Bill Text: CT HB06801 | 2015 | General Assembly | Comm Sub
Bill Title: An Act Concerning Crowdfunding, Prohibited Acts Of Mortgage Servicers, Small Business Lending, Alternative Forms Of Identification For Opening Bank Accounts, Reverse Mortgages, Disclosures For Prepaid Cards, Successors In Interest In Foreclosed Property And The Prevention Of Fraud In Deposit Accounts.
Spectrum: Committee Bill
Status: (Engrossed - Dead) 2015-05-22 - File Number 883 [HB06801 Detail]
Download: Connecticut-2015-HB06801-Comm_Sub.html
General Assembly |
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January Session, 2015 |
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AN ACT CONCERNING CROWDFUNDING, PROHIBITED ACTS OF MORTGAGE SERVICERS, SMALL BUSINESS LENDING, ALTERNATIVE FORMS OF IDENTIFICATION FOR OPENING BANK ACCOUNTS, REVERSE MORTGAGES AND DISCLOSURES FOR PREPAID CARDS.
Be it enacted by the Senate and House of Representatives in General Assembly convened:
Section 1. (Effective July 1, 2015) The Banking Commissioner shall study legislation in other states concerning statutory restrictions on crowdfunding and investment exemptions to provide small businesses and start-ups with more funding options. Such report shall include, but not be limited to, an overview of such legislation and recommendations for the implementation of such legislation in Connecticut. On or before January 1, 2016, the commissioner shall report, in accordance with the provisions of section 11-4a of the general statutes, the results of such study to the joint standing committees of the General Assembly having cognizance of matters relating to banking and commerce.
Sec. 2. Section 36a-719h of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2015):
No mortgage servicer shall:
(1) Directly or indirectly employ any scheme, device or artifice to defraud or mislead mortgagors or mortgagees or to defraud any person;
(2) Engage in any unfair or deceptive practice toward any person or misrepresent or omit any material information in connection with the servicing of the residential mortgage loan, including, but not limited to, misrepresenting the amount, nature or terms of any fee or payment due or claimed to be due on a residential mortgage loan, the terms and conditions of the servicing agreement or the mortgagor's obligations under the residential mortgage loan;
(3) Obtain property by fraud or misrepresentation;
(4) [Knowingly misapply or recklessly apply] Apply residential mortgage loan payments recklessly or knowingly misapply such payments to the outstanding balance of a residential mortgage loan;
(5) [Knowingly misapply or recklessly apply] Apply payments recklessly or knowingly misapply such payments to escrow accounts;
(6) Place hazard, homeowner's or flood insurance on the mortgaged property when the mortgage servicer knows or [has reason to know] should have known that the mortgagor has an effective policy for such insurance;
(7) Fail to comply with section 49-10a;
(8) Knowingly or recklessly provide inaccurate information to a credit bureau [, thereby harming a mortgagor's creditworthiness] that results in harm to a mortgagor's creditworthiness;
(9) Fail to report both the favorable and unfavorable payment history of the mortgagor to a nationally recognized consumer credit bureau at least annually if the mortgage servicer regularly reports information to a credit bureau;
(10) Collect private mortgage insurance beyond the date for which private mortgage insurance is required;
(11) Fail to issue a release of mortgage in accordance with section 49-8;
(12) Fail to provide written notice to a mortgagor upon taking action to place hazard, homeowner's or flood insurance on the mortgaged property, including a clear and conspicuous statement of the procedures by which the mortgagor may demonstrate that he or she has the required insurance coverage and by which the mortgage servicer shall terminate the insurance coverage placed by it and refund or cancel any insurance premiums and related fees paid by or charged to the mortgagor;
(13) Place hazard, homeowner's or flood insurance on a mortgaged property, or require a mortgagor to obtain or maintain such insurance, in excess of the replacement cost of the improvements on the mortgaged property as established by the property insurer;
(14) Fail to provide to the mortgagor a refund of unearned premiums paid by a mortgagor or charged to the mortgagor for hazard, homeowner's or flood insurance placed by a mortgagee or the mortgage servicer if the mortgagor provides reasonable proof that the mortgagor has obtained coverage such that the forced placement insurance is no longer necessary and the property is insured. If the mortgagor provides reasonable proof that no lapse in coverage occurred such that the forced placement was not necessary, the mortgage servicer shall promptly refund the entire premium;
(15) Require any amount of funds to be remitted by means more costly to the mortgagor than a bank or certified check or attorney's check from an attorney's account to be paid by the mortgagor;
(16) Refuse to communicate with an authorized representative of the mortgagor who provides a written authorization signed by the mortgagor, provided the mortgage servicer may adopt procedures reasonably related to verifying that the representative is in fact authorized to act on behalf of the mortgagor;
(17) Conduct any business covered by sections 36a-715 to 36a-719l, inclusive, without holding a valid license as required under said sections, or assist or aid and abet any person in the conduct of business without a valid license as required under this title;
(18) Negligently make any false statement or knowingly and wilfully make any omission of a material fact in connection with any information or reports filed with a governmental agency or the system or in connection with any investigation conducted by the Banking Commissioner or another governmental agency; or
(19) Collect, charge, attempt to collect or charge or use or propose any agreement purporting to collect or charge any fee prohibited by sections 36a-485 to 36a-498f, inclusive, 36a-534a and 36a-534b.
