Connecticut 2025 Regular Session Status: In Committee

SB 1398 — AN ACT CONCERNING COMMUNITY REINVESTMENT BY BANKS AND CREDIT UNIONS.

Last action — FILE NO. 292

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  1. ✓
    Introduced
  2. 2
    In Committee
  3. 3
    Passed Senate
  4. 4
    Passed House
  5. 5
    To Executive
  6. 6
    Enacted

This bill died with 2025 Regular Session. It reached “In Committee” and never advanced before the session ended, so it can no longer move — a new version would have to be reintroduced in the current session.

This bill is no longer active — its legislative session has ended, so there is no live prognosis. It would have to be reintroduced in the current session to move again.

Bill Text

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403 added · 423 removed

403 line(s) added, 423 removed.

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General Assembly Raised Bill No.
Senate General Assembly File No.
1398 January Session, 2025 LCO No.
292 January Session, 2025 Substitute Senate Bill No.
5379 Referred to Committee on BANKING Introduced by:
1398 Senate, March 27, 2025 The Committee on Banking reported through SEN.
(BA) AN ACT CONCERNING COMMUNITY REINVESTMENT BY BANKS AND CREDIT UNIONS AND REPORTS, RECORDS, INSPECTIONS AND EXAMINATIONS OF MORTGAGE LENDERS.
MILLER of the 27th Dist., Chairperson of the Committee on the part of the Senate, that the substitute bill ought to pass.
AN ACT CONCERNING COMMUNITY REINVESTMENT BY BANKS AND CREDIT UNIONS.
Providing cash management controlled disbursement services or serving as correspondent banks, trust companies or clearing agents.
Providing cash management controlled disbursement services or serving as correspondent banks, sSB1398 / File No.
LCO No.
292 1 sSB1398 File No.
5379 1 of 18 Raised Bill No.1398 (2) "Federal CRA" means (A) the federal Community Reinvestment Act of 1977, 12 USC Section 2901 et seq., as from time to time amended, and (B) the regulations implementing said act adopted by the federal financial supervisory agencies as set forthin 12 CFR Part 25,12 CFR Part 228, 12 CFR Part 345 and 12 CFR Part 563e, as from time to time amended, and as applicable to the specific type of bank.
292 trust companies or clearing agents.
(2) "Federal CRA" means (A) the federal Community Reinvestment Act of 1977, 12 USC Section 2901 et seq., as from time to time amended, and (B) the regulations implementing said act adopted by the federal financial supervisory agencies as set forthin 12 CFR Part 25,12 CFR Part 228, 12 CFR Part 345 and 12 CFR Part 563e, as from time to time amended, and as applicable to the specific type of bank.
(5)"Minority-ownedbusiness"meansany business ofwhich fifty-one per cent or more of the capital stock, if any, or assets are owned by a minority who is active in the daily affairs of the business and has the power to direct the management and policies of the business.
(5) "Minority-owned business" means any business of which at least fifty-one per cent of the capital stock, if any, or assets is owned by a minority who is active in the daily affairs of the business and has the power to direct the management and policies of the business.
(6) "Women-owned business" means any business of which fifty-one per cent or more of the capital stock, if any, or assets are owned by a woman who is active in the daily affairs of the business and has the power to direct the management and policies of the business.
(6) "Women-owned business" means any business of which at least fifty-one per cent of the capital stock, if any, or assets is owned by a woman who is active in the daily affairs of the business and has the power to direct the management and policies of the business.
(b) The commissioner shall assess the record of each bank in satisfying its continuing and affirmative obligations to help meet the credit needs of its local communities, including low and moderate- income neighborhoods and minority or women-owned businesses, consistent with the safe and sound operation of such banks, and shall provide for the consideration of such records in connection with any application listed in subsection (c) of section 36a-32.
(b) The commissioner shall assess the record of each bank in satisfying its continuing and affirmative obligations to help meet the credit needs of its local communities, including low and moderate- income neighborhoods, minority-ownedbusinessesand women-owned businesses, consistent with the safe and sound operation of such banks, and shall provide for the consideration of such records in connection with any application listed in subsection (c) of section 36a-32.
LCO No.
sSB1398 / File No.
5379 2 of 18 Raised Bill No.1398 (c) Each bank shall, in accordance with the provisions of federal CRA and without excluding low and moderate-income neighborhoods or minority or women-owned businesses, delineate the local community or communities that comprise its entire community within this state or delineate one or more assessment areas, as applicable, within which the commissioner shall evaluate the bank's record of helping to meet the credit needs of its entire community in this state.
292 2 sSB1398 File No.
The commissioner shall review the delineation for compliance with federal CRA and this subsection in connection with an examination of the bank under section 36a-17.
292 (c) Each bank shall, in accordance with the provisions of federal CRA and without excluding low and moderate-income neighborhoods, minority-owned businesses or women-owned businesses, delineate the local community or communities that comprise its entire community within this state or delineate one or more assessment areas, as applicable, within which the commissioner shall evaluate the bank's record of helping to meet the credit needs of its entire community in this state.
The commissioner shall review the delineation for compliance withfederalCRAandthissubsectioninconnectionwithanexamination of the bank under section 36a-17.
