Bill Text: CT HB07019 | 2017 | General Assembly | Comm Sub
Bill Title: An Act Concerning The Department Of Banking's Enforcement Authority, The Issuance Of Certain Reports, Requiring The Return Of Certain Portions Of Security Deposits And Making Minor Revisions To The Banking Statutes.
Spectrum: Committee Bill
Status: (Passed) 2017-07-11 - Signed by the Governor [HB07019 Detail]
Download: Connecticut-2017-HB07019-Comm_Sub.html
General Assembly |
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January Session, 2017 |
*_____HB07019BA____030817____* |
AN ACT CONCERNING THE DEPARTMENT OF BANKING'S ENFORCEMENT AUTHORITY, THE ISSUANCE OF CERTAIN REPORTS, REQUIRING THE RETURN OF CERTAIN PORTIONS OF SECURITY DEPOSITS AND MAKING MINOR REVISIONS TO THE BANKING STATUTES.
Be it enacted by the Senate and House of Representatives in General Assembly convened:
Section 1. Subsection (a) of section 36a-494 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2017):
(a) (1) The commissioner may suspend, revoke or refuse to renew any mortgage lender, mortgage correspondent lender or mortgage broker license or take any other action, in accordance with the provisions of section 36a-51, for any reason which would be sufficient grounds for the commissioner to deny an application for such license under sections 36a-485 to 36a-498f, inclusive, 36a-534a and 36a-534b, or if the commissioner finds that the licensee, any control person of the licensee, the qualified individual or branch manager with supervisory authority, trustee, employee or agent of such licensee has done any of the following: (A) Made any material misstatement in the application; (B) committed any fraud, misappropriated funds or misrepresented, concealed, suppressed, intentionally omitted or otherwise intentionally failed to disclose any of the material particulars of any residential mortgage loan transaction, including disclosures required by subdivision (6) of subsection (a) of section 36a-493, or part III of chapter 669 or regulations adopted pursuant thereto, to anyone entitled to such information; (C) violated any of the provisions of this title or of any [regulations] regulation or order adopted or issued pursuant thereto, or any other law or regulation applicable to the conduct of its business; or (D) failed to perform any agreement with a licensee or a borrower. For purposes of this subdivision, "agent" includes any settlement agent used by the licensee and "settlement agent" means the person specified in any Closing Disclosure or other settlement statement, provided such settlement agent has been selected by the licensee. Any settlement agent whose name appears on the licensee's list of approved settlement agents shall be deemed selected by the licensee even if the settlement agent is selected from such list by the borrower.
(2) The commissioner may suspend, revoke or refuse to renew any mortgage loan originator license or any loan processor or underwriter license or take any other action, in accordance with the provisions of section 36a-51, for any reason which would be sufficient grounds for the commissioner to deny an application for such license under sections 36a-485 to 36a-498f, inclusive, 36a-534a and 36a-534b, or if the commissioner finds that the licensee has committed any fraud, misappropriated funds, misrepresented, concealed, suppressed, intentionally omitted or otherwise intentionally failed to disclose any of the material particulars of any residential mortgage loan transaction or has violated any of the provisions of this title or of any regulations adopted pursuant to such title or any other law or regulation applicable to the conduct of such licensee's business.
Sec. 2. Subsection (e) of section 36a-457b of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):
(e) A mortgage loan made by a Connecticut credit union secured by a first lien or interest shall have a maturity not exceeding forty-two years from the date of its making, and a mortgage loan to finance a manufactured home or secured by a subordinate lien shall have a maturity not exceeding [twenty] twenty-five years from the date of its making. For purposes of this subsection, the term "manufactured home" means a movable dwelling containing living facilities suitable for year-round occupancy by one family, including permanent provision for eating, sleeping, cooling and sanitation, provided such dwelling is to be maintained as a residence of the purchaser and will, within ninety days after purchase, be located at a manufactured housing community or other semipermanent site within this state.
