage in that
�	activity under this chapter;
�	��(2)��be enrolled with the Nationwide Mortgage Licensing
�	System and Registry as required by Section 180.052; and
�	��(3)��comply with other applicable requirements of
�	Chapter 180 and rules adopted under that chapter.
�	��(c)��The finance commission shall adopt rules establishing
�	procedures for issuing, renewing, and enforcing an individual
�	license under this section. �In adopting rules under this
�	subsection, the finance commission shall ensure that:
�	��(1)��the minimum eligibility requirements for issuance
�	of an individual license are the same as the requirements of Section
�	180.055;
�	��(2)��the minimum eligibility requirements for renewal
�	of an individual license are the same as the requirements of Section
�	180.059; and
�	��(3)��the applicant pays:
�	��(A)��an investigation fee in a reasonable amount
�	determined by the commissioner; and
�	��(B)��an annual license fee in an amount determined
�	as provided by Section 14.107.
�	��(d)��The finance commission may adopt rules under this
�	chapter as required to carry out the intentions of the federal
�	Secure and Fair Enforcement for Mortgage Licensing Act of 2008
�	(Pub. L. No. 110-289).
�	��SECTION�11.��Section 342.156, Finance Code, is amended to
�	read as follows:
�	��Sec.�342.156.��LICENSE SUSPENSION OR REVOCATION. After
�	notice and a hearing the commissioner may suspend or revoke a
�	license if the commissioner finds that:
�	��(1)��the license holder failed to pay the annual
�	license fee, an examination fee, an investigation fee, or another
�	charge imposed by the commissioner under this chapter;
�	��(2)��the license holder, knowingly or without the
�	exercise of due care, violated this chapter or a rule adopted or
�	order issued under this chapter; [or]
�	��(3)��a fact or condition exists that, if it had existed
�	or had been known to exist at the time of the original application
�	for the license, clearly would have justified the commissioner's
�	denial of the application; or
�	��(4)��the license holder has failed to ensure that an
�	individual acting as a residential mortgage loan originator, as
�	defined by Section 180.002, in the making, transacting, or
�	negotiating of a loan subject to this chapter is licensed under this
�	chapter in accordance with Section 342.0515.
�	��SECTION�12.��The heading to Subchapter J, Chapter 347,
�	Finance Code, is amended to read as follows:
�	SUBCHAPTER J. �RIGHTS AND DUTIES OF CREDITOR AND RESIDENTIAL
�	MORTGAGE LOAN ORIGINATOR
�	��SECTION�13.��Section 347.451, Finance Code, is amended by
�	adding Subsection (b-1) to read as follows:
�	��(b-1)��A registered creditor that engages in the activity of
�	originating a residential mortgage loan must meet the surety bond
�	or recovery fund fee requirement, as applicable, of the creditor's
�	residential mortgage loan originator under Section 180.058.
�	��SECTION�14.��Subchapter J, Chapter 347, Finance Code, is
�	amended by adding Section 347.4515 to read as follows:
�	��Sec.�347.4515.��RESIDENTIAL MORTGAGE LOAN ORIGINATOR
�	LICENSE REQUIRED. �(a) �In this section, "Nationwide Mortgage
�	Licensing System and Registry" and "residential mortgage loan
�	originator" have the meanings assigned by Section 180.002.
�	��(b)��Unless exempt under Section 180.003, an individual who
�	acts as a residential mortgage loan originator in the making,
�	transacting, or negotiating of an extension of credit subject to
�	this chapter must:
�	��(1)��be individually licensed to engage in that
�	activity under this chapter;
�	��(2)��be enrolled with the Nationwide Mortgage Licensing
�	System and Registry as required by Section 180.052; and
�	��(3)��comply with other applicable requirements of
�	Chapter 180 and rules adopted under that chapter.
�	��(c)��The finance commission shall adopt rules establishing
�	procedures for issuing, renewing, and enforcing an individual
�	license under this section. In adopting rules under this
�	subsection, the finance commission shall ensure that:
�	��(1)��the minimum eligibility requirements for issuance
�	of an individual license are the same as the requirements of Section
�	180.055;
�	��(2)��the minimum eligibility requirements for renewal
�	of an individual license are the same as the requirements of Section
�	180.059; and
�	��(3)��the applicant pays:
�	��(A)��an investigation fee in a reasonable amount
�	determined by the commissioner; and
�	��(B)��an annual license fee in an amount determined
�	as provided by Section 14.107.
