Connecticut 2025 Regular Session

Connecticut Senate Bill SB01257 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1	1
2	2
3		-	LCO 1 of 44
	3	+	LCO No. 4385 1 of 46
4	4
5		-	General Assembly ~~Substitute~~ Bill No. 1257
	5	+	General Assembly Raised Bill No. 1257
6	6		January Session, 2025
	7	+	LCO No. 4385
	8	+
	9	+
	10	+	Referred to Committee on BANKING
	11	+
	12	+
	13	+	Introduced by:
	14	+	(BA)
	15	+
7	16
8	17
9	18
10	19		AN ACT CONCERNING CONSUMER CREDIT AND COMMERCIAL
11	20		FINANCING.
12	21		Be it enacted by the Senate and House of Representatives in General
13	22		Assembly convened:
14	23
15	24		Section 1. Subsection (c) of section 36a-492 of the general statutes is 1
16	25		repealed and the following is substituted in lieu thereof (Effective October 2
17	26		1, 2025): 3
18	27		(c) The surety company shall have the right to cancel the bond at any 4
19	28		time by a written notice to the principal stating the date cancellation 5
20	29		shall take effect, provided the surety company notifies the 6
21	30		commissioner in writing not less than thirty days prior to the effective 7
22	31		date of cancellation. [If the bond is issued electronically on the system,] 8
23	32		Such written notice of cancellation [may] shall be provided by the surety 9
24	33		company to the principal and the commissioner through the system at 10
25	34		least thirty days prior to the date of cancellation. [Any notice of 11
26	35		cancellation not provided through the system shall be sent by certified 12
27	36		mail to the principal and the commissioner at least thirty days prior to 13
28	37		the date of cancellation.] A surety bond shall not be cancelled unless the 14
29	38		surety company notifies the commissioner in writing not less than thirty 15
	39	+	Raised Bill No. 1257
	40	+
	41	+
	42	+
	43	+	LCO No. 4385 2 of 46
	44	+
30	45		days prior to the effective date of cancellation. After receipt of such 16
31	46		notification from the surety company, the commissioner shall give 17
32	47		written notice to the principal of the date such bond cancellation shall 18
33	48		take effect and such notice shall be deemed notice to each mortgage loan 19
34		-	originator licensee sponsored by such principal. The commissioner shall 20 Substitute Bill No. 1257
35		-
36		-
37		-	LCO 2 of 44
38		-
	49	+	originator licensee sponsored by such principal. The commissioner shall 20
39	50		automatically suspend the licenses of a mortgage lender, mortgage 21
40	51		correspondent lender or mortgage broker on such date and inactivate 22
41	52		the licenses of the mortgage loan originators sponsored by such lender, 23
42	53		correspondent lender or broker. In the case of a cancellation of an 24
43	54		exempt registrant's bond, the commissioner shall inactivate the licenses 25
44	55		of the mortgage loan originators sponsored by such exempt registrant. 26
45	56		No automatic suspension or inactivation shall occur if, prior to the date 27
46	57		that the bond cancellation shall take effect, (1) the principal submits a 28
47	58		letter of reinstatement of the bond from the surety company or a new 29
48	59		bond, (2) the mortgage lender, mortgage correspondent lender or 30
49	60		mortgage broker licensee has ceased business and has surrendered all 31
50	61		licenses in accordance with subsection (a) of section 36a-490, or (3) in the 32
51	62		case of a mortgage loan originator licensee, the sponsorship with the 33
52	63		mortgage lender, mortgage correspondent lender or mortgage broker 34
53	64		who was automatically suspended pursuant to this section or, with the 35
54	65		exempt registrant who failed to provide the bond required by this 36
55	66		section, has been terminated and a new sponsor has been requested and 37
56	67		approved. After a mortgage lender, mortgage correspondent lender or 38
57	68		mortgage broker license has been automatically suspended pursuant to 39
58	69		this section, the commissioner shall (A) give the licensee notice of the 40
59	70		automatic suspension, pending proceedings for revocation or refusal to 41
60	71		renew pursuant to section 36a-494 and an opportunity for a hearing on 42
61	72		such action in accordance with section 36a-51, as amended by this act, 43
62	73		and (B) require such licensee to take or refrain from taking such action 44
63	74		as the commissioner deems necessary to effectuate the purposes of this 45
64	75		section. The commissioner may provide information to an exempt 46
65	76		registrant concerning actions taken by the commissioner pursuant to 47
66	77		this subsection against any mortgage loan originator licensee that was 48
67	78		sponsored and bonded by such exempt registrant. 49
	79	+	Raised Bill No. 1257
	80	+
	81	+
	82	+
	83	+	LCO No. 4385 3 of 46
	84	+
68	85		Sec. 2. Subsection (c) of section 36a-602 of the general statutes is 50
69	86		repealed and the following is substituted in lieu thereof (Effective October 51
70	87		1, 2025): 52
71	88		(c) The surety company may cancel the bond at any time by a written 53
72		-	notice to the licensee and the commissioner, stating the date cancellation 54 Substitute Bill No. 1257
73		-
74		-
75		-	LCO 3 of 44
76		-
	89	+	notice to the licensee and the commissioner, stating the date cancellation 54
77	90		shall take effect. [If the bond is issued electronically on the system, such] 55
78	91		Such written notice [may] shall be provided by the surety company to 56
79	92		the licensee and the commissioner through the system at least thirty 57
80	93		days prior to the date of cancellation. [Any notice of cancellation not 58
81	94		provided through the system shall be sent by certified mail to the 59
82	95		licensee and the commissioner at least thirty days prior to the date of 60
83	96		cancellation.] A surety bond shall not be cancelled unless the surety 61
84	97		company notifies the commissioner in writing not less than thirty days 62
85	98		prior to the effective date of cancellation. After receipt of such 63
86	99		notification from the surety company, the commissioner shall give 64
87	100		written notice to the licensee of the date such bond cancellation shall 65
88	101		take effect. The commissioner shall automatically suspend the license on 66
89	102		such date, unless the licensee, prior to such date, submits (1) a letter of 67
90	103		reinstatement of the bond from the surety company, (2) a new bond, (3) 68
91	104		evidence that all of the principal sum of such surety bond has been 69
92	105		invested as provided in subsection (d) of this section, (4) a new bond 70
93	106		that replaces the surety bond in part and evidence that the remaining 71
94	107		part of the principal sum of such surety bond has been invested as 72
95	108		provided in subsection (d) of this section, or (5) evidence that the 73
96	109		licensee has ceased business and has surrendered the license. After a 74
97	110		license has been automatically suspended, the commissioner shall (A) 75
98	111		give the licensee notice of the automatic suspension pending 76
99	112		proceedings for revocation or refusal to renew such license and an 77
100	113		opportunity for a hearing on such actions in accordance with section 78
101	114		36a-51, as amended by this act, and (B) require the licensee to take or 79
102	115		refrain from taking such action as the commissioner deems necessary to 80
103	116		effectuate the purposes of this section. 81
104	117		Sec. 3. Subsection (b) of section 36a-664 of the general statutes is 82
	118	+	Raised Bill No. 1257
	119	+
	120	+
	121	+
	122	+	LCO No. 4385 4 of 46
	123	+
105	124		repealed and the following is substituted in lieu thereof (Effective October 83
106	125		1, 2025): 84
107	126		(b) The surety shall have the right to cancel any bond filed under 85
108	127		subsection (a) of this section at any time by a written notice to the 86
109	128		licensee and the commissioner, stating the date cancellation shall take 87
110		-	effect. [If such bond is issued electronically on the system,] Such written 88 Substitute Bill No. 1257
111		-
112		-
113		-	LCO 4 of 44
114		-
	129	+	effect. [If such bond is issued electronically on the system,] Such written 88
115	130		notice of cancellation [may] shall be provided by the surety to the 89
116	131		principal and the commissioner through the system at least thirty days 90
117	132		prior to the date of cancellation. [Any notice of cancellation not provided 91
118	133		through the system shall be sent by certified mail to the licensee and the 92
119	134		commissioner at least thirty days prior to the date of cancellation.] No 93
120	135		such bond shall be cancelled unless the surety notifies the commissioner 94
121	136		in writing not less than thirty days prior to the effective date of 95
122	137		cancellation. After receipt of such notification from the surety, the 96
123	138		commissioner shall give written notice to the licensee of the date such 97
124	139		bond cancellation shall take effect. The commissioner shall 98
125	140		automatically suspend the license on such date, unless prior to such date 99
126	141		the licensee submits a letter of reinstatement of the bond from the surety 100
127	142		or a new bond or the licensee has surrendered the license. After a license 101
128	143		has been automatically suspended, the commissioner shall (1) give the 102
129	144		licensee notice of the automatic suspension pending proceedings for 103
130	145		revocation or refusal to renew and an opportunity for a hearing on such 104
131	146		actions in accordance with section 36a-51, as amended by this act, and 105
132	147		(2) require the licensee to take or refrain from taking such action as the 106
133	148		commissioner deems necessary to effectuate the purposes of this 107
134	149		section. 108
135	150		Sec. 4. Subsection (c) of section 36a-671d of the general statutes is 109
136	151		repealed and the following is substituted in lieu thereof (Effective October 110
137	152		1, 2025): 111
138	153		(c) The surety shall have the right to cancel any bond written or 112
139	154		issued under subsection (a) of this section at any time by a written notice 113
140	155		to the debt negotiation licensee and the commissioner stating the date 114
	156	+	Raised Bill No. 1257
	157	+
	158	+
	159	+
	160	+	LCO No. 4385 5 of 46
	161	+
141	162		cancellation shall take effect. [If such bond is issued electronically on the 115
142	163		system,] Such written notice of cancellation [may] shall be provided by 116
143	164		the surety to the licensee and the commissioner through the system at 117
144	165		least thirty days prior to the date of cancellation. [Any notice of 118
145	166		cancellation not provided through the system shall be sent by certified 119
146	167		mail to the licensee and the commissioner at least thirty days prior to 120
