Connecticut General Statutes, Chapter 668 (incl. §§ 36a-596 definitions and 36a-613 virtual currency kiosks) (Part 2 of 4)
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underwriter licensee or”; P.A. 12-96 amended Subsec. (a)(1) to add definitions of “agent” and “settlement agent” and provide that any settlement agent whose name appears on list of approved settlement agents shall be deemed selected by licensee, and amended Subsec. (b) to designate existing provisions re violations as Subdivs. (1) and (3) and to add Subdiv. (2) re violation due to an act or omission the person knew or should have known would contribute to the violation; P.A. 15-235 amended Subsec. (a) to change “HUD-1 settlement statement” to “Closing Disclosure”, effective August 1, 2015; P.A. 17-38 added references to Sec. 36a-498h, amended Subsec. (a) to add Subdiv. (3) re commissioner may suspend, revoke or refuse to renew lead generator license or take other action, and amended Subsec. (c) to add “order a licensee to” in Subdiv. (1) and replace “person” with “individual”; P.A. 17-236 amended Subsec. (a)(1)(C) to replace “any regulations adopted pursuant thereto,” with “any regulation or order adopted or issued pursuant thereto, and pertaining to any such person,”; P.A. 18-173 amended Subsec. (a) by deleting reference to supervisory authority in Subdiv. (1), and replacing provisions re violation of regulations adopted pursuant to title with provisions re regulation or order adopted or issued pursuant to title and pertaining to certain persons in Subdivs. (2) and (3), amended Subsec. (c) by deleting provisions re commissioner's findings as a result of investigation and adding reference to Sec. 36a-51a, deleting Subdiv. (2) re hearing, and deleting Subdiv. (1) designator, amended Subsec. (d) by deleting provisions re opportunity for hearing and effective dates of temporary order and adding provision re temporary order to be issued in accordance with Secs. 36a-24b(j) and 36a-52, replaced references to Sec. 36a-498f with references to Sec. 36a-498e, and made technical and conforming changes. (Return to Chapter Table of Contents) (Return to List of Chapters) (Return to List of Titles) Sec. 36a-495. (Formerly Sec. 36-440j). Regulations. Section 36a-495 is repealed, effective October 1, 2002. (P.A. 85-399, S. 11; P.A. 99-36, S. 30; P.A. 02-111, S. 51.) (Return to Chapter Table of Contents) (Return to List of Chapters) (Return to List of Titles) Sec. 36a-496. (Formerly Sec. 36-440k). Applications and referrals from unlicensed mortgage brokers or mortgage loan originators. No person engaged in the business of making residential mortgage loans in this state, whether licensed in accordance with the provisions of sections 36a-485 to 36a-498e, inclusive, 36a-534a and 36a-534b or exempt from licensing, shall accept applications or referral of applicants from, or pay a fee to, any mortgage broker or mortgage loan originator who is required to be licensed under said sections but was not, as of the time of the performance of such mortgage broker's or mortgage loan originator's services in connection with loans made or to be made by the mortgage lender or mortgage correspondent lender, licensed to act as such by the commissioner, if the mortgage lender or mortgage correspondent lender has actual knowledge that the mortgage broker or mortgage loan originator was not licensed by the commissioner. (P.A. 91-306, S. 2; P.A. 02-111, S. 12; P.A. 04-69, S. 9; P.A. 07-156, S. 13; P.A. 08-176, S. 31, 51; P.A. 09-209, S. 15; P.A. 18-173, S. 16.) History: Sec. 36-440k transferred to Sec. 36a-496 in 1995; P.A. 02-111 extended prohibition to include accepting applications or referrals of applications from, or payment of fees to, unregistered originators and replaced references to “mortgage broker” with references to “first mortgage broker”; P.A. 04-69 substituted “36a-498a” for “36a-498”; P.A. 07-156 deleted references to “registered”, effective September 30, 2008; P.A. 08-176 changed effective date of P.A. 07-156, S. 13, from September 30, 2008, to July 1, 2008, added language re person not licensed at the time of performance of services, added references to “mortgage correspondent lender” and made conforming changes, effective July 1, 2008; P.A. 09-209 changed “mortgage loans” to “residential mortgage loans”, effective July 31, 2009; P.A. 18-173 replaced reference to Sec. 36a-498a with reference to Sec. 36a-498e and added references to Secs. 36a-534a and 36a-534b. (Return to Chapter Table of Contents) (Return to List of Chapters) (Return to List of Titles) Sec. 36a-497. (Formerly Sec. 36-440l). Advertisements. (a) No mortgage lender licensee, mortgage correspondent lender licensee or mortgage broker licensee shall: (1) Advertise or cause to be advertised in this state, any residential mortgage loan in which such person intends to act only as a mortgage broker unless the advertisement includes the following statement, clearly and conspicuously expressed: “MORTGAGE BROKER ONLY, NOT A MORTGAGE LENDER OR MORTGAGE CORRESPONDENT LENDER”; or (2) In connection with an advertisement in this state, use (A) a simulated check; (B) a comparison between the loan payments under the residential mortgage loan offered and the loan payments under a hypothetical loan or extension of credit, unless the advertisement includes, with respect to both the hypothetical loan or extension of credit and the residential mortgage loan being offered, the interest rate, the loan balance, the total amount of finance charges, the total number of payments and the monthly payment amount that would be required to pay off the outstanding loan balance shown; (C) representations such as “verified as eligible”, “eligible”, “preapproved”, “prequalified” or similar words or phrases, without also disclosing, in immediate proximity to and in similar size print, language which sets forth prerequisites to qualify for the residential mortgage loan, including, but not limited to, income verification, credit check, and property appraisal or evaluation; or (D) any words or symbols in the advertisement or on the envelope containing the advertisement that give the appearance that the mailing was sent by a government agency. (b) (1) Each lead generator licensee shall include the following statement in all advertisements of residential mortgage loans and solicitations of leads by mail, electronic mail or through such licensee's Internet web site, clearly and conspicuously expressed: “LEAD GENERATOR ONLY, NOT ACTING IN THE CAPACITY OF A MORTGAGE LOAN ORIGINATOR, MORTGAGE BROKER, MORTGAGE CORRESPONDENT LENDER OR MORTGAGE LENDER. INFORMATION RECEIVED WILL BE SHARED WITH ONE OR MORE THIRD PARTIES IN CONNECTION WITH YOUR RESIDENTIAL MORTGAGE LOAN INQUIRY.”. (2) No person required to be licensed as a lead generator shall: (A) Accept payment of any advance fee, as defined in section 36a-485, in connection with a residential mortgage loan, or (B) use, sell, lease, exchange or otherwise transfer or release information received from a consumer in connection with a residential mortgage loan inquiry for purposes other than as necessary to facilitate a residential mortgage loan transaction. (P.A. 91-306, S. 3; P.A. 94-122, S. 238, 340; P.A. 99-63, S. 3; P.A. 02-111, S. 13; P.A. 08-176, S. 52; P.A. 09-209, S. 16; P.A. 17-38, S. 11; P.A. 18-173, S. 94.) History: P.A. 94-122 made a technical change, effective January 1, 1995; Sec. 36-440l transferred to Sec. 36a-497 in 1995; P.A. 99-63 designated existing provisions as Subdiv. (1), changing “in any medium” to “in this state” and making technical changes, and added Subdiv. (2) re advertising restrictions; P.A. 02-111 amended Subdiv. (1) to replace reference to “mortgage broker” with reference to “first mortgage broker”; P.A. 08-176 added references to mortgage lender, mortgage correspondent lender and mortgage broker licensees and made conforming changes, effective July 1, 2008; P.A. 09-209 changed “mortgage loan” to “residential mortgage loan”, effective July 31, 2009; P.A. 17-38 designated existing provisions re mortgage lender licensee, mortgage correspondent lender licensee or mortgage broker licensee advertisements as Subsec. (a), and added Subsec. (b) re lead generator licensee; P.A. 18-173 made technical changes. (Return to Chapter Table of Contents) (Return to List of Chapters) (Return to List of Titles) 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. (a) Except as provided in subsection (c) of this section, every advance fee paid or given, directly or indirectly, to a mortgage lender, mortgage correspondent lender or mortgage broker required to be licensed pursuant to sections 36a-485 to 36a-498e, inclusive, 36a-534a and 36a-534b shall be refundable. (b) No mortgage loan originator required to be licensed pursuant to sections 36a-485 to 36a-498e, inclusive, 36a-534a and 36a-534b shall accept payment of any advance fee except an advance fee on behalf of a mortgage lender, mortgage correspondent lender or mortgage broker licensee. Nothing in this subsection shall be construed as prohibiting the mortgage lender, mortgage correspondent lender or mortgage broker licensee from paying a mortgage loan originator all or part of an advance fee, provided such advance fee paid is not refundable under this section. (c) Subsection (a) of this section shall not apply if: (1) The person providing the advance fee and the mortgage lender, mortgage correspondent lender or mortgage broker agree in writing that the advance fee shall not be refundable, in whole or in part; and (2) the written agreement complies in all respects with the provisions of subsection (d) of this section. (d) An agreement under subsection (c) of this section shall meet all of the following requirements to be valid and enforceable: (1) The agreement shall be dated, signed by both parties, and be executed prior to the payment of any advance fee; (2) the agreement shall expressly state the total advance fee required to be paid and any amount of the advance fee that shall not be refundable; (3) the agreement shall clearly and conspicuously state any conditions under which the advance fee will be retained by the mortgage lender, mortgage correspondent lender or mortgage broker; (4) the term “nonrefundable” shall be used to describe each advance fee or portion thereof to which the term is applicable, and shall appear in boldface type in the agreement each time it is used; and (5) the form of the agreement shall (A) be separate from any other forms, contracts, or applications utilized by the mortgage lender, mortgage correspondent lender or mortgage broker, (B) contain a heading in a size equal to at least ten-point boldface type that shall title the form “AGREEMENT CONCERNING NONREFUNDABILITY OF ADVANCE FEE”, (C) provide for a duplicate copy which shall be given to the person paying the advance fee at the time of payment of the advance fee, and (D) include such other specifications as the commissioner may by regulation prescribe. (e) An agreement under subsection (c) of this section that does not meet the requirements of subsection (d) of this section shall be voidable at the election of the person paying the advance fee. (f) (1) No mortgage lender, mortgage correspondent lender or mortgage broker required to be licensed pursuant to sections 36a-485 to 36a-498e, inclusive, 36a-534a and 36a-534b shall enter into an agreement with or otherwise require any person to pay the mortgage lender, mortgage correspondent lender or mortgage broker for any fee, commission or other valuable consideration lost as a result of such person failing to consummate a residential mortgage loan, provided the mortgage lender, mortgage correspondent lender or mortgage broker may collect such fee, commission or consideration as an advance fee subject to the requirements of this section. (2) No mortgage broker required to be licensed pursuant to sections 36a-485 to 36a-498e, inclusive, 36a-534a and 36a-534b shall enter into an agreement with or otherwise require any person to pay the mortgage broker any fee, commission or other valuable consideration for the prepayment of the principal of a residential mortgage loan by such person before the date on which the principal is due. (g) (1) For the purposes of this subsection: (A) “Unfair or deceptive act or practice” means (i) the failure to clearly and conspicuously state in the initial phase of the solicitation that the solicitor is not affiliated with the mortgage lender, mortgage correspondent lender or mortgage broker with which the consumer initially applied, (ii) the failure to clearly and conspicuously state in the initial phase of the solicitation that the solicitation is based on personal information about the consumer that was purchased, directly or indirectly, from a consumer reporting agency without the knowledge or permission of the mortgage lender, mortgage correspondent lender or mortgage broker with which the consumer initially applied, (iii) the failure in the initial solicitation to comply with the provisions of the federal Fair Credit Reporting Act relating to prescreening solicitations that use consumer reports, including the requirement to make a firm offer of credit to the consumer, or (iv) knowingly or negligently using information from a mortgage trigger lead (I) to solicit consumers who have opted out of prescreened offers of credit under the federal Fair Credit Reporting Act, or (II) to place telephone calls to consumers who have placed their contact information on a federal or state Do Not Call list; and (B) “Mortgage trigger lead” means a consumer report obtained pursuant to Section 604(c)(1)(B) of the federal Fair Credit Reporting Act, 15 USC 1681b, where the issuance of the report is triggered by an inquiry made with a consumer reporting agency in response to an application for credit. “Mortgage trigger lead” does not include a consumer report obtained by a mortgage lender or mortgage correspondent lender that holds or services existing indebtedness of the applicant who is the subject of the report. (2) No mortgage lender, mortgage correspondent lender, mortgage broker or mortgage loan originator shall engage in an unfair or deceptive act or practice in soliciting an application for a residential mortgage loan when such solicitation is based, in whole or in part, on information contained in a mortgage trigger lead. Any violation of this subsection shall be deemed an unfair or deceptive trade practice under subsection (a) of section 42-110b. (h) No mortgage lender or mortgage correspondent lender shall include in a residential mortgage loan for which an application is received by such lender on or after October 1, 2009, a provision that increases the interest rate as a result of a default other than a failure to comply with a provision to maintain an automatic electronic payment feature where such maintenance provision has been provided in return for an interest rate reduction and the increase is no greater than such reduction. (P.A. 92-132, S. 4, 5; P.A. 94-122, S. 239, 340; P.A. 02-111, S. 14; P.A. 04-69, S. 10; P.A. 06-45, S. 5; P.A. 07-118, S. 1; 07-156, S. 14; P.A. 08-176, S. 31, 53; P.A. 09-207, S. 6; 09-209, S. 17; Sept. Sp. Sess. P.A. 09-7, S. 100; P.A. 11-216, S. 23; P.A. 18-173, S. 17.) History: P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-440m transferred to Sec. 36a-498 in 1995; P.A. 02-111 replaced references to “mortgage broker” with references to “first mortgage broker” throughout, added new Subsec. (b) re acceptance of advance fee by originator, redesignated existing Subsecs. (b) to (d) as Subsecs. (c) to (e) and made technical changes throughout; P.A. 04-69 amended Subsecs. (a) and (b) to substitute “36a-498a” for “36a-498”; P.A. 06-45 added Subsec. (f) to prohibit mortgage lenders and first mortgage brokers from entering into agreements with borrowers to compensate licensees for fees, commissions or other valuable consideration lost if borrowers fail to close loan unless compensation is collected as advance fee and to prohibit first mortgage brokers from imposing fees, commissions or other valuable consideration on borrowers for prepayment of principal of loan, effective May 8, 2006; P.A. 07-118 added Subsec. (g) to define “unfair or deceptive act or practice” and “mortgage trigger lead”, to prohibit mortgage lenders and first mortgage brokers from engaging in an unfair or deceptive act or practice in soliciting application for a first mortgage loan if solicitation is based in any way on a mortgage trigger lead, and to provide that violation is deemed an unfair or deceptive trade practice under Sec. 42-110b(a); P.A. 07-156 amended Subsec. (b) to substitute “licensed” for “registered” and to insert “mortgage lender or first mortgage broker” re licensee, effective September 30, 2008; P.A. 08-176 changed effective date of P.A. 07-156, S. 14, from September 30, 2008, to July 1, 2008, added references to “mortgage correspondent lender” and “mortgage loan originator” and made conforming changes, effective July 1, 2008; P.A. 09-207 added Subsec. (h) re prohibition against mortgage loan provisions that increase interest rate as result of default other than failure to comply with provision to maintain an automatic electronic payment feature; P.A. 09-209 changed “mortgage loan” to “residential mortgage loan” in Subsecs. (f) and (g)(2) and inserted references to other licensing provisions in Subsecs. (a), (b) and (f), effective July 31, 2009; Sept. Sp. Sess. P.A. 09-7 amended Subsec. (h) to add “for which an application is received by such lender on or after October 1, 2009”, effective October 5, 2009; P.A. 11-216 amended Subsec. (h) to add “residential” re mortgage loan, effective July 13, 2011; P.A. 18-173 replaced references to Sec. 36a-498f with references to Sec. 36a-498e. (Return to Chapter Table of Contents) (Return to List of Chapters) (Return to List of Titles) Sec. 36a-498a. Prepaid finance charges; restrictions. Secondary mortgage loan; demand for payment prior to maturity; liability for noncompliance; deed. (a) No mortgage lender licensee or mortgage correspondent lender licensee under section 36a-489 and no person exempt from licensure under subdivisions (1) to (3), inclusive, of subsection (a) and subdivisions (1) and (4) of subsection (b) of section 36a-487 making a first mortgage loan may charge, impose or cause to be paid, directly or indirectly, prepaid finance charges that exceed in the aggregate, the greater of five per cent of the principal amount of the loan or two thousand dollars. If the proceeds of the loan are used to refinance an existing loan, the aggregate of the prepaid finance charges for the current refinancing and any previous financings by such licensee or exempt person or affiliate of such licensee or exempt person within two years of the current refinancing shall not exceed the greater of five per cent of the principal amount of the initial loan or two thousand dollars. The provisions of this section shall not prohibit such licensee or exempt person from charging, imposing or causing to be paid, directly or indirectly, prepaid finance charges in addition to those permitted by this section in connection with any additional proceeds received by the borrower in the refinancing, provided such prepaid finance charges on the additional proceeds shall not exceed five per cent of the additional proceeds. (b) (1) No mortgage lender or mortgage correspondent lender making a secondary mortgage loan may (A) charge, impose or cause to be paid, directly or indirectly, in connection with any secondary mortgage loan transaction, prepaid finance charges that exceed in the aggregate eight per cent of the principal amount of the loan, or (B) include in the loan agreement, under which prepaid finance charges have been assessed, any provision that permits the mortgage lender or mortgage correspondent lender to demand payment of the entire loan balance prior to the scheduled maturity, except that such loan agreement may contain a provision that permits the mortgage lender or mortgage correspondent lender to demand payment of the entire loan balance if any scheduled installment is in default for more than sixty days or if any condition of default set forth in the mortgage note exists. (2) Any mortgage lender or mortgage correspondent lender who fails to comply with the provisions of this subsection shall be liable to the borrower in an amount equal to the sum of: (A) The amount by which the total of all prepaid finance charges exceeds eight per cent of the principal amount of the loan; (B) eight per cent of the principal amount of the loan or two thousand five hundred dollars, whichever is less; and (C) the costs incurred by the borrower in bringing an action under this subsection, including reasonable attorney's fees, as determined by the court, provided no such mortgage lender or mortgage correspondent lender shall be liable for more than the amount specified in this subsection in a secondary mortgage loan transaction involving more than one borrower. (c) For purposes of this section, “additional proceeds” has the same meaning as provided in subdivision (3) of section 36a-746e and “prepaid finance charge” has the same meaning as provided in subdivision (7) of section 36a-746a. (d) Any mortgage deed to secure a secondary mortgage loan that is recorded in the land records of any town shall contain the word “Mortgage” in the heading, either in capital letters or underscored and shall contain the principal amount of the loan. (P.A. 01-34, S. 13; P.A. 04-69, S. 11; P.A. 06-45, S. 6: P.A. 07-156, S. 15; P.A. 08-176, S. 31, 54; P.A. 09-207, S. 7; 09-209, S. 23; P.A. 12-96, S. 