H.B. No. 2779

	AN ACT
	relating to the regulation of certain mortgage banker employees who
	are residential mortgage loan originators; providing penalties.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  Section 157.001, Finance Code, is amended to
	read as follows:
	Sec. 157.001.  SHORT TITLE. This chapter may be cited as the
	Mortgage Banker Registration and Residential Mortgage Loan
	Originator License Act.
	SECTION 2.  Section 157.002, Finance Code, is amended to
	read as follows:
	Sec. 157.002.  DEFINITIONS. In this chapter:
	(1)  "Commissioner" means the savings and mortgage
	lending commissioner.
	(2)  "Disciplinary action" means any order by the
	commissioner that requires one or more of the following:
	(A)  suspension or revocation of a residential
	mortgage loan originator license under this chapter;
	(B)  probation of a suspension or revocation of a
	residential mortgage loan originator license under this chapter on
	terms and conditions that the commissioner determines appropriate;
	(C)  a reprimand of a person with a residential
	mortgage loan originator license under this chapter; or
	(D)  an administrative penalty imposed on a person
	holding a residential mortgage loan originator license under this
	chapter.
	(3)  "Finance commission" means the Finance Commission
	of Texas.
	(4)  "Mortgage banker" means a person who:
	(A)  accepts an application for a residential
	mortgage loan or makes a residential mortgage loan; and
	(B)  is an approved or authorized:
	(i)  mortgagee with direct endorsement
	underwriting authority granted by the United States Department of
	Housing and Urban Development;
	(ii)  seller or servicer of the Federal
	National Mortgage Association or the Federal Home Loan Mortgage
	Corporation; or
	(iii)  issuer for the Government National
	Mortgage Association.
	(5)  "Residential mortgage [(3) "Mortgage] loan" means
	a debt secured by a [first] lien on residential real property
	designed principally for occupancy by one to four families that is
	created by a deed of trust, security deed, or other security
	instrument.
	(6)  "Residential mortgage loan originator" has the
	meaning assigned by Section 180.002.
	SECTION 3.  Section 157.003, Finance Code, is amended by
	amending Subsections (b), (c), and (d) and adding Subsection (b-1)
	to read as follows:
	(b)  To register under this chapter, a mortgage banker shall
	file with the commissioner a statement that contains:
	(1)  the name and address of the mortgage banker;
	(2)  the name, address, and telephone number of the
	representative of the mortgage banker to be contacted regarding a
	written complaint; [and]
	(3)  a list of the locations in this state at which the
	person conducts the business of a mortgage banker; and
	(4)  a list of employees of the mortgage banker who are
	residential mortgage loan originators.
	(b-1)  The list of mortgage banker employees required by
	Subsection (b)(4) must be promptly updated to reflect any changes,
	and the updated list must be submitted to the commissioner.
	(c)  An employee of a mortgage banker who is not a
	residential mortgage loan originator is not required to register or
	be licensed under this chapter.
	(d)  Except as provided by Section 157.008(b), the [The]
	commissioner may not require a mortgage banker to provide
	information other than information contained in the registration
	statement.
	SECTION 4.  Section 157.004, Finance Code, is amended to
	read as follows:
	Sec. 157.004.  EXEMPTIONS. This chapter does not apply to:
	(1)  a federally insured bank, savings bank, savings
	and loan association, Farm Credit System Institution, or credit
	union;
	(2)  a [an affiliate or] subsidiary of a federally
	insured bank, savings bank, savings and loan association, Farm
	Credit System Institution, or credit union;
	(3)  a person licensed as a mortgage broker under
	Chapter 156; [or]
	(4)  an authorized lender licensed under Chapter 342;
	or
	(5)  the state or a governmental agency, political
	subdivision, or other instrumentality of the state, or an employee
	of the state or a governmental agency, political subdivision, or
	instrumentality of the state who is acting within the scope of the
	person's employment [if:
	[(A)     the authorized lender includes with an
	application for a mortgage loan a notice that is substantially
	similar to the notice required by Section 157.007 and provides the
	method of submitting complaints to the consumer credit
	commissioner;
	[(B)     the authorized lender uses the forms adopted
	by the Finance Commission of Texas under Section 157.011(b); and
	[(C)     the Finance Commission of Texas determines
	by rule that the consumer credit commissioner may suspend or revoke
	a license issued under Chapter 342 if the authorized lender engages
	in unlawful or unfair practices while making a mortgage loan].
