Connecticut General Statutes, Chapter 668 (incl. §§ 36a-596 definitions and 36a-613 virtual currency kiosks) (Part 1 of 4)

Document text

Research, not advice. Part of the Bitcoin research archive (October 2026). Claims labelled unverified, contested or fringe are reported, not endorsed; statuses of bills and rules are as of the date checked. Government, court and patent records are public domain; the research notes are CC BY 4.0.

Chapter 668 - Nondepository Financial Institutions

CHAPTER 668

NONDEPOSITORY FINANCIAL INSTITUTIONS

Table of Contents

Note: Readers should refer to the 2026 Supplement, revised to January 1, 2026, for updated versions of statutes amended, repealed or added during the 2025 legislative sessions.

Sec. 36a-485. (Formerly Sec. 36-440). Definitions.

Sec. 36a-486. (Formerly Sec. 36-440a). Licenses required. Exemptions. Prohibited advertisements. Violations. Temporary authority to act as mortgage loan originator.

Sec. 36a-487. (Formerly Sec. 36-440b). Exemptions from licensure.

Sec. 36a-488. (Formerly Sec. 36-440c). Mortgage lender, mortgage correspondent lender, mortgage broker, mortgage loan originator, loan processor, underwriter and lead generator licenses. Requirements.

Sec. 36a-489. (Formerly Sec. 36-440d). Licenses: Issuance; denial; renewal; suspension; financial responsibility; withdrawal or abandonment of application.

Sec. 36a-489a. Prelicensing education, written test and annual continuing education requirements.

Sec. 36a-490. (Formerly Sec. 36-440e). License requirements. Request to surrender license. Requirements for filing information with system.

Sec. 36a-491. (Formerly Sec. 36-440f). Expiration of licenses. Applications for renewal. Fees.

Sec. 36a-492. (Formerly Sec. 36-440g). Surety bond required. Cancellation of bond. Automatic suspension of license. Notices.

Sec. 36a-493. (Formerly Sec. 36-440h). Records to be maintained by licensee.

Sec. 36a-494. (Formerly Sec. 36-440i). Suspension, revocation or refusal to renew license or taking other action. Removal from office and from employment or retention. Temporary order to cease business.

Sec. 36a-495. (Formerly Sec. 36-440j). Regulations.

Sec. 36a-496. (Formerly Sec. 36-440k). Applications and referrals from unlicensed mortgage brokers or mortgage loan originators.

Sec. 36a-497. (Formerly Sec. 36-440l). Advertisements.

Sec. 36a-498. (Formerly Sec. 36-440m). Refundability of advance fees. Exceptions. Prohibited acts by mortgage lenders, correspondent lenders, brokers and loan originators re borrowers.

Sec. 36a-498a. Prepaid finance charges; restrictions. Secondary mortgage loan; demand for payment prior to maturity; liability for noncompliance; deed.

Sec. 36a-498b. Release of secondary mortgage. Notice of outstanding balance of obligation secured by secondary mortgage.

Sec. 36a-498c. Adoption of mortgage loan policy with respect to subprime mortgage loans and nontraditional mortgage loans.

Sec. 36a-498d. Unique identifier of licensee. Advertising of licensee.

Sec. 36a-498e. Prohibited acts.

Sec. 36a-498f. Authority of commissioner re investigations and examinations. Prohibited acts by subjects of investigation or examination.

Sec. 36a-498g. Severability.

Sec. 36a-498h. Lead generator licensees. Prohibited acts.

Secs. 36a-499 to 36a-509. Reserved

Secs. 36a-510 to 36a-517. (Formerly Secs. 36-224a to 36-224h). Definitions. License required; violations. Persons exempt from license requirement. License as secondary mortgage lender, secondary mortgage correspondent lender or secondary mortgage broker; prerequisites; application for license; denial of application for license. License and processing fees; expiration of licenses; fees nonrefundable. License. Records to be maintained by licensee. Suspension, revocation or refusal to renew license or taking of other action.

Sec. 36a-518. (Formerly Sec. 36-224i). Regulations.

Secs. 36a-519 to 36a-524. (Formerly Secs. 36-224j to 36-224o). Prepayment penalties. Release of secondary mortgage; notice of loan balance. Limitation on prepaid finance charges; demand for payment prior to maturity; liability of mortgage lender to borrower for noncompliance; refundability of advance fees; exceptions; prohibited acts by mortgage lenders and secondary mortgage brokers re borrowers. Mortgage deeds. Applications and referrals from unlicensed secondary mortgage brokers or originators. Advertisements.

Secs. 36a-525 to 36a-534. Reserved

Sec. 36a-534a. Notice of discriminatory lending practices. Violation as grounds for license suspension, revocation or nonrenewal.

Sec. 36a-534b. Participation in system. Authority of commissioner to establish requirements. Reports.

Sec. 36a-534c. Reports re system.

Sec. 36a-535. (Formerly Sec. 36-254). Definitions.

Sec. 36a-536. (Formerly Sec. 36-255). License required. Location of licensed activity.

Sec. 36a-537. (Formerly Sec. 36-256a). Application. Criminal history records check, fingerprints, investigation of financial condition. Abandonment of application.

Sec. 36a-538. (Formerly Sec. 36-256b). Payment of cost of investigation.

Sec. 36a-539. (Formerly Sec. 36-257). License fee. Automatic suspension of license. Notice. Opportunity for hearing. Prohibited acts.

Sec. 36a-540. (Formerly Sec. 36-258). License. Change in control person. Automatic suspension of license. Surrender of license.

Sec. 36a-541. (Formerly Sec. 36-259a). Authority of commissioner to issue license or deny application for license. Standards for renewal.

Sec. 36a-542. (Formerly Sec. 36-259b). Requirements for filing with system. Unique identifier of licensee. Advertising of license.

Sec. 36a-543. (Formerly Sec. 36-260a). Suspension, revocation or refusal to renew license or taking of other action. Enforcement powers of commissioner.

Sec. 36a-544. (Formerly Sec. 36-260b). Regulations.

Sec. 36a-545. (Formerly Sec. 36-262a). Books and records.

Sec. 36a-546. (Formerly Sec. 36-263). Penalty.

Sec. 36a-547. Retail installment contract records.

Secs. 36a-548 to 36a-554. Reserved

Sec. 36a-555. (Formerly Sec. 36-225). Definitions.

Sec. 36a-556. (Formerly Sec. 36-226). Small loan lending and related activities prohibited without license or exemption. License required for certain persons acting for exempt person.

Sec. 36a-557. (Formerly Sec. 36-227). Exemptions.

Sec. 36a-558. (Formerly Sec. 36-228). Prohibitions re small loans and related activities. Permitted small loan provisions. Open-end small loans. Lead generation activities.

Sec. 36a-559. (Formerly Sec. 36-229). Credit life insurance. Credit accident and health insurance.

Sec. 36a-560. (Formerly Sec. 36-230). Restrictions on licensee.

Sec. 36a-561. (Formerly Sec. 36-231). Prohibited practices.

Sec. 36a-562. (Formerly Sec. 36-232). Main and branch offices.

Sec. 36a-563. (Formerly Sec. 36-233). Application for small loan license.

Sec. 36a-564. (Formerly Sec. 36-233a). License fees. Renewal. Automatic suspension.

Sec. 36a-565. (Formerly Sec. 36-233b). Findings required for issuance of license. Denial of application. Minimum funds. Standards for renewal. Surrender of license.

Sec. 36a-566. (Formerly Sec. 36-234). License not assignable or transferable. Use of name. Change in control person, name or place of business. Automatic suspension of license.

Sec. 36a-567. (Formerly Sec. 36-235). Change in information. Required system filing or notice to commissioner.

Sec. 36a-568. (Formerly Sec. 36-236). Unique identifier of licensee. Advertising of licensee.

Sec. 36a-569. (Formerly Sec. 36-237). Books and records. Reports of condition. Submission of sworn statement and other information.

Sec. 36a-570. (Formerly Sec. 36-239). Suspension, revocation or refusal to renew license or taking of other action. Enforcement action and orders. Removal from office and employment. Temporary order to cease business.

Sec. 36a-571. (Formerly Sec. 36-241). License suspension.

Sec. 36a-572. (Formerly Sec. 36-242). Investigations and examinations.

Sec. 36a-573. (Formerly Sec. 36-243). Regulations.

Secs. 36a-574 to 36a-579. Reserved

Sec. 36a-580. (Formerly Sec. 36-564). Definitions. Applicability of provisions.

Sec. 36a-581. (Formerly Sec. 36-565). License required. Application. Criminal history records check. Change in information. Required system filing or notice to commissioner. Authority of commissioner to deny application for license. Abandonment of application.

Sec. 36a-582. (Formerly Sec. 36-566). License and location fees. Automatic suspension of license or renewal license. Notice. Opportunity for hearing. Expenses of examination.

Sec. 36a-583. (Formerly Sec. 36-567). License not transferable or assignable. Change in control person. Automatic suspension. Surrender of license.

Sec. 36a-584. (Formerly Sec. 36-568). Maximum fees for the cashing of state checks. Regulations. Maximum amount of check that may be cashed by check cashing licensee. Exceptions. Report.

Sec. 36a-585. (Formerly Sec. 36-569). Maximum fees set by Banking Commissioner.

Sec. 36a-586. (Formerly Sec. 36-570). Records to be maintained by check cashing license. Reporting requirements. Prohibited acts. Advertisements.

Sec. 36a-587. (Formerly Sec. 36-571). Suspension, revocation or refusal to renew license or taking of other action. Removal from office and from employment or retention. Temporary order to cease business.

Sec. 36a-588. (Formerly Sec. 36-572). Regulations.

Sec. 36a-589. (Formerly Sec. 36-573). Violations.

Secs. 36a-590 to 36a-594. Reserved

Sec. 36a-595. (Formerly Sec. 36-530). Short title: Money Transmission Act.

Sec. 36a-596. (Formerly Sec. 36-531). Definitions.

Sec. 36a-597. (Formerly Sec. 36-532). License required. Penalty.

Sec. 36a-598. (Formerly Sec. 36-533). Application. Criminal history records check. Abandonment of application. Required system filing or notice to commissioner. License not assignable or transferable. Use of name. Automatic suspension.

Sec. 36a-599. (Formerly Sec. 36-534). License fees. Surrender of license. Plan and accounting. Termination of business.

Sec. 36a-600. (Formerly Sec. 36-536). Investigation of applicant. Issuance of license. Authority of commissioner to deny application for license.

Sec. 36a-601. (Formerly Sec. 36-537). Renewal of license. Automatic suspension of renewal license. Notice. Opportunity for hearing.

Sec. 36a-602. (Formerly Sec. 36-538). Surety bond. Investments in lieu of surety bond.

Sec. 36a-603. (Formerly Sec. 36-539). Investments equal to amount of money transmissions. Virtual currency equal to amount owed or obligated. Investments and virtual currency held in trust.

Sec. 36a-604. (Formerly Sec. 36-540). Net worth requirements.

Sec. 36a-605. (Formerly Sec. 36-541). Examination of licensees.

Sec. 36a-606. (Formerly Sec. 36-542). Reports. Annual financial reports required.

Sec. 36a-606a. Federal reporting requirements. Anti-money-laundering program.

Sec. 36a-607. (Formerly Sec. 36-543). Conduct of business authorized by delegate. Prohibited practices. Deadline to remit value received for transmission.

Sec. 36a-608. (Formerly Sec. 36-544). Enforcement powers of commissioner. Removal from office and from employment or retention. Temporary order to cease business.

Sec. 36a-609. (Formerly Sec. 36-545). Exemptions.

Sec. 36a-610. (Formerly Sec. 36-546). Regulations.

Sec. 36a-611. Maintenance of records. Unique identifier of license. Advertising of license.

Sec. 36a-612. Notification of change in list of authorized delegates or locations.

Sec. 36a-613. Virtual currency kiosks. Disclosures. Receipts. Fee and commission. Maximum daily transaction limits. Cancellation and refund. Requirements applicable to owners or operators.

Sec. 36a-614. Regulations.

Sec. 36a-615. (Formerly Sec. 36-577). Definitions.

Sec. 36a-616. (Formerly Sec. 36-578). Advance fees imposed by loan brokers prohibited.

Sec. 36a-617. (Formerly Sec. 36-580). Penalties for violations.

Sec. 36a-618. (Formerly Sec. 36-581). Remedies.

Sec. 36a-619. (Formerly Sec. 36-582). Remedies provided by sections 36a-615 to 36a-620, inclusive, not exclusive.

Sec. 36a-620. (Formerly Sec. 36-583). Regulations.

Secs. 36a-621 to 36a-624. Reserved

Sec. 36a-625. Short title: Connecticut Business and Industrial Development Corporation Act.

Sec. 36a-626. Definitions.

Sec. 36a-627. License required. Exemptions.

Sec. 36a-628. Application. Fee. Examination. Criminal history records check.

Sec. 36a-629. Safe and sound business practice required.

Sec. 36a-630. Licensees to provide financing and management assistance to small businesses.

Sec. 36a-631. Books and records. Annual financial reports.

Sec. 36a-632. Jurisdiction of Banking Commissioner.

Sec. 36a-633. License fee. Costs of examination to be borne by applicants. Automatic suspension of license or renewal license. Notice. Opportunity for hearing.

Sec. 36a-634. Regulations.

Sec. 36a-635. Reserved

Sec. 36a-636. Defintions.

Sec. 36a-636a. License.

Sec. 36a-636b. Duties of licensees.

Sec. 36a-636c. Books and records. Annual report.

Sec. 36a-636d. Licensees subject to jurisdiction of commissioner.

Sec. 36a-636e. License fees and expenses. Expiration and renewal. Automatic suspension. Surrender or termination of license.

Sec. 36a-636f. Regulations.

Secs. 36a-637 to 36a-644. Reserved

PART I

MORTGAGE LENDERS, CORRESPONDENT LENDERS, BROKERS AND
LOAN ORIGINATORS

(A)

LICENSES. LOANS

Sec. 36a-485. (Formerly Sec. 36-440). Definitions. As used in this section and sections 36a-486 to 36a-498e, inclusive, 36a-498h, 36a-534a and 36a-534b, unless the context otherwise requires:

(1) “Advance fee” means any consideration paid or given, directly or indirectly, by a consumer to a person for a residential mortgage loan prior to the closing of such residential mortgage loan, including, but not limited to, loan fees, points, broker's fees or commissions, transaction fees or similar prepaid finance charges;

(2) “Advertise”, “advertisement” or “advertising” means the use of any announcement, statement, assertion or representation that is placed before the public in a newspaper, magazine or other publication, or in the form of a notice, circular, pamphlet, letter or poster or over any radio or television station, by means of the Internet, or by other electronic means of distributing information, by personal contact, or in any other way;

(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;

(4) “Control person” means an individual that directly or indirectly exercises control over another person. Any person that (A) is a director, general partner or executive officer; (B) in the case of a corporation, directly or indirectly has the right to vote ten per cent or more of a class of any voting security or has the power to sell or direct the sale of ten per cent or more of any class of voting securities; (C) in the case of a limited liability company, is a managing member; or (D) in the case of a partnership, has the right to receive upon dissolution, or has contributed, ten per cent or more of the capital, is presumed to be a control person. For purposes of this subdivision, “control” means the power, directly or indirectly, to direct the management or policies of a company, whether through ownership of securities, by contract or otherwise;

(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;

(6) “Dwelling” means a “dwelling”, as defined in Section 103 of the Consumer Credit Protection Act, 15 USC 1602, that is located in this state;

(7) “Employee” means an individual (A) whose manner and means of work performance are subject to the right of control of, or are controlled by, a person, and (B) whose compensation is reported or required to be reported on a W-2 form issued by the controlling person. For purposes of the definition of “registered mortgage loan originator”, “employee” has the foregoing meaning or such other meaning as the federal banking agencies may issue in connection with such agencies' implementation of such agencies' responsibilities under the S.A.F.E. Mortgage Licensing Act of 2008, 12 USC 5101 et seq.;

(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;

(9) “First mortgage loan” means a residential mortgage loan that is secured by a first mortgage;

(10) “Immediate family member” means a spouse, child, sibling, parent, grandparent or grandchild and includes stepparents, stepchildren, stepsiblings and adoptive relationships;

(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;

(12) “Individual” means a natural person;

(13) “Lead” means any information identifying a potential consumer of a residential mortgage loan;

(14) “Lead generator” means a person who, for or with the expectation of compensation or gain: (A) Sells, assigns or otherwise transfers one or more leads for a residential mortgage loan; (B) generates or augments one or more leads for another person; or (C) directs a consumer to another person for a residential mortgage loan by performing marketing services, including, but not limited to, online marketing, direct response advertising or telemarketing;

(15) “Loan processor or underwriter” means an individual who performs clerical or support duties. 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) communication with a consumer to obtain the information necessary 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;

(16) “Main office” means the main address designated on the system;

(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 when acting within the scope of such exemption;

(18) “Mortgage correspondent lender” means a person engaged in the business of making residential mortgage loans in such person's own name where the loans are not held by such person for more than ninety days and are funded by another person through a warehouse agreement, table funding agreement or similar agreement;

(19) “Mortgage lender” means a person engaged in the business of making residential mortgage loans in such person's own name utilizing such person's own funds or by funding loans through a warehouse agreement, table funding agreement or similar agreement;

(20) “Mortgage loan originator” means an individual who for compensation or gain or with the expectation of compensation or gain, either for such individual or for the person employing or retaining such individual, (A) takes a residential mortgage loan application, or (B) offers or negotiates terms of a residential mortgage loan. “Mortgage loan originator” does not include (i) an individual engaged solely as a loan processor or underwriter; (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; (iii) a person solely involved in extensions of credit relating to timeshare plans, as that term is defined in Paragraph 53D of 11 USC 101; 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. Mortgage Licensing Act of 2008, 12 USC Section 5101 et seq., requires such individual to be licensed as a mortgage loan originator under state laws implementing said S.A.F.E. Mortgage Licensing Act;

(21) “Office” means a branch office or a main office;

(22) “Out-of-state mortgage loan originator” means an individual who maintains a unique identifier through the system and holds a valid mortgage loan originator license issued pursuant to the laws of any state other than this state;

(23) “Person” means a natural person, corporation, company, limited liability company, partnership or association;

(24) “Principal amount of the loan” means the gross amount the borrower is obligated to repay including any prepaid finance charge that is financed, and any other charge that is financed;

(25) “Real estate brokerage activity” means any activity that involves offering or providing real estate brokerage services to the public, including (A) acting as a real estate agent or real estate broker for a buyer, seller, lessor or lessee of real property; (B) bringing together parties interested in the sale, purchase, lease, rental or exchange of real property; (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; (D) engaging in any activity for which a person engaged in the activity is required to be registered or licensed as a real estate agent or real estate broker under any applicable law; and (E) offering to engage in any activity, or act in any capacity, described in this subdivision;

(26) “Registered mortgage loan originator” means any individual who (A) meets the definition of mortgage loan originator and 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; and (B) is registered with and maintains a unique identifier through the system;

(27) “Residential mortgage loan” means any loan, including a shared appreciation agreement, primarily for personal, family or household use that is secured by a mortgage, deed of trust or other equivalent consensual security interest on a dwelling or residential real estate upon which is constructed or intended to be constructed a dwelling;

(28) “Residential real estate” means any real property located in this state, upon which is constructed or intended to be constructed a dwelling;

(29) “Secondary mortgage loan” means a residential mortgage loan that is secured, in whole or in part, by a mortgage, provided such property is subject to one or more prior mortgages;

(30) “Shared appreciation agreement” means a nonrecourse obligation in which an advance sum of monetary value is extended to a consumer, as a lump sum or otherwise, in exchange for an equity interest in a dwelling, residential real estate or a future obligation to repay a sum upon the occurrence of an event, including, but not limited to, the transfer of ownership, repayment maturity date, death of the consumer or as outlined and explicitly agreed to within said agreement;

(31) “Simulated check” means a document that imitates or resembles a check but is not a negotiable instrument;

(32) “Sponsored” means employed or retained as an independent contractor;

(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;

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

(35) “Unique identifier” means a number or other identifier assigned by protocols established by the system; and

(36) “Warehouse agreement” means an agreement to provide credit to a person to enable the person to have funds to make residential mortgage loans and hold such loans pending sale to other persons.