15; P.A. 18-173, S. 18.) History: P.A. 04-69 substituted Subdiv. “(7)” for “(6)” in definition of “prepaid finance charge”; P.A. 06-45 included in prohibition against lenders charging borrowers excessive prepaid finance charges, persons making five or fewer first mortgage loans within any period of 12 consecutive months, effective May 8, 2006; P.A. 07-156 inserted “mortgage lender or first mortgage broker” re licensee, effective September 30, 2008; P.A. 08-176 changed effective date of P.A. 07-156, S. 15, from September 30, 2008, to July 1, 2008, designated existing provisions as Subsec. (a) and amended same to add “mortgage correspondent lender licensee”, make a technical change and delete definitions of “additional proceeds” and “prepaid finance charge”, added said definitions as Subsec. (c), added Subsec. (b) re secondary mortgage loan and added Subsec. (d) re mortgage deed to secure a secondary mortgage loan, effective July 1, 2008; P.A. 09-207 amended Subsec. (b)(2) by deleting references to mortgage brokers and making technical changes, effective July 7, 2009; P.A. 09-209 amended Subsec. (a) by making a technical change, effective July 31, 2009; P.A. 12-96 amended Subsec. (a) to make a technical change; P.A. 18-173 amended Subsec. (a) by replacing reference to Sec. 36a-487(a)(1) and (b)(1), (4) and (5) with reference to Sec. 36a-487(a)(1) to (3) and (b)(1) and (4). (Return to Chapter Table of Contents) (Return to List of Chapters) (Return to List of Titles) Sec. 36a-498b. Release of secondary mortgage. Notice of outstanding balance of obligation secured by secondary mortgage. (a) Each mortgage lender, mortgage correspondent lender and mortgage broker, all as defined in section 36a-485 and licensed under section 36a-489, shall deliver to the mortgagor a release of a secondary mortgage: (1) Upon receipt by such licensee of cash or a certified check in the amount of the outstanding balance of the obligation secured by such mortgage; or (2) upon payment by the payor bank, as defined in section 42a-4-105, of any check that is payable to such licensee or its assignee in the amount of the outstanding balance of the obligation secured by such mortgage. (b) Each such licensee shall advise any person designated by the mortgagor of the amount of the outstanding balance of the obligation secured by the secondary mortgage granted to such licensee no later than the second business day after the licensee receives a request for such information. (P.A. 08-176, S. 55.) History: P.A. 08-176 effective July 1, 2008. (Return to Chapter Table of Contents) (Return to List of Chapters) (Return to List of Titles) Sec. 36a-498c. Adoption of mortgage loan policy with respect to subprime mortgage loans and nontraditional mortgage loans. At least once a year, each mortgage lender and mortgage correspondent lender, both as defined in section 36a-485 and licensed under section 36a-489, shall adopt a mortgage loan policy with respect to subprime mortgage loans and nontraditional mortgage loans made by such mortgage lender or such mortgage correspondent lender based on and consistent with the most current version of the Conference of State Bank Supervisors, American Association of Residential Mortgage Regulators and National Association of Consumer Credit Administrators Statement on Subprime Mortgage Lending, and the Conference of State Bank Supervisors and American Association of Residential Mortgage Regulators Guidance on Nontraditional Mortgage Product Risks. Such licensees shall comply with such policy and develop and implement internal controls that are reasonably designed to ensure such compliance. The mortgage loan policy and any residential mortgage loan, as defined in section 36a-485, made pursuant to the policy shall be subject to examination concerning prudent lending practices by the commissioner. (P.A. 08-176, S. 56; P.A. 09-209, S. 4.) History: P.A. 08-176 effective July 1, 2008; P.A. 09-209 changed “mortgage loan” to “residential mortgage loan” and “Banking Commissioner” to “commissioner”, effective July 31, 2009. (Return to Chapter Table of Contents) (Return to List of Chapters) (Return to List of Titles) Sec. 36a-498d. Unique identifier of licensee. Advertising of licensee. (a)(1) The unique identifier of any mortgage loan originator or loan processor or underwriter licensed under section 36a-489 shall be clearly shown on all residential mortgage loan application forms. (2) The unique identifier of any mortgage lender, mortgage correspondent lender, mortgage broker or lead generator licensed under section 36a-489 shall be clearly shown on all solicitations or advertisements, including business cards or Internet web sites, and any other documents as established by rule, regulation or order of the commissioner and shall be clearly stated in all audio solicitations or advertisements. (3) The unique identifier of a mortgage loan originator or loan processor or underwriter licensed under section 36a-489 shall be clearly shown on all solicitations and advertisements, including business cards and Internet web sites, and any other documents as established by rule, regulation or order of the commissioner, and shall be clearly stated in all audio solicitations and advertisements when disseminated by: (A) A mortgage loan originator or loan processor or underwriter regarding such individual's own services, or (B) the sponsor of such mortgage loan originator or loan processor or underwriter if such solicitation or advertisement identifies the services of a particular mortgage loan originator or loan processor or underwriter. (b) The advertising of any person licensed under section 36a-489: (1) Shall not include any statement that such person is endorsed in any way by this state, except that such advertising may include a statement that such person is licensed in this state; (2) shall not include any statement or claim that is false, deceptive or misleading; (3) shall otherwise conform to the requirements of sections 36a-485 to 36a-498e, inclusive, 36a-498h, 36a-534a and 36a-534b, any regulations issued thereunder and any other applicable law; and (4) shall be retained for two years from the date of its use. (P.A. 09-209, S. 21; P.A. 11-216, S. 24; P.A. 18-173, S. 19.) History: P.A. 09-209 effective July 31, 2009; P.A. 11-216 deleted reference to Sec. 36a-485, added reference to loan processor or underwriter, deleted “originating a residential mortgage loan” and made technical changes; P.A. 18-173 amended Subsec. (a) by designating existing provision re clearly showing unique identifier on residential mortgage loan application forms as Subdiv. (1), designating existing provisions re solicitations and advertisements as Subdiv. (2), and amending same by adding provision re unique identifier to be clearly stated in audio solicitations or advertisements, adding Subdiv. (3) re unique identifier of mortgage loan originator or loan processor or underwriter to be clearly shown on solicitations and advertisements and clearly stated in audio solicitations and advertisements disseminated by certain persons, and making technical and conforming changes, and added Subsec. (b) re advertising of person licensed under Sec. 36a-489. (Return to Chapter Table of Contents) (Return to List of Chapters) (Return to List of Titles) Sec. 36a-498e. Prohibited acts. (a) No person who is required to be licensed and who is subject to this section, sections 36a-485 to 36a-498d, inclusive, 36a-534a and 36a-534b, may, directly or indirectly: (1) Employ any scheme, device or artifice to defraud or mislead borrowers or lenders or to defraud any person; (2) Engage in any unfair or deceptive practice toward any person; (3) Obtain property by fraud or misrepresentation; (4) Solicit or enter into a contract with a borrower that provides in substance that such person or individual may earn a fee or commission through “best efforts” to obtain a loan even though no loan is actually obtained for the borrower; (5) Solicit, advertise or enter into a contract for specific interest rates, points or other financing terms unless the terms are actually available at the time of soliciting, advertising or contracting; (6) Conduct any business as a mortgage lender, mortgage correspondent lender, mortgage broker, lead generator, mortgage loan originator or loan processor or underwriter without holding a valid license as required under this section, sections 36a-485 to 36a-498d, inclusive, 36a-498h, 36a-534a and 36a-534b or assist or aid and abet any person in the conduct of business as a mortgage lender, mortgage correspondent lender, mortgage broker, lead generator, mortgage loan originator or loan processor or underwriter without a valid license as required under said sections; (7) Fail to make disclosures as required by this section, sections 36a-485 to 36a-498d, inclusive, 36a-498h, 36a-534a and 36a-534b and any other applicable state or federal law including regulations adopted thereunder; (8) Fail to comply with this section, sections 36a-485 to 36a-498d, inclusive, 36a-498h, 36a-534a and 36a-534b or rules or regulations adopted under said sections or fail to comply with any other state or federal law, including the rules and regulations adopted thereunder, applicable to any business authorized or conducted under said sections; (9) Make, in any manner, any false or deceptive statement or representation including, with regard to the rates, points or other financing terms or conditions for a residential mortgage loan, or engage in bait and switch advertising; (10) Negligently make any false statement or knowingly and wilfully make any omission of material fact in connection with any information or reports filed with a governmental agency or the system, as defined in section 36a-2, or in connection with any investigation conducted by the commissioner or another governmental agency; (11) Make any payment, threat or promise, directly or indirectly, to any person for the purposes of influencing the independent judgment of the person in connection with a residential mortgage loan as defined in section 36a-485 or make any payment, threat or promise, directly or indirectly, to any appraiser of a property, for the purposes of influencing the independent judgment of the appraiser with respect to the value of the property; (12) Collect, charge, attempt to collect or charge or use or propose any agreement purporting to collect or charge any fee prohibited by this section, sections 36a-485 to 36a-498d, inclusive, 36a-498h, 36a-534a and 36a-534b; (13) Cause or require a borrower to obtain property insurance coverage in an amount that exceeds the replacement cost of the improvements as established by the property insurer; or (14) Fail to truthfully account for moneys belonging to a party to a residential mortgage loan transaction. (b) (1) No person, other than an individual, who is required to be licensed and is subject to sections 36a-485 to 36a-498h, inclusive, 36a-534a and 36a-534b, and no qualifying individual or branch manager shall fail to establish, enforce and maintain policies and procedures reasonably designed to achieve compliance with subsection (a) of this section. (2) No individual who (A) is required to be licensed as a mortgage loan originator, (B) is subject to sections 36a-485 to 36a-498e, inclusive, 36a-534a and 36a-534b, and (C) supervises loan processors or loan underwriters shall fail to enforce any policies and procedures established in accordance with subdivision (1) of this subsection. (3) No violation of this subsection shall be found unless the failure to establish, enforce and maintain policies and procedures resulted in conduct in violation of sections 36a-485 to 36a-498e, inclusive, 36a-498h, 36a-534a and 36a-534b, inclusive, or rules or regulations adopted under said sections or any other state or federal law, including the rules and regulations thereunder, applicable to any business authorized or conducted under said sections. (P.A. 09-209, S. 20; Sept. Sp. Sess. P.A. 09-7, S. 96; P.A. 11-216, S. 25; P.A. 14-89, S. 35; P.A. 17-38, S. 12; 17-233, S. 9; 17-236, S. 24; P.A. 18-173, S. 20; P.A. 23-126, S. 10.) History: P.A. 09-209 effective July 31, 2009; Sept. Sp. Sess. P.A. 09-7 added “who is required to be licensed and who is” in introductory language, effective October 5, 2009; P.A. 11-216 amended Subdiv. (6) to add references to loan processor or underwriter; P.A. 14-89 amended Subdiv. (10) to replace reference to Sec. 36a-485 with reference to Sec. 36a-2 and replace “Banking Commissioner” with “commissioner”; P.A. 17-38 deleted “or individual” re requirement to be licensed, added reference to lead generator in Subdiv. (6), and added references to Sec. 36a-498h; P.A. 17-233 designated provisions re requirement to be licensed as Subsec. (a) and amended same to delete “or individual”, add “, directly or indirectly”, delete “directly or indirectly” in Subdiv. (1), and make a technical change, added Subsec. (b) re establishment, enforcement and maintenance of policies and procedures; P.A. 17-236 changed effective date of P.A. 17-233, S. 9, from October 1, 2017, to July 1, 2018, effective July 11, 2017; P.A. 18-173 amended Subsec. (a) by replacing “36a-498f” with “36a-489e”, adding “lead generator” in Subdiv. (6), and adding reference to Sec. 36a-498h in Subdivs. (6), (7), (8) and (12), amended Subsec. (b)(1) by replacing “36a-498f” with “36a-498h”, amended Subsecs. (b)(2) and (b)(3) by replacing “36a-498f” with “36a-498e”, and made technical and conforming changes; P.A. 23-126 amended Subsec. (a) by making technical and conforming changes throughout and adding lead generators to provision prohibiting certain persons from assisting or aiding and abetting any person in conducting certain businesses without license in Subdiv. (6). (Return to Chapter Table of Contents) (Return to List of Chapters) (Return to List of Titles) Sec. 36a-498f. Authority of commissioner re investigations and examinations. Prohibited acts by subjects of investigation or examination. Section 36a-498f is repealed, effective October 1, 2018. (P.A. 09-209, S. 19; P.A. 17-38, S. 13; P.A. 18-173, S. 101.) (Return to Chapter Table of Contents) (Return to List of Chapters) (Return to List of Titles) Sec. 36a-498g. Severability. If any provision or application of section 36a-21, sections 36a-485 to 36a-498e, inclusive, or sections 36a-498h, 36a-534a and 36a-534b to any person or circumstance is held invalid by a court of this state, the remainder of said sections or the application of such provision to other persons or circumstances shall not be affected. (P.A. 09-209, S. 22; P.A. 18-173, S. 21.) History: P.A. 09-209 effective July 31, 2009; P.A. 18-173 replaced reference to Sec. 36a-498f with reference to Sec. 36a-498e, added reference to Sec. 36a-498h, and made a technical change. (Return to Chapter Table of Contents) (Return to List of Chapters) (Return to List of Titles) Sec. 36a-498h. Lead generator licensees. Prohibited acts. (a) No person required to be licensed as a lead generator shall, while engaged in lead generation activities: (1) Initiate any outbound telephone call using an automatic telephone dialing system or an artificial or prerecorded voice without the prior express written consent of the recipient; (2) Fail to transmit the lead generator's name and telephone number to any caller identification service in use by a consumer; (3) Initiate an outbound telephone call to a consumer's residence between nine o'clock p.m. and eight o'clock a.m. local time in the consumer's location; (4) Fail to clearly and conspicuously identify the lead generator and the purpose of the contact in its written and oral communications with a consumer; (5) Fail to provide the ability to opt out of any unsolicited advertisement communicated to a consumer via an electronic mail address; (6) Initiate an unsolicited advertisement via electronic mail to a consumer more than ten business days after the receipt of a request from such consumer to opt out of such unsolicited advertisements; (7) Use a subject heading or electronic mail address in a commercial electronic mail message that would likely mislead a recipient, acting reasonably under the circumstances, about a material fact regarding the sender, contents or subject matter of the message; (8) Sell, lease, exchange or otherwise transfer or release the electronic mail address or telephone number of a consumer who has requested to opt out of future solicitations; (9) Collect, buy, lease, exchange or otherwise transfer or receive an individual's Social Security number or bank account number; (10) Use information from a trigger lead to solicit consumers who have opted out of firm offers of credit under the federal Fair Credit Reporting Act; (11) Initiate a telephone call to a consumer who has placed his or her contact information on a federal or state Do Not Call list, unless the consumer has provided express written consent; (12) Represent to the public, through advertising or other means of communicating or providing information, including, but not limited to, the use of business cards or stationery, brochures, signs or other promotional items, that such lead generator can or will perform any other activity requiring licensure under this title, unless such lead generator is duly licensed to perform such other activity or exempt from such licensure requirements; or (13) Refer applicants to, or receive a fee from, any person who is required to be licensed under this title but was not so licensed as of the time of performance of such lead generator's services. (b) A violation of any provision of this section shall be deemed an unfair or deceptive act or practice pursuant to subsection (a) of section 42-110b. (P.A. 17-38, S. 16.) History: P.A. 17-38 effective January 1, 2018. (Return to Chapter Table of Contents) (Return to List of Chapters) (Return to List of Titles) Secs. 36a-499 to 36a-509. Reserved for future use. (Return to Chapter Table of Contents) (Return to List of Chapters) (Return to List of Titles) (B) SECONDARY MORTGAGE LENDERS, BROKERS AND ORIGINATORS 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. Sections 36a-510 to 36a-517, inclusive, are repealed, effective July 1, 2008. (P.A. 77-228, S. 1–8; 77-604, S. 81, 84; 77-614, S. 161, 587, 610; P.A. 78-216, S. 1–7; 78-303, S. 85, 136; P.A. 80-67, S. 1–5; 80-482, S. 251, 345, 348; P.A. 81-472, S. 69, 159; P.A. 82-174, S. 1, 14; P.A. 86-403, S. 76, 132; P.A. 87-9, S. 2, 3; 87-66; P.A. 88-14; 88-150, S. 2; 88-230, S. 1, 12; P.A. 89-211, S. 40; P.A. 90-98, S. 1, 2; 90-184, S. 1–4; P.A. 92-12, S. 64; 92-89, S. 4, 20; 92-132, S. 1, 5; P.A. 93-130, S. 1, 3; 93-142, S. 4, 7, 8; P.A. 94-104, S. 1; 94-122, S. 240–245, 340; P.A. 96-71, S. 3, 8; P.A. 99-63, S. 4; P.A. 00-61, S. 3, 9; P.A. 02-111, S. 15–22; P.A. 04-69, S. 12–15; P.A. 05-46, S. 4, 5; P.A. 06-45, S. 7–9; P.A. 07-91, S. 4–6, 18; 07-156, S. 16–22; P.A. 08-176, S. 31, 83, 84.) (Return to Chapter Table of Contents) (Return to List of Chapters) (Return to List of Titles) Sec. 36a-518. (Formerly Sec. 36-224i). Regulations. Section 36a-518 is repealed, effective October 1, 2002. (P.A. 77-228, S. 9; P.A. 02-111, S. 51.) (Return to Chapter Table of Contents) (Return to List of Chapters) (Return to List of Titles) 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. Sections 36a-519 to 36a-524, inclusive, are repealed, effective July 1, 2008. (P.A. 80-67, S. 6, 7; P.A. 83-460, S. 1–3; P.A. 84-69, S. 1, 3; P.A. 90-184, S. 5, 6; P.A. 91-306, S. 4–6; P.A. 92-132, S. 2, 5; P.A. 93-130, S. 2, 3; P.A. 94-122, S. 246–248, 340; P.A. 99-63, S. 5; P.A. 01-34, S. 14; P.A. 02-12, S. 3; 02-111, S. 23–27; P.A. 03-61, S. 1, 2; P.A. 06-45, S. 10; P.A. 07-118, S. 2; 07-156, S. 23, 24; P.A. 08-176, S. 31, 83, 84.) (Return to Chapter Table of Contents) (Return to List of Chapters) (Return to List of Titles) Secs. 36a-525 to 36a-534. Reserved for future use. (Return to Chapter Table of Contents) (Return to List of Chapters) (Return to List of Titles) (C) GENERAL PROVISIONS Sec. 36a-534a. Notice of discriminatory lending practices. Violation as grounds for license suspension, revocation or nonrenewal. (a) Any mortgage broker, or mortgage lender or mortgage correspondent lender, as defined in section 36a-485 and licensed pursuant to section 36a-489, shall notify the commissioner by written affidavit if any such mortgage broker, mortgage lender or mortgage correspondent lender, as a result of a transaction in which such mortgage broker, mortgage lender or mortgage correspondent lender was involved, reasonably believes that the lending practices of a financial institution or federal bank violate section 36a-737 or 46a-66. Such mortgage broker, mortgage lender or mortgage correspondent lender shall provide the commissioner with any written document containing lending restrictions which a financial institution or federal bank has provided to such mortgage broker, mortgage lender or mortgage correspondent lender. In the event the commissioner finds that there is a reasonable basis for said notification, the commissioner shall notify the Commission on Human Rights and Opportunities of said notification and the action the commissioner plans to take with respect thereto. (b) The commissioner may suspend, revoke or refuse to renew the license of any such broker or lender who violates subsection (a) of this section. (P.A. 98-221; P.A. 99-36, S. 31; P.A. 02-111, S. 28; P.A. 08-176, S. 57.) History: P.A. 99-36 made technical changes; P.A. 02-111 amended Subsec. (a) by adding references to “first” mortgage broker, “secondary mortgage” broker and “mortgage” lender and made a technical change in Subsec. (b); P.A. 08-176 