	SECTION 5.  Section 157.007, Finance Code, is amended to
	read as follows:
	Sec. 157.007.  DISCLOSURE STATEMENT.  A mortgage banker
	shall include the following notice to a residential mortgage loan
	applicant with an application for a residential mortgage loan:
	"COMPLAINTS REGARDING MORTGAGE BANKERS SHOULD BE SENT TO THE
	DEPARTMENT OF SAVINGS AND MORTGAGE LENDING,
	______________________________ (street address of the Department
	of Savings and Mortgage Lending).  A TOLL-FREE CONSUMER HOTLINE IS
	AVAILABLE AT _______________ (telephone number of the Department of
	Savings and Mortgage Lending's toll-free consumer hotline)."
	SECTION 6.  Section 157.009(d), Finance Code, is amended to
	read as follows:
	(d)  The commissioner may revoke the registration of a
	mortgage banker after considering a complaint filed under this
	chapter if the commissioner concludes that the mortgage banker has
	engaged in an intentional course of conduct to violate federal or
	state law or has engaged in an intentional course of conduct that
	constitutes improper, fraudulent, or dishonest dealings or has
	engaged in a negligent course of conduct exhibited through pattern
	or practice. The commissioner shall recite the basis of the
	decision in an order revoking the registration.
	SECTION 7.  Section 157.011, Finance Code, is amended by
	adding Subsection (c) to read as follows:
	(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).
	SECTION 8.  Chapter 157, Finance Code, is amended by adding
	Sections 157.012 through 157.031 to read as follows:
	Sec. 157.012.  LICENSE REQUIRED FOR CERTAIN EMPLOYEES OF
	MORTGAGE BANKERS. (a) 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.
	(b)  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).
	(c)  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 (a), 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.
	Sec. 157.013.  APPLICATION FOR LICENSE; FEES. (a) An
	application for a residential mortgage loan originator license must
	be:
	(1)  in writing;
	(2)  under oath; and
	(3)  on the form prescribed by the commissioner.
	(b)  An application for a residential mortgage loan
	originator license must be accompanied by an application fee in an
	amount determined by the commissioner, not to exceed $500.
	(c)  An application fee under this section is not refundable
	and may not be credited or applied to any other fee or indebtedness
	owed by the person paying the fee.
	Sec. 157.014.  ISSUANCE OF RESIDENTIAL MORTGAGE LOAN
	ORIGINATOR LICENSE. (a) The commissioner shall issue a
	residential mortgage loan originator license to an applicant if the
	commissioner determines that the applicant meets all requirements
	and conditions for the license.
	(b)  Each residential mortgage loan originator license must
	have a unique identifier as provided by Chapter 180.
	Sec. 157.015.  RENEWAL OF LICENSE. (a) A residential
	mortgage loan originator license issued under this chapter is valid
	for one year and may be renewed on or before its expiration date.
	(b)  Each residential mortgage loan originator license will
	be renewed for not more than a one-year period expiring December 31
	of each calendar year.
	(c)  An application for renewal of a residential mortgage
	loan originator license shall meet the requirements of Section
	157.013.
	(d)  An application for renewal of a residential mortgage
	loan originator license must meet all of the standards and
	qualifications for license renewal under Chapter 180.
	(e)  The commissioner shall issue a renewal residential
	mortgage loan originator license if the commissioner finds that the
	applicant meets all of the requirements and conditions for the
	license.
	(f)  The commissioner may deny the renewal application for a
	residential mortgage loan originator license for the same reasons
	and grounds on which the commissioner could have denied an original
	application for a license.
