SB 1033 — AN ACT CONCERNING VARIOUS REVISIONS TO THE BANKING STATUTES.

sSB1033(7) /An Fileadjustable No.rate provision;

209 8 sSB1033 File No.

209 (7) An adjustable rate provision;

(A) Such fees are assessed after an installment remains unpaid for ten or more consecutive days, including Sundays andholidays;(B)suchfeesdonotexceedfivepercentoftheoutstandingPublic installmentAct payment,No. excluding any previously assessed late fees, or a total of twenty-five dollars per month, whichever is less;

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1033 andholidays;(B)suchfeesdonotexceed fivepercentoftheoutstanding installment payment, excluding any previously assessed late fees, or a total of twenty-five dollars per month, whichever is less;

(4) Allowing for the accrual of interest after the maturity date or the sSB1033deferred /maturity Filedate, No.provided such interest shall not exceed twelve per cent per annum computed on a daily basis on the respective unpaid balances;

209 9 sSB1033 File No.

209 deferred maturity date, provided such interest shall not exceed twelve per cent per annum computed on a daily basis on the respective unpaid balances;

(f)Open-endsmallloansasdescribedinsubsections(a)and(b)Public ofthisAct sectionNo. shall, in addition to the requirements set forth in subsections (d) and (e) of this section:

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1033 (f)Open-endsmallloansasdescribedinsubsections(a) and(b)ofthis section shall, in addition to the requirements set forth in subsections (d) and (e) of this section:

(A) By converting the APR to a daily rate and multiplying such daily rate by the daily unpaid principal balance of the account, in which case the daily rate is determined by dividing the APR by three sSB1033hundred /sixty-five; File No.

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209 hundred sixty-five;

or (5) Not include any other fees or charges of any kind, except as expresslyPublic permittedAct byNo. subsection (g) of this section.

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1033 expressly permitted by subsection (g) of this section.

(3) Take any (A) confession of judgment, (B) power of attorney, (C) note or promise to pay that does not state the actual amount of the loan, sSB1033thetime /periodfor Filewhichtheloanismade No.andthechargesfor suchloan, or (D) instrument related to the loan in which blanks are left to be filled after the loan is made;

209(4) 11Offer sSB1033the Fileborrower any other product or service for which there is or will ever be any cost to the borrower in connection with a small loan unless (A) permitted by sections 36a-555 to 36a-573, inclusive, as amended by this act, (B) authorized under another license, or by applicable exemption from any requirement for such licensure, to offer such product or services, or (C) if no separate license or exemption therefrom is required to offer such product or services, authorized in advance, in writing, by the commissioner upon being satisfied that such other product or service is of such a character that the granting of such authority would not permit or easily facilitate evasion of the provisions of sections 36a-555 to 36a-573, inclusive, as amended by this act, or of Public Act No.

20923-126 thetime12 periodforof whichtheloanismade86 andthechargesforSubstitute suchloan,Senate orBill (D)No. instrument related to the loan in which blanks are left to be filled after the loan is made;

(4)1033 Offer the borrower any other product or service for which there is or will ever be any cost to the borrower in connection with a small loan unless (A) permitted by sections 36a-555 to 36a-573, inclusive, as amended by this act, (B) authorized under another license, or by applicable exemption from any requirement for such licensure, to offer such product or services, or (C) if no separate license or exemption therefrom is required to offer such product or services, authorized in advance, in writing, by the commissioner upon being satisfied that such other product or service is of such a character that the granting of such authority would not permit or easily facilitate evasion of the provisions of sections 36a-555 to 36a-573, inclusive, as amended by this act, or of any regulations promulgated thereunder;

(2) "Cash price" means the total amount in dollars at which the seller andbuyeragreedthesellerwouldtransferunqualifiedtitletothegoods, if the transaction were a cash sale instead of a sale under a retail sSB1033installment /contract. File No.

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209 installment contract.

(5)Public "FinanceAct charge"No. means the amount in excess of the cash price of thegoodsagreed uponby theretailseller andtheretailbuyer,to bepaid by the retail buyer for the privilege of purchasing the goods under the retail installment contract or installment loan contract.

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1033 (5) "Finance charge" means the amount in excess of the cash price of thegoodsagreed uponby theretailseller andtheretailbuyer,to bepaid by the retail buyer for the privilege of purchasing the goods under the retail installment contract or installment loan contract.

sSB1033(8) /"Lender" Filemeans No.a person who extends or offers to extend credit to a retail buyer under an installment loan contract.

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209 (8) "Lender" means a person who extends or offers to extend credit to a retail buyer under an installment loan contract.

or (B) an offer to buy or an application for extension of credit,Public orAct anNo. acceptance of an offer to buy or to extend credit, is made in Connecticut by a resident retail buyer, regardless of the situs of the contract which may be specified therein, including, but not limited to, any verbal or written solicitation or communication to buy or to have credit extended, originating within the state of Connecticut but forwarded to and received by a retail seller or a lender outside the state of Connecticut.

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1033 credit, or an acceptance of an offer to buy or to extend credit, is made in Connecticut by a resident retail buyer, regardless of the situs of the contract which may be specified therein, including, but not limited to, any verbal or written solicitation or communication to buy or to have credit extended, originating within the state of Connecticut but forwarded to and received by a retail seller or a lender outside the state of Connecticut.

(12) "Retail installment contract" means any security agreement, as defined in subdivision (74) of subsection (a) of section 42a-9-102, made sSB1033in /this Filestate, No.including one in the form of a mortgage, conditional sale contract or other instrument evidencing an agreement to pay the retail purchase price of goods, or any part thereof, in installments over a period of time and pursuant to which a security interest, as defined in subdivision (35) of subsection (b) of section 42a-1-201, is retained or taken by the retail seller for the payment of the amount of such retail installment contract.

209For 14purposesofthissubdivision,"retailinstallment sSB1033Public FileAct No.

20923-126 in15 this state, including one in the form of a86 mortgage,Substitute conditionalSenate saleBill contractNo. or other instrument evidencing an agreement to pay the retail purchase price of goods, or any part thereof, in installments over a period of time and pursuant to which a security interest, as defined in subdivision (35) of subsection (b) of section 42a-1-201, is retained or taken by the retail seller for the payment of the amount of such retail installment contract.

For1033 purposesofthissubdivision,"retailinstallment contract" does not include a rent-to-own agreement, as defined in section 42-240.

(NEW) (Effective October 1, 2023) (a) ForAs purposesused ofin this section,section: "guaranteed asset protection waiver" or "GAP waiver" means:

(1) A"Borrower" contractualmeans agreement,a entereddebtor, intoretail onbuyer or afterlessee Octoberunder 1, 2023, in which a creditorloan, agrees,retail withinstallment contract or withoutlease afor separatethe charge,purchase, torefinancing cancel or sSB1033lease /of Filea No.motor vehicle;

209(2)"Creditor"meansa 15lender,retailseller sSB1033or Filelessor No.under aloan,retail installment contract or lease for the purchase, refinancing or lease of a motor vehicle;

209Public waiveAct allNo. or part of the amounts due from a borrower under a retail installment contract or aninstallment loan contract intheevent ofatotal physical damage loss or an unrecovered theft of a motor vehicle, which agreement is a part of, or a separate addendum to, the retail installment contract or installment loan contract;

and23-126 (2)16 an excess wear and use waiver contractual agreement, entered into on or after October 1, 2023, in which a creditor agrees, with or without a separate charge, to cancel or waive all or part of the86 amountsSubstitute thatSenate mayBill becomeNo. due from a borrower under a motor vehicle lease agreement as a result of excessive wear and use of a leased motor vehicle, including, but not limited to, excess mileage, which contractual agreement is a part of, or a separate addendum to, the lease agreement.

(b)1033 A(3) GAP"Debt waiverwaiver" maymeans provide,an withexcess orwear withoutand ause separatewaiver charge,or aguaranteed benefitasset thatprotection waiveswaiver other than an amountexcess wear and use waiver or providesguaranteed aasset borrowerprotection withwaiver aoffered by any bank, Connecticut credit towardunion theor purchasefederal credit union, as those terms are defined in section 36a-2 of athe replacementgeneral motorstatutes, vehicle.as amended by this act;

A(4) GAP"Excess waiverwear shalland notuse bewaiver" consideredmeans insurancea forcontractual theagreement, purposeentered ofinto refundon requirementsor setafter forthJanuary 1, 2024, in sectionwhich 36a-773a creditor agrees, with or without a separate charge, to cancel or waive all or part of the generalamounts statutes.that may become due from a borrower under a motor vehicle lease agreement as a result of excessive wear and use of a leased motor vehicle, including, but not limited to, excess mileage, which contractual agreement is a part of, or a separate addendum to, the lease agreement;

(c)and A(5) GAP"Guaranteed waiverasset shallprotection bewaiver" cancellablemeans and provide that if a borrowercontractual cancelsagreement, suchentered waiver,into theon creditor, holder, administrator or otherafter authorizedJanuary party1, shall2024, providein towhich the borrower a procreditor rataagrees, refund,with basedor onwithout monthlya incrementsseparate startingcharge, onto thecancel fifteenthor ofwaive eachall monthor ofpart the unearned portion of the purchaseamounts pricedue offrom thea GAPborrower waiver,under provideda noretail benefitshaveinstallment beenprovidedundercontract suchGAPor waiver.Inan theeventinstallment offullloan satisfactioncontract ofin the retailevent installmentof contracta ortotal installmentphysical loandamage contractloss or repossession,an theunrecovered creditor,theft holder,of administratora ormotor othervehicle, authorizedwhich partyagreement shallis provide,a orpart causeof, the administrator or retailsellera toseparate provide,addendum notto, laterthe thanretail thirtyinstallment dayscontract afteror termination,installment anyloan refundcontract, dueand towhich amay borrowerprovide, with or without a creditseparate tocharge, bea appliedbenefit tothat thewaivesanamount borrower'sor outstandingprovidesaborrower balancewith withouta requiringcredit toward the borrowerpurchase toof requesta cancellationreplacement ofmotor thevehicle. waiver.

(b) A debt waiver shall not be considered insurance for any purpose and shall not be subject to the refund requirements set forth in section 36a-773 of the general statutes.

(c) Any amount charged or financed for a debt waiver is an authorized charge that shall be separately stated and shall not be construed to be a finance charge or interest.

Public Act No.

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1033 (d) (1) Each debt waiver shall be cancellable and shall provide the following:

(A) If the borrower cancels such waiver not later than the sixtieth day after the effective date of such waiver and no benefits have been provided under such waiver, the borrower shall be entitled to a full refund of the amount the borrower paid for such waiver;

(B) If the borrower cancels such waiver later than the sixtieth day after the effective date of such waiver, or if there is an early termination of the retail installment contract, installment loan or motor vehicle lease agreement, and no benefits have been provided under such waiver, the borrower shall be entitled to a pro rata refund of the amount the borrower paid for such waiver, less any cancellation fee included in the terms of the waiver;

and (C) If the borrower cancels such waiver at any time during its term and benefits have been provided under such waiver, the borrower shall not be entitled to any refund.