amended Subsec. (a) to add references to “mortgage correspondent lender” and make conforming changes, effective July 1, 2008. (Return to Chapter Table of Contents) (Return to List of Chapters) (Return to List of Titles) Sec. 36a-534b. Participation in system. Authority of commissioner to establish requirements. Reports. (a)(1) In addition to any other duties imposed upon the commissioner by law, the commissioner shall require mortgage lenders, mortgage correspondent lenders, mortgage brokers, lead generators, mortgage loan originators and loan processors or underwriters to be licensed and registered through the system. In order to carry out this requirement, the commissioner shall participate in the system and permit the system to process applications for mortgage lender, mortgage correspondent lender, mortgage broker, lead generator, mortgage loan originator and loan processor or underwriter licenses in this state and receive and maintain records related to such licenses that are allowed or required to be maintained by the commissioner. For this purpose, the commissioner may establish requirements as necessary for participation in the system, including: (A) Background checks for criminal history through (i) fingerprint or other databases, (ii) civil or administrative records, or (iii) credit history or any other information as deemed necessary by the system; (B) the payment of fees to apply for or renew licenses through the system; (C) the setting or resetting of renewal or reporting dates; and (D) the requirements for amending or surrendering a license or any other such activities as the commissioner deems necessary for participation in the system. For the purpose of participating in the system, the commissioner may waive or modify, in whole or in part, by regulation or order, any requirement of this section and sections 36a-485 to 36a-498e, inclusive, 36a-498h, and 36a-534a and establish new requirements as reasonably necessary to participate in the system. For the purposes of implementing an orderly and efficient licensing process, the commissioner may adopt licensing regulations, in accordance with the provisions of chapter 54, and interim procedures for licensing and acceptance of applications. For previously licensed individuals, the commissioner may establish expedited review and licensing procedures. (2) The commissioner shall report regularly to the system violations of and enforcement actions under sections 36a-485 to 36a-498e, inclusive, 36a-498h, 36a-534a and 36a-534b and other relevant information. (3) The commissioner may establish relationships or enter into contracts with the system or other entities designated by the system to collect and maintain records and process transaction fees or other fees related to licensees or other persons subject to sections 36a-485 to 36a-498e, inclusive, 36a-498h, 36a-534a and 36a-534b. (4) For the purposes of sections 36a-485 to 36a-498e, inclusive, 36a-498h, 36a-534a and 36a-534b, and to reduce the points of contact that the Federal Bureau of Investigation may have to maintain for purposes of subsections (b) to (d), inclusive, of section 36a-488, the commissioner may use the system as a channeling agent for requesting information from and distributing information to the United States Department of Justice or any governmental agency. (5) For the purposes of sections 36a-485 to 36a-498e, inclusive, 36a-498h, 36a-534a and 36a-534b, and to reduce the points of contact that the commissioner may have to maintain for purposes of subsections (b) to (d), inclusive, of section 36a-488, and section 36a-498h, the commissioner may use the system as a channeling agent for requesting and distributing information to and from any source, as directed by the commissioner. (6) Mortgage lenders, mortgage correspondent lenders, mortgage brokers, lead generators, mortgage loan originators and loan processors or underwriters may challenge information entered into the system by the commissioner. Such challenge shall (A) be made in writing to the commissioner, (B) set forth the specific information being challenged, and (C) include any evidence which supports the challenge. Challenges shall be limited to the factual accuracy of information within the system. If the commissioner determines that the information entered into the system is factually inaccurate, the commissioner shall take prompt action to correct such information. Nothing in this subdivision shall be construed to permit a challenge under this section to the merits or factual basis of any administrative action taken by the commissioner pursuant to this title. (b) Any licensing or license-related filings shall be submitted exclusively through the system, except as directed by the commissioner. (c) Any person making any filing or submission of any information on the system shall do so in accordance with the procedures and requirements of the system and pay the applicable fees or charges to the system. Each mortgage lender, mortgage correspondent lender, mortgage broker, lead generator, mortgage loan originator and loan processor or underwriter licensee and each exempt registrant, to the extent required by the system, shall timely submit to the system accurate reports of condition that shall be in such form and shall contain such information as the system may require. Failure by a licensee to submit a timely and accurate report of condition shall constitute a violation of this provision. Failure of an exempt registrant to timely and accurately submit a report of condition shall form a basis to inactivate the licenses of all sponsored mortgage loan originators or loan processor or underwriters. To the extent that the system does not require submission of reports of condition by individual mortgage loan originator or loan processor or underwriter licensees, such individual licensees shall timely and accurately report all required information in their possession to their sponsor for purposes of their sponsor's reporting obligation. Failure of an individual licensee to timely and accurately report required information in such licensee's possession to such licensee's sponsor shall constitute a violation of this provision. (P.A. 08-176, S. 39; P.A. 09-209, S. 3; P.A. 11-216, S. 26–28; P.A. 12-96, S. 2, 16; P.A. 14-89, S. 45; P.A. 17-38, S. 14; P.A. 18-173, S. 22.) History: P.A. 08-176 effective July 1, 2008; P.A. 09-209 amended Subsec. (a) by designating existing provisions as Subdiv. (1) and amending same to add provisions re system licensing and participation requirements for mortgage lenders, mortgage correspondent lenders, mortgage brokers and mortgage loan originators to be established by commissioner, and by adding Subdivs. (2) to (6) re collecting and sharing information and establishing process by which to challenge information entered into system, amended Subsec. (c)(3) by requiring lenders, brokers and loan originators to submit reports of condition to system, and changed “Nationwide Mortgage Licensing System” to “system” in Subsecs. (a), (c) and (d), effective July 31, 2009; P.A. 11-216 amended Subsec. (a)(6) to delete provision requiring commissioner to establish process, add provision re loan processors or underwriters licensees and add requirements re challenge of information, effective July 13, 2011, and amended Subsecs. (a)(1) and (c)(3) to add references to loan processor or underwriter and make technical changes, effective October 1, 2011; P.A. 12-96 amended Subsec. (a)(1) to make a technical change and amended Subsec. (c)(3) to add “and each exempt registrant, to the extent required by the system”, insert “timely” re submission, insert “accurate” re reports and add provisions re consequences of failure to submit timely and accurate report of condition or required information in licensee's possession; P.A. 14-89 made technical changes in Subsec. (c)(3), effective June 3, 2014; P.A. 17-38 amended Subsec. (a) to add references to lead generators, add references to Sec. 36a-498h, replace “subsections (b) and (c) of section 36a-488” with “subsections (b) to (d), inclusive, of section 36a-488” in Subdivs. (4) and (5) and delete “, effective October 1, 2011, individuals licensed as” in Subdiv. (6), deleted former Subsec. (b) re licenses in existence on June 30, 2008, amended Subsec. (c) to delete former Subdiv. (1) re person licensed on July 1, 2008, redesignated existing Subdiv. (2) as new Subsec. (b) and amended same to delete reference to July 1, 2008, and add “, except as directed by the commissioner”, and delete Subdiv. (3) designator, deleted former Subsec. (d) re initial application for license submitted between October 1, 2008 and December 31, 2008, and made a technical change; P.A. 18-173 amended Subsec. (a) by replacing references to Sec. 36a-498f with references to Sec. 36a-498e. (Return to Chapter Table of Contents) (Return to List of Chapters) (Return to List of Titles) Sec. 36a-534c. Reports re system. Section 36a-534c is repealed, effective June 9, 2017. (P.A. 07-156, S. 25; P.A. 08-176, S. 67; P.A. 12-96, S. 17; P.A. 17-38, S. 17.) (Return to Chapter Table of Contents) (Return to List of Chapters) (Return to List of Titles) PART II* FINANCE COMPANIES *See Sec. 36a-676 for definitions under the Truth-in-Lending Act applicable to this part. Annotation to former chapter 650: Cited. 139 C. 425. Sec. 36a-535. (Formerly Sec. 36-254). Definitions. As used in sections 36a-535 to 36a-547, inclusive, unless the context otherwise requires: (1) The terms “goods”, “retail installment sale”, “retail installment contract”, “installment loan contract”, “retail seller” and “retail buyer” have the same meanings as provided in section 36a-770; (2) “Sales finance company” means any person engaging in this state in the business, in whole or in part, of (A) acquiring retail installment contracts or installment loan contracts from the holders thereof, by purchase, discount or pledge, or by loan or advance to the holder of either on the security thereof, or otherwise, or (B) receiving payments of principal and interest from a retail buyer under a retail installment contract or installment loan contract. “Sales finance company” does not include a bank, out-of-state bank, Connecticut credit union, federal credit union, or out-of-state credit union, if so engaged; (3) “Advertise” or “advertising” has the same meaning as provided in section 36a-485; (4) “Control person” has the same meaning as provided in section 36a-485; (5) “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 sales finance company; (6) “Main office” has the same meaning as provided in section 36a-485; and (7) “Unique identifier” has the same meaning as provided in section 36a-485. (1949 Rev., S. 5963; 1949, 1955, S. 2767d; 1957, P.A. 356, S. 1; March, 1958, P.A. 27, S. 50; 1959, P.A. 589, S. 1; 1961, P.A. 116, S. 18; 1969, P.A. 454, S. 27; P.A. 77-604, S. 51, 84; 77-614, S. 161, 610; P.A. 78-121, S. 108, 113; P.A. 80-482, S. 256, 345, 348; P.A. 81-128, S. 5; 81-158, S. 12, 17; P.A. 82-18, S. 2, 4; P.A. 87-9, S. 2, 3; P.A. 88-65, S. 34; P.A. 91-69; P.A. 92-12, S. 74; P.A. 94-122, S. 249, 340; P.A. 17-233, S. 10; 17-236, S. 12; P.A. 18-173, S. 23; P.A. 22-94, S. 1.) History: 1959 act amended Subdiv. (b) by specifying goods means all chattels included in one contract and raising the aggregate price to $6000; 1961 act made various changes to conform to uniform commercial code; 1969 act specified that amount for “other itemized charges ...” is part of time sale price where previously reference was to amount for insurance, other benefits and filing fees in Subsec. (c); P.A. 77-604 revised references to Sec. 42a-9-105; P.A. 77-614 replaced bank commissioner with banking commissioner within the department of business regulation and made banking department a division within said department, effective January 1, 1979; P.A. 78-121 deleted reference to private bankers in Subdiv. (h); P.A. 80-482 restored banking division as independent department and abolished the department of business regulation, allowing corresponding revision of commissioner's name; P.A. 81-128 eliminated the specific definitions for “goods”, “retail installment sale”, “retail installment contract”, “installment loan contract”, “retail seller” and “retail buyer” and provided those terms would have the definitions found in Sec. 42-83; P.A. 81-158 amended Subsec. (c) by replacing “section 36-396”, which had been repealed, with chapter 657, effective March 31, 1982; P.A. 82-18 changed effective date of P.A. 81-158 from March 31, 1982, to “the effective date of Title VI of Public Law 96-221, as contained in Section 625(a) of Public Law 96-221, as amended”, i.e. October 1, 1982; (Revisor's note: Pursuant to P.A. 87-9 “banking commissioner” was changed by the Revisors to “commissioner of banking”); P.A. 88-65 redefined “sales finance company” by deleting reference to industrial banks; P.A. 91-69 made technical changes and amended Subsec. (c) to provide that the term “sales finance company” does not include a bank, savings bank, savings and loan association, industrial bank or credit union; P.A. 92-12 redesignated Subdivs.; P.A. 94-122 deleted the definitions of “person” and “commissioner”, renumbered the remaining Subdivs. and made technical changes, effective January 1, 1995; Sec. 36-254 transferred to Sec. 36a-535 in 1995; P.A. 17-233 added Subdiv. (3) defining “advertise” or advertising” and added Subdiv. (4) defining “control person”; P.A. 17-236 amended Subdiv. (2) to redefine “sales finance company”; P.A. 18-173 replaced reference to Sec. 36a-546 with reference to Sec. 36a-547, amended Subdiv. (2) by redefining “sales finance company”, added Subdiv. (5) defining “branch office”, added Subdiv. (6) defining “main office”, added Subdiv. (7) defining “unique identifier”, and made technical changes; P.A. 22-94 redefined “sales finance company” in Subdiv. (2). (Return to Chapter Table of Contents) (Return to List of Chapters) (Return to List of Titles) Sec. 36a-536. (Formerly Sec. 36-255). License required. Location of licensed activity. No person, unless excluded from the definition of a “sales finance company” as provided in section 36a-535, shall engage in the business of a sales finance company unless such person has 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-535 to 36a-547, inclusive. Any activity subject to licensure pursuant to sections 36a-535 to 36a-547, inclusive, shall be conducted from an office located in a state, as defined in section 36a-2. A licensee under sections 36a-535 to 36a-547, inclusive, shall not be required to obtain any other license in this state in order to perform any act permitted or required to be performed by such licensee under said sections. (1949 Rev., S. 5964 (1), (6); March, 1958, P.A. 27, S. 32; P.A. 81-128, S. 6; P.A. 94-122, S. 250, 340; P.A. 18-173, S. 24.) History: P.A. 81-128 eliminated reference to repealed Subsec. (h) of Sec. 36-254 and clarified licensing exemption; P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-255 transferred to Sec. 36a-536 in 1995; P.A. 18-173 replaced reference to person licensed as provided in Secs. 36a-535 to 36a-546 with provision re person obtaining license for main office and each branch office, added provision re activities to be conducted from office located in a state, and made a conforming change. (Return to Chapter Table of Contents) (Return to List of Chapters) (Return to List of Titles) Sec. 36a-537. (Formerly Sec. 36-256a). Application. Criminal history records check, fingerprints, investigation of financial condition. Abandonment of application. (a) An application for a license as a sales finance company or for renewal of such license shall be made and processed on the system pursuant to section 36a-24b, in the form prescribed by the commissioner. 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-535 to 36a-547, inclusive. 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 responsible for the actions of the licensee, including, but not limited to, information related to such person's personal history and experience, and any administrative, civil or criminal findings by any governmental jurisdiction. (b) As part of an application, the commissioner may (1) in accordance with section 29-17a, conduct a state or national criminal history records check of the applicant, any control person of the applicant, the qualified individual or any branch manager; and (2) in accordance with section 36a-24b, (A) require the submission of fingerprints of the applicant, any control person of the applicant, the qualified individual or any branch manager to the Federal Bureau of Investigation or other state, national or international criminal databases, and (B) investigate the financial condition of any such person and require authorization of any such person for the system and the commissioner to obtain an independent credit report from a consumer reporting agency, as described in Section 603(p) of the Fair Credit Reporting Act, 15 USC 1681a, as amended from time to time. The commissioner may deem an application for a license as a sales finance company abandoned if the applicant fails to respond to any request for information required under sections 36a-535 to 36a-547, inclusive, or any regulations adopted pursuant to said sections 36a-535 to 36a-547, inclusive. The commissioner shall notify the applicant on the system that if such information is not submitted not later than sixty days after 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 section shall not be refunded. Abandonment of an application pursuant to this section shall not preclude the applicant from submitting a new application for a license under sections 36a-535 to 36a-547, inclusive. (1967, P.A. 631, S. 1; P.A. 77-614, S. 161, 610; P.A. 87-9, S. 2, 3; P.A. 94-122, S. 251, 340; P.A. 09-208, S. 6; 09-209, S. 39; P.A. 11-216, S. 29; P.A. 18-173, S. 25.) History: P.A. 77-614 replaced bank commissioner with banking commissioner, effective January 1, 1979; (Revisor's note: Pursuant to P.A. 87-9 “banking commissioner” was changed editorially by the Revisors to “commissioner of banking”); P.A. 94-122 changed “commissioner of banking” to “commissioner”, effective January 1, 1995; Sec. 36-256a transferred to Sec. 36a-537 in 1995; P.A. 09-208 added requirements that application include a history of criminal convictions and sufficient information pertaining to such convictions, effective July 7, 2009; P.A. 09-209 made technical changes, effective July 9, 2009; P.A. 11-216 deleted provision re ten-year period re history of criminal convictions, added provision authorizing commissioner to conduct state and national criminal history records checks of applicant and each partner, member, officer, director and principal employee of applicant and added provisions re abandonment of application; P.A. 18-173 replaced provisions re form of, and information to be included in, application for license as sales finance company with provisions re same and designated same as Subsec. (a), designated existing provisions re application for license to be abandoned and notification to applicant as Subsec. (b) and amended same by adding provisions re commissioner to conduct state or national criminal history records check of applicant, control person, qualified individual or branch manager, replacing “in writing” with “on the system” re notice to applicant, and replacing reference to Sec. 36a-546 with reference to Sec. 36a-547. (Return to Chapter Table of Contents) (Return to List of Chapters) (Return to List of Titles) Sec. 36a-538. (Formerly Sec. 36-256b). Payment of cost of investigation. Each person applying for a license as a sales finance company or a renewal thereof shall pay the actual cost, at the discretion of and as determined by the commissioner, of any investigation or examination made of such person by the commissioner. (1967, P.A. 631, S. 7; P.A. 94-122, S. 252, 340.) History: P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-256b transferred to Sec. 36a-538 in 1995. (Return to Chapter Table of Contents) (Return to List of Chapters) (Return to List of Titles) Sec. 36a-539. (Formerly Sec. 36-257). License fee. Automatic suspension of license. Notice. Opportunity for hearing. Prohibited acts. (a) Each applicant for a sales finance company license shall pay to the system any required fees or charges and a license fee of four hundred dollars. Each such license shall expire at the close of business on December thirty-first of the year in which the license was approved, unless such license is renewed, except that any such license 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 such license expires. Each applicant for renewal of a license shall pay to the system any required fees or charges and a renewal fee of four hundred dollars. (b) In accordance with section 36a-24b, the commissioner may automatically suspend any license if the licensee has received a deficiency on the system indicating that a required payment was Returned-ACH or returned pursuant to any other term as may be utilized by the system to indicate that payment was not accepted. After a license has been automatically suspended pursuant to this subsection, the commissioner shall (1) give the licensee notice of the automatic suspension pending proceedings for revocation or refusal to renew pursuant to section 36a-543 and an opportunity for a hearing on such action in accordance with section 36a-51, and (2) require such licensee to take or refrain from taking action as the commissioner deems necessary to effectuate the purposes of this section. (c) No abatement of the license fee shall be made if the application is denied or