CHAPTER 156. MORTGAGE BROKERS
FINANCE CODE
TITLE 3. FINANCIAL INSTITUTIONS AND BUSINESSES
SUBTITLE E. OTHER FINANCIAL BUSINESSES
CHAPTER 156. MORTGAGE BROKERS
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 156.001. SHORT TITLE. This chapter may be cited as the
Mortgage Broker License Act.
Added by Acts 1999, 76th Leg., ch. 1254, Sec. 2, eff. Sept. 1,
1999.
Sec. 156.002. DEFINITIONS. In this chapter:
(1) "Commissioner" means the savings and mortgage lending
commissioner.
(2) "Disciplinary action" means an order by the commissioner
that requires one or more of the following:
(A) suspension or revocation of a license under this chapter;
(B) probation of a suspension or revocation of a license under
this chapter on terms and conditions that the commissioner
determines appropriate;
(C) a reprimand of a person licensed under this chapter; or
(D) an administrative penalty imposed on a person licensed under
this chapter under Section 156.302.
(3) "Finance commission" means the Finance Commission of Texas.
(4) "Fund" means the mortgage broker recovery fund established
by the commissioner under Subchapter F.
(5) "Loan officer" means an individual sponsored by a licensed
mortgage broker for the purposes of performing the acts of a
mortgage broker. The term does not include:
(A) an individual who performs only clerical functions such as
delivering a loan application to a mortgage broker or mortgage
banker or gathering information related to a mortgage loan
application on behalf of the prospective borrower, mortgage
broker, or mortgage banker; or
(B) an individual who performs functions of a loan processor.
(6) "Loan processor" means an individual who works under the
instruction of a loan officer or mortgage broker and performs
only clerical functions such as gathering information, requesting
information, word processing, sending correspondence, or
assembling files.
(7) "Mortgage applicant" means a person who is solicited to use
or who uses a mortgage broker to obtain a mortgage loan.
(8) "Mortgage banker" means a person who is:
(A) approved or authorized by the United States Department of
Housing and Urban Development as a mortgagee with direct
endorsement underwriting authority;
(B) an approved seller or servicer of the Federal National
Mortgage Association;
(C) an approved seller or servicer of the Federal Home Loan
Mortgage Association; or
(D) an approved issuer for the Governmental National Mortgage
Association.
(9) "Mortgage broker" means a person who receives an application
from a prospective borrower for the purposes of making a mortgage
loan from that person's own funds or from the funds of another
person. The term does not include:
(A) a person who performs only clerical functions such as
delivering a loan application to a mortgage broker or mortgage
banker or gathering information related to a mortgage loan
application on behalf of the prospective borrower, mortgage
broker, or mortgage banker; or
(B) a person who performs functions of a loan processor.
(10) "Mortgage loan" means a debt against real estate secured by
a security interest against one-to-four family residential real
estate created by a deed of trust, security deed, or other
security instrument.
(11) "Registered financial services company" means a person
registered under Section 156.214.
Added by Acts 1999, 76th Leg., ch. 1254, Sec. 2, eff. Sept. 1,
1999.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
228, Sec. 1, eff. September 1, 2007.
Acts 2007, 80th Leg., R.S., Ch.
905, Sec. 1, eff. September 1, 2007.
Acts 2007, 80th Leg., R.S., Ch.
921, Sec. 6.052, eff. September 1, 2007.
Sec. 156.003. SECONDARY MARKET TRANSACTIONS. This chapter does
not prohibit a mortgage broker from receiving compensation from a
party other than the mortgage applicant for the sale, transfer,
assignment, or release of rights on the closing of a mortgage
transaction.
Added by Acts 1999, 76th Leg., ch. 1254, Sec. 2, eff. Sept. 1,
1999.
Sec. 156.004. DISCLOSURE TO APPLICANT. At the time an applicant
submits an application to a mortgage broker, the mortgage broker
shall provide to the applicant a disclosure that specifies the
nature of the relationship between applicant and broker, the
duties the broker has to the applicant, and how the mortgage
broker will be compensated. The finance commission, by rule,
shall promulgate a standard disclosure form to be used by the
mortgage broker.
Added by Acts 1999, 76th Leg., ch. 1254, Sec. 2, eff. Sept. 1,
1999. Amended by Acts 2001, 77th Leg., ch. 867, Sec. 85, eff.
Sept. 1, 2001.
Sec. 156.005. AFFILIATED BUSINESS ARRANGEMENTS. Unless
prohibited by federal or state law, this chapter may not be
construed to prevent affiliated or controlled business
arrangements or loan origination services by or between mortgage
brokers and other professionals if the mortgage broker complies
with all applicable federal and state laws permitting those
arrangements or services.
Added by Acts 1999, 76th Leg., ch. 1254, Sec. 2, eff. Sept. 1,
1999.
Amended by:
Acts 2005, 79th Leg., Ch.
1018, Sec. 6.01, eff. September 1, 2005.
SUBCHAPTER B. ADMINISTRATION PROVISIONS
Sec. 156.101. ADMINISTRATION OF CHAPTER.
Text of subsection as amended by Acts 2009, 81st Leg., R.S., Ch.
1104, Sec. 4
(a) Except as provided by Subsection (a-2), the commissioner
shall administer this chapter.
Text of subsection as amended by Acts 2009, 81st Leg., R.S., Ch.
1317, Sec. 28
(a) The commissioner shall administer and enforce 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.
(b) Repealed by Acts 2009, 81st Leg., R.S., Ch. 1317, Sec.
28(i), eff. September 1, 2009.
(c) Repealed by Acts 2009, 81st Leg., R.S., Ch. 1317, Sec.
28(i), eff. September 1, 2009.
(d) The commissioner shall participate in the Nationwide
Mortgage Licensing System and Registry as provided by Chapter
180.
Added by Acts 1999, 76th Leg., ch. 1254, Sec. 2, eff. Sept. 1,
1999.
Amended by:
Acts 2009, 81st Leg., R.S., Ch.
1104, Sec. 4, eff. June 19, 2009.
Acts 2009, 81st Leg., R.S., Ch.
