The Department of Banking News Bulletin
Bulletin # 2249
Week Ending March 30, 2007
This bulletin constitutes the only official notification you will receive from this office concerning any of the following applications. Any observations you may have are solicited. Any comments should be in writing to Howard F. Pitkin, Banking Commissioner, at the Connecticut Department of Banking, 260 Constitution Plaza, Hartford, CT 06103-1800 or via E-mail. Written comments will be considered only if they are received within ten days from the date of this bulletin.
BRANCH ACTIVITY
State Credit Union Activity
| Date | Credit Union | Location | Activity |
|---|---|---|---|
| 3/26/07 |
Dutch Point Credit Union, Inc.
Wethersfield |
457 Willard Avenue
Newington, CT 06111 |
filed |
DE NOVO LIMITED BRANCH
On March 30, 2007, pursuant to Sections 36a-412(a)(2) and 36a 145(c)(1) of the Connecticut General Statutes, the Commissioner granted approval to Mellon Trust of New England, N.A., to establish a de novo limited branch to operate under the name Mellon Private Wealth Management, at 406 Farmington Avenue, Farmington, Connecticut, to engage in trust services and fiduciary activities.
EFFECTIVE REGULATIONS
Below is a copy of adopted regulations concerning the payment of interest on funds held in escrow by mortgagees. The new regulations were effective March 30, 2007, and are also available on the Department’s website.
SECURITIES AND BUSINESS INVESTMENTS DIVISION ACTIVITY
Broker-dealer Registration Revoked
Broker-dealer Registration Revoked
On March 22, 2007, the Commissioner entered an Order revoking the broker-dealer registration of Great Eastern Securities, Inc. The firm is located at 50 Broad Street, Suite 1401, New York, New York. The action had been preceded by a January 26, 2007 Notice of Intent to Revoke Registration as Broker-dealer, Order Summarily Suspending Registration, Order Denying Withdrawal of Registration as Broker-dealer and Notice of Intent to Fine. The matter involving the Notice of Intent to Fine remains pending.
In revoking the firm’s registration, the Commissioner found that 1) from at least September 2005 forward, the firm employed six unregistered agents in contravention of Section 36b-6(b) of the Connecticut Uniform Securities Act; 2) the firm violated Section 36b-16 of the Act by selling securities of AFV Solutions, Inc., Ad Venture Partners, Inc., Fidelis Energy, Inc., Produce Safety and Security International, Inc. and Youbet.com, Inc. when such securities were not registered under the Act or the subject of an exemptive claim or claim of covered security status; 3) the respondent violated Section 36b-31-6f(b) of the Regulations by failing to enforce and maintain adequate supervisory procedures; 4) the respondent violated Section 36b-31-14a(a) of the Regulations under the Act by failing to keep true, accurate and current records; and 5) the firm violated Section 36b-14(d) of the Act and Section 36b-31-14f(b)(3) of the Regulations by not providing copies or computer printouts of records requested by the Commissioner. Great Eastern Securities, Inc. did not appear or contest the revocation of its registration.
Dated: Tuesday, April 3, 2007
Howard F. Pitkin
Banking Commissioner
_______________________________________________
Regulations Concerning Payment of Interest
on Funds in Escrow by Mortgagees
on Funds in Escrow by Mortgagees
Effective March 30, 2007, the following regulations concerning the payment of interest on funds held in escrow by mortgagees were adopted. A complete compilation of Department of Banking regulations in Word format may also be found on this Web site.
Section 1. The Regulations of Connecticut State Agencies are amended by adding Sections 49-2b-1 to 49-2b-4, inclusive, as follows:
(NEW) Sec. 49-2b-1. Definitions
As used in sections 49-2b-1 to 49-2b-4, inclusive, of the Regulations of Connecticut State Agencies:
(1) “Annual rate” means the rate of interest used by a mortgagee to determine the amount owed to a mortgagor pursuant to subsection (a) of section 49-2a of the Connecticut General Statutes;
(2) “Insurance premiums” means premiums on a policy of fire, casualty, property liability, flood or other hazard insurance or homeowner’s insurance applicable with respect to mortgaged property located in this state;
(3) “Mortgaged property” means real property that is used as security for repayment of a loan or extension of credit;
(4) “Mortgagee” means any grantee of a mortgage, including the successors and assigns of such grantee, or any mortgage servicing company, required pursuant to section 49-2a of the Connecticut General Statutes to pay interest on funds of a mortgagor held in escrow for the payment of taxes and insurance premiums;
(5) “Mortgagor” means any individual who is a grantor of a mortgage encumbering property located within this state that is owner-occupied residential property consisting of not more than four living units and housing cooperatives occupied solely by the housing cooperative shareholders; and
(6) “Taxes” means property taxes on mortgaged property located in this state.
(NEW) Sec. 49-2b-2. Minimum interest calculation
The minimum monthly amount of interest credited to funds of a mortgagor held in escrow by a mortgagee for payment of taxes and insurance premiums may be determined by multiplying either the actual average daily balance as of the day of the month corresponding to the date set by the mortgagee for the payment by the mortgagor of funds to be held in escrow by the mortgagee or the actual average daily balance for the month by the quotient obtained by dividing the annual rate by twelve. The annual rate shall not be less than the minimum required by section 49-2a of the Connecticut General Statutes. Any other method of computation may be employed as long as it does not result in less than the minimum monthly amount of interest determined in accordance with this section.