withdrawn prior to issuance of the license or if the license is surrendered, revoked or suspended prior to the expiration of the period for which it was issued. All fees required by this section shall be nonrefundable. (d) No person who is required to be licensed and who is subject to the provisions of sections 36a-535 to 36a-547, inclusive, and no control person shall, directly or indirectly: (1) Employ any scheme, device or artifice to defraud or mislead any person in connection with a retail installment contract or a retail installment loan; (2) engage in any unfair or deceptive practice toward any person in connection with a retail installment contract or a retail installment loan; (3) obtain property by fraud or misrepresentation; (4) solicit, advertise or offer rates or other financing terms for a retail installment contract or a retail installment loan unless those rates or terms are actually available at the time of soliciting, advertising or offering such rates or terms; (5) fail to comply with the provisions of sections 36a-535 to 36a-547, inclusive, or the rules or regulations adopted under said sections, or fail to comply with any other state or federal law, including the rules and regulations thereunder; (6) make, in any manner, any false or deceptive statement or representation, including with regard to rates or other financing terms or conditions or engage in bait and switch advertising; (7) negligently make any false statement or knowingly and wilfully make any omission of material fact in connection with any information or reports filed with a governmental agency or the system, or in connection with any investigation conducted by the commissioner or another governmental agency; (8) make any payment, threat or promise to any person for the purposes of influencing the independent judgment of the person in connection with the business of a sales finance company; (9) fail to truthfully account for moneys belonging to a party to a retail installment contract or retail installment loan; or (10) fail to establish, enforce and maintain policies and procedures for supervising employees, agents and office operations that are reasonably designed to achieve compliance with applicable laws and regulations concerning sales finance companies. (1949 Rev., S. 5964 (3); 1953, S. 2768d; 1959, P.A. 204, S. 1; 1967, P.A. 631, S. 2; P.A. 73-392; P.A. 88-150, S. 4; P.A. 92-89, S. 6, 20; P.A. 94-104, S. 3; 94-122, S. 253, 340; P.A. 96-71, S. 4, 8; P.A. 02-111, S. 29; P.A. 04-69, S. 16; P.A. 17-233, S. 11; P.A. 18-173, S. 26.) History: 1959 act increased fees by 50%; 1967 act added provision requiring applicant to pay fee for period ending June thirtieth next succeeding the issuance of license and specifying that fee will be returned if application is denied or withdrawn, retaining fee amounts and dates as before; P.A. 73-392 increased $150 and $75 fees previously in effect to $200 and $100, respectively; P.A. 88-150 amended the section by providing that the license fee is nonrefundable, increasing the fee to $200 and adding the provision re expiration of licenses on June thirtieth; P.A. 92-89 increased the license fee from $200 to $400; P.A. 94-104 added a $100 processing fee for a person whose license expired within 60 days of his application; P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-257 transferred to Sec. 36a-539 in 1995; P.A. 96-71 deleted “nonrefundable” in Subsec. (a) and added Subsec. (b) to make all fees required by this section and section 36a-542 nonrefundable, effective July 1, 1996; P.A. 02-111 amended Subsec. (a) by providing that the license fee for “sales finance company” license is $800, provided if application is filed not earlier than one year before the expiration date of license, fee is $400, adding provision re license that is renewed effective July 1, 2003, shall expire on September 30, 2005, and adding provision re licenses issued pursuant to Secs. 36a-535 to 36a-546, inclusive, shall expire at the close of business on September thirtieth of the odd-numbered year following its issuance; P.A. 04-69 inserted new Subsec. (b), requiring commissioner to automatically suspend license if commissioner determines that a check filed to pay the license fee has been dishonored and requiring commissioner to give notice of the automatic suspension pending proceedings for revocation and an opportunity for a hearing in accordance with Sec. 36a-51, and redesignated existing Subsec. (b) as Subsec. (c); P.A. 17-233 added Subsec. (d) re persons who are required to be licensed and are subject to provisions of Secs. 36a-535 to 36a-546; P.A. 18-173 substantially amended Subsec. (a) including by replacing provisions re applying for license to commissioner and paying fee of $800 with provisions re paying to system fees and charges and license fee of $400, deleting provision re fee if application not filed earlier than one year before expiration date, replacing provision re license to expire September 30th of odd-numbered year following issuance with provision re license to expire December 31st of year in which license was approved, replacing provisions re license renewal and fee with provisions re same, substantially amended Subsec. (b) by replacing provisions re automatic suspension when check filed with commissioner to pay fee is dishonored with provision re automatic suspension when deficiency received on system indicating payment returned or not accepted, amended Subsec. (c) by adding reference to application denied or withdrawn prior to issuance and deleting reference to Sec. 36a-542, amended Subsec. (d) by replacing references to Sec. 36a-546 with references to Sec. 36a-547, and made technical and conforming changes. (Return to Chapter Table of Contents) (Return to List of Chapters) (Return to List of Titles) Sec. 36a-540. (Formerly Sec. 36-258). License. Change in control person. Automatic suspension of license. Surrender of license. (a) Each license shall specify the location at which the business is to be conducted. Such license shall not be transferable or assignable. Any change in any control person of the licensee, except a change of a director, general partner or executive officer that is not the result of an acquisition or change of control of the licensee, shall be the subject of an advance change notice filed on the system 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. (b) 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 licensee may change the name of the licensee or address of the office specified on the most recent filing with the system if at least thirty calendar days prior to such change, the licensee files such change with the system and the commissioner does not disapprove such change, in writing, or request further information from the licensee within such thirty-day period. (c) The commissioner may automatically suspend any license for a violation of subsection (a) or (b) of this section. After the license has been automatically suspended pursuant to this subsection, the commissioner shall (1) give the licensee notice of the automatic suspension, pending proceedings for revocation of or refusal to renew the license pursuant to section 36a-543 and an opportunity for a hearing in accordance with section 36a-51, and (2) require the licensee to take or refrain from taking action as the commissioner deems necessary to effectuate the purpose of this section. (d) Not later than fifteen days after the date a licensee ceases to engage in this state in the business of a sales finance company for any reason, including a business decision to terminate operations in this state, license revocation, bankruptcy or voluntary dissolution, such licensee shall surrender to the commissioner, in accordance with subsection (c) of section 36a-51, its license for each location in which such licensee has ceased to engage in such business. (1949 Rev., S. 5964 (4); 1957, P.A. 356, S. 2; P.A. 02-111, S. 30; P.A. 08-119, S. 6; P.A. 18-173, S. 27; P.A. 21-138, S. 8.) History: Sec. 36-258 transferred to Sec. 36a-540 in 1995; P.A. 02-111 replaced former provisions with provisions re license to specify location at which business is conducted, license maintenance and availability for public inspection, license not transferable or assignable, notice to commissioner of change of location and licensee's use of specified name; P.A. 08-119 added requirement for surrender of license when licensee ceases to engage in the business of a sales finance company; P.A. 18-173 designated existing provisions re license to specify location at which business is conducted and license not transferrable or assignable as Subsec. (a) and substantially amended same, including by deleting provisions re location where license is to be maintained, change in location of licensee and use of name other than name specified on license with provisions re change in control person of licensee or change in control of licensee to be subject of advance change notice filed on system, added Subsec. (b) re licensee use of name other than legal name or approved fictitious name, added Subsec. (c) re automatic suspension of license, notice to licensee and opportunity for hearing, designated existing provisions re surrendering license to commissioner, and amended same by replacing provision re surrender in person or by registered or certified mail with provision re surrender in accordance with Sec. 36a-51(c); P.A. 21-138 amended Subsec. (a) 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-541. (Formerly Sec. 36-259a). Authority of commissioner to issue license or deny application for license. Standards for renewal. (a) If the commissioner finds, upon the filing of an application for a license as a sales finance company, that the financial responsibility, character, reputation, integrity and general fitness of the applicant, the applicant's control persons, qualified individual and any branch manager are such as to warrant belief that the business will be operated soundly and efficiently, in the public interest and consistent with the purposes of sections 36a-535 to 36a-547, inclusive, the commissioner may thereupon issue the applicant the license. If the commissioner fails to make such findings, or if the commissioner finds that the applicant has made any material misstatement in the application, the commissioner shall not issue a license, and shall notify the applicant of the denial and the reasons for such denial. The commissioner may deny an application if the commissioner finds that the applicant or the applicant's control persons, qualified individual or any branch manager has been convicted of any misdemeanor involving any aspect of the sales finance business, or any felony. Any denial of an application by the commissioner shall, when applicable, be subject to the provisions of section 46a-80. (b) The minimum standards for renewal of a sales finance license shall include the following: (1) The applicant continues to meet the minimum standards under subsection (a) of this section; (2) the applicant has paid all required fees for renewal of the license; and (3) the applicant has paid all outstanding examination fees or other moneys due to the commissioner. If the commissioner finds that requirements for license renewal set forth in this subsection are not met, the applicant's license shall expire. The commissioner may adopt procedures for the reinstatement of expired licenses consistent with the standards established by the system. (c) Each license shall remain in force and effect until the license has been surrendered, revoked or suspended or has expired in accordance with the provisions of sections 36a-535 to 36a-547, inclusive. (1967, P.A. 631, S. 3; P.A. 94-122, S. 254, 340; P.A. 02-111, S. 31; P.A. 09-208, S. 7; P.A. 11-216, S. 30; P.A. 18-173, S. 28.) History: P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-259a transferred to Sec. 36a-541 in 1995; P.A. 02-111 replaced former Subsecs. (a) and (b) with provisions re findings, issuance of license and denial of application; P.A. 09-208 authorized commissioner to deny application based on certain criminal convictions, specified when withdrawal of application becomes effective, and provided that commissioner may deny license up to 1 year after date the withdrawal became effective, effective July 7, 2009; P.A. 11-216 deleted provision re ten-year period re misdemeanor and felony convictions; P.A. 18-173 designated existing provisions re finding by commissioner that business will be operated soundly and efficiently and in the public interest as Subsec. (a) and amended same by replacing references to partners, members, officers, directors and principal employees with references to control persons, qualified individual and branch manager, replacing reference to Sec. 36a-546 with reference to Sec. 36a-547, and deleting provisions re withdrawal of application, added Subsec. (b) re minimum standards for renewal of license, and added Subsec. (c) re license to remain in force and effect until surrendered, revoked, suspended or it has expired. (Return to Chapter Table of Contents) (Return to List of Chapters) (Return to List of Titles) Sec. 36a-542. (Formerly Sec. 36-259b). Requirements for filing with system. Unique identifier of licensee. Advertising of license. (a) Except as otherwise specified in subsections (a) and (b) of section 36a-540, each sales finance company applicant or licensee, and each 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 a sales finance company application or license not later than fifteen days from the date such applicant, licensee, control person, qualified individual or branch manager had reason to know of the change. (b) A sales finance company licensee shall file on 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 the licensee had reason to know of the occurrence of any such development: (1) Filing of a bankruptcy petition by the licensee 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 sales finance activities of the licensee, or receipt of 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 initiation 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 managers 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; or (5) Receiving notification of the filing for bankruptcy of any control person, branch manager or qualified individual of the licensee. (c) Any person filing or submitting any information on the system shall do so in accordance with the procedures and requirements of the system and shall pay the applicable fees or charges to the system. Each sales finance company licensee, to the extent required by the system, shall timely submit to the system accurate reports of condition that shall be in such form and shall contain such information as the system may require. Failure by a licensee to submit a timely and accurate report of condition shall constitute a violation of this provision. (d) The unique identifier of any person licensed under section 36a-541 shall be clearly shown on all solicitations and advertisements, including business cards and Internet web sites, and any other documents as established by rule, regulation or order of the commissioner, and shall be clearly stated in all audio solicitations and advertisements. The solicitations or advertisements of any person licensed under section 36a-541: (1) Shall not include any statement that such person is endorsed in any way by this state, except that such solicitations and advertisements may include a statement that such person is licensed in this state; (2) shall not include any statement or claim that is deceptive, false or misleading; (3) shall otherwise conform to the requirements of sections 36a-535 to 36a-547, inclusive, any regulations issued thereunder and any other applicable law; and (4) shall be retained for two years from the date of use of such solicitation or advertisement. (1967, P.A. 631, S. 4; P.A. 74-235, S. 1, 2; P.A. 94-104, S. 4; 94-122, S. 255, 340; P.A. 96-71, S. 5, 8; P.A. 02-111, S. 32; P.A. 04-69, S. 17; P.A. 05-46, S. 6; P.A. 18-173, S. 29.) History: P.A. 74-235 raised fee from $150 to $200; P.A. 94-104 changed fee to nonrefundable fee, increased the fee from $200 to $400 and added a $100 late fee; P.A. 94-122 changed “him” to “the commissioner”, effective January 1, 1995; Sec. 36-259b transferred to Sec. 36a-542 in 1995; P.A. 96-71 substituted “license fee” for “nonrefundable fee”, effective July 1, 1996; P.A. 02-111 changed time for filing renewal application to on or before September first of year in which the license expires or, in the case of a license that expires on June 30, 2003, on or before June 1, 2003, revising dates constituting untimely filing accordingly, increased license fee to $800, and added provision re $900 fee for license that expires on June 30, 2003; P.A. 04-69 designated existing provisions as Subsec. (a) and added new Subsec. (b) requiring commissioner to automatically suspend license or renewal license if commissioner determines that a check filed to pay the fee for a renewal application 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) 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. 18-173 deleted former Subsec. (a) re renewal of sales finance company license, added new Subsec. (a) re sales finance company applicant or licensee, control person, qualified individual or branch manager to file on system or notify commissioner in writing of change in information, deleted former Subsec. (b) re automatic license suspension when check to pay fee for renewal application is dishonored, added new Subsec. (b) re sales finance company licensee to file on system occurrence of certain developments or notify commissioner in writing of occurrence, added Subsec. (c) re filing or submitting information in accordance with procedures and requirements of system, payment of fees or charges to system, and submission of reports of condition, added Subsec. (d) re unique identifier of person licensed to be clearly shown on solicitations and advertisements and clearly stated in audio solicitations and advertisements. (Return to Chapter Table of Contents) (Return to List of Chapters) (Return to List of Titles) Sec. 36a-543. (Formerly Sec. 36-260a). Suspension, revocation or refusal to renew license or taking of other action. Enforcement powers of commissioner. (a) The commissioner may suspend, revoke or refuse to renew any sales finance company license or take any other action, in accordance with section 36a-51, if any fact or condition exists which, if it had existed at the time of the original application for such license, would have warranted the commissioner's denial of such license or if the commissioner finds that the licensee or any control person of the licensee, qualified individual or branch manager with supervisory authority, trustee, employee or agent of such licensee has done any of the following: (1) Knowingly or without the exercise of due care to prevent such violation, has violated any provision of this title, or of any regulation or order adopted or issued pursuant thereto pertaining to such person, or any other law or regulation applicable to the conduct of such licensee's installment sales financing business; (2) failed to comply with any demand or requirement made by the commissioner under and within the commissioner's authority; (3) made any material misstatement in the application or in any filing made in connection with the license; (4) defrauded any retail buyer to the buyer's damage; or (5) wilfully failed to perform any written agreement with any retail buyer. (b) The commissioner in the commissioner's discretion may revoke or suspend only the particular license with respect to which grounds for revocation or suspension are of general application to all locations, or if to more than one location, operated by such licensee, the commissioner shall revoke or suspend all of the licenses issued to such licensee or those licenses to which the grounds for revocation or suspension apply, as the case may be. (c) No suspension, revocation or surrender of any license shall impair or affect the obligation of any installment contract, obligation or credit agreement lawfully acquired previously thereto by the licensee. (d) Whenever it appears to the commissioner that (1) any person has violated, is violating or is about to violate any provision of sections 36a-535 to 36a-547, inclusive, within the jurisdiction of the commissioner or any regulation adopted under said sections, (2) any person is, was or would be a cause of the violation of any such provision 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 defrauded any retail buyer to the buyer's damage or wilfully failed to perform any written agreement with any retail buyer, the commissioner may take action against such person or such licensee in accordance with sections 36a-50 and 36a-52. (e) The commissioner, in accordance with section 36a-51a, may order a licensee to remove any individual conducting business under sections 36a-535 to 36a-547, inclusive, from office and from employment or retention as an independent contractor in the sales finance business in this state. (f) 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. (1967, P.A. 631, S. 5; 1971, P.A. 179, S. 22; 870, S. 93; P.A. 74-254, S. 11; P.A. 82-174, S. 4, 13, 14; P.A. 92-12, S. 75; P.A. 93-194, S. 3, 7; P.A. 94-122, S. 256, 340; P.A. 02-111, S. 33; P.A. 04-69, S. 18; P.A. 07-91, S. 19; P.A. 18-173, S. 30.) History: 1971 acts required appeal to return day between 12 and 30 days after service rather than to “next” or “next but one” return day after service and, effective September 1, 1971, replaced superior court with