1317, Sec. 1, eff. September 1, 2009.
Acts 2009, 81st Leg., R.S., Ch.
1317, Sec. 28(g), eff. September 1, 2009.
Acts 2009, 81st Leg., R.S., Ch.
1317, Sec. 28(i), eff. September 1, 2009.
Sec. 156.102. RULEMAKING AUTHORITY. (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.
(a-1) 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).
(b) The finance commission may adopt rules to prohibit false,
misleading, or deceptive practices by mortgage brokers and loan
officers but may not adopt any other rules restricting
competitive bidding or advertising by mortgage brokers or loan
officers. When adopting rules under this subsection, the finance
commission may not restrict:
(1) the use of any medium for an advertisement;
(2) the personal appearance of or voice of a person in an
advertisement;
(3) the size or duration of an advertisement; or
(4) a mortgage broker's or loan officer's advertisement under a
trade name.
(b-1) The finance commission on the commissioner's
recommendation may adopt rules to promote a fair and orderly
administration of the fund consistent with the purposes of
Subchapter F.
(c) The finance commission may adopt rules regarding books and
records that a person licensed under this chapter is required to
keep, including the location at which the books and records must
be kept.
(d) The finance commission shall consult with the commissioner
when proposing and adopting rules under this chapter.
Added by Acts 1999, 76th Leg., ch. 1254, Sec. 2, eff. Sept. 1,
1999. Amended by Acts 2001, 77th Leg., ch. 867, Sec. 86, eff.
Sept. 1, 2001.
Amended by:
Acts 2005, 79th Leg., Ch.
1018, Sec. 6.02, eff. September 1, 2005.
Acts 2009, 81st Leg., R.S., Ch.
1104, Sec. 5, eff. June 19, 2009.
Acts 2009, 81st Leg., R.S., Ch.
1317, Sec. 2, eff. September 1, 2009.
Sec. 156.103. POWERS OF COMMISSIONER. (a) In addition to any
other action, proceeding, or remedy authorized by law, the
commissioner may institute an action in the commissioner's name
to enjoin a violation of this chapter or a rule adopted under
this chapter. To sustain an action filed under this subsection,
it is not necessary to allege or prove that an adequate remedy at
law does not exist or that substantial or irreparable damage
would result from a continued violation of this chapter.
(b) The commissioner is not required to provide an appeal bond
in any action or proceeding to enforce this chapter.
(c) The commissioner may authorize specific employees to conduct
hearings and make recommendations for final decisions in
contested cases.
Added by Acts 1999, 76th Leg., ch. 1254, Sec. 2, eff. Sept. 1,
1999.
Sec. 156.104. MORTGAGE INDUSTRY ADVISORY COMMITTEE. (a) The
mortgage industry advisory committee is created to advise and
assist the commissioner.
(b) The advisory committee is composed of six members appointed
by the commissioner. Each of the members must be:
(1) under the regulatory authority of the department;
(2) actively engaged in the business of originating, brokering,
or funding residential mortgage loans at the time of
appointment; and
(3) primarily engaged in the business of originating, brokering,
or funding residential mortgage loans for at least two years
before the member's appointment.
(b-1) The members of the committee must include:
(1) three individuals licensed as residential mortgage loan
originators under this chapter, one of whom must hold an active
real estate broker or salesperson license issued under Chapter
1101, Occupations Code; and
(2) three individuals licensed as residential mortgage loan
originators under Chapter 157, one of whom must hold an active
real estate broker or salesperson license issued under Chapter
1101, Occupations Code.
(c) Appointments to the advisory committee shall be made without
regard to the sex, race, color, age, disability, religion, or
national origin of the appointees.
(d) The members of the advisory committee serve for a staggered
three-year term, with the terms of two members expiring February
1 of each year.
(e) The advisory committee shall meet at least twice a year at
the call of the commissioner.
(f) The commissioner may remove a member of the advisory
committee if:
(1) the member does not have at the time of appointment the
qualifications required by Subsection (b); or
(2) the commissioner determines that the member cannot discharge
the member's duties for a substantial part of the term for which
the member is appointed.
(g) In the event of a vacancy during a term, the appointing
entity or official shall fill the vacancy for the unexpired part
of the term with a person who meets the qualifications of the
vacated position.
(h) In addition to other powers and duties delegated to it by
the commissioner, the advisory committee shall advise the
commissioner with respect to:
(1) the proposal and adoption of rules relating to:
(A) the licensing of mortgage brokers and loan officers;
(B) the education and experience requirements for licensing
mortgage brokers and loan officers; and
(C) conduct and ethics of mortgage brokers and loan officers;
(2) the form of or format for any applications or other
documents under this chapter; and
(3) the interpretation, implementation, and enforcement of this
chapter.
(i) Each member of the advisory committee is entitled to a per
diem allowance and to reimbursement of travel expenses
necessarily incurred in performing functions as a member of the
committee, subject to any applicable limitation in the General
Appropriations Act.
(j) The advisory committee shall take a record vote on any
matter described by Subsection (h)(1). The commissioner shall
inform the finance commission of:
(1) the result of the vote; and
(2) any additional information the commissioner considers
necessary to ensure the finance commission is sufficiently
notified of the advisory committee's recommendations.
(k) A record vote taken by the advisory committee under
Subsection (j) is only a recommendation and does not supersede
the rulemaking authority of the finance commission under this
subchapter.
Added by Acts 1999, 76th Leg., ch. 1254, Sec. 2, eff. Sept. 1,
1999. Amended by Acts 2001, 77th Leg., ch. 867, Sec. 87, eff.
Sept. 1, 2001.
Amended by:
Acts 2005, 79th Leg., Ch.
1018, Sec. 6.03, eff. September 1, 2005.
Acts 2009, 81st Leg., R.S., Ch.
1317, Sec. 3, eff. September 1, 2009.
Acts 2009, 81st Leg., R.S., Ch.
1317, Sec. 4, eff. September 1, 2009.
Acts 2009, 81st Leg., R.S., Ch.
1317, Sec. 5, eff. April 1, 2010.
