CHAPTER 341. GENERAL PROVISIONS

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Statutes > Texas > Finance-code > Title-4-regulation-of-interest-loans-and-financed-transactions > Chapter-341-general-provisions

FINANCE CODE

TITLE 4. REGULATION OF INTEREST, LOANS, AND FINANCED TRANSACTIONS

SUBTITLE B. LOANS AND FINANCED TRANSACTIONS

CHAPTER 341. GENERAL PROVISIONS

SUBCHAPTER A. DEFINITIONS AND TIME COMPUTATION

Sec. 341.001. DEFINITIONS. In this subtitle:

(1) "Authorized lender" means a person who holds a license

issued under Chapter 342, a bank, or a savings association.

(2) "Bank" means a person:

(A) organized as a state bank under Subtitle A, Title 3, or

under similar laws of another state if the deposits of a bank

from another state are insured by the Federal Deposit Insurance

Corporation; or

(B) organized as a national bank under 12 U.S.C. Section 21 et

seq., as subsequently amended.

(3) "Cash advance" means the total of the amount of cash or its

equivalent that the borrower receives and the amount that is paid

at the borrower's direction or request, on the borrower's behalf,

or for the borrower's benefit.

(4) "Commissioner" means the consumer credit commissioner.

(5) "Credit union" means a person:

(A) doing business under Subtitle D, Title 3; or

(B) organized under the Federal Credit Union Act (12 U.S.C.

Section 1751 et seq.), as subsequently amended.

(6) "Deferred presentment transaction" means a transaction in

which:

(A) a cash advance in whole or part is made in exchange for a

personal check or authorization to debit a deposit account;

(B) the amount of the check or authorized debit equals the

amount of the advance plus a fee; and

be cashed or deposited or the authorized debit will not be made

until a designated future date.

(7) "Finance commission" means the Finance Commission of Texas

or a subcommittee created by rule of the Finance Commission of

Texas.

(8) "Interest" has the meaning assigned by Section 301.002.

(9) "Loan" has the meaning assigned by Section 301.002 and

includes a sale-leaseback transaction and a deferred presentment

transaction.

(10) "Sale-leaseback transaction" means a transaction in which a

person sells personal property used primarily for personal,

family, or household use and the buyer of the property agrees to

lease the property back to the seller. In a sale-leaseback

transaction:

(A) the buyer is a creditor and the seller is an obligor;

(B) an agreement to defer payment of a debt and an obligation to

pay the debt are established; and

for the property by the buyer is interest subject to this

subtitle.

(11) "Savings association" means a person:

(A) organized as a state savings and loan association or savings

bank under Subtitle B or C, Title 3, or under similar laws of

another state if the deposits of the savings association from

another state are insured by the Federal Deposit Insurance

Corporation; or

(B) organized as a federal savings and loan association or

savings bank under the Home Owners' Loan Act (12 U.S.C. Section

1461 et seq.), as subsequently amended.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Amended by Acts 1999, 76th Leg., ch. 344, Sec. 2.033, eff. Sept.

1, 1999; Acts 2001, 77th Leg., ch. 1235, Sec. 9, eff. Sept. 1,

2001.

Sec. 341.002. COMPUTATION OF MONTH. (a) For the computation of

time in this subtitle, a month is the period from a date in a

month to the corresponding date in the succeeding month. If the

succeeding month does not have a corresponding date, the period

ends on the last day of the succeeding month.

(b) For the computation of a fraction of a month, a day is equal

to one-thirtieth of a month.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

SUBCHAPTER B. REGULATING OFFICIAL

Sec. 341.101. CONSUMER CREDIT COMMISSIONER. The consumer credit

commissioner has the powers and shall perform all duties relating

to the issuance of a license under this subtitle and is

responsible for the other administration of this subtitle except

as provided by this subchapter.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 341.102. REGULATION OF BANKS. (a) The banking

commissioner shall enforce this subtitle relating to the

regulation of a state bank operating under this subtitle.