court of common pleas except that courts with cases pending retain jurisdiction unless pending matters deemed transferable; P.A. 74-254 repealed Subsec. (g) which had contained appeal provisions; P.A. 82-174 amended Subsec. (a) by authorizing the commissioner to “refuse to renew” a license and providing that after 10 days' written notice and allowing the licensee a reasonable opportunity to be heard the commissioner may suspend, revoke or refuse to renew a license repealing former Subsec. (b) re mandatory hearing prior to revocation or suspension; P.A. 92-12 redesignated Subsecs. and made technical changes; P.A. 93-194 amended Subsec. (c) re effectiveness of a surrender of any license by a licensee when the commissioner has instituted a proceeding to suspend, revoke or refuse to renew such license, effective June 23, 1993; P.A. 94-122 deleted Subsec. (c) re surrender of licenses, relettered former Subsecs. (d) and (e) as Subsecs. (c) and (d), deleted Subsec. (f) re investigating complaints of violations by licensees, added new Subsec. (e) re enforcement actions against violators and made technical changes, effective January 1, 1995; Sec. 36-260a transferred to Sec. 36a-543 in 1995; P.A. 02-111 amended Subsec. (a) by adding provision re “sales finance company” license, changing “refusal to issue” to “denial of” such license, and adding “member” in Subdiv. (5)(A), amended Subsec. (b) to change “place of business” to “location”, deleted former Subsec. (d) re rules and redesignated existing Subsec. (e) as Subsec. (d); P.A. 04-69 amended Subsec. (d) to allow commissioner to take action against violator or licensee in accordance with Sec. 36a-52 and added provision authorizing action whenever it appears that any licensee has defrauded any retail buyer to the buyer's damage or wilfully failed to perform any written agreement with any retail buyer; P.A. 07-91 amended Subsec. (a) to authorize commissioner to take any other action, in accordance with Sec. 36a-51, effective June 5, 2007; P.A. 18-173 substantially amended Subsec. (a) including by adding provisions re condition exists which would have warranted commissioner's denial of license, adding references to control person of licensee, qualified individual or branch manager with supervisory authority, trustee, employee or agent of licensee, and deleting provisions re officer, director, trustee member or partner guilty of act or omission which would be cause for revoking or suspending license and agent or employee guilty of act or omission and licensee approved or had knowledge and retained benefit, proceeds, profit or advantage of act or omission, amended Subsec. (d) by designating existing provision re person violating provision of sections or regulations as Subdiv. (1), and amending same by replacing reference to Sec. 36a-546 with reference to Sec. 36a-547, and adding reference to jurisdiction of commissioner, adding Subdiv. (2) re person cause of violation of provision or regulation due to act or omission person knew or should have known would contribute to violation, and designating existing provision re licensee defrauded retail buyer as Subdiv. (3), added Subsec. (e) re commissioner's authority to order licensee to remove individual from office, employment or retention as an independent contractor, added Subsec. (f) re commissioner's authority to issue temporary order to cease business, and made technical and conforming changes. (Return to Chapter Table of Contents) (Return to List of Chapters) (Return to List of Titles) Sec. 36a-544. (Formerly Sec. 36-260b). Regulations. (a) The commissioner may adopt regulations, in accordance with chapter 54, as necessary to carry out the provisions of sections 36a-535 to 36a-547, inclusive, including the defining of any terms, whether or not used in said sections, so far as the definitions are not inconsistent with the provisions of said sections. (b) No regulation may be adopted under this section unless the commissioner finds that the action is necessary or appropriate in the public interest or for the protection of purchasers and consistent with the purposes fairly intended by the policy and provisions of sections 36a-535 to 36a-547, inclusive. (1967, P.A. 631, S. 6; P.A. 94-122, S. 257, 340; P.A. 18-173, S. 90.) History: P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-260b transferred to Sec. 36a-544 in 1995; P.A. 18-173 replaced references to Sec. 36a-546 with references to Sec. 36a-547. (Return to Chapter Table of Contents) (Return to List of Chapters) (Return to List of Titles) Sec. 36a-545. (Formerly Sec. 36-262a). Books and records. Each applicant or licensee shall have established bookkeeping methods and shall keep books and records at the place of business specified in the license in a form and manner satisfactory to the commissioner, or shall make such books and records available at such place of business not later than five business days after requested by the commissioner. All such books and records shall be preserved for at least two years after the making of the final entry therein. (1967, P.A. 631, S. 8; P.A. 00-61, S. 4, 9.) History: Sec. 36-262a transferred to Sec. 36a-545 in 1995; P.A. 00-61 added provision re availability of books and records at place of business, effective July 1, 2000. (Return to Chapter Table of Contents) (Return to List of Chapters) (Return to List of Titles) Sec. 36a-546. (Formerly Sec. 36-263). Penalty. Any individual, corporation, partnership, limited partnership, association or other unincorporated enterprise, and any responsible officer, partner or employee thereof, who wilfully fails to comply with or violates any of the provisions of sections 36a-535 to 36a-547, inclusive, or who engages in business as a sales finance company without being licensed as a sales finance company by the commissioner in accordance with the provisions of said sections, shall be fined not more than five hundred dollars or imprisoned not more than six months or both. (1949 Rev., S. 5968; P.A. 18-173, S. 91.) History: Sec. 36-263 transferred to Sec. 36a-546 in 1995; P.A. 18-173 replaced “36a-545” with “36a-547”. Annotation to former section 36-263: Cited. 139 C. 425. (Return to Chapter Table of Contents) (Return to List of Chapters) (Return to List of Titles) Sec. 36a-547. Retail installment contract records. On and after October 1, 2018, a sales finance company, as defined in section 36a-535, shall acquire and maintain adequate records in the form and manner as the commissioner shall direct in each retail installment contract acquired by purchase, discount, pledge, loan, advance or otherwise, and any application for a retail installment contract, covering the retail sale of a motor vehicle in the state that has been reviewed by the sales finance company or relates to a retail installment contract acquired by the sales finance company, including, but not limited to, the: (1) Name, address, income, credit score, ethnicity, race and sex of the applicant and any coapplicants; (2) type, amount and annual percentage rate of the loan; and (3) disposition of the application. Such records shall be made available to the Banking Commissioner not later than five business days after a request for such records by the commissioner. Each sales finance company shall retain such records for not less than two years after the date of the application for applications that were denied or, for any retail installment contract that was acquired, for not less than two years after the date of final payment or sale or assignment of such contract, whichever occurs first, or such longer period as may be required by any other provision of law. On or before July 1, 2019, each licensee shall provide to the commissioner the records collected between October 1, 2018, to June 30, 2019, inclusive. (P.A. 16-65, S. 15; P.A. 17-236, S. 5; P.A. 18-173, S. 97.) History: P.A. 16-65 effective May 26, 2016; P.A. 17-236 made a technical change, effective July 11, 2017; P.A. 18-173 replaced “October 1, 2016” with “October 1, 2018”, amended Subdiv. (1) by adding “, ethnicity, race and sex” and deleting “and, if known, the ethnicity, race and sex of such individuals”, replaced “January 30, 2017” with “July 1, 2019”, and replaced “December 31, 2016” with “June 30, 2019”, and made technical changes. (Return to Chapter Table of Contents) (Return to List of Chapters) (Return to List of Titles) Secs. 36a-548 to 36a-554. Reserved for future use. (Return to Chapter Table of Contents) (Return to List of Chapters) (Return to List of Titles) PART III* SMALL LOAN LENDING AND RELATED ACTIVITIES *See Sec. 42a-9-203 re attachment of security interest. Annotation to former chapter 647: Cited. 23 CS 184. Sec. 36a-555. (Formerly Sec. 36-225). Definitions. As used in this section and sections 36a-556 to 36a-573, inclusive: (1) “Advertise” or “advertising” means any announcement, statement, assertion or representation that is placed before the public in a newspaper, magazine or other publication, in the form of a notice, circular, pamphlet, letter or poster, over any radio or television station, by means of the Internet, by other electronic means of distributing information, by personal contact, or in any other way or medium; (2) “APR” means the annual percentage rate for the loan calculated according to the provisions of the federal Military Lending Act, 10 USC 987, as amended from time to time, and the regulations promulgated thereunder. For the purpose of calculating the APR, each of the following shall be deemed to be a finance charge: (A) A charge set forth in 32 CFR 232.4(c)(1), as amended from time to time, (B) a charge for any ancillary product, membership or service sold in connection or concurrent with a small loan, (C) any amount offered or agreed to by a borrower in furtherance of obtaining credit or as compensation for the use of money, and (D) any fee, voluntarily or otherwise, charged, agreed to or paid by a borrower in connection or concurrent with a small loan; (3) “Branch office” means a location other than the main office where the licensee, or any person on behalf of the licensee, will engage in activities that require a small loan license; (4) “Connecticut borrower” means any borrower who resides in or maintains a domicile in this state and who (A) negotiates or agrees to the terms of the small loan in person, by mail, by telephone or via the Internet while physically present in this state, (B) enters into or executes a small loan agreement with the lender in person, by mail, by telephone or via the Internet while physically present in this state, or (C) makes a payment on the loan in this state. For purposes of this subdivision, “payment on the loan” includes a debit on an account the borrower holds in a branch of a financial institution or the use of a negotiable instrument drawn on an account at a financial institution. For purposes of this subdivision, “financial institution” means any bank or credit union chartered or licensed under the laws of this state, any other state or the United States; (5) “Control person” means an individual that directly or indirectly exercises control over another person, and includes 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. 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; (6) “Generating leads” means (A) engaging in the business of selling leads for small loans, (B) generating or augmenting leads for small loans for other persons for or with the expectation of compensation or gain, or (C) referring consumers to other persons for a small loan for or with the expectation of compensation or gain for such referral, except “generating leads” shall not include generating or augmenting leads for small loans for an exempt person, as described in subsection (b) of section 36a-557, using the exempt person's data or customer information; (7) “Lead” means any information identifying a potential consumer of a small loan; (8) “Main office” means the main address designated on the system; (9) “Open-end small loan” has the same meaning as “open-end credit”, as defined in 12 CFR 1026.2, as amended from time to time; (10) “Person” means a natural person, corporation, company, limited liability company, partnership or association; (11) “Small loan” (A) means any loan of money or extension of credit, or the purchase of, or an advance of money on, a borrower's future potential source of money, including, but not limited to, future pay, salary, pension income or a tax refund, if (i) the amount or value is fifty thousand dollars or less, and (ii) the APR is greater than twelve per cent, and (B) does not include (i) a retail installment contract made in accordance with section 36a-772, (ii) a loan or extension of credit for agricultural, commercial, industrial or governmental use, (iii) a residential mortgage loan, as defined in section 36a-485, or (iv) an open-end credit account that is accessed by a credit card issued by an exempt entity, as described in subdivision (1) of subsection (b) of section 36a-557; (12) “Trigger lead” means a consumer report obtained pursuant to Section 604(C)(1)(B) of the Fair Credit Reporting Act, 15 USC 1681b, where the issuance of the report is triggered by an inquiry made with a consumer reporting agency in response to an application for credit. “Trigger lead” does not include a consumer report obtained by a small loan lender that holds or services existing indebtedness of the applicant who is the subject of the report; and (13) “Unique identifier” means a number or other identifier assigned by protocols established by the system. (1949 Rev., S. 5937; 1949, S. 2753d; 1957, P.A. 439, S. 1; 1963, P.A. 175, S. 1; 1969, P.A. 242, S. 1; P.A. 77-129, S. 1; 77-183, S. 1, 2; P.A. 78-121, S. 71, 113; 78-303, S. 50, 136; P.A. 87-9, S. 2, 3; P.A. 88-65, S. 33; P.A. 89-338, S. 1; P.A. 92-12, S. 65; P.A. 94-122, S. 258, 340; P.A. 97-13, S. 1; P.A. 98-264; P.A. 02-111, S. 34; P.A. 04-69, S. 19; P.A. 08-176, S. 58; P.A. 09-208, S. 40; 09-209, S. 18; P.A. 15-235, S. 13; P.A. 16-65, S. 19; P.A. 17-233, S. 12; P.A. 23-126, S. 1.) History: 1963 act increased limit from $600 to $1,000 and added reference to charge or consideration in provision re 12% interest; 1969 act increased limit to $1,800 and deleted reference to loans of “goods or things in action”; P.A. 77-129 increased limit to $5,000; P.A. 77-183 authorized loans by building or savings and loan associations and wholly owned subsidiary service corporations; P.A. 78-121 included federal credit unions, deleted private bankers and referred to savings and loan associations rather than “building or” savings and loan associations in authority to make loans; P.A. 78-303 replaced banking commission with banking commissioner in keeping with requirements of P.A. 77-614 which repealed the commission; (Revisor's note: Pursuant to P.A. 87-9 “banking commissioner” was changed editorially by the Revisors to “commissioner of banking”); P.A. 88-65 deleted a reference to industrial banks; P.A. 89-338 increased the limit from $5,000 to $10,000 for loans made under Sec. 36-233b, clarified that the section applies to out-of-state institutions and added the exception for entities making loans for agricultural, commercial, industrial or governmental use or extending credit through certain open-end credit plans; P.A. 92-12 made technical changes; P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-225 transferred to Sec. 36a-555 in 1995; P.A. 97-13 increased limit from $5,000 to $15,000 for loans made under Sec. 36a-563, deleted reference to limit of $10,000 for loans made under Sec. 36a-565, and made reference to limit of $15,000 applicable to loans made under Sec. 36a-565 to conform to existing provisions of Sec. 36a-565; P.A. 98-264 added exceptions for licensed nondepository first mortgage lenders and secondary mortgage lenders and made technical changes; P.A. 02-111 amended Subdiv. (8) by deleting “nondepository first” and amended Subdiv. (9) by deleting “secondary”; P.A. 04-69 made technical changes, and amended Subdiv. (8) by substituting “36a-498a” for “36a-498” and inserting “when making first mortgage loans, as defined in section 36a-485”, and amended Subdiv. (9) by inserting “when making secondary mortgage loans, as defined in section 36a-510”; P.A. 08-176 added reference to “mortgage correspondent lender” in Subdiv. (8), deleted former Subdiv. (9), renumbered existing Subdiv. (10) as new Subdiv. (9) and made a technical change, effective July 1, 2008; P.A. 09-208 inserted Subdiv. (1) designator, added Subdivs. (2) and (3) re loan prohibitions and made conforming changes; P.A. 09-209 replaced reference to Secs. 36a-485 to 36a-498a with reference to Sec. 36a-489 and changed “first mortgage loans” to “residential mortgage loans”, effective July 31, 2009; P.A. 15-235 replaced reference to Sec. 36a-676(a)(8) with reference to 15 USC 1602, effective August 1, 2015; P.A. 16-65 replaced former provisions with introductory language and Subdivs. (1) to (13) re definitions, effective July 1, 2016; P.A. 17-233 amended Subdiv. (8) by redefining “main office”; P.A. 23-126 redefined “APR” in Subdiv. (2), redefined “Connecticut borrower” in Subdiv. (4), redefined “small loan” in Subdiv. (11), and made technical and conforming changes throughout. Annotation to former section 36-225: Cited. 149 C. 158. (Return to Chapter Table of Contents) (Return to List of Chapters) (Return to List of Titles) 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. (a) Without having first obtained a small loan license from the commissioner pursuant to section 36a-565, no person shall, by any method, including, but not limited to, mail, telephone, Internet or other electronic means, unless exempt pursuant to section 36a-557: (1) Make a small loan to a Connecticut borrower; (2) Offer, solicit, broker, directly or indirectly arrange, place or find a small loan for a prospective Connecticut borrower; (3) Engage in any other activity intended to assist a prospective Connecticut borrower in obtaining a small loan, including, but not limited to, generating leads; (4) Receive payments of principal and interest in connection with a small loan made to a Connecticut borrower; (5) Purchase, acquire or receive assignment of a small loan made to a Connecticut borrower; and (6) Advertise or cause to be advertised in this state a small loan or any of the services described in subdivisions (1) to (5), inclusive, of this subsection. (b) No person shall accept any lead, referral or application for a small loan to a prospective Connecticut borrower from a person who is not (1) licensed pursuant to section 36a-565, or (2) exempt from licensure pursuant to section 36a-557. (c) No person shall sell, transfer, pledge, assign or otherwise dispose of any small loan made to a Connecticut borrower to any person who is not (1) licensed pursuant to section 36a-565, or (2) exempt from licensure pursuant to section 36a-557. (d) Any person who purports to act as an agent, service provider or in another capacity for a person who is exempt from licensure pursuant to subsection (a) or (b) of section 36a-557, shall require licensure pursuant to subsection (a) of this section if: (1) Such person holds, acquires or maintains, directly or indirectly, the predominant economic interest in a small loan; (2) such person markets, brokers, arranges or facilitates the loan and holds the right, requirement or right of first refusal to purchase the small loans, receivables or interests in the small loans; or (3) the totality of the circumstances indicate that such person is the lender and the transaction is structured to evade the requirements of sections 36a-555 to 36a-573, inclusive. Circumstances weighing in favor of deeming a person a lender who shall be licensed under sections 36a-555 to 36a-573, inclusive, include, but are not limited to, the person: (A) Indemnifying, insuring or protecting an exempt person for any costs or risks related to a small loan; (B) predominantly designing, controlling or operating a small loan program; or (C) purporting to act as an agent, service provider or in another capacity for an exempt person in this state while acting directly as a lender in another state. (1949 Rev., S. 5940; 1949, S. 2756d; P.A. 78-303, S. 51, 136; P.A. 87-9, S. 2, 3; P.A. 91-357, S. 52, 78; P.A. 92-12, S. 66; P.A. 94-122, S. 259, 340; P.A. 02-111, S. 35; P.A. 09-208, S. 8; P.A. 11-216, S. 31; P.A. 16-65, S. 20; P.A. 23-126, S. 2.) History: P.A. 78-303 specified commissioner referred to in section as banking commissioner and substituted banking commissioner for banking commission elsewhere in section in keeping with P.A. 77-614 which repealed the banking commission; (Revisor's note: Pursuant to P.A. 87-9 “banking commissioner” was changed editorially by the Revisors to “commissioner of banking”); P.A. 91-357 made technical changes; P.A. 92-12 made technical changes; P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-226 transferred to Sec. 36a-556 in 1995; P.A. 02-111 deleted provisions re public notice, added “limited liability company” in Subdiv. (1), added provisions re commissioner's authority to deny application for license, changed “place of business” to “location”, and deleted provisions re maintenance of capital investment and exception; P.A. 09-208 authorized commissioner to deny application based on certain criminal convictions, specified when withdrawal of application becomes effective, and provided that commissioner may deny license up to 1 year after date the withdrawal became effective, effective July 7, 2009; P.A. 11-216 deleted provision re ten-year period re misdemeanor and felony convictions; P.A. 16-65 replaced former provisions