Sec. 156.105. STANDARD FORMS. (a) The finance commission, by
rule, shall adopt one or more standard forms for use by a
mortgage broker or loan officer in representing that an applicant
for a mortgage loan is preapproved or has prequalified for the
loan.
(b) The finance commission shall adopt rules requiring a
mortgage broker or loan officer licensed under this chapter to
use the forms adopted by the finance commission under Subsection
(a).
Added by Acts 2001, 77th Leg., ch. 407, Sec. 1, eff. Sept. 1,
2001.
SUBCHAPTER C. MORTGAGE BROKER LICENSE AND LOAN OFFICER LICENSE
Sec. 156.201. LICENSES REQUIRED. (a) A person may not act in
the capacity of, engage in the business of, or advertise or hold
that person out as engaging in or conducting the business of a
mortgage broker in this state unless the person holds an active
mortgage broker license or is exempt under Section 156.202.
(b) An individual may not act or attempt to act as a loan
officer unless the individual at the time is:
(1) licensed under this chapter and sponsored by a licensed
mortgage broker and acting for the mortgage broker; or
(2) exempt under Section 156.202.
(c) Each mortgage broker licensed under this chapter is
responsible to the commissioner and members of the public for any
act or conduct performed by the mortgage broker or a loan officer
sponsored by or acting for the mortgage broker in connection
with:
(1) the origination of a mortgage loan; or
(2) a transaction that is related to the origination of a
mortgage loan in which the mortgage broker knew or should have
known of the transaction.
Added by Acts 1999, 76th Leg., ch. 1254, Sec. 2, eff. Sept. 1,
1999.
Amended by:
Acts 2005, 79th Leg., Ch.
1018, Sec. 6.04, eff. September 1, 2005.
Acts 2007, 80th Leg., R.S., Ch.
905, Sec. 2, eff. September 1, 2007.
Sec. 156.2011. PROVISIONAL LOAN OFFICER LICENSE. (a) An
applicant for a loan officer license may be issued a provisional
loan officer license as provided by this section only if the
applicant:
(1) during the 20 months immediately preceding the application,
has at least 18 months of experience as a loan officer employed
by a person exempt from this chapter under Section 156.202; and
(2) meets the qualifications for a loan officer license, other
than the educational and examination requirements.
(b) The commissioner shall use best efforts to issue the
provisional loan officer license on or before the later of:
(1) the 10th business day after the date of receipt of a
completed application; or
(2) the second business day after the date of receipt of the
criminal background information required under Section 156.206
demonstrating that the applicant has no pending criminal charges
and has not been convicted of a criminal offense.
(c) For purposes of Subsection (b)(2), a person is considered
convicted as provided by Section 156.204(d).
(d) A provisional loan officer license is valid for 90 days
after the date the license is issued, except as provided by
Subsection (e).
(e) The commissioner may revoke a provisional loan officer
license if the commissioner discovers that the applicant has made
a misrepresentation relating to the applicant's qualifications
for a loan officer license, has violated this chapter, or does
not meet the qualifications for a provisional loan officer
license. The revocation of a provisional loan officer license is
not subject to appeal.
(f) The finance commission by rule may impose a fee not to
exceed $100 for an expedited issuance of a provisional loan
officer license. The fee is nonrefundable and is in addition to
the fee for the application for a regular loan officer license.
Added by Acts 2007, 80th Leg., R.S., Ch.
905, Sec. 3, eff. September 1, 2007.
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).
Added by Acts 2009, 81st Leg., R.S., Ch.
1104, Sec. 6, eff. June 19, 2009.
Sec. 156.202. EXEMPTIONS. (a) The following persons are exempt
from this chapter:
(1) any of the following entities or an employee of any of the
following entities provided the employee is acting for the
benefit of the employer:
(A) a bank, savings bank, or savings and loan association, or a
subsidiary or an affiliate of a bank, savings bank, or savings
and loan association;
(B) a state or federal credit union, or a subsidiary, affiliate,
or credit union service organization of a state or federal credit
union;
(C) an insurance company licensed or authorized to do business
in this state under the Insurance Code;
(D) a mortgage banker registered under Chapter 157;
(E) an organization that qualifies for an exemption from state
franchise and sales tax as a 501(c)(3) organization;
(F) a Farm Credit System institution; or
(G) a political subdivision of this state involved in affordable
home ownership programs;
(2) an individual who makes a mortgage loan from the
individual's own funds to a spouse, former spouse, or persons in
the lineal line of consanguinity of the individual lending the
money;
(3) an owner of real property who in any 12-consecutive-month
period makes no more than five mortgage loans to purchasers of
the property for all or part of the purchase price of the real
estate against which the mortgage is secured;
(4) an individual who:
(A) makes a mortgage loan from the individual's own funds;
(B) is not an authorized lender under Chapter 342, Finance Code;
and
(C) does not regularly engage in the business of making or
brokering mortgage loans; or
(5) an individual who is an exclusive agent of a registered
financial services company under a written agreement prohibiting
the individual from soliciting, processing, negotiating, or
placing a mortgage loan with a person other than the registered
financial services company or an affiliate of that company.
(b) An exclusive agent described by Subsection (a)(5) is
considered an employee of the registered financial services
company for purposes of this chapter.
Added by Acts 1999, 76th Leg., ch. 1254, Sec. 2, eff. Sept. 1,
1999. Amended by Acts 2001, 77th Leg., ch. 5, Sec. 1, eff. Sept.
1, 2001; Acts 2003, 78th Leg., ch. 135, Sec. 1, eff. Sept. 1,
2003.
Amended by:
Acts 2005, 79th Leg., Ch.
1018, Sec. 6.05, eff. September 1, 2005.
Acts 2007, 80th Leg., R.S., Ch.
228, Sec. 2, eff. September 1, 2007.
Acts 2007, 80th Leg., R.S., Ch.
905, Sec. 4, eff. September 1, 2007.
Acts 2009, 81st Leg., R.S., Ch.
1317, Sec. 6, eff. September 1, 2009.