(a) In connection with the examination of a bank under section 36a- 17, the commissioner shall assess the record of the performance of the bank in helping to meet the credit needs of its entire community, including low and moderate-income neighborhoods and minority or women-ownedbusinesses,consistentwiththesafeandsoundoperation of the bank.
(a) In connection with the examination of a bank under section 36a- 17, the commissioner shall assess the record of the performance of the bank in helping to meet the credit needs of its entire community, including low and moderate-income neighborhoods, minority-owned businesses and women-owned businesses, consistent with the safe and sound operation of the bank.
In addition, the commissioner shall consider the following in assessing a bank's record of performance:
In addition, the commissioner shall consider thefollowing in assessing a bank'srecordofperformance:
(b) (1) Upon the conclusion of the assessment required under subsection (a) of this section, the commissioner shall prepare a written LCO No.
(b) (1) Upon the conclusion of the assessment required under subsection (a) of this section, the commissioner shall prepare a written evaluation of the bank's record of meeting the credit needs of its entire sSB1398 / File No.
5379 3 of 18 Raised Bill No.1398 evaluation of the bank's record of meeting the credit needs of its entire community, including low and moderate-income neighborhoods and minority or women-owned businesses.
292 3 sSB1398 File No.
292 community, including low and moderate-income neighborhoods, minority-owned businesses and women-owned businesses.
(2) The public section of the performance evaluation shall (A) state the commissioner's assessment of the community reinvestment performance of the bank utilizing the applicable methodology set forth infederalCRA, (B) discussthe facts supporting such assessment and (C) contain the bank's rating and a statement describing the basis for the rating.
(2) The public section of the performance evaluation shall (A) state the commissioner's assessment of the community reinvestment performance of the bank utilizing the applicable methodology set forth in federal CRA, (B) discuss the facts supporting such assessment, and (C) contain the bank's rating and a statement describing the basis for the rating.
Subsections (a) to (c), inclusive, of section 36a-34 of the general LCO No.
Subsections (a) to (c), inclusive, of section 36a-34 of the general statutes are repealed and the following is substituted in lieu thereof (Effective October 1, 2025):
5379 4 of 18 Raised Bill No.1398 statutes are repealed and the following is substituted in lieu thereof (Effective October 1, 2025):
sSB1398 / File No.
(a) As used in subsection (b) of this section:
292 4 sSB1398 File No.
292 (a) As used in subsection (b) of this section:
(5)"Minority-ownedbusiness"meansany business ofwhich fifty-one per cent or more of the capital stock, if any, or assets are owned by a minority who is active in the daily affairs of the business and has the power to direct the management and policies of the business.
(5) "Minority-owned business" means any business of which at least fifty-one per cent of the capital stock, if any, or assets is owned by a minority who is active in the daily affairs of the business and has the power to direct the management and policies of the business.
LCO No.
[(4)] (6) "Resulting entity" means:
5379 5 of 18 Raised Bill No.1398 [(4)] (6) "Resulting entity" means:
(C) in the case of an approval pursuant to section 36a-181, the Connecticut bank;
(C) in the case of an sSB1398 / File No.
292 5 sSB1398 File No.
292 approval pursuant to section 36a-181, the Connecticut bank;
(7) "Women-owned business" means any business of which fifty-one per cent or more of the capital stock, if any, or assets are owned by a woman who is active in the daily affairs of the business and has the power to direct the management and policies of the business.
(7) "Women-owned business" means any business of which at least fifty-one per cent of the capital stock, if any, or assets is owned by a woman who is active in the daily affairs of the business and has the power to direct the management and policies of the business.
and (2) except as otherwise provided in this subsection, if the entity, and in the case of an approval pursuant to section 36a-411, the bank or any subsidiary bank of the Connecticut holding company, received any overallrating other than an assigned rating of "outstanding" on its most recent applicable community reinvestment performance evaluation, the resulting entity will provide adequate services to meet the banking needs of all of the community [residents] of such resulting entity, including low-income residents, [and] moderate-income residents and minority or women- owned businesses to the extent permitted by its charter, in accordance with a plan submitted by the applicant to the commissioner, in such LCO No.
and (2) except as otherwise provided in this subsection, if the entity, and in the case of an approval pursuant to section 36a-411, the bank or any subsidiary bank of the Connecticut holding company, received any overallrating other than an assigned rating of "outstanding" on its most recent applicable community reinvestment performance evaluation, the resulting entity will provide adequate services to meet the banking needs of all of the community [residents] of such resulting entity, including low-income residents, [and] moderate-income residents, minority-owned businesses and women-owned businesses to the extent permitted by its charter, in accordance with a plan submitted by the applicant to the commissioner, in such form and containing such information as the commissioner may require, or, if acceptable to the commissioner, in accordance with an approved strategic plan prepared under federal CRA, or the relevant portion thereof, that is submitted by the applicant to the commissioner.
5379 6 of 18 Raised Bill No.1398 formandcontainingsuchinformationasthecommissionermayrequire, or, if acceptable to the commissioner, in accordance with an approved strategic plan prepared under federal CRA, or the relevant portion thereof, that is submitted by the applicant to the commissioner.
