§ 156.303 — DISCIPLINARY ACTION; CEASE AND DESIST ORDER.

Texas § 156.303

• Jurisdiction: Texas
• Code FI: Finance Code

Text

Sec. 156.303. DISCIPLINARY ACTION; CEASE AND DESIST ORDER. (a) The commissioner may order disciplinary action against a licensed or registered residential mortgage loan company when the commissioner, after notice and opportunity for hearing, has determined that the company:
(1) obtained a license or registration, including a renewal of a license or registration, under this chapter through a false or fraudulent representation or made a material misrepresentation in an application for a license or registration or for the renewal of a license or registration under this chapter;
(2) published or caused to be published an advertisement related to the business of a residential mortgage loan company that:
(A) is misleading;
(B) is likely to deceive the public;
(C) in any manner tends to create a misleading impression;
(D) fails to identify as a residential mortgage loan company the person causing the advertisement to be published; or
(E) violates federal or state law;
(3) while performing an act for which a license or registration under this chapter is required, engaged in conduct that constitutes improper, fraudulent, or dishonest dealings;
(4) entered a plea of guilty or nolo contendere to, or is convicted of, a criminal offense that is a felony or that involves fraud or moral turpitude in a court of this or another state or in a federal court;
(5) failed to use a fee collected in advance of closing of a residential mortgage loan for a purpose for which the fee was paid;
(6) charged or received, directly or indirectly, a fee for assisting a mortgage applicant in obtaining a residential mortgage loan before all of the services that the person agreed to perform for the mortgage applicant are completed, and the proceeds of the residential mortgage loan have been disbursed to or on behalf of the mortgage applicant;
(7) failed within a reasonable time to honor a credit card charge back or a check issued to the commissioner after the commissioner has mailed a request for payment, including payment of any applicable fees, to the person's last known business address as reflected by the commissioner's records;
(8) paid compensation to a person who is not licensed, registered, or exempt under this chapter or Chapter 157 for acts for which a license or registration under this chapter or Chapter 157 is required;
(9) induced or attempted to induce a party to a contract to breach the contract so the person may make a residential mortgage loan;
(10) published or circulated an unjustified or unwarranted threat of legal proceedings in matters related to the person's actions or services as a residential mortgage loan company;
(11) established an association, by employment or otherwise, with a person not licensed, registered, or exempt under this chapter or Chapter 157 who was expected or required to act as a residential mortgage loan company or residential mortgage loan originator;
(12) aided, abetted, or conspired with a person to circumvent the requirements of this chapter or Subchapter D , Chapter 157 ;
(13) acted in the dual capacity of a residential mortgage loan company and real estate broker, salesperson, or attorney in a transaction without the knowledge and written consent of the mortgage applicant or in violation of applicable requirements under federal law;
(14) discriminated against a prospective borrower on the basis of race, color, religion, sex, national origin, ancestry, familial status, or a disability;
(15) failed or refused on demand to:
(A) produce a document, book, or record concerning a residential mortgage loan transaction conducted by a residential mortgage loan originator for inspection by the commissioner or the commissioner's authorized personnel or representative;
(B) give the commissioner or the commissioner's authorized personnel or representative free access to the books or records relating to the person's business kept by an officer, agent, or employee of the person or any business entity through which the person conducts residential mortgage loan origination activities, including a subsidiary or holding company affiliate; or
(C) provide information requested by the commissioner as a result of a formal or informal complaint made to the commissioner;
(16) failed without just cause to surrender, on demand, a copy of a document or other instrument coming into the person's possession that was provided to the person by another person making the demand or that the person making the demand is under law entitled to receive;
(17) disregarded or violated this chapter, a rule adopted by the finance commission under this chapter, or an order issued by the commissioner under this chapter; or
(18) provided false information to the commissioner during the course of an investigation or inspection.