147	168		the date of cancellation.] No such bond shall be cancelled unless the 121
148		-	surety notifies the commissioner in writing not less than thirty days 122 Substitute Bill No. 1257
149		-
150		-
151		-	LCO 5 of 44
152		-
	169	+	surety notifies the commissioner in writing not less than thirty days 122
153	170		prior to the effective date of cancellation. After receipt of such 123
154	171		notification from the surety, the commissioner shall give written notice 124
155	172		to the debt negotiation licensee of the date such bond cancellation shall 125
156	173		take effect. The commissioner shall automatically suspend the licenses 126
157	174		of the debt negotiation licensee on such date and inactivate the license 127
158	175		of any sponsored mortgage loan originator, unless prior to such date the 128
159	176		debt negotiation licensee submits a letter of reinstatement of the bond 129
160	177		from the surety or a new bond, surrenders all licenses or, in the case of 130
161	178		a mortgage loan originator sponsored by a debt negotiation licensee, the 131
162	179		sponsorship has been terminated and a new sponsor has been requested 132
163	180		and approved. After a license has been automatically suspended, the 133
164	181		commissioner shall (1) give the debt negotiation licensee notice of the 134
165	182		automatic suspension pending proceedings for revocation or refusal to 135
166	183		renew and an opportunity for a hearing on such actions in accordance 136
167	184		with section 36a-51, as amended by this act, and (2) require the debt 137
168	185		negotiation licensee to take or refrain from taking such action as the 138
169	186		commissioner deems necessary to effectuate the purposes of this 139
170	187		section. 140
171	188		Sec. 5. Subsection (b) of section 36a-802 of the general statutes is 141
172	189		repealed and the following is substituted in lieu thereof (Effective October 142
173	190		1, 2025): 143
174	191		(b) The surety company shall have the right to cancel the bond at any 144
175	192		time by a written notice to the licensee and the commissioner stating the 145
176	193		date cancellation shall take effect. [If the bond is issued electronically on 146
177	194		the system,] Such written notice of cancellation [may] shall be provided 147
	195	+	Raised Bill No. 1257
	196	+
	197	+
	198	+
	199	+	LCO No. 4385 6 of 46
	200	+
178	201		by the surety company to the licensee and the commissioner through 148
179	202		the system at least thirty days prior to the date of cancellation. [Any 149
180	203		notice of cancellation not provided through the system shall be sent by 150
181	204		certified mail to the licensee and the commissioner at least thirty days 151
182	205		prior to the date of cancellation.] A surety bond shall not be cancelled 152
183	206		unless the surety company notifies the commissioner in writing not less 153
184	207		than thirty days prior to the effective date of cancellation. After receipt 154
185	208		of such notification from the surety company, the commissioner shall 155
186		-	give written notice to the licensee of the date such bond cancellation 156 Substitute Bill No. 1257
187		-
188		-
189		-	LCO 6 of 44
190		-
	209	+	give written notice to the licensee of the date such bond cancellation 156
191	210		shall take effect. The commissioner shall automatically suspend the 157
192	211		license on such date, unless the licensee prior to such date submits a 158
193	212		letter of reinstatement of the bond from the surety company or a new 159
194	213		bond or the licensee has ceased business and has surrendered its license. 160
195	214		After a license has been automatically suspended, the commissioner 161
196	215		shall (1) give the licensee notice of the automatic suspension pending 162
197	216		proceedings for revocation or refusal to renew and an opportunity for a 163
198	217		hearing on such actions in accordance with section 36a-51, as amended 164
199	218		by this act, and (2) require the licensee to take or refrain from taking 165
200	219		such action as the commissioner deems necessary to effectuate the 166
201	220		purposes of this section. 167
202	221		Sec. 6. Subdivision (2) of subsection (b) of section 36a-490 of the 168
203	222		general statutes is repealed and the following is substituted in lieu 169
204	223		thereof (Effective October 1, 2025): 170
205	224		(2) No licensee may use any name other than its legal name or a 171
206	225		fictitious name approved by the commissioner, provided such licensee 172
207	226		may not use its legal name if the commissioner disapproves use of such 173
208	227		name. No licensee shall use any name or address other than the name 174
209	228		and address specified on the license issued by the commissioner. A 175
210	229		mortgage lender, mortgage correspondent lender, mortgage broker or 176
211	230		lead generator licensee may change the name of the licensee or address 177
212	231		of the office specified on the most recent filing with the system if (A) at 178
213	232		least thirty calendar days prior to such change, the licensee files such 179
214	233		change with the system and, in the case of a [main or branch office] 180
	234	+	Raised Bill No. 1257
	235	+
	236	+
	237	+
	238	+	LCO No. 4385 7 of 46
	239	+
215	240		change to the legal name of the licensee, provides, directly to the 181
216	241		commissioner, a bond rider [or endorsement, or addendum, as 182
217	242		applicable,] to the surety bond on file with the commissioner that 183
218	243		reflects the new legal name [or address of the main or branch office] of 184
219	244		the licensee, and (B) the commissioner does not disapprove such change, 185
220	245		in writing, or request further information within such thirty-day period. 186
221	246		Sec. 7. Subdivision (2) of subsection (d) of section 36a-598 of the 187
222	247		general statutes is repealed and the following is substituted in lieu 188
223		-	thereof (Effective October 1, 2025): 189 Substitute Bill No. 1257
224		-
225		-
226		-	LCO 7 of 44
227		-
	248	+	thereof (Effective October 1, 2025): 189
228	249		(2) No licensee may use any name other than its legal name or a 190
229	250		fictitious name approved by the commissioner, provided such licensee 191
230	251		may not use its legal name if the commissioner disapproves use of such 192
231	252		name. No licensee shall use any name or address other than the name 193
232	253		and address specified on the license issued by the commissioner. A 194
233	254		licensee may change the name of the licensee or the address of the office 195
234	255		specified on the most recent filing with the system if, (A) at least thirty 196
235	256		calendar days prior to such change, the licensee files such change with 197
236	257		the system and, in the case of a change to the legal name of the licensee, 198
237	258		provides a bond rider [, endorsement or addendum, as applicable,] to 199
238	259		the surety bond on file with the commissioner that reflects the new legal 200
239	260		name [or address] of the licensee, and (B) the commissioner does not 201
240	261		disapprove such change, in writing, or request further information 202
241	262		within such thirty-day period. 203
242	263		Sec. 8. Subsection (b) of section 36a-658 of the general statutes is 204
243	264		repealed and the following is substituted in lieu thereof (Effective October 205
244	265		1, 2025): 206
245	266		(b) No licensee shall use any name or address other than the name 207
246	267		and address stated on the license issued by the commissioner. No 208
247	268		licensee may use any name other than its legal name or a fictitious name 209
248	269		approved by the commissioner, provided such licensee may not use its 210
249	270		legal name if the commissioner disapproves use of such name. A 211
	271	+	Raised Bill No. 1257
	272	+
	273	+
	274	+
	275	+	LCO No. 4385 8 of 46
	276	+
250	277		licensee may change the name of the licensee or address of the office 212
251	278		specified on the most recent filing with the system if (1) at least thirty 213
252	279		calendar days prior to such change, the licensee files such change with 214
253	280		the system and, in the case of a change to the legal name of the licensee, 215
254	281		provides to the commissioner a bond rider [, endorsement or 216
255	282		addendum, as applicable;] to the surety bond on file with the 217
256	283		commissioner that reflects the new legal name of the licensee, and (2) 218
257	284		the commissioner does not disapprove such change, in writing, or 219
258	285		request further information from the licensee within such thirty-day 220
259	286		period. 221
260		-	Sec. 9. Subsection (i) of section 36a-671 of the general statutes is 222 Substitute Bill No. 1257
261		-
262		-
263		-	LCO 8 of 44
264		-
	287	+	Sec. 9. Subsection (i) of section 36a-671 of the general statutes is 222
265	288		repealed and the following is substituted in lieu thereof (Effective October 223
266	289		1, 2025): 224
267	290		(i) No licensee may use any name other than its legal name or a 225
268	291		fictitious name approved by the commissioner, provided such licensee 226
269	292		may not use its legal name if the commissioner disapproves use of such 227
270	293		name. No licensee shall use any name or address other than the name 228
271	294		and address specified on the license issued by the commissioner. A 229
272	295		licensee may change the name of the licensee or the address of the office 230
273	296		specified on the most recent filing with the system if [,] (1) at least thirty 231
274	297		calendar days prior to such change, the licensee files such change with 232
275	298		the system and, in the case of a change to the legal name of the licensee, 233
276	299		provides to the commissioner a bond rider, endorsement or addendum, 234
277	300		as applicable, to the surety bond on file with the commissioner that 235
278	301		reflects the new legal name of the licensee, and (2) the commissioner 236
279	302		does not disapprove such change, in writing, or request further 237
280	303		information within such thirty-day period. 238
281	304		Sec. 10. Subsection (b) of section 36a-719a of the general statutes is 239
282	305		repealed and the following is substituted in lieu thereof (Effective October 240
283	306		1, 2025): 241
284	307		(b) No licensee may use any name other than its legal name or a 242
	308	+	Raised Bill No. 1257
	309	+
	310	+
	311	+
	312	+	LCO No. 4385 9 of 46
	313	+
285	314		fictitious name approved by the commissioner, provided such licensee 243
286	315		may not use its legal name if the commissioner disapproves use of such 244
287	316		name. No licensee shall use any name or address other than the name 245
288	317		and address stated on the license issued by the commissioner. A 246