with Subsecs. (a) to (c) re small loan lending and related activities prohibited without license or exemption, effective July 1, 2016; P.A. 23-126 added Subsec. (d) re licensure requirement for certain persons who purport to act as agent, as service provider or in another capacity for person exempt from licensure. (Return to Chapter Table of Contents) (Return to List of Chapters) (Return to List of Titles) Sec. 36a-557. (Formerly Sec. 36-227). Exemptions. (a) The following persons are exempt from the requirement for licensure set forth in section 36a-556: (1) A licensed pawnbroker; (2) A person licensed as a consumer collection agency in accordance with section 36a-801 when engaged in the activities of a consumer collection agency in the normal course of business; (3) A person who services small loans for an exempt person described in subsection (b) of this section, when such exempt person owns the small loans, provided the servicing arrangements include, in addition to receiving payments of principal and interest in connection with the small loans, the provision of accounting, recordkeeping and data processing services and such person does not engage in the activities set forth in subsection (d) of section 36a-556; (4) A person who is a passive buyer of a small loan. For purposes of this subdivision, “passive buyer” means a person who: (A) Has acquired a small loan for investment purposes from a person who is either licensed or exempt from licensure under subdivisions (1) to (3), inclusive, of subsection (b) of this section; (B) will receive the principal and interest and any other moneys due under the small loan through a person who is either licensed or exempt from licensure under subdivisions (1) to (3), inclusive, of subsection (b) of this section; and (C) has had and will have no communications of any kind with the Connecticut borrower regarding the small loan it has acquired; (5) 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, when generating leads; and (6) A retail seller who offers, extends or facilitates credit through an open-end or closed-end credit plan for the purchase of goods or services from such retail seller. (b) The following persons are exempt from the provisions of sections 36a-555 to 36a-573, inclusive: (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 such bank or credit union; and (3) Any operating subsidiary where each owner of such operating subsidiary is wholly owned by the same bank or credit union. (c) Loans made by an exempt person described in subsection (b) of this section shall be exempt from the provisions of sections 36a-555 to 36a-573, inclusive, including, without limitation, the provisions applicable to licensed persons, even if: (1) The exempt person utilizes the services of a person exempt from licensing or required to be licensed pursuant to section 36a-556 in connection with the small loans that are made or offered to be made by the exempt person described in subsection (b) of this section; and (2) a person exempt from licensing or required to be licensed pursuant to section 36a-556 engages in activities intended to assist a prospective Connecticut borrower or a Connecticut borrower in obtaining a small loan that is made or offered to be made by an exempt person described in subsection (b) of this section. Nothing in this subsection shall be construed as exempting persons required to be licensed pursuant to section 36a-556 from the requirements to obtain and maintain a license or from the provisions of sections 36a-562 to 36a-573, inclusive. Notwithstanding the foregoing, no person licensed or required to be licensed under section 36a-556 shall engage in any of the activities described in subsection (a) of section 36a-556 for any small loan that has an APR in excess of thirty-six per cent if that small loan contains any condition or provision inconsistent with the requirements of subsections (d) to (g), inclusive, of section 36a-558. This subsection shall not apply to loans described in subsection (d) of section 36a-556. (1949 Rev., S. 5938; 1949, S. 2754d; P.A. 94-122 S. 260, 340; P.A. 02-111, S. 36; P.A. 09-208, S. 9; P.A. 11-216, S. 32; P.A. 16-65, S. 21; P.A. 18-173, S. 31, 32; P.A. 23-126, S. 3.) History: P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-227 transferred to Sec. 36a-557 in 1995; P.A. 02-111 deleted provisions re content of application; P.A. 09-208 designated existing provisions as Subsec. (a), added Subdivs. (1) and (2) therein re criminal conviction information to be included in application and added Subsec. (b) specifying when withdrawal of application becomes effective and providing that commissioner may deny license up to 1 year after date the withdrawal became effective, effective July 7, 2009; P.A. 11-216 amended Subsec. (a) to delete provision re ten-year period re history of criminal convictions, add provisions authorizing commissioner to conduct state and national criminal history records check of applicant and each member, officer and director of applicant and add provisions re abandonment of application; P.A. 16-65 replaced former provisions with new Subsecs. (a) to (c) re exemptions, effective July 1, 2016; P.A. 18-173 amended Subsec. (a)(4) by replacing references to Subsec. (a)(1) to (3) with references to Subsec. (b)(1) to (3) and amended Subsec. (c) by adding “or offered to be made” and “or offered” re small loan; P.A. 23-126 amended Subsec. (a)(3) by adding provision re person does not engage in certain activities and amended Subsec. (c) by deleting “a disclosed”, making a technical change and adding provision re Subsec. (c) inapplicable to certain loans. (Return to Chapter Table of Contents) (Return to List of Chapters) (Return to List of Titles) 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. (a) Except as provided in subsection (c) of section 36a-557, no person licensed or required to be licensed under section 36a-556 shall engage in any of the activities described in subsection (a) of section 36a-556 for any small loan that contains any condition or provision inconsistent with the requirements in subsections (d) to (g), inclusive, of this section. (b) No person exempt from licensure under section 36a-557 shall engage in any of the activities described in subdivision (4), (5) or (6) of subsection (a) of section 36a-556 for any small loan made by a person who was licensed or who was required to be licensed under section 36a-556 that contains any condition or provision inconsistent with the requirements in subsections (d) to (g), inclusive, of this section. (c) (1) Except as the result of a bona fide error or as set forth in subdivision (2) of this subsection, any small loan described in subsection (a) or (b) of this section that contains any condition or provision inconsistent with the requirements in subsections (d) to (g), inclusive, of this section shall not be enforced in this state. Such small loan shall be void and no person shall have the right to collect or receive any principal, interest, charge or other consideration thereon. Any person attempting to collect or receive principal, interest, charge or other consideration on such small loan shall be subject to the provisions of section 36a-570. (2) Subdivision (1) of this subsection shall not apply when: (A) The inconsistent condition or provision is the result of a bona fide error; or (B) the small loan was lawfully made in compliance with a validly enacted licensed loan law of another state to a borrower who was not, at the time of the making of such loan, a Connecticut borrower but who has since become a Connecticut borrower. (3) For the purposes of this subsection, the term “bona fide error” includes, but is not limited to, clerical, calculation and computer malfunction, programming and printing errors, but does not include an error of legal judgment with respect to a person's obligations under sections 36a-555 to 36a-573, inclusive, or under regulations implemented pursuant to section 36a-573. (d) Small loans that are the subject of the activities set forth in subsections (a) and (b) of this section shall not contain: (1) For a small loan that is under five thousand dollars, an APR that exceeds the lesser of thirty-six per cent or the maximum annual percentage rate for interest that is permitted with respect to the consumer credit extended under the Military Lending Act, 10 USC 987, as amended from time to time, or for a small loan that is between five thousand and fifty thousand dollars, an APR that exceeds twenty-five per cent; (2) For other than an open-end small loan, a provision that increases the interest rate due to payment default; (3) A payment schedule with regular periodic payments that when aggregated do not fully amortize the outstanding principal balance; (4) A payment schedule with regular periodic payments that cause the principal balance to increase; (5) A payment schedule that consolidates more than two periodic payments and pays them in advance from the proceeds, unless such payments are required to be escrowed by a governmental agency; (6) A prepayment penalty; (7) An adjustable rate provision; (8) A waiver of participation in a class action or a provision requiring a borrower, whether acting individually or on behalf of others similarly situated, to assert any claim or defense in a nonjudicial forum that: (A) Utilizes principles that are inconsistent with the law as set forth in the general statutes or common law; or (B) limits any claim or defense the borrower may have; (9) A call provision that permits the lender, in its sole discretion, to accelerate the indebtedness, except when repayment of the loan is accelerated by a bona fide default pursuant to a due-on-sale clause; (10) A security interest, except as provided in subsection (e) of this section; or (11) Fees or charges of any kind, except as expressly permitted by subsection (e) of this section. (e) Small loans as described in subsections (a) and (b) of this section may contain provisions: (1) For late fees, if: (A) Such fees are assessed after an installment remains unpaid for ten or more consecutive days, including Sundays and holidays; (B) such fees do not exceed five per cent of the outstanding installment payment, excluding any previously assessed late fees, or a total of twenty-five dollars per month, whichever is less; and (C) no interest is charged on such fees; (2) Allowing charges for a dishonored check or any other form of returned payment, provided the total fee for such returned payment shall not exceed twenty dollars; (3) Allowing for collection of deferral charges, but only upon the specific written authorization of the borrower and in a total amount not to exceed the interest due during the applicable billing cycle; (4) Allowing for the accrual of interest after the maturity date or the deferred maturity date, provided such interest shall not exceed twelve per cent per annum computed on a daily basis on the respective unpaid balances; (5) Providing for reasonable attorney's fees subject to the conditions and restrictions set forth in section 42-150aa; (6) Including credit life insurance or credit accident and health insurance subject to the conditions and restrictions set forth in section 36a-559; and (7) Taking a security interest in a motor vehicle in connection with a closed-end small loan made solely for the purchase or refinancing of such motor vehicle, provided the APR of such loan shall not exceed the rates indicated for the respective classifications of motor vehicles as follows: (A) New motor vehicles, fifteen per cent; (B) used motor vehicles of a model designated by the manufacturer by a year not more than two years prior to the year in which the sale is made, seventeen per cent; and (C) used motor vehicles of a model designated by the manufacturer by a year more than two years prior to the year in which the sale is made, nineteen per cent. (f) Open-end small loans as described in subsections (a) and (b) of this section shall, in addition to the requirements set forth in subsections (d) and (e) of this section: (1) Not provide for an advance of money exceeding at any one time an unpaid principal of fifty thousand dollars; (2) Provide for payments and credits to be made to the same borrower's account from which advances, interests, charges and costs on such loan are debited; (3) Provide for interest to be computed on any unpaid principal balance of the account in each billing cycle by one of the following methods: (A) By converting the APR to a daily rate and multiplying such daily rate by the daily unpaid principal balance of the account, in which case the daily rate is determined by dividing the APR by three hundred sixty-five; or (B) by converting the APR to a monthly rate and multiplying the monthly rate by the average daily unpaid principal balance of the account in the billing cycle, in which case (i) the monthly rate is determined by dividing the APR by twelve, and (ii) the average daily unpaid principal balance is the sum of the amount unpaid each day during the cycle divided by the number of days in the cycle. In either of such computations, the billing cycle shall be monthly and the unpaid principal balance on any day shall be determined by adding to any balance unpaid as of the beginning of such day all advances and other permissible amounts charged to the borrower and deducting all payments and other credits made or received that day; (4) Not compound interest or charges by adding any unpaid interest or charges authorized by sections 36a-555 to 36a-573, inclusive, to the unpaid principal balance of the borrower's account; or (5) Not include any other fees or charges of any kind, except as expressly permitted by subsection (g) of this section. (g) Open-end small loans as described in subsections (a) and (b) of this section, in addition to the requirements set forth in subsections (d) to (f), inclusive, of this section, may: (1) Provide for an annual fee for the privileges made available to the borrower under the open-end loan agreement, provided such annual fee shall not exceed fifty dollars; and (2) Include credit life insurance or credit accident and health insurance, subject to the conditions and restrictions set forth in section 36a-559. (h) No person licensed or required to be licensed under sections 36a-555 to 36a-573, inclusive, who is engaged in generating leads shall in connection with lead generation activities: (1) Initiate any outbound telephone call using an automatic telephone dialing system or an artificial or prerecorded voice without the prior express written consent of the recipient; (2) Fail to transmit or cause to transmit the lead generator's name and telephone number to any caller identification service in use by a consumer; (3) Initiate an outbound telephone call to a consumer's residence between nine o'clock p.m. and eight o'clock a.m. local time at the consumer's location; (4) Fail to clearly and conspicuously identify the lead generator and the purpose of the contact in its written and oral communications with a consumer; (5) Fail to provide the ability to opt out of any unsolicited advertisement communicated to a consumer via an electronic mail address; (6) Initiate an unsolicited advertisement via electronic mail to a consumer more than ten business days after the receipt of a request from such consumer to opt out of such unsolicited advertisements; (7) Use a subject heading or electronic mail address in a commercial electronic mail message that would likely mislead a recipient, acting reasonably under the circumstances, about a material fact regarding the sender, contents or subject matter of the message; (8) Sell, lease, exchange or otherwise transfer or release the electronic mail address or telephone number of a consumer who has requested to be opted out of future solicitations; (9) Collect, buy, lease, exchange or otherwise transfer or receive an individual's Social Security number or bank account number; (10) Use information from a trigger lead to solicit consumers who have opted out of firm offers of credit under the federal Fair Credit Reporting Act; (11) Initiate a telephone call to a consumer who has placed his or her contact information on a federal or state Do Not Call list, unless the consumer has provided express written consent; (12) Represent to the public, through advertising or other means of communicating or providing information, including, but not limited to, the use of business cards or stationery, brochures, signs or other promotional items, that such lead generator can or will perform any other activity requiring licensure under this title, unless such lead generator is duly licensed to perform such other activity or exempt from such licensure requirements; (13) Refer applicants to, or receive a fee from, any person who is required to be licensed under this title, but was not so licensed as of the time of the performance of such lead generator's services; or (14) Assist or aid and abet any person in the conduct of business requiring licensure under this title when such person does not hold the license required. (1949 Rev., S. 5938; 1949, S. 2754d; March, 1958, P.A. 27, S. 47; P.A. 88-150, S. 3; P.A. 92-89, S. 5, 20; P.A. 94-104, S. 2; 94-122, S. 338, 340; P.A. 96-71, S. 6, 8; P.A. 02-111, S. 37; P.A. 04-69, S. 20; P.A. 05-46, S. 7; P.A. 16-65, S. 22; P.A. 17-233, S. 13, 14; P.A. 18-173, S. 96; P.A. 23-126, S. 4.) History: P.A. 88-150 specified that the license fee is nonrefundable and added the provision re expiration of licenses on June thirtieth; P.A. 92-89 increased the license fees from $200 to $400; P.A. 94-104 changed the license renewal deadline from June twentieth to June first, added a $100 late fee and added a $100 processing fee for a person whose license expired within 60 days of his application; P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-228 transferred to Sec. 36a-558 in 1995; P.A. 96-71 amended Subsec. (a) to delete “nonrefundable” modifying “license fee” and added Subsec. (b) to make all fees required by this section nonrefundable, effective July 1, 1996; P.A. 02-111 amended Subsec. (a) by providing that license fee for “small loan lender” license is $800, provided if application is filed not earlier than one year before the expiration date of license, fee is $400, by adding provision re license that is renewed effective July 1, 2003, shall expire on September 30, 2005, by adding provisions re expiration of license at the close of business on September thirtieth of the odd-numbered year following its issuance, renewal fee of $800 and exceptions for licenses that expire on June 30, 2003, and by making conforming and technical changes; P.A. 04-69 inserted new Subsec. (b), requiring commissioner to automatically suspend license or renewal license if commissioner determines that a check filed to pay 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, and redesignated existing Subsec. (b) as Subsec. (c); P.A. 05-46 amended Subsec. (a) 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. 