(b) The official exercising authority over the operations of

national banks equivalent to the authority exercised by the

banking commissioner over state banks may enforce this subtitle

relating to the regulation of a national bank operating under

this subtitle.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 341.103. REGULATION OF SAVINGS INSTITUTIONS, LICENSED

MORTGAGE BROKERS AND LOAN OFFICERS, AND REGISTERED MORTGAGE

BANKERS AND LICENSED LOAN OFFICERS. (a) The savings and

mortgage lending commissioner shall enforce this subtitle

relating to the regulation of:

(1) state savings associations operating under this subtitle;

(2) state savings banks operating under this subtitle;

(3) persons licensed under Chapter 156; and

(4) persons registered or licensed under Chapter 157.

(b) The official exercising authority over the operation of

federal savings associations equivalent to the authority

exercised by the savings and mortgage lending commissioner over

state savings associations may enforce this subtitle relating to

the regulation of a federal savings association operating under

this subtitle.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Amended by Acts 1999, 76th Leg., ch. 344, Sec. 2.034, eff. Sept.

1, 1999.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

905, Sec. 11, eff. September 1, 2007.

Acts 2007, 80th Leg., R.S., Ch.

905, Sec. 12, eff. September 1, 2007.

Acts 2007, 80th Leg., R.S., Ch.

921, Sec. 6.060, eff. September 1, 2007.

Acts 2009, 81st Leg., R.S., Ch.

1147, Sec. 9, eff. April 1, 2010.

Acts 2009, 81st Leg., R.S., Ch.

1147, Sec. 10, eff. April 1, 2010.

Sec. 341.104. REGULATION OF CREDIT UNIONS. (a) The credit

union commissioner shall enforce this subtitle relating to the

regulation of state credit unions operating under this subtitle.

(b) The official exercising authority over federal credit unions

equivalent to the authority exercised by the credit union

commissioner may enforce this subtitle relating to the regulation

of a federal credit union operating under this subtitle.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

SUBCHAPTER C. REVISED CEILINGS AND BRACKETS

Sec. 341.201. DEFINITIONS OF INDEXES. In this subchapter:

(1) "Consumer price index" means the Consumer Price Index for

Urban Wage Earners and Clerical Workers: U.S. City Average, All

Items, 1967=100, compiled by the Bureau of Labor Statistics,

United States Department of Labor, or, if that index is canceled

or superseded, the index chosen by the Bureau of Labor Statistics

as most accurately reflecting the changes in the purchasing power

of the dollar for consumers.

(2) "Reference base index" means the consumer price index for

December 1967.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 341.202. REVISION OF CEILING OR BRACKET. (a) Each year

the commissioner shall compute, in accordance with Section

341.203, the amount of each:

(1) ceiling on a cash advance regulated under this subtitle that

is required to be revised; and

(2) bracket that establishes a range of cash advances or

balances to which a maximum charge provided by this subtitle

applies and that is required to be revised.

(b) The revised ceiling or bracket amount takes effect on July 1

of the year of its computation.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 341.203. COMPUTATION OF REVISED CEILING OR BRACKET. (a)

The amount of a revised ceiling or bracket is computed by:

(1) dividing the reference base index into the consumer price

index at the end of the preceding year;

(2) computing the percentage of change under Subdivision (1) to

the nearest whole percent;

(3) rounding the result computed under Subdivision (2) to the

next lower multiple of 10 percent unless the result computed

under Subdivision (2) is a multiple of 10 percent in which event

that result is used; and

(4) multiplying the reference amount of the ceiling or bracket

provided by this subtitle by the result under Subdivision (3).

(b) If the consumer price index is revised, the revised index

shall be used to compute amounts under this section after that

revision takes effect. If the revision changes the reference base

index, a revised reference base index shall be used. The revised

reference base index shall bear the same ratio to the reference

base index as the revised consumer price index for the first

month in which it is available bears to the consumer price index

for the first month in which the revised consumer price index is

available.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 341.204. PUBLICATION OF REVISED CEILING, BRACKET, OR INDEX

INFORMATION. (a) The commissioner shall send the amount of a

revised ceiling or bracket computed under Section 341.203 to the

secretary of state for publication in the Texas Register before

May 1 of the year in which the amount of the bracket or ceiling

is to change.

