Bill Text: CT SB00404 | 2016 | General Assembly | Introduced

Connecticut Senate Bill 404 (Prior Session Legislation)

Introduced

Bill Title: An Act Concerning Money Transmission In The State And The Fiduciary Duties Of Mortgage Servicers.

Sponsorship: Committee Bill

Status: (Introduced - Dead) 2016-03-04 - Public Hearing 03/08 [SB00404 Detail]

Download: Connecticut-2016-SB00404-Introduced.html


General Assembly		*Raised Bill No. 404*
*February Session, 2016*		LCO No. 1636
		01636_______BA_
Referred to Committee on BANKING
Introduced by:
(BA)

AN ACT CONCERNING MONEY TRANSMISSION IN THE STATE AND THE FIDUCIARY DUTIES OF MORTGAGE SERVICERS.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. Subsection (a) of section 36a-597 of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2016):

(a) No person shall engage in the business of money transmission in this state, or advertise or solicit such services, without a license issued by the commissioner as provided in sections 36a-595 to 36a-612, inclusive, except as an authorized delegate of a person that has been issued a license by the commissioner and in accordance with section 36a-607. A person [shall be deemed to be] is engaged in the business of money transmission in this state if such person: (1) Has a place of business [in] located within this state, (2) receives money or monetary value in this state or from a person located in this state, (3) transmits money or monetary value from a location in this state or to a person located in this state, (4) issues stored value or payment instruments that are sold in this state, or (5) sells stored value or payment instruments in this state. The licensee shall promptly notify the commissioner, in writing, of the termination of the contract between such licensee and authorized delegate.

Sec. 2. Section 36a-716 of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2016):

(a) Any mortgage servicer who receives funds from a mortgagor to be held in escrow for payment of taxes and insurance premiums shall: [pay]

(1) Deposit such funds in one or more separate trust accounts maintained at a federally insured bank, Connecticut credit union, federal credit union or out-of-state bank that maintains in this state a branch as defined in section 36a-410;

(2) Reconcile each trust account on a monthly basis. For purposes of this section, "reconcile" means maintaining records in accordance with generally accepted accounting principles for each trust account that clearly identify (A) the amounts and dates of all escrow payments made by the mortgagor, and (B) all remittances made on behalf of the mortgagor for the payment of taxes and insurance premiums, for not less than two years after the date of the final entry of activity on the account;

(3) Under no circumstances commingle funds of the mortgage servicer or use such funds in the conduct of the mortgage servicer's business;

(4) Use each trust account solely for the purposes of (A) the deposit of funds received from the mortgagor, and (B) the payment of taxes and insurance premiums;

(5) Reimburse the mortgagor for any service charge or other fee imposed by the bank or credit union against the trust account for the withdrawal of funds by depositing into the trust account the amount of such charge or fee not later than thirty days after the date of withdrawal;

(6) Pay the taxes and insurance premiums of the mortgagor to the appropriate taxing authority and insurance company in the amount required and at the time such taxes and insurance premiums are due provided [(1)] (A) the mortgage servicer has been provided with the tax or insurance bills at least fifteen days prior to the date such taxes and insurance premiums are due, and [(2)] (B) the mortgagor has paid to the mortgage servicer the amounts required to be paid into the escrow account, as determined by the mortgage servicer, for all amounts scheduled to be paid to the mortgage servicer prior to the date such taxes and insurance premiums are due.

(b) Each mortgage servicer shall, through its own effort and expense, determine and notify the mortgagor of the amounts necessary to be paid into the escrow account to [assure] ensure that sufficient funds will be available for the payment of such taxes and insurance premiums as of the date such payment is due.

(c) If the amount held in the escrow account as of the date such taxes and insurance premiums are due is insufficient to pay the taxes and insurance premiums despite compliance by the mortgagor with [subdivision (2)] subparagraph (B) of subdivision (6) of subsection (a) of this section, the mortgage servicer shall pay such taxes and insurance premiums from its own funds. The mortgage servicer shall then give the mortgagor the option of paying the shortage over a period of not less than one year. The mortgage servicer shall not charge or collect interest on such shortage during the one-year period.


This act shall take effect as follows and shall amend the following sections:
Section 1	July 1, 2016	36a-597(a)
Sec. 2	July 1, 2016	36a-716

Statement of Purpose:

To (1) clarify what constitutes activity occurring within this state in the context of money transmission and debt negotiation services; and (2) require that moneys received by mortgage servicers from mortgagors for the payment of such mortgagors' taxes and insurance premiums are deposited into a separate trust account and not commingled with other funds of the servicer.

[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not underlined.]