(a-1) The commissioner may also order disciplinary action after notice and opportunity for hearing against a licensed or registered residential mortgage loan company if the commissioner becomes aware during the term of the license of any fact that would have been grounds for denial of an original license if the fact had been known by the commissioner on the date the license was issued.
(b) In addition to disciplinary action by the commissioner authorized under Subsection (a), the commissioner, if the commissioner has reasonable cause to believe that a person licensed under this chapter has or is about to violate this section, may issue without notice and hearing an order to cease and desist from continuing a particular action or an order to take affirmative action, or both, to enforce compliance with this chapter.
(c) An order issued under Subsection (b) must contain a reasonably detailed statement of the facts on which the order is made. If a person against whom the order is made requests a hearing, the commissioner shall set and give notice of a hearing before the commissioner or a hearings officer. The hearing shall be governed by Chapter 2001 , Government Code. Based on the findings of fact, conclusions of law, and recommendations of the hearings officer, the commissioner by order may find a violation has occurred or not occurred.
(d) If a hearing is not requested under Subsection (c) not later than the 30th day after the date on which an order is made, the order is considered final and not appealable.
(e) The commissioner, after giving notice and an opportunity for hearing, may impose against a person who violates a cease and desist order an administrative penalty in an amount not to exceed $1,000 for each day of the violation. In addition to any other remedy provided by law, the commissioner may institute in district court a suit for injunctive relief and to collect the administrative penalty. A bond is not required of the commissioner with respect to injunctive relief granted under this subsection.
(f) For purposes of Subsection (a), a person is considered convicted if a sentence is imposed on the person, the person receives community supervision, including deferred adjudication community supervision, or the court defers final disposition of the person's case.
(g) If a person fails to pay an administrative penalty that has become final or fails to comply with an order of the commissioner that has become final, in addition to any other remedy provided under law the commissioner, on not less than 10 days' notice to the person, may without a prior hearing suspend the person's residential mortgage loan company license or registration. The suspension shall continue until the person has complied with the order or paid the administrative penalty. During the period of suspension, the person may not originate a residential mortgage loan and all compensation received by the person during the period of suspension is subject to forfeiture as provided by Section 156.406 (b).
(h) An order of suspension under Subsection (g) may be appealed. An appeal is a contested case governed by Chapter 2001 , Government Code. A hearing of an appeal of an order of suspension issued under Subsection (g) shall be held not later than the 30th day after the date of receipt of the notice of appeal. The appellant shall be provided at least three days' notice of the time and place of the hearing.
(i) An order revoking the license or registration of a residential mortgage loan company may provide that the person is prohibited, without obtaining prior written consent of the commissioner, from:
(1) engaging in the business of originating or making residential mortgage loans; or
(2) otherwise affiliating with a person for the purpose of engaging in the business of originating or making residential mortgage loans.
(j) The commissioner may, on not less than 10 days' notice to the person, suspend a person's license without a prior hearing under this chapter if an indictment or information is filed or returned alleging that the person committed a criminal offense involving fraud, theft, or dishonesty. The suspension continues until the criminal case is dismissed or the person is acquitted. A person may appeal the suspension in accordance with Subsection (h).
(k) The commissioner may, at the commissioner's discretion, rescind or vacate any previously issued order.

Legislative History

Added by Acts 1999, 76th Leg., ch. 1254, Sec. 2, eff. Sept. 1, 1999. Amended by Acts 2001, 77th Leg., ch. 867, Sec. 92, eff. Sept. 1, 2001; Acts 2003, 78th Leg., ch. 170, Sec. 3, eff. Sept. 1, 2003. Amended by: Acts 2005, 79th Leg., Ch. 1018 (H.B. 955 ), Sec. 6.15, eff. September 1, 2005. Acts 2007, 80th Leg., R.S., Ch. 905 (H.B. 2783 ), Sec. 10, eff. September 1, 2007. Acts 2009, 81st Leg., R.S., Ch. 1317 (H.B. 2774 ), Sec. 17, eff. September 1, 2009. Acts 2011, 82nd Leg., R.S., Ch. 655 (S.B. 1124 ), Sec. 32, eff. September 1, 2011. Acts 2013, 83rd Leg., R.S., Ch. 160 (S.B. 1004 ), Sec. 34, eff. September 1, 2013.