(2) Any debt waiver cancellation fee shall be included in the terms of the waiver and shall not exceed fifty dollars.

(e) A creditor shall provide, or shall cause a retail seller to provide, a refund due to a borrower pursuant to this section not later than sixty days after the creditor receives the borrower's cancellation concerning such refund, without requiring the borrower to request the refund.

(a) On each call report date, each qualified public depository shall file sSB1033withthecommissioner /a Filewrittenreport,certifiedunder oath unless such report is filed electronically, indicating (1) the qualified public Public Act No.

20923-126 1618 sSB1033of File86 Substitute Senate Bill No.

2091033 withthecommissioner awrittenreport,certifiedunder oath unless such report is filed electronically, indicating (1) the qualified public depository's tier one leverage ratio and risk-based capital ratio or net worth ratio, as determined in accordance with applicable federal regulations andregulations adoptedby thecommissioner in accordance with chapter 54, (2) the uninsured and total amount of public deposits held by the qualified public depository other than deposits that have been redeposited into the qualified public depository by another insured depository institution pursuant to a reciprocal deposit arrangement that makes such funds eligible for insurance coverage by theFederalDepositInsurance CorporationortheNationalCredit Union Administration, (3) the description and market value of any eligible collateral segregated and designated to secure the uninsured public deposits in accordance with sections 36a-330 to 36a-338, inclusive, as amended by this act, and (4) the amount and the name of the issuer of any letter of credit issued pursuant to section 36a-337.

No person licensed as a mortgage lender, mortgage correspondent lender, mortgage broker or mortgage loan originator shallPublic engageAct the services of a lead generator unless such lead generator sSB1033 / File No.

20923-126 1719 sSB1033of File86 Substitute Senate Bill No.

2091033 shall engage the services of a lead generator unless such lead generator is licensed under section 36a-489 or exempt from licensure pursuant to subdivision (5) of this subsection.

Each licensed mortgage loan originator and each licensed loan processororunderwritershallregisterwithandmaintainavaliduniqueprocessororunderwritershallregisterwithand maintainavalidunique identifier issued by the system.

(2)Public TheAct followingNo. are exempt from this section:

(A)23-126 A20 registered mortgage loan originator or an employee of an86 institutionSubstitute orSenate subsidiaryBill described in section 36a-485, who is not required to be registered under sSB1033 / File No.

2091033 18(2) sSB1033The Filefollowing No.are exempt from this section:

209(A) A registered mortgage loan originator or an employee of an institution or subsidiary described in section 36a-485, who is not required to be registered under Section 1507 of the S.A.F.E.

(3)Public NoAct individualNo. shall engage in the activities of a loan processor or underwriter unless such individual obtains and maintains a license as a loan processor or underwriter under section 36a-489.

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1033 (3) No individual shall engage in the activities of a loan processor or underwriter unless such individual obtains and maintains a license as a loan processor or underwriter under section 36a-489.

sSB1033(A) /An Fileemployee No.of a licensed mortgage lender, mortgage correspondent lender or mortgage broker who engages in loan processor or underwriter activities (i) in connection with residential mortgage loans either originated or made by such licensee, and (ii) at the direction of and subject to the supervision of a licensed mortgage loan originator of such licensee;

209 19 sSB1033 File No.

209 (A) An employee of a licensed mortgage lender, mortgage correspondent lender or mortgage broker who engages in loan processor or underwriter activities (i) in connection with residential mortgage loans either originated or made by such licensee, and (ii) at the direction of and subject to the supervision of a licensed mortgage loan originator of such licensee;

The followingPublic personsAct shallNo. be exempt from licensure as a lead generator:

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1033 following persons shall be exempt from licensure as a lead generator:

(C) Any operating subsidiary where each owner of such operating sSB1033subsidiary /is Filewholly No.owned by the same such bank or credit union;

209 20 sSB1033 File No.

209 subsidiary is wholly owned by the same such bank or credit union;

For purposes of this subparagraph, "affiliate" means an entity that is controlled by or is under common controlwith the bank or credit union, such that the bank or creditunion(i)directly or indirectly actingthroughoneor more other persons owns, controls or has the power to vote more than fifty per cent of any class of voting securities of the affiliate, (ii) controls in any mannerPublic theAct electionNo. of a majority of directors or trustees of the affiliate, or (iii) directly or indirectly exercises a controlling influence over the management or policies of the affiliate.

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1033 manner the election of a majority of directors or trustees of the affiliate, or (iii) directly or indirectly exercises a controlling influence over the management or policies of the affiliate.

sSB1033(1) /Employ Fileany No.scheme, device or artifice to defraud or mislead borrowers or lenders or to defraud any person;

209 21 sSB1033 File No.

209 (1) Employ any scheme, device or artifice to defraud or mislead borrowers or lenders or to defraud any person;

(6) Conduct any business as a mortgage lender, mortgage correspondent lender, mortgage broker, lead generator, mortgage loan originator or loan processor or underwriter without holding a valid license as required under this section, sections 36a-485 to [36a-498e] 36a- 498d,inclusive,36a-498h,36a-534aand36a-534borassistoraidandabet any person in the conduct of business as a mortgage lender, mortgage correspondent lender, mortgage broker, lead generator, mortgage loan originatorPublic orAct loanNo. processor or underwriter without a valid license as required under said sections;

(7)23-126 Fail24 toof make86 disclosuresSubstitute asSenate requiredBill byNo. this section, sections 36a- 485 to [36a-498e] 36a-498d, inclusive, 36a-498h, 36a-534a and 36a-534b and any other applicable state or federal law including regulations adopted thereunder;

1033 originator or loan processor or underwriter without a valid license as required under said sections;

(7) Fail to make disclosures as required by this section, sections 36a- to [36a-498e] 36a-498d, inclusive, 36a-498h, 36a-534a and 36a-534b and any other applicable state or federal law including regulations adopted thereunder;

(9) Make, in any manner, any false or deceptive statement or sSB1033representation /including, Filewith No.regard to the rates, points or other financing terms or conditions for a residential mortgage loan, or engage in bait and switch advertising;

209 22 sSB1033 File No.

209 representation including, with regard to the rates, points or other financing terms or conditions for a residential mortgage loan, or engage in bait and switch advertising;

(12)Collect, charge, attempt to collect or charge or use or propose any agreementPublic purportingAct toNo. collect or charge any fee prohibited by this section,sections36a-485to[36a-498e]36a-498d,inclusive,36a-498h, 36a- 534a and 36a-534b;

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1033 agreement purporting to collect or charge any fee prohibited by this section,sections36a-485to[36a-498e]36a-498d,inclusive,36a-498h, 36a- 534a and 36a-534b;

(1) The applicant has identified a qualified individual for its main office and a sSB1033branch /manager Filefor No.each branch office where such business is conducted, provided such qualified individual and branch manager have supervisory authority over the mortgage servicer activities at the respective office location and at least three years' experience in the mortgage servicing business within the five years immediately preceding the date of the application for licensure;

209 23 sSB1033 File No.

209 branch manager for each branch office where such business is conducted, provided such qualified individual and branch manager have supervisory authority over the mortgage servicer activities at the respective office location and at least three years' experience in the mortgage servicing business within the five years immediately preceding the date of the application for licensure;

(3) the applicant demonstrates that the financial responsibility, character and general fitness of the applicant, the control personsPublic ofAct theNo. applicant, the qualified individual and any branch manager command the confidence of the community and warrant a determination that the applicant will operate honestly, fairly and efficiently within the purposes of sections 36a-715 to 36a-719l, inclusive;

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1033 persons of the applicant, the qualified individual and any branch manager command the confidence of the community and warrant a determination that the applicant will operate honestly, fairly and efficiently within the purposes of sections 36a-715 to 36a-719l, inclusive;

and (B) a qualified sSB1033individual /or Filea No.branch manager where the applicant establishes to the satisfaction of the commissioner that the applicant (i) holds only mortgage servicing rights at the main office or branch office and conducts no other activity at such office, and (ii) has designated a qualified individual or branch manager at such main office or branch office who is responsible for the actions of the application.

209 24 sSB1033 File No.

209 individual or a branch manager where the applicant establishes to the satisfaction of the commissioner that the applicant (i) holds only mortgage servicing rights at the main office or branch office and conducts no other activity at such office, and (ii) has designated a qualified individual or branch manager at such main office or branch office who is responsible for the actions of the application.

For purposes of this subsection, the level of offense of the crime and the status of any conviction, pardon or expungement shall be determined by reference to the law of the jurisdictionPublic whereAct theNo. case was prosecuted.

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1033 jurisdiction where the case was prosecuted.

sSB1033Sec. / File No.

209 25 sSB1033 File No.

209 Sec.

Subsection (e) of section 36a-318 of the general statutes is repealedrepealedandthefollowing andthefollowing issubstituted inlieuthereof(EffectiveOctober 1, 2023):

(e) (1) Except as provided in subdivision (2) of this subsection, each financial institution, upon the closing of a deposit account, shall, not later than ten business days after closing the deposit account, (A) mail a written notice setting forth the reason for closing the deposit account to the depositor at the address the financial institution has on record for the depositor, or (B) if the depositor consented to the delivery of correspondence from the financial institution by electronic mail, send a notice by electronic mail setting forth the reason for closing the deposit accountPublic toAct theNo. depositor at the electronic mail address the financial institution has on record for the depositor.

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1033 account to the depositor at the electronic mail address the financial institution has on record for the depositor.

(G) the depositor or the depositor's agent, including the depositor's estate representative, closes sSB1033the /deposit Fileaccount; No.

209(H) 26the sSB1033deposit Fileaccount No.is closed by the financial institutionafterescheatingthebalanceofthedepositaccounttotheState Treasurer pursuant to part III of chapter 32;

209 the deposit account;

(H) the deposit account is closed by the financial institutionafter escheatingthebalanceofthedepositaccounttotheState Treasurer pursuant to part III of chapter 32;

or (J) the financial institution closes the deposit account in accordance with a notice the financial institution provides to the depositor prior to the closing ofthedeposit account stating thereasonthedeposit account will be closed and the time period after which the deposit account will be closed.Public Act No.

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1033 closed.

and [(3)] (4) "Consumer transaction account" means a demand deposit account, negotiable order of withdrawal account, share draft account or similar account used primarily for personal, family or household sSB1033purposes. / File No.

209 27 sSB1033 File No.