16-65 replaced former provisions with new Subsecs. (a) to (h) re small loan prohibitions and permitted provisions, open-end small loans and lead generation activities, effective July 1, 2016; P.A. 17-233 amended Subsec. (d) by deleting provision re calculation under Military Lending Act in Subdiv. (1), and adding “payment” in Subdiv. (2), and amended Subsec. (e)(1)(B) by deleting “the lesser of”; P.A. 18-173 amended Subsec. (d)(1) by adding “lesser of thirty-six per cent or the”; P.A. 23-126 amended Subsec. (d)(1) by making technical changes and changing “fifteen” to “fifty”, amended Subsec. (e)(6) by making a technical change and amended Subsec. (f)(1) by changing “fifteen” to “fifty”. (Return to Chapter Table of Contents) (Return to List of Chapters) (Return to List of Titles) Sec. 36a-559. (Formerly Sec. 36-229). Credit life insurance. Credit accident and health insurance. (a) Subject to the conditions provided in this section, insurance may be sold to a Connecticut borrower by a licensee at the request of the borrower (1) for insuring the life of persons obligated on a small loan pursuant to sections 38a-645 to 38a-658, inclusive, and (2) providing accident and health insurance covering one person on a small loan pursuant to sections 38a-645 to 38a-658, inclusive. In the case of credit life insurance sold under subdivision (1) of this subsection, the amount of the insurance shall be sufficient to pay the total balance of the loan due on the date of the insured's death. Credit accident and health insurance sold under subdivision (2) of this subsection shall not provide indemnity against the risk of a borrower becoming disabled for a period of less than fourteen days, except that it may provide for retroactive coverage if the disability continues for the period stated in the policy. Irrespective of the number of obligors, only one obligor may be insured, except that life insurance may cover both a borrower and such borrower's spouse where both are obligors on a small loan. A licensee shall not require the purchase of insurance as a condition precedent to the making of a small loan. A licensee shall, both verbally and in writing, inform the borrower prior to entering into any small loan contract of his or her right not to purchase credit insurance. In order to be excluded from the APR calculation, the charge for insurance shall be reasonable, the licensee may not receive any direct or indirect compensation relating to the sale of the insurance and the charge for the insurance may not be paid to an affiliate of the licensee. (b) If a borrower obtains credit accident and health insurance, the borrower shall have the right to cancel such credit accident and health insurance at any time by giving written notice of cancellation to the licensee. Notification of this right shall be made in the borrower's insurance election. All persons obligated on the loan shall agree, in writing, to the cancellation and return all certificates of insurance. Upon cancellation, the licensee shall, at the licensee's option, either refund the insurance charges to the borrower or apply them to the unpaid balance of the loan. (c) For the purposes of this section, in the case of an open-end small loan, the additional charge for credit life insurance or credit accident and health insurance shall be calculated in each billing cycle by applying the current monthly premium rate for such insurance, as such rate may be determined by the Insurance Commissioner, to the unpaid balances in the account, using any of the methods for the calculation of loan charges specified in subdivision (4) of subsection (f) of section 36a-558. No credit life insurance or credit accident and health insurance written in connection with an open-end small loan shall be cancelled by the licensee because of delinquency of the borrower in the making of the required minimum payments on the loan unless (1) one or more of such payments is past due for a period of ninety days or more, and (2) the licensee advances to the insurer the amounts required to keep the insurance in force during such period, which amounts may be debited from the borrower's account. Any cancellation shall be effective at the end of the billing cycle in which the notice is received and the licensee shall discontinue any further charges for credit accident and health insurance. (1949 Rev., S. 5940; 1949, S. 2756d; P.A. 84-32, S. 2; P.A. 94-122, S. 261, 340; P.A. 06-35, S. 1; P.A. 16-65, S. 23.) History: P.A. 84-32 permitted a license to be transferred to cover a place of business located in an adjacent city or town; P.A. 94-122 changed “he” to “the commissioner”, effective January 1, 1995; Sec. 36-229 transferred to Sec. 36a-559 in 1995; P.A. 06-35 required that change in licensee's place of business be in accordance with Sec. 36a-562 and provided that license shall remain in force and effect until expiration, effective May 8, 2006; P.A. 16-65 replaced former provisions with Subsecs. (a) to (c) re credit life, accident and health insurance, effective July 1, 2016. (Return to Chapter Table of Contents) (Return to List of Chapters) (Return to List of Titles) Sec. 36a-560. (Formerly Sec. 36-230). Restrictions on licensee. No licensee shall: (1) Cause a borrower, including, but not limited to, a comaker or guarantor, to owe at any time more than fifty thousand dollars in principal on one or more small loans; (2) Induce or permit a borrower to split or divide any small loan or loans, or induce or permit a borrower to become obligated, directly or indirectly, under more than one contract of loan at the same time, primarily for the purpose of obtaining rates or charges that would otherwise be prohibited by any applicable provision of sections 36a-555 to 36a-573, inclusive; (3) Take any (A) confession of judgment, (B) power of attorney, (C) note or promise to pay that does not state the actual amount of the loan, the time period for which the loan is made and the charges for such loan, or (D) instrument related to the loan in which blanks are left to be filled after the loan is made; (4) Offer the borrower any other product or service for which there is or will ever be any cost to the borrower in connection with a small loan unless (A) permitted by sections 36a-555 to 36a-573, inclusive, (B) authorized under another license, or by applicable exemption from any requirement for such licensure, to offer such product or services, or (C) if no separate license or exemption therefrom is required to offer such product or services, authorized in advance, in writing, by the commissioner upon being satisfied that such other product or service is of such a character that the granting of such authority would not permit or easily facilitate evasion of the provisions of sections 36a-555 to 36a-573, inclusive, or of any regulations promulgated thereunder; or (5) Renew or refinance a small loan unless the renewal or refinancing of the loan will result in a distinct advantage to the borrower, provided restoration to a contractually up-to-date condition shall not, in itself, constitute a distinct advantage to the borrower. (1949 Rev., S. 5943; P.A. 78-303, S. 52, 136; P.A. 87-9, S. 2, 3; P.A. 94-122, S. 262, 340; P.A. 08-119, S. 7; P.A. 16-65, S. 24; P.A. 18-173, S. 33; P.A. 23-126, S. 5.) History: P.A. 78-303 replaced banking commission with banking commissioner in keeping with provisions of P.A. 77-614; (Revisor's note: Pursuant to P.A. 87-9 “banking commissioner” was changed editorially by the Revisors to “commissioner of banking”); P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-230 transferred to Sec. 36a-560 in 1995; P.A. 08-119 added requirement for surrender of license when licensee ceases to engage in the business of a small loan lender; P.A. 16-65 replaced former provisions with introductory language and Subdivs. (1) to (5) re restrictions on licensee, effective July 1, 2016; P.A. 18-173 made a technical change; P.A. 23-126 amended Subdiv. (1) by changing “fifteen” to “fifty”. (Return to Chapter Table of Contents) (Return to List of Chapters) (Return to List of Titles) Sec. 36a-561. (Formerly Sec. 36-231). Prohibited practices. No person licensed or required to be licensed and no control person shall, directly or indirectly: (1) Assist or aid and abet any person in conduct prohibited by sections 36a-555 to 36a-573, inclusive; (2) Employ any scheme, device or artifice to defraud or mislead any person in connection with a small loan; (3) Make, in any manner, any false, misleading or deceptive statement or representation in connection with a small loan or engage in bait and switch advertising; (4) Engage in any unfair or deceptive practice toward any person or misrepresent or omit any material information in connection with a small loan; or (5) Fail to establish, enforce and maintain policies and procedures for supervising employees, agents and office operations that are reasonably designed to achieve compliance with applicable laws and regulations concerning small loan lenders. (1949 Rev., S. 5948 (1); P.A. 94-122, S. 263, 340; P.A. 16-65, S. 25; P.A. 17-233, S. 15.) History: P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-231 transferred to Sec. 36a-561 in 1995; P.A. 16-65 replaced former provisions with introductory language and Subdivs. (1) to (4) re prohibited practices, effective July 1, 2016; P.A. 17-233 added reference to control persons, added Subdiv. (5) re failure to establish, enforce and maintain policies and procedures, and made a technical change. (Return to Chapter Table of Contents) (Return to List of Chapters) (Return to List of Titles) Sec. 36a-562. (Formerly Sec. 36-232). Main and branch offices. In each case where a license is required by section 36a-556, the licensee shall have a main office license and may have a branch office license. All offices shall be located in the United States. Each main office shall have a qualified individual, who shall be responsible for the actions of the licensee and for supervising all aspects of the licensee's small loan business. Each branch shall have a branch manager, who shall be responsible for the actions of the licensee and for supervising all aspects of the branch's small loan business. (1949 Rev., S. 5944; 1949, S. 2759d; P.A. 84-32, S. 1; P.A. 92-12, S. 67; P.A. 94-122, S. 264, 340; P.A. 06-35, S. 2; P.A. 16-65, S. 26; P.A. 18-173, S. 34.) History: P.A. 84-32 permitted a licensee to change his place of business to an adjacent city or town with the approval of the banking commissioner; P.A. 92-12 made technical changes; P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-232 transferred to Sec. 36a-562 in 1995; P.A. 06-35 required licensees to apply to commissioner prior to changing place of business within the same city or town or to an adjacent city or town, rather than giving written notice of change to commissioner, and made technical and conforming changes, effective May 8, 2006; P.A. 16-65 replaced former provisions with provisions re main and branch offices, effective July 1, 2016; P.A. 18-173 added “the actions of the licensee and for”. (Return to Chapter Table of Contents) (Return to List of Chapters) (Return to List of Titles) Sec. 36a-563. (Formerly Sec. 36-233). Application for small loan license. (a) An application for a small loan license shall be made and processed on the system pursuant to section 36a-24b, in the form prescribed by the commissioner on 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-555 to 36a-573, inclusive. The applicant shall, at a minimum, furnish to the system, in a form prescribed by the system, information concerning the identity of the applicant and 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. The commissioner, in accordance with section 29-17a, may conduct a state and national criminal history records check of the applicant and its control persons, qualified individual and branch manager, and, in accordance with section 36a-24b, may require the submission of fingerprints to the Federal Bureau of Investigation or other state, national or international criminal databases and may require control persons, qualified individuals and branch managers to furnish authorization for the system and the commissioner to obtain an independent credit report from a consumer reporting agency described in Section 603(p) of the Fair Credit Reporting Act, 15 USC 1681a, as amended from time to time. Applicants may also be required to upload on the system an audited financial statement prepared by a certified public accountant in accordance with generally accepted accounting principles dated not later than ninety days after the end of the applicant's fiscal year. Such financial statement shall include a balance sheet, income statement, statement of cash flows and all relevant notes thereto. If the applicant is a start-up company, only an initial statement of condition shall be required. (b) The commissioner may deem an application for a small loan license abandoned if the applicant fails to respond to any request for information required under sections 36a-555 to 36a-573, inclusive, or any regulation adopted pursuant to section 36a-573. The commissioner shall notify the applicant on the system that if such information is not submitted on or before sixty days after 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-555 to 36a-573, inclusive. (1949 Rev., S. 5949; 1949, S. 2762d; 1957, P.A. 439, S. 3; 1963, P.A. 175, S. 2; 1969, P.A. 242, S. 2, 3; P.A. 73-419; P.A. 75-99, S. 1–4, 6; P.A. 77-129, S. 2–5; P.A. 80-45, S. 1, 2; P.A. 81-102, S. 1–3; P.A. 83-358, S. 1, 2; P.A. 92-12, S. 68; P.A. 97-13, S. 2; P.A. 00-164, S. 1; P.A. 07-217, S. 153, 154; P.A. 15-235, S. 18; P.A. 16-65, S. 27.) History: 1963 act incorporated previous provisions as Subsecs. (a) and (h) substituting “charges” for “interest” where occurring, raised loan limit in Subsec. (a) from $600 to $1,000 “excluding charges” and changing method of calculating charges, raised limit in Subsec. (h) from $600 to $1,000, substituted 24 months and 15 days for 20 months, deleted prohibition against granting additional loan to borrower until unpaid balance of previous loan is paid in full and required consideration of renewed or refinanced contract as separate loan transaction in same Subsec. and inserted Subsecs. (b) to (g); 1969 act increased loan limit in Subsecs. (a) and (h) to $1,800, raised amount charged on excess of $300 from $9 to $11 per $100 in Subsec. (a), specified applicability of provisions to loans under chapter in Subsec. (h) and made 24-month and 15-day period applicable where cash advance was $1,000 or less and allowed 36-month and 15-day period where advance exceeded that amount; P.A. 73-419 added provisions governing date when prepayment is deemed to have occurred in Subsec. (f); P.A. 75-99 raised loan limit in Subsecs. (a) and (h) from $1,800 to $5,000 and in Subsec. (a) made previous charge rates applicable to loans not exceeding former limit and added rates for other allowed loans, amending Subsec. (h) accordingly and adding reference to loans secured by real estate, replaced default charge of $0.05 per dollar with charge consisting of the lesser of $5 or $0.05 per dollar and added Subsec. (i) authorizing loans in excess of $1,800 if secured by real estate; P.A. 77-129 clarified loan limits in Subsec. (a) by referring to unsecured or secured loans and to types of security, made previous provisions of Subsec. (b) applicable to loans originally scheduled for repayment within 48 months and 15 days and added provisions re loans with longer repayment period, deleted references to loans secured by real estate in Subsec. (h) and added provision which allowed extension of renewal period to the number of months loan maturity day has been extended through deferred payments and repealed Subsec. (i); P.A. 80-45 raised amount which determines charge rate in Subsec. (a)(1) from $300 to $600; P.A. 81-102 amended Subsec. (d) by increasing the maximum default charge from $5 to $7.50 and establishing a minimum default charge of $3, and amended Subsec. (e) to make the length of the extension of the maturity of a contract subject to the original repayment period of the loan; P.A. 83-358 added Subsec. (j) concerning allowable closing costs on loans secured by real estate and added Subsec. (k) prohibiting unauthorized charges for default on any loan; P.A. 92-12 made technical changes; Sec. 36-233 transferred to Sec. 36a-563 in 1995; P.A. 97-13 increased limit from $5,000 to $15,000 in Subsecs. (a) and (h) and made technical changes (Revisor's note: A reference in Subsec. (a) to Secs. “36-555 to 36a-573”, inclusive, was changed editorially by the Revisors to Secs. “36a-555 to 36a-573”, inclusive); P.A. 00-164 amended Subsec. (h) by adding provision re service charges imposed for dishonored checks; P.A. 07-217 made technical changes in Subsecs. (c) and (e), effective July 12, 2007; P.A. 15-235 amended Subsec. (b) to change “36a-685” to “36a-686”, effective August 1, 2015; P.A. 16-65 replaced former provisions with new Subsecs. (a) and (b) re small loan license application, effective July 1, 2016. Annotations to former section 36-233: Under former statute which applied to loans not exceeding $300, loan violates section and is void where it results in accommodation comaker becoming obligated for more than $300. 109 C. 116. Cited. 115 C. 104; 120 C. 155. Provision in chattel mortgage for attorney's fees in case of reclamation will render note void. Id., 193. Effect of receipt showing more than 3% interest was charged. 124 C. 349. Where no security was in fact given, erroneous printed statement as to security was not fatal. Id., 353. Cited. 149 C. 159; 201 C. 89. (Return to Chapter Table of Contents) (Return to List of Chapters) (Return to List of Titles) Sec. 36a-564. (Formerly Sec. 36-233a). License fees. Renewal. Automatic suspension. (a) Each applicant for a small loan license shall pay to the system any required fees or charges and a license fee of four hundred dollars. Each such license shall expire at the close of business on December thirty-first of the year in which the license was 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 renewal of a small loan license shall pay to the system any required fees or charges and a renewal fee of four hundred dollars. (b) In accordance with section 36a-24b, the commissioner may automatically suspend any license if such person receives a deficiency on the system indicating that a required payment was Returned-ACH or returned pursuant to any other term as may be utilized by the system to indicate that payment was not accepted. After the license has been automatically suspended pursuant to this subsection, the commissioner shall (1) give the licensee notice of the automatic suspension pending proceedings for revocation or refusal to renew pursuant to section 36a-570 and an opportunity for a hearing on such action in accordance with section 36a-51, and (2) require such licensee to take or refrain from taking such action as the commissioner deems necessary to effectuate the purposes of this section. (c) No abatement of the license fee shall be made if an application is denied or withdrawn prior to the issuance of the license or if the license is surrendered, revoked or suspended prior to the expiration of the period for which the license was issued. All fees required by this section shall be nonrefundable. (1963, P.A. 175, S. 8; P.A. 94-122, S. 265, 340; P.A. 16-65, S. 28; P.A. 18-173, S. 35.) History: P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-233a transferred to Sec. 36a-564 in 1995; P.A. 16-65 replaced former provisions with Subsecs. (a) to (c) re license fees, license renewal and automatic suspension of license, effective July 1, 2016; P.A. 18-173 amended Subsec. (b) by replacing reference to Sec. 36a-27b with reference to Sec. 36a-24b, replacing “shall” with “may” re automatically suspending license, designating existing provisions re giving licensee notice of automatic suspension as Subdiv. (1), designating existing provisions re requiring licensee to take or refrain from taking action as Subdiv. (2) and amending same to replace “action that, in the opinion of the commissioner, will effectuate” with “action as the commissioner deems necessary to effectuate”, and amended Subsec. (c) by adding “an application is denied or withdrawn prior to the issuance of the license or if”. (Return to Chapter Table of Contents) (Return to List of Chapters) (Return to List of Titles) Sec. 36a-565. (Formerly Sec. 36-233b). Findings required for issuance of license. Denial of application. Minimum funds. Standards for renewal. Surrender of license. (a) Upon the filing of the required application and license fee under sections 36a-563 and 36a-564, the commissioner shall investigate the facts and no license shall be granted unless the commissioner finds that: (1) The experience, character and general fitness of the applicant and its control persons, qualified individual and any branch manager are satisfactory; (2) the activities to be conducted by the applicant will be for the convenience and advantage of the consumers it seeks to serve; (3) the applicant has available the funds required by subsection (d) of this section; and (4) the applicant and its control persons and any qualified individual and 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. (b) Notwithstanding the provisions of subsection (a) of this section, the commissioner may deny an application if the applicant or its control persons or qualified individual or branch manager have demonstrated a lack of financial responsibility. For purposes of this subsection, a person has shown that he or she 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. (c) Notwithstanding the provisions of subsection (a) of this section, 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 or of its control persons or qualified individual or branch manager. (d) Applicants shall have a minimum of fifty thousand dollars continuously available for each licensed location. The requirement of this subsection may be met by cash on hand, cash in bank or lines of credit. (e) The minimum standards for renewal of a small loan license shall include the following: (1) The applicant continues to meet the minimum standards under subsections (a) to (d), inclusive, of this section; (2) the applicant has paid all required fees for renewal of the license; and (3) the applicant has paid any outstanding examination fees or other moneys due to the commissioner. The license of a small loan lender 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. (f) Surrender of a license shall be governed by subsection (c) of section 36a-51. Not later than fifteen days after the date a licensee ceases to engage in this state in the business of a small loan lender for any reason, including a business decision to terminate operations in this state, license revocation, bankruptcy or voluntary dissolution, such licensee shall request surrender of the license on the system for each location in which such licensee has ceased to engage in such business. (g) Every license shall remain in force and effect until the license has been surrendered, revoked or suspended, or has expired in accordance with the provisions of sections 36a-555 to 36a-573, inclusive. (P.A. 79-249; P.A. 89-338, S. 2; P.A. 90-99, S. 1, 2; P.A. 91-25, S. 1, 2; P.A. 95-28; P.A. 96-38; P.A. 00-164, S. 2; P.A. 16-65, S. 29; P.A. 17-236, S. 6; P.A. 18-173, S. 36.) History: P.A. 89-338 increased the loan limit in Subsecs. (a) and (c) from $5,000 to $10,000 and made one-hundred-twenty-month and 15-day payment period where a cash advance brought the balance in excess of $5,000; P.A. 90-99 amended Subsec. (c) by defining “bona fide error” and amended Subsec. (h) by authorizing the sale of credit accident and health insurance on open-end loans and specifying borrowers right to terminate coverage; P.A. 91-25 amended Subsec. (a) by adding “interest” to Subdiv. (2) and changing “charges are” to read “interest is” in Subdiv. (3), amended Subsec. (c) by limiting interest on open-end loans to an annual percentage rate not to exceed 19.8% and adding Subdivs. (1) to (4), inclusive, re permissible loan charges, amended Subsec. (d) by adding “interest or”, amended