2014 Banking and Related Legislation
Each year, the Department of Banking, with the coordination of the Government Relations and Consumer Affairs Division, conducts an active legislative program. During the 2014 session, five department proposals were incorporated into two bills that were enacted into law by the General Assembly. These bills also included various other proposals from industry and Legislators.
Please note that the hyperlinks for each bill lead to the Connecticut General Assembly website. These links can provide you with copies of the Public Acts and more detailed legislative summaries of the bills.
Department of Banking Proposals
Public Act 14-7 - HB 283, AN ACT CONCERNING THE BANKING LAWS, THE UNIFORM COMMERCIAL CODE, THE ELECTRONIC FUND TRANSFER ACT AND MORTGAGORS IN GOOD STANDING
This bill makes a number of unrelated changes. Among other things, it:
- expands the licensure and bond requirements for businesses that make residential mortgage loans or act as mortgage lenders, mortgage correspondent lenders, or mortgage brokers that engage the services of mortgage loan originators to act on their behalf;
- creates a bond requirement for certain bona fide nonprofit organizations that are exempt from mortgage broker licensure and choose to sponsor a mortgage loan originator;
- limits the recovery of judgments against a debt negotiator's bond by prospective mortgagors of certain types of mortgages;
- expands licensure requirements for debt negotiators who are also mortgage loan originators;
- modifies the process by which a debtor's funds held by a financial institution can be obtained to satisfy a judgment, including expanding the circumstances when a bank must leave the lesser of $1,000 or the balance in a person's account; and
- expands the types of banks that may offer savings promotion raffles.
Effective Date: Upon passage, except for (1) the provision on certificates of good standing, which is effective July 1, 2014; (2) provisions on service of process in certain cases, funds exempt from execution, and nonprime loans, which are effective October 1, 2014; and (3) a conforming change regarding funds exempt from execution, which is effective July 1, 2015.
Public Act 14-89 - HB 5353, AN ACT CONCERNING MORTGAGE SERVICERS, CONNECTICUT FINANCIAL INSTITUTIONS, CONSUMER CREDIT LICENSES, THE FORECLOSURE MEDIATION PROGRAM, MINOR REVISIONS TO THE BANKING STATUTES, THE MODERNIZATION OF CORPORATION LAW AND REVERSE MORTGAGE TRANSACTIONS
This bill makes numerous unrelated changes regarding financial services companies. Among other things, it:
renames mortgage servicing companies “mortgage servicers”, modifies who is subject to licensure, expands the scope of services subject to licensure, adds new licensing, application, fee, bonding, and recordkeeping requirements, specifies standards of conduct for servicers, and provides the commissioner with authority to conduct investigations and examinations and take enforcement actions against violators;
expands the definition of an “automatic teller machine” to include those equipped with a telephone or televideo device that allows contact with bank employees;
increases the prelicensing and continuing education and testing requirements for mortgage lenders, mortgage correspondent lenders, and mortgage brokers;
extends the state's foreclosure mediation program by two years, until July 1, 2016, requires that the program operate within available appropriations, and requires the chief court administrator to develop a premediation review protocol;
creates a 17-member Commission on Connecticut's Leadership in Corporation and Business Law, within the Legislative Branch; and
establishes a six-member task force to study the reverse mortgage industry.
Effective Date: Various