(b) If the consumer price index is revised or superseded, the

commissioner promptly shall send the revised index, the numerical

equivalent of the reference base index under a revised reference

base index, or the designation of the index that supersedes the

consumer price index, as appropriate, to the secretary of state

for publication in the Texas Register.

under this section.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

SUBCHAPTER D. ADVERTISING REQUIREMENTS

Sec. 341.301. INFORMATION ABOUT ADVERTISERS. (a) In each

advertisement that purports to offer credit regulated by this

subtitle, Subtitle C, or Chapter 394, the advertiser shall

disclose the legal or registered name of the advertiser and:

(1) shall disclose the street address of the advertiser's place

of business unless the advertisement:

(A) is located on the premises of the advertiser's place of

business; or

(B) is broadcast by radio or television; or

(2) if the advertisement is broadcast by radio or television,

shall:

(A) disclose the telephone number of the advertiser; and

(B) comply with the applicable disclosure requirements of 12

C.F.R. Section 226.1 et seq. (Regulation Z).

(b) This section does not apply to:

(1) a federally insured depository institution; or

(2) a person engaged in interstate commerce who advertises under

a generally recognized trade name, abbreviated form of a trade

name, or logo.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

SUBCHAPTER E. PROHIBITIONS AND VIOLATIONS

Sec. 341.401. DISCRIMINATION PROHIBITED.

See, also, italicized material following text of this section

(a) An authorized lender or other person involved in a

transaction subject to this title may not deny to an individual

who has the capacity to contract an extension of credit,

including a loan, in the individual's name or restrict or limit

the credit extended:

(1) because of sex, race, color, religion, national origin,

marital status, or age;

(2) because all or part of the individual's income derives from

a public assistance program in the form of social security or

supplemental security income; or

(3) because the individual has in good faith exercised a right

under the Consumer Credit Protection Act (15 U.S.C. Section 1601

et seq.; 18 U.S.C. Section 891 et seq.).

(b) In interpreting this section, a court or administrative

agency shall be guided by the Equal Credit Opportunity Act (15

U.S.C. Section 1691 et seq.) and regulations under and

interpretations of that Act by the Federal Reserve Board to the

extent that Act and those regulations and interpretations can be

made applicable to conduct prohibited by this section.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 341.402. PENALTIES FOR PROHIBITED DISCRIMINATION. (a) A

person who violates Section 341.401 is liable to the aggrieved

individual for:

(1) the actual damages caused by the violation;

(2) punitive damages not to exceed $10,000 in an action brought

by the aggrieved individual; and

(3) court costs.

(b) The liability of a person under this section is instead of

and not in addition to that person's liability under Title VII of

the Consumer Credit Protection Act (15 U.S.C. Section 1691 et

seq.). If the same act or omission violates Section 341.401 and

applicable federal law, the person aggrieved by that conduct may

bring a legal action to recover monetary damages either under

this section or under that federal law, but not both.

section, a person holding a license issued under this subtitle

who violates Section 341.401 is subject to revocation or

suspension of the license or the assessment of civil penalties by

the commissioner.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Amended by:

Acts 2005, 79th Leg., Ch.

1018, Sec. 1.02, eff. September 1, 2005.

Sec. 341.403. FALSE, MISLEADING, OR DECEPTIVE ADVERTISING. (a)

A person may not, in any manner, advertise or cause to be

advertised a false, misleading, or deceptive statement or

representation relating to a rate, term, or condition of a credit

transaction, including a loan, regulated under this subtitle,

Subtitle C, or Chapter 394, or advertise credit terms that the

person does not intend to offer to consumers who qualify for

those terms.

(b) If a rate or charge is stated in advertising, the rate or

charge shall be stated fully and clearly.

advertising or competitive bidding by a license holder regulated

by the Office of Consumer Credit Commissioner except to prohibit

false, misleading, or deceptive practices.

(d) In its rules to prohibit false, misleading, or deceptive

practices, the finance commission may not include a rule that:

(1) restricts the use of any medium for advertising;

(2) restricts the use of a license holder's personal appearance

or voice in an advertisement;

(3) relates to the size or duration of an advertisement by the

license holder; or

(4) restricts the license holder's advertisement under a trade

name, unless the trade name is deceptive.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Amended by Acts 2001, 77th Leg., ch. 1235, Sec. 10, eff. Sept. 1,

2001.

Amended by:

Acts 2005, 79th Leg., Ch.

1018, Sec. 1.03, eff. September 1, 2005.