Upon receiving any such plan, the commissioner sSB1398 / File No.
Upon receiving any such plan, the commissioner shall make the plan available for public inspection and comment at the Department of Banking and cause notice of its submission and availability for inspection and comment to be published in the department's weekly bulletin.
292 6 sSB1398 File No.
292 shall make the plan available for public inspection and comment at the Department of Banking and cause notice of its submission and availability for inspection and comment to be published in the department's weekly bulletin.
In making such finding, the commissioner shall, unless clearly inapplicable, consider, among other factors, whether the plan identifies specific unmet credit and consumer banking needs in the local community and specifies how such needs will be satisfied, provides for sufficient distribution of banking services among branches or satellite devices, or both, located in low-income neighborhoods, contains adequate assurances that banking services will be offered on a nondiscriminatory basis and demonstrates a commitment to extend credit for housing, small business, minority or women-owned business and consumer purposes in low-income neighborhoods.
In making such finding, the commissioner shall, unless clearly inapplicable, consider, among other factors, whether the plan identifies specific unmet credit and consumer bankingneedsinthelocalcommunityandspecifieshowsuchneedswill be satisfied, provides for sufficient distribution of banking services among branches or satellite devices, or both, located in low-income neighborhoods, contains adequate assurances that banking services will be offered on a nondiscriminatory basis and demonstrates a commitment to extend credit for housing, small business, minority- owned businesses, women-owned businesses and consumer purposes in low-income neighborhoods.
The submission of such plan shall not be required in the case of an approval under subsection (d) of section 36a-145, provided, the commissioner may require the filing of such information in lieu of a plan as the commissioner deems appropriate.
The submission of such plan shall not be required in the case of an approval under subsection (d) of section 36a- 145, provided, the commissioner may require the filing of such information in lieu of a plan as the commissioner deems appropriate.
If the commissioner determines that an applicant is an eligible entity, the commissioner may (A) exempt such applicant from the requirement that such applicant file a plan, or (B) require such information in lieu of a plan as the commissioner deems appropriate.
If the commissioner determines that an applicant is an eligible entity, the commissionermay(A)exemptsuchapplicantfromtherequirementthat such applicant file a plan, or (B) require such information in lieu of a plan as the commissioner deems appropriate.
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Except with respect to an approval pursuant to section 36a-145 and section 36a-181, the commissioner shall not approve the transaction if LCO No.
Except with respect to an approval pursuant to section 36a-145 and section 36a-181, the commissioner shall not approve the transaction if the transaction would result in a monopoly, or would be in furtherance of any combination or conspiracy to monopolize or attempt to monopolize the business of banking in this state or if the commissioner determines that the effect of the proposed transaction may be to substantially lessen competition, or would tend to create a monopoly, or would be in restraint of trade, sSB1398 / File No.
5379 7 of 18 Raised Bill No.1398 the transaction would result in a monopoly, or would be in furtherance of any combination or conspiracy to monopolize or attempt to monopolize the business of banking in this state or if the commissioner determines that the effect of the proposed transaction may be to substantially lessen competition, or would tend to create a monopoly, or would be in restraint of trade, unless the commissioner finds that the anticompetitive effects of the proposed transaction are clearly outweighed in the public interest by the probable effect of the transaction in meeting the convenience and needs of the community to be served.
292 7 sSB1398 File No.
292 unless the commissioner finds that the anticompetitive effects of the proposed transaction are clearly outweighed in the public interest by the probable effect of the transaction in meeting the convenience and needs of the community to be served.
and (2) except as otherwise provided in this subsection, if the bank or any banking subsidiary of the holding company referred to in the acquisition statement received any overall rating other than an assigned rating of "outstanding" on its most recent applicable community reinvestment performance evaluation, such bank or banking subsidiary will provide adequate services to meet the banking needs of all of the community [residents] of such bank or banking subsidiary, including low-income residents, [and] moderate-income residents and minority or women- owned businesses to the extent permitted by its charter or their charters.
and (2) except as otherwise provided in this subsection, if the bank or any banking subsidiary of the holding company referred to in the acquisition statement received any overall rating other than an assigned rating of "outstanding" on its most recent applicable community reinvestment performance evaluation, such bank or banking subsidiary will provide adequate services to meet the banking needs of all of the community [residents] of such bank or banking subsidiary, including low-income residents, [and] moderate-income residents, minority-owned businesses and women-owned businesses to the extent permitted by its charter or their charters.
If the acquiring person is not a natural person, or if the acquiring person is a natural person who would be the beneficial owner of twenty-five per cent or more of any class of voting securities of the bank or holding LCO No.