	(g)  The commissioner may deny the renewal application for a
	residential mortgage loan originator license if:
	(1)  the person seeking the renewal of the residential
	mortgage loan originator license is in violation of this chapter or
	Chapter 180, an applicable rule adopted under this chapter or
	Chapter 180, or any order previously issued to the person by the
	commissioner;
	(2)  the person seeking renewal of the residential
	mortgage loan originator license is in default in the payment of any
	administrative penalty, fee, charge, or other indebtedness owed
	under this title;
	(3)  the person seeking the renewal of the residential
	mortgage loan originator license is in default on a student loan
	administered by the Texas Guaranteed Student Loan Corporation,
	under Section 57.491, Education Code; or
	(4)  during the current term of the license, the
	commissioner becomes aware of any fact that would have been grounds
	for denial of an original license if the fact had been known by the
	commissioner on the date the license was granted.
	Sec. 157.016.  RENEWAL AFTER EXPIRATION OF LICENSE; NOTICE.
	(a) A person whose residential mortgage loan originator license
	has expired may not engage in activities that require a license
	until the license has been renewed.
	(b)  A person whose residential mortgage loan originator
	license has not been renewed before January 1 but who is otherwise
	eligible to renew a license, and does so before March 1, may renew
	the license by paying the commissioner a reinstatement fee in an
	amount that is equal to 150 percent of the required renewal fee.
	(c)  A person whose residential mortgage loan originator
	license has not been renewed before March 1 may not renew the
	license. The person may obtain a new license by complying with the
	requirements and procedures for obtaining an original license.
	(d)  Not later than the 60th day before the date a person's
	residential mortgage loan originator license is scheduled to
	expire, the commissioner or the commissioner's authorized
	representative shall send written notice of the impending
	expiration to the person at the person's last known address
	according to the official licensing records.
	Sec. 157.017.  DENIAL OF APPLICATIONS AND RENEWALS. (a) If
	the commissioner declines or fails to issue or renew a residential
	mortgage loan originator license, the commissioner shall promptly
	give written notice to the applicant that the application or
	renewal, as appropriate, was denied.
	(b)  Before the applicant or a person requesting the renewal
	of a residential mortgage loan originator license may appeal a
	determination to a district court as provided by Section
	157.026(d), the applicant or person must file with the
	commissioner, not later than the 10th day after the date on which
	notice under Subsection (a) is received, an appeal of the ruling
	requesting a time and place for a hearing before an administrative
	law judge designated by the commissioner.
	(c)  The designated administrative law judge shall set the
	time and place for a hearing requested under Subsection (b) not
	later than the 90th day after the date on which the appeal is
	received. The administrative law judge shall provide at least 10
	days' notice of the hearing to the applicant or person requesting
	the renewal. The time of the hearing may be continued periodically
	with the consent of the applicant or person requesting the renewal.
	After the hearing, the commissioner shall enter an order relative
	to the applicant based on the findings of fact, conclusions of law,
	and recommendations of the administrative law judge.
	(d)  If an applicant or person requesting the renewal fails
	to request a hearing under this section, the commissioner's refusal
	to issue or renew a license is final and not subject to review by the
	courts.
	(e)  A hearing held under this section is governed by Chapter
	2001, Government Code. An appeal of a final order issued under this
	section may be made in accordance with Section 157.026(d).
	(f)  A person who requests a hearing under this section shall
	be required to pay a deposit to secure the payment of the costs of
	the hearing in an amount to be determined by the commissioner not to
	exceed $500. The entire deposit shall be refunded to the person if
	the person prevails in the contested case hearing. If the person
	does not prevail, any portion of the deposit in excess of the costs
	of the hearing assessed against that person shall be refunded.
	(g)  A person whose application for a license has been denied
	is not eligible to be licensed for a period of two years after the
	date the denial becomes final, or a shorter period determined by the
	commissioner after evaluating the specific circumstances of the
	person's subsequent application. The finance commission may adopt
	rules to provide conditions for which the commissioner may shorten
	the time for eligibility for a new license.
	Sec. 157.018.  PROBATIONARY AND PROVISIONAL LICENSES. (a)
	The commissioner may issue probationary and provisional licenses.