Sec. 156.203. APPLICATION FOR A LICENSE; FEES. (a) An
application for a mortgage broker or loan officer license must
be:
(1) in writing;
(2) under oath; and
(3) on the form prescribed by the commissioner.
(b) An application for a mortgage broker license must be
accompanied by:
(1) an application fee in an amount determined by the
commissioner not to exceed $375; and
(2) a recovery fund fee as provided by Section 156.502.
(c) An application for a loan officer license must be
accompanied by:
(1) an application fee in an amount determined by the
commissioner not to exceed $275; and
(2) a recovery fund fee as provided by Section 156.502.
(d) 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.
(e) In addition to the disciplinary action by the commissioner
authorized under Section 156.303(a)(7), the commissioner may
collect a fee in an amount not to exceed $50 for any returned
check or credit card charge back.
Added by Acts 1999, 76th Leg., ch. 1254, Sec. 2, eff. Sept. 1,
1999.
Amended by:
Acts 2005, 79th Leg., Ch.
1018, Sec. 6.06, eff. September 1, 2005.
Acts 2007, 80th Leg., R.S., Ch.
905, Sec. 5, eff. September 1, 2007.
Acts 2009, 81st Leg., R.S., Ch.
1317, Sec. 7, eff. September 1, 2009.
For expiration of Subsections (c) and (f), see Subsection (f).
Sec. 156.204. QUALIFICATIONS. (a) To be eligible to be
licensed as a mortgage broker as an individual, the individual
must:
(1) be at least 18 years of age;
(2) be a citizen of the United States or a lawfully admitted
alien;
(3) maintain a physical office in this state and designate that
office in the application;
(4) provide the commissioner with satisfactory evidence that the
applicant satisfies one of the following:
(A) the individual has received a bachelor's degree in an area
relating to finance, banking, or business administration from an
accredited college or university and has 18 months of experience
in the mortgage or lending field as evidenced by documentary
proof of full-time employment as a mortgage broker or licensed
loan officer with a mortgage broker or an individual exempt under
Section 156.202;
(B) the individual is licensed in this state as:
(i) an active real estate broker under Chapter 1101, Occupations
Code;
(ii) an active attorney; or
(iii) an active general lines insurance agent or a limited lines
insurance agent, or holds an equivalent insurance license under
the Insurance Code; or
(C) the individual has three years of experience in the mortgage
lending field as evidenced by documentary proof of full-time
employment as a licensed loan officer with a mortgage broker or
an individual exempt under Section 156.202;
(5) provide the commissioner with satisfactory evidence of:
(A) having passed an examination, offered by a testing service
or company approved by the finance commission, that demonstrates
knowledge of:
(i) the mortgage industry; and
(ii) the role and responsibilities of a mortgage broker; and
(B) compliance with the financial requirements of this chapter;
(6) not have been convicted of a criminal offense that the
commissioner determines directly relates to the occupation of a
mortgage broker as provided by Chapter 53, Occupations Code;
(7) satisfy the commissioner as to the individual's good moral
character, including the individual's honesty, trustworthiness,
and integrity;
(8) not be in violation of this chapter, a rule adopted under
this chapter, or any order previously issued to the individual by
the commissioner; and
(9) provide the commissioner with satisfactory evidence that:
(A) if the individual has not been previously licensed as a
mortgage broker or a loan officer under this subchapter, the
individual has completed 90 hours of education courses approved
by the commissioner under this section; or
(B) if the individual has not been previously licensed as a
mortgage broker under this subchapter but has been licensed as a
loan officer under this subchapter, the individual has
successfully completed an additional 30 hours of education
courses approved by the commissioner under this section.
(b) A corporation, limited liability company, or limited
partnership may not act as a mortgage broker unless the entity
obtains a mortgage broker license. To be eligible for a mortgage
broker license the entity must designate an individual licensed
as a mortgage broker as its designated representative and pay an
application fee in an amount to be determined by the commissioner
not to exceed $175. The designated representative must be:
(1) if the entity is a corporation, an officer of the
corporation;
(2) if the entity is a limited liability company, a manager of
the limited liability company; or
(3) if the entity is a limited partnership:
(A) an individual who is a general partner;
(B) an officer of a general partner that is a corporation; or
(C) a manager of a general partner that is a limited liability
company.
(c) To be eligible to be licensed as a loan officer a person
must:
(1) be an individual who is at least 18 years of age;
(2) be a citizen of the United States or a lawfully admitted
alien;
(3) designate in the application the name of the mortgage broker
sponsoring the loan officer;
(4) provide the commissioner with satisfactory evidence that the
applicant satisfies one of the following:
(A) the person has successfully completed at least 60 hours of
education courses approved by the commissioner;
(B) the person has successfully completed 30 hours of education
courses approved by the commissioner under this section if the
applicant:
(i) has 18 months or more of experience as a mortgage loan
officer as evidenced by documentary proof of full-time employment
as a mortgage loan officer with a person exempt under Section
156.202; or
(ii) is a person who meets the qualifications under Subsection
(a)(4)(B); or
(C) the person holds an active mortgage broker license issued
under this chapter;
(5) not have been convicted of a criminal offense that the
commissioner determines directly relates to the occupation of a
loan officer as provided by Chapter 53, Occupations Code;
(6) satisfy the commissioner as to the individual's good moral
character, including the individual's honesty, trustworthiness,
and integrity;
(7) provide the commissioner with satisfactory evidence of
having passed an examination, offered by a testing service or
company approved by the finance commission, that demonstrates
knowledge of:
(A) the mortgage industry; and
(B) the role and responsibilities of a loan officer; and
(8) not be in violation of this chapter, a rule adopted under
this chapter, or any order previously issued to the individual by
the commissioner.