�	��(d)��The finance commission may adopt rules under this
�	chapter as required to carry out the intentions of the federal
�	Secure and Fair Enforcement for Mortgage Licensing Act of 2008
�	(Pub. L. No. 110-289).
�	��SECTION�15.��Section 348.501, Finance Code, is amended by
�	adding Subsection (c) to read as follows:
�	��(c)��A license holder under this chapter who engages in the
�	sale of a motor vehicle to be used as a principal dwelling must meet
�	the surety bond or recovery fund fee requirements, as applicable,
�	of the holder's residential mortgage loan originator under Section
�	180.058.
�	��SECTION�16.��Subchapter F, Chapter 348, Finance Code, is
�	amended by adding Section 348.5015 to read as follows:
�	��Sec.�348.5015.��RESIDENTIAL MORTGAGE LOAN ORIGINATOR
�	LICENSE REQUIRED. �(a) �In this section, "Nationwide Mortgage
�	Licensing System and Registry" and "residential mortgage loan
�	originator" have the meanings assigned by Section 180.002.
�	��(b)��Unless exempt under Section 180.003, an individual who
�	acts as a residential mortgage loan originator in the sale of a
�	motor vehicle to be used as a principal dwelling must:
�	��(1)��be licensed to engage in that activity under this
�	chapter;
�	��(2)��be enrolled with the Nationwide Mortgage Licensing
�	System and Registry as required by Section 180.052; and
�	��(3)��comply with other applicable requirements of
�	Chapter 180 and rules adopted under that chapter.
�	��(c)��The finance commission shall adopt rules establishing
�	procedures for applying for issuing, renewing, and enforcing a
�	license under this section. In adopting rules under this
�	subsection, the finance commission shall ensure that:
�	��(1)��the minimum eligibility requirements for issuance
�	of a license are the same as the requirements of Section 180.055;
�	��(2)��the minimum eligibility requirements for renewal
�	of a license are the same as the requirements of Section 180.059;
�	and
�	��(3)��the applicant pays:
�	��(A)��an investigation fee in a reasonable amount
�	determined by the commissioner; and
�	��(B)��an annual license fee in an amount determined
�	as provided by Section 14.107.
�	��(d)��The finance commission may adopt rules under this
�	chapter as required to carry out the intentions of the federal
�	Secure and Fair Enforcement for Mortgage Licensing Act of 2008
�	(Pub. L. No. 110-289).
�	��SECTION�17.��Subchapter B, Chapter 351, Finance Code, as
�	added by Chapter 1220 (H.B. 2138), Acts of the 80th Legislature,
�	Regular Session, 2007, is amended by adding Section 351.0515 to
�	read as follows:
�	��Sec.�351.0515.��RESIDENTIAL MORTGAGE LOAN ORIGINATOR
�	LICENSE REQUIRED. �(a) �In this section, "Nationwide Mortgage
�	Licensing System and Registry" and "residential mortgage loan
�	originator" have the meanings assigned by Section 180.002.
�	��(b)��Unless exempt under Section 180.003, an individual who
�	acts as a residential mortgage loan originator in the making,
�	transacting, or negotiating of a property tax loan for a principal
�	dwelling must:
�	��(1)��be individually licensed to engage in that
�	activity under this chapter;
�	��(2)��be enrolled with the Nationwide Mortgage Licensing
�	System and Registry as required by Section 180.052; and
�	��(3)��comply with other applicable requirements of
�	Chapter 180 and rules adopted under that chapter.