(NEW) Sec. 49-2b-3. Payment of interest upon final repayment of mortgage
If the mortgage debt is paid prior to December thirty-first, the mortgagee shall promptly pay to the mortgagor any interest remaining as a credit to the escrow account of the mortgagor, computed to the date of final repayment of the mortgage debt.
(NEW) Sec. 49-2b-4. Annual report of interest credited by mortgagee
Not more than thirty days after each December thirty-first, the mortgagee shall report to the mortgagor the amount of interest credited to the escrow account of the mortgagor during the year ending and including each December thirty-first. The mortgagee may use for this purpose the Department of Treasury Internal Revenue Service Form 1099-INT, which may be obtained by calling 1-800-TAX-FORM (1-800-829-3676) or by accessing the Internal Revenue Service’s web site at http://www.irs.ustreas.gov/. In the alternative, the mortgagee may use any acceptable substitute form that complies with the requirements of 26 CFR 1.6049-6 and Internal Revenue Service Publication Form 1179.
Sec. 2. Sections 49-2a-1, 49-2a-2, 49-2a-4 and 49-2a-5 of the Regulations of Connecticut State Agencies are repealed.
Statement of Purpose: To clarify the statutory authority for adopting regulations concerning the payment of interest on funds held in escrow by mortgagees; update the definition of “mortgagee”; add a definition for the term “annual rate”; provide the forms to be used for reporting to mortgagors the interest due; and make technical changes.
Section 1. The Regulations of Connecticut State Agencies are amended by adding Sections 49-2b-1 to 49-2b-4, inclusive, as follows:
(NEW) Sec. 49-2b-1. Definitions
As used in sections 49-2b-1 to 49-2b-4, inclusive, of the Regulations of Connecticut State Agencies:
(1) “Annual rate” means the rate of interest used by a mortgagee to determine the amount owed to a mortgagor pursuant to subsection (a) of section 49-2a of the Connecticut General Statutes;
(2) “Insurance premiums” means premiums on a policy of fire, casualty, property liability, flood or other hazard insurance or homeowner’s insurance applicable with respect to mortgaged property located in this state;
(3) “Mortgaged property” means real property that is used as security for repayment of a loan or extension of credit;
(4) “Mortgagee” means any grantee of a mortgage, including the successors and assigns of such grantee, or any mortgage servicing company, required pursuant to section 49-2a of the Connecticut General Statutes to pay interest on funds of a mortgagor held in escrow for the payment of taxes and insurance premiums;
(5) “Mortgagor” means any individual who is a grantor of a mortgage encumbering property located within this state that is owner-occupied residential property consisting of not more than four living units and housing cooperatives occupied solely by the housing cooperative shareholders; and
(6) “Taxes” means property taxes on mortgaged property located in this state.
(NEW) Sec. 49-2b-2. Minimum interest calculation
The minimum monthly amount of interest credited to funds of a mortgagor held in escrow by a mortgagee for payment of taxes and insurance premiums may be determined by multiplying either the actual average daily balance as of the day of the month corresponding to the date set by the mortgagee for the payment by the mortgagor of funds to be held in escrow by the mortgagee or the actual average daily balance for the month by the quotient obtained by dividing the annual rate by twelve. The annual rate shall not be less than the minimum required by section 49-2a of the Connecticut General Statutes. Any other method of computation may be employed as long as it does not result in less than the minimum monthly amount of interest determined in accordance with this section.
(NEW) Sec. 49-2b-3. Payment of interest upon final repayment of mortgage
If the mortgage debt is paid prior to December thirty-first, the mortgagee shall promptly pay to the mortgagor any interest remaining as a credit to the escrow account of the mortgagor, computed to the date of final repayment of the mortgage debt.
(NEW) Sec. 49-2b-4. Annual report of interest credited by mortgagee
Not more than thirty days after each December thirty-first, the mortgagee shall report to the mortgagor the amount of interest credited to the escrow account of the mortgagor during the year ending and including each December thirty-first. The mortgagee may use for this purpose the Department of Treasury Internal Revenue Service Form 1099-INT, which may be obtained by calling 1-800-TAX-FORM (1-800-829-3676) or by accessing the Internal Revenue Service’s web site at http://www.irs.ustreas.gov/. In the alternative, the mortgagee may use any acceptable substitute form that complies with the requirements of 26 CFR 1.6049-6 and Internal Revenue Service Publication Form 1179.
Sec. 2. Sections 49-2a-1, 49-2a-2, 49-2a-4 and 49-2a-5 of the Regulations of Connecticut State Agencies are repealed.
Statement of Purpose: To clarify the statutory authority for adopting regulations concerning the payment of interest on funds held in escrow by mortgagees; update the definition of “mortgagee”; add a definition for the term “annual rate”; provide the forms to be used for reporting to mortgagors the interest due; and make technical changes.