209 purposes.

No banking institution shall be required to make such basic banking account available at any branch or otherPublic officeAct suchNo. banking institution maintains outside of the state.

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1033 other office such banking institution maintains outside of the state.

(e) (1) A banking institution that posts, in the public area of its branchesandofficesinthestate,noticeoftheavailabilityofitsconsumer transaction accounts other than its basic banking accounts [,] shall also sSB1033post /equally Fileconspicuous No.notice, in the same public areas of its branches and offices in the state and in the same manner, of the availability of its basic banking accounts.

209A 28banking sSB1033institution Filethat makes available in thepublic area ofitsbranchesandofficesin thestate materialdescribing Public Act No.

20923-126 post31 equally conspicuous notice, in the same public areas of its86 branchesSubstitute andSenate officesBill inNo. the state and in the same manner, of the availability of its basic banking accounts.

A1033 banking institution that makes available in thepublic area ofitsbranchesandofficesin thestate materialdescribing the terms of its other consumer transaction accounts, other than its basic banking accounts, shall also make comparable descriptive material available, in the same such public area of its branches and offices in the state and in the same manner, for its basic banking account.

sSB1033(5) /"Bank Fileand trust company" means an institution chartered or Public Act No.

20923-126 2932 sSB1033of File86 Substitute Senate Bill No.

2091033 (5) "Bank and trust company" means an institution chartered or organized under the laws of this state as a bank and trust company;

[(11)] (12) "Company" means any corporation, joint stock company, trust, association, partnership, limited partnership, unincorporated organization,limitedliabilitycompanyorsimilarorganization,butdoes not include (A) any corporation the majority of the shares of which are ownedPublic byAct the United States or by any state, or (B) any trust which by its terms shall terminate within twenty-five years or not later than twenty- sSB1033 / File No.

20923-126 3033 sSB1033of File86 Substitute Senate Bill No.

2091033 owned by the United States or by any state, or (B) any trust which by its terms shall terminate within twenty-five years or not later than twenty- one years and ten months after the death of beneficiaries living on the effective date of the trust;

[(17)] (18) "Credit union service organization" means an entity organized under state or federal law to provide credit union service organization services primarily to its members, to Connecticut credit unions, federal credit unions and out-of-state credit unions other than itsPublic members,Act andNo. to members of any such other credit unions;

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1033 its members, and to members of any such other credit unions;

sSB1033[(19)] /(20) File"Demand No.account" means an account into which demand deposits may be made;

209 31 sSB1033 File No.

209 [(19)] (20) "Demand account" means an account into which demand deposits may be made;

[(26)] (27) "Executive officer" means every officer of a Connecticut bank who participates or has authority to participate, otherwise than in the capacity of a director, in major policy-making functions of such bank, regardless of whether such officer has an official title or whether that title contains a designation of assistant and regardless of whether suchPublic officerAct isNo. serving without salary or other compensation.

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1033 such officer is serving without salary or other compensation.

sSB1033[(27)] /(28) File"Federal No.agency" has the meaning given to that term in 12 USC Section 3101, as amended from time to time;

209 32 sSB1033 File No.

209 [(27)] (28) "Federal agency" has the meaning given to that term in 12 USC Section 3101, as amended from time to time;

[(32)] (33) "Financial institution" means any Connecticut bank, Connecticut credit union, or other person whose activities in this state are subject to the supervision of the commissioner, but does not include a person whose activities are subject to the supervision of the commissioner solely pursuant to chapter 672a, 672b or 672c or any combinationPublic thereof;Act No.

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1033 combination thereof;

[(34)](35)"Foreigncountry"meansany country other thantheUnitedthan theUnited States and includes any colony, dependency or possession of any such country;

[(35)](36)"Governing board"meansthegroupofpersonsvestedboard"meansthegroupofpersonsvestedwith with the management of the affairs of a financial institution irrespective of sSB1033the /name Fileby No.which such group is designated;

209 33 sSB1033 File No.

209 the name by which such group is designated;

[(42)]Public (43)Act "Mutual"No. when used in conjunction with any institution that is a bank or out-of-state bank means any such institution without capital stock;

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1033 [(42)] (43) "Mutual" when used in conjunction with any institution that is a bank or out-of-state bank means any such institution without capital stock;

sSB1033[(45)] /(46) File"Out-of-state No.bank" means any institution that engages in the business of banking, but does not include a bank, Connecticut credit union, federal credit union or out-of-state credit union;

209 34 sSB1033 File No.

209 [(45)] (46) "Out-of-state bank" means any institution that engages in the business of banking, but does not include a bank, Connecticut credit union, federal credit union or out-of-state credit union;

[(50)]Public (51) "Prepayment penalty" means any charge or penalty for paying all or part of the outstanding balance owed on a loan before the date on which the principal is due and includes computing a refund of unearnedinterestbyamethodthatislessfavorabletotheborrowerthan the actuarial method, as defined by Section 933(d) of the Housing and Community Development Act ofNo. 1992, 15 USC 1615(d), as amended from time to time;

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1033 [(50)] (51) "Prepayment penalty" means any charge or penalty for paying all or part of the outstanding balance owed on a loan before the date on which the principal is due and includes computing a refund of unearnedinterestbyamethodthatislessfavorabletotheborrowerthan the actuarial method, as defined by Section 933(d) of the Housing and Community Development Act of 1992, 15 USC 1615(d), as amended from time to time;

sSB1033[(53)] /(54) File"Reorganized No.savings institution" means any reorganized savings bank or reorganized savings and loan association;

209 35 sSB1033 File No.

209 [(53)] (54) "Reorganized savings institution" means any reorganized savings bank or reorganized savings and loan association;

[(58)] (59) "Savings account" means a deposit account, other than an escrow account established pursuant to section 49-2a, into which savingsPublic depositsAct mayNo. be made and which account must be evidenced by periodicstatementsdeliveredat least semiannually or by apassbook;

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1033 savings deposits may be made and which account must be evidenced by periodicstatementsdeliveredat least semiannually or by apassbook;

[(63)] (64) "Share account holder" means a person who maintains a share account in a Connecticut credit union, federal credit union or out- sSB1033of-state /credit Fileunion No.that maintains in this state a branch, as defined in section 36a-435b;

209 36 sSB1033 File No.

209 of-state credit union that maintains in this state a branch, as defined in section 36a-435b;

[(68)]Public (69)Act "SubsidiaryNo. holding company" means a stock holding company, controlled by a mutual holding company, that holds one hundred per cent of the stock of a reorganized savings institution;

[(69)](70)"Supervisoryagency"means:(A)Thecommissioner;(B)the23-126 Federal40 Depositof Insurance86 Corporation;Substitute Senate Bill No.

1033 [(68)] (69) "Subsidiary holding company" means a stock holding company, controlled by a mutual holding company, that holds one hundred per cent of the stock of a reorganized savings institution;

[(69)](70)"Supervisoryagency"means:(A)Thecommissioner;(B) the Federal Deposit Insurance Corporation;

sSB1033[(71)] /(72) File"Time No.account" means an account into which time deposits may be made;

209 37 sSB1033 File No.

209 [(71)] (72) "Time account" means an account into which time deposits may be made;

and [(74)]Public (75)Act "UninsuredNo. bank" means a Connecticut bank that does not accept retail deposits and for which insurance of deposits by the Federal Deposit Insurance Corporation or its successor agency is not required.

23-126 41 of 86 Substitute Senate Bill No.

1033 [(74)] (75) "Uninsured bank" means a Connecticut bank that does not accept retail deposits and for which insurance of deposits by the Federal Deposit Insurance Corporation or its successor agency is not required.

(iv) public funds or money held in sSB1033afiduciarycapacity;(v)schoolsavingsfunds;and(vi)clubdeposits;and /(B) Filepay No.interest or dividends thereon;

209 38 sSB1033 File No.

209 afiduciarycapacity;(v)schoolsavingsfunds;and(vi)clubdeposits;and (B) pay interest or dividends thereon;

(7)Public Act (A)No. as guardian or conservator of the estate of any person, but not of the person, (B) as a trustee, receiver, executor or administrator, or (C) in any other fiduciary capacity, all without bond unless a bond is ordered by the court;

23-126 42 of 86 Substitute Senate Bill No.

1033 (7) Act (A) as guardian or conservator of the estate of any person, but not of the person, (B) as a trustee, receiver, executor or administrator, or (C) in any other fiduciary capacity, all without bond unless a bond is ordered by the court;

(11) Act as agent, fiscal agent or trustee for any corporation or for holders of bonds, notes or other securities, and pledge assets to secure depositsinitsbanking departmentwhen(A) madebyitastrusteeunder a trust indenture for the holders of revenue bonds issued by this state, any municipality, district, municipal corporation or authority or political subdivision thereof, and the express provisions of the authority or its political subdivision, and the express provisions of the trust indenture require the deposit to be so secured, (B) made by it as fiscal agent for a housing authority in connection with a federally-assisted housing project and federal regulations or other requirements call for the deposits to be so secured, or (C) made by it to secure deposits in individual retirement accounts and qualified retirement plan accounts, established in accordance with the applicable provisions of the Internal sSB1033Revenue /Code Fileof No.1986, or any prior or subsequent corresponding internal revenue code of the United States, as from time to time amended, where such deposits exceed the maximum of federal deposit insurance available for such accounts;

209 39 sSB1033 File No.

209 Revenue Code of 1986, or any prior or subsequent corresponding internal revenue code of the United States, as from time to time amended, where such deposits exceed the maximum of federal deposit insurance available for such accounts;

(13)Public Act asNo. agent (A) in the collection of taxes for any qualified treasurer of any taxing district or qualified collector of taxes, or (B) for any electric distribution, gas, water or telephone company operating within this state in receiving moneys due that company for utility services furnished by it;

23-126 43 of 86 Substitute Senate Bill No.

1033 (13) Act as agent (A) in the collection of taxes for any qualified treasurer of any taxing district or qualified collector of taxes, or (B) for any electric distribution, gas, water or telephone company operating within this state in receiving moneys due that company for utility services furnished by it;

(17) Establish a charitable fund, either in the form of a charitable trust or a nonprofit corporation to assist in making charitable contributions, provided (A) the trust or nonprofit corporation is exempt from federal income taxation and may accept charitable contributions under Section 501 of the Internal Revenue Code of 1986, or any subsequent sSB1033corresponding /internal Filerevenue No.code of the United States, as from time to time amended, (B) the trust or nonprofit corporation's operations shall be disclosed fully to the commissioner upon request, and (C) the trust department of the bank or one or more directors or officers of the bank act as trustees or directors of the fund;

209Public 40Act sSB1033 File No.