(P.A. 85-399, S. 1; P.A. 87-9, S. 2, 3; P.A. 89-347, S. 9; P.A. 92-12, S. 87; 92-132, S. 3, 5; P.A. 94-122, S. 229, 340; P.A. 99-36, S. 23; 99-63, S. 2; P.A. 02-111, S. 2; P.A. 04-69, S. 1; P.A. 07-91, S. 1; 07-156, S. 4; P.A. 08-176, S. 31, 38; P.A. 09-209, S. 2; P.A. 11-110, S. 3; 11-216, S. 7–9; P.A. 12-96, S. 7; P.A. 14-7, S. 1; 14-89, S. 30; P.A. 17-38, S. 1; 17-233, S. 7; P.A. 18-173, S. 7; P.A. 21-138, S. 5.)

History: (Revisor's note: Pursuant to P.A. 87-9 “banking commissioner” was changed editorially by the Revisors to “commissioner of banking”); P.A. 89-347 added Subsec. (g) defining “mortgage broker”; P.A. 92-12 redesignated Subdivs. and made technical changes; P.A. 92-132 added Subdiv. (8) defining “advance fee”; P.A. 94-122 deleted definitions of “commissioner” and “person”, alphabetized remaining definitions and made technical changes, effective January 1, 1995; Sec. 36-440 transferred to Sec. 36a-485 in 1995; P.A. 99-36 made a technical change; P.A. 99-63 amended Subdiv. (2) to redefine “first mortgage loan”, added new Subdivs. (7) and (8) defining “simulated check” and “advertise” or “advertisement”, and made technical changes; P.A. 02-111 redefined “advance fee” and “mortgage lender”, deleted definitions of “mortgage broker” and “principal officer” and added definitions of “first mortgage broker”, “first mortgage correspondent lender”, “first mortgage lender”, “originator”, “table funding agreement” and “warehouse agreement”, renumbering Subdivs. accordingly; P.A. 04-69 substituted “36a-498a” for “36a-498” throughout; P.A. 07-91 redefined “originator” in Subdiv. (8); P.A. 07-156 redefined “advance fee” in Subdiv. (1) to delete “or registered”, and redefined “originator” in Subdiv. (8) to insert “mortgage lender or first mortgage broker” re exclusion for officer, effective September 30, 2008; P.A. 08-176 changed effective date of P.A. 07-156, S. 4, from September 30, 2008, to July 1, 2008, redefined “advertise” or “advertisement” and “mortgage lender”, deleted definitions of “first mortgage broker”, “first mortgage correspondent lender” and “first mortgage lender”, added definitions of “branch office”, “main office”, “mortgage broker”, “mortgage correspondent lender”, “mortgage loan”, “office”, “principal amount of the loan”, and “secondary mortgage loan”, changed defined term “originator” to “mortgage loan originator” and added arrange or find mortgage loans therein, renumbered existing Subdivs. (6), (8), (9), (10), (11) and (12) as new Subdivs. (4), (10), (13), (15), (16) and (17), respectively, and made conforming and technical changes, effective July 1, 2008; P.A. 09-209 applied definitions to other licensing provisions, redefined “advance fee” in Subdiv. (1), added reference to “advertising” in Subdiv. (2), defined “control person”, “depository institution” and “federal banking agency” in new Subdivs. (4) to (6), redefined “first mortgage loan” in redesignated Subdiv. (7), defined “immediate family member”, “individual” and “loan processor” or “underwriter” in new Subdivs. (8) to (10), redefined “mortgage broker”, “mortgage correspondent lender” and “mortgage lender” in redesignated Subdivs. (12) to (14), deleted former Subdiv. (9) defining “mortgage loan”, redefined “mortgage loan originator” in redesignated Subdiv. (15), defined “person”, “real estate brokerage activity”, “registered mortgage loan originator” and “residential mortgage loan” in new Subdivs. (17) and (19) to (21), deleted former Subdiv. (13) defining “residential property”, defined “residential real estate” in new Subdiv. (22), redefined “secondary mortgage loan” in redesignated Subdiv. (23), defined “sponsored”, “system” and “unique identifier” in new Subdivs. (25), (26) and (28), and redefined “warehouse agreement” in redesignated Subdiv. (29), effective July 31, 2009; P.A. 11-110 amended Subdiv. (15) to add reference to Bureau of Consumer Financial Protection, effective July 21, 2011; P.A. 11-216 amended Subdiv. (10) to change defined term to “loan processor or underwriter” and redefine same, amended Subdiv. (15) to redefine “mortgage loan originator” and amended Subdiv. (26) to add “loan processors or underwriters”; P.A. 12-96 added reference to Sec. 36a-534c re applicability of definitions, amended Subdiv. (1) to replace “36a-498a” with “36a-498f”, added new Subdivs. (6) and (7) defining “dwelling” and “employee”, redesignated existing Subdivs. (6) to (8) as Subdivs. (8) to (10), added new Subdiv. (11) defining “independent contractor”, redesignated existing Subdivs. (9) to (29) as Subdivs. (12) to (32), redefined “mortgage broker” in redesignated Subdiv. (15) and “mortgage loan originator” in redesignated Subdiv. (18), and made technical changes in redesignated Subdivs. (24) and (25); P.A. 14-7 redefined “branch office” to add reference to mortgage loan originator in Subdiv. (3), effective May 8, 2014; P.A. 14-89 redefined “branch office” to add reference to mortgage loan originator in Subdiv. (3), made a technical change in Subdiv. (15), deleted former Subdiv. (29) re definition of “system” and redesignated existing Subdivs. (30) to (32) as Subdivs. (29) to (31), effective June 3, 2014; P.A. 17-38 replaced “to 36a-534c, inclusive” with references to Secs. 36a-498h and 36a-534b, amended Subdiv. (1) to redefine “advance fee”, amended Subdiv. (6) to redefine “dwelling”, added new Subdiv. (13) defining “lead”, added new Subdiv. (14) defining “lead generator”, redesignated existing Subdivs. (13) to (29) as Subdivs. (15) to (31), added Subdiv. (32) defining “trigger lead”, redesignating Subdivs. (30) and (31) as Subdivs. (33) and (34); P.A. 17-233 amended Subdiv. (4) by redefining “control person”; P.A. 18-173 replaced reference to Sec. 36a-498f with reference to Sec. 36a-498e; P.A. 21-138 defined “out-of-state mortgage loan originator” in new Subdiv. (22), redesignated existing Subdivs. (22) to (28) as new Subdivs. (23) to (29), amended redesignated Subdiv. (27) by adding “, including a shared appreciation agreement,”, defined “shared appreciation agreement” in new Subdiv. (30), and redesignated existing Subdivs. (29) to (34) as new Subdivs. (31) to (36).

(Return to Chapter
Table of Contents)
(Return to
List of Chapters)
(Return to
List of Titles)

Sec. 36a-486. (Formerly Sec. 36-440a). Licenses required. Exemptions. Prohibited advertisements. Violations. Temporary authority to act as mortgage loan originator. (a) No person shall engage in the business of making residential mortgage loans or act as a mortgage broker in this state unless such person has first obtained a license for its main office and for each branch office where such business is conducted in accordance with the provisions of sections 36a-485 to 36a-498e, inclusive, 36a-534a and 36a-534b. Any activity subject to licensure pursuant to sections 36a-485 to 36a-498e, inclusive, 36a-534a or 36a-534b shall be conducted from an office located in a state, as defined in section 36a-2. Any such person who is an individual shall also obtain a mortgage loan originator license prior to conducting such business unless such individual does not engage directly in the activities of a mortgage loan originator or conducts such business pursuant to the temporary authority provided in subsection (e) of this section. 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. A person, other than a licensed mortgage loan originator acting on behalf of a mortgage broker, shall be deemed to be acting as a mortgage broker if such person advertises or causes to be advertised that such person will negotiate, solicit, place or find a residential mortgage loan, either directly or indirectly. A mortgage correspondent lender shall not be deemed to be acting as a mortgage lender if such mortgage correspondent lender makes a loan utilizing its own funds in a situation where another person does not honor such person's commitment to fund the loan. A licensed lead generator shall not be deemed to be acting as a mortgage lender, mortgage correspondent lender, mortgage broker or mortgage loan originator when engaged in the activities of a lead generator, as described in section 36a-485 if such person does not: (1) Obtain compensation or gain contingent upon the consummation of a residential mortgage loan or the receipt of a residential mortgage loan application, or (2) utilize financial criteria particular to the consumer or the residential mortgage loan transaction to selectively place a lead or to steer a consumer to a specific person for a residential mortgage loan.

(b) (1) No person licensed as a mortgage lender, mortgage correspondent lender or mortgage broker shall engage the services of a mortgage loan originator or of a loan processor or underwriter required to be licensed under this section unless such mortgage loan originator or loan processor or underwriter is licensed under section 36a-489 or acting pursuant to the temporary authority provided in subsection (e) of this section. No person licensed as a mortgage lender, mortgage correspondent lender, mortgage broker or mortgage loan originator shall engage the services of a lead generator unless such lead generator is licensed under section 36a-489 or exempt from licensure pursuant to subdivision (5) of this subsection. 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 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. An individual, unless specifically exempted under subdivision (2) of this subsection, shall be deemed to be engaged in the business of a mortgage loan originator if such individual: (A) Acts as a mortgage loan originator in connection with any residential mortgage loan on behalf of a licensee or person exempt under section 36a-487; or (B) makes any representation to the public through advertising or other means of communication that such individual can or will act as a mortgage loan originator on behalf of a licensee or person exempt under section 36a-487. Each licensed mortgage loan originator and each licensed loan processor or underwriter shall register with and maintain a valid unique identifier issued by the system. No individual may act as a mortgage loan originator for more than one person at the same time. No loan processor or underwriter licensee may be sponsored by more than one person at a time. The license of a mortgage loan originator or a loan processor or underwriter is not effective during any period when such mortgage loan originator or a loan processor or underwriter is not sponsored by a licensed mortgage lender, mortgage correspondent lender or mortgage broker, or by a person registered as an exempt registrant under subsection (d) of section 36a-487, or during any period in which the license of the mortgage lender, mortgage correspondent lender or mortgage broker with whom such originator or loan processor or underwriter is associated has been suspended. Either the mortgage loan originator, the loan processor or underwriter or the sponsor may file a notification of the termination of sponsorship with the system.

(2) The following are exempt from this section: (A) A registered mortgage loan originator or an employee of an institution or subsidiary described in section 36a-485, who is not required to be registered under Section 1507 of the S.A.F.E. Mortgage Licensing Act of 2008, 12 USC Section 5101 et seq., when acting for such institution or subsidiary; (B) an individual who offers or negotiates the terms of a residential mortgage loan with or on behalf of an immediate family member of such individual; (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; (D) a Connecticut licensed attorney who negotiates the terms of a residential mortgage loan on behalf of a client as an ancillary matter to the attorney's representation of the client, unless the attorney 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; (E) an individual who takes a residential mortgage loan application or offers or negotiates terms of a residential mortgage loan as an employee of a federal, state or local government agency or housing finance agency exempt from licensure pursuant to section 36a-487, and who does so only pursuant to such individual's official duties as an employee of such agency; (F) an individual who takes a residential mortgage loan application or offers or negotiates terms of a residential mortgage loan as an employee of an organization that has obtained bona fide nonprofit status from the commissioner and is exempt from licensure pursuant to section 36a-487, and who does so only pursuant to such individual's official duties as an employee of such organization; and (G) an individual who offers or negotiates the terms of a residential mortgage loan secured by a dwelling that is not the individual's residence but is owned by such individual, 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. The following individuals are exempt from the foregoing license requirement:

(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;

(B) An employee of a person exempt from licensure under subdivision (1), (2) or (3) of subsection (a) of section 36a-487 who engages in loan processor or underwriter activities at the direction of and subject to the supervision of either a licensed mortgage loan originator or a registered mortgage loan originator of such exempt person; or

(C) Any individual engaged, in any capacity, in loan processor or underwriter activities in connection with a residential mortgage loan originated by an individual not required to be licensed or registered as a mortgage loan originator under this part.

(4) An individual engaging solely in loan processor or underwriter activities shall not represent to the public, through advertising or other means of communicating or providing information, including the use of business cards, stationery, brochures, signs, rate lists or other promotional items, that such individual can or will perform any of the activities of a mortgage loan originator.

(5) On and after January 1, 2018, no person shall, directly or indirectly, act as a lead generator without first obtaining a license under section 36a-489, unless such person is exempt from licensure. The following persons shall be exempt from licensure as a lead generator:

(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;

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

(C) Any operating subsidiary where each owner of such operating subsidiary is wholly owned by the same such bank or credit union;

(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;

(E) A consumer reporting agency, as defined in Section 603 (f) of the Fair Credit Reporting Act, 15 USC 1681a, as amended from time to time;

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

(G) An individual employed by an affiliate of a bank or credit union exempt from licensure pursuant to subparagraph (A) of this subdivision, who is registered or licensed with a state or federal regulator to engage in securities brokerage, investment advisory or insurance sales activities and who, incidental to the performance of such regulated activities, performs lead generation activities by referring one or more leads to such bank or credit union. 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 credit union (i) directly or indirectly acting through one or 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.

(c) If 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. Mortgage Licensing Act of 2008, 12 USC Section 5101 et seq., requires an individual described in subparagraph (B) (iv) of subdivision (20) of section 36a-485 to be licensed as a mortgage loan originator under state laws implementing said S.A.F.E. 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.

(d) Each residential mortgage loan taken, offered, negotiated, solicited, arranged, placed, found, made, processed or underwritten without a license shall constitute a separate violation for purposes of section 36a-50.

(e) (1) An individual who is 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 of time described in subdivision (3) of this subsection, provided the individual (A) has not had (i) an application for a loan originator license denied in any governmental jurisdiction, or (ii) a loan originator license revoked or suspended in any governmental jurisdiction; (B) has not been subject to, or served with, a cease and desist order in any governmental jurisdiction or by the Bureau of Consumer Financial Protection pursuant to 12 USC 5113(c); (C) has not been convicted of a misdemeanor or felony that would preclude licensure in this state under subdivision (1) of subsection (b) of section 36a-489; (D) has submitted an application for licensure as a mortgage loan originator in this state pursuant to subsection (c) of section 36a-488; and (E) was registered in the system as a registered loan originator, as defined in 12 USC 5102, during the one-year period immediately preceding the date on which the individual submits in connection with such application for licensure in this state the individual's personal history and experience, including authorization to obtain an independent credit report, criminal background check and information relating to administrative, civil or criminal findings by any governmental jurisdiction.

(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; and (B) was an out-of-state mortgage loan originator during the thirty-day period immediately preceding the date on which the individual submits in connection with the application for licensure as a mortgage loan originator in this state the individual's personal history and experience, including authorization to obtain an independent credit report, criminal background check and information relating to administrative, civil or criminal findings by any governmental jurisdiction.

(3) The period of temporary authority described in subdivisions (1) and (2) of this subsection shall commence on the date the registered loan originator or out-of-state mortgage loan originator submits the information required by subsection (c) of section 36a-488 and shall end on the earliest of (A) the date the individual withdraws the application to be a licensed mortgage loan originator in this state; (B) the date the commissioner denies the application; (C) the date the commissioner issues the mortgage loan originator license; or (D) one hundred twenty days after the date the individual submits the application, provided such application is identified as incomplete on the system.

(4) Any person employing an individual who has temporary authority to act as a mortgage loan originator in this state pursuant to this subsection shall be subject to the laws of this state to the same extent as if the employed individual is licensed as a mortgage loan originator in this state. Any individual who has temporary authority to act as a mortgage loan originator in this state pursuant to this subsection and who engages in residential mortgage loan origination activities shall be subject to the laws of this state to the same extent as if the individual is licensed as a mortgage loan originator in this state.

(P.A. 85-399, S. 2; P.A. 89-347, S. 10; P.A. 93-32; P.A. 94-122, S. 230, 340; P.A. 96-71, S. 1, 8; 96-109, S. 10; 96-180, S. 117, 166; P.A. 02-111, S. 3; P.A. 04-69, S. 2; P.A. 07-156, S. 5; P.A. 08-176, S. 31, 40; P.A. 09-208, S. 2; 09-209, S. 5; P.A. 11-110, S. 4; 11-216, S. 10; P.A. 12-96, S. 8; P.A. 14-7, S. 11; 14-89, S. 34, 48; P.A. 15-14, S. 7; P.A. 17-38, S. 2; P.A. 18-173, S. 8; P.A. 21-138, S. 6; P.A. 23-126, S. 9.)

