SECTION 83.831. Review of Electronic Recordkeeping Systems and Optical Imaging Systems

(a) Generally. Records and accounting systems maintained in whole or in part by electronic systems must contain the equivalent information as required in §83.828 and §83.829 of this title (relating to Files and Records Required (Subchapter E and F Lenders) and Files and Records Required (Subchapter G Lenders)).

(b) Software review for Chapter 342, Subchapter E or F licensees. A licensee making, transacting, or negotiating consumer loans subject to Texas Finance Code, Chapter 342, Subchapter E or F must use a reviewed software system unless the licensee utilizes either a manual recordkeeping system that complies with §83.828 of this title or a proprietary software system that is not sold or distributed to other licensees, unless the other licensees are affiliates of the licensee operating the proprietary system. A list of reviewed non-proprietary software systems that may be used by licensees will be maintained on the OCCC's website. A licensee or software vendor must provide documentation of the non-proprietary software system to the OCCC that explains how the required information is maintained within the system.

(c) Software review for Chapter 342, Subchapter G licensees. A licensee making, transacting, or negotiating secondary mortgage loans subject to Texas Finance Code, Chapter 342, Subchapter G will not have to submit its electronic recordkeeping system for review.

(d) Non-proprietary software system documentation.

(1) Required information. A licensee or software vendor seeking a review of a non-proprietary software system must make available a complete and detailed written description of the system proposed to be utilized, including:

(A) a statement specifying whether the system will be used in its entirety;

(B) operating manuals;

(C) instructions;

(D) a copy of the software to be used; and

(E) a full description of backup systems in place that will ensure business continuity and the protection of the data.

(2) Amendments. Any amendment or change to a non-proprietary software system is required to meet the minimum reporting requirements as established by this section.

(3) Responsibility for filing non-proprietary software system. A non-proprietary software vendor may make a filing on behalf of a licensee; however, it is the licensee's responsibility to ensure that the non-proprietary software system was reviewed prior to utilizing the system.

(e) Compliance. If an examination of the system demonstrates that the required records are not being maintained appropriately, the commissioner may disapprove the use of the system. A licensee will have 90 days to bring the electronic system into compliance.

(f) Optical imaging systems. Records may be retained and stored using optical image storage media, provided the following requirements are satisfied:

(1) The optical image storage must be nonerasable "write once, read many" ("WORM") that does not allow changes to the stored document or record;

(2) The stored document or record is made or preserved as part of and in the regular course of business;

(3) The custodian of the record is able to identify the stored document or record, the mode of its preparation, and the mode of storing it on the optical image storage system;

(4) The optical image storage system contains a reliable indexing system that provides ready access to a desired document or record, appropriate quality control of the storage process to ensure the quality of imaged documents or records, and date-ordered arrangement of stored documents or records to assure a consistent and logical flow of paperwork to preclude unnecessary search time;

(5) The original documents must be maintained for one year after the date of the loan. If a licensee assigns loans to another authorized lender and no longer services the loans, the licensee who sold the loans to another lender is no longer required to maintain the original documents for the transferred loans; however, the licensee must either maintain photocopies of the original form documents for one year or enter into an agreement with the authorized lender acquiring the loans to provide access to the original form documents for a period of one year. The optical imaged records must be maintained for the entire required retention period; and

(6) A licensee must maintain at the licensee's office a method of viewing documents or records stored pursuant to this section. A licensee must provide a hard copy of any document or record requested by the OCCC.

Source Note: The provisions of this §83.831 adopted to be effective November 9, 2006, 31 TexReg 9006; amended to be effective November 4, 2010, 35 TexReg 9698; amended to be effective May 5, 2011, 36 TexReg 2725; amended to be effective July 10, 2014, 39 TexReg 5142