20923-126 corresponding44 internal revenue code of the86 UnitedSubstitute States,Senate asBill fromNo. time to time amended, (B) the trust or nonprofit corporation's operations shall be disclosed fully to the commissioner upon request, and (C) the trust department of the bank or one or more directors or officers of the bank act as trustees or directors of the fund;

1033 (18) In the discretion of a majority of its governing board, make contributions or gifts to or for the use of any corporation, trust or community chest, fund or foundation created or organized under the laws of the United States or of this state and organized and operated exclusively for charitable, educational or public welfare purposes, or of any hospital which is located in this state and which is exempt from federal income taxes and to which contributions are deductible under Section 501(c) of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended;

(22) (A) Issue credit cards and debit cards and enter into card agreements with the bank's card holders and with other card issuers, (B) lend money to individuals, honor drafts and similar orders drawn or accepted, whether by writteninstrument or electronictransmission, and pay and agree to pay obligations incurred in connection with those agreements, (C) become affiliated with any credit card corporation or association, and (D) subject to sections 36a-155 to 36a-159, inclusive, sSB1033where /applicable, Fileprovide No.electronic fund transfer facilities and services and enter into agreements with customers and other persons regarding the provision of such facilities;

209Public 41Act sSB1033 File No.

20923-126 where45 applicable,of provide86 electronicSubstitute fundSenate transferBill facilitiesNo. and services and enter into agreements with customers and other persons regarding the provision of such facilities;

1033 (23) Provide virtual banking services to customers as provided in section 36a-170;

(30) Issue and sell securities which (A) are guaranteed by the Federal National Mortgage Association or any other agency or instrumentality authorized by state or federal law to create a secondary market with respect to loans of the type originated by the bank, or (B) subject to the sSB1033approvalofthecommissioner,relatetoloansoriginatedbythebankand /Public FileAct No.

20923-126 4246 sSB1033of File86 Substitute Senate Bill No.

2091033 approvalofthecommissioner,relatetoloansoriginatedbythebankand are guaranteed or insured by a financial guaranty insurance company or comparable private entity;

(B) With the written approval of the commissioner, purchase real estate adjoining any parcel of real estate then owned by it and acquired in the usual course of business, provided the aggregate of all investmentsPublic andAct loans authorized in this subparagraph and in subparagraph(A)ofthissubdivisionandintheequipmentusedby such sSB1033 / File No.

20923-126 4347 sSB1033of File86 Substitute Senate Bill No.

2091033 investments and loans authorized in this subparagraph and in subparagraph(A)ofthissubdivisionandintheequipmentusedby such bank in its operations, together with the amount of any indebtedness incurred by any corporation holding real estate of the bank and such bank's proportionate share, computed according to stock ownership, of any indebtedness incurred by any service corporation, does not exceed fifty per cent ofthe [equity capital and reserves for loanand lease losses] capital and surplus of the bank, unless the commissioner finds that the rental income from any part of the premises not occupied by the bank will be sufficient to warrant larger investment;

(38) Even if not expressly authorized to exercise fiduciary powers, act as trustee or custodian of a plan which qualifies as part of a retirement plan for self-employed individuals or an individual retirement account underPublic theAct provisionsNo. of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended, if the governing instrument limits the investment of the funds held pursuant to such plan to the following investments:

23-126 48 of 86 Substitute Senate Bill No.

1033 under the provisions of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended, if the governing instrument limits the investment of the funds held pursuant to such plan to the following investments:

and (B) with sSB1033respect /to Fileretirement No.plans for self-employed individuals, notes of members in such plans which evidence the indebtedness of such members for funds borrowed from the plans.

209 44 sSB1033 File No.

209 respect to retirement plans for self-employed individuals, notes of members in such plans which evidence the indebtedness of such members for funds borrowed from the plans.

(40) With the prior written approval of the commissioner, engage in closely related activities, unless the commissioner determines that any suchactivityshallbeconductedbyasubsidiaryoftheConnecticutbank, utilizing such organizational, structural or other safeguards as the commissionerPublic mayAct require,No. in order to protect the Connecticut bank from exposure to loss.

As23-126 used49 in this subdivision, "closely related activities" means those activities that are closely related to the business of banking,86 areSubstitute convenientSenate andBill useful to the business of banking, are reasonably related to the operation of a Connecticut bank or are financial in nature including, but not limited to, business and professional services, data processing, courier and messenger services, credit-related activities, consumer services, services related to real sSB1033 / File No.

2091033 45commissioner sSB1033may Filerequire, No.in order to protect the Connecticut bank from exposure to loss.

209As used in this subdivision, "closely related activities" means those activities that are closely related to the business of banking, are convenient and useful to the business of banking, are reasonably related to the operation of a Connecticut bank or are financial in nature including, but not limited to, business and professional services, data processing, courier and messenger services, credit-related activities, consumer services, services related to real estate, financial consulting, tax planning and preparation, community development activities, any activities reasonably related to such activities, or any activity permitted under the Bank Holding Company Act of 1956, 12 USC Section 1841 et seq., as from time to time amended, or the Home Owners’ Loan Act of 1933, 12 USC Section 1461 et seq., as from time to time amended, or the regulations promulgated under such acts as from time to time amended;

and (42)Public Act asNo. trustee or custodian of a manufacturing reinvestment account established pursuant to section 32-9zz.

23-126 50 of 86 Substitute Senate Bill No.

1033 (42) Act as trustee or custodian of a manufacturing reinvestment account established pursuant to section 32-9zz.

(c) The governing board of each Connecticut bank shall adopt a loan review policy that is designed to ensure that all material loans made by theConnecticutbankpursuantto thissectionandsections[36a-260] 36a- 261 to 36a-266, inclusive, as amended by this act, are reviewed.

The policy shall establish appropriate standards, consistent with prudent sSB1033risk /management Fileprinciples, No.for the review to address the bank's compliance with the loan policy adopted pursuant to subsection (b) of this section and the need for plans to implement special collection, workout, divestiture or other means of bringing such loans into compliance with the loan policy.

209 46 sSB1033 File No.

209 risk management principles, for the review to address the bank's compliance with the loan policy adopted pursuant to subsection (b) of this section and the need for plans to implement special collection, workout, divestiture or other means of bringing such loans into compliance with the loan policy.

Subsections (b) to (i), inclusive, of section 36a-261 of the generalPublic statutesAct areNo. repealed and the following is substituted in lieu thereof (Effective October 1, 2023):

23-126 51 of 86 Substitute Senate Bill No.

1033 general statutes are repealed and the following is substituted in lieu thereof (Effective October 1, 2023):

(2) Any such mortgage loan shall be secured either by (A) a first mortgage which is a first lien or (B) a mortgage which is subordinate to another mortgage or other mortgages, provided, in the case of a loan secured by a mortgage which is subordinate to another mortgage or other mortgages, which other mortgage or mortgages are held by a person other than the Connecticut bank, the real estate securing such loan is (i) residential real estate, or (ii) nonresidential real estate provided the loan does not exceed, at the time of origination, a loan-to- sSB1033value /ratio Fileof No.fifty per cent, or (iii) nonresidential real estate in a loan transaction which, at the time of origination, exceeds a loan-to-value ratio of fifty per cent, provided the aggregate amount of all such loans made pursuant to this subparagraph (B)(iii) does not exceed, at the time of origination, twenty-five per cent of the [equity capital and reserves for loan and lease losses] capital and surplus of the Connecticut bank.

209 47 sSB1033 File No.

209 value ratio of fifty per cent, or (iii) nonresidential real estate in a loan transaction which, at the time of origination, exceeds a loan-to-value ratio of fifty per cent, provided the aggregate amount of all such loans made pursuant to this subparagraph (B)(iii) does not exceed, at the time of origination, twenty-five per cent of the [equity capital and reserves for loan and lease losses] capital and surplus of the Connecticut bank.

(c) "Real estate", as used in this section, includes refrigerating equipment, dishwashing equipment, stoves and clothes washing machines, hereinafter called "household equipment", used on the premises at the time of execution of the mortgage or substituted after the mortgage is executed if such equipment is specifically declared in the mortgage deed to be used as a part of the mortgaged realty, and if such mortgage declares that household equipment substituted for the originalhouseholdequipmentmentionedinsuchmortgageshallbepartPublic ofAct theNo. mortgaged realty.

23-126 52 of 86 Substitute Senate Bill No.

1033 originalhouseholdequipmentmentionedinsuchmortgageshallbepart of the mortgaged realty.

The following are not encumbranceswithinthemeaning ofthis section:(1)Reservationsto the United States of America of fissionable materials, (2) leases, provided the impact of the lease is adequately reflected in the appraisal or evaluation required by subsection (e) of this section, and (3) easements, restrictions, interests and other rights (A) which do not materially adversely affect the marketability of the real estate, (B) which are otherwise adequately reflected in the appraisal or evaluation required sSB1033by /subsection File(e) No.of this section, (C) where the attendant risks are satisfactorily insured under an acceptable policy of title insurance, or (D) which the bank otherwise reasonably determines do not present a material adverse risk after consideration of the relevant underwriting risks for the loan or class of loans.

209 48 sSB1033 File No.

209 by subsection (e) of this section, (C) where the attendant risks are satisfactorily insured under an acceptable policy of title insurance, or (D) which the bank otherwise reasonably determines do not present a material adverse risk after consideration of the relevant underwriting risks for the loan or class of loans.

(e) The real estate shall be appraised or otherwise suitably evaluated, before any loan is made on its security, by one or more suitable persons who are familiar withrealestatewithreal estate valuesinthecommunity where thereal estateislocated.Suchpersonsshallbeapprovedbythegoverningboard of the Connecticut bank making the loan, or by a management committee, board committee or agent appropriately designated by such governing board in accordance with the appraisal policy required by this subsection, provided, if the loan under consideration is a loan to be insuredPublic orAct guaranteedNo. by a governmental agency, the appraiser may be one who appraised the property for the governmental agency.

23-126 53 of 86 Substitute Senate Bill No.

1033 insured or guaranteed by a governmental agency, the appraiser may be one who appraised the property for the governmental agency.

sSB1033(g) /Loans Filenot No.exceeding fifty per cent of the value of the real estate may be made without further restriction than is set forth in subsections (a) to (f), inclusive, of this section.

209 49 sSB1033 File No.

209 (g) Loans not exceeding fifty per cent of the value of the real estate may be made without further restriction than is set forth in subsections (a) to (f), inclusive, of this section.

(1) No loan shall be made until the person or persons liable on the note have filed with the bank a satisfactoryPublic financialAct statementNo. which shall be kept on file.

23-126 54 of 86 Substitute Senate Bill No.

1033 satisfactory financial statement which shall be kept on file.

sSB1033(2) /Loans Filebacked No.by the full faith and credit of a state government, provided the amount of the assurance is at least equal to the portion of the loan that exceeds the applicable loan-to-value limit.

