SB 268 — AN ACT CONCERNING VARIOUS REVISIONS TO THE BANKING STATUTES.

(1) Owns reverse mortgage loans, (2) performs subservicing for others withwithno no responsibility to advance moneysmoneysnot not yet receivedreceivedinconnection in connection with such subservicing activities, or (3) conducts reverse mortgage servicing.

(c) A covered institution shall maintain the Federal Housing Finance Agency'sPublic EligibilityAct RequirementsNo. for Enterprise Single-Family Seller/Servicers for minimum capital ratio, net worth and liquidity, as amended from time to time, whether or not the mortgage servicer is approved for government sponsored enterprise servicing.

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268 Agency's Eligibility Requirements for Enterprise Single-Family Seller/Servicers for minimum capital ratio, net worth and liquidity, as amended from time to time, whether or not the mortgage servicer is approved for government sponsored enterprise servicing.

(e) A covered institution shall maintain sufficient allowable assets for sSB268liquidity /in Fileaddition No.to the amounts required for servicing liquidity, to cover normal business operations.

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148 liquidity in addition to the amounts required for servicing liquidity, to cover normal business operations.

(g)Public AAct coveredNo. institution shall establish and maintain a board of directors responsible for oversight of the covered institution.

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268 (g) A covered institution shall establish and maintain a board of directors responsible for oversight of the covered institution.

(1) Establish a written corporate governance framework, includingappropriateinternalcontrolsdesignedto monitor corporate governance and assess compliance with the corporate governance framework, (2)monitor andensure institutionalcompliance with the rules established under sections 36a-715 to 36a-719l, inclusive, of the general statutes and accurately and timely complete and submit sSB268regulatory /reports, Fileincluding No.filing the mortgage call report, and (3) establish internal audit requirements that are appropriate for the size, complexity and risk profile of the servicer, with appropriate independence to provide a reliable evaluation of the servicer's internal control structure, risk management and governance.

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148 regulatory reports, including filing the mortgage call report, and (3) establish internal audit requirements that are appropriate for the size, complexity and risk profile of the servicer, with appropriate independence to provide a reliable evaluation of the servicer's internal control structure, risk management and governance.

(i) A covered institution shall establish a risk management program under the oversight of the board of directors that identifies, measures, monitorsPublic andAct controlsNo. risk commensurate with the complexity of the servicer.

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268 monitors and controls risk commensurate with the complexity of the servicer.

(3) Operational risk, which means the risk resulting from inadequate sSB268or /failed Fileinternal No.processes, people and systems or from external events;

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148 or failed internal processes, people and systems or from external events;

(j)Public AAct coveredNo. institution shall annually conduct a risk management assessment.

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268 (j) A covered institution shall annually conduct a risk management assessment.

(a) (1) The commissioner shall not issue a mortgage lender license, a sSB268mortgage /correspondent Filelender No.license or a mortgage broker license to any person unless such person meets the following tangible net worth and experience requirements, as applicable:

148(A) 10The sSB268minimum Filetangible net worth requirement for a mortgage lender shall be two hundred fifty thousand dollars and the minimum tangible net worth requirement for a mortgage correspondent lender and a mortgage broker shall be fifty thousand dollars, and (B) a mortgage lender, mortgage correspondent lender or mortgage broker shall have, (i) at the main office for which the license is sought, a qualified individual who has supervisory authority over the lending or brokerage activities of the licensee and who is responsible for the actions of the licensee, and (ii) at each branch office, a branch manager who has supervisory authority over the lending or brokerage activities of the branch office, who is responsible for the actions of the branch office, who has at least three years' experience in the mortgage business within the five years immediately preceding the Public Act No.

14822-94 mortgage11 correspondentof lender47 licenseSubstitute orSenate aBill mortgageNo. broker license to any person unless such person meets the following tangible net worth and experience requirements, as applicable:

(A)268 The minimum tangible net worth requirement for a mortgage lender shall be two hundred fifty thousand dollars and the minimum tangible net worth requirement for a mortgage correspondent lender and a mortgage broker shall be fifty thousand dollars, and (B) a mortgage lender, mortgage correspondent lender or mortgage broker shall have, (i) at the main office for which the license is sought, a qualified individual who has supervisory authority over the lending or brokerage activities of the licensee and who is responsible for the actions of the licensee, and (ii) at each branch office, a branch manager who has supervisory authority over the lending or brokerage activities of the branch office, who is responsible for the actions of the branch office, who has at least three years' experience in the mortgage business within the five years immediately preceding the date of the application for the license, and who is licensed as a mortgage loan originator under section 36a-489.

As used in subparagraph (B) of this subdivision, "at the main office" may be established by demonstrating to the satisfaction of the commissioner that the qualified individual [resides within one hundred miles of the main office or]or is [otherwise]otherwise] is capable of providing full-time [, in-person] supervision of the main office, and "at each branch office" may be established by demonstrating to the satisfaction of the commissioner that the branch manager [resides within one hundred miles of the branch office or]or is [otherwise]otherwise] is capable of providing full-time [, in-person] supervision of the branch office.

The commissioner may waive the requirements of subparagraph (B) of this subdivision pertaining to a qualified individual where it is demonstrated to the satisfaction of the commissioner that no activity subject to licensure under sections 36a-485 to 36a-498e, inclusive, as amended by this act, 36a-534a and 36a-534b will be conducted at the sSB268main /office Fileand No.the licensee designates a qualified individual responsible for the actions of the licensee.

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148 main office and the licensee designates a qualified individual responsible for the actions of the licensee.

(2)Public EachAct licenseeNo. shall maintain the net worth required by this subsection.

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268 (2) Each licensee shall maintain the net worth required by this subsection.

Each such form shall contain content as set forth by instruction or procedure of the commissioner and may be changed or updated as necessary by the commissioner in order to carry out the purpose of sections 36a-21, 36a- 485 to 36a-498e, inclusive, as amended by this act, 36a-498h, 36a-534a and 36a-534b.

In the case of an initial application for a license, the following supplementary information shall sSB268be /filed, Fileas No.applicable:

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148 be filed, as applicable:

(A) A statement specifyingPublic theAct dutiesNo. and responsibilities of such person's employment, the term of employment, including month and year, and the name, address and telephone number of a supervisor, employer or, if self- employed, a business reference;

and22-94 (B)13 if required by the commissioner, copies of W-247 forms,Substitute 1099Senate taxBill formsNo. or, if self-employed, 1120 corporate tax returns, signed letters from the employer on the employer's letterhead verifying such person's duties and responsibilitiesandtermofemployment including monthandyear,and if such person is unable to provide such letters, other proof satisfactory to thecommissioner that suchpersonmeetstheexperience requirement.

268 specifying the duties and responsibilities of such person's employment, the term of employment, including month and year, and the name, address and telephone number of a supervisor, employer or, if self- employed, a business reference;

and (B) if required by the commissioner, copies of W-2 forms, 1099 tax forms or, if self-employed, corporate tax returns, signed letters from the employer on the employer's letterhead verifying such person's duties and responsibilitiesandtermofemployment including monthandyear,and if such person is unable to provide such letters, other proof satisfactory to thecommissioner that suchpersonmeetstheexperience requirement.

[The specified office shall be within a one-hundred-mile distance from where such sSB268licensee /resides, Fileunless No.such licensee can otherwise demonstrate to the commissioner's satisfaction that the licensee will be subject to supervision by a qualified individual or branch manager.] An application to license an individual as a mortgage loan originator or a loan processor or underwriter or for renewal of such license shall be filed, in a form prescribed by the commissioner, with the system.

148Each 13such sSB268form Fileshall contain content as set forth by instruction or procedure of the commissioner and may be changed or updated as necessary by Public Act No.