History: P.A. 89-347 added requirements re mortgage brokers; P.A. 93-32 made previous provision Subsec. (a) and added new Subsec. (b) imposing civil penalty for those who do not obtain the license required; P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-440a transferred to Sec. 36a-486 in 1995; P.A. 96-71, 96-109 and 96-180 all amended Subsec. (a) to delete “loan” before “mortgage loan business in this state”, effective July 1, 1996; P.A. 02-111 amended Subsec. (a) by rewriting provisions applicable to lenders and brokers and adding provisions re first mortgage correspondent lenders, added new Subsec. (b) re registration of originators, and redesignated existing Subsec. (b) as Subsec. (c), adding “or registration” therein; P.A. 04-69 amended Subsecs. (a) and (b) to substitute “36a-498a” for “36a-498”; P.A. 07-156 amended Subsecs. (b) and (c) to replace registration requirement for originators with licensing requirement and to make conforming changes, effective September 30, 2008; P.A. 08-176 changed effective date of P.A. 07-156, S. 5, from September 30, 2008, to July 1, 2008, amended Subsec. (a) to add reference to main office and each branch office, to provide that a person, other than a mortgage loan originator, “shall be deemed to be engaged in the business of making mortgage loans if such person advertises, causes to be advertised, solicits, offers to make or makes mortgage loans, either directly or indirectly”, and to make conforming changes, amended Subsec. (b) to add mortgage correspondent lender, to change notification provision from “shall promptly notify the commissioner, in writing” to “may file” with Nationwide Mortgage Licensing System and to make conforming changes, and amended Subsec. (c) to add “arranged” and to make a conforming change, effective July 1, 2008; P.A. 09-208 amended Subsec. (b) by providing that license of mortgage loan originator is not effective during any period in which license of lender, correspondent lender or broker with whom originator is associated has been suspended, effective July 7, 2009; P.A. 09-209 amended Subsec. (a) to apply to persons engaged in business of making residential mortgage loans and by requiring certain individuals to obtain a mortgage loan originator license, adding provision re when a person is considered to be acting as a mortgage broker, making technical changes and inserting reference to other licensing provisions, amended Subsec. (b) by designating existing provisions as Subdiv. (1) and amending same by requiring individuals engaged in business of mortgage loan originator with respect to a dwelling to obtain and maintain a license, and by adding Subdiv. (2) re exemptions, Subdiv. (3) re loan processors or underwriters who are independent contractors and Subdiv. (4) re advertising, added new Subsec. (c) re determinations made by U.S. Department of Housing and Urban Development or court, redesignated existing Subsec. (c) as Subsec. (d) and amended same by adding “residential” re mortgage loan, effective July 31, 2009; P.A. 11-110 amended Subsec. (c) to add references to Bureau of Consumer Financial Protection, effective July 21, 2011; P.A. 11-216 amended Subsec. (b)(1) and (b)(3) to add references to loan processors or underwriters, to prohibit the engagement in business without a license 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”, to permit alternative sponsorship “by a person registered as an exempt registrant under subsection (c) of section 36a-487”, to prohibit a loan processor or underwriter who is employed by any person other than a licensed mortgage lender, mortgage correspondent lender or mortgage broker or any person exempt from licensure under Sec. 36a-487(a)(1) from engaging in activities of a loan processor or underwriter without a license, to eliminate requirement of maintaining valid unique identifier issued by the system, and to make conforming and technical changes; P.A. 12-96 amended Subsec. (b) to add provisions re when individual shall be deemed engaged in the business of a mortgage loan originator and re loan processor or underwriter licensee not to be sponsored by more than one person at a time in Subdiv. (1), to add provision in Subpara. (C) re context demonstrating individual is engaged in activities with a degree of habitualness or repetition and add new Subparas. (E), (F) and (G) re residential mortgage loans in Subdiv. (2), and to replace former Subdiv. (3) with new Subdiv. (3) re loan processor or underwriter activities, amended Subsec. (d) to add “taken, offered” and “processed or underwritten”, and made technical changes; P.A. 14-7 amended Subsec. (b)(1) to replace reference to Sec. 36a-487(c) with reference to Sec. 36a-487(d), effective May 8, 2014; P.A. 14-89 amended Subsec. (b) to replace “licensed attorney” with “Connecticut licensed attorney” in Subdiv. (2)(D) and add reference to Sec. 36a-487(a)(2) or (3) in Subdiv. (3)(B); P.A. 15-14 made a technical change in Subsec. (b)(3)(C); P.A. 17-38 amended Subsec. (a) by deleting reference to April 1, 2010, adding provision re licensed lead generator not deemed to be acting as mortgage lender, mortgage correspondent lender, mortgage broker or mortgage loan originator, amended Subsec. (b) by replacing reference to Sec. 36a-485(23) with reference to Sec. 36a-485(25) in Subdiv. (2)(A), and adding Subdiv. (5) re lead generator licensure and exemptions, amended Subsec. (c) by replacing reference to Sec. 36a-485(18) with reference to Sec. 36a-485(20), and made a technical change; P.A. 18-173 amended Subsec. (a) by replacing reference to Sec. 36a-498f with reference to Sec. 36a-498e and adding provision re activity subject to licensure to be conducted from office located in the state; P.A. 21-138 amended Subsec. (a) by adding provision re conducting business pursuant to temporary authority provided in subsection (e), amended Subsec. (b)(1) by adding provisions re acting pursuant to temporary authority provided in subsection (e), amended Subsec. (b)(2) by deleting “subdivision (25) of”, amended Subsec. (b)(3) by adding Subpara. (G) re incidental performance of lead generation activities and by making a technical change, and added Subsec.(e) re temporary authority to act as mortgage loan originator; P.A. 23-126 amended Subsec. (b)(1) by adding provision prohibiting certain persons from engaging the services of a lead generator unless such lead generator is licensed or exempt from licensure.

(Return to Chapter
Table of Contents)
(Return to
List of Chapters)
(Return to
List of Titles)

Sec. 36a-487. (Formerly Sec. 36-440b). Exemptions from licensure. (a) The following are exempt from licensing as a mortgage lender, mortgage correspondent lender or mortgage broker under sections 36a-485 to 36a-498e, inclusive, 36a-534a and 36a-534b: (1) 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; (2) any wholly-owned subsidiary of any such bank or credit union; (3) any operating subsidiary where each owner of such operating subsidiary is wholly owned by the same such bank or credit union; (4) any person licensed under sections 36a-671 to 36a-671d, inclusive, or exempt from licensure under section 36a-671c, who is negotiating or offering to negotiate terms of a residential mortgage loan as authorized by said sections 36a-671 to 36a-671d, inclusive; and (5) any person engaged solely in providing loan processing or underwriting services to persons (A) licensed as a mortgage lender, mortgage correspondent lender or mortgage broker, or (B) exempt from such licensure under subdivision (1) of this subsection. Each wholly-owned subsidiary of a Connecticut bank or Connecticut credit union that engages in the business of making residential mortgage loans or acts as a mortgage broker in this state shall provide written notification to the commissioner prior to engaging in such activity.

(b) The following are exempt from licensing as a mortgage lender or mortgage correspondent lender under sections 36a-485 to 36a-498e, inclusive, 36a-534a and 36a-534b:

(1) Persons making five or fewer residential mortgage loans within any period of twelve consecutive months, provided nothing herein shall relieve such persons from complying with all applicable laws;

(2) Bona fide nonprofit organizations making residential mortgage loans that promote home ownership for the economically disadvantaged;

(3) Agencies of the federal government, or any state or municipal government, or any housing finance agency making residential mortgage loans under the specific authority of the laws of any state or the United States. For purposes of this subdivision, a “housing finance agency” means any authority:

(A) Chartered by a state to help meet the affordable housing needs of the residents of the state; (B) supervised directly or indirectly by the state government; (C) subject to audit and review by the state in which it operates; and (D) whose activities make it eligible to be a member of the National Council of State Housing Agencies;

(4) Persons owning real property who take back from the buyer of such property a secondary mortgage loan in lieu of any portion of the purchase price of the property;

(5) Any corporation or its affiliate that makes residential mortgage loans exclusively for the benefit of its employees or agents;

(6) Any corporation, licensed in accordance with section 38a-41, or its affiliate or subsidiary, that makes residential mortgage loans to promote home ownership in urban areas;

(7) Persons acting as fiduciaries with respect to any employee pension benefit plan qualified under the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended, who make residential mortgage loans solely to plan participants from plan assets; and

(8) Persons making secondary mortgage loans to immediate family members.

(c) A bona fide nonprofit organization shall be exempt from licensing as a mortgage broker under sections 36a-485 to 36a-498e, inclusive, 36a-534a and 36a-534b to the extent that such bona fide nonprofit organization acts as a mortgage broker in connection with residential mortgage loans to be exclusively made by persons covered by the exemption set forth in either subdivision (5) or (6) of subsection (b) of this section.

(d) Any person claiming exemption from licensure under this section may register on the system as an exempt registrant for purposes of sponsoring a mortgage loan originator or a loan processor or underwriter pursuant to subdivision (1) of subsection (b) of section 36a-486. Such registration shall not affect the exempt status of such person. Any approval of such registration, or any approval of any renewal of such registration, shall not constitute a determination by the commissioner that such entity is exempt, but rather shall evidence the commissioner's approval to use the system for purposes of sponsoring and bonding.

(e) (1) For purposes of this section, a “bona fide nonprofit organization” means an organization that has filed a written certified submission to the commissioner in a form prescribed by the commissioner and with such documentation as may be required by the commissioner and that demonstrates to the satisfaction of the commissioner that the organization: (A) Has the status of a tax-exempt organization under Section 501(c)(3) of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended; (B) promotes affordable housing or provides home ownership education or similar services; (C) conducts its activities in a manner that serves public or charitable purposes rather than commercial purposes; (D) receives funding and revenue and charges fees in a manner that does not incentivize it or its employees to act other than in the best interests of its clients; (E) compensates its employees in a manner that does not incentivize employees to act other than in the best interests of its clients; (F) provides or identifies for the borrower residential mortgage loans (i) with terms favorable to the borrower, which means such terms must be consistent with loan origination in a public or charitable context, not a commercial context, and (ii) comparable to mortgage loans and housing assistance provided under government housing assistance programs; and (G) meets such other standards as the commissioner may by regulation require. Any organization that demonstrates to the satisfaction of the commissioner its status as a bona fide nonprofit organization shall timely report any change in any information previously submitted to the commissioner and, not later than December thirty-first of each year, submit to the commissioner a renewed certification and documentation to update all information last filed in support of such bona fide nonprofit organization status or such status shall expire, except that any organization that obtained initial bona fide nonprofit status from the commissioner after November first of a given year shall submit a renewal certification and documentation by December thirty-first of the following year.

(2) The commissioner shall have the authority to periodically examine the books and activities of a certified bona fide nonprofit organization and to revoke the bona fide nonprofit organization status of an entity that does not continue to meet the criteria in subdivision (1) of this subsection.

(P.A. 85-399, S. 3; P.A. 88-65, S. 37; P.A. 89-211, S. 41; P.A. 92-12, S. 88; P.A. 94-122, S. 231, 340; P.A. 99-36, S. 24; P.A. 02-111, S. 4; P.A. 04-69, S. 3; P.A. 08-176, S. 41; P.A. 09-209, S. 6; P.A. 11-216, S. 11; P.A. 12-96, S. 9; P.A. 14-89, S. 21; P.A. 15-235, S. 30; P.A. 18-173, S. 9.)

History: P.A. 88-65 deleted a reference to industrial bank in Subsec. (a); P.A. 89-211 clarified reference to the Internal Revenue Code of 1986; P.A. 92-12 redesignated Subdivs.; P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-440b transferred to Sec. 36a-487 in 1995; P.A. 99-36 made a technical change; P.A. 02-111 amended Subdivs. (2), (3) and (4) by substituting “making” for “granting”, amended Subdiv. (6) by changing “licensed lender” to “licensed mortgage lender” and amended Subdiv. (8) by substituting “makes” for “grants”; P.A. 04-69 substituted “36a-498a” for “36a-498”; P.A. 08-176 amended Subdiv. (1) to add reference to operating subsidiaries of federal banks and federally-chartered out-of-state banks, amended Subdiv. (2) to add “provided nothing herein shall relieve such persons from complying with all applicable laws”, amended Subdiv. (6) to replace former provision with provision re owners who take back a secondary mortgage loan in lieu of any portion of purchase price, added Subdiv. (10) re making of secondary mortgage loans to relatives, and made conforming changes, effective July 1, 2008; P.A. 09-209 designated existing introductory clause and Subdiv. (1) as Subsec. (a), amended same by adding citations to additional licensing provisions and adding exemptions re certain financial institutions, added Subsec. (b) re exemptions from licensing as a lender or correspondent lender, redesignated existing Subdivs. (2) to (10) as Subsecs. (b)(1) to (b)(9) and added “residential” re mortgage loans throughout, effective July 31, 2009; P.A. 11-216 amended Subsec. (a) to add provision re exemption is from licensing as a mortgage lender, mortgage correspondent lender or mortgage broker, designate provision re exemption for banks and credit unions as Subdiv. (1), add Subdiv. (2) re exemption for any person licensed under Secs. 36a-671 to 36a-671d or exempt from licensure and add Subdiv. (3) re exemption for any person engaged solely in providing loan processing or underwriting services to persons licensed as mortgage lender, correspondent lender or broker or exempt from such licensure, and added Subsec. (c) re persons exempt from licensure registering on the system; P.A. 12-96 amended Subsec. (b) to replace “corporations” with “organizations” in Subdiv. (2), to replace “quasi-governmental” with “housing finance” and add definition of “housing finance agency” in Subdiv. (3) and to make technical changes, added new Subsec. (c) re exemption of bona fide nonprofit organization, redesignated existing Subsec. (c) as Subsec. (d) and added Subsec. (e) defining “bona fide nonprofit organization”; P.A. 14-89 amended Subsec. (a) to designate existing provision re subsidiary as new Subdiv. (2) and amend same to replace “operating subsidiary” with “wholly-owned subsidiary”, delete references to federal bank and federally chartered out-of-state bank and make conforming changes, add new Subdiv. (3) re operating subsidiary and redesignate existing Subdivs. (2) and (3) as Subdivs. (4) and (5); P.A. 15-235 amended Subsec. (d) to add provision re scope of commissioner's approval of registration and to change “exempt” to “claiming exemption”, effective July 7, 2015; P.A. 18-173 amended Subsecs. (a) to (c) by replacing references to Sec. 36a-498f with references to Sec. 36a-498e, further amended Subsec. (b) by deleting former Subdiv. (4) re persons licensed under Secs. 36a-555 to 36a-573, and redesignating existing Subdivs. (5) to (9) as Subdivs. (4) to (8), amended Subsec. (e) by designating existing provisions re definition of “bona fide nonprofit organization” as Subdiv. (1) and amending same by adding provision re expiration of status, and adding Subdiv. (2) re commissioner's authority to examine books and activities of certified bona fide nonprofit organization and revoke status, and made technical and conforming changes.

(Return to Chapter
Table of Contents)
(Return to
List of Chapters)
(Return to
List of Titles)

Sec. 36a-488. (Formerly Sec. 36-440c). Mortgage lender, mortgage correspondent lender, mortgage broker, mortgage loan originator, loan processor, underwriter and lead generator licenses. Requirements. (a)(1) The commissioner shall not issue a mortgage lender license, a mortgage correspondent lender license or a mortgage broker license to any person unless such person meets the following tangible net worth and experience requirements, as applicable: (A) The minimum tangible net worth requirement for a mortgage lender shall be two hundred fifty thousand dollars and the minimum tangible net worth requirement for a mortgage correspondent lender and a mortgage broker shall be fifty thousand dollars, and (B) a mortgage lender, mortgage correspondent lender or mortgage broker shall have, (i) at the main office for which the license is sought, a qualified individual who has supervisory authority over the lending or brokerage activities of the licensee and who is responsible for the actions of the licensee, and (ii) at each branch office, a branch manager who has supervisory authority over the lending or brokerage activities of the branch office, who is responsible for the actions of the branch office, who has at least three years' experience in the mortgage business within the five years immediately preceding the date of the application for the license, and who is licensed as a mortgage loan originator under section 36a-489. As used in this subdivision, “experience in the mortgage business” means paid experience in the origination, processing or underwriting of residential mortgage loans, the marketing of such loans in the secondary market or in the supervision of such activities, or any other relevant experience as determined by the commissioner. As used in subparagraph (B) of this subdivision, “at the main office” may be established by demonstrating to the satisfaction of the commissioner that the qualified individual is capable of providing full-time supervision of the main office, and “at each branch office” may be established by demonstrating to the satisfaction of the commissioner that the branch manager is capable of providing full-time supervision of the branch office. The commissioner may waive the requirements of subparagraph (B) of this subdivision pertaining to a qualified individual where it is demonstrated to the satisfaction of the commissioner that no activity subject to licensure under sections 36a-485 to 36a-498e, inclusive, 36a-534a and 36a-534b will be conducted at the main office and the licensee designates a qualified individual responsible for the actions of the licensee. The commissioner may waive the requirements of subparagraph (B) of this subdivision pertaining to a branch manager where a person licensed as a mortgage lender under section 36a-489 will act only as a mortgage servicer at such branch office, and the individual designated as branch manager meets the requirements for branch manager as set forth in section 36a-719. No person granted a waiver of the requirements of subparagraph (B) of this subdivision shall conduct any activity at the main office or at any branch office that would have precluded issuance of such waiver without first designating a qualified individual or branch manager, as applicable, who meets all applicable requirements and is approved by the commissioner.