209 50 sSB1033 File No.

209 (2) Loans backed by the full faith and credit of a state government, provided the amount of the assurance is at least equal to the portion of the loan that exceeds the applicable loan-to-value limit.

(4)Public LoansAct thatNo. are renewed, refinanced, or restructured without the advancement of new funds or an increase in a line of credit, except for reasonable closing costs.

23-126 55 of 86 Substitute Senate Bill No.

1033 (4) Loans that are renewed, refinanced, or restructured without the advancement of new funds or an increase in a line of credit, except for reasonable closing costs.

(9) Loans or loan programs which are determined by the governing board of the Connecticut bank, or by a management committee or board committee appropriately designated by such governing board, to be prudent under the circumstances after consideration of the relevant sSB1033underwritingrisks,provided(A)theaggregateamountofallsuchloans, /calculated Fileat the time of origination of each such loan, does not exceed one hundred per cent of the bank's [equity capital and reserves for loan and lease losses] capital and surplus, (B) the aggregate amount of all such loans, calculated at the time of origination of each such loan, other than loans secured by one-to-four-family residential property, does not exceed thirty per cent of the bank's [equity capital and reserves for loan Public Act No.

20923-126 5156 sSB1033of File86 Substitute Senate Bill No.

2091033 underwritingrisks,provided(A)theaggregateamountofallsuchloans, calculated at the time of origination of each such loan, does not exceed one hundred per cent of the bank's [equity capital and reserves for loan and lease losses] capital and surplus, (B)(C) the aggregate amount of all such loans,loans calculatedis atincluded in the timepercentage of originationassets oflimitation eachspecified suchin loan,subsection other(s) thanof loansthis securedsection, byand one-to-four-family(D) residentialthe property,bank doesmakes nota exceednotation thirtyof persuch centdeterminationandthereasonstherefor ofintheapplicableloanfile.A theloan bank'swhich [equityis capitalincluded andwithin reservesthe foraggregate loanlimits andof leasethis losses]subsection capitalmay andsubsequently surplus,be (C)excluded if the aggregateapplicable amountloan-to-value oflimit allis suchsatisfied loansbecause isof includeda reduction in theprincipal percentageor ofsenior assetsliens, limitationadditional specifiedcontribution inof subsectionreal (s)estate ofcollateral thisor section,increases andin (D)equity thevalue banksubstantiated makesby a notationcurrent ofsuitable suchappraisal determinationandthereasonsthereforor intheapplicableloanfile.evaluation.

A loan which is included within the aggregate limits of this subsection may subsequently be excluded if the applicable loan-to-value limit is satisfied because of a reduction in principal or senior liens, additional contribution of real estate collateral or increases in equity value substantiated by a current suitable appraisal or evaluation.

Notwithstanding any provision of this [subsection] section, the limitation on the liabilities of any one obligor shall take into account the credit exposure to such obligor arising from a derivative sSB1033transaction. / File No.

209 52 sSB1033 File No.

209 transaction.

As used in this section, an obligor shall not include any person who is a guarantor or indemnitor ofPublic aAct directNo. 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 with respect to such liability pursuant to the direct benefit or common enterprise tests set forth in subsection (b) of this section.

23-126 57 of 86 Substitute Senate Bill No.

1033 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 with respect to such liability pursuant to the direct benefit or common enterprise tests set forth in subsection (b) of this section.

For purposesofdetermining thelimitationsofthissection,incomputing the sSB1033liabilities /of Filean obligor, a liability is incurred at the time of the closing of the transaction, unless such closing is preceded by a legally binding Public Act No.

20923-126 5358 sSB1033of File86 Substitute Senate Bill No.

2091033 liabilities of an obligor, a liability 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.

For purposes of this section, the proceeds of a loanPublic toAct an obligor shall be deemed to be used for the direct benefit of sSB1033 / File No.

20923-126 5459 sSB1033of File86 Substitute Senate Bill No.

2091033 loan to an obligor shall be deemed to be used for the direct benefit of another person and shall be attributed to the person when the proceeds, or assets purchased with the proceeds, are transferred to another person, other than in a bona fide arm's length transaction where the proceeds are used to acquire property, goods or services.

Substantial financial interdependence is deemed to exist when fifty per cent or more of one obligor's gross receipts or gross expenditures, on an annualbasis, are derivedfromtransactionswiththeotherobligor.Grossderived fromtransactionswiththeotherobligor.Gross receipts and expenditures include gross revenues, expenses, intercompany loans, dividends, capital contributions, and similar receipts or payments;

(3) When separate persons borrow from a Connecticut bank to acquire a business enterprise of which such obligors will own more than fifty per cent of the voting securities or voting interests, in which case a commonenterpriseisdeemedtoexistbetweentheobligorscommonenterpriseisdeemedtoexistbetweentheobligorsforpurposes forpurposes of combining the acquisition loans;

or (4) When the commissioner determines, based upon an evaluation of thePublic factsAct andNo. circumstances of particular transactions, that a common enterprise exists.

(c)23-126 Loans60 toof an86 obligorSubstitute andSenate itsBill subsidiary, or to different subsidiaries sSB1033 / File No.

2091033 55the sSB1033facts Fileand No.circumstances of particular transactions, that a common enterprise exists.

209(c) Loans to an obligor and its subsidiary, or to different subsidiaries of an obligor shall not be aggregated unless either the direct benefit or the common enterprise test is met.

This provision shall not apply to limited partners in limited partnerships or to members of joint ventures, limited liability companies or associations unless the partners or members, by the terms of the partnership or membershipagreement,aremembershipagreement, are heldgenerally liable for thedebtsor actions of the partnership, joint venture, limited liability company or association, and such terms are valid under applicable law.

Loans to partners or members of a partnership, joint venture, limited liability company or association are not attributed to other members of the partnership, joint venture, limited liability company or association unless either the direct benefit or the common enterprisePublic testAct isNo. met.

23-126 61 of 86 Substitute Senate Bill No.

1033 enterprise test is met.

If the government's support, sSB1033excluding /guarantees Fileby No.a central government of the obligor's debt, exceeds the obligor's annual revenues from other sources, it shall be presumed that the means test has not been satisfied.

209 56 sSB1033 File No.

209 excluding guarantees by a central government of the obligor's debt, exceeds the obligor's annual revenues from other sources, it shall be presumed that the means test has not been satisfied.

(4) The bank's assessment of theobligor's means of servicing the loan, including specificreasonsspecificreasonsinsupport insupport ofthat assessment.Theassessment. assessment shallinclude ananalysisoftheobligor'sfinancialhistory,itspresent and projected economic and financial performance, and the significance of any financial support provided to the obligor by third parties, including the obligor's central government;

The assessment shallinclude ananalysisoftheobligor'sfinancialhistory,itspresent and projected economic and financial performance, and the significance of any financial support provided to the obligor by third parties, including the obligor's central government;

The written representationPublic shallAct ordinarilyNo. constitute sufficient evidence that the purpose test has been satisfied.

23-126 62 of 86 Substitute Senate Bill No.

1033 representation shall ordinarily constitute sufficient evidence that the purpose test has been satisfied.

(f) Obligations of the United States or this state, or of any town, city, borough or legally established district in this state which has the power sSB1033to /levy Filetaxes No.for the payment of such obligations, shall not be subject to any limitation based upon such [equity capital and reserves for loanand lease losses] capital and surplus.

209 57 sSB1033 File No.

209 to levy taxes for the payment of such obligations, shall not be subject to any limitation based upon such [equity capital and reserves for loanand lease losses] capital and surplus.

except that obligations secured by the pledge of direct or fully guaranteed obligations of the United States which will mature in not morePublic thanAct eighteenNo. months shall not be subject under this section to any limitation based upon such [equity capital and reserves for loan and lease losses] capital and surplus, except as otherwise provided in subsection (l) of this section.

(i)23-126 Any63 Connecticut bank may accept drafts or bills of exchange86 drawnSubstitute uponSenate itBill having not more than six months' sight to run, exclusive of days of grace, which grow out of transactions involving the importation or exportation of goods, or which grow out of transactions involving the domestic shipment of goods, provided shipping documents conveying or securing title are attached at the time of sSB1033 / File No.

2091033 58more sSB1033than Fileeighteen No.months shall not be subject under this section to any limitation based upon such [equity capital and reserves for loan and lease losses] capital and surplus, except as otherwise provided in subsection (l) of this section.

209(i) Any Connecticut bank may accept drafts or bills of exchange drawn upon it having not more than six months' sight to run, exclusive of days of grace, which grow out of transactions involving the importation or exportation of goods, or which grow out of transactions involving the domestic shipment of goods, provided shipping documents conveying or securing title are attached at the time of acceptance, or which are secured at the time of acceptance by a warehouse receipt or other such document conveying or securing title covering readily marketable staples.

(1) Obligations in the form of bankers' acceptances of other banks, provided such acceptances have at the time of discount not more than six months' sight, exclusive of days of grace, and are endorsedPublic byAct atNo. least one other bank;

23-126 64 of 86 Substitute Senate Bill No.

1033 endorsed by at least one other bank;

Loans made to manufacturing, industrial or commercial sSB1033borrowers /when Filethe No.bank looks for repayment out of the operations of the borrowers' business, relying primarily on the borrowers' general credit standing and forecast of operation, shall not be considered to be secured by a mortgage on real estate for purposes of this subsection, even though such loan may be secured by a mortgage on real estate.

209 59 sSB1033 File No.

209 borrowers when the bank looks for repayment out of the operations of the borrowers' business, relying primarily on the borrowers' general credit standing and forecast of operation, shall not be considered to be secured by a mortgage on real estate for purposes of this subsection, even though such loan may be secured by a mortgage on real estate.

(C) calculatingdetermining the exceptions from limitations established in subsection (f) of this section on obligations of the United States or this state, or of any onetown, obligorcity, borough or legally established district in subsectionthis (h)state which has the power to levy taxes for the payment of thissuch section;Public Act No.

(D)23-126 calculating65 the limitations established in subsection (i) of this86 sectionSubstitute onSenate theBill amountNo. of bills of exchange a Connecticut bank may accept;

(E)1033 determiningobligations; the exceptions from limitations on obligations established in subsection (j) of this section;

and(D) (F)determining calculating the exceptions from limitations established in subsection (k)(g) of this section on obligations of any one obligor, with the exception of loans secured by mortgage of real estate and insured by the Federal Housing Administrator, which are secured or covered by aguaranties, firstor mortgageby commitments or agreements to take over or to purchase, made by the United States or the Federal Reserve Bank or by any department, bureau, board, commission or establishment of the United States, including any corporation wholly owned, directly or indirectly by the United States, which, at the time of making such guaranty or commitment or agreement to take over or purchase, is authorized by law to enter into contracts with any financing institution guaranteeing such financing institution against loss of principal and interest on realloans, estate.taxes or advances or agreeing to take over or purchase the same;

(E) calculating the limitations on any one obligor established in subsection (h) of this section;

(F) calculating the limitations established in subsection (i) of this section on the amount of bills of exchange a Connecticut bank may accept;

(G) determining the exceptions from limitations on obligations established in subsection (j) of this section;

and (H) calculating the limitations established in subsection (k) of this section on obligations which are secured by a first mortgage on real estate.