14822-94 licensee14 resides, unless such licensee can otherwise demonstrate to the commissioner's satisfaction that the licensee will be subject to supervision by a qualified individual or branch manager.] An application to license an individual as a mortgage loan originator or a loan processor or underwriter or for renewal of such47 licenseSubstitute shallSenate beBill filed,No. in a form prescribed by the commissioner, with the system.

Each268 such form shall contain content as set forth by instruction or procedure of the commissioner and may be changed or updated as necessary by the commissioner in order to carry out the purpose of sections 36a-485 to 36a-498e, inclusive, as amended by this act, 36a-498h, 36a-534a and 36a-534b.

The applicant shall,at aminimum,furnishto the system information concerning the identity of the applicant, any control person of the applicant and the qualified individual responsible for the actions of the licensee, including, but not limited to, a personal history sSB268and /experience, Filein No.a form prescribed by the system, and information related to any administrative, civil or criminal findings by any governmental jurisdiction.

148The 14commissioner, sSB268in Fileaccordance with section 29-17a, may conduct a state or national criminal history records check of the applicant, any control person of the applicant and the Public Act No.

14822-94 and15 experience,of in47 aSubstitute formSenate prescribedBill byNo. the system, and information related to any administrative, civil or criminal findings by any governmental jurisdiction.

The268 commissioner, in accordance with section 29-17a, may conduct a state or national criminal history records check of the applicant, any control person of the applicant and the qualified individual, and, in accordance with section 36a-24b, may require the submission of fingerprints of such persons to the Federal Bureau of Investigation or other state, national or international criminal databases as part of the application.

(i) The surety bond shall cover all mortgage loan originators sponsored by such exempt registrant and comply with the requirements set forth in this section, and (ii) the penal sSB268sum /of Filesuch bond shall be in an amount determined in accordance with subsection (d) of this section, provided the penal sum of the bond shall Public Act No.

14822-94 1516 sSB268of File47 Substitute Senate Bill No.

148268 sum of such bond shall be in an amount determined in accordance with subsection (d) of this section, provided the penal sum of the bond shall be not less than one hundred thousand dollars;

(b) Except for the bond required by subparagraph (C) of subdivision (3) of subsection (a) of this section, the bond required by subsection (a) of this section shall be (1) in a form approved by the Attorney General, and(2) conditioneduponthemortgage lender,mortgage correspondent lender or mortgage broker licensee and any mortgage loan originator licensee sponsored by such mortgage lender, mortgage correspondent lender or mortgage broker or, in the case of a mortgage loan originator sSB268Public /Act File No.

14822-94 1617 sSB268of File47 Substitute Senate Bill No.

148268 licensee sponsored by an exempt registrant, upon such mortgage loan originator licensee faithfully performing any and all written agreements or commitments with or for the benefit of borrowers and prospective borrowers, truly and faithfully accounting for all funds received from a borrower or prospective borrower by the licensee in the licensee's capacity as a mortgage lender, mortgage correspondent lender, mortgage broker or mortgage loan originator, and conducting such mortgage business consistent with the provisions of sections 36a-485 to 36a-498e, inclusive, as amended by this act, 36a-534a and 36a-534b.

The principal shall notify the commissioner ofPublic theAct commencementNo. of an action on the bond.

When22-94 an18 actionof is47 commencedSubstitute onSenate aBill principal's bond, the commissioner may require the sSB268 / File No.

148268 17of sSB268the Filecommencement No.of an action on the bond.

148When an action is commenced on a principal's bond, the commissioner may require the filing of a new bond and immediately on recovery on any action on the bond, the principal shall file a new bond.

No automatic suspension or inactivation shall occur if, prior to the date that the bond cancellation shall take effect, (1) the principal submits a letter of reinstatement of the bond from the surety company or a new bond, (2) the mortgage lender, mortgage correspondent lender or mortgage broker licensee has ceased business and has surrendered all licensesPublic inAct accordance with subsection (a) of section 36a-490, or (3) in the case of a mortgage loan originator licensee, the sponsorship with the mortgage lender, mortgage correspondent lender or mortgage broker who was automatically suspended pursuant to this section or, with the exempt registrant who failed to provide the bond required by this sSB268 / File No.

14822-94 1819 sSB268of File47 Substitute Senate Bill No.

148268 licenses in accordance with subsection (a) of section 36a-490, or (3) in the case of a mortgage loan originator licensee, the sponsorship with the mortgage lender, mortgage correspondent lender or mortgage broker who was automatically suspended pursuant to this section or, with the exempt registrant who failed to provide the bond required by this section, has been terminated and a new sponsor has been requested and approved.

(2)Anapplicantforaninitialmortgagebrokerlicenseshallfilea(2)Anapplicantforaninitialmortgagebrokerlicenseshallfileabond bond in a penal sum of fifty thousand dollars in connection with its application for the main office.

(3) An exempt registrant under subsection (d) of section 36a-487 who is exempt from licensure under subdivision (1), (2) or (3) of subsection (a) of section 36a-487 shall file a bond in a penal sum of one hundred thousandPublic dollarsAct theNo. first time such exempt registrant sponsors a mortgage loan originator.

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268 thousand dollars the first time such exempt registrant sponsors a mortgage loan originator.

sSB268(5) /Persons Fileexempt No.from licensure under subdivision (4) of subsection (a) of section 36a-487, shall file a bond in a penal sum as set forth in section 36a-671d, as amended by this act.

148 19 sSB268 File No.

148 (5) Persons exempt from licensure under subdivision (4) of subsection (a) of section 36a-487, shall file a bond in a penal sum as set forth in section 36a-671d, as amended by this act.

(iii) the aggregate dollar amount of all residential mortgage loans originated by such licensee at all licensed locations or by the exempt registrant during the preceding four quarters ending June thirtieth is one hundred million dollars or more but less than two hundred fifty million dollars, the penal sum of thebondshallbethreehundredthousanddollars;and(iv)theaggregate dollar amount of all residential mortgage loans originated by such licensee at all licensed locations or by the exempt registrant during the preceding four quarters ending June thirtieth is two hundred fifty millionPublic dollarsAct orNo. more, the penal sum of the bond shall be five hundred thousand dollars.

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268 million dollars or more, the penal sum of the bond shall be five hundred thousand dollars.

(i) The aggregate dollar amount of all residential mortgage loans originated by such licensee at all licensed locations or by the exempt registrant during the preceding four quarters ending June thirtieth is less than thirty sSB268milliondollars,thepenalsumofthebondshallbefiftythousanddollars; / File No.

148 20 sSB268 File No.

148 milliondollars,thepenalsumofthebondshallbefiftythousanddollars;

(9) The commissioner may require a change in the penal sum of the bondPublic ifAct theNo. commissioner determines at any time that the aggregate dollar amount of all residential mortgage loans originated warrants a change in the penal sum of the bond.

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268 bond if the commissioner determines at any time that the aggregate dollar amount of all residential mortgage loans originated warrants a change in the penal sum of the bond.

(2) No application for a debt negotiation license for a main office or sSB268branch /office, Fileand No.no renewal of such a license, shall be granted unless the applicant has filed a single surety bond with the commissioner in an aggregate amount of fifty thousand dollars for each licensed location, or such other amount required by subdivision (4) of this subsection.

148 21 sSB268 File No.

148 branch office, and no renewal of such a license, shall be granted unless the applicant has filed a single surety bond with the commissioner in an aggregate amount of fifty thousand dollars for each licensed location, or such other amount required by subdivision (4) of this subsection.

[, which bond shall identify any licensed branch office as a bonded location on such bond by addendum.] (4) In the case of a debt negotiation licensee engaging or offering to engage in the business of negotiating residential mortgage loans on behalf of mortgagors, such debt negotiation licensee shall file a bond in the penal sum amount set forth in subsection (e) of this section based on thePublic aggregateAct dollarNo. amount of the residential mortgage loans negotiated or offered to be negotiated by its sponsored mortgage loan originator licensees.

