Legislative Blog

J.B. Williams, J.D.

4 bills that modify the Finance Code

A Blog about 88th Legislature Laws

A Bit of Background

The following backgrounds help summarize the author's views on both the general topic: Texas and more specifically 88th Legislature Laws as it relates to that topic.

Brief Summary of Texas

Texas is truly a Republic. There are a multitude of items that to modify the state constitution must be modified. So there are times when Constitutional amendments are on the voting ballots. While I sometimes abhor the wording, the concept that all of those legally able to vote in Texas must vote on the change is a good one. And bills in Texas are generally short, making it easier for everyone to understand.

Summary of 88th Legislature Laws

The blogs here will discuss the laws passed by Congress and signed into law, as well as those, passed by Congress and approved by the voters to become law. There are a multitude of laws and each time I post blogs I will notate here the current effective date if it is different from prior blogs. I am currently posting bills that took effect immediately - those bills total 336. I am currently posting regarding larger bills, so each blog covers a single bill.

Blog Summary

HB 219 - Release of deed of trust or other lien securing a home loan

HB 1666 - Commingling of funds by digital asset service providers

HB 2746 - Refunds and credits under terminated debt cancellation agreements

SB 1371 - Regulation of consumer credit transactions; changing fee

4 bills that modify the Finance Code

Published: 2025-06-03

HB 219

Release of deed of trust or other lien securing a home loan

Within 60 days of a mortgage holder receiving the payoff amount for a home loan, they must deliver a release of lien to the mortgagor or file a release of lien with the appropriate county clerk's office for recording. I'm not sure if this is in response to the thousands of mortgage servicers that never filed liens with the clerk's offices or what. But this makes it seem like they can send a release to the home owner without notifying the clerk that the lien has been released. Thankfully the mortgagor can deliver a written request within 20 days of the payoff to request that the mortgage servicer either sends them the release or files it with the county clerk. Then the mortgage servicer has 30 days to comply.

Pretty short changes, and while there are ways to home owners to ensure their release is filed without their needing to handle it themselves, I'm not sure homeowners will be aware. Perhaps there is language elsewhere stating that mortgage servicers need to advise home owners of their options at some point. I hope it isn't when they take out the loan because there is such a volume of paperwork then. Most don't read it ever, and then it would be years before the payoff. While I am a firm believer in people being responsible, this is one where it seems appropriate for a mortgage servicer to be required to ensure the release information is provided to the clerk. If they filed a lien, then they should be responsible for taking that lien off the county paperwork.

HB 1666

Commingling of funds by digital asset service providers

Commission is the Finance Commission of Texas.

Department is the Texas Department of Banking

This will apply to a digital asset service provider that is doing business in Texas, holds a money transmission license, and either serves more than 500 digital asset customers in Texas or has at least $20 million in customer funds. There are exclusions for banks or entities specifically excluded.

A digital asset service provider may not commingle customer funds with funds belonging to the service provider. This includes the service provider's operating capital; proprietary accounts; digital assets; fiat currency; or other property that is not customer funds. Customer funds may not be used to secure or guarantee transactions other than for the customer. They must be held in such a way that the customer is fully able to withdraw their funds. Customer funds may either be in separate accounts for each customer or in omnibus accounts with only digital assets.

A digital asset service provider must create a plan to allow the customer to view their accounting of liabilities owed to them at least quarterly. They must also allow an auditor access and view at any time a pseudonymized version of the information made available to each customer.

Within 90 days of the end of the fiscal year, the digital asset provider must file a report with the Texas Department of Banking. The report must include the following:

• an attestation of the outstanding liability to their digital asset customers;
• evidence of the assets held by the provider;
• a copy of their plan to viewing and auditing;
• an attestation by an auditor that the information being reported is true and correct

Auditors must be independent certified public accountants licensed in the United States and apply attestation standards adopted by the American Institute of Certified Public Accountants.

The commissioner may waive requirements of this section or allow alternative information to be provided if the commissioner determines it is consistent with the purpose of this chapter and best serves the public interest.

Money transmission licenses may be suspended or revoked. Their may be penalties issued for violations.

HB 2746

Refunds and credits under terminated debt cancellation agreements

If a debt cancellation agreement terminates early and is still held by the retail seller that has not assigned or transferred the contract, then the holder now has to provide the written instruction within 30 days to the administrator. If the debt cancellation agreement terminates early and is not held by the original retain seller, then the current holder must, within 60 days, refund or credit the appropriate amount of the debt cancellation fee or cause it to be refunded/credited by providing written instructions to the administrator.

SB 1371

Regulation of consumer credit transactions; changing fee

Part of the licensing fee for credit access business is a fee to improving consumer credit, financial education, and asset-building opportunities in Texas. That fee may not exceed $200 annually for each license.

The funds being held must be invested under a prudent person standard. The finance commission may not make grants.

There are additional guidelines that must be following, these include but are not limited to Truth in Lending Act, Consumer Financial Protection Bureau, Equal Credit Opportunity.

Pawn shops must now use the Annual Percentage Rate computed according to Regulation Z (23CFR Part 1026) adopted by the Consumer Financial Protection Bureau under the Truth in Lending Act.

A lot of the changes here where shifts in following specific other laws that now are either in different places or have shifted/added regulations. More clarification and precision in calling out other laws.

 

J.B. Williams, J.D.

4,312 federal laws were passed from 1995 through December 2016.
Along with 88,819 federal rules and regulations.