Bill Text: TX SB1791 | 2021-2022 | 87th Legislature | Introduced

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Bill Title: Relating to the investment and use of excess residential mortgage loan originator recovery fund fees; changing a fee.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2021-03-26 - Referred to Business & Commerce [SB1791 Detail]

Download: Texas-2021-SB1791-Introduced.html

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87R7862 JES-F
By: Lucio S.B. No. 1791

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.