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268 the aggregate dollar amount of the residential mortgage loans negotiated or offered to be negotiated by its sponsored mortgage loan originator licensees.

The principal shall file, as the commissioner may require, any bond rider or endorsement to the surety bond on file with the commissioner to reflect any changes necessary to maintain the surety sSB268bond /coverage Filerequired No.by this section.

148 22 sSB268 File No.

148 bond coverage required by this section.

Any debtor or mortgagor who may be damaged by a failure to perform any written agreements, by the wrongful conversion of funds paid by a debtor or mortgagor to a debt negotiation licensee or mortgage loan originator licensee, or by conduct inconsistent with the provisions of sectionsPublic 36a-485Act toNo. 36a-498e, inclusive, as amended by this act, 36a-534a, 36a-534b and 36a-671 to 36a-671f, inclusive, as amended by this act, may proceedonanysuchsuretybondagainsttheprincipalorsuretythereon, or both, to recover damages.

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268 sections 36a-485 to 36a-498e, inclusive, as amended by this act, 36a-534a, 36a-534b and 36a-671 to 36a-671f, inclusive, as amended by this act, may proceedonanysuchsuretybondagainsttheprincipalorsuretythereon, or both, to recover damages.

When an sSB268action /is Filecommenced No.on a principal's bond, the commissioner may require the filing of a new bond and immediately on recovery on any action on the bond, the principal shall file a new bond.

148 23 sSB268 File No.

148 action is commenced on a principal's bond, the commissioner may require the filing of a new bond and immediately on recovery on any action on the bond, the principal shall file a new bond.

If such bond is issued electronically on the system, written notice of cancellation may be provided by the surety to thePublic licenseeAct andNo. the commissioner through the system at least thirty days prior to the date of cancellation.

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268 the licensee and the commissioner through the system at least thirty days prior to the date of cancellation.

After a license has been automatically suspended, the commissioner shall (1) give the debt negotiation licensee notice of the automatic suspension pending proceedings for revocation or refusal to renew and an opportunity for a hearing on such actions in accordance with section 36a-51, and (2) require the debt negotiation licensee to take sSB268or /refrain Filefrom No.taking such action as the commissioner deems necessary to effectuate the purposes of this section.

148 24 sSB268 File No.

148 or refrain from taking such action as the commissioner deems necessary to effectuate the purposes of this section.

(2)Public AAct debtNo. negotiation licensee exempt from licensure as a mortgage lender, mortgage correspondent lender or mortgage broker pursuant to subdivision (4) of subsection (a) of section 36a-487 and sponsoring and bonding at least one mortgage loan originator as an exempt registrant under subdivision (2) of subsection (a) and subsection (d) of section 36a- 487 shall file a bond with a penal sum in the following amount:

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268 (2) A debt negotiation licensee exempt from licensure as a mortgage lender, mortgage correspondent lender or mortgage broker pursuant to subdivision (4) of subsection (a) of section 36a-487 and sponsoring and bonding at least one mortgage loan originator as an exempt registrant under subdivision (2) of subsection (a) and subsection (d) of section 36a- shall file a bond with a penal sum in the following amount:

and (C) If the aggregate dollar amount of all residential mortgage loans negotiated or offered to be negotiated by all sponsored mortgage loan originators during the preceding twelve-month period ending July thirty-first of the current year is fifty million dollars or more, the penal sSB268sum /of Filethe No.bond shall be one hundred fifty thousand dollars.

148 25 sSB268 File No.

148 sum of the bond shall be one hundred fifty thousand dollars.

(g) Financial information necessary to verify the aggregate amount of residential mortgage loans negotiated or offered to be negotiated shall bePublic filedAct withNo. the commissioner as the commissioner may require, and shall be reported on the system at such time and in such form as the system may require.

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268 be filed with the commissioner as the commissioner may require, and shall be reported on the system at such time and in such form as the system may require.

Subsection (i) of section 36a-801 of the 2022 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective fromOctober passage):1, 2022):

A licensee may change the name of the licensee or address of the office specified on the most recent filing with the system if, at least thirty calendar days prior to such change, (1) the licensee files such change with the system and provides a bond rider, endorsement or addendum, as applicable, to the surety bond on file with the commissioner that reflects the new name or address, and (2) the commissioner does not disapprove such change, in sSB268writing, /or Filerequest No.further information from the licensee within such thirty-day period.

148 26 sSB268 File No.

148 writing, or request further information from the licensee within such thirty-day period.

Any change in any control person of the licensee, except a changePublic ofAct aNo. director, general partner or executive officer that is not the result of an acquisition or change of control of the licensee, shall be the subject of an advance change notice filed on the system at least thirty days prior to the effective date of such change and no such change shall occurwithoutthecommissioner'sapproval.Forpurposesofthissection, "change of control" means any change causing the majority ownership, voting rights or control of a licensee to be held by a different control person or group of control persons.

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268 change of a director, general partner or executive officer that is not the result of an acquisition or change of control of the licensee, shall be the subject of an advance change notice filed on the system at least thirty days prior to the effective date of such change and no such change shall occurwithoutthecommissioner'sapproval.Forpurposesofthissection, "change of control" means any change causing the majority ownership, voting rights or control of a licensee to be held by a different control person or group of control persons.

After a license has been automatically suspended pursuant to this section, the commissioner shall (A) give the licensee notice of the automatic suspension, pending proceedings for revocation or refusal to renew pursuant to section 36a- 804 and an opportunity for a hearing on such action in accordance with section 36a-51, and (B) require such licensee to take or refrain from taking such action as the commissioner deems necessary to effectuate the purposes of this section.

(a) No such license and no renewal thereof shall be granted to a consumer collection agency, except a consumer collection agency engaged solely in the business of debt buying, unless the applicant has sSB268filedwiththecommissioner /abondtothepeopleofthestate Fileinthepenal sum of [twenty-five thousand dollars] fifty thousand dollars for the main office and fifty thousand dollars for each branch office, approved by the Attorney General as to form and by the commissioner as to Public Act No.

14822-94 2729 sSB268of File47 Substitute Senate Bill No.

148268 filedwiththecommissioner abondtothepeopleofthe state inthepenal sumof[twenty-fivethousanddollars]onehundredthousanddollarsfor the main office and fifty thousand dollars for each branch office, approved by the Attorney General as to form and by the commissioner as to sufficiency of the security thereof.

(b) Each consumer collection agency, except a consumer collection agency engaged solely in the business of debt buying, shall deposit funds collected or received from consumer debtors for payment for others on an account, bill or other indebtedness in one or more trust accounts maintained at a federally insured bank, Connecticut credit union, federal credit union or an out-of-state bank, [that maintains in this state a branch as defined in section 36a-410,] which accounts shall sSB268be /reconciled Filemonthly. No.

148Such 28funds sSB268shall Filenot be commingled with funds Public Act No.

14822-94 be30 reconciledof monthly.47 Substitute Senate Bill No.

Such268 funds shall not be commingled with funds of the consumer collection agency or used in the conduct of the consumer collection agency's business.

(6) any person employedPublic inAct theNo. capacity of outside salesman as defined in the regulations of the Federal Fair Labor Standards Act;

(7)22-94 any31 insideof sSB26847 /Substitute FileSenate Bill No.

148268 29employed sSB268in Filethe No.capacity of outside salesman as defined in the regulations of the Federal Fair Labor Standards Act;

148(7) any inside salesperson whose sole duty is to sell a product or service (A) whose regular rate of pay is in excess of two times the minimum hourly rate applicable to him under section 31-58, (B) more than half of whose compensation for a representative period, being not less than one month, represents commissions on goods or services, and (C) who does not work more than fifty-four hours during a work week of seven consecutive calendar days.