(C) calculatingdetermining the limitationsexceptions onfrom anylimitations one obligor established in subsectionPublic (h)Act ofNo. this section;

(D)23-126 calculating66 theof limitations86 establishedSubstitute sSB1033Senate /Bill File No.

2091033 60subsection sSB1033(f) Fileof No.this section on obligations of the United States or this state, or of any town, city, borough or legally established district in this state which has the power to levy taxes for the payment of such obligations;

209(D) determining the exceptions from limitations established in subsection (i)(g) of this section on obligations of any one obligor, with the amountexception of billsloans secured by mortgage of exchangereal aestate Connecticutand bankinsured mayby accept;the Federal Housing Administrator, which are secured or covered by guaranties, or by commitments or agreements to take over or to purchase, made by the United States or the Federal Reserve Bank or by any department, bureau, board, commission or establishment of the United States, including any corporation wholly owned, directly or indirectly by the United States, which, at the time of making such guaranty or commitment or agreement to take over or purchase, is authorized by law to enter into contracts with any financing institution guaranteeing such financing institution against loss of principal and interest on loans, taxes or advances or agreeing to take over or purchase the same;

(E) determiningcalculating the exceptions from limitations on obligationsany one obligor established in subsection (j)(h) of this section;

and (F) calculating the limitations established in subsection (k)(i) of this section on obligationsthe whichamount areof securedbills byof exchange a firstConnecticut mortgagebank onmay realaccept; estate.

(3)(G) Anydetermining Connecticutthe bankexceptions thatfrom makeslimitations theon subsequentobligations electionestablished as provided in subdivisionsubsection (2)(j) of this subsectionsection; may elect to use equity capital and adjusted allowances for credit losses, instead of capital and surplus, for the purposes of:

(A)and Calculating(H) calculating the limitations established in subsection (a)(k) of this section on liabilitiesobligations ofwhich anyare onesecured obligor;by a first mortgage on real estate.

(B) calculating the limitations established in subsection (a) of this section on obligations as endorser or guarantor of negotiable or nonnegotiable installment consumer paper which carry an agreement to repurchase on default;

(C) calculating the limitations on any one obligor established in subsection (h) of this section;

(D) calculating the limitations established in subsection (i) of this section on the amount of bills of exchange a Connecticut bank may accept;

(E) determining the exceptions from limitations on obligations established in subsection (j) of this section;

and (F) calculating the limitations established in subsection (k) of this section on obligations which are secured by a first mortgage on real estate.

(2) any obligation identified by certificates of participation in investmentsPublic describedAct inNo. subdivision (1) of this subsection in which a Connecticut bank could invest directly;

or23-126 (3)67 repurchase agreements, and the term "debt mutual fund" means a partnership interest in, shares of stock86 of,Substitute unitsSenate ofBill beneficial interest in or other ownership interest in sSB1033 / File No.

2091033 61investments sSB1033described Filein No.subdivision (1) of this subsection in which a Connecticut bank could invest directly;

209or (3) repurchase agreements, and the term "debt mutual fund" means a partnership interest in, shares of stock of, units of beneficial interest in or other ownership interest in any one investment company registered under the Investment Company Act of 1940, as from time to time amended, commonly described as mutual funds, money market funds, investment trusts or business trusts, provided the portfolios of such investment companies consist solely of investments described in subdivision (1) of this subsection.

(c) In addition to other investments authorized by this part, any Connecticut bank may purchase or hold for its own account the following debt securities and debt mutual funds without regard to any otherPublic liabilityAct toNo. the Connecticut bank of the maker, obligor, guarantor or issuer of such debt securities and debt mutual funds, provided (1) the debt securities and debt mutual funds are rated in the three highest rating categories by a rating service recognized by the commissioner,or, if not so rated, determined by the bank's governing board to be a prudent investment;

(2)23-126 unless68 the bank obtains the prior approval of the86 commissioner,Substitute andSenate exceptBill as otherwise provided in subsection (e) of sSB1033 / File No.

2091033 62other sSB1033liability Fileto No.the Connecticut bank of the maker, obligor, guarantor or issuer of such debt securities and debt mutual funds, provided (1) the debt securities and debt mutual funds are rated in the three highest rating categories by a rating service recognized by the commissioner,or, if not so rated, determined by the bank's governing board to be a prudent investment;

209(2) unless the bank obtains the prior approval of the commissioner, and except as otherwise provided in subsection (e) of this section, the total amount of the debt securities and debt mutual funds of any one maker, obligor or issuer purchased or held by a Connecticut bank or for a Connecticut bank's account may not exceed, at any time, seventy-five per cent of its [total equity capital and reserves for loan and lease losses] capital and surplus;

(A) General obligations of any agency of the United States, including government sponsoredenterprises,sponsored enterprises, which are not guaranteed fully as to principal and interest by the United States or for which the full faith and credit of the United States is not pledged for the payment of principal and interest;

(d)Public InAct additionNo. to other investments authorized by this part, any Connecticut bank may purchase or hold for its own account the following debt securities and debt mutual funds without regard to any other liability to the Connecticut bank of the maker, obligor, guarantor or issuer of such debt securities and debt mutual funds, provided the debt securities and debt mutual funds are rated in the three highest rating categories by a rating service recognized by the commissioner or, if not so rated, determined by the bank's governing board to be a prudent investment:

sSB103323-126 /69 Fileof 86 Substitute Senate Bill No.

2091033 63(d) sSB1033In Fileaddition No.to other investments authorized by this part, any Connecticut bank may purchase or hold for its own account the following debt securities and debt mutual funds without regard to any other liability to the Connecticut bank of the maker, obligor, guarantor or issuer of such debt securities and debt mutual funds, provided the debt securities and debt mutual funds are rated in the three highest rating categories by a rating service recognized by the commissioner or, if not so rated, determined by the bank's governing board to be a prudent investment:

209 (1) The general obligations of the United States or this state;

(e) (1) Not later than January 1, 2024, a Connecticut bank may, provided the Connecticut bank notifies the commissioner of such election, in writing, not later than said date, elect to use equity capital and adjusted allowances for credit losses, instead of capital and surplus, for the purposes of calculating the limitations established in subsections (b) and (c) of this section on the total amount of the debt securities and debtmutualfundsofanyonemaker,obligorordebtmutualfundsofanyonemaker,obligororissuerpurchasedor issuerpurchasedor held by a Connecticut bank or for a Connecticut bank's account.

(2) Any Connecticut bank that makes the election as provided in subdivision(1)ofthissubsectionmayPublic subsequentlyelect,providedsuchAct ConnecticutNo. bank notifies the commissioner, in writing, that such Connecticut bank has made such subsequent election, to use capital and surplus, instead of equity capital and adjusted allowances for credit losses, for the purposes of calculating the limitations established in subsections (b) and (c) of this section on the total amount of the debt securities and debt mutual funds of any one maker, obligor or issuer purchased or held by a Connecticut bank or for a Connecticut bank's account.

(3)23-126 Any70 Connecticut bank that makes the subsequent election as provided in subdivision (2) of this86 subsectionSubstitute maySenate electBill to use equity sSB1033 / File No.

2091033 64subdivision(1)ofthissubsectionmay sSB1033subsequentlyelect,providedsuch FileConnecticut No.bank notifies the commissioner, in writing, that such Connecticut bank has made such subsequent election, to use capital and surplus, instead of equity capital and adjusted allowances for credit losses, for the purposes of calculating the limitations established in subsections (b) and (c) of this section on the total amount of the debt securities and debt mutual funds of any one maker, obligor or issuer purchased or held by a Connecticut bank or for a Connecticut bank's account.

209 capital and adjusted allowances for credit losses, instead of capital and surplus, for the purposes of calculating the limitations established in subsections (b) and (c) of this section on the total amount of the debt securities and debt mutual funds of any one maker, obligor or issuer purchased or held by a Connecticut bank or for a Connecticut bank's account.

(b) In addition to other investments authorized by sections 36a-275 to 36a-277,Public inclusive,Act asNo. amended by this act, and 36a-280, any Connecticut bank may purchase or hold for its own account equity securities and equity mutual funds, without regard to any other liability to the Connecticut bank of the issuer of such equity securities and equity mutual funds, provided:

(1)23-126 The71 total amount of equity86 securitiesSubstitute andSenate sSB1033Bill / File No.

2091033 6536a-277, sSB1033inclusive, Fileas No.amended by this act, and 36a-280, any Connecticut bank may purchase or hold for its own account equity securities and equity mutual funds, without regard to any other liability to the Connecticut bank of the issuer of such equity securities and equity mutual funds, provided:

209(1) The total amount of equity securities and equity mutual funds of any one issuer purchased or held by a Connecticut bank or for a Connecticut bank's account, except as otherwise provided in subsection (f) of this section, may not exceed, at any time, twenty-five per cent of its [total equity capital and reserves for loan and lease losses] capital and surplus;

For purposes of this subsection and subsection (e) of this section, a "controlling interest" means at least fifty-one per cent of the equity securities issued by the corporation or other entity, unless the commissioner determines that under the circumstances, a lesser percentage constitutes effective working control of the corporation or otherPublic entity.Act No.

23-126 72 of 86 Substitute Senate Bill No.

1033 other entity.

Notwithstanding the provisions of this subsection, any investment in a controlling interest in a corporation or other entity, the sSB1033functions /of Filewhich No.are limited to one or more of the functions that the bank may carry on directly in the exercise of its express or incidental powers, shall be made in accordance with subsection (d) of this section.

209(f) 66(1) sSB1033Not Filelater No.than January 1, 2024, a Connecticut bank may, provided the Connecticut bank notifies the commissioner of such election, in writing, not later than said date, elect to use equity capital and adjusted allowances for credit losses, instead of capital and surplus, for thepurpose ofcalculating thelimitationestablished in subsection(b) ofthissectiononthetotalamount ofequity securitiesandequity mutual funds of any one issuer purchased or held by a Connecticut bank or for a Connecticut bank's account.

209 functions of which are limited to one or more of the functions that the bank may carry on directly in the exercise of its express or incidental powers, shall be made in accordance with subsection (d) of this section.