289	318		mortgage servicer licensee may change the name of the licensee or 247
290	319		address of any office specified on the most recent filing with the system 248
291	320		if (1) at least thirty calendar days prior to such change, the licensee files 249
292	321		such change with the system and, in the case of a [main office or branch 250
293	322		office] change to the legal name of the licensee, provides the 251
294	323		commissioner a bond rider [or endorsement, or addendum, as 252
295	324		applicable, to any] to the surety bond [or evidence of errors and 253
296	325		omissions coverage] on file with the commissioner that reflects the new 254
297		-	legal name [or address of the main office or branch office;] of the 255 Substitute Bill No. 1257
298		-
299		-
300		-	LCO 9 of 44
301		-
	326	+	legal name [or address of the main office or branch office;] of the 255
302	327		licensee, and (2) the commissioner does not disapprove such change, in 256
303	328		writing, or request further information within such thirty-day period. 257
304	329		Sec. 11. Subsection (i) of section 36a-801 of the general statutes is 258
305	330		repealed and the following is substituted in lieu thereof (Effective October 259
306	331		1, 2025): 260
307	332		(i) No person licensed to act within this state as a consumer collection 261
308	333		agency shall do so under any other name or at any other place of 262
309	334		business than that named in the license. No licensee may use any name 263
310	335		other than its legal name or a fictitious name approved by the 264
311	336		commissioner, provided such licensee may not use its legal name if the 265
312	337		commissioner disapproves use of such name. A licensee may change the 266
313	338		name of the licensee or address of the office specified on the most recent 267
314	339		filing with the system if, at least thirty calendar days prior to such 268
315	340		change, (1) the licensee files such change with the system and, in the 269
316	341		case of a change to the legal name of the licensee, provides a bond rider 270
317	342		[, endorsement or addendum, as applicable,] to the surety bond on file 271
318	343		with the commissioner that reflects the new legal name [or address] of 272
319	344		the licensee, and (2) the commissioner does not disapprove such change, 273
320	345		in writing, or request further information from the licensee within such 274
321	346		thirty-day period. Not more than one place of business shall be 275
	347	+	Raised Bill No. 1257
	348	+
	349	+
	350	+
	351	+	LCO No. 4385 10 of 46
	352	+
322	353		maintained under the same license but the commissioner may issue 276
323	354		more than one license to the same licensee upon compliance with the 277
324	355		provisions of sections 36a-800 to 36a-814, inclusive, as to each new 278
325	356		licensee. A license shall not be transferable or assignable. Any change in 279
326	357		any control person of the licensee, except a change of a director, general 280
327	358		partner or executive officer that is not the result of an acquisition or 281
328	359		change of control of the licensee, shall be the subject of an advance 282
329	360		change notice filed on the system at least thirty days prior to the effective 283
330	361		date of such change and no such change shall occur without the 284
331	362		commissioner's approval. For purposes of this section, "change of 285
332	363		control" means any change causing the majority ownership, voting 286
333	364		rights or control of a licensee to be held by a different control person or 287
334	365		group of control persons. The commissioner may automatically suspend 288
335		-	a license for any violation of this subsection. After a license has been 289 Substitute Bill No. 1257
336		-
337		-
338		-	LCO 10 of 44
339		-
	366	+	a license for any violation of this subsection. After a license has been 289
340	367		automatically suspended pursuant to this section, the commissioner 290
341	368		shall (A) give the licensee notice of the automatic suspension, pending 291
342	369		proceedings for revocation or refusal to renew pursuant to section 36a-292
343	370		804 and an opportunity for a hearing on such action in accordance with 293
344	371		section 36a-51, as amended by this act, and (B) require such licensee to 294
345	372		take or refrain from taking such action as the commissioner deems 295
346	373		necessary to effectuate the purposes of this section. 296
347	374		Sec. 12. Subdivision (2) of section 36a-535 of the general statutes is 297
348	375		repealed and the following is substituted in lieu thereof (Effective October 298
349	376		1, 2025): 299
350	377		(2) "Sales finance company" means any person engaging in this state 300
351	378		in the business, in whole or in part, of (A) acquiring retail installment 301
352	379		contracts or installment loan contracts from the holders thereof, by 302
353	380		purchase, discount or pledge, or by loan or advance to the holder of 303
354	381		either on the security thereof, or otherwise, or (B) receiving payments, 304
355	382		[of principal and interest] including, but not limited to, principal, 305
356	383		interest or fees, from a retail buyer [under] in connection with a retail 306
357	384		installment contract or installment loan contract. "Sales finance 307
358	385		company" does not include a bank, out-of-state bank, Connecticut credit 308
	386	+	Raised Bill No. 1257
	387	+
	388	+
	389	+
	390	+	LCO No. 4385 11 of 46
	391	+
359	392		union, federal credit union, or out-of-state credit union, if so engaged; 309
360	393		Sec. 13. Section 36a-718 of the general statutes is repealed and the 310
361	394		following is substituted in lieu thereof (Effective October 1, 2025): 311
362	395		(a) On and after January 1, 2015, no person shall act as a mortgage 312
363	396		servicer, directly or indirectly, without first obtaining a license under 313
364	397		section 36a-719, as amended by this act, from the commissioner for its 314
365	398		main office and for each branch office where such business is conducted, 315
366	399		unless such person is exempt from licensure pursuant to subsection (b) 316
367	400		of this section. Any activity subject to licensure pursuant to sections 36a-317
368	401		715 to 36a-719l, inclusive, as amended by this act, shall be conducted 318
369	402		from an office located in a state, as defined in section 36a-2, as amended 319
370	403		by this act. 320
371		-	(b) The following persons are exempt from mortgage servicer 321 Substitute Bill No. 1257
372		-
373		-
374		-	LCO 11 of 44
375		-
	404	+	(b) The following persons are exempt from mortgage servicer 321
376	405		licensing requirements: (1) Any bank, out-of-state bank, Connecticut 322
377	406		credit union, federal credit union or out-of-state credit union, provided 323
378	407		such bank or credit union is federally insured; (2) any wholly-owned 324
379	408		subsidiary of such bank or credit union; (3) any operating subsidiary 325
380	409		where each owner of such operating subsidiary is wholly owned by the 326
381	410		same such bank or credit union; (4) any person [licensed as a mortgage 327
382	411		lender in this state while] registered as an exempt mortgage servicer 328
383	412		registrant pursuant to subsection (d) of this section and acting as a 329
384	413		mortgage servicer from a location licensed as a main office or branch 330
385	414		office under sections 36a-485 to 36a-498e, inclusive, as amended by this 331
386	415		act, 36a-534a and 36a-534b [, provided (A) such person meets the 332
387	416		supplemental mortgage servicer surety bond, fidelity bond and errors 333
388	417		and omissions coverage requirements under section 36a-719c, and (B)] 334
389	418		during any period that the [license] registration of the exempt mortgage 335
390	419		[lender] servicer registrant in this state has not been suspended; [, such 336
391	420		exemption shall not be effective;] and (5) any person licensed as a 337
392	421		mortgage correspondent lender in this state while acting as a mortgage 338
393	422		servicer with respect to any residential mortgage loan it has made and 339
394	423		during the permitted ninety-day holding period for such loan from a 340
	424	+	Raised Bill No. 1257
	425	+
	426	+
	427	+
	428	+	LCO No. 4385 12 of 46
	429	+
395	430		location licensed as a main office or branch office under sections 36a-485 341
396	431		to 36a-498e, inclusive, as amended by this act, 36a-534a and 36a-534b, 342
397	432		provided during any period the license of the mortgage correspondent 343
398	433		lender in this state has been suspended, such exemption shall not be 344
399	434		effective. 345
400	435		(c) The provisions of sections 36a-719e to 36a-719h, inclusive, as 346
401	436		amended by this act, shall apply to any person, including a person 347
402	437		exempt from licensure pursuant to subsection (b) of this section, who 348
403	438		acts as a mortgage servicer in this state on or after January 1, 2015. 349
404	439		(d) (1) Any person licensed as a mortgage lender in this state shall 350
405	440		register on the system as an exempt mortgage servicer registrant prior 351
406	441		to acting as a mortgage servicer from any location licensed as a main 352
407	442		office or branch office under sections 36a-485 to 36a-498e, inclusive, as 353
408	443		amended by this act, 36a-534a and 36a-534b. Each registration shall 354
409		-	expire at the close of business on December thirty-first of the year in 355 Substitute Bill No. 1257
410		-
411		-
412		-	LCO 12 of 44
413		-
	444	+	expire at the close of business on December thirty-first of the year in 355
414	445		which such registration was approved, unless such registration is 356
415	446		renewed or, if such registration is approved on or after November first, 357
416	447		such registration shall expire at the close of business on December 358
417	448		thirty-first of the year following the year in which such registration was 359
418	449		approved. An application for renewal of a registration shall be filed on 360
419	450		the system between November first and December thirty-first of the 361
420	451		year in which the registration expires. Each applicant for an initial 362
421	452		registration or renewal of a registration shall meet the supplemental 363
422	453		mortgage servicer surety bond, fidelity bond and errors and omissions 364
423	454		coverage requirements under section 36a-719c, as amended by this act, 365
424	455		and pay to the system any required fees or charges. All fees paid 366
425	456		pursuant to this subdivision shall be nonrefundable. 367
426	457		(2) The commissioner may suspend, revoke or refuse to renew any 368
427	458		exempt mortgage servicer registration or take any other action, in 369
