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AN ACT
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relating to the registration of a registered financial services |
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company and the authority of its exclusive agents to act as mortgage |
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brokers. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 156.002, Finance Code, is amended by |
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adding Subdivision (11) to read as follows: |
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(11) "Registered financial services company" means a |
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person registered under Section 156.214. |
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SECTION 2. Section 156.202, Finance Code, is amended to |
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read as follows: |
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Sec. 156.202. EXEMPTIONS. The following persons are exempt |
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from this [This] chapter [does not apply to]: |
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(1) any of the following entities or an employee of any |
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of the following entities provided the employee is acting for the |
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benefit of the employer: |
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(A) a bank, savings bank, or savings and loan |
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association, or a subsidiary or an affiliate of a bank, savings |
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bank, or savings and loan association; |
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(B) a state or federal credit union, or a |
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subsidiary, affiliate, or credit union service organization of a |
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state or federal credit union; |
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(C) an insurance company licensed or authorized |
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to do business in this state under the Insurance Code; |
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(D) a mortgage banker registered under Chapter |
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157; |
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(E) an organization that qualifies for an |
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exemption from state franchise and sales tax as a 501(c)(3) |
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organization; |
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(F) a Farm Credit System institution; or |
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(G) a political subdivision of this state |
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involved in affordable home ownership programs; |
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(2) an individual who makes a mortgage loan from the |
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individual's own funds to a spouse, former spouse, or persons in the |
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lineal line of consanguinity of the individual lending the money; |
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(3) an owner of real property who makes a mortgage loan |
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to a purchaser of the property for all or part of the purchase price |
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of the real estate against which the mortgage is secured; [or] |
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(4) an individual who: |
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(A) makes a mortgage loan from the individual's |
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own funds; |
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(B) is not an authorized lender under Chapter |
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342, Finance Code; and |
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(C) does not regularly engage in the business of |
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making or brokering mortgage loans; or |
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(5) an individual who is an exclusive agent of a |
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registered financial services company under a written agreement |
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prohibiting the individual from soliciting, processing, |
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negotiating, or placing a mortgage loan with a person other than the |
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registered financial services company or an affiliate of that |
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company. |
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SECTION 3. Subchapter C, Chapter 156, Finance Code, is |
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amended by adding Section 156.214 to read as follows: |
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Sec. 156.214. REGISTERED FINANCIAL SERVICES COMPANY. (a) |
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A registered financial services company may perform the services of |
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a mortgage broker as if the company were licensed as a mortgage |
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broker under this chapter, through individuals who are the |
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exclusive agents of the registered financial services company. |
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(b) To be eligible to register as a registered financial |
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services company, a person must: |
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(1) be a depository institution exempt from this |
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chapter under Section 156.202(1)(A) or (B) and chartered and |
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regulated by the Office of Thrift Supervision or the Office of the |
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Comptroller of the Currency, or be a subsidiary or affiliate of the |
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institution; |
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(2) provide the commissioner with satisfactory |
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evidence of an undertaking of accountability in a form acceptable |
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to the commissioner, supported by a surety bond equal to $1 million |
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to cover the person's responsibility for mortgage broker activities |
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of each exclusive agent; |
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(3) provide a business plan satisfactory to the |
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commissioner that sets forth the person's plan to provide education |
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to its exclusive agents, handle consumer complaints relating to its |
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exclusive agents, and supervise the mortgage broker activities of |
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its exclusive agents; |
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(4) pay an annual registration fee of the lesser of: |
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(A) one-half of the license fee for a loan |
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officer under Section 156.203(c)(1), multiplied by the number of |
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exclusive agents under contract to act for the person in this state; |
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or |
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(B) $200,000; and |
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(5) designate an officer of the person to be |
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responsible for the activities of the exclusive agents. |
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(c) If the commissioner determines that a person has met the |
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requirements of Subsection (b), the commissioner shall issue a |
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registration to the person. The registration is valid for one year |
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and may be renewed on or before its expiration date. A person may |
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renew an expired registration in the same manner as a person may |
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renew an expired license under Section 156.2081(b). |
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(d) A registered financial services company is subject to |
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Subchapters D and E as if the company were licensed as a mortgage |
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broker. |
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(e) No person may be an exclusive agent of a registered |
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financial services company without the prior consent of the |
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commissioner if the individual has: |
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(1) been convicted of a criminal offense involving |
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dishonesty, breach of trust, or money laundering; or pled guilty or |
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nolo contendere in connection with a prosecution for an offense |
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described in this subdivision; or agreed to enter into a pretrial |
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diversion or similar program in connection with a prosecution for |
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an offense described in this subdivision; or |
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(2) been the subject of a revocation or suspension of |
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any professional license in this state or any other jurisdiction. |
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(f) Prior to permitting an exclusive agent to solicit, |
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process, negotiate, or place a mortgage loan, the registered |
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financial services company shall submit to the commissioner such |
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information as the commissioner may require relating to the person |
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together with a fingerprint imprint of the person. The |
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commissioner shall obtain criminal history record information as |
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provided in Section 156.206(b). The commissioner may assess a fee |
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in an amount determined by the finance commission to cover the cost |
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of the criminal background check. This section does not apply to a |
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person who is licensed as a mortgage broker or loan officer under |
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Chapter 156 at the time he becomes an exclusive agent of a |
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registered financial services company. |
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(g) The commissioner shall notify the person and the |
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registered financial services company of his determination as to |
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whether or not the person is eligible to be an exclusive agent under |
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Subsection (a). A person who is determined to be ineligible may |
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appeal the decision of the commissioner in the same manner as an |
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appeal may be made under Section 156.209. |
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SECTION 4. This Act takes effect September 1, 2007. |
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______________________________ |
______________________________ |
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President of the Senate |
Speaker of the House |
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I certify that H.B. No. 1716 was passed by the House on April |
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12, 2007, by the following vote: Yeas 138, Nays 1, 1 present, not |
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voting. |
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______________________________ |
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Chief Clerk of the House |
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I certify that H.B. No. 1716 was passed by the Senate on May |
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10, 2007, by the following vote: Yeas 31, Nays 0. |
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______________________________ |
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Secretary of the Senate |
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APPROVED: _____________________ |
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Date |
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_____________________ |
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Governor |