If the acquiring person is not a natural person, or if the acquiring person is a natural person who would be the beneficial owner of twenty-five per cent or more of any class of voting securities of the bank or holding company referred to in the acquisition statement, thefinding asto theadequacy ofservicesto beprovidedshall be based on a plan submitted by the acquiring person to the commissioner, in such form and containing such information as the commissioner may require, or, if acceptable to the commissioner, in accordance with an approved strategic plan prepared under federal CRA, or the relevant portion thereof, that is submitted by the acquiring person to the commissioner.
5379 8 of 18 Raised Bill No.1398 company referred to in the acquisition statement, the finding as to the adequacy of services to be provided shall be based on a plan submitted by the acquiring person to the commissioner, in such form and containing such information as the commissioner may require, or, if acceptable to the commissioner, in accordance with an approved strategic plan prepared under federal CRA, or the relevant portion thereof, that is submitted by the acquiring person to the commissioner.
Upon receiving any such plan, the sSB1398 / File No.
Upon receiving any such plan, the commissioner shall make the plan available for public inspection and comment at the Department of Banking and cause notice of its submission and availability for inspection and comment to be published in the department's weekly bulletin.
292 8 sSB1398 File No.
With the concurrence of the commissioner, the acquiring personshallpublish,intheformofalegaladvertisementinanewspaper having a substantial circulation in the area, notice of such plan's submission and availability for public inspection and comment.
292 commissioner shall make the plan available for public inspection and comment at the Department of Banking and cause notice of its submissionandavailability for inspectionandcomment to bepublished in the department's weekly bulletin.
With the concurrence of the commissioner, the acquiring person shall publish, in the form of a legal advertisement in a newspaper having a substantial circulation in the area, notice of such plan's submission and availability for public inspection and comment.
The commissioner shall not make such finding until the expiration of such thirty-day period.Inmakingsuchfinding,thecommissionershallconsider,among other factors, whether the plan identifies specific unmet credit and consumer banking needsinthe localcommunity andspecifieshow such needs will be satisfied, provides for sufficient distribution of banking services among branches or satellite devices, or both, located in low- income neighborhoods, contains adequate assurances that banking services will be offered on a nondiscriminatory basis and demonstrates a commitment to extend credit for housing, small business, minority or women-owned business and consumer purposes in low-income neighborhoods.
The commissioner shall not make such finding until the expiration of such thirty-day period.
In making such finding, the commissioner shall consider, among other factors, whether the plan identifies specific unmet credit and consumer banking needs in the local community and specifies how such needs will be satisfied, provides for sufficient distribution of banking services among branches or satellite devices, or both, located in low-income neighborhoods, contains adequate assurances that banking services will be offered on a nondiscriminatory basis and demonstrates a commitment to extend credit for housing, small business, minority-owned businesses, women- owned businesses and consumer purposes in low-income neighborhoods.
If the acquiring person is a natural person who would be the beneficial owner of less than twenty-five per cent of all classes of voting securities of the bank or holding company referred to in the acquisition statement, the LCO No.
If the acquiring person is a natural person who would be the beneficial owner of less than twenty-five per cent of all classes of voting securities of the bank or holding company referred to in the acquisition statement, the commissioner shall make the finding as to adequacy of services to be provided based on the commitment of the acquiring person to use the acquiring person's best efforts to cause such bank or banking subsidiaries of such holding company to provide such services.
5379 9 of 18 Raised Bill No.1398 commissioner shall make the finding as to adequacy of services to be provided based on the commitment of the acquiring person to use the acquiring person's best efforts to cause such bank or banking subsidiaries of such holding company to provide such services.
The commissioner shall not make a determination stating that the commissioner does not disapprove such offer, invitation, request, agreement or acquisition if such offer, invitation, request, agreement or acquisition would result in a monopoly, or would be in furtherance of sSB1398 / File No.
The commissioner shall not make a determination stating that the commissioner does not disapprove such offer, invitation, request, agreement or acquisition if such offer, invitation, request, agreement or acquisition would result in a monopoly, or would be in furtherance of any combination or conspiracy to monopolize or attempt to monopolize the business of banking in this state or if the commissioner should determine that the effect of the proposed offer, invitation, request, agreement or acquisition may be to substantially lessen competition, or would tend to create a monopoly, or would be in restraint of trade, unless the commissioner finds that the anticompetitive effects of the proposed transaction are clearly outweighed in the public interest by the probable effect of the transaction in meeting the convenience and needs of the community to be served.
292 9 sSB1398 File No.
292 any combination or conspiracy to monopolize or attempt to monopolize the business of banking in this state or if the commissioner should determine that the effect of the proposed offer, invitation, request, agreement or acquisition may be to substantially lessen competition, or would tend to create a monopoly, or would be in restraint of trade, unless the commissioner finds that the anticompetitive effects of the proposed transaction are clearly outweighed in the public interest by the probable effect of the transaction in meeting the convenience and needs of the community to be served.