428	459		accordance with the provisions of section 36a-51, as amended by this 370
429	460		act, if the commissioner finds that the registrant no longer meets the 371
430	461		requirements for registration or if the registrant or any control person, 372
	462	+	Raised Bill No. 1257
	463	+
	464	+
	465	+
	466	+	LCO No. 4385 13 of 46
	467	+
431	468		trustee, employee or agent of such registrant has: (A) Made any material 373
432	469		misstatement in an application; (B) committed any fraud or 374
433		-	misappropriated funds; or (C) violated any provision of this title or ~~any~~ 375
434		-	regulation or order adopted or issued pursuant thereto pertaining to 376
435		-	such person, or any other law or regulation applicable to the conduct of 377
436		-	such registrant's business. 378
	470	+	misappropriated funds; or (C) violated any provision of this title or of 375
	471	+	any regulation or order adopted or issued pursuant thereto pertaining 376
	472	+	to such person, or any other law or regulation applicable to the conduct 377
	473	+	of such registrant's business. 378
437	474		Sec. 14. Section 36a-719c of the general statutes is repealed and the 379
438	475		following is substituted in lieu thereof (Effective October 1, 2025): 380
439	476		(a) Each mortgage servicer applicant or licensee and [any person 381
440	477		exempt from mortgage servicer licensure pursuant to subdivision (4) of 382
441	478		subsection (b) of section 36a-718] exempt mortgage servicer registrant 383
442	479		shall file with the commissioner (1) a surety bond, written by a surety 384
443	480		authorized to write such bonds in this state, covering its main office and 385
444	481		any branch office from which it acts as mortgage servicer, in a penal sum 386
445	482		of one hundred thousand dollars per office location in accordance with 387
446		-	subsection (b) of this section, (2) a fidelity bond, written by a surety 388 Substitute Bill No. 1257
447		-
448		-
449		-	LCO 13 of 44
450		-
	483	+	subsection (b) of this section, (2) a fidelity bond, written by a surety 388
451	484		authorized to write such bonds in this state, in accordance with the 389
452	485		requirements of subsection (c) of this section, and (3) evidence of errors 390
453	486		and omissions coverage, written by a surety authorized to write such 391
454	487		coverage in this state, in accordance with the requirements of subsection 392
455	488		(c) of this section. No mortgage servicer licensee and no [person 393
456	489		otherwise exempt from mortgage servicer licensure pursuant to 394
457	490		subdivision (4) of subsection (b) of section 36a-718] exempt mortgage 395
458	491		servicer registrant shall act as a mortgage servicer in this state without 396
459	492		maintaining the surety bond, fidelity bond and errors and omissions 397
460	493		coverage required by this section. 398
461	494		(b) The surety bond required by subsection (a) of this section shall be 399
462	495		(1) in a form approved by the Attorney General, [;] and (2) conditioned 400
463	496		upon the mortgage servicer licensee or [person exempt from mortgage 401
464	497		servicer licensure pursuant to subdivision (4) of subsection (b) of section 402
465	498		36a-718] exempt mortgage servicer registrant faithfully performing any 403
466	499		and all written agreements or commitments with or for the benefit of 404
	500	+	Raised Bill No. 1257
	501	+
	502	+
	503	+
	504	+	LCO No. 4385 14 of 46
	505	+
467	506		mortgagors and mortgagees, truly and faithfully accounting for all 405
468	507		funds received from a mortgagor or mortgagee in such person's capacity 406
469	508		as a mortgage servicer, and conducting such mortgage business 407
470	509		consistent with the provisions of sections 36a-715 to 36a-719l, inclusive, 408
471	510		as amended by this act. Any mortgagor that may be damaged by the 409
472	511		failure of a mortgage servicer licensee or [person exempt from mortgage 410
473	512		servicer licensure pursuant to subdivision (4) of subsection (b) of section 411
474	513		36a-718] exempt mortgage servicer registrant to perform any written 412
475	514		agreements or commitments, or by the wrongful conversion of funds 413
476	515		paid by a mortgagor to such licensee or [person] registrant, may proceed 414
477	516		on such bond against the principal or surety thereon, or both, to recover 415
478	517		damages. The commissioner may proceed on such bond against the 416
479	518		principal or surety on such bond, or both, to collect any civil penalty 417
480	519		imposed pursuant to subsection (a) of section 36a-50, any restitution 418
481	520		imposed pursuant to subsection (c) of section 36a-50 and any unpaid 419
482	521		costs of examination of a licensee as determined pursuant to section 36a-420
483	522		65. The proceeds of the bond, even if commingled with other assets of 421
484		-	the principal, shall be deemed by operation of law to be held in trust for 422 Substitute Bill No. 1257
485		-
486		-
487		-	LCO 14 of 44
488		-
	523	+	the principal, shall be deemed by operation of law to be held in trust for 422
489	524		the benefit of such claimants against the principal in the event of 423
490	525		bankruptcy of the principal and shall be immune from attachment by 424
491	526		creditors and judgment creditors. The surety bond shall run 425
492	527		concurrently with the period of the license or registration for the main 426
493	528		office of the mortgage servicer or exempt mortgage [lender] servicer 427
494	529		registrant and the aggregate liability under the bond shall not exceed 428
495	530		the penal sum of the bond. The principal shall notify the commissioner 429
496	531		of the commencement of an action on the bond. When an action is 430
497	532		commenced on a principal's bond, the commissioner may require the 431
498	533		filing of a new bond and immediately on recovery on any action on the 432
499	534		bond, the principal shall file a new bond. 433
500	535		(c) (1) The fidelity bond and errors and omissions coverage required 434
501	536		by subsection (a) of this section shall name the commissioner as an 435
502	537		additional loss payee on drafts the surety issues to pay for covered 436
503	538		losses directly or indirectly incurred by mortgagors of residential 437
	539	+	Raised Bill No. 1257
	540	+
	541	+
	542	+
	543	+	LCO No. 4385 15 of 46
	544	+
504	545		mortgage loans serviced by the mortgage servicer or exempt mortgage 438
505	546		servicer registrant. The fidelity bond shall cover losses arising from 439
506	547		dishonest and fraudulent acts, embezzlement, misplacement, forgery 440
507	548		and similar events committed by employees of the mortgage servicer or 441
508	549		exempt mortgage servicer registrant. The errors and omissions coverage 442
509	550		shall cover losses arising from negligence, errors and omissions by the 443
510	551		mortgage servicer or exempt mortgage servicer registrant with respect 444
511	552		to the payment of real estate taxes and special assessments, hazard and 445
512	553		flood insurance or the maintenance of mortgage and guaranty 446
513	554		insurance. The fidelity bond and errors and omissions coverage shall 447
514	555		each be in the following principal amounts based on the mortgage 448
515	556		servicer's or exempt mortgage servicer registrant's volume of servicing 449
516	557		activity most recently reported to the commissioner: 450
517	558		[(1)] (A) If the amount of the residential mortgage loans serviced is 451
518	559		one hundred million dollars or less, the principal amount shall be at 452
519	560		least three hundred thousand dollars; or 453
520	561		[(2)] (B) If the amount of such loans exceeds one hundred million 454
521		-	dollars, the principal amount shall be at least three hundred thousand 455 Substitute Bill No. 1257
522		-
523		-
524		-	LCO 15 of 44
525		-
	562	+	dollars, the principal amount shall be at least three hundred thousand 455
526	563		dollars plus [(A)] (i) three-twentieths of one per cent of the amount of 456
527	564		residential mortgage loans serviced greater than one hundred million 457
528	565		dollars but less than or equal to five hundred million dollars; [(B)] (ii) 458
529	566		plus one-eighth of one per cent of the amount of residential mortgage 459
530	567		loans serviced greater than five hundred million dollars but less than or 460
531	568		equal to one billion dollars; and [(C)] (iii) plus one-tenth of one per cent 461
532	569		of the amount of residential mortgage loans serviced greater than one 462
533	570		billion dollars. 463
534	571		(2) The fidelity bond and errors and omissions coverage may provide 464
535	572		for a deductible amount not to exceed the greater of one hundred 465
536	573		thousand dollars or five per cent of the face amount of such bond or 466
537	574		coverage. 467
538	575		(d) A surety shall have the right to cancel the surety bond, fidelity 468
	576	+	Raised Bill No. 1257
	577	+
	578	+
	579	+
	580	+	LCO No. 4385 16 of 46
	581	+
539	582		bond and errors and omissions coverage required by this section at any 469
540	583		time by a written notice to the principal and the commissioner stating 470
541	584		the date cancellation shall take effect. [If the surety bond required by 471
542	585		this section was issued electronically on the system,] Such written notice 472
543	586		of cancellation [may] shall be provided by the surety company to the 473
544	587		principal and the commissioner through the system at least thirty days 474
545	588		prior to the date of cancellation. [Any notice of cancellation not provided 475
546	589		through the system shall be sent by certified mail to the principal and 476
547	590		the commissioner at least thirty days prior to the date of cancellation.] 477
548	591		A surety bond, fidelity bond or errors and omissions coverage shall not 478
549	592		be cancelled unless the surety notifies the commissioner, in writing, not 479
550	593		less than thirty days prior to the effective date of cancellation. After 480
551	594		receipt of such notification from the surety, the commissioner shall give 481
552	595		written notice to the principal of the date such cancellation shall take 482
553	596		effect. The commissioner shall automatically suspend the license of a 483
554	597		mortgage servicer licensee or registration of an exempt mortgage 484
555	598		servicer registrant on such date or on any date when a fidelity bond or 485
556	599		errors and omissions coverage expires or is no longer in effect. No 486
557	600		automatic suspension or inactivation shall occur if, prior to the date that 487
558	601		such bond or errors and omissions coverage cancellation or expiration 488
559		-	shall take effect, (1) the principal submits a letter of reinstatement of the 489 Substitute Bill No. 1257
560		-
561		-
562		-	LCO 16 of 44