Sec. 3. (Effective July 1, 2015) The Department of Banking, in consultation with the Department of Economic and Community Development, shall, within available appropriations, conduct a study of small business lending in the state. Such study shall include, but not be limited to, the feasibility of: (1) Establishing a state-run business and industrial development corporation; (2) creating mechanisms to increase Small Business Administration lending to promote and finance small businesses; and (3) forming a partnership between the Department of Economic and Community Development and Connecticut banks and credit unions to increase access to credit for small businesses in underserved communities. The Banking Commissioner shall report, in accordance with the provisions of section 11-4a of the general statutes, the findings of such study to the joint standing committees of the General Assembly having cognizance of matters relating to banking and finance on or before January 1, 2016.
Sec. 4. (Effective July 1, 2015) The Department of Banking shall, within available appropriations, conduct a study of the feasibility of requiring Connecticut banks and Connecticut credit unions to accept alternative forms of identification for persons without a Social Security number, such as an Individual Taxpayer Identification Number issued by the Internal Revenue Service, state-issued forms of identification or foreign documents, for purposes of providing such persons with the ability to open accounts at such banks or credit unions. The Banking Commissioner shall report, in accordance with the provisions of section 11-4a of the general statutes, the findings of such study to the joint standing committee of the General Assembly having cognizance of matters relating to banking on or before January 1, 2016.
Sec. 5. (NEW) (Effective October 1, 2015) (a) Any entity, including, but not limited to, any Connecticut bank or Connecticut credit union, prior to accepting a final and complete application for a reverse annuity mortgage loan or assessing any fees for such mortgage, shall:
(1) (A) Inform the prospective applicant of the counseling requirement in subdivision (2) of this subsection, and (B) provide the prospective applicant with a list of at least three independent housing counseling agencies approved by the United States Department of Housing and Urban Development to engage in reverse annuity mortgage loan counseling, as provided in 24 CFR 206.300. No such counseling agency shall receive any compensation, either directly or indirectly, from the lender or from any other person or entity involved in originating or servicing the loan;
(2) Receive a signed certification from the prospective applicant or the prospective applicant's authorized representative that the applicant has received counseling from an independent housing counseling agency, as described in subdivision (1) of this subsection;
(3) Provide the prospective applicant, prior to his or her counseling session with the independent agency counselor, with a reverse annuity mortgage loan worksheet containing issues that the prospective applicant is advised to consider and discuss with the counselor; and
(4) Receive a certification from the prospective applicant or the prospective applicant's authorized representative that either: (A) The reverse annuity mortgage loan origination, or (B) the counseling session required by subsection (2) of this section was conducted in person. Any counseling not conducted in person shall be conducted by telephone. The certification shall be signed by the prospective applicant and either the independent agency counselor or the reverse annuity mortgage loan originator and shall include the date of the meeting, and the name, address and telephone number of both the prospective applicant and either the counselor or the loan originator. The lender shall maintain the certification in an accurate, reproducible and accessible format for the term of the reverse annuity mortgage loan.
(b) A violation of the provisions of this section shall be an unfair or deceptive act or practice in the conduct of trade or commerce pursuant to subsection (a) of section 42-110b of the general statutes.
Sec. 6. Section 42-460a of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2015):
(a) As used in this section:
(1) "General-use prepaid card" has the same meaning given to that term in 12 CFR 1005.20(a)(3), as from time to time amended, but shall not include a linked prepaid card or any card, code or other device identified in 12 CFR 1005.20(b); and
(2) "Linked prepaid card" means a general-use prepaid card that enables the purchaser of or individual who increases or reloads funds onto the card, code or device (A) to receive back the remaining unexpended balance and the accrued interest earned on the unexpended balance on such card, code or device as of the date of expiration of such card, code or device by way of a financial account that is linked to the card, code or device; (B) to set the expiration date on such card, code or device at not less than ninety days from the date of purchase of or increasing or reloading of funds onto such card, code or device, for the purpose of receiving back the unexpended balance and accrued interest earned on the unexpended balance on such card, code or device in an expedited manner; and (C) to transfer the unexpended balance on such card, code or device to a bank offering a higher yield on and full insurance from the Federal Deposit Insurance Corporation for the transferred balance until the consumer or recipient of such card, code or device utilizes the unexpended balance or until the date of expiration on such card, code or device has passed, provided such purchaser or individual has a financial account that is linked to such card, code or device.