(11) any personPublic employedAct inNo. agriculture;

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268 person employed in agriculture;

(13)any person employed as a firefighter by a private nonprofit corporation which on sSB268May /24, File1984, No.has a valid contract with any municipality to extinguish fires and protect its inhabitants from loss by fire;

148 30 sSB268 File No.

148 May 24, 1984, has a valid contract with any municipality to extinguish fires and protect its inhabitants from loss by fire;

Beginning on October 1, 2012, the total annual compensation for purposes of Subsection (a) of 29 CFR 541.601 shall be increased annually, effective October first of each year, based on the percentage increase, from year to year, in the average of all workers'Public weeklyAct earningsNo. as determined by the Labor Commissioner pursuant to subdivision (1) of subsection (b) of section 31-309;

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268 workers' weekly earnings as determined by the Labor Commissioner pursuant to subdivision (1) of subsection (b) of section 31-309;

For purposes of this subdivision, (A) "commercial mortgage loan originator" means an individual who for compensation or gain or with the expectation of sSB268compensation /or Filegain, No.either for such individual or for the person employing or retaining such individual, (i) [accepts] takes a commercial mortgage loan application, or (ii) offers or negotiates the terms of a commercial mortgage loan, and (B) "commercial mortgage loan" means a mortgage loan not primarily for personal, family or household use.

148Sec. 31 sSB268 File No.

14812. compensation or gain, either for such individual or for the person employing or retaining such individual, (i) [accepts] takes a commercial mortgage loan application, or (ii) offers or negotiates the terms of a commercial mortgage loan, and (B) "commercial mortgage loan" means a mortgage loan not primarily for personal, family or household use.

ThisSubsection act(o) shallof takesection effect36a-145 asof followsthe andgeneral shallstatutes amendis therepealed followingandthefollowing sections:issubstituted inlieuthereof(EffectiveOctober 1, 2022):

Section(o) 1(1) OctoberWith 1,the 2022approval 36a-535(2)of Sec.the commissioner, a Connecticut bank may establish a loan production office in or outside this state.

2The Octobercommissioner 1,shall 2022not 36a-596approve Sec.the establishment of a loan production office under this subdivision unless the commissioner has considered the Connecticut bank's record of compliance with, and overall rating under, the Community Reinvestment Act of 1977, 12 USC 2901 et seq., as amended from time to time.

3(2) OctoberA 1,Connecticut 2022bank 36a-598(d)(1)that Sec.proposes to close any loan production office shall submit to the commissioner a notice of the proposed closing not later than thirty days prior to the date proposed for such closing.

4The Octobernotice 1,shall 2022include Newa sectiondetailed Sec.statement of the reasons for the decision to close the loan production office and the statistical and other information in support of such reasons.

5After fromreceipt passageof 36a-488the Sec.notice, the commissioner may require the Connecticut bank to submit any additionalinformation.TheConnecticutbank shallprovidenoticeofthe proposed closing to its customers by posting a notice in a conspicuous manner on the premises of such loan production office for at least a Public Act No.

622-94 from34 passageof 36a-49247 Sec.Substitute Senate Bill No.

7268 fromthirty-day passageperiod 36a-671dending Sec.on the date proposed for such closing.

8 from passage 36a-801(i) Sec.

913. October 1, 2022 36a-802(a) Sec.

10Subsection from(d) passageof 36a-811(b)section Sec.36a-412 of the general statutes is repealed andthefollowing issubstituted inlieuthereof(EffectiveOctober 1, 2022):

11(d) OctoberWith 1,the 2022approval 31-76iof Statementthe ofcommissioner, Legislativeany Commissioners:out-of-state bank, other than a foreign bank, may establish a loan production office in this state.

InThe Sectioncommissioner 4shall (e),not "including,approve butthe notestablishment limitedof to,a suchloan asproduction mortgage-backedoffice securities"under wasthis changedsubsection tounless "including,the butcommissioner nothas limitedconsidered to,the mortgage-out-of-state backedbank's securities"record forof grammar.compliance with the requirements of the Community Reinvestment Act of 1977, 12 USC 2901 et seq., as amended from time to time, and overall Community Reinvestment Act rating.

BASec. Joint Favorable Subst.

-LCO14. sSB268 / File No.

148(Effective 32October sSB2681, File2022) No.(a) The chairpersons of the joint standing committee of the General Assembly having cognizance of matters relating to banking shall convene a working group to (1) examine the Community Reinvestment Act of 1977, 12 USC 2901 et seq., as amended from time to time, (2) monitor proposed changes to said act andmake recommendationsandsubmit commentsto federalregulators and the Connecticut federal legislative delegation, and (3) recommend methods to incentivize banks and credit unions to (A) open branch offices in communities without adequate banking services, and (B) offer loan products to individuals in low and moderate-income neighborhoods.

148(b) The followingworking Fiscalgroup Impactshall Statementconsist and Bill Analysis are prepared for the benefit of the membersfollowing ofmembers: the General Assembly, solely for purposes of information, summarization and explanation and do not represent the intent of the General Assembly or either chamber thereof for any purpose.

In(1) general,The fiscalchairpersons, impactsvice-chairpersons areand basedranking uponmembers aof varietythe ofjoint informationalstanding sources,committee includingof the analyst’sGeneral professionalAssembly knowledge.having cognizance of matters relating to banking;

Whenever(2) applicable,The agencyBanking dataCommissioner, isor consulted as part of the analysis,Banking howeverCommissioner's finaldesignee; products do not necessarily reflect an assessment from any specific department.

OFAPublic FiscalAct NoteNo. State Impact:

None22-94 Municipal35 Impact:of 47 Substitute Senate Bill No.

None268 Explanation(3) ThisA billrepresentative makesof variousthe changesConnecticut toBankers' statutesAssociation; governing banking department licensees and increases surety bond amounts for consumer collection agency licensees.

These(4) changesA arerepresentative notof anticipatedthe toCredit resultUnion inLeague aof fiscalConnecticut; impact to the state or municipalities.

The(5) OutA Yearsrepresentative Stateof Impact:Connecticut banks, who shall be appointed by the minority leader of the House of Representatives;

None(6) MunicipalA Impact:representative of Connecticut credit unions, who shall be appointed by the minority leader of the Senate;

Noneand sSB268(7) /Two Filerepresentatives No.of organizations representing the interests of low and moderate-income communities without adequate banking services, one of whom shall be appointed by the speaker of the House of Representatives, and one of whom shall be appointed by the president pro tempore of the Senate.

148(c) 33All sSB268initial Fileappointments No.to the working group shall be made not later than thirty days after the effective date of this section.

148Any OLRvacancy Billshall Analysisbe sSBfilled 268by ANthe ACTappointing CONCERNINGauthority. VARIOUS REVISIONS TO THE BANKING STATUTES.

SUMMARY(d) ThisThe billchairpersons makesof variousthe changesjoint tostanding statutescommittee governingof the General Assembly having cognizance of matters relating to banking departmentshall licensees.be the chairpersons of the working group.

AmongSuch otherchairpersons things,shall itschedule increasesthefirstmeetingoftheworkinggroup,which regulatoryshallbeheldnotlaterthan requirementssixty fordays moneyafter transmitterthe andeffective mortgagedate servicerof licensees.this section.

For(e) moneyThe transmitters,administrative itstaff expands the definition of “control” and “control person” to incorporate key individuals and exclude passive investors, specifically as these individuals relate to notifying the departmentjoint ofstanding acommittee “change of control.” For certain mortgage servicers that service at least 2,000 residential loans, the billGeneral requiresAssembly theyhaving meetcognizance minimum capital and liquidity requirements, establish a board of directors,matters conductrelating annualto audits,banking andshall establishserve aas riskadministrative managementstaff programof (§the 4).working group.

The(f) billNot alsolater increasesthan February 1, 2024, the financialworking suretygroup requiredshall forsubmit debta negotiator,report consumeron collection,its findings and certainrecommendations mortgageto licensees.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.