(f) (1) Not later than January 1, 2024, a Connecticut bank may, provided the Connecticut bank notifies the commissioner of such election, in writing, not later than said date, elect to use equity capital and adjusted allowances for credit losses, instead of capital and surplus, for the purpose ofcalculating thelimitationestablished in subsection(b) ofthissectiononthetotalamount ofequity securitiesandequity mutual funds of any one issuer purchased or held by a Connecticut bank or for a Connecticut bank's account.

(3) Any Connecticut bank that makes the subsequent election as provided in subdivision (2) of this subsection may elect to use equity capital and adjusted allowances for credit losses, instead of capital and surplus, for the purpose of calculating the limitation established in subsection (b) of this section on the total amount of equity securities and equity mutual funds of any one issuer purchased or held by a Connecticut bank or for a Connecticut bank's account.

(a)Public InAct addition to other investments authorized by sections 36a-275, as amended by this act, and 36a-276, as amended by this act, this section and section 36a-280, any Connecticut bank may purchase or hold for its sSB1033 / File No.

20923-126 6773 sSB1033of File86 Substitute Senate Bill No.

2091033 (a) In addition to other investments authorized by sections 36a-275, as amended by this act, and 36a-276, as amended by this act, this section and section 36a-280, any Connecticut bank may purchase or hold for its own account the following securities, without regard to any other liability to the Connecticut bank of the obligor, maker, guarantor or issuer of such securities, provided the total amount of the securities of any one maker, obligor or issuer held by a Connecticut bank or for a Connecticut bank's account may not exceed, at any time, and except as provided in subsection (b) of this section, ten per cent of its [equity capital and reserves for loan and lease losses] capital and surplus:

(4)Public Shares of stock and debt securities issued by the National Corporation for Housing Partnerships or by any other corporation created pursuant to Title IX oftheHousing andUrbanDevelopment Act ofNo. 1968;

limited23-126 partnership74 interestsof in86 TheSubstitute NationalSenate HousingBill Partnership or in any other limited partnership formed pursuant to sSB1033 / File No.

2091033 68(4) sSB1033Shares Fileof No.stock and debt securities issued by the National Corporation for Housing Partnerships or by any other corporation created pursuant to Title IX oftheHousing andUrbanDevelopment Act of 1968;

209limited partnership interests in The National Housing Partnership or in any other limited partnership formed pursuant to Section 907(a) of that act;

(6) Debt securities or equity securities of a corporation, all the equity securities of which corporation are to be owned by one or more Connecticut banks and which corporation is organized and operatedoperatedfor for the purpose of developing, and stimulating and assisting the development of, by any means and in any capacity, by itself or jointly with others, low and moderate income housing in this state;

For purposes of this section, a "social purposePublic investment"Act meansNo. an investment which contributes to the public welfare by facilitating the provisionofa service or facility needed by residents of the area in which an office of the bank making the investment is located.

(b)23-126 (1)75 Not later than January 1, 2024, a Connecticut bank may, provided the Connecticut bank notifies the commissioner of such86 election,Substitute inSenate writing,Bill not later than said date, elect to use equity capital sSB1033 / File No.

2091033 69purpose sSB1033investment" Filemeans No.an investment which contributes to the public welfare by facilitating the provisionofa service or facility needed by residents of the area in which an office of the bank making the investment is located.

209(b) (1) Not later than January 1, 2024, a Connecticut bank may, provided the Connecticut bank notifies the commissioner of such election, in writing, not later than said date, elect to use equity capital and adjusted allowances for credit losses, instead of capital and surplus, for the purpose of calculating the limitation established in subsection (a) of this section on the total amount of the securities of any one maker, obligor or issuer held by a Connecticut bank or for a Connecticut bank's account.

(3) Any Connecticut bank that makes the subsequent election as provided in subdivision (2) of this subsection may elect to use equity capital and adjusted allowances for credit losses, instead of capital and surplus, for the purpose of calculating the limitation established in subsection (a) of this section on the total amount of the securities of any one maker, obligor or issuer held by a Connecticut bank or for a Connecticut bank's account.

Section 36a-438a of the general statutes is repealed and the followingPublic isAct substitutedNo. in lieu thereof (Effective October 1, 2023):

(a)23-126 (1)76 Except as provided in subdivision (2) of this86 subsection,Substitute theSenate sSB1033Bill / File No.

2091033 70following sSB1033is Filesubstituted No.in lieu thereof (Effective October 1, 2023):

209(a) (1) Except as provided in subdivision (2) of this subsection, the field of membership of a Connecticut credit union is limited to:

[, or] and (C) persons within a well-defined community, neighborhood or rural district.district;

or (D) any combination thereof.

The commissioner shall, in determining whether to approve the inclusion of an association in the field of membership of a Connecticut credit union, consider the public interest and benefit of such inclusion and, in determining whether an association was formed to serve a purpose other than expanding the field of membership of a Connecticut credit union, consider the totality of the circumstances, including, but notlimitedto,thefollowingfactors:(i)Whethertheassociationprovides opportunities for members to participate in furthering the goals of the association;Public Act No.

23-126 77 of 86 Substitute Senate Bill No.

1033 association;

(vii) the extent of meetings and member engagement sSB1033on /topics Filerelated No.to the association's core purposes;

209 71 sSB1033 File No.

209 on topics related to the association's core purposes;

[(3) The field of membership of a Connecticut credit union under subparagraphs (A) and (B) of subdivision (1) of this subsection may include associations and organizations of individuals who are members of such credit union, partnerships in which the majority of the partners are individualswho are membersofsuch credit union,andcorporations in which the majority of whose shareholders are individuals who are members of such credit union.] [(4)] (3) The field of membership of a Connecticut credit union under subparagraph (C) of subdivision (1) of this subsection may include groups located outside of the well-defined community, neighborhood or rural district such credit union serves that were within such credit union's field of membership at the time it converted from a field of membershipspecifiedinsubparagraph(A)or(B)ofsaidsubdivision (1), provided such credit union's continuing relationships with such groups are not exclusive and, if authorized under this chapter, other Connecticutcreditunionsmayalsoprovideservicestosuchgroups.The commissioner may not approve an amendment to the bylaws of such a creditunionunderthissubdivisionunlessthecommissionerdetermines in writing that any potential harm that the expansion of the field of membership of such credit union may have on any other Connecticut credit unionanditsmembersisclearly outweighedinthepublicinterest by the probable beneficial effect of the expansion in meeting the convenience and needs of the members of the group proposed to be includedPublic inAct theNo. field of membership.

23-126 78 of 86 Substitute Senate Bill No.

1033 included in the field of membership.

(1) The commissioner determines that the well-defined community, neighborhoodorruraldistrictis:(A)[an]Aninvestmentarea,asdefined sSB1033in /Section File103(16) No.of the Community Development Banking and Financial Institutions Act of 1994, 12 USC Section 4702(16), and meets anyadditionalrequirementsthatthecommissionermayimpose;and(B) underserved by other depository institutions, as defined in Section 19(b)(1)(A) of the Federal Reserve Act, 12 USC Section 461(b), based on data of the commissioner and federal supervisory agencies;

209 72 sSB1033 File No.

209 in Section 103(16) of the Community Development Banking and Financial Institutions Act of 1994, 12 USC Section 4702(16), and meets anyadditionalrequirementsthatthecommissionermayimpose;and(B) underserved by other depository institutions, as defined in Section 19(b)(1)(A) of the Federal Reserve Act, 12 USC Section 461(b), based on data of the commissioner and federal supervisory agencies;

(A) [the] The Connecticut credit union has not engaged in anyPublic materialAct unsafeNo. or unsound practice during the one-year period preceding the date on which the proposed amendment is filed with the commissioner;

23-126 79 of 86 Substitute Senate Bill No.

1033 any material unsafe or unsound practice during the one-year period preceding the date on which the proposed amendment is filed with the commissioner;

[,] and (E) sSB1033formation /of Filea No.separate credit union by the group proposed to be included is not practicable and consistent with reasonable safety and soundness standards.

209 73 sSB1033 File No.

209 formation of a separate credit union by the group proposed to be included is not practicable and consistent with reasonable safety and soundness standards.

(3) The commissioner may approve an amendment to the bylaws of a Connecticut credit union to change the field of membership without regard for the common bond whenever the commissioner determines that continued operation of the Connecticut credit union without the proposedPublic amendmentAct mayNo. result in liquidation or merger of such credit union.

23-126 80 of 86 Substitute Senate Bill No.

1033 proposed amendment may result in liquidation or merger of such credit union.

sSB1033(5) /"Out-of-state Filebank" No.has the same meaning as provided in section 36a-2 of the general statutes, as amended by this act;

209 74 sSB1033 File No.

209 (5) "Out-of-state bank" has the same meaning as provided in section 36a-2 of the general statutes, as amended by this act;

(b) The Banking Commissioner shall,shall: within available appropriations, designate a Bank Merger Ombudsman within the Department of Banking.

(c) The Bank Merger Ombudsman, in consultation with the Banking Commissioner, shall:

(3)Public CommunicateAct complaintsNo. concerning a financial institution, following a merger involving the financial institution, to the primary regulator of such financial institution if such financial institution is an out-of-state bank, out-of-state credit union or federal credit union;

(4)23-126 Compile81 andof analyze86 dataSubstitute concerningSenate theBill complaintsNo. the Bank Merger Ombudsman receives under subdivision (2) of this subsection;

(5)1033 Assist(3) personsCommunicate whocomplaints submitconcerning complaintsa underfinancial subdivisioninstitution, (2)following ofa thismerger subsectioninvolving the financial institution, to understandthe theirprimary rightsregulator andof responsibilitiessuch concerningfinancial institution if such complaints;financial institution is an out-of-state bank, out-of-state credit union or federal credit union;

(6)(4) ProvideAssist informationpersons towho thesubmit public,complaints stateunder agencies,subdivision legislators(2) andof otherthis personssubsection regardingto theunderstand problemstheir rights and concernsresponsibilities ofconcerning personssuch whocomplaints; sSB1033 / File No.