(2) "Community credit union" means a Connecticut credit union that LCO No.
(2) "Community credit union" means a Connecticut credit union that has ten million dollars or more in total assets and the membership of which is limited to persons within a well-defined community, neighborhood or rural district as provided in subsection (a) of section 36a-438a.
5379 10 of 18 Raised Bill No.1398 has ten million dollars or more in total assets and the membership of which is limited to persons within a well-defined community, neighborhood or rural district as provided in subsection (a) of section 36a-438a.
(3) "Community reinvestment performance" means the performance of a community credit union in helping to meet the credit needs of its entire community, including low-income and moderate-income neighborhoods, minority-owned businesses and women-owned businesses.
(3) "Community reinvestment performance" means the performance of a community credit union in helping to meet the credit needs of its entire community, including low-income and moderate-income neighborhoods and minority or women-owned businesses.
sSB1398 / File No.
(4) "Minority" means an individual whose race is defined as other than white, or whose ethnicity is defined as Hispanic or Latino by the federal Office of Management and Budget for use by the Bureau of Census of the United States Department of Commerce.
292 10 sSB1398 File No.
(5)"Minority-ownedbusiness"meansany business ofwhich fifty-one per cent or more of the capital stock, if any, or assets are owned by a minority who is active in the daily affairs of the business and has the power to direct the management and policies of the business.
292 (4) "Minority" means an individual whose race is defined as other than white, or whose ethnicity is defined as Hispanic or Latino by the federal Office of Management and Budget for use by the Bureau of Census of the United States Department of Commerce.
(6) "Women-owned business" means any business of which fifty-one per cent or more of the capital stock, if any, or assets are owned by a woman who is active in the daily affairs of the business and has the power to direct the management and policies of the business.
(5) "Minority-owned business" means any business of which at least fifty-one per cent of the capital stock, if any, or assets is owned by a minority who is active in the daily affairs of the business and has the power to direct the management and policies of the business.
(6) "Women-owned business" means any business of which at least fifty-one per cent of the capital stock, if any, or assets is owned by a woman who is active in the daily affairs of the business and has the power to direct the management and policies of the business.
(a) Each community credit union shall satisfy its continuing and affirmative obligation to help meet the credit needs of its community, including low-income and moderate-income neighborhoods and minority or women-owned businesses, consistent with the safe and sound operation of such community credit union.
(a) Each community credit union shall satisfy its continuing and affirmative obligation to help meet the credit needs of its community, including low-income and moderate-income neighborhoods, minority- owned businesses and women-owned businesses, consistent with the safe and sound operation of such community credit union.
(b) Not later than six months following July 1, 2001, each community LCO No.
(b) Not later than six months following July 1, 2001, each community credit union shall delineate one or more assessment areas within which the commissioner shall evaluate the community credit union's community reinvestment performance in this state and shall file such delineations with the commissioner.
5379 11 of 18 Raised Bill No.1398 credit union shall delineate one or more assessment areas within which the commissioner shall evaluate the community credit union's community reinvestment performance in this state and shall file such delineations with the commissioner.
A community credit union may adjust the boundaries of itsassessment areasto include only theportionofa political subdivision that it reasonably can be expected to serve.
A community credit union may adjust the boundaries of itsassessment areasto include only theportionofa political subdivision sSB1398 / File No.
292 11 sSB1398 File No.
292 that it reasonably can be expected to serve.
(5) record of lending and other lending-related activities to borrowers of different income levels, minority or women-owned LCO No.
(5) record of lending and other lending-related activities to borrowers of different income levels, minority-owned businesses, women-owned businesses and businesses and farms of different sizes;
5379 12 of 18 Raised Bill No.1398 businesses and businesses and farms of different sizes;
Sec.
This act shall take effect as follows and shall amend the following sections:
6.
(NEW) (Effective October 1, 2025) (a) As used in this section:
(1) "Commissioner" means the Banking Commissioner;
(2) "Licensee" means a mortgage lender licensed under section 36a- 489 of the general statutes;
(3) "Mortgage lender" has the same meaning as provided in section 36a-485 of the general statutes;
and (4) "Residential mortgage loan" has the same meaning as provided in section 36a-485 of the general statutes.
(b) (1) Each licensee shall annually, on or before a date determined by the commissioner, file a report with the commissioner and such records pertaining to the business conducted by the licensee in the state during the preceding calendar year as the commissioner may require.
Such report shall be in a form and manner prescribed by the commissioner.
A licensee that fails to file or amend such report within fifteen days after receiving notice from the commissioner requesting such report or amendment shall be fined fifty dollars for each day during which such failure continues, unless the licensee demonstrates justifiable cause for such failure.
