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2018 Banking and Related Legislation

Each year, the Department of Banking (DOB) conducts an active legislative program coordinated by the Government Relations and Consumer Affairs Division.  Below are highlights of the agency and related bills that passed.

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 each bill.

Department of Banking Proposal

Public Act 18-173 - HB-5490, An Act Concerning Consumer Credit Licenses

I. Changes to the Commissioner's Authority

  1. Consolidates certain authorities of the Commissioner available in only certain license types into the general authority of the Commissioner
    1. Examination/investigation authority
    2. Authority to suspend/revoke after license expiration
    3. Withdrawal procedures and denial after withdrawal
    4. Removal authority
  2. Enables the Commissioner to collect costs of examination of student loan servicers
  3. Makes more consistent specific authorities within and across each license type
    1. E.g., enforcement provisions made more consistent and applicable to control persons, QIs, BMs
    2. E.g., investigative authority relating to license qualifications and qualifications for licensure modified consistent with 36a-24b
    3. E.g., makes renewal criteria more consistent across license types
    4. Adds ability to automatically suspend a license on an impermissible transfer, or for failure to give notice of change of control, name or location, and in the case of mortgage (including servicer) or small loan (which have experience and/or supervisory requirements), for failure to designate a QI or BM within 30 days of a vacancy
  4. Makes Commissioner’s authority to proceed against a bond consistent across all license types

II. Revises the Statutes for all License Types Subject to the Orders of the Commissioner Dated June 17, 2015 and May 12, 2016 to Reflect Licensure on the System Pursuant to Those Orders

III. Changes to Various Statutory Requirements

  1. All license types
    1. Imposes a new requirement in all license type, other than small loan, that activity subject to licensure must occur in an office in the U.S.  (Small loan requires all offices in the U.S.)
    2. Requires advance notice/approval for changes in control persons
    3. Expands and makes consistent System updating and event reporting requirements (e.g., making events consistent and applying also to events of control persons, QIs and BMs)
    4. Updates bond provisions to provide for certain electronic notices if a bond is issued on the System
    5. Adds a requirement for use of a unique identifier on advertisements, adds prohibitions on advertising, and establishes a 2-year record retention requirement for advertising
    6. Clarifies that QIs and BMs are responsible for the actions of the licensee
    7. For all license types other than mortgage (because it already exists), adds a requirement to complete reports of condition required by the System (may or may not yet be available)
  2. Mortgage
    1. Clarifies renewal procedures for certified BFNPs and provides for Commissioner examination and revocation authority pursuant to the SAFE Act; also extends record retention requirements to certified BFNPs
    2. QIs and BMs – establishes commutable distance parameters or demonstration of ability to provide full-time, in-person supervision if beyond such parameters; similar requirement on MLOs to be tied to an office and subject to supervision
    3. Permits a waiver of all requirements imposed on QIs where no activity subject to licensure occurs at the main office
    4. Permits a waiver of all requirements on BMs where a licensed lender only services at the branch and BM meets requirements for servicer BM (Note:  Explanation section in the proposal needs revision.)
    5. Clarifies that all entities bonded must file RMLAs
    6. Removes exemption from mortgage licensure for small loan licensees (RMLs excluded from definition of small loan)
  3. Sales Finance
    1. Amends the definition of sales finance company
  4. Small Loan
    1. Corrects erroneous cross references in “passive buyer” exemption
    2. Expands the exemption for loans made by banks to include loans “offered”
  5. Check Cashing
    1. Removes name and location change fees
    2. Reduces the quarterly reporting requirement on type and number of checks cashed to include only those over $6,000
  6. Money Transmission
    1. Removes an existing name change fee
    2. Merges the separate investigation fee into the license fee (no change to total)
    3. Modifies reporting requirements to reflect information captured by MSB call reports
    4. Removes a notice requirement in the event a contract with an authorized delegate is terminated (covered by other language regarding changes to delegates)
    5. Expands certain reporting requirements to events of authorized delegates, and expands suspension, revocation and refusal to renew authority if there is a violation by an authorized delegate
  7. Debt Adjuster
  8. Debt Negotiator - Revised to address fact that exempt registrant platform not utilized for bonding debt negotiators anymore
  9. Mortgage Servicing
    1. Adds ability of Commissioner to waive supervision and experience requirement of QI where there is no license-able activity at the main office; ability to waive supervision and experience of QI or BM if only holding servicing rights at the respective office
    2. Authorizes auto-suspension where a fidelity bond or E&O coverage expires
  10. Consumer Collection
    1. Expands debt buyer activity to include those “receiving payment”
    2. Removes reference to financials reviewed by “public accountant” – CPA only
    3. Exempts debt buyers from a TNW requirement
  11. Student Loan Servicing
    1. Removes reference to financials reviewed by “public accountant” – CPA only
    2. Collapses investigation fee into license fee (no increase in total)
    3. Requires licensees to comply with student loan servicing standards set by the Commissioner
    4. Amends definitions of “student loan borrower” and “student loan servicer” to apply to individuals who reside in this state
Summary of Public Act 18-173

Chart Summary of 36a Updates(pdf)

Effective Date:  October 1, 2018, except the provisions (1) allowing mortgage loan originators, processors, and underwriters that otherwise qualify for license renewal to compensate for any continuing education deficiencies according to regulations are effective January 1, 2019, (2) requiring unique identifiers on advertisements and business cards for money transmitters are effective July 1, 2019, and (3) making certain technical changes are effective July 1, 2018. 

Other Banking Related Legislation

Public Act 18-90 - SB-472, An Act Concerning Security Freezes on Credit Reports, Identity Theft Prevention Services and Regulations of Credit Rating Agencies

To (1) prohibit credit rating agencies from charging a fee to consumers to place or remove a security freeze from the consumer's account, (2) require credit rating agencies to notify other credit rating agencies of a consumer's request to place or remove a security freeze from such consumer's account, and (3) increase the amount of identity theft prevention or mitigation services provided after a security breach.

Summary of Public Act 18-90

Effective Date: October 1, 2018


Public Act 18-117 - HB-7019, An Act Concerning Connecticut Credit Unions

To: (1) Allow Connecticut credit unions to, without prior approval from the Commissioner of Banking, engage in any activity that a federal credit union or out-of-state credit union may be authorized to engage in under state or federal law; (2) require the Commissioner of Banking to report certain information; (3) change the requirements for reviewing policies adopted by the governing board of a Connecticut credit union; (4) allow Connecticut credit unions to provide electronic notices of certain meetings; (5) allow members of a Connecticut credit union to vote by electronic means; and (6) expand the area of operation and services of Connecticut credit unions.

Summary of Public Act 18-117

Effective Date:  October 1, 2018

Legislative Program Index