Text of subsection effective on January 01, 2011
(c-1) To be eligible to be licensed as a loan officer a person
must:
(1) be an individual who is at least 18 years of age;
(2) be a citizen of the United States or a lawfully admitted
alien;
(3) designate in the application the name of the mortgage broker
sponsoring the loan officer;
(4) provide the commissioner with satisfactory evidence that the
applicant satisfies one of the following:
(A) the person has successfully completed at least 60 hours of
education courses approved by the commissioner;
(B) the person has successfully completed 30 hours of education
courses approved by the commissioner under this section if the
applicant has 18 months or more of experience as a residential
mortgage loan originator as evidenced by documentary proof of
full-time employment; or
(C) the person holds an active license as a residential mortgage
loan originator under Chapter 157 and has held that license for a
minimum of one year;
(5) not have been convicted of a criminal offense that the
commissioner determines directly relates to the occupation of a
loan officer as provided by Chapter 53, Occupations Code;
(6) satisfy the commissioner as to the individual's good moral
character, including the individual's honesty, trustworthiness,
and integrity;
(7) provide the commissioner with satisfactory evidence of
having passed an examination, offered by a testing service or
company approved by the finance commission, that demonstrates
knowledge of:
(A) the mortgage industry; and
(B) the role and responsibilities of a loan officer; and
(8) not be in violation of this chapter, a rule adopted under
this chapter, or any order previously issued to the individual by
the commissioner.
(d) For the purposes of Subsections (a)(6) and (c)(5), a person
is considered convicted if a sentence is imposed on the person,
the person receives community supervision, including deferred
adjudication community supervision, or the court defers final
disposition of the person's case.
(e) The education courses required for a mortgage broker or loan
officer license under Subsection (a)(9) or (c)(4) must cover
ethics, the Real Estate Settlement Procedures Act of 1974 (12
U.S.C. Section 2601 et seq.), the Truth in Lending Act (15 U.S.C.
Section 1601 et seq.), the Equal Credit Opportunity Act (15
U.S.C. Section 1691 et seq.), and the provisions of this chapter.
(f) Subsection (c) and this subsection expire January 1, 2011.
Added by Acts 1999, 76th Leg., ch. 1254, Sec. 2, eff. Sept. 1,
1999. Amended by Acts 2001, 77th Leg., ch. 1420, Sec. 14.746,
eff. Sept. 1, 2001; Acts 2003, 78th Leg., ch. 170, Sec. 1, eff.
Sept. 1, 2003; Acts 2003, 78th Leg., ch. 171, Sec. 1, eff. Sept.
1, 2003; Acts 2003, 78th Leg., ch. 1276, Sec. 14A.771, eff. Sept.
1, 2003.
Amended by:
Acts 2005, 79th Leg., Ch.
728, Sec. 7.001, eff. September 1, 2005.
Acts 2005, 79th Leg., Ch.
859, Sec. 1, eff. September 1, 2005.
Acts 2005, 79th Leg., Ch.
1018, Sec. 6.07, eff. September 1, 2005.
Acts 2007, 80th Leg., R.S., Ch.
905, Sec. 6, eff. September 1, 2007.
Acts 2009, 81st Leg., R.S., Ch.
1317, Sec. 8, eff. September 1, 2009.
Acts 2009, 81st Leg., R.S., Ch.
1317, Sec. 9, eff. January 1, 2011.
Sec. 156.205. FINANCIAL REQUIREMENTS. Financial requirements
for holding a mortgage broker or loan officer license shall be
met through participation in the fund.
Added by Acts 1999, 76th Leg., ch. 1254, Sec. 2, eff. Sept. 1,
1999.
Amended by:
Acts 2005, 79th Leg., Ch.
1018, Sec. 6.08, eff. September 1, 2005.
Acts 2009, 81st Leg., R.S., Ch.
1317, Sec. 10, eff. September 1, 2009.
Sec. 156.206. CRIMINAL BACKGROUND CHECK. (a) On receipt of an
application for a mortgage broker license or a loan officer
license, the commissioner shall conduct a criminal background
check of the applicant.
(b) The commissioner shall obtain criminal history record
information on an applicant that is maintained by the Department
of Public Safety and shall obtain criminal history record
information from the Federal Bureau of Investigation on each
applicant. Each applicant must submit with the application
fingerprint and other information necessary to implement this
section. The commissioner may submit the fingerprint and other
information to the Federal Bureau of Investigation, and the
Department of Public Safety is designated to be the recipient of
the criminal history record information. The commissioner may
also obtain criminal history record information from any court or
any local, state, or national governmental agency.
(c) The commissioner shall keep confidential any criminal
background information obtained under this subsection and may not
release or disclose the information unless:
(1) the information is a public record at the time the
commissioner obtains the information; or
(2) the commissioner releases the information:
(A) under order from a court;
(B) with the permission of the applicant;
(C) to a person through whom the applicant is conducting or will
conduct business; or
(D) to a governmental agency.
(d) Notwithstanding Subsection (c), criminal history record
information obtained from the Federal Bureau of Investigation may
be released or disclosed only to a governmental entity or as
authorized by federal statute, federal rule, or federal executive
order.
Added by Acts 1999, 76th Leg., ch. 1254, Sec. 2, eff. Sept. 1,
1999. Amended by Acts 2001, 77th Leg., ch. 337, Sec. 5, eff.
Sept. 1, 2001; Acts 2001, 77th Leg., ch. 407, Sec. 2, eff. Sept.
1, 2001; Acts 2001, 77th Leg., ch. 867, Sec. 88, eff. Sept. 1,
2001; Acts 2003, 78th Leg., ch. 173, Sec. 1, 2, eff. Sept. 1,
2003; Acts 2003, 78th Leg., ch. 296, Sec. 11, 12, eff. Sept. 1,
2003.
Sec. 156.207. ISSUANCE OF LICENSE CERTIFICATE; PROVISIONAL
LICENSE. (a) The commissioner shall issue a license certificate
to an applicant for a mortgage broker license if the commissioner
finds that the applicant meets all requirements and conditions
for the license.
(b) When an applicant for a loan officer license has met all
requirements and conditions for the license, the commissioner
shall issue a license certificate to the mortgage broker
sponsoring the loan officer.