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

(b) The commissioner may issue a mortgage lender license, a mortgage correspondent lender license, or a mortgage broker license. Each mortgage lender licensee may also act as a mortgage correspondent lender and a mortgage broker, and each mortgage correspondent lender licensee may also act as a mortgage broker. An application for a license as a mortgage lender, mortgage correspondent lender or mortgage broker office or renewal of such license shall be filed, in a form prescribed by the commissioner, with the system. Each such form shall contain content as set forth by instruction or procedure of the commissioner and may be changed or updated as necessary by the commissioner in order to carry out the purpose of sections 36a-21, 36a-485 to 36a-498e, inclusive, 36a-498h, 36a-534a and 36a-534b. The applicant shall, at a minimum, furnish to the system information concerning the identity of the applicant, any control person of the applicant, the qualified individual and any branch manager, including personal history and experience in a form prescribed by the system and information related to any administrative, civil or criminal findings by any governmental jurisdiction. In the case of an initial application for a license, the following supplementary information shall be filed, as applicable: (1) For a main office license, a financial statement as of a date not more than twelve months prior to the filing of the application which reflects tangible net worth; (2) a bond as required by section 36a-492; (3) evidence that the qualified individual or branch manager meets the experience required by subsection (a) of this section; and (4) such other information pertaining to the applicant, the applicant's background, the background of its principals, employees, mortgage loan originators, and loan processors or underwriters, and the applicant's activities as the commissioner may require. For the purpose of this subsection, evidence of experience of the qualified individual or branch manager shall include: (A) A statement specifying the duties and responsibilities of such person's employment, the term of employment, including month and year, and the name, address and telephone number of a supervisor, employer or, if self-employed, a business reference; and (B) if required by the commissioner, copies of W-2 forms, 1099 tax forms or, if self-employed, 1120 corporate tax returns, signed letters from the employer on the employer's letterhead verifying such person's duties and responsibilities and term of employment including month and year, and if such person is unable to provide such letters, other proof satisfactory to the commissioner that such person meets the experience requirement. The commissioner may conduct a criminal history records check of the applicant, any control person of the applicant and the qualified individual or branch manager and require the applicant to submit the fingerprints of such persons and authorization of such persons 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 part of the application.

(c) The commissioner may issue a mortgage loan originator license or a loan processor or underwriter license. Each mortgage loan originator licensee may also act as a loan processor or underwriter. Each mortgage loan originator licensee shall be associated with a specified licensed office and be subject to supervision by a qualified individual or branch manager. An application to license an individual as a mortgage loan originator or a loan processor or underwriter or for renewal of such license shall be filed, in a form prescribed by the commissioner, with the system. Each such form shall contain content as set forth by instruction or procedure of the commissioner and may be changed or updated as necessary by the commissioner in order to carry out the purpose of sections 36a-485 to 36a-498e, inclusive, 36a-498h, 36a-534a and 36a-534b. The applicant shall, at a minimum, furnish to the system, in a form prescribed by the system, information concerning the applicant's identity, including personal history and experience and information related to any administrative, civil or criminal findings by any governmental jurisdiction. Each applicant for a mortgage loan originator license or a loan processor or underwriter license shall furnish to the system fingerprints for submission to the Federal Bureau of Investigation and any governmental agency or entity authorized to receive such information for a state, national and international criminal history background check. Each applicant shall furnish authorization 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.

(d) The commissioner may issue a lead generator license. An application for a license as a lead generator or an application for a license renewal shall be filed, in a form prescribed by the commissioner, with the system, accompanied by the fees required under section 36a-491. 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-485 to 36a-498e, inclusive, 36a-498h, 36a-534a and 36a-534b. The applicant shall, at a minimum, furnish to the system information concerning the identity of the applicant, any control person of the applicant and the qualified individual responsible for the actions of the licensee, including, but not limited to, a personal history and experience, in a form prescribed by the system, and information related to any administrative, civil or criminal findings by any governmental jurisdiction. The commissioner, in accordance with section 29-17a, may conduct a state or national criminal history records check of the applicant, any control person of the applicant and the qualified individual, and, in accordance with section 36a-24b, may require the submission of fingerprints of such persons to the Federal Bureau of Investigation or other state, national or international criminal databases as part of the application.

(P.A. 85-399, S. 4; P.A. 89-347, S. 11; P.A. 94-122, S. 232, 340; P.A. 99-36, S. 25; P.A. 02-111, S. 5; P.A. 06-45, S. 1; P.A. 07-91, S. 2; 07-156, S. 6; P.A. 08-176, S. 31, 42; P.A. 09-209, S. 7; P.A. 11-216, S. 12, 13; P.A. 12-96, S. 10; P.A. 17-38, S. 3; P.A. 18-173, S. 10; P.A. 22-94, S. 5.)

History: P.A. 89-347 amended Subsec. (b) by inserting new Subdiv. (4) re the applicant's status as a lender or a broker and renumbered the remaining Subdiv.; P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-440c transferred to Sec. 36a-488 in 1995; P.A. 99-36 made a technical change in Subsec. (a); P.A. 02-111 replaced former Subsec. (a) with new provisions re obtaining license as first mortgage lender, first mortgage correspondent lender or first mortgage broker and re obligation to notify commissioner if net worth falls below requisite net worth, amended Subsec. (b) to reflect commissioner's authority to issue first mortgage lender license, first mortgage correspondent lender license and first mortgage broker license and to revise application requirements and added new Subsec. (c) re application for registration of originator; P.A. 06-45 added Subsec. (d) to provide that filing application for registration of originator with knowledge that application contains a material misstatement by originator shall be a violation of Sec. 36a-53a, effective May 8, 2006; P.A. 07-91 amended Subsec. (d) to provide that filing application for renewal of registration of originator with knowledge that application contains a material misstatement by originator shall be a violation of Sec. 36a-53a; P.A. 07-156 amended Subsec. (a)(1) to delete proviso re inapplicability of experience requirements to any person whose license is renewed effective October 1, 2002, amended Subsec. (b) to authorize commissioner to conduct a criminal history records check of applicants and key persons of such applicants, to require applicants to submit fingerprints of such persons, and to require filing of applications with the national mortgage licensing system, amended Subsec. (c) to authorize commissioner to conduct criminal history records check of applicant for an originator license, to require applicant to submit fingerprints as part of application, and to require filing application with such system, and deleted former Subsec. (d) and language in Subsecs. (b)(8) and (c) re registration of originator and substituted language re originator license in Subsec. (c), effective September 30, 2008; P.A. 08-176 changed effective date of P.A. 07-156, S. 6, from September 30, 2008, to July 1, 2008, amended Subsec. (a)(1) to increase minimum tangible net worth requirement for a mortgage correspondent lender and a mortgage broker, on and after March 2, 2009, to $50,000, to add requirement for branch manager with supervisory authority at each branch office who has at least 3 years' experience in the mortgage business within the 5 years immediately preceding application for license, to define “experience in the mortgage business”, and to make conforming changes, amended Subsec. (b) to substitute, on and after July 1, 2008, application to Nationwide Mortgage Licensing System for application to commissioner, to delete former Subdivs. (1) to (5) re requirements for application to commissioner and to renumber existing Subdiv. (6) as new Subdiv. (1) re financial statement, to change requirement for financial statement to apply to application for license for main office or renewal of license, rather than for all licenses under section, and substitute “twelve” for “six” months, to add new Subdiv. (2) re bond, to renumber existing Subdiv. (7) as new Subdiv. (3) re evidence of experience and existing Subdiv. (8) as new Subdiv. (4) re other information, to add provision re what is included in evidence of experience of the qualified individual or branch manager, and to make conforming changes, and amended Subsec. (c) to include reference to applications for specified offices, to substitute, on and after July 1, 2008, application to Nationwide Mortgage Licensing System for application to commissioner and to make conforming changes, effective July 1, 2008; P.A. 09-209 amended Subsec. (a)(1) by adding provision re branch manager at each branch office, establishing prelicensing education and written test requirements and adding “residential” re mortgage loans, amended Subsec. (a)(2) by deleting requirement that licensee notify commissioner if licensee's net worth falls below required net worth, added Subsec. (a)(3) re prelicensing education and written test requirements, amended Subsec. (b) by authorizing commissioner to create license application and renewal forms and specifying minimum requirements for such forms, by modifying criminal history records check provision and by authorizing commissioner to obtain independent credit report from a consumer reporting agency, amended Subsec. (c) by designating existing provisions as Subdiv. (1), by authorizing commissioner to create license application and renewal forms and specifying minimum application requirements, and by adding Subdiv. (2) re criminal history background checks and credit reports, and made conforming and technical changes throughout, effective July 31, 2009; P.A. 11-216 amended Subsec. (b) to add reference to loan processors or underwriters and make technical changes, effective July 13, 2011, and amended Subsec. (c)(1) to add provisions re loan processor or underwriter, to permit mortgage loan originator licensees to act as a loan processor or underwriter and to make technical changes, effective October 1, 2011; P.A. 12-96 amended Subsec. (a)(1)(B) to add provision re being licensed as a mortgage loan originator under Sec. 36a-489 and make technical changes; P.A. 17-38 amended Subsec. (c) by deleting clauses (i) and (ii) in Subdiv. (1)(A), deleting provisions effective April 1, 2010 and November 1, 2012 in Subdiv. (1)(B)(iii) and (iv), and deleting former Subdiv. (3) re qualified individual and branch manager to have completed prelicensing education requirement and passed written test not later than April 1, 2010, amended Subsec. (b) by deleting reference to July 1, 2008, and adding reference to Sec. 36a-498h, amended Subsec. (c) by deleting Subdiv. (2) re furnishing fingerprints to system not later than April 1, 2010, deleting Subdiv. (1) designator, adding reference to Sec. 36a-498h, deleting references to April 1, 2010 and October 1, 2011, deleting provision re furnishing authorization effective July 31, 2010 or 30 days after system commences accepting authorizations, adding Subsec. (d) re commissioner may issue lead generator license, and made technical changes; P.A. 18-173 amended Subsec. (a)(1) by redesignating existing provision re main office as new clause (i) and amending same by adding provision re supervisory authority over lending or brokerage activities of licensee and responsibility for licensee's actions, designating existing provisions re branch office as new clause (ii) and amending same by adding “of the branch office, who is responsible for the actions of the branch office”, deleting former clause (i) to (iii) designators in Subpara. (B), and adding provisions re establishment of “at the main office” and waiver of requirements of Subpara. (B), amended Subsec. (b) by deleting provision re unaudited financial statement, deleting Subpara. (A) and (B) designators in Subdiv. (1), redesignating provision re bond as new Subdiv. (2), and redesignating existing Subdivs. (2) and (3) as Subdivs. (3) and (4), amended Subsec. (c) by adding provision re mortgage loan originator licensee to be associated with specified licensed office, amended Subsec. (d) by deleting provision re applicant to notify commissioner on system of change to information, replaced references to Sec. 36a-498f with references to Sec. 36a-498e, and made technical and conforming changes; P.A. 22-94 amended Subsec. (a)(1) by deleting language re residing within 100 miles of main office and deleting references to “in-person”, and amended Subsec. (c) by deleting “from which such licensee will operate” and deleting provision stating specified office shall be within 100-mile distance from where licensee resides unless licensee demonstrates that licensee will be subject to supervision by qualified individual or branch manager, effective May 24, 2022.

(Return to Chapter
Table of Contents)
(Return to
List of Chapters)
(Return to
List of Titles)

Sec. 36a-489. (Formerly Sec. 36-440d). Licenses: Issuance; denial; renewal; suspension; financial responsibility; withdrawal or abandonment of application. (a)(1) The commissioner shall not issue an initial license for a mortgage lender, mortgage correspondent lender or mortgage broker unless the commissioner, at a minimum, finds that: (A) The applicant meets the requirements of subsection (a) of section 36a-488; (B) notwithstanding the provisions of section 46a-80, the applicant, the control persons of the applicant and the qualified individual or branch manager have not been convicted of, or pled guilty or nolo contendere to, a felony in a domestic, foreign or military court during the seven-year period preceding the date of the application for licensing or at any time preceding the date of application if such felony involved an act of fraud, dishonesty, a breach of trust or money laundering, provided any pardon or expungement of a conviction shall not be a conviction for purposes of this subdivision; (C) the applicant demonstrates that the financial responsibility, character and general fitness of the applicant, the control persons of the applicant and the qualified individual or branch manager are such as to command the confidence of the community and to warrant a determination that the applicant will operate honestly, fairly and efficiently within the purposes of sections 36a-485 to 36a-498e, inclusive, 36a-498h, 36a-534a and 36a-534b; (D) the applicant has met the surety bond requirement under section 36a-492; and (E) the applicant, the control persons of the applicant and the qualified individual or branch manager have not made a material misstatement in the application. If the commissioner fails to make such findings, the commissioner shall not issue a license, and shall notify the applicant of the denial and the reasons for such denial. For purposes of this subsection, the level of offense of the crime and the status of any conviction, pardon or expungement shall be determined by reference to the law of the jurisdiction where the case was prosecuted. In the event that such jurisdiction does not use the term “felony”, “pardon” or “expungement”, such terms shall include legally equivalent events.

(2) (A) The minimum standards for license renewal for a mortgage lender, mortgage correspondent lender or mortgage broker shall include the following: (i) The applicant continues to meet the minimum standards under subdivision (1) of this subsection; and (ii) the mortgage lender, mortgage correspondent lender or mortgage broker has paid all required fees for renewal of the license and has paid any outstanding examination fees or other moneys due to the commissioner.

(B) The license of a mortgage lender, mortgage correspondent lender or mortgage broker failing to satisfy the minimum standards for license renewal shall expire. The commissioner may adopt procedures for the reinstatement of expired licenses consistent with the standards established by the system. The commissioner may automatically suspend a mortgage lender, mortgage correspondent lender or mortgage broker license if the licensee receives a deficiency on the system indicating that the payment required by subparagraph (A) of this subdivision was Returned-ACH or returned pursuant to such other term as may be utilized by the system to indicate that the payment was not accepted. After a license has been automatically suspended pursuant to this section, the commissioner shall (i) give the licensee notice of the automatic suspension, pending proceedings for revocation or refusal to renew pursuant to section 36a-494 and an opportunity for a hearing on such action in accordance with section 36a-51, and (ii) require such licensee to take or refrain from taking such action as the commissioner deems necessary to effectuate the purposes of this section.

(b) (1) The commissioner shall not issue an initial license for a mortgage loan originator or a loan processor or underwriter unless the commissioner, at a minimum, finds that the applicant has: (A) Never had a mortgage loan originator or equivalent loan processor or underwriter license revoked in any governmental jurisdiction, except that a subsequent formal vacating of such revocation shall not be deemed a revocation; (B) notwithstanding the provisions of section 46a-80, not been convicted of, or pled guilty or nolo contendere to, a felony in a domestic, foreign or military court during the seven-year period preceding the date of the application for licensing or at any time preceding such date of application if such felony involved an act of fraud, dishonesty, a breach of trust, or money laundering, provided any pardon or expungement of a conviction shall not be a conviction for purposes of this subdivision; (C) demonstrated financial responsibility, character and general fitness so as to command the confidence of the community and to warrant a determination that the mortgage loan originator or loan processor or underwriter will operate honestly, fairly and efficiently within the purposes of sections 36a-485 to 36a-498e, inclusive, 36a-498h, 36a-534a and 36a-534b; (D) completed the prelicensing education requirement described in section 36a-489a and passed a written test that meets the test requirement described in section 36a-489a; (E) met the surety bond requirement under section 36a-492 and, in the case of a mortgage loan originator required to be licensed under section 36a-671e, met the surety bond requirements under sections 36a-492 and 36a-671d; and (F) not made a material misstatement in the application. If the commissioner denies an application for a mortgage loan originator or a loan processor or underwriter license, the commissioner shall notify the applicant and may notify the sponsor or any other person the commissioner deems appropriate of the denial and the reasons for such denial. For purposes of this subsection, the level of offense of the crime and the status of any conviction, pardon or expungement shall be determined by reference to the law of the jurisdiction where the case was prosecuted. In the event that such jurisdiction does not use the term “felony”, “pardon” or “expungement”, those terms shall include legally equivalent events.

(2) (A) The minimum standards for license renewal for a mortgage loan originator or a loan processor or underwriter shall include the following: (i) The licensee continues to meet the minimum standards for license issuance under subdivision (1) of this subsection; (ii) the licensee has satisfied the annual continuing education requirements described in subsection (c) of section 36a-489a; and (iii) the licensee has paid all required fees for renewal of the license and any outstanding examination fees or other moneys due to the commissioner.

(B) The license of a mortgage loan originator or a loan processor or underwriter that fails to satisfy the minimum standards for license renewal shall expire. The commissioner may adopt procedures for the reinstatement of expired licenses consistent with the standards established by the system. The commissioner may automatically suspend a mortgage loan originator or a loan processor or underwriter license if the licensee receives a deficiency on the system indicating that the payment of renewal fees required by subparagraph (A) of subdivision (2) of this subsection was Returned-ACH or returned pursuant to such other term as may be utilized by the system to indicate that the payment was not accepted. After a license has been automatically suspended pursuant to this section, the commissioner shall (i) give the licensee notice of the automatic suspension, pending proceedings for revocation or refusal to renew pursuant to section 36a-494 and an opportunity for a hearing on such action in accordance with section 36a-51 and (ii) require such licensee to take or refrain from taking such action as the commissioner deems necessary to effectuate the purposes of this section.

(c) For purposes of this section, a person has shown that such person is not financially responsible when such person has shown a disregard in the management of such person's own financial condition. A determination that a person has not shown financial responsibility may include, but is not limited to: (1) Current outstanding judgments, except judgments solely as a result of medical expenses; (2) current outstanding tax liens or other government liens and filings; (3) foreclosures during the three years preceding the date of application for an initial license or renewal of a license; or (4) a pattern of seriously delinquent accounts within the past three years.

(d) (1) The commissioner shall not issue a lead generator license to an applicant for such license unless the commissioner, at a minimum, finds that: (A) The applicant demonstrates that the character, reputation, integrity and general fitness of the applicant, any control person of the applicant and the qualified individual are such as to command the confidence of the community and warrant a determination that the applicant will operate honestly, fairly and efficiently within the purposes of sections 36a-485 to 36a-498e, inclusive, 36a-498h, 36a-534a and 36a-534b; (B) the applicant has not made a material misstatement in the application; and (C) the applicant has met any other requirements determined by the commissioner. If the commissioner fails to make such findings, the commissioner shall not issue a license and shall notify the applicant of the denial and the reasons for such denial. Without limiting the foregoing requirements of this subdivision, and subject to the provisions of section 46a-80, the commissioner may deny an application based on the history of criminal convictions of the applicant, any control person of the applicant or the qualified individual.

(2) (A) The minimum standards for license renewal for a lead generator shall include the following: (i) The applicant continues to meet the minimum standards under subdivision (1) of this subsection; and (ii) the lead generator has paid all required fees for renewal of a license and any outstanding examination fees or other moneys due to the commissioner.

(B) The license of a lead generator who fails to satisfy the minimum standards for license renewal shall expire. The commissioner may adopt procedures for the reinstatement of expired licenses consistent with the standards established by the system. The commissioner may automatically suspend a lead generator license if the licensee receives a deficiency on the system indicating that the payment of renewal fees required by subparagraph (A) of subdivision (2) of this subsection was Returned-ACH or returned pursuant to such other term as may be utilized by the system to indicate that the payment was not accepted. After a license has been automatically suspended pursuant to this section, the commissioner shall (i) give the licensee notice of the automatic suspension, pending proceedings for revocation or refusal to renew pursuant to section 36a-494, and an opportunity for a hearing on such action in accordance with section 36a-51; and (ii) require such licensee to take or refrain from taking such action as the commissioner deems necessary to effectuate the purposes of this section.

(e) The commissioner may deem an application for a license under this section abandoned if the applicant fails to respond to any request for information required under sections 36a-485 to 36a-498e, inclusive, 36a-498h, 36a-534a and 36a-534b, or the regulations adopted pursuant to said sections. The commissioner shall notify the applicant on the system that if such information is not submitted not later than sixty days from the date of such request the application shall be deemed abandoned. An application filing fee paid prior to the date an application is deemed abandoned pursuant to this subsection shall not be refunded. Abandonment of an application pursuant to this subsection shall not preclude the applicant from submitting a new application for a license under sections 36a-485 to 36a-498e, inclusive, 36a-498h, 36a-534a and 36a-534b.

(P.A. 85-399, S. 5; P.A. 89-347, S. 12; P.A. 94-122, S. 233, 340; P.A. 99-36, S. 26; P.A. 02-111, S. 6; P.A. 04-69, S. 4; P.A. 06-45, S. 2; P.A. 07-156, S. 7; P.A. 08-176, S. 31, 43; P.A. 09-207, S. 5; 09-208, S. 3; 09-209, S. 8; P.A. 11-216, S. 14–16; P.A. 12-96, S. 1, 11, 12; P.A. 17-38, S. 4; P.A. 18-173, S. 11.)

History: P.A. 89-347 extended the application of the section to mortgage brokers; P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-440d transferred to Sec. 36a-489 in 1995; P.A. 99-36 made technical changes; P.A. 02-111 designated existing provisions as Subsec. (a) and amended same by requiring commissioner to find that applicant meets requirements of Sec. 36a-488(a), providing that application requirements extend to “partners” in a partnership, and adding provisions re extending application requirements to “members if the applicant is a limited liability company”, re denial of license application based on material misstatement in application, and re denial of application subject to provisions of Sec. 46a-80 and added Subsec. (b) re application for registration of originator; P.A. 04-69 substituted “36a-498a” for “36a-498”; P.A. 06-45 amended Subsec. (a) to require commissioner to deny application for license if commissioner finds that applicant made a material misstatement in application for registration of originator or files application for such registration with knowledge that application contains a material misstatement by originator, and amended Subsec. (b) to require commissioner to register originator named in application unless commissioner finds that originator has made a material misstatement in application and to make technical changes, effective May 8, 2006; P.A. 07-156 replaced language re application for registration of originator and registration with language re application for originator license and license and made conforming changes, effective September 30, 2008; P.A. 08-176 changed effective date of P.A. 07-156, S. 7, from September 30, 2008, to July 1, 2008, amended Subsec. (a) to add mortgage correspondent lender, amended Subsecs. (a) and (b) to add references to Secs. 36a-760a to 36a-760h and to make conforming changes, and amended Subsec. (b) to delete provision re license remaining in force and effect, effective July 1, 2008; P.A. 09-207 added provisions, codified by the Revisors as Subsec. (e), re circumstances under which commissioner may consider license application to be abandoned, effective July 7, 2009; P.A. 09-208 added provisions, codified by the Revisors as Subsec. (d), re withdrawal of license application, effective July 7, 2009; P.A. 09-209 deleted former Subsecs. (a) and (b), added new Subsec. (a) re commissioner's minimum findings for issuance and renewal of mortgage lender, mortgage correspondent lender or mortgage broker license, added new Subsec. (b) re commissioner's minimum findings for issuance and renewal of mortgage loan originator license, and added Subsec. (c) re determinations of financial responsibility, effective July 31, 2009 (Revisor's note: In Subsecs. (a)(2)(A)(ii) and (b)(2)(A)(ii), references to Sec. 36a-489a(d) were changed editorially by the Revisors to Sec. 36a-489a(c) for accuracy); P.A. 11-216 amended Subsec. (e) to make technical changes, delete reference to Sec. 36a-498a, add references to Secs. 36a-498f, 36a-534a and 36a-534b and require notification to be made “on the system”, effective July 13, 2011, and amended Subsec. (a)(2)(B) to permit automatic suspension of a mortgage lender, correspondent lender or broker license and amended Subsec. (b) to add provisions re loan processor or underwriter, to require that mortgage loan originator applicant meet the surety bond requirements under Secs. 36a-492 and 26a-671d in Subdiv. (1), to permit automatic suspension of a mortgagor loan originator or loan processor or underwriter license in Subdiv. (2)(B), and to make conforming changes, effective October 1, 2011; P.A. 12-96 amended Subsec. (a) by adding reference to expungement of a conviction and adding provisions re determination of conviction, pardon or expungement in Subdiv. (1) and by replacing “person” with “individual” and requiring each qualified individual and branch manager to be licensed as a mortgagee loan originator and have completed continuing education requirements in Subdiv. (2)(A), amended Subsec. (b)(1) by adding reference to expungement of a conviction in Subpara. (B), requiring qualified individuals or branch managers to have completed continuing education requirements in Subpara. (D) and requiring status of a conviction, pardon or expungement to be determined by reference to law of jurisdiction where case was prosecuted, and amended Subsec. (e) to make technical changes; P.A. 17-38 amended Subsec. (a) by adding reference to Sec. 36a-498h in Subdiv. (1)(C), deleting provisions effective April 1, 2010 and November 1, 2012 in Subdiv. (2)(A)(ii) and redesignating clause (iii) as new clause (ii), amended Subsec. (b) by adding reference to Sec. 36a-498h in Subdiv. (1)(C), deleting provisions effective April 1, 2010 and October 1, 2011 in Subdiv. (1)(D), deleting reference to July 31, 2010 in Subdiv. (1)(E), and deleted Subdiv. (3) re completion of prelicensing education requirement and passing written test, added new Subsec. (d) re issuance of lead generator license to applicant, renewal of license and procedures for reinstatement of expired licenses, redesignated existing Subsec. (d) as Subsec. (e) and amended same by designating existing provisions re withdrawal of application for license as Subdiv. (1), and adding Subdiv. (2) re failure to renew license, and redesignated existing Subsec. (e) re application deemed abandoned as Subsec. (f), and made technical and conforming changes; P.A. 18-173 amended Subsec. (a) by deleting references to having supervisory authority at office and adding reference to control persons of applicant and qualified individual or branch manager re material misstatement in application in Subdiv. (1), amended Subsecs. (a) and (b) by adding provisions re payment of outstanding examination fees or other moneys due commissioner in Subdiv. (2)(A), designating existing provision re commissioner to give licensee notice as clause (i), designating existing provision re commissioner to require licensee to take or refrain from taking action as clause (ii) and amending same by replacing “action that, in the opinion of the commissioner, will effectuate” with “action as the commissioner deems necessary to effectuate”, further amended Subsec. (b) by adding reference to renewal fees in Subdiv. (2)(B), amended Subsec. (d) by adding provision re payment of outstanding examination fees or other moneys due commissioner in Subdiv. (2)(A), adding reference to renewal fees, and replacing “action that, in the opinion of the commissioner, will effectuate” with “action as the commissioner deems necessary to effectuate” in Subdiv. (2)(B), deleted former Subsec. (e) re withdrawal of application and expiration of license for failure to renew, redesignated Subsec. (f) as new Subsec. (e), replaced references to Sec. 36a-498f with references to Sec. 36a-498e, and made technical and conforming changes.

Although Subsec. (a) does not expressly address sole proprietorships, it delineates those individuals to whom commissioner looks in determining the general fitness of various corporate organizations, including principal employees of corporations, and it follows that commissioner reasonably would examine acts of the few employees of sole proprietorship, done in furtherance of its business, in assessing the organization's character or general fitness. 94 CA 547.

(Return to Chapter
Table of Contents)
(Return to
List of Chapters)
(Return to
List of Titles)

Sec. 36a-489a. Prelicensing education, written test and annual continuing education requirements. (a)(1) In order to meet the prelicensing education and testing requirements referred to in section 36a-489, an individual shall complete:

(A) At least twenty hours of education approved in accordance with subdivision (2) of this subsection, which shall include at least (i) three hours of instruction on relevant federal law and regulations; (ii) three hours of ethics training, including instruction on fraud, consumer protection and fair lending issues; and (iii) two hours of training related to lending standards for the nontraditional mortgage product marketplace.

(B) At least one hour of education approved in accordance with subdivision (2) of this subsection on relevant Connecticut law.

(2) For purposes of subdivision (1) of this subsection, prelicensing education courses shall be reviewed and approved by the system based upon reasonable standards. Review and approval of a prelicensing education course shall include review and approval of the course provider.

(3) Nothing in this subsection shall preclude any prelicensing education course, as approved by the system, that is provided by the sponsor or employer of the individual or an entity which is affiliated with the individual by an agency contract, or any subsidiary or affiliate of such sponsor, employer or entity.

(4) Prelicensing education may be offered either in a classroom, online or by any other means approved by the system.

(5) When prelicensing education requirements described in subdivision (1) of this subsection are completed in another state, such out-of-state prelicensing education requirements shall be accepted as credit towards completion of the prelicensing education requirements of this state, provided such out-of-state prelicensing education requirements are approved by the system.

(6) (A) An individual previously licensed under section 36a-489, who is applying to be relicensed shall prove that such individual has completed any continuing education requirements in effect when the license was last held, except that an individual required to retake prelicensing education pursuant to subparagraph (B) of subdivision (7) and subparagraph (B) of subdivision (8) of this subsection shall not be required to complete any outstanding continuing education requirements.

(B) An individual who previously held a position as a qualified individual or branch manager, at a time when such individual was not required to be licensed as a mortgage loan originator, may not hold such position again until such individual has completed all of the continuing education requirements for the year in which such individual last held such position and, effective November 1, 2012, has obtained the required mortgage loan originator license.

(7) (A) If an individual has not obtained a mortgage loan originator license in any state or an active federal registration by the date that is three years from the date such individual completed twenty hours of prelicensing education pursuant to subparagraph (A) of subdivision (1) of this subsection, such individual shall be required to retake twenty hours of prelicensing education in accordance with subparagraph (A) of subdivision (1) of this subsection prior to being licensed as either a mortgage loan originator or a loan processor or underwriter.

(B) If an individual previously held but no longer holds an approved mortgage loan originator license in any state or an active federal registration, such individual shall obtain a mortgage loan originator license in any state or an active federal registration not later than three years from the date such individual last held such license or registration, or such individual shall retake twenty hours of prelicensing education in accordance with subparagraph (A) of subdivision (1) of this subsection prior to being licensed as a mortgage loan originator or loan processor or underwriter.

(8) (A) If an individual has not obtained a mortgage loan originator license or a loan processor or underwriter license in this state by the date that is three years from the date such individual completed one hour of Connecticut specific prelicensing education pursuant to subparagraph (B) of subdivision (1) of this subsection, such individual shall retake one hour of Connecticut specific prelicensing education prior to being licensed as a mortgage loan originator or loan processor or underwriter.

(B) If an individual previously held but no longer holds an approved mortgage loan originator license or loan processor or underwriter license in this state, such individual shall obtain a mortgage loan originator license or loan processor or underwriter license in this state not later than three years from the date such individual last held such license, or such individual shall be required to retake one hour of Connecticut specific prelicensing education in accordance with subparagraph (B) of subdivision (1) of this subsection prior to being licensed as a mortgage loan originator or loan processor or underwriter.

(b) (1) In order to meet the written test requirements referred to in section 36a-489, an individual shall pass, in accordance with the standards established under this subsection, a qualified written test developed by the system and administered by a test provider approved by the system based upon reasonable standards.

(2) A written test shall not be treated as a qualified written test for purposes of subdivision (1) of this subsection unless the test adequately measures the individual's knowledge and comprehension in appropriate subject areas, including ethics, federal law and regulation pertaining to mortgage origination, state law and regulation pertaining to mortgage origination, and federal and state law and regulation, including instruction on fraud, consumer protection, the nontraditional mortgage marketplace and fair lending issues.

(3) Nothing in this subsection shall prohibit a test provider approved by the system from providing a test at the location of the sponsor or employer, any subsidiary or affiliate of the sponsor or employer or any entity with which the individual holds an exclusive arrangement to conduct the business of a mortgage loan originator.

(4) (A) An individual shall not be considered to have passed a qualified written test unless the individual achieves a test score of not less than seventy-five per cent correct answers to questions.

(B) An individual may retake a test three consecutive times with each consecutive taking occurring at least thirty days after the preceding test. After failing three consecutive tests, an individual shall wait at least six months before taking the test again.

(C) (i) An individual who was previously licensed as a mortgage loan originator who completed the test in connection with such license and who has not been licensed as a mortgage loan originator within the five-year period preceding the date of the filing of such individual's application for a mortgage loan originator license, not taking into account any time during which such individual was a registered mortgage loan originator, shall retake such test; and (ii) an individual previously licensed as a loan processor or underwriter who applies to be licensed again shall retake the test if such individual has not been licensed as a loan processor or underwriter within the five-year period preceding the date of the filing of such application, not taking into account any time during which such individual was engaged in loan processing or underwriting but not required to be licensed under subdivision (3) of subsection (b) of section 36a-486.

(c) (1) In order to meet the annual continuing education requirements referred to in subsection (b) of section 36a-489, a licensed mortgage loan originator, a qualified individual or branch manager and a licensed loan processor or underwriter, shall complete at least eight hours of education approved in accordance with subdivision (2) of this subsection. Such courses shall include at least (A) three hours of instruction on relevant federal law and regulation; (B) two hours of ethics, including instruction on fraud, consumer protection and fair lending issues; (C) two hours of training related to lending standards for the nontraditional mortgage product marketplace; and (D) effective January 1, 2015, one hour of relevant Connecticut law.

(2) For purposes of subdivision (1) of this subsection, continuing education courses shall be reviewed and approved by the system based upon reasonable standards. Review and approval of a continuing education course shall include review and approval of the course provider.

(3) Nothing in this subsection shall preclude any education course approved by the system that is provided by the sponsor or employer or an entity that is affiliated with the mortgage loan originator, qualified individual, branch manager or loan processor or underwriter by an agency contract, or by any subsidiary or affiliate of such sponsor, employer or entity.

(4) Continuing education may be offered either in a classroom, online or by any other means approved by the system.

(5) Except as provided in procedures adopted under subsections (a) and (b) of section 36a-489 or in regulations adopted under subdivision (9) of this subsection, a licensed mortgage loan originator, qualified individual, branch manager or a licensed loan processor or underwriter, may only receive credit for a continuing education course in the year for which the course is taken, and may not take the same approved course in the same or successive years to meet the annual requirements for continuing education.

(6) A licensed mortgage loan originator, a qualified individual, a branch manager or a licensed loan processor or underwriter who is an approved instructor of an approved continuing education course may receive credit for the licensee's own annual continuing education requirement at the rate of two hours credit for every one hour taught.

(7) When education requirements described in subparagraphs (A)(i) to (A)(iii), inclusive, of subdivision (1) of subsection (a) of this section are completed in another state, such out-of-state education requirements shall be accepted as credit towards completion of the education requirements of this state, provided such out-of-state education requirements are approved by the system.

(8) A licensed mortgage loan originator and a licensed loan processor or underwriter who subsequently becomes unlicensed must complete the continuing education requirements for the last year in which the license was held prior to issuance of an initial or renewed license. A qualified individual or branch manager who ceases to hold such position shall complete the continuing education requirements for the last year in which such individual or branch manager held such position prior to licensure as a mortgage loan originator.

(9) A person who meets the requirements of subparagraphs (A)(i) and (A)(ii) of subdivision (2) of subsection (a) or subparagraphs (A)(i) and (A)(iii) of subdivision (2) of subsection (b) of section 36a-489 may compensate for any deficiency in an individual's continuing education requirements pursuant to regulations adopted by the commissioner.

(d) For purposes of this section “nontraditional mortgage product” means any mortgage product other than a thirty-year fixed rate mortgage.

(P.A. 09-209, S. 9; P.A. 11-216, S. 17; P.A. 12-96, S. 13; P.A. 14-89, S. 36; P.A. 17-38, S. 5; 17-233, S. 8; P.A. 18-173, S. 92.)

History: P.A. 09-209 effective July 31, 2009; P.A. 11-216 amended Subsec. (a) to add reference to Sec. 36a-488, replace “applicant” with “individual” and make a technical change in Subdiv. (1), to add “employer” and replace “applicant” with “individual” in Subdiv. (3), and to replace “person” with “individual”, make technical changes and add Subpara. (B) re continuing education requirements for individuals who previously held qualified individual or branch manager positions in Subdiv. (6), amended Subsec. (b) to add reference to Sec. 36a-488 and make a technical change in Subdiv. (1), to replace “applicant's” with “individual's” in Subdiv. (2), to add “employer”, delete “of the applicant”, replace “applicant” with “individual” and add “or acts as a qualified individual or branch manager” in Subdiv. (3), to replace “three” with “four” in Subdiv. (4)(B), and to add clauses (i) to (iii) re requirements for retaking a test in Subdiv. (4)(C), amended Subsec. (c) to revise reference to Sec. 36a-489 and add “a qualified individual or branch manager and, effective October 1, 2011, a licensed loan processor or underwriter” in Subdiv. (1), to delete “of the mortgage loan originator” and add “employer” and “qualified individual or branch manager or, effective October 1, 2011, loan processor or underwriter” in Subdiv. (3), to make technical changes, revise reference to Sec. 36a-489 and add “qualified individual or branch manager or, effective October 1, 2011, a licensed loan processor or underwriter” in Subdiv. (5), to add “or a qualified individual or branch manager or, effective October 1, 2011, a licensed loan processor or underwriter” in Subdiv. (6), and to add “and, effective October 1, 2011, a licensed loan processor or underwriter” and add provision re continuing education requirements for qualified individuals or branch managers in Subdiv. (8), and amended Subsec. (d) to delete definition of “system”, effective July 13, 2011; P.A. 12-96 amended Subsec. (a)(6)(B) to add provisions re previously held position at a time when individual was not required to be licensed as a mortgage loan originator and re individual to obtain required mortgage loan originator license, amended Subsec. (b) to delete provision re acting as a qualified individual or branch manager in Subdiv. (3) and, in Subdiv. (4), replace “four” with “three” re retaking of test in Subpara. (B) and delete former Subpara. (C)(ii), and amended Subsec. (c) to replace “holding such position again” with “licensure as a mortgage loan originator” in Subdiv. (8) and make technical changes in Subdivs. (5) and (9); P.A. 14-89 amended Subsec. (a)(1) to replace “twenty” with “twenty-one” re hours of education and to add Subpara. (D) re 1 hour of relevant Connecticut law and amended Subsec. (c)(1) to add Subpara. (D) re 1 hour of relevant Connecticut law; P.A. 17-38 amended Subsec. (a) by deleting reference to Sec. 36a-488 in Subdiv. (1), deleting provisions re effective date of prelicensing and testing requirements, replacing “all of the” with “any”, replacing “for the year in which” with “in effect when”, and deleting reference to November 1, 2012 in Subdiv. (6), amended Subsec. (b) by deleting reference to Sec. 36a-488 in Subdiv. (1), and adding “previously”, deleting provision re effective date of prelicensing and testing requirements, adding “as a mortgage loan originator who completed the test in connection with such license and”, and deleting reference to October 1, 2011 in Subdiv. (4)(C), amended Subsec. (c) by deleting references to October 1, 2011, deleting reference to Sec. 36a-489(a) in Subdiv. (1), replacing “(A)(iii)” with “(A)(ii)” and adding “subparagraphs (A)(i) and (A)(iii) of subdivision (2) of subsection” in Subdiv. (9), and made technical changes; P.A. 17-233 amended Subsec. (a)(1) by designating existing provisions re instruction and training as new Subpara. (A) and amending same by redesignating existing Subparas. (A) to (C) as clauses (i) to (iii), replacing 21 hours with 20 hours, and deleting former Subpara. (D) re one hour of relevant Connecticut law, adding new Subpara. (B) re at least one hour of approved education on relevant Connecticut law, amended Subsec. (a)(6) by adding provision re individual required to retake prelicensing education, added Subsecs. (a)(7) and (a)(8) re mortgage loan originator, loan processor or underwriter license, amended Subsec. (b)(7) by adding “subparagraphs (A)(i) to (A)(iii), inclusive, of”, and made technical and conforming changes, effective January 1, 2019; P.A. 18-173 amended Subsec. (a) by deleting reference to Sec. 36a-488 in Subdiv. (1), deleting references to applicable effective date of prelicensing and testing requirements, and replacing “all of the continuing education requirements for the year in which” with “any continuing education requirements in effect when” in Subdiv. (6), amended Subsec. (b) by deleting reference to Sec. 36a-488 in Subdiv. (1), replacing “individual who was licensed subsequent to the applicable effective date of the prelicensing and testing requirements referred to in section 36a-489” with “individual who was previously licensed as a mortgage loan originator who completed the test in connection with such license” in Subdiv. (4)(C)(i), amended Subsec. (c) by deleting reference to Sec. 36a-489(a) in Subdiv. (1), and replacing “(A)(iii)” with “(A)(ii)” and adding “subparagraphs (A)(i) and (A)(iii) of subdivision (2) of subsection” re Sec. 36a-489(b), deleted references to October 1, 2011, and made technical and conforming changes, effective January 1, 2019.

(Return to Chapter
Table of Contents)
(Return to
List of Chapters)
(Return to
List of Titles)

Sec. 36a-490. (Formerly Sec. 36-440e). License requirements. Request to surrender license. Requirements for filing information with system. (a)(1) Any licensee who intends to permanently cease engaging in the business of making residential mortgage loans or acting as a mortgage broker or lead generator 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 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. No surrender shall be effective until accepted by the commissioner.

(2) A mortgage loan originator licensee who intends to permanently cease engaging in the business of a mortgage loan originator at any time during a license period for any cause, including, but not limited to, bankruptcy, shall file a request to surrender the license 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. No surrender shall be effective until accepted by the commissioner.

(3) A loan processor or underwriter licensee who intends to permanently cease engaging in the activities of a loan processor or underwriter at any time during a license period for any cause, including, but not limited to, bankruptcy, shall file a request to surrender the license 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. No surrender shall be effective until accepted by the commissioner.

(b) (1) A mortgage lender, mortgage correspondent lender, mortgage broker or lead generator license shall not be transferable or assignable. Any change in any control person of the licensee, except a change of 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 not later than thirty days prior to the effective date of such change and no such change shall occur without the commissioner's approval. For purposes of this section, “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.

(2) No licensee may use any name other than its legal name or a fictitious name approved by the commissioner, provided such licensee may not use its legal name if the commissioner disapproves use of such name. No licensee shall use any name or address other than the name and address specified on the license issued by the commissioner. A mortgage lender, mortgage correspondent lender, mortgage broker or lead generator licensee may change the name of the licensee or address of the office specified on the most recent filing with the system if (A) at least thirty calendar days prior to such change, the licensee files such change with the system and, in the case of a main or branch office, provides, directly to the commissioner, a bond rider or endorsement, or addendum, as applicable, to the surety bond on file with the commissioner that reflects the new name or address of the main or branch office, and (B) the commissioner does not disapprove such change, in writing, or request further information within such thirty-day period.

(3) The commissioner may automatically suspend any license for a violation of this subsection, or upon a failure of the licensee to designate a qualified individual or branch manager who meets the requirements set forth in section 36a-488, within thirty days of a vacancy in the position. After a license has been automatically suspended pursuant to this subsection, the commissioner shall (A) give the licensee notice of the automatic suspension, pending proceedings for revocation of or refusal to renew the license pursuant to section 36a-494 and an opportunity for a hearing in accordance with section 36a-51, and (B) require the licensee to take or refrain from taking action as the commissioner deems necessary to effectuate the purpose of this section.

(c) Except as otherwise specified in subsection (b) of this section, each mortgage lender, mortgage correspondent lender, mortgage broker or lead generator applicant or licensee, and each individual designated as a control person, qualified individual or branch manager of such applicant or licensee, shall file on the system, or, if the information cannot be filed on the system, notify the commissioner, in writing, of any change in the information such applicant, licensee, control person, qualified individual or branch manager most recently submitted to the system in connection with the application or license not later than fifteen days after the date such applicant, licensee, control person, qualified individual or branch manager had reason to know of the change. A mortgage lender, mortgage correspondent lender, mortgage broker or lead generator licensee shall file with the system or, if the information cannot be filed on the system, notify the commissioner, in writing, of the occurrence of any of the following developments not later than fifteen days after the date such licensee had reason to know of such development:

(1) Filing for bankruptcy or the consummation of a corporate restructuring of the licensee;

(2) Filing of a criminal indictment against the licensee in any way related to the lending or brokerage activities of the licensee, or receiving notification of the filing of any criminal felony indictment or felony conviction of any control person, branch manager or qualified individual of the licensee;

(3) Receiving notification of the institution of license denial, cease and desist, suspension or revocation procedures, or other formal or informal action by any governmental agency against the licensee or any control person, branch manager or qualified individual of the licensee and the reasons therefor;

(4) Receiving notification of the initiation of any action against the licensee or any control person, branch manager or qualified individual of the licensee by the Attorney General or the attorney general of any other state and the reasons therefor;

(5) Receiving notification of a material adverse action with respect to any existing line of credit or warehouse credit agreement;

(6) Suspension or termination of the licensee's status as an approved seller or servicer by the Federal National Mortgage Association, Federal Home Loan Mortgage Corporation or Government National Mortgage Association;

(7) Exercise of recourse rights by investors or subsequent assignees of residential mortgage loans if such loans for which the recourse rights are being exercised, in the aggregate, exceed the licensee's net worth exclusive of real property and fixed assets;

(8) Receiving notification of filing for bankruptcy of the licensee or of any control person, branch manager or qualified individual of the licensee; or

(9) A decrease in the net worth required by subsection (a) of section 36a-488.

(d) Each mortgage loan originator applicant or licensee and each loan processor or underwriter applicant or licensee shall file with the system or, if the information cannot be filed on the system, notify the commissioner, in writing, of any change in the information most recently submitted in connection with the application or license not later than fifteen days after the date such applicant or licensee had reason to know of the change. Each mortgage loan originator licensee and each loan processor or underwriter licensee shall file with the system, or, if the information cannot be filed on the system, notify the commissioner, in writing, of the occurrence of any of the following developments not later than fifteen days after the date that such licensee had reason to know of the development:

(1) Filing for bankruptcy of the licensee;

(2) Filing of a criminal indictment against the licensee;

(3) Receiving notification of the institution of license or registration denial, cease and desist, suspension or revocation procedures, or other formal or informal action by any governmental agency against the licensee and the reasons therefor; or

(4) Receiving notification of the initiation of any action against the licensee by the Attorney General or the attorney general of any other state and the reasons therefor.

(e) Each mortgage lender, mortgage correspondent lender, mortgage broker, lead generator, mortgage loan originator and loan processor or underwriter license shall remain in force and effect until it has been surrendered, revoked or suspended, or until it expires or is no longer effective, in accordance with the provisions of this title.

(P.A. 85-399, S. 6; P.A. 89-347, S. 13; P.A. 94-122, S. 234, 340; P.A. 97-22, S. 1; P.A. 02-111, S. 7; P.A. 04-69, S. 5; P.A. 07-91, S. 3; 07-156, S. 8; P.A. 08-176, S. 31, 44; P.A. 09-208, S. 4; 09-209, S. 10; P.A. 10-32, S. 112; P.A. 11-216, S. 18, 19; P.A. 17-38, S. 6; P.A. 18-173, S. 12; P.A. 21-138, S. 7.)

History: P.A. 89-347 amended Subsec. (a) by adding the reference to a licensee acting as a mortgage broker in more than one location; P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-440e transferred to Sec. 36a-490 in 1995; P.A. 97-22 made a technical change in Subsec. (a); P.A. 02-111 amended Subsec. (a) by changing requirement re license from “prominently posted in each place of business of the licensee” to “maintained at the location for which the license was issued and shall be available for public inspection”, by changing requirement re change of location from prior approval to prior written notice and by making technical changes, amended Subsec. (b) by deleting former notice requirements and adding provision requiring licensee to promptly notify commissioner of any change in the information provided in the application and amended Subsec. (c) by replacing reference to Sec. 36a-495 with reference to Sec. 36a-498; P.A. 04-69 amended Subsec. (c) to substitute “36a-498a” for “36a-498”; P.A. 07-91 amended Subsec. (a) to delete provision requiring only prior written notice to commissioner for any change of location of a licensee, and amended Subsec. (b) to allow licensee to change name or location specified on its license if, at least 21 calendar days prior to change, licensee provides written notice to commissioner on a form satisfactory to commissioner and a bond rider or endorsement to surety bond on file and commissioner does not disapprove change, in writing, or request further information within such 21-day period; P.A. 07-156 amended Subsec. (a) to insert “mortgage lender and first mortgage broker” re license, effective September 30, 2008; P.A. 08-176 changed effective date of P.A. 07-156, S. 8, from September 30, 2008, to July 1, 2008, amended Subsec. (a) to add mortgage correspondent lender, to delete provisions re business at more than one location, to substitute legal name or fictitious name approved by commissioner for name stated on license, to add provisions re licensee who ceases to engage in business and to make conforming changes, amended Subsec. (b) to substitute “thirty” for “twenty-one” calendar days and “thirty-day” for “twenty-one-day” period and provide for filing with Nationwide Mortgage Licensing System, added new Subsecs. (c) and (d) re notification requirements, redesignated existing Subsec. (c) as Subsec. (e) and made conforming changes therein, effective July 1, 2008; P.A. 09-208 amended Subsec. (e) by substituting “this title” for “sections 36a-485 to 36a-498a, inclusive”, effective July 7, 2009; P.A. 09-209 changed “mortgage loan” to “residential mortgage loan” and “Nationwide Mortgage Licensing System” to “system” throughout, amended Subsec. (a) to provide that no surrender of license is effective until accepted by commissioner, amended Subsec. (b) to reposition and revise provision re prompt filing of change in information, amended Subsec. (c) by deleting former Subdiv. (9) re notifying commissioner of change in control and adding new Subdiv. (9) re decrease in net worth, and amended Subsec. (e) by inserting reference to other licensing provisions, effective July 31, 2009; P.A. 10-32 made technical changes in Subsec. (e), effective May 10, 2010; P.A. 11-216 amended Subsec. (a) to designate existing provisions as Subdiv. (1) and delete “license revocation” therein and add Subdivs. (2) and (3) re filing request to surrender a license, amended Subsec. (b) to add references to main or branch office and addendum, amended Subsec. (d) to add reference to loan processor or underwriter, require notification of any change in information most recently submitted and delete “mortgage loan originator” in Subdivs. (1) to (4) and amended Subsec. (e) to add reference to loan processor or underwriter, effective July 13, 2011; P.A. 17-38 added references to lead generator, amended Subsec. (a)(3) and (d) to delete reference to October 1, 2011, amended Subsec. (c)(3) and (d)(3) to delete “regulatory”, and made technical changes; P.A. 18-173 amended Subsec. (a)(1) by deleting provision re transfer or assignment of license and use of name other than legal or approved fictitious name, amended Subsec. (b) by adding Subdiv. (1) re transfer or assignment of license and change in control person, designating existing provisions re change to name or address on most recent filing with the system as Subdiv. (2) and amending same to add provision re use of name other than legal name or approved fictitious name, redesignating existing Subdivs. (1) and (2) as Subparas. (A) and (B), deleting provision re licensee to promptly file change in information most recently submitted in connection with license with the system or notify commissioner of change, and adding Subdiv. (3) re automatic suspension of license, amended Subsec. (c) by adding provision re filing or notice to commissioner of change to information, adding provision re notice to commissioner of occurrence of developments not later than 15 days after licensee has reason to know of development, deleting reference to licensee's officers, directors, members, partners or shareholders owning ten per cent or more of the outstanding stock in Subdivs. (2) and (8), adding references to control person, branch manager or qualified individual of licensee in Subdivs. (2), (3), (4) and (8), amended Subsec. (d) by adding references to applicant and application, adding provisions re filing or notice to commissioner of change to information or of certain developments not later than 15 days after date applicant or licensee had reason to know of change or development, and made technical and conforming changes; P.A. 21-138 amended Subsec. (b)(1) by defining “change of control” and making a conforming change.

(Return to Chapter
Table of Contents)
(Return to
List of Chapters)
(Return to
List of Titles)

Sec. 36a-491. (Formerly Sec. 36-440f). Expiration of licenses. Applications for renewal. Fees. (a) Each mortgage lender, mortgage correspondent lender, mortgage broker, lead generator, mortgage loan originator and loan processor or underwriter license shall expire at the close of business on December thirty-first of the year in which it is approved, unless such license is renewed, and provided any such license that is approved on or after November first shall expire at the close of business on December thirty-first of the year following the year in which it is approved. An application for renewal of a license shall be filed between November first and December thirty-first of the year in which the license expires. Each applicant for an initial license or renewal of a license as a mortgage lender or mortgage correspondent lender shall pay to the system any required fees or charges and a license fee of one thousand dollars, and each applicant for an initial or renewal license as a mortgage broker or lead generator shall pay to the system any required fees or charges and a license fee of five hundred dollars. Each applicant for an initial license or renewal of a license as a mortgage loan originator or loan processor or underwriter shall pay to the system any required fees or charges and a license fee of three hundred dollars.

(b) All fees paid pursuant to this section, including fees paid in connection with an application that is denied or withdrawn prior to the issuance of the license, shall be nonrefundable. No fee paid pursuant to this section shall be prorated if the license is surrendered, revoked or suspended prior to the expiration of the period for which it was approved.

(P.A. 85-399, S. 7; P.A. 88-150, S. 5; P.A. 89-347, S. 14; P.A. 92-89, S. 7, 20; P.A. 94-104, S. 5; P.A. 96-71, S. 2, 8; P.A. 99-36, S. 27; P.A. 02-111, S. 8; P.A. 04-69, S. 6; P.A. 05-46, S. 2; P.A. 06-45, S. 3; P.A. 07-156, S. 9; P.A. 08-176, S. 31, 45; P.A. 09-209, S. 11; June Sp. Sess. P.A. 09-3, S. 380; P.A. 11-216, S. 20; P.A. 17-38, S. 7.)

History: P.A. 88-150 amended Subsec. (a) by providing that the license fee is nonrefundable and adding the provision re the expiration of licenses on September thirtieth; P.A. 89-347 added references to mortgage brokers, establishing license fee for mortgage brokers; P.A. 92-89 increased the fee applicable to lender's and combination licenses from $250 to $400 and increased the fee applicable to broker's licenses from $100 to $200; P.A. 94-104 changed the license renewal deadline from September tenth to September first and added a $100 late fee in Subsec. (a), and added Subsec. (a)(2) re applications filed by a licensee whose license expired within 60 days of his application; Sec. 36-440f transferred to Sec. 36a-491 in 1995; P.A. 96-71 clarified that all license fees required by this section are nonrefundable, effective July 1, 1996; P.A. 99-36 made a technical change in Subsec. (a); P.A. 02-111 amended Subsec. (a) by providing for license expiration at the close of business on September thirtieth of the even-numbered year following its issuance unless renewed, adding provisions re fee of $800 for first mortgage lender and first mortgage correspondent lender licenses and fee of $400 for first mortgage broker license, adding provisions re lesser fee if application filed not earlier than one year before expiration date, making conforming and technical changes and incorporating provisions of existing Subdiv. (2) into Subdiv. (1) and adding new Subdiv. (2) re application and fees for registration of originator, and amended Subsec. (b) by adding “or registration”; P.A. 04-69 amended Subsec. (a) to change reference to each license issued pursuant to section “36a-489”, in lieu of “this” section, and to substitute “36a-498a” for “36a-498” in Subdiv. (1), and add Subdiv. (3) requiring commissioner to automatically suspend license or registration if commissioner determines that a check filed to pay the license or registration fee has been dishonored and requiring commissioner to give notice of the automatic suspension pending proceedings for revocation or refusal to renew and an opportunity for a hearing in accordance with Sec. 36a-51; P.A. 05-46 amended Subsec. (a)(1) to provide that renewal application filed with commissioner after September first, accompanied by late fee, shall be deemed to be timely and sufficient for purposes of Sec. 4-182(b); P.A. 06-45 amended Subsec. (a)(2) to delete proviso re prorated registration fee of $50 for originator for application filed not earlier than one year before date license expires; P.A. 07-156 amended Subsec. (a)(1) to delete requirement that applicants pay various license fees to commissioner and substitute requirement that applicants, including applicants for a first mortgage broker license, pay the required license fee and processing fee for an initial or renewal application to the national mortgage licensing system and to change date of expiration of licenses issued pursuant to Sec. 36a-489 from September 30th of even-numbered year following issuance to December 31 of year following issuance, amended Subsec. (a)(2) to delete references to registration and to substitute references to license re originators, to require applicants for originator license to pay required license and processing fees for an initial or renewal application to the national mortgage licensing system in lieu of commissioner and to provide that license shall expire on December 31 of year following issuance, deleted former Subsec. (a)(3), and amended Subsec. (b) to delete references to registration, effective September 30, 2008; P.A. 08-176 changed effective date of P.A. 07-156, S. 9, from September 30, 2008, to July 1, 2008, amended Subsec. (a) to expand provisions re date of expiration of licenses, add time frame for renewal of licenses and license fees and make conforming changes, and amended Subsec. (b) to add provisions allowing certain originator fees to be refundable and preventing prorating, effective July 1, 2008; P.A. 09-209 changed “Nationwide Mortgage Licensing System” to “system” and “license or renewal” to “initial license or renewal” throughout, amended Subsec. (a) by deleting Subdiv. (1) designator, applying provisions to mortgage loan originator license, deleting provision re licensee filing renewal application not later than March first of year following year of expiration, replacing former Subdiv. (2) re expiration of mortgage loan originator license with provision, effective November 1, 2009, increasing license fee for originators from $100 to $300, and amended Subsec. (b) by changing “such fees” to “any license fee”, effective July 31, 2009; June Sp. Sess. P.A. 09-3 amended Subsec. (a) to increase fees; P.A. 11-216 amended Subsec. (a) to add references to loan processor or underwriter and amended Subsec. (b) to delete provision re license fee paid by originator for license not sponsored by mortgage lender, correspondent lender or broker; P.A. 17-38 amended Subsec. (a) by deleting provision re expiration date of mortgage lender, mortgage correspondent lender and mortgage broker license extended to December 31, 2008, deleting references to July 1, 2008 and October 1, 2011, adding references to lead generator, deleting provision re fees to renew mortgage lender or mortgage correspondent lender license for person who is licensee on September 30, 2008 and deleting provision re fees to renew mortgage broker license for person who is licensee on June 30, 2008, and making technical changes.

(Return to Chapter
Table of Contents)
(Return to
List of Chapters)
(Return to
List of Titles)

Sec. 36a-492. (Formerly Sec. 36-440g). Surety bond required. Cancellation of bond. Automatic suspension of license. Notices. (a)(1) Each licensed mortgage lender, mortgage correspondent lender and mortgage broker shall file with the commissioner a single surety bond, written by a surety authorized to write such bonds in this state, covering its main office and any branch office, in a penal sum determined in accordance with subsection (d) of this section, provided the penal sum of the bond for licensed mortgage lenders and mortgage correspondent lenders shall be not less than one hundred thousand dollars and the penal sum of the bond for mortgage brokers shall be not less than fifty thousand dollars. The bond shall cover all mortgage loan originators sponsored by such licensee.

(2) Each mortgage loan originator licensee shall be covered by a surety bond with a penal sum in an amount that reflects the dollar amount of loans originated by such mortgage loan originator in accordance with subsection (d) of this section, provided such coverage shall be provided through a single surety bond filed with the commissioner by the person who sponsors such mortgage loan originator.

(3) (A) In the case of an exempt registrant under subdivision (1), (2) or (3) of subsection (a) of section 36a-487: (i) The surety bond shall cover all mortgage loan originators sponsored by such exempt registrant and comply with the requirements set forth in this section, and (ii) the penal sum of such bond shall be in an amount determined in accordance with subsection (d) of this section, provided the penal sum of the bond shall be not less than one hundred thousand dollars; (B) in the case of an exempt registrant under subsection (b) of section 36a-487: (i) The surety bond shall cover all mortgage loan originators sponsored by such exempt registrant and comply with the requirements set forth in this section, and (ii) the penal sum of the bond shall be in an amount determined in accordance with subsection (d) of this section, provided the penal sum shall be not less than fifty thousand dollars; and (C) in the case of a person exempt from licensure as a mortgage lender, mortgage correspondent lender or mortgage broker under subdivision (4) of subsection (a) of section 36a-487, the surety bond shall cover all mortgage loan originators sponsored by such person and comply with the requirements set forth in section 36a-671d.

(4) The principal on a bond required by this section shall file quarterly reports on the system reflecting residential mortgage loan volume in accordance with subsection (c) of section 36a-534b to confirm that it maintains the required penal sum in an amount required by subsection (d) of this section. The principal shall file such information as the commissioner may require under subsection (d) of this section and shall file, as the commissioner may require, pursuant to subsection (d) of this section, any bond rider or endorsement to the surety bond on file with the commissioner to reflect any changes necessary to maintain the surety bond coverage required by this section.

(5) The commissioner may adopt regulations in accordance with chapter 54 with respect to the requirements for such surety bonds.

(b) Except for the bond required by subparagraph (C) of subdivision (3) of subsection (a) of this section, the bond required by subsection (a) of this section shall be (1) in a form approved by the Attorney General, and (2) conditioned upon the mortgage lender, mortgage correspondent lender or mortgage broker licensee and any mortgage loan originator licensee sponsored by such mortgage lender, mortgage correspondent lender or mortgage broker or, in the case of a mortgage loan originator licensee sponsored by an exempt registrant, upon such mortgage loan originator licensee faithfully performing any and all written agreements or commitments with or for the benefit of borrowers and prospective borrowers, truly and faithfully accounting for all funds received from a borrower or prospective borrower by the licensee in the licensee's capacity as a mortgage lender, mortgage correspondent lender, mortgage broker or mortgage loan originator, and conducting such mortgage business consistent with the provisions of sections 36a-485 to 36a-498e, inclusive, 36a-534a and 36a-534b. Any borrower or prospective borrower who may be damaged by failure to perform any written agreements or commitments, or by the wrongful conversion of funds paid by a borrower or prospective borrower to a licensee, may proceed on such bond against the principal or surety thereon, or both, to recover damages. Any borrower or prospective borrower who may be damaged by a mortgage lender, mortgage correspondent lender, mortgage broker or mortgage loan originator licensee's failure to satisfy a judgment against the licensee arising from the making or brokering of a nonprime home loan, as defined in section 36a-760, may proceed on such bond against the principal or surety thereon, or both, to recover the amount of the judgment. The commissioner may proceed on such bond against the principal or surety thereon, or both, to collect any civil penalty imposed upon a licensee pursuant to subsection (a) of section 36a-50 and any unpaid costs of examination of a licensee as determined pursuant to section 36a-65 and, on and after April 1, 2019, any restitution imposed pursuant to subsection (c) of section 36a-50. The proceeds of the bond, even if commingled with other assets of the principal, shall be deemed by operation of law to be held in trust for the benefit of such claimants against the principal in the event of bankruptcy of the principal and shall be immune from attachment by creditors and judgment creditors. The bond shall run concurrently with the period of the license for the main office and the aggregate liability under the bond shall not exceed the penal sum of the bond. The principal shall notify the commissioner of the commencement of an action on the bond. When an action is commenced on a principal's bond, the commissioner may require the filing of a new bond and immediately on recovery on any action on the bond, the principal shall file a new bond.

(c) The surety company shall have the right to cancel the bond at any time by a written notice to the principal stating the date cancellation shall take effect, provided the surety company notifies the commissioner in writing not less than thirty days prior to the effective date of cancellation. If the bond is issued electronically on the system, written notice of cancellation may be provided by the surety company to the principal and the commissioner through the system at least thirty days prior to the date of cancellation. Any notice of cancellation not provided through the system shall be sent by certified mail to the principal and the commissioner at least thirty days prior to the date of cancellation. A surety bond shall not be cancelled unless the surety company notifies the commissioner in writing not less than thirty days prior to the effective date of cancellation. After receipt of such notification from the surety company, the commissioner shall give written notice to the principal of the date such bond cancellation shall take effect and such notice shall be deemed notice to each mortgage loan originator licensee sponsored by such principal. The commissioner shall automatically suspend the licenses of a mortgage lender, mortgage correspondent lender or mortgage broker on such date and inactivate the licenses of the mortgage loan originators sponsored by such lender, correspondent lender or broker. In the case of a cancellation of an exempt registrant's bond, the commissioner shall inactivate the licenses of the mortgage loan originators sponsored by such exempt registrant. No automatic suspension or inactivation shall occur if, prior to the date that the bond cancellation shall take effect, (1) the principal submits a letter of reinstatement of the bond from the surety company or a new bond, (2) the mortgage lender, mortgage correspondent lender or mortgage broker licensee has ceased business and has surrendered all licenses in accordance with subsection (a) of section 36a-490, or (3) in the case of a mortgage loan originator licensee, the sponsorship with the mortgage lender, mortgage correspondent lender or mortgage broker who was automatically suspended pursuant to this section or, with the exempt registrant who failed to provide the bond required by this section, has been terminated and a new sponsor has been requested and approved. After a mortgage lender, mortgage correspondent lender or mortgage broker 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-494 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. The commissioner may provide information to an exempt registrant concerning actions taken by the commissioner pursuant to this subsection against any mortgage loan originator licensee that was sponsored and bonded by such exempt registrant.

(d) The penal sum of the bond required by subdivisions (1) to (3), inclusive, of subsection (a) of this section shall be determined as follows:

(1) An applicant for an initial mortgage lender license or mortgage correspondent lender license shall file a bond in a penal sum of one hundred thousand dollars in connection with its application for the main office.

(2) An applicant for an initial mortgage broker license shall file a bond in a penal sum of fifty thousand dollars in connection with its application for the main office.

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

(4) An exempt registrant under subsection (d) of section 36a-487 who is exempt from licensure under subsection (b) of section 36a-487 shall file a bond in a penal sum of fifty thousand dollars the first time such exempt registrant sponsors a mortgage loan originator.

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

(6) (A) For mortgage lender and mortgage correspondent lender licensees and persons sponsoring and bonding at least one mortgage loan originator as an exempt registrant under subsection (d) of section 36a-487 and who are exempt from licensing under subdivision (1), (2) or (3) of subsection (a) of section 36a-487, if: (i) The aggregate dollar amount of all residential mortgage loans originated by such licensee at all licensed locations or by the exempt registrant during the preceding four quarters ending June thirtieth is less than thirty million dollars, the penal sum of the bond shall be one hundred thousand dollars; (ii) the aggregate dollar amount of all residential mortgage loans originated by such licensee at all licensed locations or by the exempt registrant during the preceding four quarters ending June thirtieth is thirty million dollars or more but less than one hundred million dollars, the penal sum of the bond shall be two hundred thousand dollars; (iii) the aggregate dollar amount of all residential mortgage loans originated by such licensee at all licensed locations or by the exempt registrant during the preceding four quarters ending June thirtieth is one hundred million dollars or more but less than two hundred fifty million dollars, the penal sum of the bond shall be three hundred thousand dollars; and (iv) the aggregate dollar amount of all residential mortgage loans originated by such licensee at all licensed locations or by the exempt registrant during the preceding four quarters ending June thirtieth is two hundred fifty million dollars or more, the penal sum of the bond shall be five hundred thousand dollars.

(B) For mortgage broker licensees and persons who are sponsoring and bonding at least one mortgage loan originator as an exempt registrant under subsection (d) of section 36a-487 and who are exempt from licensing under subsection (b) or (c) of section 36a-487, if: (i) The aggregate dollar amount of all residential mortgage loans originated by such licensee at all licensed locations or by the exempt registrant during the preceding four quarters ending June thirtieth is less than thirty million dollars, the penal sum of the bond shall be fifty thousand dollars; (ii) the aggregate dollar amount of all residential mortgage loans originated by such licensee at all licensed locations or by the exempt registrant during the preceding four quarters ending June thirtieth is thirty million dollars or more but less than fifty million dollars, the penal sum of the bond shall be one hundred thousand dollars; and (iii) the aggregate dollar amount of all residential mortgage loans originated by such licensee at all licensed locations or by the exempt registrant during the preceding four quarters ending June thirtieth is fifty million dollars or more, the penal sum of the bond shall be one hundred fifty thousand dollars.

(7) For purposes of this subsection, the aggregate dollar amount of all residential mortgage loans originated by such licensee or exempt registrant includes the aggregate dollar amount of all closed residential mortgage loans that the licensee or exempt registrant originated, brokered or made, as applicable.

(8) Financial information necessary to verify the aggregate dollar amount of residential mortgage loans originated shall be filed with the commissioner, as the commissioner may require, and shall be reported on the system at such time and in such form as the system may require.

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

(P.A. 85-399, S. 8; P.A. 89-347, S. 15; P.A. 90-277; P.A. 94-122, S. 235, 340; P.A. 99-36, S. 28; P.A. 02-111, S. 9; P.A. 04-69, S. 7; P.A. 07-156, S. 10; P.A. 08-176, S. 31, 46, 47; P.A. 09-208, S. 5; 09-209, S. 12; P.A. 11-216, S. 21; P.A. 14-7, S. 12; 14-89, S. 47; P.A. 15-235, S. 29; P.A. 17-38, S. 8; P.A. 18-173, S. 13; P.A. 22-94, S. 6; P.A. 23-126, S. 12.)

History: P.A. 89-347 extended the application of the section to mortgage brokers; P.A. 90-277 reduced the required bond sum from $50,000 to $40,000; P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-440g transferred to Sec. 36a-492 in 1995; P.A. 99-36 made technical changes; P.A. 02-111 added provision re performance “for the benefit” of borrowers and prospective borrowers, changed any “person” to any “borrower or perspective borrower”, added provisions re commissioner to proceed on bond to collect civil penalty imposed pursuant to Sec. 36a-50(a) and re bond proceeds deemed to be held in trust and immune from attachment, and made conforming and technical changes; P.A. 04-69 designated existing provisions as Subsec. (a), substituting “36a-498a” for “36a-498” therein, and added Subsec. (b) giving surety company the right to cancel the bond at any time by written notice to licensee, specifying manner of notice, requiring surety company to notify commissioner in writing prior to cancellation, requiring commissioner to automatically suspend license on date cancellation takes effect, unless bond has been replaced or renewed, and requiring commissioner to give licensee notice of automatic suspension pending proceedings for revocation or refusal to renew and an opportunity for a hearing in accordance with Sec. 36a-51; P.A. 07-156 amended Subsec. (a) to insert “mortgage lender or first mortgage broker” re license, effective September 30, 2008; P.A. 08-176 changed effective date of P.A. 07-156, S. 10, from September 30, 2008, to July 1, 2008, amended Subsec. (a) to add “mortgage correspondent lender”, to increase amount of bond to $80,000 on and after August 1, 2009, to add provision, commencing August 1, 2009, for borrower or prospective borrower of nonprime home loan to proceed on bond to recover amount of judgment, to allow commissioner to proceed on bond to collect any unpaid costs of examination of licensee and to make conforming changes, and amended Subsec. (b) to delete provision re automatic suspension of license when bond is cancelled, effective July 1, 2008; P.A. 09-208 amended Subsec. (b) by adding provisions re automatic suspension of license and opportunity for hearing upon cancellation of bond; P.A. 09-209 amended Subsec. (a) by designating existing provisions as Subdiv. (1), deleting provisions re conditions of surety bond and proceeding on bonds, adding provision re penal sum of bond reflecting dollar amount of loans originated by lender or broker as determined by commissioner and adding Subdiv. (2) re surety bonds for originators, added new Subsec. (b) re conditions of surety bond and proceeding on bonds and redesignated existing Subsec. (b) as Subsec. (c), effective July 31, 2009; P.A. 11-216 replaced former Subsec. (a)(1) and (2) with new Subsec. (a)(1) to (5) re surety bond requirements, amended Subsec. (b) to require bond to be in form approved by Attorney General, add provision re mortgage loan originator licensee sponsored by an exempt registrant, make technical changes, and replace “licensee” with “principal”, amended Subsec. (c) to replace “licensee” with “principal”, permit notice from commissioner to principal of bond cancellation to be deemed notice to each mortgage loan originator licensee sponsored by such principal, add requirements re suspension or inactivation of license and prevention of suspension or inactivation for mortgage loan originator licensees whose sponsorship has been terminated and who have requested and received approval for new sponsor, permit commissioner to provide information re exempt registrants concerning actions taken against any mortgage loan originator licensees sponsored by such registrants and make technical changes, and added Subsec. (d) re determination of penal sum of bond required, effective July 1, 2011; P.A. 14-7 amended Subsec. (d) by replacing references to Sec. 36a-487(c) with references to Sec. 36a-487(d) in Subdivs. (3) to (6) and adding reference to Sec. 36a-487(c) in Subdiv. (6)(B), effective May 8, 2014; P.A. 14-89 added references to Sec. 36a-487(a)(2) or (3) in Subsecs. (a)(3), (d)(3) and (d)(6) and replaced references to Sec. 36a-487(a)(2) with references to Sec. 36a-487(a)(4) in Subsecs. (a)(3) and (d)(5); P.A. 15-235 replaced references to not later than September 1, 2011, and every September first thereafter with references to after review of preceding four-quarter period ending June thirtieth re deadline for principal on bond to file information with commissioner in Subsec. (a)(4), replaced references to twelve-month period ending July thirty-first of current year with references to four quarters ending June thirtieth re time period for determination of penal sum on bond in Subsec. (d)(6), and made technical changes, effective July 7, 2015; P.A. 17-38 deleted references to October 1, 2011, amended Subsec. (b) to delete reference to August 1, 2009, and made technical changes; P.A. 18-173 amended Subsec. (a) by replacing references to exempt registrant with references to person exempt from licensure as mortgage lender, mortgage correspondent lender or mortgage broker in Subdiv. (3), replacing provision re annual confirmation in connection with renewal request with provision re filing quarterly reports on system, and deleting provision re reviewing preceding four-quarter period, deleting Subpara. (B) re principal on bond to annually confirm it maintains required penal sum and filing information as commissioner may require, and deleting Subpara. (A) designator in Subdiv. (4), amended Subsec. (b) by adding reference to bond required by Subsec. (a)(3)(C), replacing reference to Sec. 36a-498f with reference to Sec. 36a-498e, and adding provision re restitution imposed on and after April 1, 2019, amended Subsec. (c) by adding provisions re surety company to notify commissioner prior to effective date of cancellation, designating existing provisions re notice to licensee and requiring licensee to take or refrain from taking action as Subparas. (A) and (B), respectively, replacing “action as in the opinion of the commissioner will effectuate” with “action as the commissioner deems necessary to effectuate” in Subpara. (B), amended Subsec. (d)(5) by deleting reference to exempt registrant, and made technical and conforming changes; P.A. 22-94 amended Subsec. (a)(1) by deleting “file an addendum to such bond to cover”, effective May 24, 2022; P.A. 23-126 made a technical change in Subsec. (d)(5).

