SB 906 — AN ACT CONCERNING LEAD GENERATORS OF RESIDENTIAL MORTGAGE LOANS.

General Assembly   RaisedSubstitute Bill No.

906 January Session, 2017   LCO*_____SB00906BA____030817____* No.AN ACT CONCERNING LEAD GENERATORS OF RESIDENTIAL MORTGAGE LOANS.

4204   *04204_______BA_* Referred to Committee on BANKING   Introduced by:

  (BA)   AN ACT CONCERNING LEAD GENERATORS OF RESIDENTIAL MORTGAGE LOANS.

As used in this section and sections 36a-486 to 36a-498f, inclusive, as amended by this act, and 36a-534a to[to [36a-534c]36a-534c, 36a-534b,inclusive] inclusive,and 36a-534b, as amended by this act, and section 16 of this act, unless the context otherwise requires:

(32) "Trigger lead" means a consumer report obtained pursuant to subparagraph (B) of subdivision (1) of subsection (c) of sectionSection 604 of the Fair Credit Reporting Act, 15 USC 1681b, as amended from time to time, where the issuance of the report is triggered by an inquiry made with a consumer reporting agency in response to an application for credit.credit;

A licensed lead generator shall not be deemed to be acting as a mortgage lender, mortgage correspondent lender, mortgage broker or mortgage loan originator when engaged in the activities of a lead generator, as described in section 36a-484,36a-485, as amended by this act, if such person does not:

(1) Obtain compensation or gain contingent upon the consummation of a residential mortgage loan or the receipt of a residential mortgage loan application, or (2) utilize financial criteria particular to the consumer or the residential mortgage loan transaction to selectively place a lead or to steer a consumer to a specific person for a residential mortgage loan.

(B) Any wholly-ownedwholly owned subsidiary of any such bank or credit union;

and (F) An employee of a person licensed as a lead generator or exempt from licensure as a lead generator, while engaged in lead generator activities on behalf of such person.

The commissioner may automatically suspend a lead generator license if the licensee receives a deficiency on the system indicating that the payment required by subparagraph (A) of subdivision (2) of this subsection was Returned-ACH or returned pursuant to such other term as may be utilized by the system to indicate that the payment was not accepted.

(d) Each lead generator licensee shall maintain adequate records of its lead generation activities at the office named in the license, or, if requested by the commissioner, shall make such records available at such office or send such records to the commissioner by registered or certified mail, return receipt requested, or by any express delivery carrier that provides a dated delivery carrier that provides a dated delivery receipt, not later than five business days after such records are requested by the commissioner.

(2) records of any contact or attempted contact with a customer,consumer, including the name, date, method and nature of contact, and any information provided to or received from the consumer;

(3) The commissioner may suspend, revoke or refuse to renew any lead generator license or take any other action, in accordance with the provisions of section 36a-51, for any reason that would be sufficient grounds for the commissioner to deny an application for such license under sections 36a-485 to 36a-498f, inclusive, as amended by this act, 36a-534a and 36a-534b, as amended by this act, and section 16 of this act, or if the commissioner finds that the licensee, any control person of the licensee or qualified individual, trustee, employee or agent of such licensee has done any of the following:

or (C) violated any of the provisions of title 36a of the general statutes or of any regulations adopted pursuant thereto, or any other law or regulation applicable to the conduct of such licensee's lead generator business.

No person [or individual] who is required to be licensed and who is subject to sections 36a-485 to 36a-498f, inclusive, as amended by this act, 36a-534a and 36a-534b, as amended by this act, [may] and section 16 of this act may:and no control person shall directly or indirectly:

(1) Directly[Directly or indirectly employemploy] Employ any scheme, device or artifice to defraud or mislead borrowers or lenders or to defraud any person;

or[or] (14) Fail to truthfully account for moneys belonging to a party to a residential mortgage loan transaction.transaction;

[.] or (15) Fail to supervise the operation of the business to ensure compliance with all applicable laws.

(4) For the purposes of sections 36a-485 to 36a-498f, inclusive, as amended by this act, 36a-534a and 36a-534b, as amended by this act, and section 16 of this act, and to reduce the points of contact that the Federal Bureau of Investigation may have to maintain for purposes of subsections (b),(b) [and][and (c)(c)] andto (d)(d), inclusive, of section 36a-488, as amended by this act, the commissioner may use the system as a channeling agent for requesting information from and distributing information to the United States Department of Justice or any governmental agency.

(5) For the purposes of sections 36a-485 to 36a-498f, inclusive, as amended by this act, 36a-534a and 36a-534b, as amended by this act, and section 16 of this act, and to reduce the points of contact that the commissioner may have to maintain for purposes of subsections (b),(b) [and][and (c)(c)] andto (d)(d), inclusive, of section 36a-488, as amended by this act, and section 16 of this act, the commissioner may use the system as a channeling agent for requesting and distributing information to and from any source, as directed by the commissioner.

17 from passage Repealer section StatementBA ofJoint Purpose:Favorable Subst.

To provide the Commissioner of Banking with regulatory authority over lead generators of residential mortgage loans.

[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.]