Subsec. (e) by changing “charges” to read “interest” and made technical changes to Subdivs. (f) and (g); Sec. 36-233b transferred to Sec. 36a-565 in 1995; P.A. 95-28 changed “ten” to “fifteen” in Subsecs. (a)(1), defining “open-end loan”, and (c), deleted Subsec. (g) re maximum term for full payment and re maximum specified annual percentage rates, and relettered Subsecs. (h) to (k), inclusive, as Subsecs. (g) to (j) (Revisor's note: A reference in Subsec. (g) to “Commissioner of Insurance” was changed editorially by the Revisors to “Insurance Commissioner” for consistency with customary statutory usage); P.A. 96-38 amended Subsec. (c)(1) to increase permitted annual fee from $35 to $50; P.A. 00-164 amended Subsec. (c)(3) by replacing language re bad check charge with language re service charges for dishonored check; P.A. 16-65 replaced former provisions with new Subsecs. (a) to (g) re findings required for issuance of license, denial of application, minimum funds, standards for renewal, withdrawal of application, surrender of license and failure to renew, effective July 1, 2016; P.A. 17-236 amended Subsec. (c) by making a technical change, effective July 11, 2017; P.A. 18-173 amended Subsec. (e) by replacing “subsection (a)” with “subsections (a) to (d), inclusive,” and adding provisions re failure to satisfy standards for license renewal and commissioner's authority to adopt procedures for reinstatement of expired licenses, amended Subsec. (f) by deleting provisions re withdrawal of application for license and commissioner's authority to deny license prior to withdrawal and deleting former Subdiv. (2) re license that expires due to licensee's failure to renew, and made a technical change. (Return to Chapter Table of Contents) (Return to List of Chapters) (Return to List of Titles) 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. (a) No license issued under section 36a-556 shall be assignable or transferable. Any change in any control person of the licensee, except a change of a director, general partner or executive officer that is not the result of an acquisition or change of control of the licensee, shall be the subject of an advance change notice filed on the system at least thirty days prior to the effective date of such change and no such change shall 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. (b) 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 of such name. No licensee shall engage in any activity requiring a small loan license under any other name or at any other place of business than that named in the license. Any proposed change in a licensee's name or to the licensee's place of business shall be the subject of an advance change notice filed on the system at least thirty days prior to the effective date of such change and no such change to the licensee's name or place of business shall be made without the commissioner's approval of such change. (c) The commissioner may automatically suspend any license for a violation of this section or upon a failure of the licensee to designate a qualified individual or branch manager who meets the requirements set forth in section 36a-562 not later than thirty-days after such position becomes vacant. After a license has been automatically suspended pursuant to this subsection, the commissioner shall (1) give the licensee notice of the automatic suspension, pending proceedings for revocation of or refusal to renew the license pursuant to section 36a-570 and an opportunity for a hearing in accordance with section 36a-51, and (2) require the licensee to take or refrain from taking action as the commissioner deems necessary to effectuate the purpose of this section. (1957, P.A. 439, S. 5; 1959, P.A. 555; 1963, P.A. 175, S. 3; 1969, P.A. 242, S. 4; P.A. 79-134; P.A. 83-345, S. 1, 2; P.A. 16-65, S. 30; P.A. 18-173, S. 37; P.A. 21-138, S. 9.) History: 1959 act expanded and clarified insurance refund provisions; 1963 act clarified provision re amount of life insurance required; 1969 act deleted detailed provisions re insurance amounts, charges and refunds and specified that gain or benefit to licensee not deemed additional or excess charges; P.A. 79-134 added exception re coverage of married couple; P.A. 83-345 authorized the providing of accident and health insurance covering one person on a loan, required licensees to inform the borrower of his right not to purchase credit insurance and permitted borrowers to cancel any insurance coverage up to 15 days after the loan is made; Sec. 36-234 transferred to Sec. 36a-566 in 1995; P.A. 16-65 replaced former provisions with new Subsecs. (a) and (b) re license not to be assignable or transferable, use of name and change in control persons, name or place of business, effective July 1, 2016; P.A. 18-173 amended Subsec. (a) by replacing “proposed change” with “change”, replacing “persons” with “person of the licensee, except a change of a director, general partner or executive officer that is not the result of an acquisition or change of control of the licensee,”, and deleting “to the control persons”, added new Subsec. (c) re automatic suspension of license, and made technical and conforming changes; P.A. 21-138 defined “change of control” in Subsec. (a). (Return to Chapter Table of Contents) (Return to List of Chapters) (Return to List of Titles) Sec. 36a-567. (Formerly Sec. 36-235). Change in information. Required system filing or notice to commissioner. (a) Except as otherwise specified in section 36a-566, each small loan license applicant or licensee, and each control person, qualified individual and branch manager of the applicant or licensee shall file any change in the information most recently submitted to the system by such licensee, control person, qualified individual or branch manager in connection with the application or license, or, if the information cannot be filed on the system, notify the commissioner, in writing, of such change in the information not later than fifteen days after the date the applicant, licensee, control person, qualified individual or branch manager has reason to know of such change. (b) A 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 licensee had reason to know of the occurrence: (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 activities of the licensee or receiving notification of the filing of any criminal felony indictment or felony conviction of any of the licensee's control persons or qualified individual or branch manager; (3) receiving notification of the institution of a 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 against the licensee or any control person, branch manager or qualified individual of the licensee with respect to any existing line of credit or warehouse credit agreement; (6) receiving notification of any of the licensee's control persons or qualified individual or branch manager filing or having filed for bankruptcy; or (7) a decrease in the available funds required by section 36a-565. (1949 Rev., S. 5950; 1949, S. 2763d; 1963, P.A. 175, S. 4; 1969, P.A. 454, S. 35; P.A. 92-12, S. 69; P.A. 94-84; P.A. 16-65, S. 31; P.A. 18-173, S. 38.) History: 1963 act specified in Subdiv. (a) that only certain Subsecs. of Sec. 36-233 need be stated, and amended Subdiv. (b) to require receipt for cash payments only where previously receipt required for all forms of payments; 1969 act deleted former Subdivs. (a) and (b) which required delivery to borrower of statement containing amount owed, scheduled payments, etc. and receipts for cash payments, relettering accordingly; P.A. 92-12 made technical changes; P.A. 94-84 authorized returning to the borrower a duplicate of the original document clearly identifying the loan, showing such loan has been paid in full and the note cancelled; Sec. 36-235 transferred to Sec. 36a-567 in 1995; P.A. 16-65 replaced former provisions with Subsecs. (a) and (b) re change in information and required system filing or notice to commissioner, effective July 1, 2016; P.A. 18-173 substantially amended Subsec. (a) including by adding references to control person, qualified individual and branch manager, adding references to application and applicant, and replacing “directly notify” with “notify”, amended Subsec. (b) by replacing “directly notify” with “notify”, adding references to control person, branch manager, and qualified individual in Subdivs. (3) to (5), and made technical and conforming changes. Annotations to former section 36-235: Actual amount of loan must be stated; “for value received” and amount of note are not sufficient; rate of interest must be clearly stated. 115 C. 102. Under former requirement of statement re maturity, failure to state all contingencies which would accelerate payment of principal rendered note unenforceable. 120 C. 152; 124 C. 349. Not necessary that receipt state period for which interest was due or state balance due. Id., 351. Statement held insufficient because it stated different day of week for installment payments from day designated in note. 127 C. 523. (Return to Chapter Table of Contents) (Return to List of Chapters) (Return to List of Titles) Sec. 36a-568. (Formerly Sec. 36-236). Unique identifier of licensee. Advertising of licensee. (a) The unique identifier of any small loan licensee shall be clearly shown on the licensee's application forms for a small loan and all of the licensee's solicitations or advertisements, including business cards or Internet web sites, and any other documents as established by rule, regulation or order of the commissioner. (b) The advertising of a licensee: (1) Shall not include any statement that such licensee is endorsed in any way by this state, except it may include a statement that such licensee is licensed in this state; (2) shall not include any statement or claim which is deceptive, false or misleading; (3) shall be retained for two years from the date of its use; and (4) shall otherwise conform to the requirements of sections 36a-555 to 36a-573, inclusive, and any regulations issued thereunder. (1949 Rev., S. 5951; 1949, S. 2764d; 1963, P.A. 175, S. 5; 1969, P.A. 242, S. 5; 454, S. 36; P.A. 75-99, S. 5, 6; P.A. 77-129, S. 6; P.A. 16-65, S. 32; P.A. 18-173, S. 39.) History: 1963 act rephrased provisions and increased maximum repayment period from 20 months to 24 months and 15 days and time for payment of first installment from 45 days to 1 month and 15 days; 1969 acts prohibited taking mortgage or lien except as authorized in Sec. 36-234, made previous repayment period applicable to loans not exceeding $1,000 and allowed 36 months and 15 days for larger loans and deleted provision prohibiting licensee from taking any note or promise to pay which “does not state the actual amount of the loan, the time for which it is made and the charges” and from taking “any instrument in which blanks are left to be filled after the loan is made”; P.A. 75-99 specified conditions for taking security interest in real estate and stated that time for repayment of loan secured by real estate may not be restricted; P.A. 77-129 clarified use of chattels and personal property as loan security and deleted reference to security authorized in Sec. 36-234, allowed repayment period of 72 months and 15 days in cases where cash advance exceeded $1,800, deleted statement that time for loan repayment where loan secured by real estate is not to be limited and added provision re applicability of Sec. 42-98 to repossession of property other than real estate; Sec. 36-236 transferred to Sec. 36a-568 in 1995; P.A. 16-65 replaced former provisions with Subsecs. (a) and (b) re unique identifier and advertising of licensee, effective July 1, 2016; P.A. 18-173 amended Subsec. (b) by making technical changes and replacing “one year” with “two years” in Subdiv. (3). Annotation to former section 36-236: Cited. 115 C. 105. (Return to Chapter Table of Contents) (Return to List of Chapters) (Return to List of Titles) Sec. 36a-569. (Formerly Sec. 36-237). Books and records. Reports of condition. Submission of sworn statement and other information. (a) Each small loan licensee shall keep adequate books and records at the place of business specified in the license in such form and in such manner as the commissioner prescribes and shall preserve all books, accounts and records for the following time periods: (1) If the licensee offered, solicited, brokered, directly or indirectly arranged, placed, found or generated leads for a small loan, at least two years after the date it engaged in such activity; (2) if the licensee made, owns or services a small loan, at least two years after the date the licensee (A) no longer owns the small loan, or (B) has made the final entry on the small loan. (b) Each licensee shall make such books and records available at such office or send such books and 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 to do so by the commissioner. Upon request, the commissioner may grant a licensee additional time to make such books and records available or send them to the commissioner. (c) Licensees shall be required to complete any reports of condition required by the system. Any such reports of condition shall be accurately and timely filed on the system in accordance with the due dates and formats required by the system. (d) Until such time as information is able to be captured by a system-based report, each licensee shall furnish annually, on or before January thirtieth, a sworn statement of the condition of the business of such licensee as of the preceding December thirty-first, together with such other information and statements as the commissioner may, from time to time, require. Any licensee that fails to furnish any such report of condition pursuant to subsection (c) of this section or such sworn statement or any other information required by this subsection shall be in violation of this section. (1949 Rev., S. 5946; 1951, S. 2760d; 1971, P.A. 199; P.A. 16-65, S. 33.) History: 1971 act imposed $10 penalty for each day that licensee fails to furnish required information or sworn statement; Sec. 36-237 transferred to Sec. 36a-569 in 1995; P.A. 16-65 replaced former provisions with Subsecs. (a) to (d) re books and records, reports of condition and submission of sworn statement and other information, effective July 1, 2016. (Return to Chapter Table of Contents) (Return to List of Chapters) (Return to List of Titles) 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. (a) The commissioner may suspend, revoke or refuse to renew any license issued under sections 36a-555 to 36a-573, inclusive, 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-555 to 36a-573, inclusive, or if the commissioner finds that the licensee or any control person of the licensee, qualified individual or branch manager with supervisory authority, trustee, employee or agent of such licensee has done any of the following: (1) Made any material misstatement in the application; (2) committed any fraud, misappropriated funds or misrepresented, concealed, suppressed, intentionally omitted or otherwise intentionally failed to disclose any of the material particulars of any small loan transaction to anyone entitled to such information, including, but not limited to, any disclosures required by part III of chapter 669 or regulations adopted pursuant thereto; (3) violated any of the provisions of this title or 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 small loan business; or (4) failed to perform any agreement with a licensee or a borrower. (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-555 to 36a-573, inclusive, or any regulation adopted pursuant thereto, (2) any person is, was or would be a cause of the violation of any such provision 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 small loan transaction to anyone entitled to such information, including disclosures required by part III of chapter 669 or regulations adopted pursuant thereto, 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-555 to 36a-573, inclusive, from office and from employment or retention as an independent contractor in the small loan 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. (1949 Rev., S. 5948 (3); P.A. 94-122, S. 266, 340; P.A. 07-91, S. 7; P.A. 16-65, S. 34; P.A. 18-173, S. 40.) History: P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-239 transferred to Sec. 36a-570 in 1995; P.A. 07-91 authorized commissioner to adopt regulations and make findings as necessary for the association of small loan business with other businesses and the conduct of associated businesses, effective June 5, 2007; P.A. 16-65 replaced former provisions with Subsecs. (a) to (d) re enforcement powers of commissioner, effective July 1, 2016; P.A. 18-173 amended Subsec. (a) by replacing “, any regulations adopted pursuant thereto or any other law or regulation applicable to the conduct of its business”, with “or 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 small loan business” in Subdiv. (3), amended Subsec. (c) by deleting Subdiv. (2) re hearing, deleting Subdiv. (1) designator, replacing provisions re commissioner's findings as a result of investigation with reference to Sec. 36a-51a, and amended Subsec. (d) by deleting provisions re opportunity for a hearing and temporary order with provision re temporary order to be issued in accordance with Sec. 36a-24b(j). (Return to Chapter Table of Contents) (Return to List of Chapters) (Return to List of Titles) Sec. 36a-571. (Formerly Sec. 36-241). License suspension. Section 36a-571 is repealed, effective October 1, 2002. (1949 Rev., S. 5948 (2); P.A. 02-111, S. 51.) (Return to Chapter Table of Contents) (Return to List of Chapters) (Return to List of Titles) Sec. 36a-572. (Formerly Sec. 36-242). Investigations and examinations. Section 36a-572 is repealed, effective October 1, 2018. (1949 Rev., 5942; 1949, S. 2758d; P.A. 74-254, S. 5; P.A. 78-303, S. 53, 136; P.A. 94-122, S. 267, 340; P.A. 02-111, S. 38; P.A. 04-69, S. 21; P.A. 07-91, S. 20; P.A. 16-65, S. 35; P.A. 18-173, S. 102.) (Return to Chapter Table of Contents) (Return to List of Chapters) (Return to List of Titles) Sec. 36a-573. (Formerly Sec. 36-243). Regulations. The commissioner may adopt such regulations, in accordance with chapter 54, as the commissioner deems necessary to administer and enforce the provisions of this section and sections 36a-555 to 36a-570, inclusive. (1949 Rev., S. 5952; 1949, S. 2765d; 1957, P.A. 439, S. 4; 1963, P.A. 175, S. 7; 1969, P.A. 242, S. 7; P.A. 77-129, S. 7; P.A. 86-216, S. 1, 3; P.A. 94-122, S. 268, 340; P.A. 97-13, S. 3; P.A. 09-208, S. 41; P.A. 11-216, S. 33; P.A. 15-53, S. 4; P.A. 16-65, S. 36; P.A. 18-173, S. 41.) History: 1963 act included “charge” in provision re 12% interest and raised applicable loan limit from $600 to $1,000; 1969 act raised limit to $1,800 and deleted reference to loan, etc. of “goods or things in action”; P.A. 77-129 raised limit to $5,000 and added proviso re loans exceeding allowed interest rate or charge; P.A. 86-216 amended section to permit a licensed small loan company to enforce an interest provision against an out of state borrower who becomes a Connecticut resident, even if the interest rate exceeds the maximum rate permitted under Connecticut law; P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-243 transferred to Sec. 36a-573 in 1995; P.A. 97-13 increased limit from $5,000 to $15,000 for loan transactions entered into on and after October 1, 1997; P.A. 09-208 designated existing provisions as Subsec. (a) and added Subsecs. (b) and (c) re applicability to loans made or renewed in this state and enforcement of provisions; P.A. 11-216 amended Subsec. (c) to make a technical change, effective July 13, 2011; P.A. 15-53 added new Subsec. (c) re interest, consideration or charges in excess of those permitted, added Subsec. (d) re assisting or aiding and abetting persons in prohibited conduct re small loans, and redesignated existing Subsec. (c) as Subsec. (e) and made conforming changes therein, effective June 19, 2015; P.A. 16-65 replaced former provisions with provisions re regulations, effective July 1, 2016; P.A. 18-173 replaced “36a-572” with “36a-570”. Annotations to former section 36-243: Under former statute, note is void and unenforceable if maker owes licensee more than $300. 109 C. 116. Cited. 115 C. 106; 149 C. 159; 201 C. 89. (Return to Chapter Table of Contents) (Return to List of Chapters) (Return to List of Titles) Secs. 36a-574 to 36a-579. Reserved for future use. (Return to Chapter Table of Contents) (Return to List of Chapters) (Return to List of Titles) PART IV CHECK CASHING SERVICES Sec. 36a-580. (Formerly Sec. 36-564). Definitions. Applicability of provisions. (a) For purposes of this chapter: (1) “Advertise” or “advertising” has the same meaning as provided in section 36a-485. (2) “Branch office” means a location other than the main office at which a licensee or any person on behalf of a licensee engages in the business of cashing checks, drafts or money orders for consideration. (3) “Control person” has the same meaning as provided in section 36a-485. (4) “General facility” means a facility at a fixed location where a licensee may engage in the business of cashing checks, drafts or money orders and which is open to the general public for at least six hours per day four days per week. (5) “Limited facility” means a mobile facility, where on no more than two days per week, on property occupied by an employer, a licensed operator of a general facility may, under written contract with such employer, engage in the business of cashing payroll checks for the employees of the employer. (6) “Main office” has the same meaning