Subsec. (c): Use of the word “shall” is mandatory and directs the commissioner to suspend a mortgage lender license in the event of surety bond cancellation unless the lender satisfies one of two exceptions to the requirement of automatic suspension. 342 C. 273.

(Return to Chapter
Table of Contents)
(Return to
List of Chapters)
(Return to
List of Titles)

Sec. 36a-493. (Formerly Sec. 36-440h). Records to be maintained by licensee. (a) Each mortgage lender, mortgage correspondent lender and mortgage broker licensee, and each bona fide nonprofit organization exempt from licensure under subdivision (2) of subsection (b) of section 36a-487 shall maintain adequate records of each residential mortgage loan transaction at the office named in the license, or, if requested by the commissioner, shall make such records available at such office or send such records to the commissioner by registered or certified mail, return receipt requested, or by any express delivery carrier that provides a dated delivery receipt, not later than five business days after requested by the commissioner to do so. Upon request, the commissioner may grant a licensee or exempt bona fide nonprofit organization additional time to make such records available or send them to the commissioner. Such records shall provide the following information: (1) A copy of any disclosures required under part III of chapter 669; (2) whether the licensee or exempt bona fide nonprofit organization acted as a mortgage lender, a mortgage correspondent lender, a mortgage broker, a mortgage lender and a mortgage broker, or a mortgage correspondent lender and a mortgage broker; (3) if the licensee or exempt bona fide nonprofit organization is acting as a mortgage lender or mortgage correspondent lender, and retains the residential mortgage loan or receives payments thereon, an adequate loan history for those loans retained or upon which payments are received, itemizing the amount and date of each payment and the unpaid balance at all times; (4) the purpose for which the loan was made; (5) the original or an exact copy of the note, loan agreement or other evidence of indebtedness and mortgage deed; (6) a statement signed by the borrower acknowledging the receipt of such statement which discloses the full amount of any fee, commission or consideration paid to the mortgage lender, mortgage correspondent lender and mortgage broker for all services in connection with the origination and settlement of the residential mortgage loan; (7) the name and address of the mortgage lender, mortgage correspondent lender and the mortgage broker, if any, involved in the loan transaction; (8) a copy of the initial and a copy of the final residential mortgage loan application taken from the borrower; and (9) a copy of all information used in evaluating the application.

(b) For each loan that is made and serviced by a licensee or exempt bona fide nonprofit organization, the licensee or exempt bona fide nonprofit organization shall retain: (1) The records of such loan transaction for not less than two years following the final payment thereon, or the assignment of such loan, whichever occurs first, or such longer period as may be required by any other provision of law, and (2) copies of the note, Closing Disclosure or other settlement statement, or such other records as are sufficient to verify the mortgage lender's or mortgage correspondent lender's compliance with section 36a-498a for not less than five years from the date of the transaction.

(c) For each loan transaction in which a licensee or exempt bona fide nonprofit organization acts as a mortgage lender, mortgage correspondent lender or mortgage broker but does not service the loan, the licensee or exempt bona fide nonprofit organization shall retain: (1) The records of such loan transaction for not less than two years from the date of the transaction or such longer period as may be required by any other provision of law, and (2) copies of the note, Closing Disclosure or other settlement statement, or such other records as are sufficient to verify the mortgage lender's or mortgage correspondent lender's compliance with section 36a-498a for not less than five years from the date of the transaction.

(d) Each lead generator licensee shall maintain adequate records of its lead generation activities at the office named in the license, or, if requested by the commissioner, shall make such records available at such office or send such records to the commissioner by registered or certified mail, return receipt requested, or by any express delivery carrier that provides a dated delivery receipt, not later than five business days after such records are requested by the commissioner. Upon request, the commissioner may grant a lead generator licensee additional time to make such records available or send such records to the commissioner. Such records shall include, for the preceding two-year period: (1) Copies of all solicitation materials used in the lead generator's business regardless of medium, including, but not limited to, business cards, telephone scripts, mailers, electronic mail and radio, television and Internet advertisements; (2) records of any contact or attempted contact with a consumer, including the name, date, method and nature of contact, and any information provided to or received from the consumer; and (3) the name, address and, if applicable, unique identifier of any person who received, requested or contracted for leads or referrals and any fees or consideration charged or received for such services.

(e) Any person who furnishes to a licensee or an exempt bona fide nonprofit organization any records required to be maintained under this section or any information necessary to complete such records may charge a fee to the licensee or exempt bona fide nonprofit organization in an amount not to exceed fifty dollars.

(P.A. 85-399, S. 9; P.A. 89-347, S. 16; P.A. 90-184, S. 8; P.A. 94-122, S. 236, 340; P.A. 02-111, S. 10; P.A. 07-156, S. 11; P.A. 08-176, S. 31, 48, 49; P.A. 09-209, S. 13; P.A. 15-235, S. 38; P.A. 17-38, S. 9; P.A. 18-173, S. 14.)

History: P.A. 89-347 amended Subsec. (a) by inserting new Subdiv. (2) requiring the licensee to state whether it acted as a mortgage lender, a mortgage broker or any combination thereof and renumbering the remaining subdivisions in Subsec. (a) and adding Subsec. (a)(6) re the borrower's statement, made a technical change in Subsec. (c) and added Subsec. (d) re record retention requirements for mortgage brokers; P.A. 90-184 added Subsec. (e) authorizing a fee to be charged for records or information furnished to a licensee; P.A. 94-122 changed “commissioner or his representative” to “commissioner” and “any combination thereof” to “both” in Subsec. (a), deleted Subsec. (b) re examination of books and records of licensees, and relettered former Subsecs. (c) through (e) as Subsecs. (b) through (d), effective January 1, 1995; Sec. 36-440h transferred to Sec. 36a-493 in 1995; P.A. 02-111 amended Subsec. (a) to change where records are maintained or made available from “place of business” to “location” named in the license, to replace references to “mortgage broker” with reference to “first mortgage broker”, to add new Subdiv. (7) re name and address of broker and to make technical changes, amended Subsec. (b) to increase record retention period for licensees who make or service loans from one to two years following final payment or assignment, or such longer retention period as may be required by law, and amended Subsec. (c) by deleting reference to licensee acting as a “mortgage broker” and substituting “mortgage lender or first mortgage broker but does not service the loan” and by making technical changes; P.A. 07-156 amended Subsec. (a) to insert “mortgage lender and first mortgage broker” re licensee, effective September 30, 2008; P.A. 08-176 changed effective date of P.A. 07-156, S. 11, from September 30, 2008, to July 1, 2008, amended Subsec. (a) to add provisions re sending records to commissioner and re granting of additional time, to add “mortgage correspondent lender”, to add, in Subdiv. (5), “loan agreement or other evidence of indebtedness”, to add Subdivs. (8) and (9) re copy of loan application and information used in evaluating application, and to make conforming changes, amended Subsecs. (b) and (c) to designate existing provisions re records of loan transaction as Subdiv. (1) and add Subdiv. (2) re copies of note, HUD-1 settlement statement or other settlement statement or other records, and further amended Subsec. (c) to add “mortgage correspondent lender” and make a conforming change, effective July 1, 2008; P.A. 09-209 amended Subsec. (a) by changing “mortgage loan” to “residential mortgage loan”, effective July 31, 2009; P.A. 15-235 amended Subsecs. (b) and (c) to change “HUD-1 settlement statement” to “Closing Disclosure”, effective August 1, 2015; P.A. 17-38 added new Subsec. (d) re maintenance of records by lead generator licensee, and redesignated existing Subsec. (d) as Subsec. (e); P.A. 18-173 added references to exempt bona fide nonprofit organization.

(Return to Chapter
Table of Contents)
(Return to
List of Chapters)
(Return to
List of Titles)

Sec. 36a-494. (Formerly Sec. 36-440i). Suspension, revocation or refusal to renew license or taking other action. Removal from office and from employment or retention. Temporary order to cease business. (a)(1) The commissioner may suspend, revoke or refuse to renew any mortgage lender, mortgage correspondent lender or mortgage broker license or take any other action, in accordance with the provisions of section 36a-51, for any reason which would be sufficient grounds for the commissioner to deny an application for such license under sections 36a-485 to 36a-498e, inclusive, 36a-498h, 36a-534a and 36a-534b, or if the commissioner finds that the licensee, any control person of the licensee, the qualified individual or branch manager, trustee, employee or agent of such licensee has done any of the following: (A) Made any material misstatement in the application; (B) committed any fraud, misappropriated funds or misrepresented, concealed, suppressed, intentionally omitted or otherwise intentionally failed to disclose any of the material particulars of any residential mortgage loan transaction, including disclosures required by subdivision (6) of subsection (a) of section 36a-493, or part III of chapter 669 or regulations adopted pursuant thereto, to anyone entitled to such information; (C) violated any of the provisions of this title or of any regulation or order adopted or issued pursuant thereto pertaining to any such person, or any other law or regulation applicable to the conduct of its business; or (D) failed to perform any agreement with a licensee or a borrower. For purposes of this subdivision, “agent” includes any settlement agent used by the licensee and “settlement agent” means the person specified in any Closing Disclosure or other settlement statement, provided such settlement agent has been selected by the licensee. Any settlement agent whose name appears on the licensee's list of approved settlement agents shall be deemed selected by the licensee even if the settlement agent is selected from such list by the borrower.

(2) The commissioner may suspend, revoke or refuse to renew any mortgage loan originator license or any loan processor or underwriter license or take any other action, in accordance with the provisions of section 36a-51, for any reason which would be sufficient grounds for the commissioner to deny an application for such license under sections 36a-485 to 36a-498e, inclusive, 36a-498h, 36a-534a and 36a-534b, or if the commissioner finds that the licensee has committed any fraud, misappropriated funds, misrepresented, concealed, suppressed, intentionally omitted or otherwise intentionally failed to disclose any of the material particulars of any residential mortgage loan transaction or has violated any of the provisions of this title or of any regulation or order adopted or issued pursuant thereto pertaining to any such person, or any other law or regulation applicable to the conduct of such licensee's business.

(3) The commissioner may suspend, revoke or refuse to renew any lead generator license or take any other action, in accordance with the provisions of section 36a-51, for any reason that would be sufficient grounds for the commissioner to deny an application for such license under sections 36a-485 to 36a-498e, inclusive, 36a-498h, 36a-534a and 36a-534b, or if the commissioner finds that the licensee, any control person of the licensee or qualified individual, trustee, employee or agent of such licensee has done any of the following: (A) Made any material misstatement in the application for licensure; (B) committed any fraud or misrepresentation in connection with such licensee's lead generator business; or (C) violated any of the provisions of this title or of any regulation or order adopted or issued pursuant thereto, and pertaining to any such person, or any other law or regulation applicable to the conduct of such licensee's lead generator business.

(b) Whenever it appears to the commissioner that (1) any person has violated, is violating or is about to violate any of the provisions of sections 36a-485 to 36a-498e, inclusive, 36a-498h, 36a-534a and 36a-534b, or any regulation adopted pursuant thereto, (2) any person is, was, or would be a cause of the violation of any such provisions or regulation due to an act or omission such person knew or should have known would contribute to such violation, or (3) any licensee has failed to perform any agreement with a borrower, committed any fraud, misappropriated funds or misrepresented, concealed, suppressed, intentionally omitted or otherwise intentionally failed to disclose any of the material particulars of any residential mortgage loan transaction, including disclosures required by subdivision (6) of subsection (a) of section 36a-493, or part III of chapter 669 or regulations adopted pursuant thereto, to anyone entitled to such information, the commissioner may take action against such person or licensee in accordance with sections 36a-50 and 36a-52.

(c) The commissioner may order a licensee to remove any individual conducting business under sections 36a-485 to 36a-498e, inclusive, 36a-498h, 36a-534a and 36a-534b from office and from employment or retention as an independent contractor in the mortgage business in this state in accordance with section 36a-51a.

(d) The commissioner may issue a temporary order to cease business under a license if the commissioner determines that such license was issued erroneously. Such temporary order shall be issued in accordance with subsection (j) of section 36a-24b and section 36a-52.

(P.A. 85-399, S. 10; P.A. 86-403, S. 78, 132; P.A. 88-230, S. 1, 12; P.A. 89-347, S. 17; P.A. 90-98, S. 1, 2; P.A. 93-142, S. 4, 7, 8; 93-194, S. 5, 7; P.A. 94-122, S. 237, 340; P.A. 99-36, S. 29; P.A. 00-61, S. 2, 9; P.A. 02-111, S. 11; P.A. 04-69, S. 8; P.A. 05-46, S. 3; P.A. 06-45, S. 4; P.A. 07-91, S. 17; 07-156, S. 12; P.A. 08-176, S. 31, 50; P.A. 09-209, S. 14; P.A. 11-216, S. 22; P.A. 12-96, S. 14; P.A. 15-235, S. 39; P.A. 17-38, S. 10; 17-236, S. 1; P.A. 18-173, S. 15.)

History: P.A. 86-403 deleted reference to chapter 657a in Subsec. (a); P.A. 88-230 replaced “judicial district of Hartford-New Britain” with “judicial district of Hartford”, effective September 1, 1991; P.A. 89-347 amended Subsec. (a) by adding failure to make disclosures required by Sec. 36-440h(a)(6) as grounds for suspending, revoking or refusing to renew a license; P.A. 90-98 changed the effective date of P.A. 88-230 from September 1, 1991, to September 1, 1993; P.A. 93-142 changed the effective date of P.A. 88-230 from September 1, 1993, to September 1, 1996, effective June 14, 1993; P.A. 93-194 specified that provisions apply to persons who are not licensed as well as to licensees, effective June 23, 1993; P.A. 94-122 deleted Subsec. (c) re cease and desist provisions and made technical changes, effective January 1, 1995; Sec. 36-440i transferred to Sec. 36a-494 in 1995; P.A. 99-36 made technical changes; P.A. 00-61 amended Subsec. (b) by adding language re licensee's failure to perform an agreement with a borrower, effective July 1, 2000; P.A. 02-111 amended Subsec. (a) by designating existing provisions as Subdiv. (1) and, within said Subdiv., redesignating existing Subdivs. (1) to (4) as Subparas. (A) to (D), replacing “owner” with “proprietor”, adding reference to misappropriated funds in Subpara. (B), replacing former statutory references with reference to “this title” in Subpara. (C) and adding reference to licensee in Subpara. (D), and by adding new Subdiv. (2) re commissioner's authority to suspend, revoke or refuse to renew registration of originator; P.A. 04-69 substituted “36a-498a” for “36a-498” throughout and amended Subsec. (b) to allow commissioner to take action against violator or licensee in accordance with Sec. 36a-52; P.A. 05-46 amended Subsec. (b) to allow commissioner to impose civil penalty or issue cease and desist order against licensees and registrants who commit fraud, misappropriate funds or misrepresent, conceal, suppress, intentionally omit or otherwise intentionally fail to disclose any material particulars of mortgage loan transaction to anyone entitled to such information; P.A. 06-45 amended Subsec. (a)(2) to provide that violations of title 36a or regulations or any other law applicable to conduct of registrant's business are grounds for suspension, revocation or refusal to renew registration of originator, effective May 8, 2006; P.A. 07-91 amended Subsec. (a)(1) and (2) to authorize commissioner to take any other action, in accordance with provisions of Sec. 36a-51, effective June 5, 2007; P.A. 07-156 amended Subsec. (a)(1) to insert “mortgage lender or first mortgage broker” re license, amended Subsec. (a)(2) to substitute “license” and “licensee” for “registration” and “registrant”, and amended Subsec. (b) to delete references to “registrant”, effective September 30, 2008; P.A. 08-176 changed effective date of P.A. 07-156, S. 12, from September 30, 2008, to July 1, 2008, and amended Subsec. (a) to add “mortgage correspondent lender”, make conforming changes and, in Subdiv. (2), include findings that licensee has “concealed, suppressed, intentionally omitted or otherwise intentionally failed to disclose” any material particulars, effective July 1, 2008; P.A. 09-209 changed “mortgage loan” to “residential mortgage loan” throughout, amended Subsec. (a) by changing “proprietor, director, officer, member, partner, shareholder” to “any control person of the licensee, the qualified individual or branch manager with supervisory authority”, added Subsec. (c) re removal from office and from employment or retention as independent contractor and opportunity for hearing, added Subsec. (d) re temporary order to cease business under license and opportunity for hearing, and inserted references to other licensing provisions throughout, effective July 31, 2009; P.A. 11-216 amended Subsec. (a)(2) to add “any loan processor or