UnderThe theworking bill,group applicantsshall forterminate aon debt negation branch office license must file a surety bond for the samedate $50,000Public thatAct existingNo. law requires for main office license applications.

Additionally,22-94 the36 billof specifies47 thatSubstitute aSenate bondBill mustNo. be filed for each licensed location (main and branch offices) (§ 7).

For268 consumercollectionagencylicensees,that thebillincreasestherequiredit bondsubmits amountsuch forreport license renewals from $25,000 for a main or branchFebruary office1, to2024, $100,000whichever foris eachlater. main office and $50,000 for each branch office.

ForSec. mortgage lenders, correspondent lenders, and brokers, it requires they file a surety bond covering their main office and any branch office, rather than file one for the main office and an addendum for branch offices, as required under current law (§ 6).

sSB26815. / File No.

148Subsection 34(a) sSB268of Filesection No.36a-262 of the general statutes is repealed andthefollowing issubstituted inlieuthereof(EffectiveOctober 1, 2022):

148(a) TheExcept billas alsootherwise adoptsprovided severalin remotethis worksection, provisionsthe fortotal mortgagedirect lenders,or correspondentindirect lenders,liabilities of any one obligor that are not fully secured, however incurred, to any Connecticut bank, exclusive of such bank's investment in the investment securities of such obligor, shall not exceed at the time incurred fifteen per cent of the equity capital and brokersreserves (§for 5);loan and lease losses ofsuch bank.

Finally,thebillmakesnumerousminorchangestoThe statutesgoverningtotaldirect licensees,or including:indirect liabilitiesofany one obligor that are fully secured, however incurred, to any Connecticut bank, exclusive of such bank's investment in the investment securities of such obligor, shall not exceed at the time incurred ten per cent of the equity capital and reserves for loan and lease losses of such bank, provided this limitation shall be separate from and in addition to the limitation on liabilities that are not fully secured.

1.Notwithstanding any provision of this subsection, the limitation on the liabilities of any one obligorshalltakeintoaccountthecreditexposuretosuchobligorarising from a derivative transaction.

expandingThe thecommissioner definitionshall ofhave “salesthe financeauthority company” to includeestablish anythe businessmethod thatfor receivesdetermining principalthe andcredit interestexposure paymentsand fromthe aextent retailto buyerwhich underthe acredit retailexposure installmentshall orbe installmenttaken loaninto contract,account. regardless of whether they own or have ever conveyed, assigned, or transferred the loan (§ 1);

2.As used in this [subsection,] section, an obligor shall not include any person who is a guarantor or indemnitor of a direct or indirect liability when (1) in the case of a liability where the primary obligor is not a natural person, the bank seeks repayment of any such liability out of the operations of the business of the primary obligor, (2) the bank relies primarily on the primary obligor's general credit standing and, in the case of a liability where the primary obligor is not a natural person, the forecast of operation of the primary obligor's business, (3) there is no aspect of the loan that is being made as an exception to the bank's lending policies, and (4) such guarantor or indemnitor is not an obligor Public Act No.

specifying22-94 that37 aof “commercial47 mortgageSubstitute loanSenate originator”Bill whoNo. is exempt fromcertainstate overtime lawsasa highly compensated employee is a person who “takes” commercial loan applications, rather than accepts these applications (§ 11);

and268 3.with respect to such liability pursuant to the direct benefit or common enterprise tests set forth in subsection (b) of this section.

expandingAs used in this subsection, (A) "primary obligor" means a person who is named as a borrower or debtor, but not a guarantor or indemnitor, in a direct or indirect liability, (B) "guarantor"means a person who is obligatedto pay a direct or indirect liability when the typesprimary obligor has defaulted on such liability pursuant to the terms of banksthe consumerliability, collection(C) licensees"indemnitor" canmeans deposita debtorperson moneywho intobecomes (§§obligated 8-10).to pay a direct or indirect liability pursuant to an indemnity agreement, and (D) "derivative transaction" includes any transaction that is a contract, agreement, swap, warrant, note or option that is based, in whole or in part, on the value of any interest in, or any quantitative measure or the occurrence ofany eventrelatingto, oneor more commodities,securities,currencies, interest or other rates, indices or other assets.

EFFECTIVEThe DATE:commissioner may adopt regulations in accordance with the provisions of chapter 54 establishing the method for determining credit exposure to derivative transactions and the extent to which the credit exposure shall be taken into account.

OctoberFor 1,purposes 2022,of exceptthis thesection, provisionsa onliability remoteshall supervisionbe considered to befully securedifit issecuredby readily marketablecollateralhaving a market value, as determined by reliable and workcontinuously provisions;available price quotations, at least equal to the amount of the liability.

mortgageFor licensee,purposesofdetermining debtthelimitationsofthissection,incomputing negotiator,the andliabilities certainof consumeran collectionobligor, agencya bondliability requirements;is incurred at the time of the closing of the transaction, unless such closing is preceded by a legally binding written commitment to enter into the transaction, in which case such liability isincurred atthetime ofcommitmentandisnetofany liabilities of the obligor to such bank that will be paid with the proceeds of the commitment at the time of closing.

andThe expandinglimitations theprovided banksfor eligiblein this subsection may be exceeded for consumera collectionperiod agencyof deposittime arenot effectiveto uponexceed passage.six hours if at the closing of any transaction at which such obligor incurs such liabilities to a Connecticut bank in excess of such limitations, such bank immediately assigns or participates out to one or more other persons an amount that constitutes not less than the excess over the applicable Public Act No.

§22-94 238 &of 347 —Substitute MONEYSenate TRANSMITTERSBill ByNo. law, money transmitter licenses are not transferable or assignable.

Under268 currentlimitation. law, licensees must file an advance change notice and receive the commissioner’s approval before changing a control person, unless it is a change of a director, general partner, or executive officer, unrelated to an acquisition or other change of control.

TheObligations billas instead:endorser or guarantor of negotiable or nonnegotiable installment consumer paper which carry anagreement to repurchase on default, unless the bank's sole recourse is to an agreed reserve held by it, in which case the liability shall be excluded, a full recourse endorsement or an unconditional guarantee by the person, partnership, association or corporation transferring the same, shall be subject under this section to a limitation of fifteen per cent of the bank's equity capital and reserves for loan and lease losses in addition to the applicable limitations of this section with respect to the makers of such obligations;

1.provided, upon certification by an officer of the bank designated for that purpose by the governing board that the responsibility of each maker of such obligations has been evaluated and the bank is relying primarily upon each such maker for the payment of such obligations, the limitations of this section as to the obligations of each maker shall be the sole applicable loan limitation;

allows“passiveinvestors”intoand thedefinitionof“controlperson,”provided generallysuch allowingcertification certainshall individualsbe betweenin 10%writing and 25%shall ofbe votingretained rightsas topart rebutof athe presumptionrecords of control;such bank.

andSec. sSB268 / File No.

14816. 35 sSB268 File No.

148Section 2.36a-785 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2022):

requires(a) thisWhen filingthe whenretail changingbuyer is in default in the payment of any keysum individual,due providedunder itthe isretail unrelatedinstallment tocontract anor acquisitioninstallment loan contract, or in the performance of any other changecondition that such contract requires the retailbuyertoperform,orintheperformanceofanypromise,thebreach of controlwhich asis withby such contract expressly made a ground for the exemptionretaking of the goods, the holder of the contract may retake possession of such goods, provided the filing of a petition in bankruptcy under current11 law.USC Chapter 7 by a retail buyer of a motor vehicle, or such retail buyer's status as a debtor in bankruptcy, shall not be considered a default of a retail installment contract or ground for repossession of such motor vehicle.

UnderUnless the bill,goods acan “keybe individual”retaken iswithout anybreach individualof ultimatelythe responsiblepeace, forthe establishinggoods orshall directingbe aretaken licensee’sby policieslegal orprocess, procedures,provided includingnothing anexecutivecontained officer,manager,director,ortrustee.Public Act No.