Sec. 3. Subdivision (3) of subsection (h) of section 36a-437a of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):
(3) The bylaws may be amended by the adoption at a meeting of an amendment resolution by two-thirds of the directors of the credit union. Written notice of the meeting and text of the proposed amendment shall be given to each director at least seven days prior to the meeting. The Connecticut credit union shall file with the commissioner, within ten days after its adoption, one copy of any proposed amendment on a form provided by the commissioner. In the case of a proposed amendment requiring the commissioner's approval, the commissioner shall, within thirty days after such filing, determine whether such proposed amendment is consistent with the provisions and purposes of sections 36a-435a to 36a-472a, inclusive. The thirty-day period may be extended by the commissioner, in writing, if the commissioner determines that the proposed amendment raises issues that require additional information or additional time for analysis. [The commissioner, upon determining that such proposed amendment satisfies the requirements of said sections 36a-435a to 36a-472a, inclusive, shall endorse the commissioner's approval on such proposed amendment, and return one copy thereof to the Connecticut credit union.]
Sec. 4. Subsection (a) of section 36a-86 of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):
(a) The governing board of each Connecticut bank shall annually procure an audit or examination by certified public accountants or holders of certificates of authority as public accountants selected by vote of the governing board or a duly authorized committee thereof, and such accountants shall agree to provide related working papers, policies and procedures to the commissioner, if requested. The accountants shall thoroughly examine the books, records, accounts and affairs of such bank and submit a signed report of the audit or examination showing the condition of the bank to the governing board of such bank within a reasonable period of time following the conclusion of the audit or examination. The signed report shall be kept on file in such bank and [a copy] such governing board shall [be filed] file the following documents with the commissioner not later than the earlier of (1) one hundred twenty days following the close of such bank's fiscal year, or (2) the date prescribed by federal law for such bank to file such audit or examination with the applicable federal banking regulator, unless the commissioner extends such deadline for good cause shown: (A) A copy of the signed report; (B) any written communication regarding matters that the accountants are required to communicate to the audit committee of the bank; and (C) any written communication from the accountants to the governing board noting significant deficiencies and material weaknesses in internal controls of the bank. Members of the governing board of such Connecticut bank shall not be personally liable for any loss suffered by such bank through the wrongdoing or negligence of any officer or employee, which wrongdoing or negligence should have been discovered by the accountants in the performance of their duties, provided such members shall have exercised due care to procure thorough and substantial audits by the accountants.
Sec. 5. Section 36a-547 of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):
On and after October 1, 2016, a sales finance company, as defined in section 36a-535, as amended by this act, shall acquire and maintain adequate records in the form and manner as the commissioner shall direct in each retail installment contract acquired by purchase, discount, pledge, loan, advance or otherwise, and any application for a retail installment contract, covering the retail sale of a motor vehicle in the state that has been reviewed by the sales finance company or relates to a retail installment contract acquired by the sales finance company, including, but not limited to, the: (1) Name, address, income and credit score of the applicant and any coapplicants and, if known, the ethnicity, race and sex of such individuals; (2) type, amount and annual percentage rate of the loan; and (3) disposition of the application. Such records shall be made available to the Banking Commissioner not later than five business days after a request for such records by the commissioner. Each sales finance company shall retain such records for not less than two years after the date of the application for applications that were denied or, for any retail installment contract that was acquired, for not less than two years after the date of final payment or sale or assignment of such contract, whichever occurs first, or such longer period as may be required by any other provision of law. On or before January 30, 2017, each licensee shall provide to the commissioner the records collected between October 1, 2016, to December 31, 2016, inclusive.
Sec. 6. Subsection (c) of section 36a-565 of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):
(c) Notwithstanding the [provision] provisions of subsection (a) of this section, and subject to the provisions of section 46a-80, the commissioner may deny an application based on the history of criminal convictions of the applicant or of its control persons or qualified individual or branch manager.
Sec. 7. Subsection (c) of section 36a-636e of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):
(c) Upon surrender or termination of the license, the licensee shall promptly notify all customers and provide confirmation of the notification to the commissioner not later than fifteen days after the date of such [suspension] surrender or termination.