Sec. 341.404. PROHIBITED ACTS RELATING TO A LOAN. A person may

not perform an act, including advertising, or offer a service

that would cause another to believe that the person is offering

to make, arrange, or negotiate a loan that is subject to this

subtitle, Subtitle C, or Chapter 394 unless the person is

authorized to perform the act or offer the service as:

(1) a credit service organization under Chapter 393;

(2) a pawnbroker under Chapter 371; or

(3) an authorized lender.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 341.405. PENALTY FOR MAKING ILLEGAL OFFER. (a) A person

commits an offense if the person violates Section 341.404. An

offense under that section is a Class C misdemeanor.

(b) A person who violates Section 341.404:

(1) may be prosecuted for the offense; or

(2) may be held liable for:

(A) the penalties under Chapter 349; and

(B) civil penalties assessed by the consumer credit

commissioner.

penalties described by Subsection (b)(2).

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 341.406. WHEN ACT OR OMISSION NOT VIOLATION. An act or

omission does not violate this title if the act or omission

conforms to:

(1) Subchapter C;

(2) a provision determined by the commissioner; or

(3) an interpretation of this title that is in effect at the

time of the act or omission and that was made by:

(A) the commissioner under Section 14.108; or

(B) an appellate court of this state or the United States.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

SUBCHAPTER F. LICENSING AND REGULATION IN GENERAL

Sec. 341.501. STAGGERED RENEWAL. The finance commission by rule

may adopt a system under which licenses under this subtitle

expire on various dates during the year. For the year in which

the license expiration date is changed, the Office of Consumer

Credit Commissioner shall prorate license fees 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.

Added by Acts 2001, 77th Leg., ch. 1235, Sec. 11, eff. Sept. 1,

2001.

Sec. 341.502. FORM OF LOAN CONTRACT AND RELATED DOCUMENTS. (a)

A contract for a loan under Chapter 342, a retail installment

transaction under Chapter 348 other than a contract for a

commercial vehicle, or a home equity loan regulated by the Office

of Consumer Credit Commissioner must be:

(1) written in plain language designed to be easily understood

by the average consumer; and

(2) printed in an easily readable font and type size.

(a-1) If the terms of the agreement for a loan under Subsection

(a) were negotiated in Spanish, a copy of a summary of those

terms and other pertinent information shall be provided to the

debtor in Spanish in a form identical to disclosures required for

a closed-end transaction under 12 C.F.R. Section 226.18.

(b) The finance commission shall adopt rules governing the form

of contracts to which this section applies. The rules must

include model contracts complying with the rules and this

section.

model contract. The person, however, may not use a contract other

than a model contract unless the person has submitted the

contract to the commissioner. The commissioner shall issue an

order disapproving the contract if the commissioner determines

that the contract does not comply with this section or rules

adopted under this section.

(d) The person may begin using a contract submitted under

Subsection (c) on the date it is submitted for review. If the

commissioner issues an order disapproving the contract, the

person may not use the contract after the order takes effect.

(e) A person may not represent that the commissioner's failure

to disapprove a contract constitutes an approval of the contract

by the commissioner, the Office of Consumer Credit Commissioner,

or the finance commission.

Added by Acts 2001, 77th Leg., ch. 1235, Sec. 11, eff. Sept. 1,

2001.

Amended by:

Acts 2005, 79th Leg., Ch.

1071, Sec. 1, eff. September 1, 2005.

Acts 2005, 79th Leg., Ch.

1071, Sec. 2, eff. September 1, 2005.

Acts 2009, 81st Leg., R.S., Ch.

238, Sec. 2, eff. September 1, 2009.

SUBCHAPTER G. STATE-LICENSED RESIDENTIAL MORTGAGE LOAN ORIGINATOR

RECOVERY FUND

Sec. 341.601. DEFINITION. In this subchapter, "fund" means the

state-licensed residential mortgage loan originator recovery

fund.

Added by Acts 2009, 81st Leg., R.S., Ch.

1104, Sec. 9, eff. June 19, 2009.

Sec. 341.602. STATE-LICENSED RESIDENTIAL MORTGAGE LOAN

ORIGINATOR RECOVERY FUND. (a) The commissioner under Chapter

180 shall establish, administer, and maintain a state-licensed

residential mortgage loan originator recovery fund as provided by

this subchapter. The amounts received by the commissioner for

deposit in the fund shall be held by the commissioner in trust

for carrying out the purposes of the fund.