(2) A licensee shall keep such records, in a form and manner prescribed by the commissioner, as necessary to enable the commissioner to determine whether such licensee is conducting business in accordance with the provisions of this section, part I of LCO No.
5379 13 of 18 Raised Bill No.1398 chapter 668 of the general statutes, any regulation promulgated by the commissioner under this section or part I of chapter 668 of the general statutes and any other law or regulation applicable to the conduct of the licensee for which such licensee is licensed under section 36a-489 of the general statutes.
Each such licensee shall preserve all such records for a period prescribed by the commissioner.
(3) Records required pursuant to this section shall be in addition to the records required under section 36a-493 of the general statutes.
(4) Service of a subpoena for records requiredpursuant to this section by delivery to an office of a licensee located within the state shall be deemed to have been served at the location, whether within or outside the state, where the original records are kept or maintained.
(c) (1) The commissioner shall inspect the records required pursuant to this section, section 36a-493 of the general statutes, part I of chapter 668 of the general statutes, any regulation promulgated by the commissioner under this section or part I of chapter 668 of the general statutes and any other law or regulation applicable to the conduct of the licensee for which such licensee is licensed under section 36a-489 of the general statutes.
For the purposes of such inspection, the commissioner shall have access to the offices, places of business, books, accounts, papers, recordsandfilesoflicensees.
The commissioner may require the attendanceandtestimonyofanypersonwhomthecommissionerdeems necessary relative to the conduct of such licensee's business.
The total cost for any such inspection shall be paid by the licensee not later than thirty days after receipt of an invoice from the commissioner, including, but not limited to, any expense necessary for travel outside the state for the purpose of conducting such inspection.
(2) If, during the course of such inspection, the commissioner determines that a licensee has made not less than fifty residential mortgage loans in the preceding calendar year, the commissioner shall examine such licensee to assess such licensee's compliance with fair LCO No.
5379 14 of 18 Raised Bill No.
1398 lending laws, including, but not limited to, the federal Equal Credit Opportunity Act, 15 USC 1691 et seq., as amended from time to time, and the Home Mortgage Disclosure Act set forth in sections 36a-735 to 36a-744, inclusive, of the general statutes.
Such examination shall also include, but need not be limited to, an evaluation of (A) such licensee's origination of loans and other efforts to assist low and moderate income individuals to be able to acquire or remain in affordable housing at rates and terms that are reasonable in consideration of the licensee's history of lending to similarly situated individuals, the availability of mortgage loan products suitable for low and moderate income individuals and safe and sound business practices, (B) any pattern regarding such licensee's loan origination that shows an undue concentration or system of lending resulting in the loss of affordable housing, (C) such licensee's efforts to facilitate resolutions of delinquencies on residential mortgage loans, (D) such licensee's efforts to ensure public notice of examinations of such licensee and the right of interested parties to submit to the commissioner written comments related to such examinations, and (E) any other efforts of such licensee to comply with fair lending laws and to meet the residential mortgage loan needs of communities in the state.
(3) Upon the completion of such examination, the commissioner shall prepare a written evaluation of such licensee's record of performance, which shall be open to public inspection upon request.
Such written evaluation shall include (A) the information used to assign the licensee's descriptive rating pursuant to subdivision (4) of this subsection, (B) the conclusions made by the commissioner, (C) the facts supporting such conclusions, and (D) the descriptive rating assigned to the licensee on the basis of such information, conclusions and facts.
(4) On the basis of such examination, the commissioner shall assign the licensee one of the following descriptive ratings:
(A) Outstanding record of performance in meeting the residential mortgage loan needs of communities in the state, (B) high satisfactory record of performance in meeting the residential mortgage loan needs of communities in the state, (C) satisfactory record of performance in meeting the residential LCO No.
5379 15 of 18 Raised Bill No.1398 mortgage loan needs of communities in the state, (D) needs to improve the record of performance in meeting the residential mortgage loan needs of communities in the state, or (E) substantial noncompliance in meetingtheresidentialmortgageloanneedsofcommunitiesinthe state.
(5) Notwithstanding the provisions of this subsection, the commissioner may establish an alternative examination procedure for a licensee that, for the most recent examination, was assigned a rating of outstanding or high satisfactory as described in subparagraphs (A) and (B) of subdivision (4) of this subsection.
(6) For the purposes of an examination conducted pursuant to this subsection, the commissioner shall not consider a loan origination or loan purchase with respect to a licensee if another licensee claims the same loan origination or loan purchase for the purposes of such other licensee's examination under this subsection.
(7) The commissioner shall furnish a copy of records of an examinationconducted pursuant to thissubsectionto alicensee for such licensee's use, provided such licensee shall not disclose such records to any other person, organization or agency without receiving prior written approval from the commissioner.