Sec. 8. Subsection (b) of section 36a-813 of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):
(b) In the case of a claim for default judgment the plaintiff shall file, in addition to the evidence required under the rules of the Superior Court, a sworn affidavit that lists the name, address and dates of ownership of each owner of the debt, from the charge-off creditor to the current owner. The plaintiff shall attach documentation to the affidavit that fully substantiates the amount of the debt. If the debt is a credit card debt subject to federal charge-off requirements, the following documents shall, subject to subsection (c) of this section, suffice to substantiate the debt: (1) A copy of the most recent monthly statement recording a purchase transaction, service billed, last payment or balance transfer, (2) a statement that reflects the charge-off balance, (3) with respect to consumer debt purchased on or after October 1, 2016, an additional monthly account statement sent to the consumer debtor while the account was active, which shows the consumer debtor's name and address, (4) such other statements, if any, required by the federal consumer financial protection bureau in its regulations, and (5) [postcharge-off] post-charge-off itemization of the balance if the balance is different from the charge-off amount.
Sec. 9. Subsection (c) of section 36a-636a of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):
(c) The commissioner, at any time and in accordance with section 29-17a, may arrange for a state and national criminal history records check of each principal, executive officer and director of the applicant or licensee.
Sec. 10. Subdivision (3) of section 49-30p of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):
(3) "Mortgagor" has the same meaning as provided in section 49-24a, except a mortgagor, for the purposes of sections 49-30p to 49-30w, inclusive, as amended by this act, shall only include those mortgagors with personal net liquid assets, excluding retirement and tax advantaged health savings plans, that are less than one hundred thousand dollars;
Sec. 11. Subsection (a) of section 36a-805 of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):
(a) No consumer collection agency shall: (1) Furnish legal advice or perform legal services or represent that it is competent to do so, or institute judicial proceedings on behalf of others; (2) communicate with consumer debtors, property tax debtors or federal income tax debtors in the name of an attorney or upon the stationery of an attorney, or prepare any forms or instruments which only attorneys are authorized to prepare; (3) receive assignments as a third party of claims for the purpose of collection or institute suit thereon in any court; (4) assume authority on behalf of a creditor to employ or terminate the services of an attorney unless such creditor has authorized such agency in writing to act as such creditor's agent in the selection of an attorney to collect the creditor's accounts; (5) demand or obtain in any manner a share of the proper compensation for services performed by an attorney in collecting a claim, whether or not such agency has previously attempted collection thereof; (6) solicit claims for collection under an ambiguous or deceptive contract; (7) refuse to return any claim or claims upon written request of the creditor, claimant or forwarder, which claims are not in the process of collection after the tender of such amounts, if any, as may be due and owing to the agency; (8) advertise or threaten to advertise for sale any claim as a means of forcing payment thereof, unless such agency is acting as the assignee for the benefit of creditors; (9) refuse or fail to account for and remit to its clients all money collected which is not in dispute within sixty days from the last day of the month in which said money is collected; (10) refuse or intentionally fail to return to the creditor all valuable papers deposited with a claim when such claim is returned; (11) refuse or fail to furnish at intervals of not less than ninety days, upon the written request of the creditor, claimant or forwarder, a written report upon claims received from such creditor, claimant or forwarder; (12) add any [post charge-off] post-charge-off charge or fee for cost of collection, unless such cost is a court cost, to the amount of any claim which it receives for collection or knowingly accept for collection any claim to which any such charge or fee has already been added to the amount of the claim unless (A) the consumer debtor is legally liable for such charge or fee as determined by the contract or other evidence of an agreement between the consumer debtor and creditor, a copy of which shall be obtained by or available to the consumer collection agency from the creditor and maintained as part of the records of the consumer collection agency or the creditor, or both, and (B) the total charge or fee for cost of collection does not exceed fifteen per cent of the total amount actually collected and accepted as payment in full satisfaction of the debt; (13) use or attempt to use or make reference to the term "bonded by the state of Connecticut", "bonded" or "bonded collection agency" or any combination of such terms or words, except the word "bonded" may be used on the stationery of any such agency in type not larger than twelve-point; (14) when the debt is beyond the statute of limitations, fail to provide the following disclosure in type not less than ten-point informing the consumer debtor in its initial communication with such consumer debtor that (A) when collecting on debt that is not past the date for obsolescence provided for in Section 605(a) of the Fair Credit Reporting Act, 15 USC 1681c: "The law limits how long you can be sued on a debt. Because of the age of your debt, (INSERT OWNER NAME) will not sue you for it. If you do not pay the debt, (INSERT OWNER NAME) may report or continue to report it to the credit reporting agencies as unpaid"; and (B) when collecting on debt that is past the date for obsolescence provided for in Section 605(a) of the Fair Credit Reporting Act, 15 USC 1681c: "The law limits how long you can be sued on a debt. Because of the age of your debt, (INSERT OWNER NAME) will not sue you for it and (INSERT OWNER NAME) will not report it to any credit reporting agencies."; or (15) engage in any activities prohibited by sections 36a-800 to 36a-812, inclusive.
Sec. 12. Section 36a-535 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2017):
As used in sections 36a-535 to 36a-546, inclusive, as amended by this act, unless the context otherwise requires:
(1) The terms "goods", "retail installment sale", "retail installment contract", "installment loan contract", "retail seller" and "retail buyer" have the same meanings as provided in section 36a-770;
(2) "Sales finance company" means any person engaging in this state in the business, in whole or in part, of (A) acquiring retail installment contracts [from retail sellers,] or installment loan contracts from the holders thereof, by purchase, discount or pledge, or by loan or advance to the holder of either on the security thereof, or otherwise, [but] or (B) acquiring retail installment loan contracts or installment loan contracts as described in subparagraph (A) of this subsection and subsequently conveying, assigning or otherwise transferring any interest in such contract to another person, but continuing to receive payments of principal and interest from a retail buyer under such contract. "Sales finance company" does not include a bank, out-of-state bank, Connecticut credit union, federal credit union, or out-of-state credit union, if so engaged.
Sec. 13. Section 36a-606a of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2017):
(a) Each licensee shall comply with the applicable provisions of the Currency and Foreign Transactions Reporting Act, 31 USC Section 5311 et seq., as from time to time amended, and any regulations adopted under such provisions, as from time to time amended and, upon request, shall provide proof of such compliance to the commissioner. In addition to any other remedies provided by law, a violation of such federal law or regulation shall be deemed a violation of this section and a basis upon which the commissioner may take enforcement action pursuant to section 36a-608.
(b) Each licensee shall establish an anti-money-laundering program, which shall include, but need not be limited to, (1) internal policies, procedures and controls, (2) a designated compliance officer, (3) an ongoing employee training program, and (4) an independent audit function to test the effectiveness of such anti-money-laundering program.
Sec. 14. Subsection (b) of section 36a-801 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2017):
(b) Any person desiring to act within this state as a consumer collection agency shall make a written application to the commissioner for such license in such form as the commissioner prescribes. Such application shall be accompanied by (1) a financial statement prepared by a certified public accountant or a public accountant which evidences that the applicant has a minimum tangible net worth of fifty thousand dollars, the accuracy of which is sworn to under oath before a notary public by the proprietor, a general partner or a corporate officer or a member duly authorized to execute such documents, (2) (A) the history of criminal convictions of the (i) applicant; (ii) partners, if the applicant is a partnership; (iii) members, if the applicant is a limited liability company or association; or (iv) officers, directors and principal employees, if the applicant is a corporation, and (B) sufficient information pertaining to the history of criminal convictions of such applicant, partners, members, officers, directors and principal employees as the commissioner deems necessary to make the findings under subsection (c) of this section, (3) a license fee of eight hundred dollars, or in the case of an initial application that is filed not earlier than one year before the date such license will expire, a license fee of four hundred dollars, and (4) an investigation fee of one hundred dollars. The commissioner shall cause to be made such inquiry and examination as to the qualifications of each such applicant or any partner, member, officer, director or principal employee of the applicant as the commissioner deems necessary. The commissioner, in accordance with section 29-17a, may conduct a state and national criminal history records check of the applicant and of each partner, member, officer, director and principal employee of such applicant. Each applicant shall furnish satisfactory evidence to the commissioner that the applicant is a person of good moral character and is financially responsible.