(b) Subject to this subsection, the fund shall be used to

reimburse residential mortgage loan applicants for actual damages

incurred because of acts committed by a state-licensed

residential mortgage loan originator who was licensed under

Chapter 342, 347, 348, or 351 when the act was committed. The

use of the fund is limited to reimbursement for out-of-pocket

losses caused by an act that constitutes a violation of Chapter

180 or this subtitle. Payments from the fund may not be made to

a lender who makes a residential mortgage loan originated by the

state-licensed residential mortgage loan originator or who

acquires a residential mortgage loan originated by the

state-licensed residential mortgage loan originator.

to reimburse expenses incurred to secure and destroy residential

mortgage loan documents that have been abandoned by a current or

former state-licensed residential mortgage loan originator under

the regulatory authority of the agency.

(d) Payments from the fund shall be reduced by the amount of any

recovery from the state-licensed residential mortgage loan

originator or from any surety, insurer, or other person or entity

making restitution to the applicant on behalf of the originator.

(e) The commissioner, as manager of the fund, is entitled to

reimbursement for reasonable and necessary costs and expenses

incurred in the management of the fund, including costs and

expenses incurred with regard to applications filed under Section

341.605.

(f) Amounts in the fund may be invested and reinvested in the

same manner as funds of the Employees Retirement System of Texas,

and the interest from those 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 payment of judgments awarded under this

subchapter.

Added by Acts 2009, 81st Leg., R.S., Ch.

1104, Sec. 9, eff. June 19, 2009.

Sec. 341.603. FUNDING. (a) An applicant for an original

residential mortgage loan originator license issued under Chapter

342, 347, 348, or 351 or for renewal of a residential mortgage

loan originator license issued under Chapter 342, 347, 348, or

351 shall, in addition to paying the original application fee or

renewal fee, pay a fee in an amount determined by the

commissioner. The fee shall be deposited in the fund.

(b) If the balance remaining in the fund at the end of a

calendar year is more than $2.5 million, the amount of money in

excess of that amount shall be 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.

Added by Acts 2009, 81st Leg., R.S., Ch.

1104, Sec. 9, eff. June 19, 2009.

Sec. 341.604. STATUTE OF LIMITATIONS. (a) An application for

the recovery of actual damages from the fund under Section

341.605 may not be filed after the second anniversary of the date

of the alleged act or omission causing the actual damages or the

date the act or omission should reasonably have been discovered.

(b) This section does not apply to a subrogation claim brought

by the commissioner for recovery of money paid out of the fund.

Added by Acts 2009, 81st Leg., R.S., Ch.

1104, Sec. 9, eff. June 19, 2009.

Sec. 341.605. PROCEDURE FOR RECOVERY. (a) To recover from the

fund, a residential mortgage loan applicant must file a written

sworn application with the commissioner in the form prescribed by

the commissioner. A person who knowingly makes a false statement

in connection with applying for money out of the fund may be

subject to criminal prosecution under Section 37.10, Penal Code.

(b) The residential mortgage loan applicant is required to show:

(1) that the applicant's claim is based on facts allowing

recovery under Section 341.602; and

(2) that the applicant:

(A) is not a spouse of the state-licensed residential mortgage

loan originator;

(B) is not a child, parent, grandchild, grandparent, or sibling,

including relationships by adoption, of the state-licensed

residential mortgage loan originator;

state-licensed residential mortgage loan originator or a current

or former employer, employee, or associate of the originator;

(D) is not a person who has aided, abetted, or participated

other than as a victim with the state-licensed residential

mortgage loan originator in any activity that is illegal under

this subtitle or Chapter 180 or is not the personal

representative of a state-licensed residential mortgage loan

originator; and

(E) is not licensed as a state-licensed residential mortgage

loan originator who is seeking to recover any compensation in the

transaction or transactions for which the application for payment

is made.

staff shall:

(1) notify each appropriate license holder and the issuer of any

surety bond issued in connection with their licenses; and

(2) investigate the application and issue a preliminary

determination, giving the applicant, the license holder, and any

surety an opportunity to resolve the matter by agreement or to

dispute the preliminary determination.

(d) If the preliminary determination under Subsection (c)(2) is

not otherwise resolved by agreement and is not disputed by

written notice to the commissioner before the 31st day after the

notification date, the preliminary determination automatically

becomes final and the commissioner shall make payment from the

fund, subject to the limits of Section 341.606.

