Texas Examination Preparation

Texas is a pro-business state. The regulators exercise common-sense and review companies based on their actual operations. Consumer protections get enforced through audits. Newly licensed firms can expect an audit 6-12 months after their initial licensing. This first examination serves as a warning for those firms who have not undertaken a compliance review or implemented policies and procedures. Thereafter, Texas aims to evaluate licensees every 36 months, depending on the findings in the last review. 

Texas Examination Documentation Request

Licensees receive a written request for documentation 2 weeks before the scheduled examination. This includes a list of items required, including Loan files - normally a sampling - that the regulator will review. We recommend that you use our post-closing document retention and compliance checklist that is part of your QC Plan on every loan file as it closes, but if you have waited until the examiner requests the files, then you should use this checklist on the files you are submitting to avoid any glaring omissions. The examiner will focus on compliance items - fees, cost estimates, federal and state specific disclosures. 

Texas requests the following:

• Advertising Copies (including business cards) and Policies and Procedures - make sure you have used our Advertising Checklist to vet ads before they go live and keep a copy with each message.
• Quality Control Policy (Plan)
• Compliance Manual (Policies and Procedures)
• Red Flag (ID Theft) Policies and Procedures - Cyber Security / Information Technology Security 
• Written Anti-Money Laundering Program (and last independent review)
• Ability to Repay policy and procedures
• Personnel Administration/Employee Policies - Hiring and Termination policies
• Consumer Complaint Policies and Procedures
• Fraud Prevention Program / Identity Theft Prevention Program
• Loan Originator Compensation Plan - copies of agreements
• Loan Estimate Procedure for revisions
• E-SIGN Vendor Agreement and Policy