(c) In accordance with any rules adopted by the finance
commission under this subsection, the commissioner may issue a
provisional license to an applicant if a significant delay is
necessary to process the application, review information related
to the application, or obtain information related to the
application. If the commissioner has not received criminal
history record information from the Federal Bureau of
Investigation before the 61st day after the date the commissioner
requested the information, the commissioner shall issue a
provisional license to the applicant, if the applicant otherwise
meets all requirements and conditions for a license. If the
commissioner has not received criminal history record information
from the Federal Bureau of Investigation before the 181st day
after the date the commissioner requested the information, the
provisional status of the license ends and, except as provided by
Subsection (d), the license is subject to the provisions of this
chapter and other law applicable to a license issued to an
applicant who meets all requirements and conditions for a license
under this chapter.
(d) The commissioner may revoke a license issued under
Subsection (c), regardless of whether the license is provisional,
on a ground listed under Section 156.303 or on any ground that
the commissioner could have denied issuance of the license on the
application.
Added by Acts 1999, 76th Leg., ch. 1254, Sec. 2, eff. Sept. 1,
1999. Amended by Acts 2001, 77th Leg., ch. 337, Sec. 6, eff.
Sept. 1, 2001; Acts 2001, 77th Leg., ch. 867, Sec. 89, eff. Sept.
1, 2001.
Sec. 156.2071. PERSON LICENSED IN OTHER JURISDICTION. (a) The
commissioner may waive any prerequisite to obtaining a license
for an applicant after reviewing the applicant's credentials and
determining that the applicant holds a license issued by another
jurisdiction that has licensing requirements substantially
equivalent to those of this state.
(b) The commissioner may issue a provisional license to an
applicant currently licensed in another jurisdiction who seeks a
license in this state and who:
(1) has been licensed in good standing as a mortgage broker or
loan officer for at least two years in another jurisdiction,
including a foreign country, that has licensing requirements
substantially equivalent to the requirements of this chapter;
(2) has passed a national or other examination recognized by the
commissioner relating to mortgage brokers or loan officers; and
(3) is sponsored by a person licensed under this chapter with
whom the provisional license holder will practice during the time
the person holds a provisional license.
(c) The commissioner may waive the requirement of Subsection
(b)(3) for an applicant if the commissioner determines that
compliance with that subsection would be a hardship to the
applicant.
(d) A provisional license under this section is valid until the
date the commissioner approves or denies the provisional license
holder's application for a license. The commissioner shall issue
a license under this chapter to the provisional license holder
if:
(1) the provisional license holder is eligible to be licensed
under Subsection (a); or
(2) the commissioner verifies that the provisional license
holder meets the academic and experience requirements for a
license under this chapter and the provisional license holder
satisfies any other licensing requirements under this chapter.
(e) The commissioner must approve or deny a provisional license
holder's application for a license not later than the 180th day
after the date the provisional license is issued.
(f) The finance commission may establish a fee for provisional
licenses under this section in an amount reasonable and necessary
to cover the cost of issuing the license.
Added by Acts 2001, 77th Leg., ch. 337, Sec. 7, eff. Sept. 1,
2001.
For expiration of Subsections (a), (b), and (l), see Subsection
(l).
Sec. 156.208. RENEWALS. (a) A mortgage broker license issued
under this chapter is valid for a term of not more than two years
and may be renewed on or before its expiration date if the
mortgage broker:
(1) pays to the commissioner a renewal fee in an amount
determined by the commissioner not to exceed $375 and a recovery
fund fee provided by Section 156.502;
(2) has not been convicted of a criminal offense the
commissioner determines is directly related to the occupation of
a mortgage broker as provided by Chapter 53, Occupations Code;
and
(3) provides the commissioner with satisfactory evidence that
the mortgage broker:
(A) has attended, during the term of the current license, 15
hours of continuing education courses that the commissioner, in
accordance with the rules adopted by the finance commission under
this section, has approved as continuing education courses; or
(B) maintains an active license in this state as:
(i) a real estate broker;
(ii) a real estate salesperson;
(iii) an attorney; or
(iv) an active general lines insurance agent or a limited lines
insurance agent, or holds an equivalent insurance license under
the Insurance Code.
Text of subsection effective on January 01, 2011
(a-1) A mortgage broker license issued under this chapter is
valid for a term of not more than two years and may be renewed on
or before its expiration date if the mortgage broker:
(1) pays to the commissioner a renewal fee in an amount
determined by the commissioner not to exceed $375 and a recovery
fund fee provided by Section 156.502;
(2) has not been convicted of a criminal offense the
commissioner determines is directly related to the occupation of
a mortgage broker as provided by Chapter 53, Occupations Code;
and
(3) provides the commissioner with satisfactory evidence that
the mortgage broker has attended, during the term of the current
license, continuing education courses in accordance with the
applicable requirements of Chapter 180.
(b) A loan officer license issued under this chapter is valid
for a term of not more than two years and may be renewed on or
before its expiration date if the loan officer:
(1) pays to the commissioner a renewal fee in an amount
determined by the commissioner not to exceed $275 and a recovery
fund fee provided by Section 156.502;
(2) has not been convicted of a criminal offense the
commissioner determines is directly related to the occupation of
a loan officer as provided by Chapter 53, Occupations Code; and
(3) provides the commissioner with satisfactory evidence that
the loan officer:
(A) has attended, during the term of the current license, 15
hours of continuing education courses that the commissioner, in
accordance with the rules adopted by the finance commission under
this section, has approved as continuing education courses,
including courses provided by or through the licensed mortgage
broker with whom the loan officer is associated after submission
to and approval by the commission; or
(B) maintains an active license in this state as:
(i) a real estate broker;
(ii) a real estate salesperson;
(iii) an attorney; or
(iv) an active general lines insurance agent or a limited lines
insurance agent, or holds an equivalent insurance license under
the Insurance Code.
Text of subsection effective on January 01, 2011
(b-1) A loan officer license issued under this chapter is valid
for a term of not more than two years and may be renewed on or
before its expiration date if the loan officer:
(1) pays to the commissioner a renewal fee in an amount
determined by the commissioner not to exceed $275 and a recovery
fund fee provided by Section 156.502;
(2) has not been convicted of a criminal offense the
commissioner determines is directly related to the occupation of
a loan officer as provided by Chapter 53, Occupations Code; and
(3) provides the commissioner with satisfactory evidence that
the loan officer has attended, during the term of the current
license, continuing education courses in accordance with the
applicable requirements of Chapter 180.