(d) In considering an application from a licensee for a renewal of a license issued under section 36a-489 of the general statutes, the commissioner shall consider the written evaluation of such licensee's record of performance prepared pursuant to subdivision (3) of subsection (c) of this section.
Such evaluation may provide a basis for the denial of such renewal application.
(e) (1) The commissioner shall preserve a record of each investigation and examination of a licensee conducted pursuant to this section.
All such records of investigations and examinations, information derived from such investigations and examinations or created in response to such investigations and examinations and any copies of such records and information (A) shall be confidential and privileged LCO No.
5379 16 of 18 Raised Bill No.1398 communications, (B) shall not be subject to subpoena, and (C) shall not be deemed public records for the purposes of the Freedom of Information Act, as defined in section 1-200 of the general statutes.
For the purpose of this subsection, such records of investigations and examinations include, but are not limited to, records of investigations and examinations conducted by a banking regulatory agency of the federal government or another state or a foreign government that are considered confidential by such agency or foreign government and are in the commissioner's possession.
(2) The commissioner may furnish to a regulatory agency of the federal government or another state, a foreign country or a law enforcement agency any record of an investigation or examination of a licensee conducted pursuant to this section.
(3) In any proceeding before a court, the court may issue a protective order in appropriate circumstances to protect the confidentiality of any such record and order that any such record on file with the court or filed in connection with the court proceeding be sealed and that the public be excluded from any portion of the proceeding at which any such record is disclosed.
(f) The commissioner shall adopt regulations, in accordance with the provisions of chapter 54 of the general statutes, to carry out the provisions of this section.
Such regulations may (1) provide for the suspension or revocation of a licensee's license for a violation of the provisions of this section, and (2) require licensees to record, copy or reproduce records required pursuant to this section, provided nothing in this section shall be construed to permit a licensee to destroy original records or documents required pursuant to this section, part I of chapter 668 of the general statutes, any regulation promulgated by the commissioner under this section or part I of chapter 668 of the general statutes or any other law or regulation applicable to the conduct of the licensee for which such licensee is licensed under section 36a-489 of the general statutes.
LCO No.
5379 17 of 18 Raised Bill No.
1398 This act shall take effect as follows and shall amend the following sections:
3 October 1, 2025 36a-34(a) to (c) Sec.
3 October 1, 2025 36a-34(a) to (c) sSB1398 / File No.
292 12 sSB1398 File No.
292 Sec.
5 October 1, 2025 36a-37a(a) to (c) Sec.
5 October 1, 2025 36a-37a(a) to (c) Statement of Legislative Commissioners:
6 October 1, 2025 New section Statement of Purpose:
In Sections 1(a)(5), 3(a)(5) and 4(5), the definition of "minority-owned business" was redrafted for clarity;
To (1) define "minority", "minority-owned business" and "women- owned business" for the purposes of banking and credit union statutes concerning community reinvestment, (2) add various references to minority or women-owned businesses to banking and credit union statutes concerning community reinvestment, (3) require mortgage lenders to file certain reports and records, (4) require inspections of mortgage lenders, and (5) require examinations of certain mortgage lenders to assess such lenders' compliance with fair lending laws.
in Sections 1(a)(6), 3(a)(7) and 4(6), the definition of "women-owned business" was redrafted for clarity;
[Proposed deletions are enclosed in brackets.
in Sections 1(b) and (c), 2(a) and (b)(1), 3(b)(2) and (c)(2), 4(3) and 5(a) and (c)(5), provisions concerning minority-owned businesses and women- owned businesses were rewritten for clarity and internal consistency.
Proposed additions are indicated by underline, except that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not underlined.] LCO No.
BA Joint Favorable Subst.
5379 18 of 18
sSB1398 / File No.
292 13 sSB1398 File No.
292 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:
None Municipal Impact:
None Explanation The bill, which specifies that theDepartmentof Banking's assessment of certain banks and credit unions community reinvestment performance include considerations about minority and women-owned businesses, results in no impact to the state because the Department of Banking can implement these changes with existing resources.
The Out Years State Impact:
None Municipal Impact:
None sSB1398 / File No.
292 14 sSB1398 File No.
292 OLR Bill Analysis sSB 1398 AN ACT CONCERNING COMMUNITY REINVESTMENT BY BANKS AND CREDIT UNIONS.
SUMMARY This bill expands the assessment responsibilities of the banking department and certain banks and credit unions under the state’s community reinvestment laws to include considerations about minority- and women-owned businesses specifically.
Existing law already requires consideration of low- and moderate-income neighborhoods or residents.
The bill also changes the approval requirements for certain bank and holding company transactions based on applicants’ community reinvestment performance evaluations.
Under the bill, minority- and women-owned businesses are defined as any business where, respectively, a minority or woman (1) owns at least 51% of the business’s capital stock, if any, or assets;
(2) is active in the business’s daily affairs;
and (3) has the power to direct thebusiness’s management and policies.
A “minority” is someone whose race is defined as other than white, or whose ethnicity is defined as Hispanic or Latino by the federal Office of Management and Budget for U.S.