Control22-94 Person39 Under the bill, a control person is any individual in control of a47 licenseeSubstitute orSenate applicant,Bill anyNo. individual that seeks to acquire control of a licensee, or a key individual.

“Control”268 isin this section shall be construed to authorize a violation of the powercriminal to:law.

1.In the case of repossession of any motor vehicle without the knowledge of the retail buyer, the local police department shall be notifiedofsuchrepossessionnotlaterthantwohoursafterrepossession.

vote,In directlythe orabsence indirectly,of ata leastlocal 25%police ofdepartment or if the outstandinglocal votingpolice sharesdepartment orcannot interestsbe ofreached afor licenseenotification, orthe astate personpolice inshall controlbe promptly notified of thesuch licensee;repossession.

2.(b) Not less than ten days prior to the retaking, the holder of such contract may serve upon the retail buyer, personally or by registered or certified mail, a notice of intention to retake the goods on account of the retail buyer's default.

electThe ornotice appointshall astate majoritythat ofthe keyretail individualsbuyer oris executivein officers,default managers,and directors,the trustees,period orat otherthe peopleend exercisingof managerialwhich authoritysuch ofgoods awill personbe retaken, and designate (1) the obligations required to be performed in controlorder to cure the default, including the dollar amount of aany licensee;required payment, and (2) the date by which such obligations must be performed.

orThe 3.notice shall briefly and clearly state the retail buyer's rights under this subsection in the event such goods are retaken.

exercise,In directlythe orcase indirectly,of arepossession controllingof influenceany overmotor vehicle, the managementnotice orshall policiesofalicenseeinform orthe personincontrolofthem.retail buyer that heor sheisresponsible for removing allofhisor her personal property from the motor vehicle prior to the date such repossession can take place.

TheIf billthe specifiesnotice that,is forso served and the purposesretail determiningbuyer does not perform the percentageconditions ofand control,provisions arequired person'sunder intereststhe arecontract aggregatedto withcure thosethe ofdefault hisbefore ortheday herset immediatefor familyretaking,theholder members,ofthecontract includingmay spouse,retake parents,such children,goods siblings,and in-laws,hold such goods subject to the provisions of subsections (d), (e), (f), (g) and any(h) personof sharingthis theirsection home.regarding resale, but without any right of redemption.

The(c) billIf presumesthe aholder personof issuch exercisingcontract adoes controllingnot influencegive whenthe henotice orof sheintention holdsto atretake, leastdescribed 10%in subsection (b) of this section, the votingholder rightsshall ofretain asuch licenseegoods orfor personfifteen indays controlafter ofthe retaking within the licensee.state in which such goods were located when retaken.

However,During “passivesuch investors”period canthe rebutretail thisbuyer, presumption.upon payment or tender of the unaccelerated amount due Public Act No.

Under22-94 the40 bill,of a47 passiveSubstitute investorSenate isBill someoneNo. who:

1.268 under such contract at the time of retaking and interest, or upon performance or tender of performance of such other condition as may be named in such contract as precedent to the retail buyer's continued possession of such goods, or upon performance or tender of performance of any other promise for the breach of which such goods were retaken, and upon payment of the actual and reasonable expenses of any retaking and storing, may redeem such goods and become entitled to take possession of such goods and to continue in the performance of such contract as if no default had occurred.

doesThe holder of such contract shall, not havelater than three days after the powerdate of the retaking, furnish or mail, by registered or certified mail, to electthe last- known address of the retail buyer, a majoritywritten statement indicating (1) the unaccelerated sum due under such contract and the actual and reasonable expense of keyany individualsretaking orand executivestoring, officers,and managers,(2) directors,in trusteesthe orcase otherof personsrepossession exercisingof managerialany authoritymotor vehicle, the holder of such contract shall also, not later than three days after the date of the retaking, and without regard to whether notice of intention to retake was given to the buyer, send a personwritten notice (A) that the buyer is responsible for retrieving items of personal property that may have been left in controlthe motor vehicle, other than items that may have been turned over to law enforcement, (B) that such property, if any, will be available for retrieval for at least sixty days after the date on which the motor vehicle was repossessed, unless the holder of the contract specifies, or the terms of the contract specify a licensee;date at least sixty days after the repossession after which the buyer may no longer retrieve the property, and (C) the contact and business hours information that the buyer can use to make arrangements for retrieval of the property.

sSB268If /the Filebuyer No.retrieves some or all of the personal property more than fifteen days after the date on which the motor vehicle was repossessed, the holder of the contract, or an agent thereof maintaining custody of the personal property, may charge the buyer a reasonable storage fee not to exceed twenty-five dollars.

148Failure 36to sSB268furnish Fileor mail such statement as required by this section shall result in forfeiture of the holder's right to claim payment Public Act No.

14822-94 2.41 of 47 Substitute Senate Bill No.

is268 notfor employedthe byactual and doesreasonable notexpenses haveof anyretaking managerialand dutiesstorage, ofand the licenseeholder orshall personbe inliable controlfor the actual damages suffered because of asuch licensee;failure.

3.If such goods are perishable so that retention for fifteen days under this subsection would result in their destruction or substantial injury, the provisions of this subsection shall not apply and the holder of the contract may resell the goods immediately upon such retaking.

(d) If the retail buyer does not haveredeem such goods within fifteen days after the powerholder toof exercise,the directlycontract orhas indirectly,retaken apossession, controllingthe influenceholder overof the managementcontract orshall policiessell ofsuch agoods licenseeat public or personprivate insale controlnot ofless athan licensee;fifteen days and not more than one hundred eighty days after the retaking.

When the holder of the contract retakes possession by legal process, and 4.an answer is interposed, the holder of the contract may, at the holder's election, hold such retaken goods for a period not to exceed thirty days after the entry of final judgment by a court of competent jurisdiction entitling the holder of the contract to possession of such goods before holding such resale.

attestsThe toholder meetingof thesethe requirementscontract inshall agive formthe retail buyer not less than ten days' written notice of the time and mannerplace of any public sale, or the Bankingtime Commissionerafter prescribes.which any private sale or other intended disposition is to be made, either personally or by registered mail or by certified mail, return receipt requested, directed to the retail buyer at such retail buyer's last-known place of business or residence.

UnderThe currentholder law,of athe “controlcontract person”may isbid anfor individualsuch thatgoods directlyat orany indirectlypublic exercisessale. control over another person.

The followingproceeds peopleof arethe presumedresale shall be considered to be controleither persons:the amount paid for such goods at such sale or the fair cash retail market value of such goods at the time of repossession, whichever is the greater, except as otherwise provided in subsection (g) of this section.

directors,(e) generalProceeds partners,of executive officers, individuals holding the rightsresale toshall atbe leastapplied 10%in of voting shares, managing members of limited liabilities companies, and any individual holding the rightfollowing toorder receive at least 10% or more of apriority: partnership’s capital after dissolution.

In(1) changingFirst, to the definitionpayment of “controlthe person,”actual theand billreasonable appliesexpenses theof newsuch expandedresale, definition(2) if, after application pursuant to severalsubdivision other(1) moneyof transmitterthis statutes,subsection, includingthere requirementsare relatedproceeds remaining, then to licensingthe andpayment of the commissioner’sactual authorityand toreasonable enforceexpenses statutoryof requirements,any includingretaking the:and storing of said Public Act No.

1.22-94 42 of 47 Substitute Senate Bill No.

range268 goods, and (3) if, after application pursuant to subdivisions (1) and (2) of peoplethis onsubsection, whomthere are proceeds remaining, then to the commissionersatisfaction canof performthe backgroundbalance checks;due under the contract.