	(b)  The finance commission by rule shall adopt reasonable
	terms and conditions for probationary and provisional licenses.
	Sec. 157.019.  MODIFICATION OF LICENSE. (a) Before the 10th
	day preceding the effective date of an address change, a mortgage
	banker employee who is a residential mortgage loan originator shall
	notify the commissioner or authorized designee in writing of the
	new address.
	(b)  A person licensed under this chapter must notify the
	commissioner or the commissioner's authorized designee not later
	than the 10th day after the date of any change in the person's name
	for the issuance of an amended license.
	Sec. 157.020.  ANNUAL CALL REPORT. (a) Each mortgage banker
	shall file an annual call report with the commissioner or the
	commissioner's authorized designee on a form prescribed by the
	commissioner or authorized designee. The report is a statement of
	condition of the mortgage banker and the mortgage banker's
	operations, including financial statements and production activity
	volumes.
	(b)  The information contained in the call report related to
	residential mortgage loan origination volume or other trade
	information is confidential and may not be disclosed by the
	commissioner or authorized designee.
	Sec. 157.021.  INSPECTION; INVESTIGATIONS. (a) The
	commissioner may conduct an inspection of a person licensed as a
	residential mortgage loan originator as the commissioner
	determines necessary to determine whether the person is complying
	with this chapter, Chapter 180, and applicable rules. An
	inspection under this subsection may include inspection of the
	books, records, documents, operations, and facilities of the
	person. The commissioner may request the assistance and
	cooperation of the mortgage banker in providing needed documents
	and records. The commissioner may not make a request of the
	mortgage banker for documents and records unrelated to the person
	being investigated or inspected. The commissioner may share
	evidence of criminal activity gathered during an inspection or
	investigation with any state or federal law enforcement agency.
	(b)  On the signed written complaint of a person, the
	commissioner shall investigate the actions and records of a person
	licensed as a residential mortgage loan originator if the
	complaint, or the complaint and documentary or other evidence
	presented in connection with the complaint, provides a reasonable
	cause. Before commencing an investigation, the commissioner must
	notify the licensed residential mortgage loan originator in writing
	of the complaint and that the commissioner intends to investigate
	the matter.
	(c)  For reasonable cause, the commissioner at any time may
	investigate a person licensed as a residential mortgage loan
	originator to determine whether the person is complying with this
	chapter, Chapter 180, and applicable rules.
	(d)  The commissioner may conduct an undercover or covert
	investigation only if the commissioner, after due consideration of
	the circumstances, determines that the investigation is necessary
	to prevent immediate harm and to carry out the purposes of this
	chapter.
	(e)  The finance commission by rule shall provide guidelines
	to govern an inspection or investigation, including rules to:
	(1)  determine the information and records of the
	licensed residential mortgage loan originator to which the
	commissioner may demand access during an inspection or an
	investigation; and
	(2)  establish what constitutes reasonable cause for an
	investigation.
	(f)  Information obtained by the commissioner during an
	inspection or an investigation is confidential unless disclosure of
	the information is permitted or required by other law.
	(g)  The commissioner may share information gathered during
	an investigation or inspection with any state or federal agency
	only if the commissioner determines there is a valid reason for the
	sharing.
	Sec. 157.022.  ISSUANCE AND ENFORCEMENT OF SUBPOENA. (a)
	During an investigation, the commissioner may issue a subpoena that
	is addressed to a peace officer of this state or other person
	authorized by law to serve citation or perfect service. The
	subpoena may require a person to give a deposition, produce
	documents, or both.
	(b)  If a person disobeys a subpoena or if a person appearing
	in a deposition in connection with the investigation refuses to
	testify, the commissioner may petition a district court in Travis
	County to issue an order requiring the person to obey the subpoena,
	testify, or produce documents relating to the matter. The court
	shall promptly set an application to enforce a subpoena issued
	under Subsection (a) for hearing and shall cause notice of the
	application and the hearing to be served on the person to whom the
	subpoena is directed.
