This legislative update addresses Senate Bill 43 from the 2021 Regular Legislative Session. Senate Bill 43 is effective January 1, 2022. Prior to this legislative update, we issued Legislative Update I, summarizing bills effective immediately; Legislative Update II, summarizing bills effective September 1, 2021; Legislative Update III, summarizing Proposed Constitutional Amendments SJR 35 and HJR 125; and Legislative Update IV, summarizing House Bill 2237’s revisions to Chapter 53 of the Property Code. Legislative Updates I, II, III and IV may be found on the Resources page of the firm’s website


According to the Original Author’s/Sponsor’s Statement of Intent in the Bill Analysis, Senate Bill 43 would close loopholes that have allowed evasion of registration or licensure; would provide that wrap payments are held in a constructive trust for the benefit of wrap borrowers; requires wrap lenders to properly disclose the nature and risks of wrap mortgage loans to their wrap borrowers; and offers wrap borrowers the right to rescind wrap mortgage loans when those disclosures are not made timely.

Full Memorandum