2.Not later than thirty days after the resale, the holder of the contract shall give the retail buyer a written statement itemizing the dispositionoftheproceeds.Any sumremaining after the satisfaction of such claims shall be paid to the retail buyer.

reasons(f) andEven extentif the proceeds of the resale are insufficient to whichdefray the commissioneractual canand takereasonable disciplinaryexpenses actionof againstsuch aresale, licensee;and such actual and reasonable expenses of any retaking and storing of such goods and the balance due under the contract, the holder of the contract may not recover the deficiency from the retail buyer or any surety or guarantor for the retail buyer, or from anyone who has succeeded to the obligations of such retail buyer, except as provided in subsection (g) of this section.

3.(g) If the goods retaken consist of a motor vehicle the aggregate cash price of which was more than four thousand dollars, the prima facie fair market value of such motor vehicle shall be calculated by adding together the average trade-in value for such motor vehicle and the highest-stated retail value for such motor vehicle and dividing the sum of such values by two.

rangeSuch ofaverage peopletrade-in whosevalue characterand highest-stated retail value shall be determined by the commissionervalues mustas assess,stated includingin theirthe capabilityNational toAutomobile demonstrateDealers financialAssociation responsibility;Used Car Guide, Eastern Edition, as of the date of repossession.

andIf 4.an average trade-in value is not stated in said guide, the highest-stated trade-in value stated in said guide for the motor vehicle shall be used.

rangeIf the goods retaken consist of peoplea prohibitedboat fromthe fraudaggregate cash price of which was more than four thousand dollars, the prima facie fair market value of such boat shall be calculated by adding together the average trade-in value for such boat and otherthe actions.highest-stated retail value for such boat and dividing the sum of such values by two.

§Such 4average —trade-in MORTGAGEvalue LOAN SERVICERS The bill imposes capital and liquidityhighest-stated requirementsretail onvalue certainshall coveredbe institutionsdetermined thatby servicethe 2,000values oras morestated residentialin mortgagethe loans.Amongotherthings,theseprovisionsrequirecoveredinstitutionsNational sSB268Automobile /Dealers FilePublic Act No.

14822-94 3743 sSB268of File47 Substitute Senate Bill No.

148268 toAssociation establishAppraisal andGuide maintainfor aBoats, boardEastern ofEdition, directors,as conductof annualthe audits,date andof createrepossession. risk management programs.

CoveredIf Institutionsan Underaverage thetrade-in bill,value a “covered institution” is anot mortgagestated servicerin thatsaid servicesguide, (orthe subserviceshighest-stated fortrade-in others)value atstated leastin 2,000said mortgageguide loans that are primarily for personal, family, or household use and secured by residentialpropertyintheUnitedStates.Thisthresholdexcludesowned whole loans (i.e., loans the lenderboat retainsshall inbe theirused. portfolio) and loans being interim serviced, prior to sale, as reported on the system (i.e., NMLS, a license and registration system used nationwide) or another document the commissioner requires.

(“InterimIn serviced”the isevent that the processvalue of collectingsuch mortgagemotor paymentsvehicle foror upboat tois 185not daysstated beforein sellingsuch publication, the loanfair onmarket value at retail minus the secondaryreasonable market.)costs Excludedof fromresale coveredshall institutionsbe are:determined by the court.

1.The prima facie evidence of fair market value of such motor vehicle or boat so determined may be rebutted only by direct in-court testimony.

certainIf peoplesuch exemptvalue fromof mortgagethe servicermotor licensingvehicle (i.e.,or banksboat is less than the balance due under the contract, plus the actual and certainreasonable bankexpenses subsidies),of 2.the retaking of possession, the holder of the contract may recover from the retail buyer, or from anyone who has succeeded to such retail buyer's obligations, as a deficiency, the amount by which such liability exceeds such fair market value, as defined in this subsection.

anyIf federallythe tax-exemptactual mortgageresale servicer,price andreceived 3.by the holder exceeds such fair market value, as defined in this subsection, the actual resale price shall govern.

any(h) agencyAfter thatthe existingholder stateretakes lawpossession exemptsas fromprovided mortgagein servicersubsection requirements(a) (e.g.,of state,this municipalsection, or federalif agencies,the peopleholder servicingobtains fivea orprejudgment fewerremedy mortgageagainst loansthe agoods year,under andchapter bona903a, fidethe nonprofitretail organizationsbuyer makingor residentialanyone mortgagewho loanshas succeeded to promotesuch homeretail ownershipbuyer's obligations shall not be liable for economicallyany disadvantagedbalance individuals).due, except to the extent permitted by subsection (g) of this section.

CapitalThe andholder Liquiditymay Requirementsseek Undera themonetary bill,judgment coveredon institutionsthe mustcontract maintainagainst requirementsthe forretail minimumbuyer capitalunless ratio, net worth, and liquidity outlined in the Federalgoods Housinghave Financebeen Agency’srepossessed, Eligibilitywith Requirementsor forwithout Enterprisejudicial withprocess. Single-Family Seller/Servicers.

TheyGoods mustpurchased dounder sothe regardlesscontract ofshall theirnot approvalbe forexecuted governmentupon sponsoredto enterprisesatisfy servicing.such judgment.

TheWhen billsuch alsojudgment requiresbecomes coveredfinal, institutionsthe toholder's maintain:security interest in the goods shall be extinguished.

sSB268If /the Filecontract No.covers a retail sale of a motor vehicle required to be registered, the holder shall comply with section 14-188.

148(i) 38If sSB268the Fileholder of the contract fails to comply with the provisions of subsections (c), (d), (e), (f), (g) and (h) of this section, after retaking the goods, the retail buyer may recover from the holder of the contract such Public Act No.

14822-94 1.44 of 47 Substitute Senate Bill No.

sufficient268 allowableretail assetsbuyer's foractual liquiditydamages, toif coverany, normaland businessin operations,no inevent additionless tothan one- fourth of the amountssum requiredof forall servicingpayments liquiditywhich andhave 2.been made under the contract.

sound(j) cashNo managementact andor businessagreement operatingof plansthe commensurateretail withbuyer itsbefore institutionalor complexityat tothe ensuretime normalof businessthe operations.making of a retail installment contract or installment loan contract nor any agreement or statement by the retail buyer in such contract shall constitute a valid waiver of the provisions of subsections (c), (d), (e), (f), (g), (h) and (i) of this section.

Under(k) After the bill,delivery aof coveredthe institutiongoods mustto havethe writtenretail policiesbuyer and proceduresprior implementingto theseany capitalretaking andof servicingsuch liquiditygoods requirements,by includingthe aholder sustainableof writtenthe methodologycontract, forthe satisfyingrisk of injury and loss shall rest upon the bill’sretail requirements.buyer.

Additionally,(l) aThe coveredcommissioner institutionmay mustadopt develop,regulations establish,in andaccordance implementwith plans,the policies,provisions andof procedureschapter for54 maintainto operatingimplement liquiditythe sufficientprovisions forof itsthis ongoingsection. needs, including sustainable, written methodologies for maintain sufficient operating liquidity.

UnderSec. the bill, “allowable assets for liquidity” are assets that may be used to satisfy liquidity requirements, including unrestricted cash and cash equivalents and unencumbered investment grade assets held for sale or trade (including mortgage backed securities held by Fannie Mae, Freddie Mac, Ginnie Mae, and U.S.

treasury-backed17. obligations.) For the purposes of complying with these requirements, all financial data must be determined according to generally accepted accounting principles (GAAP).

Additionally,Subsection an(a) institution’sof reversesection mortgage8-265hh portfolioof the 2022 supplement to the general statutes is excludedrepealed fromand thesethe calculations.following is substituted in lieu thereof (Effective October 1, 2022):

The(a) bill,Upon presumably,approval excludesof fromemergency thesemortgage requirementsor anylien mortgageassistance servicerspayments, thatthe solelyauthority (1)shall ownenter reverseinto mortgagean loansagreement orwith conductsthe reversehomeowner mortgagefor services,repayment orof (2)all subservicesuch others’assistance loans with nointerest responsibilityas toprovided advance money in connectionthis withsection. these activities.