	Sec. 157.023.  ADMINISTRATIVE PENALTY. (a) The
	commissioner, after notice and opportunity for a hearing, may
	impose an administrative penalty on a person licensed as a
	residential mortgage loan originator under this chapter who
	violates this chapter or a rule or order adopted under this chapter.
	(b)  The amount of the penalty may not exceed $2,500, and
	each day a violation continues or occurs is a separate violation for
	the purpose of imposing a penalty. The amount shall be based on:
	(1)  the seriousness of the violation, including the
	nature, circumstances, extent, and gravity of the violation;
	(2)  the history of previous violations;
	(3)  the amount necessary to deter a future violation;
	(4)  efforts to correct the violation; and
	(5)  any other matter that justice may require.
	(c)  The enforcement of the penalty may be stayed during the
	time the order is under judicial review if the person pays the
	penalty to the clerk of the court or files a supersedeas bond with
	the court in the amount of the penalty. A person who cannot afford
	to pay the penalty or file the bond may stay the enforcement by
	filing an affidavit in the manner required by the Texas Rules of
	Civil Procedure for a party who cannot afford to file security for
	costs, subject to the right of the commissioner to contest the
	affidavit as provided by those rules.
	(d)  The attorney general may sue to collect the penalty.
	(e)  An appeal of an administrative penalty under this
	section is considered to be a contested case under Chapter 2001,
	Government Code.
	Sec. 157.024.  DISCIPLINARY ACTION; CEASE AND DESIST ORDER.
	(a) The commissioner may order disciplinary action against a
	licensed residential mortgage loan originator when the
	commissioner, after notice and opportunity for a hearing, has
	determined that the person:
	(1)  obtained a license, including a renewal of a
	license, under this chapter through a false or fraudulent
	representation or made a material misrepresentation in an
	application for a license or for the renewal of a license under this
	chapter;
	(2)  published or caused to be published an
	advertisement related to the business of a residential mortgage
	loan originator that:
	(A)  was misleading;
	(B)  was likely to deceive the public;
	(C)  in any manner tended to create a misleading
	impression;
	(D)  failed to identify as a licensed residential
	mortgage loan originator the person causing the advertisement to be
	published; or
	(E)  violated federal or state law;
	(3)  while performing an act for which a license under
	this chapter is required, engaged in conduct that constitutes
	improper, fraudulent, or dishonest dealings;
	(4)  entered a plea of nolo contendere to or was
	convicted of a criminal offense that is a felony or that involves
	fraud or moral turpitude in a court of this or another state or in a
	federal court;
	(5)  failed to use a fee collected in advance of closing
	a residential mortgage loan for a purpose for which the fee was
	paid;
	(6)  failed within a reasonable time to honor a check
	issued to the commissioner after the commissioner mailed a request
	for payment by mail to the person's last known business address as
	reflected in the commissioner's records;
	(7)  induced or attempted to induce a party to a
	contract to breach the contract so the person could make a
	residential mortgage loan;
	(8)  published or circulated an unjustified or
	unwarranted threat of legal proceedings in matters related to the
	person's actions or services as a licensed residential mortgage
	loan originator;
	(9)  aided, abetted, or conspired with a person to
	circumvent the requirements of this chapter;
	(10)  acted in the dual capacity of a licensed
	residential mortgage loan originator and real estate broker,
	salesperson, or attorney in a transaction without the knowledge and
	written consent of the mortgage applicant or in violation of
	applicable requirements under federal law;
	(11)  discriminated against a prospective borrower on
	the basis of race, color, religion, sex, national origin, ancestry,
	familial status, or disability;
	(12)  failed or refused on demand to:
	(A)  produce a document, book, or record
	concerning a residential mortgage loan transaction conducted by the
	licensed residential mortgage loan originator for inspection by the
	commissioner or the commissioner's authorized personnel or
	representative;
	(B)  give the commissioner or the commissioner's
	authorized personnel or representative free access to the books or
	records relating to the residential mortgage loan originator's
	business kept by any other person or any business entity through
	which the residential mortgage loan originator conducts
	residential mortgage loan origination activities; or
	(C)  provide information requested by the
	commissioner as a result of a formal or informal complaint made to
	the commissioner;
	(13)  failed without just cause to surrender, on
	demand, a copy of a document or other instrument coming into the
	residential mortgage loan originator's possession that was
	provided to the residential mortgage loan originator by another
	person making the demand or that the person making the demand is
	under law entitled to receive;
	(14)  disregarded or violated this chapter, a rule
	adopted under this chapter, or an order issued by the commissioner
	under this chapter;
	(15)  provided false information to the commissioner
	during the course of an investigation or inspection;
	(16)  paid compensation to a person who is not licensed
	or exempt under this chapter for acts for which a license under this
	chapter is required; or
	(17)  established an association, by employment or
	otherwise, with a person not licensed or exempt under this chapter
	who was expected or required to act as a residential mortgage loan
	originator.