Census use.
The bill also makes conforming changes.
EFFECTIVE DATE:
October 1, 2025 §§ 1 & 2 — COMMUNITY REINVESTMENT PERFORMANCE ASSESSMENTS AND EVALUATIONS OF BANKS Existing law requires the banking commissioner to assess certain banks that maintain a branch in Connecticut and determine if each, consistent with the bank’s safe and sound operation, has a record of sSB1398 / File No.
292 15 sSB1398 File No.
292 satisfying its continuing and affirmative obligations to help meet the credit needs of its local communities.
Under existing law, the credit needs of the banks’ local communities specifically includes low- and moderate-income neighborhoods.
The bill further specifies that this also includes minority- and women-owned businesses.
By law, the banking commissioner must consider a bank’s record of meeting these obligations in connection with any application for (1) establishing a branch or other facility with the ability to accept deposits, (2) relocating the bank’s main office or a branch office, or (3) merging or consolidatingwithoracquiringtheassetsorstockorassumingliabilities of another bank.
A bank’s record of performance in helping to meet the credit needs of its community may be the basis for denying or conditioning one of these applications.
Relatedly, banks must, by state law and in keeping with the federal Community Reinvestment Act, delineate the local community or communities that comprise its entire community within Connecticut or delineate one or more assessment areas, as applicable.
By law, banks must include any low- and moderate-income neighborhoods when delineating these communities and areas.
The bill additionally requires them to include minority- and women-owned businesses when doing so.
Existing law requires the commissioner to assess each bank’s record of helping to meet the credit needs of its entire community, including low- and moderate-income neighborhoods, and review its delineation for compliance when he conducts a bank exam.
After concluding an assessment, the commissioner must prepare a written community reinvestment performance evaluation of the bank’s record meeting thosecreditneeds,includinglow-andmoderate-incomeneighborhoods specifically.
The bill adds minority- and women-owned businesses for the purposes of this assessment and evaluation.
§ 3 — COMMUNITY REINVESTMENT PERFORMANCE AND BANKING TRANSACTION APPROVAL REQUIREMENTS Existing law imposes additional requirements on certain applicants sSB1398 / File No.
292 16 sSB1398 File No.
292 seeking the banking commissioner’s approval on specific bank and holding company transactions (e.g., mergers and consolidations of Connecticut banks, the establishment of banks by out-of-state holding companies, and specific acquisitions of bank and holding company securities).
The additional requirements are for applicants who have received a rating other than “outstanding” on their most recent applicable community reinvestment performance evaluation.
(In practice, the banking department rates on the following scale:
outstanding, satisfactory, needs to improve, and substantial non- compliance.) Under current law, these applicants must submit plans showing the resulting entity will provide adequate services to meet the banking needs of all community residents, including low- and moderate-income residents to the extent permitted by its charter.
The bill requires these plans to also meet the banking needs of minority- and women-owned businesses in the entity’s community.
When making findings related to these applications, existing law requires the banking commissioner to consider some specific factors.
Under current law, one of these factors is whether an applicant’s plan demonstrates a commitment to extend credit for housing, small business, and consumer purposes in low-income neighborhoods.
The bill adds credit for minority- and women-owned businesses in low- income neighborhoods to this factor.
§§ 4-5 — COMMUNITY REINVESTMENT PERFORMANCE ASSESSMENTS AND EVALUATIONS OF CREDIT UNIONS Existing law requires community credit unions (i.e.
Connecticut credit unions with at least $10 million in total assets and membership limited to people in a well-defined community, neighborhood, or rural district) to, consistent with their safe and sound operation, satisfy their continuing and affirmative obligations to help meet the credit needs of their communities.
Under existing law, the credit needs of their communities specifically includes low- and moderate-income neighborhoods.
The bill further specifies that this also includes sSB1398 / File No.
292 17 sSB1398 File No.
292 minority- and women-owned businesses.
Relatedly, and for the purposes of the state’s community reinvestment laws on these credit unions, the bill makes a conforming change to the definition of “community reinvestment performance” so that it also specifically includes minority- and women-owned businesses.
The bill also changes one of the several factors that the banking commissioner must, by law, consider when periodically assessing these credit unions’ community reinvestment performance.
Under current law, one of these factors is the credit union’s record of lending and other lending-related activities to borrowers of different income levels and businesses and farms of different sizes.
The bill adds lending to minority- and women-owned businesses to this factor.
As with the banksabove, thecommissioner must prepare awrittenevaluation ofthe credit union’s community reinvestment performance after completing his assessment (CGS § 36a-37a(d)).
COMMITTEE ACTION Banking Committee Joint Favorable Substitute Yea 13 Nay 0 (03/11/2025) sSB1398 / File No.
292 18
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Action History

  1. FILE NO. 292

  2. SENATE CALENDAR NUMBER 192

  3. FAV. RPT., TAB. FOR CAL., SEN.

  4. RPTD. OUT OF LCO

  5. REFERRED TO Office of Legislative Research AND Office of Fiscal Analysis 03/26/25

  6. FILED WITH LCO

  7. Joint Favorable Substitute

  8. PUBLIC HEARING 0304

  9. REF. TO JOINT COMM. ON Banking

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