Sec. 15. Section 36a-806 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2017):
(a) No consumer collection agency shall engage in this state in any practice which is prohibited in section 36a-805, as amended by this act, or determined pursuant to section 36a-808 to be an unfair or deceptive act or practice, nor shall any consumer collection agency engage outside of this state in any act or practice prohibited in said section 36a-805. The commissioner shall have power to examine the affairs of every consumer collection agency in this state in order to determine whether it has been or is engaged in any act or practice prohibited by sections 36a-805 to 36a-808, inclusive, as amended by this act.
(b) No creditor or consumer collection agency shall retain, hire, or engage the services or continue to retain or engage the services of any person who engages in the business of a consumer collection agency and who is not licensed to act as such by the commissioner, if such creditor has actual knowledge that such person is not licensed by the commissioner to act as a consumer collection agency.
Sec. 16. Subsection (d) of section 36b-27 of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):
(d) (1) Whenever the commissioner finds as the result of an investigation that any person has violated any of the provisions of sections 36b-2 to 36b-34, inclusive, or any regulation, rule or order adopted or issued under said sections, or engaged in a dishonest or unethical practice, as described in sections 36b-31-15a to 36b-31-15d, inclusive, of the regulations of Connecticut state agencies, the commissioner may send a notice to (A) such person, (B) any other person that directly or indirectly controls such person and that was a cause of [the] such violation [of said sections or any such regulation, rule or order,] or practice due to an act or omission such other person knew or should have known would contribute to such violation or practice, or (C) any other person that has materially aided in such violation or practice, by registered or certified mail, return receipt requested, or by any express delivery carrier that provides a dated delivery receipt. The notice shall be deemed received by the person on the earlier of the date of actual receipt or the date seven days after the date on which such notice was mailed or sent. Any such notice shall include: (i) A reference to the title, chapter, regulation, rule or order alleged to have been violated or the legal authority for the dishonest or unethical practice allegation; (ii) a short and plain statement of the matter asserted or charged; (iii) the maximum fine that may be imposed for such violation or practice; (iv) a statement indicating that such person may file a written request for a hearing on the matters asserted not later than fourteen days after receipt of the notice; and (v) the time and place for the hearing.
(2) If a hearing is requested within the time specified in the notice, the commissioner shall hold a hearing upon the charges made unless such person fails to appear at the hearing. Any such hearing shall be held in accordance with the provisions of chapter 54. After the hearing, if the commissioner finds that the person has violated [caused a violation or materially aided in the violation of any of the provisions of sections 36b-2 to 36b-34, inclusive, or any regulation, rule or order adopted or issued under said sections] any of the provisions of sections 36b-2 to 36b-34, inclusive, or any regulation, rule or order adopted or issued under said sections, or engaged in a dishonest or unethical practice, as defined in sections 36b-31-15a to 36b-31-15d, inclusive, of the regulations of Connecticut state agencies, or that such person caused or materially aided in such violation or practice, the commissioner may, in the commissioner's discretion and in addition to any other remedy authorized by said sections, order that a fine not exceeding one hundred thousand dollars per violation or dishonest or unethical act be imposed upon such person. If such person fails to appear at the hearing, the commissioner may, as the facts require, order that a fine not exceeding one hundred thousand dollars per violation or dishonest or unethical act be imposed upon such person. The commissioner shall send a copy of any order issued pursuant to this subsection by registered or certified mail, return receipt requested, or by any express delivery carrier that provides a dated delivery receipt, to any person named in such order.