	(b)  The commissioner may also order disciplinary action
	against a licensed residential mortgage loan originator, after
	notice and opportunity for a hearing, if the commissioner, during
	the current term of the license, becomes aware of any fact that
	would have been grounds for denial of an original license if the
	fact had been known by the commissioner on the date the license was
	granted.
	(c)  In addition to disciplinary action by the commissioner
	authorized under Subsections (a) and (b), the commissioner, if the
	commissioner has reasonable cause to believe that a licensed
	residential mortgage loan originator has violated or is about to
	violate this section, may issue without notice and hearing an order
	to cease and desist continuing a particular action or an order to
	take affirmative action, or both, to enforce compliance with this
	chapter.
	(d)  An order issued under Subsection (c) must contain a
	reasonably detailed statement of the facts on which the order is
	made. If a residential mortgage loan originator against whom the
	order is made requests a hearing, the commissioner shall set and
	give notice of a hearing before the commissioner or an
	administrative law judge. The hearing shall be governed by Chapter
	2001, Government Code. Based on the findings of fact, conclusions
	of law, and recommendations of the administrative law judge, the
	commissioner by order may find that a violation has occurred or not
	occurred.
	(e)  If a hearing is not requested under Subsection (d) not
	later than the 30th day after the date on which an order is made, the
	order is considered final and not appealable.
	(f)  The commissioner, after giving notice, may impose
	against a residential mortgage loan originator who violates a cease
	and desist order an administrative penalty in an amount not to
	exceed $1,000 for each day of the violation. In addition to any
	other remedy provided by law, the commissioner may institute in
	district court a suit for injunctive relief and to collect the
	administrative penalty. A bond is not required of the commissioner
	with respect to injunctive relief granted under this subsection.
	(g)  For purposes of Subsection (a), a residential mortgage
	loan originator is considered convicted if a sentence is imposed on
	that person, that person receives community supervision, including
	deferred adjudication community supervision, or the court defers
	final disposition of that person's case.
	(h)  If a residential mortgage loan originator fails to pay
	an administrative penalty that has become final or fails to comply
	with an order of the commissioner that has become final, in addition
	to any other remedy provided under law, the commissioner, on not
	less than 10 days' notice to the residential mortgage loan
	originator, may without a prior hearing suspend the residential
	mortgage loan originator's license. The suspension continues until
	the residential mortgage loan originator has complied with the
	administrative order or paid the administrative penalty. During
	the period of suspension, the residential mortgage loan originator
	may not originate a residential mortgage loan, as defined by
	Section 180.002.
	(i)  An order of suspension under Subsection (h) may be
	appealed. An appeal is a contested case governed by Chapter 2001,
	Government Code. A hearing of an appeal of an order of suspension
	issued under Subsection (h) shall be held not later than the 15th
	day after the date of receipt of the notice of appeal. The
	appellant shall be provided at least three days' notice of the time
	and place of the hearing.
	(j)  An order revoking the license of a residential mortgage
	loan originator may provide that the person is prohibited, without
	previously obtaining written consent of the commissioner, from:
	(1)  engaging in the business of originating or making
	residential mortgage loans, as defined by Section 180.002;
	(2)  otherwise affiliating with a person for the
	purpose of engaging in the business of originating or making
	residential mortgage loans, as defined by Section 180.002; and
	(3)  being an employee, officer, director, manager,
	shareholder, member, agent, contractor, or processor of a mortgage
	banker, mortgage broker, or mortgage broker loan officer.