(c) The commissioner may require mortgage brokers or loan
officers to submit requests for renewal on a form prescribed by
the commissioner.
(d) On receipt of a request for a renewal of a license issued
under this subchapter, the commissioner may conduct a criminal
background check under Section 156.206.
(e) A renewal fee is not refundable and may not be credited or
applied to any other fee or indebtedness owed by the person
paying the fee.
(f) The finance commission by rule may adopt a system under
which licenses expire on a date or dates other than December 31.
If a system is adopted under this subsection, dates relating to
expiration and issuance of licenses shall be adjusted
accordingly. For the biennium in which the license expiration
date is changed, license fees shall be prorated on a monthly
basis so that each license holder pays only that portion of the
license fee that is allocable to the number of months during
which the license is valid. On renewal of the license on the new
expiration date, the total license renewal fee is payable.
(g) The finance commission shall adopt rules related to the
approval of courses for continuing education credit under this
section that provide for the acceptance of continuing education
courses that are related to finance, financial consulting,
lending, real estate contracts, discrimination laws, deceptive
trade practices, real property conveyances, and other topics that
are relevant to mortgage brokers and that are acceptable as
continuing education courses to other professional licensing
agencies or related trade associations. The finance commission
may approve any education course approved by the Texas Real
Estate Commission, the Mortgage Bankers Association of America,
or the National Association of Mortgage Brokers.
(h) For the purposes of Subsections (a)(2) and (b)(2), a person
is considered convicted if a sentence is imposed on the person,
the person receives community supervision, including deferred
adjudication community supervision, or the court defers final
disposition of the person's case.
(i) The finance commission shall adopt a rule that requires a
mortgage broker or loan officer to attend, during the term of the
current license, not less than eight hours of continuing
education courses related to residential mortgage lending before
renewing a license under this section.
(j) The commissioner may deny the renewal of a mortgage broker
license or a loan officer license if:
(1) the mortgage broker or loan officer is in violation of this
chapter, a rule adopted under this chapter, or any order
previously issued to the individual by the commissioner;
(2) the mortgage broker or loan officer is in default in the
payment of any administrative penalty, fee, charge, or other
indebtedness owed under this title;
(3) 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; or
(4) the mortgage broker or loan officer is in default on a
student loan administered by the Texas Guaranteed Student Loan
Corporation, pursuant to Section 57.491, Education Code.
(k) In addition to the disciplinary action by the commissioner
authorized under Section 156.303(a)(7), the commissioner may
collect a fee in an amount not to exceed $50 for any returned
check or credit card charge back.
(l) Subsections (a) and (b) and this subsection expire January
1, 2011.
Added by Acts 1999, 76th Leg., ch. 1254, Sec. 2, eff. Sept. 1,
1999. Amended by Acts 2001, 77th Leg., ch. 867, Sec. 90, eff.
Sept. 1, 2001; Acts 2001, 77th Leg., ch. 1420, Sec. 14.747, eff.
Sept. 1, 2001; Acts 2003, 78th Leg., ch. 170, Sec. 2, eff. Sept.
1, 2003.
Amended by:
Acts 2005, 79th Leg., Ch.
859, Sec. 2, eff. September 1, 2005.
Acts 2005, 79th Leg., Ch.
1018, Sec. 6.09, eff. September 1, 2005.
Acts 2007, 80th Leg., R.S., Ch.
905, Sec. 7, eff. September 1, 2007.
Acts 2009, 81st Leg., R.S., Ch.
1317, Sec. 11, eff. September 1, 2009.
Acts 2009, 81st Leg., R.S., Ch.
1317, Sec. 12, eff. January 1, 2011.
Sec. 156.2081. RENEWAL AFTER EXPIRATION; NOTICE. (a) A person
whose license has expired may not engage in activities that
require a license until the license has been renewed.
(b) A person whose license has been expired for 90 days or less
but who is otherwise eligible to renew a license may renew the
license by paying to the commissioner a renewal fee that is equal
to 1-1/2 times the normally required renewal fee.
(c) A person whose license has been expired for 91 days or more
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) A person who was licensed in this state, moved to another
state, and is currently licensed and has been in practice in the
other state for the two years preceding the date of application
may obtain a new license by paying to the commissioner a fee that
is equal to two times the normally required renewal fee for the
license.
(e) Not later than the 60th day before the date a person's
license is scheduled to expire, the commissioner shall send
written notice of the impending expiration to the person at the
person's last known address according to the records of the
Department of Savings and Mortgage Lending.
Added by Acts 2001, 77th Leg., ch. 337, Sec. 8, eff. Sept. 1,
2001.
Amended by:
Acts 2005, 79th Leg., Ch.
1018, Sec. 6.10, eff. September 1, 2005.
Sec. 156.209. DENIAL OF APPLICATIONS AND RENEWALS. (a) If the
commissioner declines or fails to issue or renew a license, the
commissioner shall promptly give written notice to the applicant
or the person requesting the renewal that the application or
renewal, as appropriate, was denied.
(b) Before the applicant or person requesting the renewal may
appeal to a district court as provided by Section 156.401, 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 a hearings officer designated by the
commissioner.
(c) The designated hearings officer 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
hearings officer 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 from the
findings of fact, conclusions of law, and recommendations of the
hearings officer.
(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 may not be 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 156.401.
(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
refundable.
(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 of disqualification.
Added by Acts 1999, 76th Leg., ch. 1254, Sec. 2, eff. Sept. 1,
1999.
Amended by:
Acts 2005, 79th Leg., Ch.
1018, Sec. 6.11, eff. September 1, 2005.
Sec. 156.210. PROBATIONARY LICENSE. The commissioner may issue
a probationary license. The finance commission by rule shall
adopt reasonable terms and conditions for a probationary license.
Added by Acts 1999, 76th Leg., ch. 1254, Sec. 2, eff. Sept. 1,
1999. Amended by Acts 2001, 77th Leg., ch. 867, Sec. 91, eff.
Sept. 1, 2001.