(b) A general-use prepaid card shall not include an expiration date relative to the underlying funds that are redeemable through the use of the applicable card, code or device. Notwithstanding the provisions of this subsection, a general-use prepaid card may include an expiration date with regard to such card, code or device, provided: (1) The following disclosures are made, in writing, on such card, code or device [: (A) That] and any packaging material related to such card, code or device: (A) A statement, disclosed with equal prominence and in close proximity to the expiration date, that such card, code or device expires, but that the underlying funds do not expire and that the consumer may contact the issuer for a replacement card, code or device; (B) a toll-free telephone number and an Internet web site address, if one is maintained, that a holder of a general-use prepaid card may use to obtain a comprehensive list of all charges, fees and expenses to be borne by the holder of such card; and [(B)] (C) a toll-free telephone number and an Internet web site address, if one is maintained, that a holder of a general-use prepaid card may use to obtain a replacement card, code or device after such card, code or device expires, provided the remaining balance is not otherwise returned to the holder; (2) no fee or charge is imposed on such holder for replacing the card, code or device or for providing such holder with the remaining balance in some other manner, provided the card, code or device has not been lost or stolen; and (3) the seller of the card, code or device has established policies and procedures to provide consumers a reasonable opportunity to purchase a card, code or device that has not less than five years remaining until the card, code or device expires.
(c) A linked prepaid card shall not include an expiration date relative to the underlying funds that are redeemable through the use of the applicable card, code or device. Notwithstanding the provisions of this subsection, a linked prepaid card may include an expiration date with regard to such card, code or device, including an expiration date contemplated by subparagraph (B) of subdivision (2) of subsection (a) of this section, provided: (1) The following disclosures are made, in writing, on such card, code or device [: (A) That] and any packaging material related to such card, code or device: (A) A statement, disclosed with equal prominence and in close proximity to the expiration date, that such card, code or device expires, but that the underlying funds do not expire, provided the purchaser of or individual who increases or reloads funds onto such card, code or device has not set an expiration date in accordance with said subparagraph (B), and that the consumer may contact the issuer for a replacement card, code or device; (B) a toll-free telephone number and an Internet web site address, if one is maintained, that a holder of a linked prepaid card may use to obtain a comprehensive list of all charges, fees and expenses to be borne by the holder of such card; and [(B)] (C) a toll-free telephone number and an Internet web site address, if one is maintained, that a holder of a general-use prepaid card may use to obtain a replacement card, code or device after such card, code or device expires, provided the purchaser of or individual who increases or reloads funds onto such card, code or device has not set an expiration date in accordance with said subparagraph (B); (2) no fee or charge is imposed on such holder for replacing the card, code or device or providing such holder with the remaining balance in some other manner, provided the card, code or device has not been lost or stolen or, if an expiration date has been set in accordance with said subparagraph (B), expired; (3) no fee or charge is imposed on the purchaser of or individual who increases or reloads funds onto the card, code or device for replacing the card, code or device or providing such purchaser or individual with the unexpended balance in some other manner, provided the card, code or device has not been lost or stolen; and (4) the seller of the card, code or device has established policies and procedures to provide consumers a reasonable opportunity to purchase a card, code or device that has not less than five years remaining until the card, code or device expires, unless the purchaser of or individual who increases or reloads funds onto such card, code or device has a financial account that is linked to such card, code or device and sets an expiration date on such card, code or device at not less than ninety days from the date of purchase or increasing or reloading at which time the unexpended balance and any accrued interest on the unexpended balance on such card, code or device shall be transferred to such financial account.
(d) For purposes of complying with the disclosure requirements of subdivision (1) of subsections (b) and (c) of this section, [(1)] the issuer of a general-use prepaid card or a linked prepaid card may provide disclosures that are consistent with the applicable provisions of 12 CFR 1005.20(e), as from time to time amended. [, and (2) such issuer shall make the disclosure required under subparagraph (A) of subdivision (1) of subsections (b) and (c) of this section with equal prominence and in close proximity to the expiration date on the applicable card, code or device.]
Sec. 7. Section 3-65c of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2015):
A holder of property subject to this part, or of a gift certificate, as defined in section 3-56a, or a general-use prepaid card, as defined in section 42-460a, as amended by this act, or a linked prepaid card, as defined in section 42-460a, as amended by this act, may not impose on the property a dormancy charge or fee, abandoned property charge or fee, unclaimed property charge or fee, escheat charge or fee, inactivity charge or fee, or any similar charge, fee or penalty for inactivity with respect to the property. Neither the property nor an agreement with respect to the property may contain language suggesting that the property may be subject to such a charge, fee or penalty for inactivity. The provisions of this section shall not apply to property subject to subdivision (1), (2), (3) or (5) of subsection (a) of section 3-57a, provided a holder of any such property may not impose an escheat charge or fee with respect to such property.
Sec. 8. Section 49-31u of the general statutes is repealed. (Effective from passage)
This act shall take effect as follows and shall amend the following sections: | ||
Section 1 |
July 1, 2015 |
New section |
Sec. 2 |
October 1, 2015 |
36a-719h |
Sec. 3 |
July 1, 2015 |
New section |
Sec. 4 |
July 1, 2015 |
New section |
Sec. 5 |
October 1, 2015 |
New section |
Sec. 6 |
October 1, 2015 |
42-460a |
Sec. 7 |
October 1, 2015 |
3-65c |
Sec. 8 |
from passage |
Repealer section |
BA |
Joint Favorable Subst. |
|
JUD |
Joint Favorable |
|
CE |
Joint Favorable |