	(k)  On notice and opportunity for a hearing, the
	commissioner may suspend the license of a residential mortgage loan
	originator under this chapter if an indictment or information is
	filed or returned alleging that the person committed a criminal
	offense involving fraud, theft, or dishonesty. The suspension
	continues until the criminal case is dismissed or the person is
	acquitted.
	Sec. 157.025.  RESTITUTION. The commissioner may order a
	residential mortgage loan originator to make restitution for any
	amount received by that person in violation of this chapter.
	Sec. 157.026.  HEARINGS AND JUDICIAL REVIEW. (a) The
	commissioner may employ an enforcement staff to investigate and
	prosecute complaints made against residential mortgage loan
	originators licensed under this chapter. The commissioner may
	employ an administrative law judge to conduct hearings under this
	section. The commissioner may collect and deposit any court costs
	assessed under a final order.
	(b)  If the commissioner proposes to suspend or revoke a
	license of a residential mortgage loan originator or if the
	commissioner refuses to issue or renew a license to an applicant for
	a residential mortgage loan originator license or person requesting
	a renewal of a residential mortgage loan originator license under
	this chapter, the applicant or license holder is entitled to a
	hearing before the commissioner or an administrative law judge who
	shall make a proposal for decision to the commissioner. The
	commissioner or administrative law judge shall prescribe the time
	and place of the hearing. The hearing is governed by Chapter 2001,
	Government Code.
	(c)  The commissioner or administrative law judge may issue
	subpoenas for the attendance of witnesses and the production of
	records or documents. Process issued by the commissioner or the
	administrative law judge may extend to all parts of the state and
	may be served by any person designated by the commissioner or
	administrative law judge.
	(d)  An individual aggrieved by a ruling, order, or decision
	of the commissioner has the right to appeal to a district court in
	the county in which the hearing was held. An appeal under this
	subsection is governed by Chapter 2001, Government Code.
	Sec. 157.027.  CIVIL ACTIONS AND INJUNCTIVE RELIEF. (a) A
	residential mortgage loan applicant injured by a violation of this
	chapter by a residential mortgage loan originator may bring an
	action for recovery of actual monetary damages and reasonable
	attorney's fees and court costs.
	(b)  The commissioner, the attorney general, or a
	residential mortgage loan applicant may bring an action to enjoin a
	violation of this chapter by a residential mortgage loan
	originator.
	(c)  A remedy provided by this section is in addition to any
	other remedy provided by law.
	Sec. 157.028.  BURDEN OF PROOF TO ESTABLISH AN EXEMPTION.
	The burden of proving an exemption in a proceeding or action brought
	under this chapter is on the person claiming the benefit of the
	exemption.
	Sec. 157.029.  RELIANCE ON WRITTEN NOTICES FROM THE
	COMMISSIONER. A person does not violate this chapter with respect
	to an action taken or omission made in reliance on a written notice,
	written interpretation, or written report from the commissioner
	unless a subsequent amendment to this chapter or a rule adopted
	under this chapter affects the commissioner's notice,
	interpretation, or report.
	Sec. 157.030.  COMPLETION OF RESIDENTIAL MORTGAGE
	ORIGINATION SERVICES. (a) On disbursement of mortgage proceeds to
	or on behalf of the residential mortgage loan applicant, the
	residential mortgage loan originator who assisted the applicant in
	obtaining the residential mortgage loan is considered to have
	completed the performance of the loan originator's services for the
	applicant and owes no additional duties or obligations to the
	applicant with respect to the loan.
	(b)  This section does not limit or preclude the liability of
	a residential mortgage loan originator for:
	(1)  failing to comply with this chapter or a rule
	adopted under this chapter;
	(2)  failing to comply with a provision of or duty
	arising under an agreement with a residential mortgage loan
	applicant under this chapter; or
	(3)  violating any other state or federal law.