(e) If the preliminary determination under Subsection (c)(2) is

disputed by the applicant, license holder, or any surety by

written notice to the commissioner before the 31st day after the

notification date, the matter shall be set for a hearing governed

by Chapter 2001, Government Code, and the hearing rules of the

finance commission.

Added by Acts 2009, 81st Leg., R.S., Ch.

1104, Sec. 9, eff. June 19, 2009.

Sec. 341.606. RECOVERY LIMITS. (a) A person entitled to

receive payment out of the fund is entitled to receive

reimbursement of actual, out-of-pocket damages as provided by

this section.

(b) A payment from the fund may be made as provided by Section

341.605 and this section. A payment for claims:

(1) arising out of the same transaction, including interest, is

limited in the aggregate to $25,000, regardless of the number of

claimants; and

(2) against a single person licensed as a residential mortgage

loan originator under Chapter 342, 347, 348, or 351 is limited in

the aggregate to $50,000 until the fund has been reimbursed for

all amounts paid.

(b)(1) and (2) that exceed the amounts available under the fund,

the commissioner shall prorate recovery based on the amount of

damage suffered by each claimant.

Added by Acts 2009, 81st Leg., R.S., Ch.

1104, Sec. 9, eff. June 19, 2009.

Sec. 341.607. REVOCATION OF LICENSE FOR PAYMENT FROM FUND. (a)

The commissioner may revoke a residential mortgage loan

originator license issued under this subtitle on proof that the

commissioner has made a payment from the fund of any amount

toward satisfaction of a claim against a state-licensed

residential mortgage loan originator under this subchapter.

(b) The commissioner may seek to collect from a state-licensed

residential mortgage loan originator the amount paid from the

fund on behalf of the originator and any costs associated with

investigating and processing the claim against the fund or with

collection of reimbursement for payments from the fund, plus

interest at the current legal rate until the amount has been

repaid in full. Any amount, including interest, recovered by the

commissioner shall be deposited to the credit of the fund.

under this section.

(d) A state-licensed residential mortgage loan originator on

whose behalf payment was made from the fund is not eligible to

receive a new license until the originator has repaid in full,

plus interest at the current legal rate, the amount paid from the

fund on the originator's behalf and any costs associated with

investigating and processing the claim against the fund or with

collection of reimbursement from the fund.

(e) This section does not limit the authority of the

commissioner to take disciplinary action against a state-licensed

residential mortgage loan originator for a violation of the

chapter under which the license was issued or the rules adopted

by the finance commission under that chapter. The repayment in

full to the fund of all obligations of a state-licensed

residential mortgage loan originator does not nullify or modify

the effect of any other disciplinary proceeding.

Added by Acts 2009, 81st Leg., R.S., Ch.

1104, Sec. 9, eff. June 19, 2009.

Sec. 341.608. SUBROGATION. When the commissioner has paid an

applicant an amount from the fund under Section 341.605, the

commissioner is subrogated to all of the rights of the applicant

to the extent of the amount paid. The applicant shall assign the

applicant's right, title, and interest in any subsequent judgment

against the state-licensed residential mortgage loan originator

up to the amount paid by the commissioner. Any amount, including

interest, recovered by the commissioner on the assignment shall

be deposited to the credit of the fund.

Added by Acts 2009, 81st Leg., R.S., Ch.

1104, Sec. 9, eff. June 19, 2009.

Sec. 341.609. FAILURE TO COMPLY WITH SUBCHAPTER OR RULE ADOPTED

BY FINANCE COMMISSION. The failure of an applicant under Section

341.605 to comply with a provision of this subchapter or a rule

adopted by the finance commission relating to the fund

constitutes a waiver of any rights under this subchapter.

Added by Acts 2009, 81st Leg., R.S., Ch.

1104, Sec. 9, eff. June 19, 2009.

Sec. 341.610. RULEMAKING. The finance commission may adopt

rules on the commissioner's recommendation to promote a fair and

orderly administration of the fund consistent with the purposes

of this subchapter.

Added by Acts 2009, 81st Leg., R.S., Ch.

1104, Sec. 9, eff. June 19, 2009.

State Codes and Statutes

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