Bill Text: TX HB3472 | 2021-2022 | 87th Legislature | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Relating to the investment and use of excess residential mortgage loan originator recovery fund fees and to the creation of the mortgage grant fund; changing a fee.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Engrossed) 2021-05-17 - Received from the House [HB3472 Detail]

Download: Texas-2021-HB3472-Introduced.html
  87R7862 JES-F
 
  By: Deshotel H.B. No. 3472
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the investment and use of excess residential mortgage
  loan originator recovery fund fees; changing a fee.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Sections 156.501(b) and (c), Finance Code, are
  amended to read as follows:
         (b)  Subject to this subsection and Section 156.502(b), the
  recovery fund shall be used to reimburse residential mortgage loan
  applicants for actual damages incurred because of acts committed by
  a residential mortgage loan originator who was licensed under
  Chapter 157 when the act was committed.  The use of the fund is
  limited to reimbursement for out-of-pocket losses caused by an act
  by a residential mortgage loan originator licensed under Chapter
  157 that constitutes a violation of Section 157.024(a)(2), (3),
  (5), (7), (8), (9), (10), (13), (16), (17), or (18) or 156.304(b).
         (c)  Amounts in the recovery fund may be invested and
  reinvested in accordance with Chapter 2256, Government Code, and
  under the prudent person standard described in Section 11b, Article
  VII, Texas Constitution [in the same manner as funds of the
  Employees Retirement System of Texas], and the interest from these
  investments shall be deposited to the credit of the fund. An
  investment may not be made under this subsection if the investment
  will impair the necessary liquidity required to satisfy claims
  [judgment payments] awarded under this subchapter.
         SECTION 2.  Section 156.502, Finance Code, is amended to
  read as follows:
         Sec. 156.502.  FUNDING. (a)  On an application for an
  original license [or for renewal of a license] issued under Chapter
  157, the applicant, in addition to paying the original application
  fee [or renewal fee], shall pay a fee in the [an] amount of
  [determined by the commissioner, not to exceed] $20.  The fee shall
  be deposited in the recovery fund.
         (b)  If the balance remaining in the recovery fund at the end
  of a calendar year is more than $3.5 million, the amount of money in
  excess of that amount shall be remitted by the commissioner to the
  comptroller for deposit in the Texas Financial Education Endowment
  account as provided by Section 393.628(c-1) [available to the
  commissioner to offset the expenses of participating in and sharing
  information with the Nationwide Mortgage Licensing System and
  Registry in accordance with Chapter 180].
         SECTION 3.  Section 157.013(b), Finance Code, is amended to
  read as follows:
         (b)  An application for a residential mortgage loan
  originator license must be accompanied by:
               (1)  an application fee in an amount determined by the
  commissioner, not to exceed $500; and
               (2)  for an original license, a recovery fund fee in the
  [an] amount of [determined by the commissioner, not to exceed] $20.
         SECTION 4.  Section 393.628, Finance Code, is amended by
  amending Subsections (c) and (f) and adding Subsection (c-1) to
  read as follows:
         (c)  Except as provided by Subsection (c-1), the [The] Texas
  Financial Education Endowment shall be administered by the finance
  commission to support statewide financial education and consumer
  credit building activities and programs, including:
               (1)  production and dissemination of approved
  financial education materials at licensed locations;
               (2)  advertising, marketing, and public awareness
  campaigns to improve the credit profiles and credit scores of
  consumers in this state;
               (3)  school and youth-based financial literacy and
  capability;
               (4)  credit building and credit repair;
               (5)  financial coaching and consumer counseling;
               (6)  bank account enrollment and incentives for
  personal savings; and
               (7)  other consumer financial education and
  asset-building initiatives as considered appropriate by the
  finance commission.
         (c-1)  The comptroller shall deposit money remitted by the
  savings and mortgage lending commissioner under Section 156.502(b)
  into a subaccount of the Texas Financial Education Endowment
  account.  Money in the subaccount must be segregated from the money
  remitted to the comptroller under Subsection (b) and may only be
  used for purposes authorized by this subsection. The finance
  commission shall administer the money deposited to the subaccount
  and with that money:
               (1)  shall provide a grant in an amount of not less than
  $100,000 each year to a statewide nonprofit organization that
  supports organizations described by Section 156.202(a-1)(1) and
  that are registered under Chapter 158 for the purposes of:
                     (A)  servicing third-party mortgage loans;
                     (B)  providing financial education to consumers
  that relates to mortgage loans; and
                     (C)  administering disaster repair programs for
  consumers with mortgage loans;
               (2)  shall provide support for statewide financial
  education, activities, and programs specifically related to
  mortgage loans for consumers, including activities and programs
  described by Subsection (c);
               (3)  if a governor's declaration of a state of disaster
  under Section 418.014, Government Code, is in effect, may provide
  direct mortgage assistance for residence homesteads, as defined by
  Section 11.13, Tax Code, as needed due to the disaster; and
               (4)  subject to the limits under Section 156.505, may
  provide reimbursements to a residential mortgage loan applicant who
  submits an application under Section 156.504 and who the
  commissioner determines has a valid claim, unless the claim is
  against a residential mortgage loan originator who conducted
  activities requiring a license under this chapter without a license
  under Chapter 157.
         (f)  The finance commission shall adopt rules to administer
  this section, including rules governing implementation of
  Subsection (c-1)(1) that:
               (1)  ensure a grant awarded under that subdivision is
  used for a public purpose described by that subdivision; and
               (2)  provide a means of recovering money awarded that
  is not used in compliance with that subdivision.
         SECTION 5.  Sections 156.501(d) and (f), Finance Code, are
  repealed.
         SECTION 6.  Section 156.501(c), Finance Code, as amended by
  this Act, applies only to an investment made on or after the
  effective date of this Act.  An investment made before the effective
  date of this Act is governed by the law as it existed immediately
  before that date, and that law is continued in effect for that
  purpose.
         SECTION 7.  This Act takes effect September 1, 2021.
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