209(5) 75Provide sSB1033information Fileto No.the public, state agencies, legislators and other persons regarding the problems and concerns of persons who submit complaints under subdivision (2) of this subsection, and make recommendations to resolve such problems and concerns;

209(6) submitAnalyze complaintsand undermonitor subdivisionthe (2)development and implementation of thisfederal,stateandlocallaws,regulationsandpoliciesrelatingtofinancial subsection,institutions and makethe recommendationsmerger toof resolvefinancial institutions, and recommend any changes to such problemslaws, andregulations concerns;or policies the Banking Commissioner deems necessary;

(7) AnalyzeReview andinformation monitorrelating theto developmentcomplaints andinvolving implementationConnecticut ofbanks federal,stateandlocallaws,regulationsandpoliciesrelatingtofinancial institutions and theConnecticut mergercredit ofunions financialsubmitted institutions,under andsubdivision recommend(2) anyof changesthis tosubsection, suchfor laws,any regulationsperson orwho policiesprovides thewritten Bankconsent Mergerfor Ombudsmansuch deemsreview; necessary;

(8) ReviewDisseminate information relatingon tothe complaintsDepartment submittedof underBanking's subdivisionInternet (2)web site concerning the availability of thisthe subsection,department's personnel for anyassisting personpersons whoholding providesaccounts writtenat consentfinancial forinstitutions suchwith review;their concerns relating to financial institution mergers;

and (9) DisseminateTake informationany concerningother action the BankBanking MergerCommissioner Ombudsman'sdeems availabilitynecessary forto assistingfulfill personsthe holdingcommissioner's accountsduties atunder financialthis institutionssubsection. with their concerns relating to financial institution mergers;

and(c) (10)On Takeor anybefore otherJanuary action1, 2025, and annually thereafter, the BankBanking MergerCommissioner Ombudsmanshall deemssubmit necessarya toreport, fulfillin theaccordance ombudsman'swith dutiesthe underprovisions thisPublic subsection.Act No.

(d)Onor23-126 before82 January 1,2025,and annually thereafter,theBanking Commissioner shall submit a report, in accordance with the provisions of section86 11-4aSubstitute ofSenate theBill generalNo. statutes, to the joint standing committee of the General Assembly having cognizance of matters relating to banking.

Each1033 reportof shallsection disclose:11-4a of the general statutes, to the joint standing committee of the General Assembly having cognizance of matters relating to banking.

(1)Each Informationreport concerningshall: implementation of this section and the overall effectiveness of the Bank Merger Ombudsman;

and(1) (2)Summarize anythe additionalanalysis stepsconducted thatby need to be taken for the DepartmentBanking ofCommissioner Bankingpursuant to address the complaints described in subdivision (2)(6) of subsection (c)(b) of this section.section for the preceding calendar year;

Thisand act(2) shallrecommend takeany effectchanges asto followsfederal, state and shalllocal amendlaws, regulations and policies relating to the followingmerger sections:of financial institutions the Banking Commissioner deems necessary.

Section 1 October 1, 2023 36a-555 Sec.

226. October 1, 2023 36a-556 Sec.

3Section October36a-609 1,of 2023the 36a-557general Sec.statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2023):

4The Octoberprovisions 1,of 2023sections 36a-558(d)36a-597 to (f)36a-607, sSB1033inclusive, /and Filesections No.36a-611 and 36a-612 shall not apply to:

209(1)Anyfederallyinsuredfederalbank,out-of-statebank,Connecticut 76bank, sSB1033Connecticut Filecredit No.union, federal credit union or out-of-state credit union, provided such institution does not engage in the business of money transmission in this state through any person who is not (A) a federally insured federal bank, out-of-state bank, Connecticut bank, Connecticut credit union, federal credit union or out-of-state credit union, (B) a person licensed pursuant to sections 36a-595 to 36a-612, inclusive, or an authorized delegate acting on behalf of such licensed person, or (C) a person exempt pursuant to [subdivision (2) or (3)] subdivisions (2) to (4), inclusive, of this section;

209(2) Sec.Any Connecticut bank that is an uninsured bank organized pursuant to subsection (t) of section 36a-70;

5[(2)] October(3) 1,The 2023United 36a-560States Sec.Postal Service and any contractor that engages in the business of money transmission in this state on behalf of the United States Postal Service;

6and October[(3)] 1,(4) 2023A 36a-770(c)person Sec.whose activity is limited to the electronic funds transfer of governmental benefits for or on behalf of a federal, state or Public Act No.

723-126 October83 1,of 202386 NewSubstitute sectionSenate Sec.Bill No.

81033 Julyother 1,governmental 2023agency, 36a-338(a)quasi-governmental Octoberagency 1,or 2023government Sec.sponsored enterprise.

9 36a-486(b) Sec.

1027. October 1, 2023 36a-498e(a) Sec.

11Section October3-24j 1,of 2023the 36a-719(a)general Sec.statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2023):

12As Octoberused 1,in 2023this 36a-492(d)(5)section Sec.and sections 3-24k and 3-24l, as amended by this act:

13(1) October"Community 1,bank" 2023means 36a-318(e)a Sec.bank [that is domiciled in this state and has assets of not more than one billion dollars;] and trust company, savings bank or savings and loan association chartered or organized under the laws of this state;

14and July(2) 1,"Community 2023credit 36a-309(a)union" means a [federal credit union, as defined in section 36a-2, the membership of which is limited to (e)persons Sec.or organizations within a well-defined local community, neighborhood or rural district as provided in the Federal Credit Union Act, 12 USC Section 1759(b)(3), as from time to time amended, that has assets of not more than one billion dollars or a state credit union that has assets of not more than one billion dollars;

15and] Octobercooperative, 1,nonprofit 2023financial 36a-2institution Octoberthat 1,(A) 2023is Sec.organized under chapter 667 and the membership of which is limited as provided in section 36a-438a, as amended by this act, (B) operates for the benefit and general welfare of its members with the earnings, benefits or services offered being distributed to or retained for its members, and (C) is governed by a volunteer board of directors elected by and from its membership.

16[(3) 36a-250(a)"State Sec.credit union" means a cooperative, nonprofit financial institution that (A) is organized under chapter 667 and the membership of which is limited to persons within a well-defined community, neighborhood or rural district as provided in section 36a-438a, (B) operates for the benefit and general welfare of its members with the earnings, benefits or services offered being distributed to or retained for Public Act No.

1723-126 October84 1,of 202386 36a-260(c)Substitute Sec.Senate Bill No.

181033 Octoberits 1,members, 2023and 36a-261(b)(C) tois (i)governed by a volunteer board of directors elected by and from its membership.] Sec.

1928. October 1, 2023 36a-262 Sec.

20Section October3-24k 1,of 2023the 36a-275general Sec.statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2023):

21(a) OctoberThe 1,State 2023Treasurer 36a-276may Sec.establish a program under which the State Treasurer may, based on cash availability, make available a pool of funds not exceeding [one] three hundred million dollars for investment with eligible community banks and community credit unions.

22Such Octoberfunds 1,shall 2023be 36a-277obtained Sec.from the state's operating cash managed by the State Treasurer.

23(b) October(1) 1,The 2023State 36a-285(f)Treasurer Sec.shall establish eligibility criteria for any program established under subsection (a) of this section.

24Such Octobereligibility 1,criteria 2023shall 36a-438ainclude, Sec.at a minimum, an asset limit for community banks and community credit unions to participate in such program.

25Such Octoberasset 1,limit 2023shall Newprovide sectionthat: Statement of Legislative Commissioners:

In(A) SectionDuring 1(2),the "[Truth-in-Lendingperiod Act,beginning 15July USC1, 1601]2023, Militaryand Lendingending Act,September 1029, USC2024, 987etno seq.,"waschangedtocommunity "[Truth-in-Lendingbank Act,or 15USCcommunity etcredit seq.]union Militarywith Lendingassets Act,exceeding 10two USCbillion 987,"dollars formay accuracy;participate in such program;

and (B) beginning September 30, 2024, no community bank or community credit union may participate in Sectionsuch 2(d)(2),program "theif person"such wascommunity changedbank's toor "suchcommunity person"credit union's assets exceed the sum of (i) the preceding asset limit established by the State Treasurer, and (ii) the median percentage loan growth of community banks and community credit unions eligible for consistency;the program at the time when the State Treasurer establishes such asset limit.

As used in Sectionthis 4(d)(1),subsection, "Military"median Lendingpercentage Act,loan 10growth" USCmeans 987the etmiddle seq.,"value wasrepresenting changedthe topercentage "Militaryincrease Lendingor Act,decrease, 10as USCthe 987,case [etmay seq.,]"be, forin accuracy;loan assets over a period of time reflected on the balance sheet of a specified group of lenders.

in(2) SectionNot 4(e)(6),later "and"than wasJuly added1, after2024, and annually thereafter, the semicolonState forTreasurer consistency;shall provide to the Department of Banking a list of the Public Act No.

in23-126 Section85 6(c),of "sections86 36a-770Substitute toSenate 36a-788,Bill inclusive,No. as amended by this act," was changed to "this section and sections [36a-770] 36a-771 to 36a-788, inclusive," for consistency with standard drafting conventions;

1033 community banks and community credit unions that are eligible to participate in Sectionsuch 7(a)(1),program "an"at wasthe addedtime beforewhen "installment"the andState "unrecovered"Treasurer forprovides clarity;each such list to the department.

inNot Sectionlater 10(a)than August 31, 2024, and Subdivs.annually thereafter, the Department of Banking shall provide to the State Treasurer the median percentage loan growth of each such community bank and community credit union.

(6)[(b)](c)TheStateTreasurershallestablishascheduleformakingsuch toinvestments (8),with inclusive,such banks and (12),credit "sectionsunions. 36a-485 to 36a-498e, inclusive, as amended by this act," was changed to "this section, sections 36a-485 to [36a-498e] 36a-498d, inclusive," for consistency with standard drafting conventions;

in[(c)] Section(d) 10(a)(7)The andState (8)Treasurer "adopted"shall wasestablish addeda beforecompetitive "thereunder"bidding procedure under which such banks and credit unions may compete for consistency;investment-related services under said program.

in[(d)] Section(e) 17(c),The "sectionsState 36a-260"Treasurer wasmay changedestablish tocapital "thisstandards sectionfor such banks and sectionscredit [36a-260]"unions forwishing consistencyto withparticipate standardin draftingsaid conventions;program.

inSec. Sections 19(l)(1), 20(e)(1), 21(f)(1) and 22(b)(1), "instead sSB1033 / File No.

20929. 77 sSB1033 File No.

209Section of4 equity capital and surplus," was changed to "instead of capitalpublic andact surplus,"23-45 foris accuracyrepealed. and consistency;

and(Effective inJuly Section1, 25(a)(1)2023) toApproved (3),June inclusive,29, (5)2023 andPublic (6),Act ",No. as amended by this act" was inserted after "statutes" for consistency with standard drafting conventions.

BA23-126 Joint86 Favorableof Subst.86

sSB1033 / File No.

209 78 sSB1033 File No.

209 The following Fiscal Impact Statement and Bill Analysis are prepared for the benefit of the members of 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 general, fiscal impacts are based upon a variety of informational sources, including the analyst’s professional knowledge.

Whenever applicable, agency data is consulted as part of the analysis, however final products do not necessarily reflect an assessment from any specific department.

OFA Fiscal Note State Impact: