88R400 JES-D     By: Toth, Cortez, Wilson, Schaefer, et al. H.B. No. 264       A BILL TO BE ENTITLED   AN ACT   relating to requirements for the physical presence of a borrower   for signing certain documents related to a home equity loan.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Section 343.002(b), Finance Code, is amended to   read as follows:          (b)  Except as provided by Subchapter D, this [This] chapter   does not apply to:                (1)  a reverse mortgage; or                (2)  an open-end account, as defined by Section   301.002.          SECTION 2.  Chapter 343, Finance Code, is amended by adding   Subchapter D to read as follows:   SUBCHAPTER D. HOME EQUITY LOANS          Sec. 343.301.  DEFINITION. In this subchapter, "home equity   loan" means an extension of credit described by Section 50(a)(6),   Article XVI, Texas Constitution.          Sec. 343.302.  PHYSICAL PRESENCE OF CERTAIN BORROWERS AT   CLOSING NOT REQUIRED. (a) This section applies to the closing of a   home equity loan by a borrower who:                (1)  is located outside of this state at the time of the   closing and is:                      (A)  a member of the armed forces of the United   States who is on active duty;                      (B)  an officer of the Commissioned Corps of the   United States Public Health Service who is on active duty;                      (C)  a member of reserve components of the armed   forces of the United States not described by Paragraph (A) who is on   active duty;                      (D)  the spouse or surviving spouse of a person   described by Paragraph (A), (B), or (C); or                      (E)  a civilian employee of the federal government   employed by, serving with, or accompanying the armed forces of the   United States, if assigned to a foreign country or a vessel or unit   of the armed forces of the United States;                (2)  has a disability that prohibits travel or is   quarantined to protect the borrower's health or the health of   others, as verified by a written letter from a physician; or                (3)  is unable to travel to the closing because the   borrower is incarcerated or under house arrest.          (b)  In lieu of closing a home equity loan in person at the   office of the lender, an attorney, or a title company, a borrower   described by Subsection (a) may close the loan:                (1)  from a remote location using remote online   notarization; or                (2)  through an agent who:                      (A)  is acting under a durable power of attorney   that expressly grants the agent the authority to engage in a home   equity loan transaction on behalf of the borrower, regardless of   where the borrower signed the power of attorney; and                      (B)  appears in person for the closing at the   office of the lender, attorney, or title company on behalf of the   borrower.          SECTION 3.  Section 751.203(b), Estates Code, is amended to   read as follows:          (b)  A certification described by Subsection (a) may be in   the following form:   CERTIFICATION OF DURABLE POWER OF ATTORNEY BY AGENT          I, ___________ (agent), certify under penalty of perjury   that:          1.  I am the agent named in the power of attorney validly   executed by ___________ (principal) ("principal") on ____________   (date), and the power of attorney is now in full force and effect.          2.  The principal is not deceased and is presently domiciled   in ___________ (city and state/territory or foreign country).          3.  To the best of my knowledge after diligent search and   inquiry:                a.  The power of attorney has not been revoked by the   principal or suspended or terminated by the occurrence of any   event, whether or not referenced in the power of attorney;                b.  At the time the power of attorney was executed, the   principal was mentally competent to transact legal matters and was   not acting under the undue influence of any other person;                c.  A permanent guardian of the estate of the principal   has not qualified to serve in that capacity;                d.  My powers under the power of attorney have not been   suspended by a court in a temporary guardianship or other   proceeding;                e.  If I am (or was) the principal's spouse, my marriage   to the principal has not been dissolved by court decree of divorce   or annulment or declared void by a court, or the power of attorney   provides specifically that my appointment as the agent for the   principal does not terminate if my marriage to the principal has   been dissolved by court decree of divorce or annulment or declared   void by a court;                f.  No proceeding has been commenced for a temporary or   permanent guardianship of the person or estate, or both, of the   principal; and                g.  The exercise of my authority is not prohibited by   another agreement or instrument.          4.  If under its terms the power of attorney becomes   effective on the disability or incapacity of the principal or at a   future time or on the occurrence of a contingency, the principal now   has a disability or is incapacitated or the specified future time or   contingency has occurred.          5.  I am acting within the scope of my authority under the   power of attorney, and my authority has not been altered or   terminated.          6.  If applicable, I am the successor to ___________   (predecessor agent), who has resigned, died, or become   incapacitated, is not qualified to serve or has declined to serve as   agent, or is otherwise unable to act.  There are no unsatisfied   conditions remaining under the power of attorney that preclude my   acting as successor agent.          7.  I agree not to:                a.  Exercise any powers granted by the power of   attorney if I attain knowledge that the power of attorney has been   revoked, suspended, or terminated; or                b.  Exercise any specific powers that have been   revoked, suspended, or terminated.          8.  A true and correct copy of the power of attorney is   attached to this document.          9.  If applicable and if used in connection with an extension   of credit under Section 50(a)(6), Article XVI, Texas Constitution,   the power of attorney was executed in the office of the lender, the   office of a title company, or the law office of   ____________________.   Date: __________, 20__.          __________________________________ (signature of agent)          SECTION 4.  Section 752.051, Estates Code, is amended to   read as follows:          Sec. 752.051.  FORM. The following form is known as a   "statutory durable power of attorney":   STATUTORY DURABLE POWER OF ATTORNEY   NOTICE: THE POWERS GRANTED BY THIS DOCUMENT ARE BROAD AND SWEEPING.   THEY ARE EXPLAINED IN THE DURABLE POWER OF ATTORNEY ACT, SUBTITLE P,   TITLE 2, ESTATES CODE. IF YOU HAVE ANY QUESTIONS ABOUT THESE POWERS,   OBTAIN COMPETENT LEGAL ADVICE. THIS DOCUMENT DOES NOT AUTHORIZE   ANYONE TO MAKE MEDICAL AND OTHER HEALTH-CARE DECISIONS FOR YOU. YOU   MAY REVOKE THIS POWER OF ATTORNEY IF YOU LATER WISH TO DO SO. IF YOU   WANT YOUR AGENT TO HAVE THE AUTHORITY TO SIGN HOME EQUITY LOAN   DOCUMENTS ON YOUR BEHALF, THIS POWER OF ATTORNEY MUST BE SIGNED BY   YOU AT THE OFFICE OF THE LENDER, AN ATTORNEY AT LAW, OR A TITLE   COMPANY, UNLESS YOU QUALIFY FOR AN EXCEPTION UNDER SECTION 343.302,   FINANCE CODE.          You should select someone you trust to serve as your agent.   Unless you specify otherwise, generally the agent's authority will   continue until:                (1)  you die or revoke the power of attorney;                (2)  your agent resigns, is removed by court order, or   is unable to act for you; or                (3)  a guardian is appointed for your estate.          I, __________ (insert your name and address), appoint   __________ (insert the name and address of the person appointed) as   my agent to act for me in any lawful way with respect to all of the   following powers that I have initialed below. (YOU MAY APPOINT   CO-AGENTS. UNLESS YOU PROVIDE OTHERWISE, CO-AGENTS MAY ACT   INDEPENDENTLY.)          TO GRANT ALL OF THE FOLLOWING POWERS, INITIAL THE LINE IN   FRONT OF (O) AND IGNORE THE LINES IN FRONT OF THE OTHER POWERS   LISTED IN (A) THROUGH (N).          TO GRANT A POWER, YOU MUST INITIAL THE LINE IN FRONT OF THE   POWER YOU ARE GRANTING.          TO WITHHOLD A POWER, DO NOT INITIAL THE LINE IN FRONT OF THE   POWER. YOU MAY, BUT DO NOT NEED TO, CROSS OUT EACH POWER WITHHELD.          ____ (A) Real property transactions, including home equity   loan transactions;          ____ (B) Tangible personal property transactions;          ____ (C) Stock and bond transactions;          ____ (D) Commodity and option transactions;          ____ (E) Banking and other financial institution   transactions;          ____ (F) Business operating transactions;          ____ (G) Insurance and annuity transactions;          ____ (H) Estate, trust, and other beneficiary transactions;          ____ (I) Claims and litigation;          ____ (J) Personal and family maintenance;          ____ (K) Benefits from social security, Medicare, Medicaid,   or other governmental programs or civil or military service;          ____ (L) Retirement plan transactions;          ____ (M) Tax matters;          ____ (N) Digital assets and the content of an electronic   communication;          ____ (O) ALL OF THE POWERS LISTED IN (A) THROUGH (N). YOU DO   NOT HAVE TO INITIAL THE LINE IN FRONT OF ANY OTHER POWER IF YOU   INITIAL LINE (O).   SPECIAL INSTRUCTIONS:          Special instructions applicable to agent compensation   (initial in front of one of the following sentences to have it   apply; if no selection is made, each agent will be entitled to   compensation that is reasonable under the circumstances):          ____ My agent is entitled to reimbursement of reasonable   expenses incurred on my behalf and to compensation that is   reasonable under the circumstances.          ____ My agent is entitled to reimbursement of reasonable   expenses incurred on my behalf but shall receive no compensation   for serving as my agent.          Special instructions applicable to co-agents (if you have   appointed co-agents to act, initial in front of one of the following   sentences to have it apply; if no selection is made, each agent will   be entitled to act independently):          ____ Each of my co-agents may act independently for me.          ____ My co-agents may act for me only if the co-agents act   jointly.          ____ My co-agents may act for me only if a majority of the   co-agents act jointly.          Special instructions applicable to gifts (initial in front of   the following sentence to have it apply):   ____ I grant my agent the power to apply my property to make gifts   outright to or for the benefit of a person, including by the   exercise of a presently exercisable general power of appointment   held by me, except that the amount of a gift to an individual may not   exceed the amount of annual exclusions allowed from the federal   gift tax for the calendar year of the gift.          ON THE FOLLOWING LINES YOU MAY GIVE SPECIAL INSTRUCTIONS   LIMITING OR EXTENDING THE POWERS GRANTED TO YOUR AGENT.   ________________________________________________________________   ________________________________________________________________   ________________________________________________________________   ________________________________________________________________   ________________________________________________________________   ________________________________________________________________   ________________________________________________________________   ________________________________________________________________   ________________________________________________________________          UNLESS YOU DIRECT OTHERWISE BELOW, THIS POWER OF ATTORNEY IS   EFFECTIVE IMMEDIATELY AND WILL CONTINUE UNTIL IT TERMINATES.          CHOOSE ONE OF THE FOLLOWING ALTERNATIVES BY CROSSING OUT THE   ALTERNATIVE NOT CHOSEN:          (A)  This power of attorney is not affected by my subsequent   disability or incapacity.          (B)  This power of attorney becomes effective upon my   disability or incapacity.          YOU SHOULD CHOOSE ALTERNATIVE (A) IF THIS POWER OF ATTORNEY   IS TO BECOME EFFECTIVE ON THE DATE IT IS EXECUTED.          IF NEITHER (A) NOR (B) IS CROSSED OUT, IT WILL BE ASSUMED THAT   YOU CHOSE ALTERNATIVE (A).          If Alternative (B) is chosen and a definition of my   disability or incapacity is not contained in this power of   attorney, I shall be considered disabled or incapacitated for   purposes of this power of attorney if a physician certifies in   writing at a date later than the date this power of attorney is   executed that, based on the physician's medical examination of me,   I am mentally incapable of managing my financial affairs. I   authorize the physician who examines me for this purpose to   disclose my physical or mental condition to another person for   purposes of this power of attorney. A third party who accepts this   power of attorney is fully protected from any action taken under   this power of attorney that is based on the determination made by a   physician of my disability or incapacity.          I agree that any third party who receives a copy of this   document may act under it. Termination of this durable power of   attorney is not effective as to a third party until the third party   has actual knowledge of the termination. I agree to indemnify the   third party for any claims that arise against the third party   because of reliance on this power of attorney. The meaning and   effect of this durable power of attorney is determined by Texas law.          If any agent named by me dies, becomes incapacitated,   resigns, refuses to act, or is removed by court order, or if my   marriage to an agent named by me is dissolved by a court decree of   divorce or annulment or is declared void by a court (unless I   provided in this document that the dissolution or declaration does   not terminate the agent's authority to act under this power of   attorney), I name the following (each to act alone and   successively, in the order named) as successor(s) to that agent:   __________.          Signed this ______ day of __________, _____________   ___________________________   (your signature)   State of _______________________   County of ______________________   This document was acknowledged before me on ____________(date) by   ________________________   (name of principal)   ____________________________   (signature of notarial officer)   (Seal, if any, of notary) ______________________________________                                        (printed name)   My commission expires: __________   IMPORTANT INFORMATION FOR AGENT   Agent's Duties          When you accept the authority granted under this power of   attorney, you establish a "fiduciary" relationship with the   principal. This is a special legal relationship that imposes on you   legal duties that continue until you resign