HBA-JLV H.B. 1493 77(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 1493
By: Wise
Financial Institutions
2/28/2001
Introduced



BACKGROUND AND PURPOSE 

The Texas Savings and Loan Department (department) protects the depositors
of Texas by ensuring the sage and sound operation of state-chartered
savings institutions.  In 1999, the legislature also gave the department
the responsibility for licensing mortgage brokers.  House Bill 1493 amends
the Mortgage Broker License Act regarding provisional licenses for and
routine on-site inspection of mortgage brokers and loan officers. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that rulemaking
authority is expressly delegated  to the savings and loan commissioner in
SECTION 4 (Section 156.207, Finance Code), and in SECTION 6 (Section
156.301, Finance Code) of this bill. 

ANALYSIS

House Bill 1493 amends the Finance Code to modify provisions relating to
the regulation of mortgage brokers.  The bill modifies the list of
exemptions from regulations of mortgage brokers to specify that only
full-time employees of certain institutions are exempt from the regulations
(Sec. 156.202).  The bill requires the savings and loan commissioner
(commissioner)  to obtain criminal history record information on each
applicant from the Federal Bureau of Investigation (FBI) and to require
applicants for a mortgage broker or loan officer license (license) to
submit information and fingerprints (Sec. 156.206).  The bill provides that
if 61 days after the commissioner requested the information, the FBI has
not submitted the criminal history record information, the commissioner is
required to issue a provisional license to the applicant, with an
expiration date of not later than 60 days after the date of issuance.  The
bill provides for the renewal of the provisional license pending receipt of
the criminal history record information.  The bill requires the
commissioner to issue a license to the applicant if the commissioner has
not received the requested information from the FBI after the 181st day
from the date the information was requested.  The bill requires the
commissioner to adopt rules for the administration of these provisions
(Sec. 156.207). 

The bill requires each licensed mortgage broker to file a confidential
annual report with the commissioner on a form prescribed by the
commissioner with certain requirements (Sec. 156.213).  The bill authorizes
the commissioner to investigate the actions and records of a licensed
mortgage broker if the commissioner has reasonable cause to believe that a
violation of the provisions regulating mortgage brokers or any rule has
occurred or is about to occur.  The bill requires the commissioner to adopt
rules specifying the criteria to be used in determining reasonable cause.
The bill authorizes the commissioner to conduct routine on-site inspections
of licensed mortgage brokers and loan officers.  An affiliate of a licensee
is subject to routine inspections by the commissioner only if reports
issued in connection with a routine inspection of a license holder provide
documented evidence of unlawful activity between a license holder and an
affiliate.  The bill authorizes the commissioner to cooperate and share
information with or authorize an inspection or examination to be conducted
by an agency of this state, an agency of the federal government, another
state, or an agency of another state.  The bill requires the commissioner
to adopt rules to implement provisions relating to complaints,
investigations, and routine inspections (Sec. 156.301). 

 EFFECTIVE DATE

September 1, 2001.