563		-
	602	+	shall take effect, (1) the principal submits a letter of reinstatement of the 489
564	603		bond or errors and omissions coverage, or a new bond or errors and 490
565	604		omissions policy, [;] or (2) the mortgage servicer licensee or exempt 491
566	605		mortgage servicer registrant has ceased business in this state and has 492
567	606		surrendered all (A) licenses in accordance with section 36a-51, as 493
568	607		amended by this act, and section 36a-719a, as amended by this act, and 494
569	608		(B) registrations in accordance with section 36a-718, as amended by this 495
570	609		act. After a mortgage servicer license or exempt mortgage servicer 496
571	610		registration has been automatically suspended pursuant to this section, 497
572	611		the commissioner shall [(A)] (i) give the licensee or registrant notice of 498
573	612		the automatic suspension, pending proceedings for revocation or 499
574	613		refusal to renew pursuant to section 36a-719j or subsection (d) of section 500
575	614		36a-718, as amended by this act, and an opportunity for a hearing on 501
576	615		such action in accordance with section 36a-51, as amended by this act, 502
	616	+	Raised Bill No. 1257
	617	+
	618	+
	619	+
	620	+	LCO No. 4385 17 of 46
	621	+
577	622		and [(B)] (ii) require such licensee or registrant to take or refrain from 503
578	623		taking such action as the commissioner deems necessary to effectuate 504
579	624		the purposes of this section. [A person licensed as a mortgage lender in 505
580	625		this state] Any exempt mortgage servicer registrant acting as a mortgage 506
581	626		servicer from a location licensed as a main office or branch office under 507
582	627		sections 36a-485 to 36a-498e, inclusive, as amended by this act, 36a-534a 508
583	628		and 36a-534b shall cease to be exempt from mortgage servicer licensing 509
584	629		requirements in this state upon cancellation or expiration of any surety 510
585	630		bond, fidelity bond or errors and omissions coverage required by this 511
586	631		section. 512
587	632		(e) If the commissioner finds that the financial condition of a 513
588	633		mortgage servicer licensee or [mortgage lender licensee] exempt 514
589	634		mortgage servicer registrant so requires, as evidenced by the reduction 515
590	635		of tangible net worth, financial losses or potential losses as a result of a 516
591	636		violation of sections 36a-715 to 36a-719k, inclusive, as amended by this 517
592	637		act, the commissioner may require one or more additional bonds 518
593	638		meeting the standards set forth in this section. The mortgage servicer 519
594	639		licensee or exempt mortgage servicer registrant shall file any such 520
595	640		additional bonds not later than ten days after receipt of the 521
596	641		commissioner's written notice of such requirement. A mortgage servicer 522
597		-	licensee or exempt mortgage [lender licensee] servicer registrant shall 523 Substitute Bill No. 1257
598		-
599		-
600		-	LCO 17 of 44
601		-
	642	+	licensee or exempt mortgage [lender licensee] servicer registrant shall 523
602	643		file, as the commissioner may require, any bond rider or endorsement 524
603	644		or addendum, as applicable, to any bond or evidence of errors and 525
604	645		omissions coverage on file with the commissioner to reflect any changes 526
605	646		necessary to maintain the surety bond, fidelity bond and errors and 527
606	647		omissions coverage required by this section. 528
607	648		Sec. 15. Section 36a-850a of the general statutes is repealed and the 529
608	649		following is substituted in lieu thereof (Effective October 1, 2025): 530
609	650		(a) [In] Any person servicing a private student education loan, 531
610	651		including, but not limited to, a private student education loan servicer, 532
611	652		private education lender and private education loan creditor, shall: 533
	653	+	Raised Bill No. 1257
	654	+
	655	+
	656	+
	657	+	LCO No. 4385 18 of 46
	658	+
612	659		(1) Prior to sending the first billing statement on a private student 534
613	660		education loan or immediately upon receipt of a private student 535
614	661		education loan following the transfer or assignment of such private 536
615	662		student education loan, provide to the student loan borrower, and to 537
616	663		any cosigner of such private student education loan, information 538
617	664		concerning the rights and responsibilities of such student loan borrower 539
618	665		and cosigner, including information regarding (A) how such private 540
619	666		student education loan obligation will appear on the cosigner's 541
620	667		consumer report, (B) how the cosigner will be notified if the private 542
621	668		student education loan becomes delinquent, including how the cosigner 543
622	669		can cure the delinquency in order to avoid negative credit furnishing 544
623	670		and loss of cosigner release eligibility, and (C) eligibility for release of 545
624	671		the cosigner's obligation on such private student education loan, 546
625	672		including number of on-time payments and any other criteria required 547
626	673		to approve the release of the cosigner from the loan obligation; 548
627	674		(2) Send annual written notice to all student loan borrowers and 549
628	675		cosigners relating to information about cosigner release, including the 550
629	676		criteria [the private student education loan servicer requires] necessary 551
630	677		to approve the release of a cosigner from a private student education 552
631	678		loan obligation and the process for applying for cosigner release; 553
632	679		(3) Upon satisfaction by the student loan borrower of the applicable 554
633		-	consecutive on-time payment requirement for purposes of cosigner 555 Substitute Bill No. 1257
634		-
635		-
636		-	LCO 18 of 44
637		-
	680	+	consecutive on-time payment requirement for purposes of cosigner 555
638	681		release eligibility, send, in writing, to such student loan borrower and 556
639	682		cosigner (A) a notification that such consecutive on-time payment 557
640	683		requirement has been satisfied and that such cosigner may be eligible 558
641	684		for cosigner release, and (B) information relating to the procedure for 559
642	685		applying for cosigner release and any additional criteria that a cosigner 560
643	686		must satisfy in order to be eligible for cosigner release. Such notification 561
644	687		and information shall be sent by either United States mail or electronic 562
645	688		mail, provided such student loan borrower has elected to receive 563
646	689		electronic communications from the [private student education loan 564
647	690		servicer] person servicing the private student education loan; 565
	691	+	Raised Bill No. 1257
	692	+
	693	+
	694	+
	695	+	LCO No. 4385 19 of 46
	696	+
648	697		(4) In the event that an application for a cosigner release is 566
649	698		incomplete, provide, in writing, (A) notice to the student loan borrower 567
650	699		and cosigner that such application is incomplete, and (B) a description 568
651	700		of the information that is missing or the additional information that is 569
652	701		needed to consider the application complete and the date by which the 570
653	702		borrower or cosigner are required to provide such information; 571
654	703		(5) Not later than thirty days following the submission of an 572
655	704		application for cosigner release, send to the student loan borrower and 573
656	705		cosigner a written notice of the decision that such application has been 574
657	706		approved or denied. If the application for cosigner release has been 575
658	707		denied, such written notice shall (A) inform such student loan borrower 576
659	708		and cosigner that such student loan borrower and cosigner have the 577
660	709		right to request all documents and information used [by the private 578
661	710		student education loan servicer in its] in the decision to deny such 579
662	711		application, including [the] any credit score threshold used, [by the 580
663	712		private student education loan servicer,] the consumer report of such 581
664	713		student loan borrower or cosigner, the credit score of such student loan 582
665	714		borrower or cosigner [,] and any other documents that are relevant or 583
666	715		specific to such student loan borrower or cosigner, [. The private student 584
667	716		education loan servicer shall provide such student loan borrower and 585
668	717		cosigner with] and (B) include (i) any adverse action notices required 586
669	718		under federal law if the denial of such application was based in whole 587
670	719		or in part on any information contained in a consumer report, and (ii) 588
671		-	the information described in subdivision (2) of this subsection; 589 Substitute Bill No. 1257
672		-
673		-
674		-	LCO 19 of 44
675		-
	720	+	the information described in subdivision (2) of this subsection; 589
676	721		[(6) Include the information described in subdivision (2) of this 590
677	722		section in any response to an application for cosigner release; 591
678	723		(7) Refrain from imposing any restrictions on a student loan borrower 592
679	724		or cosigner that may permanently prevent such student loan borrower 593
680	725		or cosigner from qualifying for a cosigner release, including, but not 594
681	726		limited to, restrictions on the number of times a student loan borrower 595
682	727		or cosigner may apply for cosigner release; 596
	728	+	Raised Bill No. 1257
	729	+
	730	+
	731	+
	732	+	LCO No. 4385 20 of 46
	733	+
683	734		(8) Refrain from imposing any negative consequences on a student 597
684	735		loan borrower or cosigner during the sixty days following issuance of 598
685	736		the notice described in subdivision (4) of this section, or until a final 599
686	737		decision concerning a student loan borrower or cosigner's application 600
687	738		for cosigner release is made. For purposes of this subdivision, "negative 601
688	739		consequences" includes, but is not limited to, the imposition of 602
689	740		additional eligibility criteria, negative credit reporting, lost eligibility for 603
690	741		a cosigner release, late fees, interest capitalization or other financial 604
691	742		penalties or injury; 605
692	743		(9) Refrain from requiring a student loan borrower to make more than 606
693	744		twelve consecutive on-time payments as part of the eligibility criteria 607
694	745		for cosigner release. Such private student education loan servicer shall 608
695	746		consider any student loan borrower who has paid the equivalent of 609
696	747		twelve months of principal and interest during any twelve-month 610
697	748		period to have satisfied the consecutive on-time payment requirement, 611