However,The theagreement extentshall ofprovide for monthly payments by the exclusion,homeowner ifafter any,emergency ismortgage unclear.or lien assistance payments have ended and shall be subject to the following provisions:

Board(1) ofIf Directorsthe Thehomeowner's billtotal requireshousing coveredexpense, institutionsincluding toprojected establishrepayments andfor maintainassistance aunder boardthis section, is greater than thirty-five per cent of directorsthe responsiblehomeowner's aggregate family income, repayment of the emergency mortgage or lien assistance payments shall be deferred until such total housing expense, including projected repayments for itsassistance oversight.under this section, is less than or equal to thirty-five per cent Public Act No.

For22-94 institutions45 thatof are47 sSB268Substitute /Senate FileBill No.

148268 39of sSB268such Fileaggregate No.family income;

148(2) notIf approvedrepayment toof serviceemergency governmentmortgage sponsoredor enterpriselien loansassistance orpayments Ginnieis Maenot loans,made orby wherethe adate federalthe agencymortgage hasis grantedpaid approvalin forfull, athe boardhomeowner alternative,shall make monthly payments to the authority in an institutionamount maynot establishless athan similarthe governingmonthly bodymortgage toor fulfilllien thesepayment oversightuntil responsibilities.such assistance is repaid;

Under(3) Interest shall accrue on all emergency mortgage and lien assistance payments made by the bill,authority at a rate based upon the boardcost (orof similarfunds governingto body)the must:state periodically determined by the State Treasurer in consultation with the authority.

1.Interest shall start to accrue whenever the homeowner is required to commence repayment under this section.

establishSec. a written corporate governance framework, including appropriate internal controls designed to monitor corporate governance and assess compliance;

2.18.

monitorSubsection and(b) ensureof institutionalsection compliance8-286 withof existingthe mortgage2022 servicingsupplement statutes,to includingthe accuratelygeneral andstatutes timelyis completingrepealed and submittingthe allfollowing regulatoryis reportssubstituted (includingin thelieu mortgagethereof call(Effective report);October 1, 2022):

and(b) 3.Not later than October 1, 2021, the authority shall establish guidelines for issuing loans under the program.

establishSuch internalguidelines auditshall requirementspermit appropriatethe forauthority to (1) provide loans to borrowers with a debt-to- income ratio equal to the institution’shighest size,debt-to-income complexityratio permitted by the Federal Housing Administration, the Federal National Mortgage Association and riskthe profile,Federal includingHome appropriateLoan independenceMortgage Corporation for residential mortgage loans, as applicable, subject to provideany other limitations of this chapter, and (2) consider (A) the application of a reliableprospective evaluationborrower, regardless of the servicer'sprospective internalborrower's controlcredit structure,score, riskand management,(B) nontraditional credit references submitted by the prospective borrower including, but not limited to, proof of employment or proof of rental and governance.utility payments.

AuditsSec. The bill requires covered institutions to annually procure an external audit from an independent public accountant.

The19. audit must include:

1.Subsection (f) of section 12-195h of the 2022 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2022):

auditedPublic financialAct statements,No. including a balance sheet, income statement, cash flow, and notes and supplemental schedules prepared in accordance with GAAP;

2.22-94 46 of 47 Substitute Senate Bill No.

an268 assessment(f) When providing the written notice required under subsection (e) of this section, the institution’sassignee internalmay controlrely structure;on the last recorded security interest of record in identifying the name and mailing address of the holder of such interest, unless the holder of such interest is the plaintiff in an action pending in Superior Court to enforce such interest, in which [the] case the assignee shall provide the written notice to the attorney appearing on behalf of the plaintiff.

3.Approved May 24, 2022 Public Act No.

a22-94 computation47 of its47 tangible net worth;

4.

validation of its applicable mortgage servicing rights valuation and reserve methodology;

5.

verification of adequate fidelity and errors and omissions sSB268 / File No.

148 40 sSB268 File No.

148 insurance;

and 6.

testing of risk management controls, including applicable compliance and stress testing.

Risk Management Program Under thebill,coveredinstitutionsmust establisharisk management program, under the board’s oversight, that identifies, measures, monitors, and controls risk commensurate with the institution’s complexity.

The program must:

1.

have the appropriate processes and models in place to measure, monitor and mitigate financial risk and changes to the institution’s risk profile and that of its serviced assets;

and 2.

be scaled to the institution’s complexity.

The program must be sufficient to manage the institution’s risks, including the following risks:

1.

credit (i.e., the risk that a borrower or counterparty will fail to perform on an obligation);

2.

liquidity (i.e., the risk that the servicer will be unable to meet its obligations as they come due because of an inability to liquidate assets or obtain adequate funding);

3.

operational (i.e., the risk resulting from inadequate or failed internal processes, people, and systems or from external events);

4.

market (i.e., the risk to the servicer's condition due to adverse market conditions);

5.

compliance (i.e., the risk of regulatory sanctions, fines, penalties, or losses due to failure to comply with laws, rules, regulations, or other applicable supervisory requirements);

6.

legal (i.e., the risk that potential actions against the servicer that result in unenforceable contracts, lawsuits, legal sanctions, or sSB268 / File No.

148 41 sSB268 File No.

148 adverse judgments can disrupt or otherwise negatively affect its operations);

and 7.

reputation (i.e., the risk to earnings and capital from negative publicity).

Covered institutions must annually conduct a risk management assessment and provide a written report to the board of directors that includes (1) evidence of risk management activities, (2) any adverse risk management findings, and (3) proposed corrective action.

If the commissioner finds any significant risks after an investigation, inquiry, or examination, the bill allows him to order or direct the institution to take additional actions necessary to ensure it operates in a safe and sound manner and complies with applicable laws.

§ 5 — REMOTE WORK AND SUPERVISION FOR MORTGAGE LENDERS, CORRESPONDENT LENDERS, BROKERS AND LOAN ORIGINATORS The billallowsmortgage lenders,correspondent lenders, andbrokers to remotely supervise licensed activities at main and branch offices.

By law, an applicant for a mortgage lender, correspondent lender, or broker license must be supervised by a qualified individual at the main or branch office where they work.

Current law requires these qualified individuals to live within 100 miles of the main office and be capable of providing fulltime, in-person supervision.

Under the bill, an applicant must instead demonstrate to the banking commissioner’s satisfaction that the qualified individual can provide full time supervision.

Unchanged by the bill, licensees supervising each office must still meet net worth and experience requirements, such as having at least three years immediate experience to supervise a branch office.

The bill similarly allows loan originators to work remotely by eliminating the requirement that they operate from an office.

The bill also makes a corresponding change allowing qualified individuals and branch managers to supervise loan originators remotely by eliminating the requirement they live within 100 miles of the licensed office.

sSB268 / File No.

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148 §§ 8 - 10 – CONSUMER COLLECTION AGENCY LICENSEES Increased Surety Bond Amount (§§ 8 & 9) Under current law, a consumer collection agency licensee applying for license renewal must file either an individual bond of $25,000 for each place of business (i.e., main or branch office) or a single bond of $25,000 per office that covers all of them.

The bill increases the required bond amount to $100,000 for main offices and $50,000 for branch offices.

As under existing law, consumer collection agencies that solely buy debt are exempt from the bond requirements.

Out-of-State Bank Deposits (§ 10) Existing law requires consumer collection agencies to deposit funds they receive from debtors into trust accounts held at certain types of financial institutions.

Under current law, they may deposit these funds in out-of-state banks only if they have a Connecticut branch;

the bill eliminates this Connecticut branch requirement.

COMMITTEE ACTION Banking Committee Joint Favorable Yea 17 Nay 0 (03/15/2022) sSB268 / File No.

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