�	��(c)��The finance commission shall adopt rules establishing
�	procedures for issuing, renewing, and enforcing an individual
�	license under this section. In adopting rules under this
�	subsection, the finance commission shall ensure that:
�	��(1)��the minimum eligibility requirements for issuance
�	of an individual license are the same as the requirements of Section
�	180.055;
�	��(2)��the minimum eligibility requirements for renewal
�	of an individual license are the same as the requirements of Section
�	180.059; and
�	��(3)��the applicant pays:
�	��(A)��an investigation fee in a reasonable amount
�	determined by the commissioner; and
�	��(B)��an annual license fee in an amount determined
�	as provided by Section 14.107.
�	��(d)��The finance commission may adopt rules under this
�	chapter as required to carry out the intentions of the federal
�	Secure and Fair Enforcement for Mortgage Licensing Act of 2008
�	(Pub. L. No. 110-289).
�	��SECTION�18.��Section 351.102, Finance Code, as added by
�	Chapter 1220 (H.B. 2138), Acts of the 80th Legislature, Regular
�	Session, 2007, is amended by adding Subsection (e) to read as
�	follows:
�	��(e)��A license holder engaged in the business of making,
�	transacting, or negotiating a property tax loan for a principal
�	dwelling must meet the surety bond or recovery fund fee
�	requirement, as applicable, of the holder's residential mortgage
�	loan originator under Section 180.058.
�	��SECTION�19.��Section 351.156, Finance Code, as added by
�	Chapter 1220 (H.B. 2138), Acts of the 80th Legislature, Regular
�	Session, 2007, is amended to read as follows:
�	��Sec.�351.156.��LICENSE SUSPENSION OR REVOCATION. �After
�	notice and a hearing the commissioner may suspend or revoke a
�	license if the commissioner finds that:
�	��(1)��the license holder failed to pay the annual
�	license fee, an examination fee, an investigation fee, or another
�	charge imposed by the commissioner under this chapter;
�	��(2)��the license holder, knowingly or without the
�	exercise of due care, violated this chapter or Section 32.06 or
�	32.065, Tax Code, or a rule adopted or an order issued under this
�	chapter or Section 32.06 or 32.065, Tax Code; [or]
�	��(3)��a fact or condition exists that, if it had existed
�	or had been known to exist at the time of the original application
�	for the license, clearly would have justified the commissioner's
�	denial of the application; or
�	��(4)��the license holder has failed to ensure that an
�	individual acting as a residential mortgage loan originator, as
�	defined by Section 180.002, in the making, transacting, or
�	negotiating of a property tax loan for a principal dwelling is
�	licensed under this chapter in accordance with Section 351.0515.
�	��SECTION�20.��Section 411.095, Government Code, is amended to
�	read as follows:
�	��Sec.�411.095.��ACCESS TO CRIMINAL HISTORY RECORD
�	INFORMATION: CONSUMER CREDIT COMMISSIONER. [~~(a)~~] �The consumer
�	credit commissioner is entitled to obtain from the department
�	criminal history record information that relates to a person who is
�	an applicant for or holder of a license under Chapter 342, 347, 348,
�	351, or 371, Finance Code.
�	��SECTION�21.��Section 411.1385, Government Code, is amended
�	to read as follows:
�	��Sec.�411.1385.��ACCESS TO CRIMINAL HISTORY RECORD
�	INFORMATION:��SAVINGS AND MORTGAGE LENDING COMMISSIONER. (a) �The
�	savings and mortgage lending commissioner is entitled to obtain
�	from the department criminal history record information maintained
�	by the department that relates to a person who is an applicant for
�	or holder of a [~~mortgage broker or loan officer~~] license issued
�	under Chapter 156 or 157, Finance Code.
�	��(b)��Criminal history record information obtained by the
�	savings and mortgage lending commissioner under Subsection (a) with
�	respect to the issuance of a license under Chapter 156, Finance
�	Code, may be released or disclosed only as provided by Section
�	156.206, Finance Code.