698	749		even if such student loan borrower has not made payments monthly 612
699	750		during such twelve-month period;] 613
700	751		[(10)] (6) Upon receipt of a request by a student loan borrower or 614
701	752		cosigner to a change that results in restarting the count of consecutive 615
702	753		on-time payments required for cosigner release eligibility, provide to 616
703	754		such student loan borrower and cosigner written notification of the 617
704	755		impact of such change on cosigner release eligibility and an opportunity 618
705	756		to withdraw or reverse such change for purposes of avoiding such 619
706	757		impact; 620
707		-	[(11)] (7) Provide a student loan borrower or cosigner (A) the right to 621 Substitute Bill No. 1257
708		-
709		-
710		-	LCO 20 of 44
711		-
	758	+	[(11)] (7) Provide a student loan borrower or cosigner (A) the right to 621
712	759		request an appeal of a determination to deny a cosigner release 622
713	760		application, (B) an opportunity to submit additional information or 623
714	761		documentation evidencing that such student loan borrower has the 624
715	762		ability, willingness and stability to make his or her payment obligations, 625
716	763		and (C) the right to request that a different employee [of the private 626
717	764		student education loan servicer] review and make a determination on 627
718	765		the application for a cosigner release; 628
	766	+	Raised Bill No. 1257
	767	+
	768	+
	769	+
	770	+	LCO No. 4385 21 of 46
	771	+
719	772		[(12)] (8) Establish and maintain a comprehensive record 629
720	773		management system reasonably designed to ensure the accuracy, 630
721	774		integrity and completeness of data and other information about cosigner 631
722	775		release applications. Such system shall include the number of cosigner 632
723	776		release applications received, the approval and denial rate of such 633
724	777		applications and the primary reasons for denial of such applications; 634
725	778		[(13) In the event that a cosigner has a total and permanent disability, 635
726	779		as determined by any federal or state agency or doctor of medicine or 636
727	780		osteopathy legally authorized to practice in the state, and unless 637
728	781		otherwise expressly prohibited under the terms of a private student 638
729	782		education loan agreement, (A) release the cosigner from his or her 639
730	783		obligation to repay the private student education loan upon receipt of 640
731	784		notification that such cosigner has a total and permanent disability, and 641
732	785		(B) refrain from requiring that a new cosigner be added to such private 642
733	786		student education loan after the original cosigner has been released 643
734	787		from such private student education loan;] 644
735	788		[(14)] (9) Provide the cosigner of a private student education loan 645
736	789		with access to the same documents and records associated with the 646
737	790		private student education loan that are available to the student loan 647
738	791		borrower of such private student education loan; and 648
739	792		[(15)] (10) If a student loan borrower has electronic access to 649
740	793		documents and records associated with a private student education 650
741	794		loan, provide equivalent electronic access to such documents and 651
742	795		records to the cosigner of such private student education loan. 652
743		-	(b) Any person that makes or extends a private student education 653 Substitute Bill No. 1257
744		-
745		-
746		-	LCO 21 of 44
747		-
	796	+	(b) Any person that makes or extends a private student education 653
748	797		loan on or after October 1, 2025, shall provide, consistent with the terms 654
749	798		of this subsection, options for cosigner release on such private student 655
750	799		education loan upon the satisfaction of certain criteria, including, but 656
751	800		not limited to, twelve consecutive on-time payments by the student loan 657
752	801		borrower or in the event of total and permanent disability of the 658
753	802		cosigner. On and after October 1, 2025, no person that makes, extends 659
	803	+	Raised Bill No. 1257
	804	+
	805	+
	806	+
	807	+	LCO No. 4385 22 of 46
	808	+
754	809		or owns one or more private student education loans, including, but not 660
755	810		limited to, any private education lender or private education loan 661
756	811		creditor, directly or indirectly, shall: 662
757	812		(1) Impose any restriction on a student loan borrower or cosigner that 663
758	813		may permanently prevent such student loan borrower or cosigner from 664
759	814		qualifying for a cosigner release, including, but not limited to, any 665
760	815		restriction on the number of times a student loan borrower or cosigner 666
761	816		may apply for a cosigner release; 667
762	817		(2) Impose any negative consequence on a student loan borrower or 668
763	818		cosigner during the sixty-day period following issuance of the notice 669
764	819		described in subparagraph (A) of subdivision (4) of subsection (a) of this 670
765	820		section, or until a final decision concerning a student loan borrower or 671
766	821		cosigner's application for a cosigner release has been made. For 672
767	822		purposes of this subdivision, "negative consequence" includes, but is not 673
768	823		limited to, the imposition of any additional eligibility criteria, negative 674
769	824		credit reporting, lost eligibility for a cosigner release, late fee, interest 675
770	825		capitalization or any other financial penalty or injury; 676
771	826		(3) Require a student loan borrower to make more than twelve 677
772	827		consecutive on-time payments as part of the eligibility criteria for a 678
773	828		cosigner release. A private student education loan servicer shall 679
774	829		consider any student loan borrower who has paid the equivalent of 680
775	830		twelve months of principal and interest during any twelve-month 681
776	831		period to have satisfied the consecutive on-time payment requirement, 682
777	832		even if such student loan borrower has not made monthly payments 683
778	833		during such twelve-month period; or 684
779		-	(4) In the event that a cosigner is totally and permanently disabled, as 685 Substitute Bill No. 1257
780		-
781		-
782		-	LCO 22 of 44
783		-
	834	+	(4) In the event that a cosigner is totally and permanently disabled, as 685
784	835		determined by any federal or state agency or doctor of medicine or 686
785	836		osteopathy legally authorized to practice in this state, (A) refuse to 687
786	837		release the cosigner from his or her obligation to repay the private 688
787	838		student education loan upon receipt of notification that such cosigner is 689
788	839		totally and permanently disabled, or (B) require that a new cosigner be 690
	840	+	Raised Bill No. 1257
	841	+
	842	+
	843	+
	844	+	LCO No. 4385 23 of 46
	845	+
789	846		added to such private student education loan after the original cosigner 691
790	847		has been released. 692
791	848		[(b)] (c) The provisions of [subsection (a)] subsections (a) and (b) of 693
792	849		this section shall not apply to the following persons: (1) Any bank, out-694
793	850		of-state bank that has a physical presence in the state, Connecticut credit 695
794	851		union, federal credit union or out-of-state credit union; (2) any wholly 696
795	852		owned subsidiary of any such bank or credit union; (3) any operating 697
796	853		subsidiary where each owner of such operating subsidiary is wholly 698
797	854		owned by the same bank or credit union; and (4) the Connecticut Higher 699
798	855		Education Supplemental Loan Authority. 700
799	856		Sec. 16. Section 36a-51 of the general statutes is repealed and the 701
800	857		following is substituted in lieu thereof (Effective October 1, 2025): 702
801	858		(a) The commissioner may suspend, revoke or refuse to renew any 703
802	859		license or registration issued by the commissioner under any provision 704
803	860		of the general statutes by sending a notice to the licensee or registrant 705
804	861		by registered or certified mail, return receipt requested, or by any 706
805	862		express delivery carrier that provides a dated delivery receipt, or by 707
806	863		personal delivery, as defined in section 4-166, in accordance with section 708
807	864		36a-52a. The notice shall be deemed received by the licensee or 709
808	865		registrant on the earlier of the date of actual receipt or seven days after 710
809	866		mailing or sending, and in the case of a notice sent by electronic mail, 711
810	867		the notice shall be deemed received by the licensee or registrant in 712
811	868		accordance with section 36a-52a. Any such notice shall include: (1) A 713
812	869		statement of the time, place, and nature of the hearing; (2) a statement 714
813	870		of the legal authority and jurisdiction under which the hearing is to be 715
814	871		held; (3) a reference to the particular sections of the general statutes, 716
815	872		regulations, rules or orders involved; (4) a short and plain statement of 717
816		-	the matters asserted; and (5) a statement indicating that the licensee or 718 Substitute Bill No. 1257
817		-
818		-
819		-	LCO 23 of 44
820		-
	873	+	the matters asserted; and (5) a statement indicating that the licensee or 718
821	874		registrant may file a written request for a hearing on the matters 719
822	875		asserted within fourteen days of receipt of the notice. If the 720
823	876		commissioner finds that public health, safety or welfare imperatively 721
824	877		requires emergency action, and incorporates a finding to that effect in 722
	878	+	Raised Bill No. 1257
	879	+
	880	+
	881	+
	882	+	LCO No. 4385 24 of 46
	883	+
825	884		the notice, the commissioner may order summary suspension of a 723
826	885		license or registration in accordance with subsection (c) of section 4-182 724
827	886		and require the licensee or registrant to take or refrain from taking such 725
828	887		action as in the opinion of the commissioner will effectuate the purposes 726
829	888		of this section, pending proceedings for suspension, revocation or 727
830	889		refusal to renew. 728
831	890		(b) If a hearing is requested within the time specified in the notice, 729
832	891		the commissioner shall hold a hearing upon the matters asserted in the 730
833	892		notice unless the licensee or registrant fails to appear at the hearing. 731
834	893		After the hearing, the commissioner shall suspend, revoke or refuse to 732
835	894		renew the license or registration for any reason set forth in the 733
836	895		applicable [licensing] provisions of the general statutes if the 734
837	896		commissioner finds sufficient grounds exist for such suspension, 735
838	897		revocation or refusal to renew. If the licensee or registrant does not 736
