To protect the health and safety of the public and our employees, the Department of Banking has limited the number of employees at our office at 260 Constitution Plaza in Hartford. When contacting the Department, please use electronic communication whenever possible. Consumers are encouraged to use our online form for complaints. If you are unsure where to send an inquiry, you may send it to Department.Banking@ct.gov and it will be routed appropriately. Thank you for your patience during this time.

2016 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 2016 session, the department sponsored several agency initiatives that were enacted into law by the General Assembly in one omnibus bill. 

Please note that the hyperlinks for the bill lead to the Connecticut General Assembly website.  These links provide you with a copy of the Public Act and more detailed legislative summary of the bill.

Department of Banking Proposals

Public Act 16-65 - HB 5571, An Act Concerning Banking and Consumer Protections

Summary of Public Act 16-65

This bill makes numerous changes to provisions governing foreclosures, small loans, and consumer collection agencies. It also makes changes to other banking-related laws. 

With regard to the foreclosure-related provisions, the bill, among other things:

  1. creates a new process whereby a court may enter a judgment of loss mitigation which allows (a) certain “underwater mortgages” to be modified without a junior lienholder's consent or (b) the mortgagor (borrower) to satisfy his or her obligation by conveying the property using a transfer agreement;
  2. makes changes to the foreclosure mediation program including, (a) authorizing mediators to excuse certain parties from mediation sessions for good cause and (b) eliminating the requirement that a mortgagee (lender) provide a certificate of good standing to a mortgagor who has completed the mediation program; and
  3. modifies the foreclosure by market sale process by, among other things, (a) eliminating certain mortgagee notice and affidavit requirements and (b) allowing a mortgagee, under certain circumstances, to file a motion for judgment of foreclosure by market sale within 30 days of receipt of a sales contract or the expiration or satisfaction of any contingencies.

Regarding the changes to the small loan statutes, the bill, among other things, expands the scope of activities that require licensure and simplifies the definition of a “small loan,” which under the bill is any monetary loan or extension of credit, or the purchase of, or an advance of money on, a borrower's future income where the amount or value is $15,000 or less and the Annual Percentage Rate (APR) is greater than 12%. It also converts the existing interest rate structure to an APR capped at the maximum 36% allowed under the federal Military Lending Act. It requires small loan licensure to be done through the Nationwide Mortgage Licensing System and Registry and changes the license application fee structure and the length of time a license remains valid.  It establishes permitted and prohibited licensee practices and loan provisions.

Among other things, the bill addresses:

  1. creditors and consumer collection agencies, including expanding the consumer collection agency law to include specified persons that collect federal income tax debt;
  2. mortgage servicer escrow accounts;
  3. retail installment loans;
  4. tenant's security deposits;
  5. tenants of foreclosed property;
  6. possessions inside repossessed vehicles;
  7. student loan servicers;
  8. a pilot program for local housing authorities to use rental payments as a means of building tenants' credit;
  9. licensing international trade and investment corporations; and
  10. a report by the treasurer on a way to convert an education savings plan into an Achieving a Better Life Experience (ABLE) account.

The bill also makes numerous technical and conforming changes. 

Effective Date:  Various  

Legislative Program Index