�	��SECTION�22.��For purposes of implementing an orderly and
�	efficient process for licensing and registering residential
�	mortgage loan originators that meets the requirements of the
�	federal Secure and Fair Enforcement for Mortgage Licensing Act of
�	2008 (Pub. L. No. 110-289), Chapter 180, Finance Code, as added by
�	this Act, Section 15.4024, Finance Code, as added by this Act, and
�	Chapters 156, 157, 342, 347, 348, and 351, Finance Code, as amended
�	by this Act, the Finance Commission of Texas, as soon as practicable
�	after the effective date of this Act, may adopt rules and establish
�	interim procedures for licensing individuals engaging in or
�	conducting the business of a residential mortgage loan originator
�	in this state and for the approval or denial of applications for
�	licenses authorizing individuals to engage in business as a
�	residential mortgage loan originator. �For individuals authorized
�	by state law to engage in residential mortgage loan origination
�	activities immediately before the effective date of this Act, the
�	Finance Commission of Texas may establish expedited review and
�	licensing procedures.
�	��SECTION�23.��(a) In this section, "Nationwide Mortgage
�	Licensing System and Registry," "regulatory official,"
�	"residential mortgage loan originator," and "unique identifier"
�	have the meanings assigned by Section 180.002, Finance Code, as
�	added by this Act.
�	��(b)��On application by a person for a license, registration,
�	and unique identifier as a residential mortgage loan originator
�	with the Nationwide Mortgage Licensing System and Registry, the
�	regulatory official may determine that the applicant meets the
�	prelicensing education courses and written test requirements of
�	Sections 180.056 and 180.057, Finance Code, as added by this Act, if
�	the applicant, on the effective date of this Act, is acting as a
�	state-licensed residential mortgage loan originator in this state
�	under Chapter 156, Finance Code. The applicant must be in good
�	standing with the regulatory official to obtain an exemption under
�	this subsection.
�	��(c)��The regulatory official may determine an exemption
�	under Subsection (b) of this section by rule of the Finance
�	Commission of Texas.
�	��(d)��This section does not grant a residential mortgage loan
�	originator a waiver from the continuing education requirements
�	prescribed by the regulatory official and the federal Secure and
�	Fair Enforcement for Mortgage Licensing Act of 2008 (Pub. L. No.
�	110-289).
�	��SECTION�24.��(a) Except as provided by Subsection (b) of
�	this section, an individual is not required to comply with Chapter
�	180, Finance Code, as added by this Act, and Chapters 156, 157, 342,
�	347, 348, and 351, Finance Code, as amended by this Act, until the
�	later of:
�	��(1)��July 31, 2010; or
�	��(2)��a subsequent date that is approved by the
�	secretary of the United States Department of Housing and Urban
�	Development under the authority granted under the federal Secure
�	and Fair Enforcement for Mortgage Licensing Act of 2008 (Pub. L. No.
�	110-289).
�	��(b)��An individual authorized to engage in residential
�	mortgage loan origination activities in this state as of July 31,
�	2009, is not required to comply with Chapter 180, Finance Code, as
�	added by this Act, and Chapters 156, 157, 342, 347, 348, and 351,
�	Finance Code, as amended by this Act, until the later of:
�	��(1)��July 31, 2011; or
�	��(2)��a subsequent date approved by the secretary of the
�	United States Department of Housing and Urban Development under the
�	authority granted under the federal Secure and Fair Enforcement for
�	Mortgage Licensing Act of 2008 (Pub. L. No. 110-289).
�	��SECTION�25.��This Act takes effect immediately if it
�	receives a vote of two-thirds of all the members elected to each
�	house, as provided by Section 39, Article III, Texas Constitution.��
�	If this Act does not receive the vote necessary for immediate
�	effect, this Act takes effect September 1, 2009.
�
�
�	______________________________	______________________________
�	��President of the Senate	Speaker of the House��
�
�
�	��I certify that H.B. No. 10 was passed by the House on April
�	28, 2009, by the following vote:��Yeas 148, Nays 0, 1 present, not
�	voting; and that the House concurred in Senate amendments to H.B.
�	No. 10 on May 29, 2009, by the following vote:��Yeas 143, Nays 0, 1
�	present, not voting.
�
�	______________________________
�	Chief Clerk of the House��
�
�	��I certify that H.B. No. 10 was passed by the Senate, with
�	amendments, on May 25, 2009, by the following vote:��Yeas 31, Nays
�	0.
�
�	______________________________
�	Secretary of the Senate��
�	APPROVED: __________________
�	��Date��
�	�
�	�� __________________
�	��Governor��