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  H.B. No. 10
 
 
 
 
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