Connecticut 2021 Regular Session Status: Enacted 1 R cosponsors

SB 848 — AN ACT IMPLEMENTING THE DEPARTMENT OF BANKING'S RECOMMENDED CHANGES TO THE BANKING STATUTES CONCERNING FINANCIAL INSTITUTIONS AND CONSUMER CREDIT LICENSES.

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  1. ✓
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    To Executive
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    Enacted

This bill has been enacted into law. Introduced February 08, 2021. Enacted.

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Advancing 52% · moderate confidence

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  • Enacted

    Current position in the legislative process.

  • 1 sponsor

    1 primary, 0 co-sponsors signed on.

  • Single-party support

    Sponsorship is currently within one party (1 R).

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Bill Text

What changed in the latest version

1196 added · 1503 removed

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Senate General Assembly File No.
Substitute Senate Bill No.
127 January Session, 2021 Substitute Senate Bill No.
848 Public Act No.
848 Senate, March 24, 2021 The Committee on Banking reported through SEN.
21-138 AN ACT IMPLEMENTING THE DEPARTMENT OF BANKING'S RECOMMENDED CHANGES TO THE BANKING STATUTES CONCERNING FINANCIAL INSTITUTIONS AND CONSUMER CREDIT LICENSES.
KASSER of the 36th Dist., Chairperson of the Committee on the part of the Senate, that the substitute bill ought to pass.
AN ACT IMPLEMENTING THE DEPARTMENT OF BANKING'S RECOMMENDED CHANGES TO THE BANKING STATUTES CONCERNING FINANCIAL INSTITUTIONS AND CONSUMER CREDIT LICENSES.
(a) The governing board of each Connecticut bank shall annually procure an audit or examination by certified public accountants or holdersofcertificatesof authority aspublicaccountantsselectedby vote of the governing board or a duly authorized committee thereof, and such accountants shall agree to providerelated working papers, policies and procedures to the commissioner, if requested.
(a) The governing board of each Connecticut bank shall annually procure an audit or examination by certified public accountants or holdersofcertificatesofauthority aspublicaccountantsselectedby vote of the governing board or a duly authorized committee thereof, and such accountants shall agree to providerelated working papers, policies and procedures to the commissioner, if requested.
The accountants shall thoroughly examine the books, records, accounts and affairs of such bank and submit a signed report of the audit or examination showing the condition of the bank to the governing board of such bank within a reasonable period of time following the conclusion of the audit or sSB848 / File No.
The accountants shall thoroughly examine the books, records, accounts and affairs of such bank and submit a signed report of the audit or examination showing the condition of the bank to the governing board of such bank within a reasonable period of time following the conclusion of the audit or examination.
127 1 sSB848 File No.
The signed report shall be kept on file in such bank and such governing board shall file the following documents with the commissioner not later than the earlier of (1) one hundred twenty days following the close of such bank's fiscal year, or (2) the date prescribed Substitute Senate Bill No.
127 examination.
848 by federal law for such bank to file such audit or examination with the applicable federal banking regulator, unless the commissioner extends such deadline for good cause shown:
The signed report shall be kept on file in such bank and such governing board shall file the following documents with the commissioner not later than the earlier of (1) one hundred twenty days following the close of such bank's fiscal year, or (2) the date prescribed by federal law for such bank to file such audit or examination with the applicable federal banking regulator, unless the commissioner extends such deadline for good cause shown:
and [(3)] (4) the signed consolidated report shall sSB848 / File No.
and [(3)] (4) the signed consolidated report shall be kept on file in such Connecticut bank and a copy shall be filed with Public Act No.
127 2 sSB848 File No.
21-138 2 of 38 Substitute Senate Bill No.
127 be kept on file in such Connecticut bank and a copy shall be filed with the commissioner.
848 the commissioner.
(2) Notwithstanding the provisions of subdivisions (1) and (3) of this subsection, to secure public deposits, each qualified public depository that (A) has been conducting business in this state for a period of less than two years, except for a depository that is a successor institution to a depository which conducted business in this state for two years or sSB848 / File No.
(2) Notwithstanding the provisions of subdivisions (1) and (3) of this subsection, to secure public deposits, each qualified public depository that (A) has been conducting business in this state for a period of less than two years, except for a depository that is a successor institution to Public Act No.
127 3 sSB848 File No.
21-138 3 of 38 Substitute Senate Bill No.
127 more, or (B) is an uninsured bank, shall at all times maintain, segregated from its other assets as required under subsection (b) of this section, eligible collateral in an amount not less than one hundred twenty per cent of all uninsured public deposits held by the depository.
848 a depository which conducted business in this state for two years or more, or (B) is an uninsured bank, shall at all times maintain, segregated from its other assets as required under subsection (b) of this section, eligible collateral in an amount not less than one hundred twenty per cent of all uninsured public deposits held by the depository.
(4) Notwithstanding the provisions of this subsection, the qualified public depository and the public depositor may agree on an amount of eligible collateral to be maintained by the depository that is greater than the minimum amounts required under subdivision (1) or (3) of this subsection, as applicable.
(4) Notwithstanding the provisions of this subsection, the qualified public depository and the public depositor may agree on an amount of Public Act No.
For purposes of this subsection, the amount of all uninsured public deposits held by the depository shall be sSB848 / File No.
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127 4 sSB848 File No.
848 eligible collateral to be maintained by the depository that is greater than the minimum amounts required under subdivision (1) or (3) of this subsection, as applicable.
127 determined at the close of business on the day of receipt of any public deposit and any deficiency in the amount of eligible collateral required under this section shall be cured not later than the close of business on the following business day.
For purposes of this subsection, the amount of all uninsured public deposits held by the depository shall be determined at the close of business on the day of receipt of any public deposit and any deficiency in the amount of eligible collateral required under this section shall be cured not later than the close of business on the following business day.
(5) For purposes of this subsection, "formal regulatory order" means a written agreement related to enforcement, including a letter of understanding or agreement or a written order, that a supervisory agency is required to publish or publishes on its web site, but does not include any written agreement or written order under which the sole obligation of the depository is to pay a civil money penalty, fine or restitution.
Public Act No.
sSB848 / File No.
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127 5 sSB848 File No.
848 (5) For purposes of this subsection, "formal regulatory order" means a written agreement related to enforcement, including a letter of understanding or agreement or a written order, that a supervisory agency is required to publish or publishes on its web site, but does not include any written agreement or written order under which the sole obligation of the depository is to pay a civil money penalty, fine or restitution.
127 (b) (1) Each qualified public depository that is a bank or out-of-state bank (A) having a tier one leverage ratio of five per cent or greater [or] and a risk-based capital ratio of ten per cent or greater, or (B) having elected to use the community bank leverage ratio framework pursuant to 12 CFR 324.12, as amended from time to time, and having a tier one leverage ratio greater than nine per cent shall transfer eligible collateral maintained under subsection (a) of this section to its own trust department, provided such trust department is located in this state unless the commissioner approves otherwise, to the trust department of another financial institution, provided such eligible collateral shall be maintained in such other financial institution's trust department located in this state unless the commissioner approves otherwise, or to a federal reserve bank or federal home loan bank.
(b) (1) Each qualified public depository that is a bank or out-of-state bank (A) having a tier one leverage ratio of five per cent or greater [or] and a risk-based capital ratio of ten per cent or greater, or (B) having elected to use the community bank leverage ratio framework pursuant to 12 CFR 324.12, as amended from time to time, and having a tier one leverage ratio greater than nine per cent shall transfer eligible collateral maintained under subsection (a) of this section to its own trust department, provided such trust department is located in this state unless the commissioner approves otherwise, to the trust department of another financial institution, provided such eligible collateral shall be maintained in such other financial institution's trust department located in this state unless the commissioner approves otherwise, or to a federal reserve bank or federal home loan bank.
Each qualified public depository that is [a] (i) a bank or out-of-state bank having a tier one leverage ratio of less than five per cent or a risk-based capital ratio of less than ten per cent, [and each qualified public depository that is] (ii) a bank or out-of-state bank having elected to use the community bank leverage ratio framework pursuant to 12 CFR 324.12, as amended from time to time, and having a tier one leverage ratio of nine per cent or less, or (iii) a credit union or federal credit union shall transfer eligible collateral maintained under subsection (a) of this section to the trust department of a financial institution that is not owned or controlled by the depository or by a holding company owning or controlling the depository, provided such eligible collateral shall be maintained in such other financial institution's trust department located in this state unless the commissioner approves otherwise, or to a federal reserve bank or federal home loan bank.
Each qualified public depository that is [a] (i) a bank or out-of-state bank having a tier one leverage ratio of less than five per cent or a risk-based capital ratio of less than ten per cent, [and each qualified public depository that is] (ii) a bank or out-of-state bank having elected to use the community bank leverage ratio framework pursuant to 12 CFR 324.12, as amended from time to time, and having a tier one leverage ratio of nine per cent or less, or (iii) a credit union or federal credit union shall transfer eligible collateral maintained under subsection (a) of this section to the trust department of a financial institution that is not owned or controlled by the depository or by a holding company owning or controlling the depository, provided such eligible collateral shall be maintained in such other financial institution's trust department located in this state unless Public Act No.
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848 the commissioner approves otherwise, or to a federal reserve bank or federal home loan bank.
The commissioner may, at any time, require the depository to value the collateral more sSB848 / File No.
The commissioner may, at any time, require the depository to value the collateral more frequently than monthly if the commissioner reasonably determines that such valuation is necessary for the protection of public deposits.
127 6 sSB848 File No.
127 frequently than monthly if the commissioner reasonably determines that such valuation is necessary for the protection of public deposits.
(4) Each qualified public depository shall enter into a written trust agreement with the financial institution, federal reserve bank or federal home loan bank serving as trustee.
(4) Each qualified public depository shall enter into a written trust agreement with the financial institution, federal reserve bank or federal Public Act No.
Such agreement shall include a statement by the financial institution that such institution shall be subject to and comply with the applicable requirements of sections 36a- 330 to 36a-338, inclusive.
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848 home loan bank serving as trustee.
Such agreement shall include a statement by the financial institution that such institution shall be subject to and comply with the applicable requirements of sections 36a- to 36a-338, inclusive.
(d) Any qualified public depository that ceases to be a qualified sSB848 / File No.
(d) Any qualified public depository that ceases to be a qualified publicdepositoryornolongerwishestobeaqualifiedpublicdepository shall no longer receive public deposits and shall give immediate notice to the commissioner, who shall thereupon instruct such qualified public depository of the procedures to be followed with respect to the return of public deposits and eligible collateral.
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127 publicdepositoryornolongerwishestobeaqualifiedpublicdepository shall no longer receive public deposits and shall give immediate notice to the commissioner, who shall thereupon instruct such qualified public depository of the procedures to be followed with respect to the return of public deposits and eligible collateral.
The thirty-day period may be extended by the commissioner, in writing, if the commissioner determines that the proposed amendment raises issues that require additional information or additional time for analysis.
The thirty-day period may be Public Act No.
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848 extended by the commissioner, in writing, if the commissioner determines that the proposed amendment raises issues that require additional information or additional time for analysis.
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(2) [An original] A copy of the certificate of amendment shall be filed sSB848 / File No.
(2) [An original] A copy of the certificate of amendment shall be filed with the commissioner.
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127 with the commissioner.
As used in this section and sections 36a-486 to 36a-498e, inclusive, as amended by this act, 36a-498h, 36a-534a and 36a-534b, unless the context otherwise requires:
As used in this section and sections 36a-486 to 36a-498e, inclusive, as amended by this act, 36a-498h, 36a-534a and 36a-534b, unless the Public Act No.
21-138 9 of 38 Substitute Senate Bill No.
848 context otherwise requires:
(3) "Branch office" means a location other than the main office at which a licensee or any person on behalf of a licensee acts as a mortgage sSB848 / File No.
(3) "Branch office" means a location other than the main office at which a licensee or any person on behalf of a licensee acts as a mortgage lender, mortgage correspondent lender, mortgage broker or mortgage loan originator;
127 9 sSB848 File No.
127 lender, mortgage correspondent lender, mortgage broker or mortgage loan originator;
(5) "Depository institution" has the same meaning as provided in Section 3 of the Federal Deposit Insurance Act, 12 USC 1813, and includes any Connecticut credit union, federal credit union or out-of- state credit union;
Public Act No.
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848 (5) "Depository institution" has the same meaning as provided in Section 3 of the Federal Deposit Insurance Act, 12 USC 1813, and includes any Connecticut credit union, federal credit union or out-of- state credit union;
(8) "Federal banking agency" means the Board of Governors of the sSB848 / File No.
(8) "Federal banking agency" means the Board of Governors of the Federal Reserve System, the Comptroller of the Currency, the Director of the Office of Thrift Supervision, the National Credit Union Administration and the Federal Deposit Insurance Corporation;
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127 Federal Reserve System, the Comptroller of the Currency, the Director of the Office of Thrift Supervision, the National Credit Union Administration and the Federal Deposit Insurance Corporation;
(11) "Independent contractor" means an individual retained on a basis where the individual is not an employee of any person in connection with the services such individual provides and whose compensation is reported or required to be reported on an Internal Revenue Service Form 1099 issued by the retaining person;
(11) "Independent contractor" means an individual retained on a basis where the individual is not an employee of any person in connection with the services such individual provides and whose compensation is reported or required to be reported on an Internal Public Act No.
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848 Revenue Service Form 1099 issued by the retaining person;
The term"clerical or support duties" includes, subsequent to the receipt of an application, (A) the receipt, collection, distribution and analysis of information common for the processing or underwriting of a residential mortgage loan, and (B) communicationwitha consumer to obtaintheinformationnecessary for the processing or underwriting of a loan to the extent that such communication does not include offering or negotiating loan rates or sSB848 / File No.
The term"clerical or support duties" includes, subsequent to the receipt of an application, (A) the receipt, collection, distribution and analysis of information common for the processing or underwriting of a residential mortgage loan, and (B) communicationwitha consumer to obtaintheinformationnecessary for the processing or underwriting of a loan to the extent that such communication does not include offering or negotiating loan rates or terms or counseling consumers about residential mortgage loan rates or terms;
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127 terms or counseling consumers about residential mortgage loan rates or terms;
(17) "Mortgage broker" (A) means a person who (i) for compensation or gain or with the expectation of compensation or gain (I) takes a residential mortgage loan application, or (II) offers or negotiates terms of a residential mortgage loan, and (ii) is not the prospective source of the funds for the residential mortgage loan, and (B) does not include (i) an individual who is licensed as a mortgage loan originator acting as a mortgage loan originator on behalf of such mortgage loan originator's sponsoring mortgage lender, mortgage correspondent lender, mortgage broker or exempt registrant, or (ii) an individual exempt from mortgage loan originator licensure under subdivision (2) of subsection (b) of section 36a-486, as amended by this act, when acting within the scope of such exemption;
(17) "Mortgage broker" (A) means a person who (i) for compensation or gain or with the expectation of compensation or gain (I) takes a residential mortgage loan application, or (II) offers or negotiates terms of a residential mortgage loan, and (ii) is not the prospective source of the funds for the residential mortgage loan, and (B) does not include (i) an individual who is licensed as a mortgage loan originator acting as a mortgage loan originator on behalf of such mortgage loan originator's Public Act No.
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848 sponsoring mortgage lender, mortgage correspondent lender, mortgage broker or exempt registrant, or (ii) an individual exempt from mortgage loan originator licensure under subdivision (2) of subsection (b) of section 36a-486, as amended by this act, when acting within the scope of such exemption;
(ii) a person who only performs real estate brokerage activities and is licensed in accordance with chapter 392, sSB848 / File No.
(ii) a person who only performs real estate brokerage activities and is licensed in accordance with chapter 392, unless the person is compensated by a mortgage lender, mortgage correspondent lender, mortgage broker or other mortgage loan originator or by any agent of such mortgage lender, mortgage correspondent lender, mortgage broker or other mortgage loan originator;
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127 unless the person is compensated by a mortgage lender, mortgage correspondent lender, mortgage broker or other mortgage loan originator or by any agent of such mortgage lender, mortgage correspondent lender, mortgage broker or other mortgage loan originator;
or (iv) any individual who solely renegotiates terms for existing mortgage loans on behalf of a mortgagee and who does not otherwise act as a mortgage loan originator, unless the United States Department of Housing and Urban Development, the Bureau of Consumer Financial Protection or a court of competent jurisdiction determines that the S.A.F.E.
or (iv) any individual who solely renegotiates terms for existing mortgage loans on behalf of a mortgagee and who does not otherwise act as a mortgage loan originator, unless the United States Department Public Act No.
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848 of Housing and Urban Development, the Bureau of Consumer Financial Protection or a court of competent jurisdiction determines that the S.A.F.E.
(C) negotiating, on behalf of any party, any portion of a contract relating to the sale, purchase, lease, rental or exchange of real property, other than in connection with providing financing with sSB848 / File No.
(C) negotiating, on behalf of any party, any portion of a contract relating to the sale, purchase, lease, rental or exchange of real property, other than in connection with providing financing with respect to any such transaction;
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127 respect to any such transaction;
[(25)] (26) "Registered mortgage loan originator" means any individualwho (A)meetsthedefinitionofmortgage loanoriginatorand is an employee of a depository institution, a subsidiary that is owned and controlled by a depository institution and regulated by a federal banking agency, or an institution regulated by the Farm Credit Administration;
[(25)] (26) "Registered mortgage loan originator" means any Public Act No.
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848 individualwho (A)meetsthedefinitionofmortgage loanoriginatorand is an employee of a depository institution, a subsidiary that is owned and controlled by a depository institution and regulated by a federal banking agency, or an institution regulated by the Farm Credit Administration;
sSB848 / File No.
[(29)] (31) "Simulated check" means a document that imitates or resembles a check but is not a negotiable instrument;
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127 [(29)] (31) "Simulated check" means a document that imitates or resembles a check but is not a negotiable instrument;
[(31)] (33) "Table funding agreement" means an agreement wherein a person agrees to fund mortgage loans to be made in another person's name and to purchase such loans after they are made;
Public Act No.
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848 [(31)] (33) "Table funding agreement" means an agreement wherein a person agrees to fund mortgage loans to be made in another person's name and to purchase such loans after they are made;
Any activity subject to licensure pursuant to sections 36a-485 to 36a-498e, inclusive, as amended by this act, 36a-534a or 36a-534b shall be conducted from an office located in a state, as definedinsection36a-2.Anysuchpersonwhoisanindividualshall also obtain a mortgage loan originator license prior to conducting such businessunlesssuchindividualdoesnot engage directlyintheactivities sSB848 / File No.
Any activity subject to licensure pursuant to sections 36a-485 to 36a-498e, inclusive, as amended by this act, 36a-534a or 36a-534b shall be conducted from an office located in a state, as definedinsection36a-2.Anysuchpersonwhoisanindividualshall also obtain a mortgage loan originator license prior to conducting such businessunlesssuchindividualdoesnot engage directlyintheactivities of a mortgage loan originator or conducts such business pursuant to the temporary authority providedinsubsection(e)ofthissection.A person, Public Act No.
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127 of a mortgage loan originator or conducts such business pursuant to the temporary authority providedinsubsection(e)ofthissection.A person, other than a licensed mortgage loan originator acting on behalf of a mortgage lender or mortgage correspondent lender, shall be deemed to be engaged in the business of making residential mortgage loans if such person advertises, causes to be advertised, solicits or offers to make residential mortgage loans, either directly or indirectly.
848 other than a licensed mortgage loan originator acting on behalf of a mortgage lender or mortgage correspondent lender, shall be deemed to be engaged in the business of making residential mortgage loans if such person advertises, causes to be advertised, solicits or offers to make residential mortgage loans, either directly or indirectly.
An individual, unless specifically exempted under subdivision (2) of this subsection or acting pursuant to the temporary authority provided in subsection (e) of this section, shall not engage in the business of a mortgage loan originator on behalf of a licensee or a sSB848 / File No.
An individual, unless specifically exempted under subdivision (2) of this subsection or acting pursuant to the temporary authority provided in subsection (e) of this section, shall not engage in Public Act No.
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127 person exempt under section 36a-487 with respect to any residential mortgage loan without first obtaining and maintaining annually a license as a mortgage loan originator under section 36a-489.
848 the business of a mortgage loan originator on behalf of a licensee or a person exempt under section 36a-487 with respect to any residential mortgage loan without first obtaining and maintaining annually a license as a mortgage loan originator under section 36a-489.
(A) A registered mortgage loan originator or an employee of an institution or subsidiary described in [subdivision (25) of] section 36a-485, as amended by this act, who is not required to be registered under Section 1507 of the S.A.F.E.
(A) A registered mortgage loan originator or an employee of an institution or subsidiary described in [subdivision (25) of] section 36a-485, as amended by this act, who is not required to be registered under Section 1507 of the Public Act No.
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848 S.A.F.E.
(C) an sSB848 / File No.
(C) an individual who offers or negotiates the terms of a residential mortgage loan secured by a dwelling that served as the individual's residence, unless the context demonstrates that such individual engaged in such activities with a degree of habitualness or repetition;
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127 individual who offers or negotiates the terms of a residential mortgage loan secured by a dwelling that served as the individual's residence, unless the context demonstrates that such individual engaged in such activities with a degree of habitualness or repetition;
(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.
(3) No individual shall engage in the activities of a loan processor or underwriter unless such individual obtains and maintains a license as a Public Act No.
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848 loan processor or underwriter under section 36a-489.
(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 sSB848 / File No.
(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;
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127 the direction of and subject to the supervision of a licensed mortgage loan originator of such licensee;
(A) Any bank, out-of-state bank, Connecticut credit union, federal credit union or out-of-state credit union, provided such bank or credit union is federally insured;
(A) Any bank, out-of-state bank, Connecticut credit union, federal Public Act No.
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848 credit union or out-of-state credit union, provided such bank or credit union is federally insured;
(D) Any person licensed as a mortgage lender, mortgage correspondent lender or mortgage broker in this state, provided such sSB848 / File No.
(D) Any person licensed as a mortgage lender, mortgage correspondent lender or mortgage broker in this state, provided such exemption shall not be effective during any period in which the license of such person is suspended;
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127 exemption shall not be effective during any period in which the license of such person is suspended;
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 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.
For purposes of this subparagraph, "affiliate" means an entity that is controlled by or is under common control with 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 manner the election of a majority of directors or trustees of the affiliate, or (iii) directly or indirectly exercises a controlling influence over the Public Act No.
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848 management or policies of the affiliate.
Mortgage Licensing Act, such individual may continue to act in such individual's current capacity, provided such individual files an application for a mortgage loan originator license not later than the date sixty days from sSB848 / File No.
Mortgage Licensing Act, such individual may continue to act in such individual's current capacity, provided such individual files an application for a mortgage loan originator license not later than the date sixty days from the date of such determination by the United States Department of Housing and Urban Development, the Bureau of Consumer Financial Protection or a court of competent jurisdiction.
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127 the date of such determination by the United States Department of Housing and Urban Development, the Bureau of Consumer Financial Protection or a court of competent jurisdiction.
(D) has submitted an application for licensure as a mortgage loan originator in this state pursuant to subsection (c) of section 36a-488;
(D) has submitted an application for licensure as a mortgage Public Act No.
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848 loan originator in this state pursuant to subsection (c) of section 36a-488;
(2) An out-of-state mortgage loan originator employed by a person licensed as a mortgage lender, mortgage correspondent lender or mortgage broker in this state shall have temporary authority to act as a mortgage loan originator in this state for the period described in sSB848 / File No.
(2) An out-of-state mortgage loan originator employed by a person licensed as a mortgage lender, mortgage correspondent lender or mortgage broker in this state shall have temporary authority to act as a mortgage loan originator in this state for the period described in subdivision (3) of this subsection, provided the individual (A) meets the requirements of subparagraphs (A) to (D), inclusive, of subdivision (1) of this subsection;
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127 subdivision (3) of this subsection, provided the individual (A) meets the requirements of subparagraphs (A) to (D), inclusive, of subdivision (1) of this subsection;
or (D) one hundred twenty days after the date the individual submits the application, provided such application is identified as incomplete on the system.
or (D) one hundred twenty Public Act No.
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848 days after the date the individual submits the application, provided such application is identified as incomplete on the system.
(b) (1) A mortgage lender, mortgage correspondent lender, mortgage sSB848 / File No.
(b) (1) A mortgage lender, mortgage correspondent lender, mortgage broker or lead generator license shall not be transferable or assignable.
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127 broker or lead generator license shall not be transferable or assignable.
(a) Each license shall specify the location at which the business is to be conducted.
(a) Each license shall specify the location at which the business is to Public Act No.
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848 be conducted.
Subsection (a) of section 36a-566 of the general statutes is repealed andthefollowing issubstitutedinlieuthereof(EffectiveOctober 1, 2021):
Subsection (a) of section 36a-566 of the general statutes is repealed andthefollowing issubstituted inlieuthereof(EffectiveOctober 1, 2021):
Any change in any control person of the licensee, except a change of a director, general partner or executive officer that is not the result of an acquisition or change of control of the licensee, shall be the subject of an advance change notice filed on the system at least thirty days prior to the effective date of such change and no such change shall sSB848 / File No.
Any change in any control person of the licensee, except a change of a director, general partner or executive officer that is not the result of an acquisition or change of control of the licensee, shall be the subject of an advance change notice filed on the system at least thirty days prior to the effective date of such change and no such change shall occurwithoutthecommissioner'sapproval.
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Forpurposesofthissection, "change of control" means any change causing the majority ownership, voting rights or control of a licensee to be held by a different control person or group of control persons.
127 occurwithoutthecommissioner'sapproval.Forpurposesofthissection, "change of control" means any change causing the majority ownership, voting rights or control of a licensee to be held by a different control person or group of control persons.
A change in any control person of the licensee, except a change of a director, general partner or executive officer that is not the result of an acquisition or change of control of the licensee, shall be the subject of an advance change notice filed on the system at least thirty days prior to the effective date of such change and no such change shall occurwithoutthecommissioner'sapproval.
A change in any control person of the licensee, except a change of a director, general partner or executive officer that is not the result of an acquisition or change of control of the licensee, shall be the Public Act No.
21-138 25 of 38 Substitute Senate Bill No.
848 subject of an advance change notice filed on the system at least thirty days prior to the effective date of such change and no such change shall occurwithoutthecommissioner'sapproval.
As part of an application, the commissioner may, (1) in accordance with section 29- sSB848 / File No.
As part of an application, the commissioner may, (1) in accordance with section 29- 17a, conduct a state or national criminal history records check of the applicant, any control person of the applicant, the qualified individual and any branch manager, and, (2) in accordance with section 36a-24b, (A) require the submission of fingerprints of any such person to the Federal Bureau of Investigation or other state, national or international criminal databases, and (B) investigate the financial condition of any such person and require authorization from any such person for the system and the commissioner to obtain an independent credit report from a consumer reporting agency, as described in Section 603(p) of the Public Act No.
127 24 sSB848 File No.
21-138 26 of 38 Substitute Senate Bill No.
127 17a, conduct a state or national criminal history records check of the applicant, any control person of the applicant, the qualified individual and any branch manager, and, (2) in accordance with section 36a-24b, (A) require the submission of fingerprints of any such person to the Federal Bureau of Investigation or other state, national or international criminal databases, and (B) investigate the financial condition of any such person and require authorization from any such person for the system and the commissioner to obtain an independent credit report from a consumer reporting agency, as described in Section 603(p) of the Fair Credit Reporting Act, 15 USC 1681a, as amended from time to time.
848 Fair Credit Reporting Act, 15 USC 1681a, as amended from time to time.
If] and (I) if the applicant is a wholly-owned subsidiary of another corporation, [the applicant shall include] the most recent audited consolidated annual financial statements of the parent corporation, [or theapplicant'smost recent auditedconsolidatedannual financial statement, and the most recent audited unconsolidated financial statement of the applicant, including its balance sheet and receiptsanddisbursementsfortheprecedingyear.
If] and (I) if the applicant is a wholly-owned subsidiary of another corporation, [the applicant shall include] the most recent audited consolidated annual financial statements of the parent corporation, [or theapplicant'smost recent auditedconsolidatedannual financial statement, and the most recent audited unconsolidated financial statement of the applicant, including its balance sheet and receiptsanddisbursementsfortheprecedingyear.If](II)iftheapplicant is publicly traded, [the applicant shall include] a copy of the most recent 10-K report that such applicant filed with the Securities and Exchange Commission, or, if the applicant is a wholly-owned subsidiary of a publicly traded company, a copy of the parent company's most recent 10-K report that was filed with the Securities and Exchange Commission, [.
If](II)iftheapplicant is publicly traded, [the applicant shall include] a copy of the most recent 10-K report that such applicant filed with the Securities and Exchange Commission, or, if the applicant is a wholly-owned subsidiary of a publicly traded company, a copy of the parent company's most recent 10-K report that was filed with the Securities and Exchange Commission, [.
(ii) A list of the applicant's permissible investments, the book and sSB848 / File No.
(ii) A list of the applicant's permissible investments, the book and market values of such investments, and the dollar amount of the applicant'saggregateoutstanding money transmissions (I)asofthedate of the financial statement filed in accordance with clause (i) of this subparagraph;
127 25 sSB848 File No.
127 market values of such investments, and the dollar amount of the applicant'saggregateoutstanding money transmissions (I)asofthedate of the financial statement filed in accordance with clause (i) of this subparagraph;
(iii) (I) The surety bond required by subsection (a) of section 36a-602, if applicable;
(iii) (I) The surety bond required by subsection (a) of section 36a-602, Public Act No.
21-138 27 of 38 Substitute Senate Bill No.
848 if applicable;
An application filing fee paid prior to the date an application is deemed abandoned pursuant to this subsection shall not sSB848 / File No.
An application filing fee paid prior to the date an application is deemed abandoned pursuant to this subsection shall not be refunded.
127 26 sSB848 File No.
127 be refunded.
(c) Except as otherwise specified in subsections (d) and (e) of this section,eachapplicant, licensee, controlpersonandqualifiedindividual shall file with the system any change in the information most recently submitted to the system by such licensee, control person or qualified individual in connection with the application or license, or, if the information cannot be filed on the system, notify the commissioner, in writing, of such change in the information not later than fifteen days after the date the applicant, licensee, control person or qualified individual has reason to know of such change.
Public Act No.
21-138 28 of 38 Substitute Senate Bill No.
848 (c) Except as otherwise specified in subsections (d) and (e) of this section,eachapplicant, licensee, controlpersonandqualifiedindividual shall file with the system any change in the information most recently submitted to the system by such licensee, control person or qualified individual in connection with the application or license, or, if the information cannot be filed on the system, notify the commissioner, in writing, of such change in the information not later than fifteen days after the date the applicant, licensee, control person or qualified individual has reason to know of such change.
A licensee may change the name of the licensee or the address of the office specified on the most recent filing with the system if, at least thirty calendar days prior to such change, the licensee files such change with the system and provides a bond rider, endorsement or addendum, as applicable, to the surety bond on file with the commissioner that reflects the new name or address, and the commissioner does not disapprove sSB848 / File No.
A licensee may change the name of the licensee or the address of the office specified on the most recent filing with the system if, at least thirty calendar days prior to such change, the licensee files such change with the system and provides a bond rider, endorsement or addendum, as applicable, to the surety bond on file with the commissioner that reflects the new name or address, and the commissioner does not disapprove such change, in writing, or request further information within such Public Act No.
127 27 sSB848 File No.
21-138 29 of 38 Substitute Senate Bill No.
127 such change, in writing, or request further information within such thirty-day period.
848 thirty-day period.
(4) The commencement of any action by the Attorney General or the attorney general of any other state against the licensee or any control sSB848 / File No.
(4) The commencement of any action by the Attorney General or the Public Act No.
127 28 sSB848 File No.
21-138 30 of 38 Substitute Senate Bill No.
127 person, qualified individual or authorized delegate of the licensee and the reasons therefor;
848 attorney general of any other state against the licensee or any control person, qualified individual or authorized delegate of the licensee and the reasons therefor;
Subsection (a) of section 36a-658 of the general statutes is repealed andthefollowing is substituted inlieuthereof(EffectiveOctober 1, 2021):
Subsection (a) of section 36a-658 of the general statutes is repealed andthefollowing issubstituted inlieuthereof(EffectiveOctober 1, 2021):
Subsection (h) of section 36a-671 of the general statutes is repealed andthefollowing issubstituted inlieuthereof(EffectiveOctober 1, 2021):
Subsection (h) of section 36a-671 of the general statutes is Public Act No.
21-138 31 of 38 Substitute Senate Bill No.
848 repealed andthefollowing issubstituted inlieuthereof(EffectiveOctober 1, 2021):
Any change in sSB848 / File No.
Any change in any control person ofthe [license] licensee, except a change of a director, generalpartnerorexecutive officer that isnottheresult ofanacquisition or change of control of the licensee, shall be the subject of an advance changenoticefiledonthesystematleastthirtydayspriortotheeffective date of such change and no such change shall occur without the commissioner's approval.
127 29 sSB848 File No.
127 any control person ofthe [license] licensee, except a change of a director, generalpartnerorexecutive officer that isnottheresult ofanacquisition or change of control of the licensee, shall be the subject of an advance changenoticefiledonthesystematleastthirtydayspriortotheeffective date of such change and no such change shall occur without the commissioner's approval.
(a)A mortgage servicer license shallnot be transferableor assignable.
(a)A mortgage servicer license shallnot be transferable or assignable.
Any licensee who intends to permanently cease acting as a mortgage servicer at any time during a license period for any cause, including, but not limited to, bankruptcy or voluntary dissolution, shall file a request to surrender the license in accordance with subsection (c) of section 36a-51, for each office at which the licensee intends to cease to do business, on the system, not later than fifteen days after the date of such cessation, provided this requirement shall not apply when a license has been suspended pursuant to section 36a-51.
Any licensee who intends to permanently cease acting as a mortgage servicer at any time during a license period for any cause, including, but not limited to, bankruptcy or voluntary dissolution, shall file a request to surrender the license in accordance with subsection (c) of section 36a-51, for each office at which the licensee intends to cease to do business, on the system, not later than fifteen days after the date of such cessation, provided this requirement shall not Public Act No.
21-138 32 of 38 Substitute Senate Bill No.
848 apply when a license has been suspended pursuant to section 36a-51.
sSB848 / File No.
(14) "Retail seller" means a person who sells or agrees to sell one or more articles of goods under a retail installment contract or an installment loan contract to a retail buyer.
127 30 sSB848 File No.
127 (14) "Retail seller" means a person who sells or agrees to sell one or more articles of goods under a retail installment contract or an installment loan contract to a retail buyer.
Each such form shall contain content as set forth by instruction or procedure of the commissioner and may be changed or updated as necessary by the commissioner in order to carry out the purposes of sections 36a-800 to 36a-814, inclusive, as amended by this act.
Each such form shall contain content as set forth by instruction or procedure of the commissioner and may be changed or updated as necessary by the commissioner in order to carry out the Public Act No.
21-138 33 of 38 Substitute Senate Bill No.
848 purposes of sections 36a-800 to 36a-814, inclusive, as amended by this act.
As part of the application, the commissioner may (1) in accordance with section 29-17a, conduct a state or national criminal sSB848 / File No.
As part of the application, the commissioner may (1) in accordance with section 29-17a, conduct a state or national criminal history records check of the applicant, any control person of the applicant, the qualified individual or any branch manager, and (2) in accordance with section 36a-24b (A) require the submission of fingerprints of the applicant, any control person of the applicant, the qualified individual or any branch manager to the Federal Bureau of Investigationor other state, nationalor internationalcriminaldatabases, and (B) investigate the financial condition of any such person and require authorization from any such person for the system and the commissioner to obtain an independent credit report from a consumer reporting agency, as described in Section 603(p) of the Fair Credit Reporting Act, 15 USC 1681a, as amended from time to time.
127 31 sSB848 File No.
127 history records check of the applicant, any control person of the applicant, the qualified individual or any branch manager, and (2) in accordance with section 36a-24b (A) require the submission of fingerprints of the applicant, any control person of the applicant, the qualified individual or any branch manager to the Federal Bureau of Investigationor other state, nationalor internationalcriminaldatabases, and (B) investigate the financial condition of any such person and require authorization from any such person for the system and the commissioner to obtain an independent credit report from a consumer reporting agency, as described in Section 603(p) of the Fair Credit Reporting Act, 15 USC 1681a, as amended from time to time.
(c) (1) Each applicant for a consumer collection agency license shall pay to the system any required fees or charges and a license fee of five hundred dollars.
Public Act No.
21-138 34 of 38 Substitute Senate Bill No.
848 (c) (1) Each applicant for a consumer collection agency license shall pay to the system any required fees or charges and a license fee of five hundred dollars.
Each applicant for renewal of a consumer collection agency license shall pay to the system any required fees or charges and a sSB848 / File No.
Each applicant for renewal of a consumer collection agency license shall pay to the system any required fees or charges and a renewal fee of four hundred dollars.
127 32 sSB848 File No.
127 renewal fee of four hundred dollars.
Any denial of an application by the commissioner shall, when applicable, be subject to the provisions of section 46a-80.
Any denial of an application by the commissioner shall, when applicable, be subject to the provisions Public Act No.
21-138 35 of 38 Substitute Senate Bill No.
848 of section 46a-80.
Every license shall remain in force and effect until the license has been surrendered, revoked or suspended or has expired in accordance with the provisions of sections 36a-800 to 36a-814, inclusive, sSB848 / File No.
Every license shall remain in force and effect until the license has been surrendered, revoked or suspended or has expired in accordance with the provisions of sections 36a-800 to 36a-814, inclusive, as amended by this act.
127 33 sSB848 File No.
127 as amended by this act.
Not more than one place of business shall be maintained under the same license but the commissioner may issue more than one license to the same licensee upon compliance with the provisions of sections 36a-800 to 36a-814, inclusive, as to each new licensee.
Not more than one place of business shall be Public Act No.
21-138 36 of 38 Substitute Senate Bill No.
848 maintained under the same license but the commissioner may issue more than one license to the same licensee upon compliance with the provisions of sections 36a-800 to 36a-814, inclusive, as to each new licensee.
Any licensee holding, applying for, or seeking renewal of more than one license may, at its option, file the bond required under section 36a-802 separately for each place of business licensed, or to be licensed, or a single bond, naming each place of sSB848 / File No.
Any licensee holding, applying for, or seeking renewal of more than one license may, at its option, file the bond required under section 36a-802 separately for each place of business licensed, or to be licensed, or a single bond, naming each place of business, in an amount equal to twenty-five thousand dollars for each place of business.
127 34 sSB848 File No.
127 business, in an amount equal to twenty-five thousand dollars for each place of business.
After a license has been automatically suspended pursuant to this section, the commissioner shall (A) give the licensee notice of the automatic suspension, pending proceedings for revocation or refusal to renew pursuant to section 36a- 804 and an opportunity for a hearing on such action in accordance with section 36a-51, and (B) require such licensee to take or refrain from taking such action as the commissioner deems necessary to effectuate the purposes of this section.
After a license has been automatically suspended pursuant to this section, the commissioner shall (A) give the licensee notice of the automatic suspension, pending proceedings for revocation or refusal to renew pursuant to section 36a- and an opportunity for a hearing on such action in accordance with section 36a-51, and (B) require such licensee to take or refrain from taking such action as the commissioner deems necessary to effectuate the purposes of this section.
Any change in any control person of the licensee, except a change of a director, general partner or executive officer that is not the result of an acquisition or change of control of the licensee, shall be the subject of an advance changenoticefiledonthesystematleastthirtydayspriortotheeffective date of such change and no such change shall occur without the commissioner's approval.
Any change in any control person of the licensee, except a change of a director, general Public Act No.
21-138 37 of 38 Substitute Senate Bill No.
848 partner or executive officer that is not the result of an acquisition or change of control of the licensee, shall be the subject of an advance changenoticefiledonthesystematleastthirtydayspriortotheeffective date of such change and no such change shall occur without the commissioner's approval.
This act shall take effect as follows and shall amend the following sections:
Approved July 7, 2021 Public Act No.
Section 1 October 1, 2021 36a-86 Sec.
21-138 38 of 38
2 October 1, 2021 36a-333 Sec.
3 October 1, 2021 36a-437a(h)(3) Sec.
4 October 1, 2021 36a-437a(g) Sec.
5 October 1, 2021 36a-485 Sec.
6 October 1, 2021 36a-486 Sec.
7 October 1, 2021 36a-490(b)(1) Sec.
8 October 1, 2021 36a-540(a) Sec.
9 October 1, 2021 36a-566(a) sSB848 / File No.
127 35 sSB848 File No.
127 Sec.
10 October 1, 2021 36a-583(a)(1) Sec.
11 October 1, 2021 36a-598 Sec.
12 October 1, 2021 36a-658(a) Sec.
13 October 1, 2021 36a-671(h) Sec.
14 October 1, 2021 36a-719a(a) Sec.
15 October 1, 2021 36a-770(c)(14) Sec.
16 October 1, 2021 36a-800(4) Sec.
17 October 1, 2021 36a-801(b) and (c) Sec.
18 October 1, 2021 36a-801(i) Sec.
19 October 1, 2021 36a-848(b) BA Joint Favorable Subst.
sSB848 / File No.
127 36 sSB848 File No.
127 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 makes various changes to the banking statutes, including those that are technical and conforming, that do not result in a fiscal impact to the state or municipalities.
The Out Years State Impact:
None Municipal Impact:
None sSB848 / File No.
127 37 sSB848 File No.
127 OLR Bill Analysis sSB 848 AN ACT IMPLEMENTING THE DEPARTMENT OF BANKING'S RECOMMENDED CHANGES TO THE BANKING STATUTES CONCERNING FINANCIAL INSTITUTIONS AND CONSUMER CREDIT LICENSES.
SUMMARY This bill makes the following changes to the state’s banking statutes:
1.
allows a Connecticut or out-of-state bank with less than $10 billion in assets to receive public deposits by meeting certain federal community bank leverage ratio (CBLR) requirements (§ 2);
2.
codifies a federal law that allows someone to temporarily act as a mortgage loan originator while applying for a Connecticut license (§§ 5 & 6);
3.
exempts certain people from lead generation licensure if they only incidentally perform these activities (§ 6);
4.
authorizes the Department of Banking (DOB) to regulate individuals offering shared appreciation mortgages (§ 5);
5.
limits when a “change of control” occurs for certain licenses (§§ 7-10, 12-14 & 18-19);
6.
expands the definition of “consumer debtor” to include anyone who owes a municipal debt resulting from property tax, instead of only personal property tax, thus subjecting real property tax debt buyers to state consumer collection laws (§ 16);
7.
requires a consumer collection agency license applicant that is solely engaged in debt buying to show a positive tangible net sSB848 / File No.
127 38 sSB848 File No.
127 worth (existing law requires those not solely engaged in debt buying to show tangible net worth of at least $50,000) (§ 17);
8.
eliminates the requirement that the DOB commissioner endorse a Connecticut credit union’s amended certificate of incorporation (§§ 3 & 4);
9.
exempts money transmitter license applicants from certain auditing requirements, and limits the type of required financial statements for applicants that are subsidiaries of a parent company (§ 11);
and 10.
allows a Connecticut bank that is a subsidiary of a holding company to submit a consolidated audit without the commissioner’s approval under certain circumstances (§ 1).
The bill also makes many technical, minor, and conforming changes, including one to clarify that a “retail seller” under the retail installment sales financing laws includes sellers using installment loan contracts (§ 15).
EFFECTIVE DATE:
October 1, 2021 § 2 — COMMUNITY BANK LEVERAGE RATIO Federal law allows eligible banks to opt into the CBLR capitalization requirements (see BACKGROUND).
Under the bill, these banks are eligible for public deposits by maintaining a tier 1 leverage ratio of greater than 9%.
A “tier 1 leverage ratio” is the ratio of certain equity and reserves (e.g., cash reserves) to risk-weighted assets and liabilities.
Existing law allows banks to receive public deposits by maintaining eligible collateral of at least 25% of its uninsured public deposits and by having a tier 1 leverage ratio of (1) at least 6% and a risk-based capital ratio of at least 12% or (2) less than 5% or a risk-based capital ratio of less than 10%.
The bill allows these banks to receive public deposits without also meeting the risk-based capital standards current law requires.
It sSB848 / File No.
127 39 sSB848 File No.
127 correspondingly includes in existing public depository laws banks that have opted in to CBLR, by:
1.
for CBLR banks with tier 1 leverage ratios greater than 9% that are under formal regulatory orders unrelated to capital, asset quality, earnings, or liquidity, allowing them to lower the minimum eligible collateral amount from 110% to 50% of uninsured deposits;
2.
requiring CBLR banks with a tier 1 leverage ratio greater than 9% to transfer eligible collateral to their own trust departments or one of another financial institution, or to a federal reserve or home loan bank;
and 3.
requiring CBLR banks with a 9% or less tier 1 leverage ratio to transfer eligible collateral to the trust department of a financial institution that is not owned or controlled by the bank or a holding company that owns or controls it, or to a federal reserve or home loan bank.
The bill also changes the transfer requirements for banks with a tier 1 leverage ratio of at least 5%.
Under current law, a bank and out-of-state banks must transfer eligible collateral to their own trust department or one of another financial institution, or to a federal reserve or home loan bank, if it has a tier 1 leverage ratio of at least 5% or a risk-based capital ratio of at least 10%.
Under the bill, the bank must complete this transfer if it meets both minimums.
