Bill Text: CT SB00923 | 2015 | General Assembly | Introduced

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Bill Title: An Act Concerning Revisions To The Small Loan Act.

Spectrum: Committee Bill

Status: (Introduced - Dead) 2015-02-19 - Public Hearing 02/24 [SB00923 Detail]

Download: Connecticut-2015-SB00923-Introduced.html

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General Assembly		Raised Bill No. 923
January Session, 2015		LCO No. 3353
		*03353_______BA_*
Referred to Committee on BANKING
Introduced by:
(BA)

AN ACT CONCERNING REVISIONS TO THE SMALL LOAN ACT.

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

Section 1. Section 36a-573 of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(a) No person, except as authorized by the provisions of sections 36a-555 to 36a-573, inclusive, shall, directly or indirectly, charge, contract for or receive any interest, charge or consideration greater than twelve per cent per annum upon the loan, use or forbearance of money or credit of the amount or value of (1) five thousand dollars or less for any such transaction entered into before October 1, 1997, and (2) fifteen thousand dollars or less for any such transaction entered into on and after October 1, 1997. The provisions of this section shall apply to any person who, as security for any such loan, use or forbearance of money or credit, makes a pretended purchase of property from any person and permits the owner or pledgor to retain the possession thereof, or who, by any device or pretense of charging for the person's services or otherwise, seeks to obtain a greater compensation than twelve per cent per annum. No loan for which a greater rate of interest or charge than is allowed by the provisions of sections 36a-555 to 36a-573, inclusive, has been contracted for or received, wherever made, shall be enforced in this state, and any person in any way participating therein in this state shall be subject to the provisions of said sections, provided, a loan lawfully made after June 5, 1986, in compliance with a validly enacted licensed loan law of another state to a borrower who was not, at the time of the making of such loan, a resident of Connecticut but who has become a resident of Connecticut, may be acquired by a licensee and its interest provision shall be enforced in accordance with its terms.

(b) The provisions of subsection (a) of this section shall apply to any loan made or renewed in this state if the loan is made to a borrower who resides in or maintains a domicile in this state and such borrower (1) negotiates or agrees to the terms of the loan in person, by mail, by telephone or via the Internet while physically present in this state; (2) enters into or executes a loan agreement with the lender in person, by mail, by telephone or via the Internet while physically present in this state; or (3) makes a payment of the loan in this state. As used in this subsection, "payment of the loan" includes a debit on an account the borrower holds in a branch of a financial institution or the use of a negotiable instrument drawn on an account at a financial institution, and "financial institution" means any bank or credit union chartered or licensed under the laws of this state, any other state or the United States and having its main office or a branch office in this state.

(c) For transactions subject to the provisions of subsection (a) of this section, if any interest, consideration or charges in excess of those permitted are charged, contracted for or received, the contract of loan, use or forbearance of money or credit shall be void and no person shall have the right to collect or receive any principal, interest, charge or other consideration.

(d) No person shall, directly or indirectly, assist or aid and abet any person in conduct prohibited by sections 36a-555 to 36a-573, inclusive.

[(c)] (e) Whenever it appears to the commissioner that any person has violated the provisions of subsection (a) of this section or offered a loan that violates the provisions of subsection (a) of this section, the commissioner may investigate, take administrative action or assess civil penalties and restitution in accordance with the provisions of sections 36a-50 and 36a-52.

This act shall take effect as follows and shall amend the following sections:
Section 1	from passage	36a-573

Statement of Purpose:

To clarify that loans made in violation of the Small Loan Act are void and to make it a violation for persons to assist or aid and abet any person in conduct prohibited by the Small Loan Act.

[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.]