Sec. 156.211. CHANGE OF ADDRESS OR SPONSORSHIP; MODIFICATION OF
LICENSE. (a) Before the 10th day preceding the effective date
of an address change, a mortgage broker shall notify the
commissioner in writing of the new address accompanied by a
change of address fee of $25. A new license certificate must be
obtained before the mortgage broker may conduct business at the
new location.
(b) A loan officer may act only for the mortgage broker
sponsoring the loan officer. A loan officer may be sponsored by
only one mortgage broker at a time. When the sponsorship of a
loan officer is terminated, the loan officer and the mortgage
broker shall immediately notify the commissioner and the mortgage
broker shall return the loan officer license to the commissioner.
The loan officer's license then becomes inactive. The loan
officer license may be activated if, before the license expires,
a mortgage broker files a request, accompanied by a $25 fee,
notifying the commissioner that the mortgage broker will sponsor
the loan officer and will assume responsibility for the actions
of the loan officer.
(b-1) Not later than the 10th day before a mortgage broker
begins doing business under an assumed name, the mortgage broker
shall file with the commissioner a copy of an assumed name
certificate for each assumed name under which the mortgage broker
intends to conduct business and pay a $25 registration fee for
each assumed name. A loan officer may not conduct business under
any assumed name that is not the registered assumed name of the
sponsoring mortgage broker.
(b-2) A person licensed under this chapter must notify the
commissioner not later than the 10th day after the date of any
change of the person's name and pay to the commissioner a change
of name fee of $25 for the issuance of an amended license
certificate.
(b-3) A business entity licensed under this chapter shall notify
the commissioner of any change of its designated representative.
The commissioner may charge a fee of $25 for each change of a
designated representative.
(c) A 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.
Added by Acts 1999, 76th Leg., ch. 1254, Sec. 2, eff. Sept. 1,
1999.
Amended by:
Acts 2005, 79th Leg., Ch.
1018, Sec. 6.12, eff. September 1, 2005.
Acts 2007, 80th Leg., R.S., Ch.
905, Sec. 8, eff. September 1, 2007.
Sec. 156.212. MAINTENANCE AND LOCATION OF OFFICES. (a) Each
mortgage broker licensed under this chapter shall maintain a
physical office in this state. The address of the office shall be
designated on the license certificate.
(b) If a mortgage broker maintains more than one place of
business in this state, the mortgage broker shall apply for, pay
a fee of $50 for, and obtain an additional license certificate to
be known as a branch office license for each additional office to
be maintained by the mortgage broker.
(c) Repealed by Acts 2009, 81st Leg., R.S., Ch. 1317, Sec. 29,
eff. September 1, 2009.
(d) Repealed by Acts 2009, 81st Leg., R.S., Ch. 1317, Sec. 29,
eff. September 1, 2009.
Added by Acts 1999, 76th Leg., ch. 1254, Sec. 2, eff. Sept. 1,
1999.
Amended by:
Acts 2009, 81st Leg., R.S., Ch.
1317, Sec. 13, eff. September 1, 2009.
Acts 2009, 81st Leg., R.S., Ch.
1317, Sec. 29, eff. September 1, 2009.
Text of section as added by Acts 2001, 77th Leg., ch. 337, Sec. 9
Sec. 156.213. ANNUAL REPORT. (a) Each licensed mortgage broker
shall file an annual report with the Savings and Loan Department.
The report must include:
(1) data on loan originations in this state for the mortgage
broker;
(2) information on each loan officer sponsored by the mortgage
broker; and
(3) any other information required by finance commission rule.
(b) Trade information, including information used to determine
statistical entries in the report related to loan origination
volume, is confidential and may not be disclosed by the Savings
and Loan Department.
Added by Acts 2001, 77th Leg., ch. 337, Sec. 9, eff. Sept. 1,
2001.
Text of section as added by Acts 2001, 77th Leg., ch. 407, Sec. 3
Sec. 156.213. ANNUAL REPORT. (a) Each licensed mortgage broker
shall file an annual report with the commissioner on a form
prescribed by the commissioner. The report must include:
(1) data on loan origination in this state for the mortgage
broker and each loan officer sponsored by the mortgage broker;
and
(2) any other information required by the commissioner.
(b) Information contained in the annual report related to loan
origination volume or other trade information is confidential and
may not be disclosed by the commissioner or any other employee of
the Savings and Loan Department.
Added by Acts 2001, 77th Leg., ch. 407, Sec. 3, eff. Sept. 1,
2001.
Sec. 156.214. REGISTERED FINANCIAL SERVICES COMPANY. (a) A
registered financial services company may perform the services of
a mortgage broker as if the company were licensed as a mortgage
broker under this chapter, through individuals who are the
exclusive agents of the registered financial services company.
(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 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
activities of its exclusive agents;
(4) pay an annual registration fee in an amount determined as
follows:
(A) if the registered financial services company has 2,000 or
fewer exclusive agents acting in this state, an amount equal to
the lesser of:
(i) 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
(ii) $200,000;
(B) if the registered financial services company has at least
2,001 but not more than 2,500 exclusive agents acting in this
state, $225,000;
(C) if the registered financial services company has at least
2,501 but not more than 3,000 exclusive agents acting in this
state, $250,000;
(D) if the registered financial services company has at least
3,001 but not more than 5,000 exclusive agents acting in this
state, $300,000; or
(E) if the registered financial services company has at least
5,001 exclusive agents acting in this state, $350,000; and
(5) designate an officer of the person to be responsible for the
activities of the exclusive agents.
(c) If the commissioner determines that a person has met the
requirements of Subsection (b), the commissioner shall issue a
registration to the person. The registration is valid for one
year and may be renewed on or before its expiration date. A
person may renew an expired registration in the same manner as a
person may renew an expired license under Section 156.2081(b).
(d) A registered financial services company is subject to
Subchapters D and E as if the company were licensed as a mortgage
broker.
(e) No person may be an exclusive agent of a registered
financial services company without the prior consent of the
commissioner if the individual has:
(1) been convicted of a criminal o