839	898		request a hearing within the time specified in the notice or fails to appear 737
840	899		at the hearing, the commissioner shall suspend, revoke or refuse to 738
841	900		renew the license or registration. No such license or registration shall be 739
842	901		suspended or revoked except in accordance with the provisions of 740
843	902		chapter 54. 741
844	903		(c) (1) Any licensee or registrant may surrender any license or 742
845	904		registration issued by the commissioner under any provision of the 743
846	905		general statutes by surrendering the license or registration to the 744
847	906		commissioner in person or by registered or certified mail, provided, in 745
848	907		the case of a license or registration issued through the system, as defined 746
849	908		in section 36a-2, as amended by this act, such surrender shall be initiated 747
850	909		by filing a request to surrender on the system. No surrender on the 748
851	910		system shall be effective until the request to surrender is accepted by the 749
852	911		commissioner. Surrender of a license or registration shall not affect the 750
853	912		licensee's or registrant's civil or criminal liability, or affect the 751
854		-	commissioner's ability to impose an administrative penalty on the 752 Substitute Bill No. 1257
855		-
856		-
857		-	LCO 24 of 44
858		-
	913	+	commissioner's ability to impose an administrative penalty on the 752
859	914		licensee or registrant pursuant to section 36a-50 for acts committed prior 753
860	915		to the surrender. If, prior to receiving the license or registration, or, in 754
861	916		the case of a license or registration issued through the system prior to 755
	917	+	Raised Bill No. 1257
	918	+
	919	+
	920	+
	921	+	LCO No. 4385 25 of 46
	922	+
862	923		the filing of a request to surrender a license or registration, the 756
863	924		commissioner has instituted a proceeding to suspend, revoke or refuse 757
864	925		to renew such license or registration, such surrender or request to 758
865	926		surrender will not become effective except at such time and under such 759
866	927		conditions as the commissioner by order determines. If no proceeding 760
867	928		is pending or has been instituted by the commissioner at the time of 761
868	929		surrender, or, in the case of a license or registration issued through the 762
869	930		system, at the time a request to surrender is filed, the commissioner may 763
870	931		still institute a proceeding to suspend, revoke or refuse to renew a 764
871	932		license or registration under subsection (a) of this section up to the date 765
872	933		one year after the date of receipt of the license or registration by the 766
873	934		commissioner, or, in the case of a license or registration issued through 767
874	935		the system, up to the date one year after the date of the acceptance by 768
875	936		the commissioner of a request to surrender a license or registration. 769
876	937		(2) If any license or registration issued on the system expires due to 770
877	938		the licensee's or registrant's failure to renew such license or registration, 771
878	939		the commissioner may institute a revocation or suspension proceeding, 772
879	940		or issue an order revoking or suspending the license or registration, 773
880	941		under applicable authorities not later than one year after the date of such 774
881	942		expiration. 775
882	943		(3) Withdrawal of an application for a license or registration filed on 776
883	944		the system shall become effective upon receipt by the commissioner of 777
884	945		a notice of intent to withdraw such application. The commissioner may 778
885	946		deny a license or registration up to the date one year after the effective 779
886	947		date of withdrawal. 780
887	948		(d) The provisions of this section shall not apply to chapters 672a, 781
888	949		672b and 672c. 782
889	950		Sec. 17. Subsection (a) of section 36a-556 of the general statutes is 783
890		-	repealed and the following is substituted in lieu thereof (Effective October 784 Substitute Bill No. 1257
	951	+	repealed and the following is substituted in lieu thereof (Effective October 784
	952	+	1, 2025): 785
	953	+	(a) Without having first obtained a small loan license from the 786
	954	+	Raised Bill No. 1257
891	955
892	956
893		-	LCO 25 of 44
894	957
895		-	~~1, 2025): 785~~
896		-	~~(a) Without having first obtained a small loan license from the 786~~
	958	+	LCO No. 4385 26 of 46
	959	+
897	960		commissioner pursuant to section 36a-565, no person shall, by any 787
898	961		method, including, but not limited to, mail, telephone, Internet or other 788
899	962		electronic means, unless exempt pursuant to section 36a-557: 789
900	963		(1) Make a small loan to a Connecticut borrower; 790
901	964		(2) Offer, solicit, broker, directly or indirectly arrange, place or find a 791
902	965		small loan for a prospective Connecticut borrower; 792
903	966		(3) Engage in any other activity intended to assist a prospective 793
904	967		Connecticut borrower in obtaining a small loan, including, but not 794
905	968		limited to, generating leads; 795
906	969		(4) Receive payments, [of] including, but not limited to, payments for 796
907	970		principal, [and] interest or fees, from a Connecticut borrower in 797
908	971		connection with a small loan; [made to a Connecticut borrower;] 798
909	972		(5) Purchase, acquire or receive assignment of a small loan made to a 799
910	973		Connecticut borrower; and 800
911	974		(6) Advertise or cause to be advertised in this state a small loan or any 801
912	975		of the services described in subdivisions (1) to (5), inclusive, of this 802
913	976		subsection. 803
914	977		Sec. 18. Section 36a-715 of the general statutes is repealed and the 804
915	978		following is substituted in lieu thereof (Effective October 1, 2025): 805
916	979		As used in sections 36a-715 to 36a-719l, inclusive, as amended by this 806
917	980		act, unless the context otherwise requires: 807
918		-	(1) "Advertise" or "advertising", "control person", "individual", "main 808
	981	+	(1) "Advertise or advertising", "control person", "individual", "main 808
919	982		office", "mortgage broker", "mortgage correspondent lender", "mortgage 809
920	983		lender", "office", "person" and "unique identifier" have the same 810
921	984		meanings as provided in section 36a-485. 811
922		-	[(1)] (2) "Branch office" means a location other than the main office at 812 Substitute Bill No. 1257
	985	+	[(1)] (2) "Branch office" means a location other than the main office at 812
	986	+	which a licensee or any person on behalf of a licensee acts as a mortgage 813
	987	+	Raised Bill No. 1257
923	988
924	989
925		-	LCO 26 of 44
926	990
927		-	which a licensee or any person on behalf of a licensee acts as a mortgage 813
	991	+	LCO No. 4385 27 of 46
	992	+
928	993		servicer. 814
929	994		[(2) The terms "advertise or advertising", "control person", 815
930	995		"individual", "main office", "mortgage broker", "mortgage 816
931	996		correspondent lender", "mortgage lender", "office", "person" and 817
932	997		"unique identifier" have the same meanings as provided in section 36a-818
933	998		485.] 819
934	999		(3) "Mortgage servicer" (A) means any person, wherever located, 820
935	1000		who, for such person or on behalf of the holder of a residential mortgage 821
936	1001		loan, receives payments, [of] including, but not limited to, payments for 822
937	1002		principal, [and] interest or fees, in connection with a residential 823
938	1003		mortgage loan, records such payments on such person's books and 824
939	1004		records and performs such other administrative functions as may be 825
940	1005		necessary to properly carry out the mortgage holder's obligations under 826
941	1006		the mortgage agreement including, when applicable, the receipt of 827
942	1007		funds from the mortgagor to be held in escrow for payment of real estate 828
943	1008		taxes and insurance premiums and the distribution of such funds to the 829
944	1009		taxing authority and insurance company, and (B) includes a person who 830
945	1010		makes payments to borrowers pursuant to the terms of a home equity 831
946	1011		conversion mortgage or reverse mortgage. 832
947	1012		(4) "Mortgagee" means the grantee of a residential mortgage, 833
948	1013		provided if the residential mortgage has been assigned of record, 834
949	1014		"mortgagee" means the last person to whom the residential mortgage 835
950	1015		has been assigned of record. 836
951	1016		(5) "Mortgagor" means any person obligated to repay a residential 837
952	1017		mortgage loan. 838
953	1018		(6) "Residential mortgage loan" means any loan primarily for 839
954	1019		personal, family or household use that is secured by a mortgage, deed 840
955	1020		of trust or other equivalent consensual security interest on a dwelling, 841
956	1021		as defined in Section 103 of the Consumer Credit Protection Act, 15 USC 842
957	1022		1602, located in this state, or real property located in this state upon 843
958		-	which is constructed or intended to be constructed a dwelling. 844 Substitute Bill No. 1257
	1023	+	which is constructed or intended to be constructed a dwelling. 844
	1024	+	Raised Bill No. 1257
959	1025
960	1026
961		-	LCO 27 of 44
	1027	+
	1028	+	LCO No. 4385 28 of 46
962	1029
963	1030		Sec. 19. Section 36a-846 of the general statutes is repealed and the 845
964	1031		following is substituted in lieu thereof (Effective October 1, 2025): 846
965	1032		As used in this section and sections 36a-847 to 36a-855, inclusive: 847
966	1033		(1) "Advertise" or "advertising" has the same meaning as provided in 848
967	1034		section 36a-485; 849
968	1035		(2) "Branch office" means a location other than the main office at 850
969	1036		which a licensee or any person on behalf of a licensee acts as a student 851
970	1037		loan servicer; 852
971	1038		(3) "Consumer report" has the same meaning as provided in Section 853
972	1039		603(d) of the Fair Credit Reporting Act, 15 USC [,] 1681a, as amended 854
973	1040		from time to time; 855
974	1041		(4) "Control person" has the same meaning as provided in section 36a-856
975	1042		485; 857
976	1043		(5) "Cosigner" has the same meaning as provided in 15 USC 1650(a), 858
977	1044		as amended from time to time; 859
978	1045		(6) "Federal student education loan" means any student education 860
979	1046		loan (A) (i) made pursuant to the William D. Ford Federal Direct Loan 861
980	1047		Program, 20 USC 1087a, et seq., as amended from time to time, or (ii) 862
981	1048		purchased by the United States Department of Education pursuant to 20 863
982	1049		USC 1087i-1(a), as amended from time to time, and (B) owned by the 864
983	1050		United States Department of Education; 865