§§ 5 & 6 — TEMPORARY AUTHORITY FOR MORTGAGE LOAN ORIGINATORS Thebillcodifiesafederallawthatallowsanindividualtotemporarily act as a mortgage loan originator while applying to DOB for a Connecticut license (P.L.
115-174, § 106).
By law, mortgage loan originators take mortgage loan applications or offer or negotiate the terms of these loans.
Under the bill, to qualify for the temporary authority, an applicant sSB848 / File No.
127 40 sSB848 File No.
127 must be (1) employed by a Connecticut-licensed mortgage lender, correspondent lender, or broker or (2) employed by these professionals and licensed as a mortgage loan originator in another state.
Application Requirements Under the bill, a licensure applicant may temporarily act as a mortgageloanoriginatorwhileintheprocessofobtainingaConnecticut license if he or she is employed by Connecticut-licensed mortgage lender, correspondent lender, or broker and was:
1.
registered in the Nationwide Mortgage Licensing System and Registry (NMLS, see BACKGROUND) as a loan originator during the year immediately preceding the licensure application date or 2.
licensed in another state as a mortgage loan originator during the days immediately preceding the licensure application date and maintains a unique identifier from the NMLS.
Under the bill and existing law, licensure applicants must submit information on their personal history and experience;
authorizations for credit and criminal background checks;
and information on administrative, civil, or criminal findings.
Additional Requirements for Exercising Temporary Authority The bill prohibits a licensure applicant from exercising temporary authority as a mortgage loan originator if he or she:
1.
had a license application denied, or a license revoked or suspended in another jurisdiction;
2.
was subject to or served with a cease and desist order in another jurisdiction or by the federal Bureau of Consumer Financial Protection regarding NMLS compliance;
or 3.
was convicted of a crime that would prohibit state licensure under existing law, such as fraud or money laundering (CGS § 36a-489).
sSB848 / File No.
127 41 sSB848 File No.
127 Duration of Temporary Authority Under the bill, temporary authority to act as a mortgage loan originator begins when an eligible individual submits his or her Connecticut license application and ends when:
1.
the applicant withdraws the application, or the DOB commissioner denies it;
2.
the DOB commissioner issues the license;
or 3.
120 days pass after the application’s submission, if the application is incomplete.
Compliance With State Law Under the bill, anyone who acts with temporary authority as a mortgage loan originator, or employs such an individual, is subject to statelawstothesameextentasifthepersonoremployee werealicensed mortgage loan originator in the state.
§ 6 — LEAD GENERATOR LICENSE EXEMPTION The bill extends the mortgage lead generator licensure exemption to bank or credit union affiliate employees who have certain other credentials and perform lead generation activities only incidentally to their regulated activities by referring leads to the bank or credit union.
By law, a lead generator is a mortgage professional who receives, or expects, compensation or gain for providing information identifying new customers for residential mortgage loans (CGS § 36a-485).
DOB licenses lead generators, but existing law provides several exemptions, including for federally insured banks and credit unions and their subsidiaries, certain other licensed mortgage professionals, consumer reporting agencies, and lead generator employees.
The bill extends the exemption to federally insured bank and credit union affiliates’ employees who:
1.
are registered or licensed with a state or federal regulator to perform securities brokerage, investment advisory, or insurance sSB848 / File No.
127 42 sSB848 File No.
127 sales activities and 2.
perform lead generation services by referring leads to the bank or credit union for which they work.
Under the bill, a bank or credit union affiliate is an entity that is controlled by or under common control with the bank or credit union.
This means the bank or credit union must:
1.
own, control, or have the power to vote more than 50% of any of the affiliate’s voting securities classes, either directly or through one or more persons;
2.
control the election of the majority of the affiliate’s directors or trustees;
or 3.
exercise a controlling influence over the affiliate’s management or policies.
§ 5 — SHARED APPRECIATION MORTGAGES The bill makes “shared appreciation agreements” residential mortgage loans, thus (1) subjecting them to existing law’s residential mortgage requirements and (2) generally requiring individuals making or offering them to be licensed and regulated by DOB.
Under the bill, a shared appreciation agreement is a nonrecourse obligation in which money is advanced to a consumer in exchange for (1) an equity interest in their residential real estate or (2) a future obligation to repay under certain circumstances, such as a transfer of ownership, maturity date, borrower’s death, or other circumstance outlined and explicitly agreed to.
By law, DOB licenses and regulates several entities that offer or conduct business involving residential mortgages, including mortgage lenders, correspondent lenders, originators, servicers, brokers, and lead generators.
Residential mortgage loan licensees are subject to reporting, oversight, advertising, andbondrequirements,among others.Licensees are generally subject to the DOB commissioner’s investigation and sSB848 / File No.
127 43 sSB848 File No.
127 examination authority and may face penalties for violating state banking laws.
§§ 7-14 & 18-19 — CHANGE OF CONTROL By law, DOB-issued consumer credit licenses are not transferable or assignable.
Licensees must fileanadvance change notice andreceive the commissioner’s approval before changing a control person, but not a director, general partner, or executive officer, due to an acquisition or other change of control.
The bill specifies that for certain licenses a “change of control” is a change that causes a licensee’s majority ownership, voting rights, or control to be held by a different control person or group of control persons.
Consequently, it does not involve minor ownership changes.
The definition applies to the following license categories:
mortgage lender, correspondent lender, broker, or servicer;
lead generator;
sales finance;
small loan;
check cashing;
money transmission;
debt adjuster or negotiator;
consumer collection;
and student loan servicer.
§§ 3 & 4 — AMENDMENTS TO CONNECTICUT CREDIT UNION CERTIFICATES OF INCORPORATION The bill eliminates the requirement that the DOB commissioner endorse an amendment to a Connecticut credit union’s certificate of incorporation.
It does so by requiring the (1) credit union to file a copy of the certificate of amendment, instead of the original, with the commissioner, and (2) commissioner to approve the amendment if it meets existing statutory criteria, rather than endorse the original certificate of amendment and return it to the credit union.
By law, an amendment is effective when the original certificate is filed with the secretary of the state.
§ 11 — MONEY TRANSMITTER LICENSE APPLICANT AUDITING REQUIREMENTS The bill exempts a money transmitter license applicant from needing to submit to the commissioner audited financial statements if the applicant has operated for one year or less.
Instead, the applicant must only submit an initial statement of condition.
sSB848 / File No.
127 44 sSB848 File No.
127 The bill also requires applicants that are a wholly-owned subsidiary of a parent company to include with the application the parent company’s most recent audited consolidated annual financial statements.
Current law requires them to include either (1) this information or (2) the most recent audited consolidated annual financial statement and the most recent audited unconsolidated financial statement, including the balance sheet and receipts and disbursements for the prior year.
§ 1 — CONNECTICUT BANK AUDIT REQUIREMENTS To meet annual audit requirements, the bill allows a Connecticut bank that is a subsidiary of a holding company to submit a signed, consolidated audit report of the holding company without the commissioner’s approval, which current law requires.
But it allows the commissioner, for good cause, to require an individual audit report for the bank.
BACKGROUND CBLR Federal law requires most banks to meet minimum capital requirements, which include having a tier 1 capital ratio of 6% and a leverage ratio of 4% (12 C.F.R.
§ 324.10).
However, banks with less than $10 billion in assets and that meet other requirements (e.g., leverage ratio greater than 9%) may instead use CBLR to meet the minimum capital requirements (12 C.F.R.
§ 324.12).
NMLS NMLS is a license and registration system developed and maintained by the Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators for the mortgage and other finance services industry.
It (1) may be also referred to as NMLSR or any other name or acronym as may be assigned and (2) is owned and operated by the State Regulatory Registry, LLC, or any successor or affiliated entity (CGS § 36a-2).
Related Bill sSB848 / File No.
127 45 sSB848 File No.
127 sSB 890 (§ 5), favorably reported by the Banking Committee, contains a similar provision about what constitutes “change of control” for student loan servicers (§ 19 of this bill).
COMMITTEE ACTION Banking Committee Joint Favorable Substitute Yea 18 Nay 0 (03/09/2021) sSB848 / File No.
127 46
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The bill updates and consolidates requirements for audits of Connecticut banks and public depositories, including changes to collateral requirements for securing public deposits.