	Sec. 157.031.  UNLICENSED ACTIVITY; OFFENSE. (a) A person
	commits an offense if the person is an employee of a mortgage
	banker, is not exempt under this chapter, and acts as a residential
	mortgage loan originator without first obtaining a license required
	under this chapter. An offense under this subsection is a Class B
	misdemeanor. A second or subsequent conviction for an offense
	under this subsection is a Class A misdemeanor.
	(b)  If the commissioner has reasonable cause to believe that
	a person who is not licensed or exempt under this chapter has
	engaged, or is about to engage, in an act or practice for which a
	license is required under this chapter, the commissioner may issue,
	without notice and hearing, an order to cease and desist from
	continuing a particular action or an order to take affirmative
	action, or both, to enforce compliance with this chapter. The order
	must contain a reasonably detailed statement of the facts on which
	the order is made. The order may assess an administrative penalty
	in an amount not to exceed $1,000 per day for each violation and may
	require a person to pay to a residential mortgage loan applicant any
	compensation received by the person from the applicant in violation
	of this chapter. If a person against whom the order is made
	requests a hearing, the commissioner shall set and give notice of a
	hearing before the commissioner or an administrative law judge.
	The hearing shall be governed by Chapter 2001, Government Code. An
	order under this subsection becomes final unless the person to whom
	the order is issued requests a hearing not later than the 30th day
	after the date the order is issued.
	(c)  If a hearing has not been requested under Subsection (b)
	not later than the 30th day after the date the order is made, the
	order is considered final and not appealable. The commissioner,
	after giving notice, may impose against a person who violates a
	cease and desist order, an administrative penalty in an amount not
	to exceed $1,000 for each day of a violation. In addition to any
	other remedy provided by law, the commissioner may institute in
	district court a suit for injunctive relief and to collect the
	administrative penalty. A bond is not required of the commissioner
	with respect to injunctive relief granted under this section.
	SECTION 9.  The heading to Section 341.103, Finance Code, is
	amended to read as follows:
	Sec. 341.103.  REGULATION OF SAVINGS INSTITUTIONS, [AND]
	LICENSED MORTGAGE BROKERS AND LOAN OFFICERS, AND REGISTERED
	MORTGAGE BANKERS AND LICENSED LOAN OFFICERS.
	SECTION 10.  Section 341.103(a), Finance Code, is amended to
	read as follows:
	(a)  The savings and mortgage lending commissioner shall
	enforce this subtitle relating to the regulation of:
	(1)  state savings associations operating under this
	subtitle;
	(2)  state savings banks operating under this subtitle;
	[and]
	(3)  persons licensed under Chapter 156; and
	(4)  persons registered or licensed under Chapter 157.
	SECTION 11.  An individual is not required to comply with
	Section 157.012, Finance Code, as added 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).
	SECTION 12.  This Act takes effect only if House Bill 10 or
	another similar bill of the Regular Session of the 81st Legislature
	relating to the licensing of residential mortgage loan originators
	is enacted and becomes law. If House Bill 10 or another similar
	bill of the Regular Session of the 81st Legislature relating to the
	licensing of residential mortgage loan originators does not become
	law, this Act does not take effect.
	SECTION 13.  Except as provided by Section 12 of this Act,
	this Act takes effect April 1, 2010.
	______________________________	______________________________
	President of the Senate	Speaker of the House
	I certify that H.B. No. 2779 was passed by the House on April
	28, 2009, by the following vote:  Yeas 146, Nays 0, 1 present, not
	voting; and that the House concurred in Senate amendments to H.B.
	No. 2779 on May 29, 2009, by the following vote:  Yeas 144, Nays 0,
	2 present, not voting.
	______________________________
	Chief Clerk of the House
	I certify that H.B. No. 2779 was passed by the Senate, with
	amendments, on May 26, 2009, by the following vote:  Yeas 31, Nays
	0.
	______________________________
	Secretary of the Senate
	APPROVED: __________________
	Date
	__________________
	Governor