Sec. 17. Subsection (b) of section 47a-21 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2017):
(b) (1) In the case of a tenant under sixty-two years of age, a landlord shall not demand a security deposit in an amount that exceeds two months' rent.
(2) In the case of a tenant sixty-two years of age or older, a landlord shall not demand a security deposit in an amount that exceeds one month's rent. Any landlord who has received a security deposit in an amount that exceeds one month's rent from a tenant who becomes sixty-two years of age after paying such security deposit shall return the portion of such security deposit that exceeds one month's rent to the tenant upon the tenant's request.
Sec. 18. (Effective from passage) (a) There is established a task force to study methods to prevent the issuance of mortgages to persons with excessive blight fines or who have violated nuisance abatement laws.
(b) The task force shall consist of the following members:
(1) Two appointed by the speaker of the House of Representatives;
(2) Two appointed by the president pro tempore of the Senate;
(3) One appointed by the majority leader of the House of Representatives;
(4) One appointed by the majority leader of the Senate;
(5) One appointed by the minority leader of the House of Representatives;
(6) One appointed by the minority leader of the Senate;
(c) Any member of the task force appointed under subsection (b) of this section may be a member of the General Assembly.
(d) All appointments to the task force shall be made not later than thirty days after the effective date of this section. Any vacancy shall be filled by the appointing authority.
(e) The speaker of the House of Representatives and the president pro tempore of the Senate shall select the chairpersons of the task force from among the members of the task force. Such chairpersons shall schedule the first meeting of the task force, which shall be held not later than sixty days after the effective date of this section.
(f) The administrative staff of the joint standing committee of the General Assembly having cognizance of matters relating to banking shall serve as administrative staff of the task force.
(g) Not later than July 1, 2018, the task force shall submit a report on its findings and recommendations to the joint standing committee of the General Assembly having cognizance of matters relating to banking, in accordance with the provisions of section 11-4a of the general statutes. The task force shall terminate on the date that it submits such report or July 1, 2018, whichever is later.
Sec. 19. (Effective from passage) On or before January 1, 2018, the Commissioner of Banking shall report, in accordance with the provisions of section 11-4a of the general statutes, to the joint standing committee of the General Assembly having cognizance of matters relating to banking on the promotion of secured and unsecured lending at Martin Luther King, Jr. Corridors.
Sec. 20. (Effective from passage) On or before January 1, 2018, the Commissioner of Banking shall submit a report, in accordance with the provisions of section 11-4a of the general statutes, to the joint standing committee of the General Assembly having cognizance of matters relating to banking concerning the effectiveness of the Student Loan Ombudsman designated under section 36a-25 of the general statutes.
This act shall take effect as follows and shall amend the following sections: | ||
Section 1 |
October 1, 2017 |
36a-494(a) |
Sec. 2 |
from passage |
36a-457b(e) |
Sec. 3 |
from passage |
36a-437a(h)(3) |
Sec. 4 |
from passage |
36a-86(a) |
Sec. 5 |
from passage |
36a-547 |
Sec. 6 |
from passage |
36a-565(c) |
Sec. 7 |
from passage |
36a-636e(c) |
Sec. 8 |
from passage |
36a-813(b) |
Sec. 9 |
from passage |
36a-636a(c) |
Sec. 10 |
from passage |
49-30p(3) |
Sec. 11 |
from passage |
36a-805(a) |
Sec. 12 |
October 1, 2017 |
36a-535 |
Sec. 13 |
October 1, 2017 |
36a-606a |
Sec. 14 |
October 1, 2017 |
36a-801(b) |
Sec. 15 |
October 1, 2017 |
36a-806 |
Sec. 16 |
from passage |
36b-27(d) |
Sec. 17 |
October 1, 2017 |
47a-21(b) |
Sec. 18 |
from passage |
New section |
Sec. 19 |
from passage |
New section |
Sec. 20 |
from passage |
New section |
BA |
Joint Favorable Subst. |