In the November 4, 2011 issue of the Texas Register (Vol. 36, No. 44), the Finance Commission of Texas (the Commission) published changes to the rules in the Texas Administrative Code (TAC) concerning Texas Residential Mortgage Loan Originator Regulations (7 TAC Chapter 80) and Mortgage Banker Registration and Residential Mortgage Loan Officer Licensing (7 TAC Chapter 81). The Commission made these changes in order to (i) implement the provisions of Senate Bill 1124 passed by the 2011 Texas legislative session (see our November 15, 2011 legislative update), (ii) conform the rules to the current practices of the Texas Department of Savings and Mortgage Lending (the Department), (iii) reconcile language in the rules to statutory language, and (iv) add clarification where needed. These administrative rules changes are effective as of November 13, 2011.

7 TAC Chapter 80

The Commission repealed §§80.1 - 80.7 and amended §§80.9, 80.13, 80.14, 80.15, 80.20 - 80.23, 80.301 - 80.305, and 80.307, as follows:

§§80.1 Scope; 80.2 Definitions; 80.3 Licensing – General; 80.4 Qualifications for Obtaining Licenses; 80.5 Renewals; 80.6 Sponsorship and Termination Thereof; and 80.7 Background Checks. These rules are repealed because they were replaced by Subchapter L (§§80.301 – 80.307) of 7 TAC Chapter 80 on January 1, 2011.
 
§80.9 Required Disclosures. The amendment to §80.9 deletes the words “License Number”  and replaces them with the text “NMLS ID” on the Residential Mortgage Loan Originator Disclosure form in Figure: 7 TAC §80.9(b).

§80.13 Books and Records. The amendment to subdivision (1)(B)(v) adds an additional item to include in the Mortgage Transaction Log and clarifies language used for a residential mortgage loan originator, as follows: “(v) the name of the residential mortgage loan originator and NMLS ID.”

§80.14 Education Program. The amendment to §80.14 is necessary because subsections (a) - (q) were rescinded and replaced with subsection (r) on January 1, 2011, so that §80.14  now reads “Pre-licensing and continuing education courses required under the Act and Finance Code Chapter 180 shall be reviewed and approved by the Nationwide Mortgage Licensing System and Registry.”

§80.15 Complaints, Administrative Penalties, and Disciplinary and/or Enforcement Actions. The amendment to §80.15  adds to subsection (a) a citation to “Finance Code §180.002(14)” for the definition of “person;” adds to subparagraph (a)(2) that the Commissioner must also send a copy of the written notice of a complaint the subject of subparagraph (a)(2) to the consumer complaint employee designated on the mortgage company record in the NMLSR; and replaces “the” with “each” in the first line of subparagraph (a)(4).

Our Comments:  The term “person” is defined in §180.002(14) as “an individual, corporation, company, limited liability company, partnership, or association.”

See attached for complete memorandum