or the power of attorney   is terminated, suspended, or revoked by the principal or by   operation of law. A fiduciary duty generally includes the duty to:                (1)  act in good faith;                (2)  do nothing beyond the authority granted in this   power of attorney;                (3)  act loyally for the principal's benefit;                (4)  avoid conflicts that would impair your ability to   act in the principal's best interest; and                (5)  disclose your identity as an agent when you act for   the principal by writing or printing the name of the principal and   signing your own name as "agent" in the following manner:          (Principal's Name) by (Your Signature) as Agent          In addition, the Durable Power of Attorney Act (Subtitle P,   Title 2, Estates Code) requires you to:                (1)  maintain records of each action taken or decision   made on behalf of the principal;                (2)  maintain all records until delivered to the   principal, released by the principal, or discharged by a court; and                (3)  if requested by the principal, provide an   accounting to the principal that, unless otherwise directed by the   principal or otherwise provided in the Special Instructions, must   include:                      (A)  the property belonging to the principal that   has come to your knowledge or into your possession;                      (B)  each action taken or decision made by you as   agent;                      (C)  a complete account of receipts,   disbursements, and other actions of you as agent that includes the   source and nature of each receipt, disbursement, or action, with   receipts of principal and income shown separately;                      (D)  a listing of all property over which you have   exercised control that includes an adequate description of each   asset and the asset's current value, if known to you;                      (E)  the cash balance on hand and the name and   location of the depository at which the cash balance is kept;                      (F)  each known liability;                      (G)  any other information and facts known to you   as necessary for a full and definite understanding of the exact   condition of the property belonging to the principal; and                      (H)  all documentation regarding the principal's   property.   Termination of Agent's Authority          You must stop acting on behalf of the principal if you learn   of any event that terminates or suspends this power of attorney or   your authority under this power of attorney. An event that   terminates this power of attorney or your authority to act under   this power of attorney includes:                (1)  the principal's death;                (2)  the principal's revocation of this power of   attorney or your authority;                (3)  the occurrence of a termination event stated in   this power of attorney;                (4)  if you are married to the principal, the   dissolution of your marriage by a court decree of divorce or   annulment or declaration that your marriage is void, unless   otherwise provided in this power of attorney;                (5)  the appointment and qualification of a permanent   guardian of the principal's estate unless a court order provides   otherwise; or                (6)  if ordered by a court, your removal as agent   (attorney in fact) under this power of attorney. An event that   suspends this power of attorney or your authority to act under this   power of attorney is the appointment and qualification of a   temporary guardian unless a court order provides otherwise.   Liability of Agent          The authority granted to you under this power of attorney is   specified in the Durable Power of Attorney Act (Subtitle P, Title 2,   Estates Code). If you violate the Durable Power of Attorney Act or   act beyond the authority granted, you may be liable for any damages   caused by the violation or subject to prosecution for   misapplication of property by a fiduciary under Chapter 32 of the   Texas Penal Code.          THE AGENT, BY ACCEPTING OR ACTING UNDER THE APPOINTMENT,   ASSUMES THE FIDUCIARY AND OTHER LEGAL RESPONSIBILITIES OF AN AGENT.          SECTION 5.  The changes in law made by this Act apply only to   a durable power of attorney executed on or after the effective date   of this Act. A durable power of attorney executed before the   effective date of this Act is governed by the law in effect on the   date the power of attorney was executed, and that law continues in   effect for that purpose.          SECTION 6.  This Act takes effect January 1, 2024, but only   if the constitutional amendment proposed by the 88th Legislature,   Regular Session, 2023, authorizing the legislature to provide for   exceptions to the requirement that a home equity loan be closed only   at the office of the lender, an attorney at law, or a title company   is approved by the voters. If that proposed constitutional   amendment is not approved by the voters, this Act has no effect.