  • Section 36a-86

    and the commissioner has approved, conditionally or unconditionally, the substitution of such consolidated report; → (2)

    Removes the requirement for commissioner approval for substitution of a consolidated audit report.

  • Section 36a-333

    A bank or out-of-state bank having a tier one leverage ratio of not less than six per cent and a risk-based capital ratio of not less than twelve per cent, (ii) a bank or out-of-state bank having elected to use the community bank leverage ratio framework pursuant to 12 CFR 324.12, as amended from time to time, and having a tier one leverage ratio greater than nine per cent, or [is] (iii) a credit union or federal credit union having a net worth ratio of not less than eight per cent, → A bank or out-of-state bank having a tier one leverage ratio of not less than six percent and a risk-based capital ratio of not less than twelve percent, (ii) a bank or out-of-state bank having elected to use the community bank leverage ratio framework pursuant to 12 CFR 324.12, as amended from time to time, and having a tier one leverage ratio greater than nine percent, or (iii) a credit union or federal credit union having a net worth ratio of not less than eight percent,

    Standardizes the language with consistent formatting and punctuation.

  • Section 36a-333

    is a bank or out-of-state bank having a tier one leverage ratio of less than five per cent or a risk-based capital ratio of less than ten per cent, or [is] (ii) a credit union or federal credit union having a net worth ratio of less than seven per cent, → is a bank or out-of-state bank having a tier one leverage ratio of less than five percent or a risk-based capital ratio of less than ten percent, or (ii) a credit union or federal credit union having a net worth ratio of less than seven percent,

    Standardizes the language with consistent formatting and punctuation.

  • Section 36a-333

    not less than one hundred ten per cent of all uninsured public deposits held by the depository. → not less than one hundred ten percent of all uninsured public deposits held by the depository.

    Standardizes the text format for percentages.

  • Section 36a-333

    the depository notifies each of its public depositors of the issuance of such order and such depository is (A) a bank or out-of-state bank having a tier one leverage ratio of not less than five per cent and a risk-based capital ratio of not less than ten per cent, or (B) a credit union or federal credit union having a net worth ratio of not less than seven per cent, → the depository notifies each of its public depositors of the issuance of such order and such depository is (A) a bank or out-of-state bank having a tier one leverage ratio of not less than five percent and a risk-based capital ratio of not less than ten percent, or (B) a credit union or federal credit union having a net worth ratio of not less than seven percent,

    Standardizes the text format for percentages.

Action History

  1. SIGNED BY GOVERNOR

  2. TRANSMITTED BY SECRETARY OF THE STATE TO GOVERNOR

  3. TRANSMITTED TO SECRETARY OF THE STATE

  4. PUBLIC ACT 21-138

  5. IN CONCURRENCE

  6. HOUSE PASSED

  7. HOUSE CALENDAR NUMBER 489

  8. FAV. RPT., TABLED FOR HOUSE CALENDAR

  9. ON CONSENT CALENDAR

  10. SENATE PASSED

  11. FILE NO. 127

  12. SENATE CALENDAR NUMBER 127

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

  14. RPTD. OUT OF LCO

  15. REFERRED TO Office of Legislative Research AND Office of Fiscal Analysis 03/23/21

  16. FILED WITH LCO

  17. Joint Favorable Substitute

  18. PUBLIC HEARING 0218

  19. REF. TO JOINT COMM. ON Banking

Sponsors

Sponsorship breakdown

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1 sponsors · 0 co-sponsors · 186 not signed on

Sponsors (1)

Co-sponsors (0)

None.

Not signed on (186)

186 members have not signed on to this bill.

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"Not signed on" means a member has not sponsored or co-sponsored this bill — it does not imply opposition. Members flagged Voted No have a recorded No vote on this bill.

Whip count is in markup. Polling the chamber and every recorded vote this session. Only the first open is slow. It’s instant for you after this. Calling the roll · Tallying · Engrossing

Subjects

finance housing
Cross-referencing the record. Reading this bill against every other bill in the corpus by meaning, not keywords. Only the first open is slow. It’s instant for you after this. Matching · Ranking · Engrossing

Frequently asked questions

Who sponsors SB 848?
SB 848 is sponsored by Tom Delnicki (Republican).
What is the current status of SB 848?
This bill has been enacted into law. Introduced February 08, 2021. Enacted.
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