984	1051		(7) "Federal student loan servicer" means any student loan servicer 866
985	1052		responsible for the servicing of a federal student education loan to a 867
986	1053		student loan borrower pursuant to a contract awarded by the United 868
987	1054		States Department of Education under 20 USC 1087f, as amended from 869
988	1055		time to time; 870
989	1056		(8) "Main office" has the same meaning as provided in section 36a-871
990		-	485; 872 Substitute Bill No. 1257
	1057	+	485; 872
	1058	+	Raised Bill No. 1257
991	1059
992	1060
993		-	LCO 28 of 44
	1061	+
	1062	+	LCO No. 4385 29 of 46
994	1063
995	1064		(9) "Private education lender" has the same meaning as provided in 873
996	1065		section 36a-856, as amended by this act; 874
997	1066		(10) "Private education loan creditor" has the same meaning as 875
998	1067		provided in section 36a-856, as amended by this act; 876
999	1068		[(9)] (11) "Private student education loan" means any student 877
1000	1069		education loan that is not a federal student education loan; 878
1001	1070		[(10)] (12) "Private student education loan servicer" means any 879
1002	1071		student loan servicer responsible for the servicing of a private student 880
1003	1072		education loan to a student loan borrower; 881
1004	1073		[(11)] (13) "Student loan borrower" means any individual who resides 882
1005	1074		within this state who has agreed to repay a student education loan; 883
1006	1075		[(12)] (14) "Student loan servicer" means any person, wherever 884
1007	1076		located, responsible for the servicing of any student education loan to 885
1008	1077		any student loan borrower; 886
1009	1078		[(13)] (15) "Servicing" means (A) receiving any [scheduled periodic] 887
1010	1079		payments from a student loan borrower pursuant to the terms of a 888
1011	1080		student education loan, [;] (B) applying the payments of principal and 889
1012	1081		interest and such other payments with respect to the amounts received 890
1013	1082		from a student loan borrower, as may be required pursuant to the terms 891
1014	1083		of a student education loan, [;] (C) maintaining account records for and 892
1015	1084		communicating with the student loan borrower concerning the student 893
1016	1085		education loan during the period when no [scheduled periodic] 894
1017	1086		payments are required, [;] (D) interacting with a student loan borrower 895
1018	1087		for purposes of facilitating the servicing of a student education loan, 896
1019	1088		including, but not limited to, assisting a student loan borrower to 897
1020	1089		prevent such borrower from defaulting on obligations arising from the 898
1021	1090		student education loan, [;] or (E) performing other administrative 899
1022	1091		services with respect to a student education loan; 900
1023	1092		[(14)] (16) "Student education loan" means any loan primarily for 901
1024		-	~~personal use to finance education or other school-related expenses; and 902 Substitute~~ Bill No. 1257
	1093	+	Raised Bill No. 1257
1025	1094
1026	1095
1027		-	LCO 29 of 44
1028	1096
	1097	+	LCO No. 4385 30 of 46
	1098	+
	1099	+	personal use to finance education or other school-related expenses; and 902
1029	1100		[(15)] (17) "Unique identifier" has the same meaning as provided in 903
1030	1101		section 36a-485. 904
1031	1102		Sec. 20. Subsection (d) of section 36a-487 of the general statutes is 905
1032	1103		repealed and the following is substituted in lieu thereof (Effective October 906
1033	1104		1, 2025): 907
1034	1105		(d) Any person claiming exemption from licensure under this section 908
1035	1106		may register on the system as an exempt registrant for purposes of 909
1036	1107		sponsoring a mortgage loan originator or a loan processor or 910
1037	1108		underwriter pursuant to subdivision (1) of subsection (b) of section 36a-911
1038	1109		486. Such registration shall not affect the exempt status of such person. 912
1039	1110		Each registration shall expire at the close of business on December 913
1040	1111		thirty-first of the year in which such registration was approved, unless 914
1041	1112		such registration is renewed or, if such registration is approved on or 915
1042	1113		after November first, such registration shall expire at the close of 916
1043	1114		business on December thirty-first of the year following the year in which 917
1044	1115		such registration was approved. An application for renewal of a 918
1045	1116		registration shall be filed on the system between November first and 919
1046	1117		December thirty-first of the year in which the registration expires. Each 920
1047	1118		applicant for an initial registration or renewal of a registration shall pay 921
1048	1119		to the system any required fees or charges. All fees paid pursuant to this 922
1049	1120		subsection shall be nonrefundable. Any approval of such registration, 923
1050	1121		or any approval of any renewal of such registration, shall not constitute 924
1051	1122		a determination by the commissioner that such entity is exempt, but 925
1052	1123		rather shall evidence the commissioner's approval to use the system for 926
1053	1124		purposes of sponsoring and bonding. 927
1054	1125		Sec. 21. Section 36a-868 of the general statutes is repealed and the 928
1055	1126		following is substituted in lieu thereof (Effective from passage): 929
1056	1127		No commercial financing contract entered into on or after July 1, 930
1057	1128		2024, shall contain any provision waiving a recipient's right to notice, 931
1058	1129		judicial hearing or prior court order under chapter 903a in connection 932
1059		-	with the provider obtaining any prejudgment remedy, including, but 933
1060		-	not limited to, attachment, execution, garnishment or replevin [,] upon 934 Substitute Bill No. 1257
	1130	+	Raised Bill No. 1257
1061	1131
1062	1132
1063		-	LCO 30 of 44
1064	1133
	1134	+	LCO No. 4385 31 of 46
	1135	+
	1136	+	with the provider obtaining any prejudgment remedy, including, but 933
	1137	+	not limited to, attachment, execution, garnishment or replevin [,] upon 934
1065	1138		commencing any litigation against the recipient. Any such provision in 935
1066	1139		a commercial financing contract entered into on or after July 1, 2024, 936
1067	1140		shall be unenforceable. 937
1068	1141		Sec. 22. Subsection (c) of section 36a-870 of the general statutes is 938
1069	1142		repealed and the following is substituted in lieu thereof (Effective July 1, 939
1070	1143		2025): 940
1071	1144		(c) Each provider and commercial financing broker [shall pay an 941
1072	1145		initial registration fee of one thousand dollars and an annual 942
1073	1146		registration fee of five hundred dollars by the fifteenth of September 943
1074	1147		each year thereafter. If a provider or commercial financing broker fails 944
1075	1148		to timely pay any such annual registration fee, its registration shall 945
1076	1149		automatically expire by operation of law] registration shall expire at the 946
1077	1150		close of business on December thirty-first of the year in which such 947
1078	1151		registration was approved, unless such registration is renewed or, if 948
1079	1152		such registration is approved on or after November first, such 949
1080	1153		registration shall expire at the close of business on December thirty-first 950
1081	1154		of the year following the year in which such registration was approved. 951
1082	1155		An application for renewal of a registration shall be filed with the 952
1083	1156		commissioner between November first and December thirty-first of the 953
1084	1157		year in which the registration expires. Each applicant for an initial 954
1085	1158		registration or renewal of a registration shall pay to the system a 955
1086	1159		registration fee of one thousand dollars and any other required fees or 956
1087	1160		charges. All fees paid pursuant to this subsection shall be 957
1088	1161		nonrefundable. 958
1089	1162		Sec. 23. Section 36a-872 of the general statutes is repealed and the 959
1090	1163		following is substituted in lieu thereof (Effective July 1, 2025): 960
1091		-	(a) [Any provider who violates any provision of sections 36a-861 to 961
	1164	+	[(a) Any provider who violates any provision of sections 36a-861 to 961
1092	1165		36a-870, inclusive, or any regulation adopted pursuant to section 36a-962
1093		-	871 shall be liable for a civil penalty pursuant to section 36a-50] The 963
	1166	+	871 shall be liable for a civil penalty pursuant to section 36a-50.] (a) The 963
	1167	+	Raised Bill No. 1257
	1168	+
	1169	+
	1170	+
	1171	+	LCO No. 4385 32 of 46
	1172	+
1094	1173		commissioner may suspend, revoke or refuse to renew any registration 964
1095	1174		issued pursuant to section 36a-870, as amended by this act, or take any 965
1096		-	other action in accordance with the provisions of section 36a-51, as 966 Substitute Bill No. 1257
1097		-
1098		-
1099		-	LCO 31 of 44
1100		-
	1175	+	other action in accordance with the provisions of section 36a-51, as 966
1101	1176		amended by this act, if the commissioner finds that the registrant or any 967
1102	1177		control person, trustee, employee or agent of such registrant has done 968
1103	1178		any of the following: (1) Made any material misstatement in the 969
1104	1179		application; (2) committed any fraud or misappropriated funds; or (3) 970
1105		-	violated (A) any provision of this title or any regulation or order 971
	1180	+	violated (A) any provision of this title or of any regulation or order 971
1106	1181		adopted or issued pursuant thereto pertaining to such registrant or any 972
1107	1182		control person, trustee, employee or agent of such registrant, or (B) any 973
1108	1183		other law or regulation applicable to the conduct of such registrant's 974
1109	1184		business. 975
1110		-	(b) [In addition to any civil penalty imposed under subsection (a) of 976
	1185	+	[(b) In addition to any civil penalty imposed under subsection (a) of 976
1111	1186		this section, if the Banking Commissioner finds that a provider has 977
1112	1187		knowingly violated any provision of sections 36a-861 to 36a-870, 978
1113	1188		inclusive, or any regulation adopted pursuant to section 36a-871, the 979
1114	1189		commissioner may seek an injunction in a court of competent 980
1115	1190		jurisdiction, and may exercise the powers granted to the commissioner 981
1116		-	under section 36a-50, on behalf of any recipient affected by the ~~violation]~~ 982
1117		-	Whenever it appears to the commissioner that any person ~~has violated,~~ 983
1118		-	is violating or is about to violate the provisions of sections ~~36a-861 to~~ 984
1119		-	36a-870, inclusive, as amended by this act, the commissioner ~~may take~~ 985
1120		-	action against such person in accordance with sections 36a-50 ~~and 36a-~~986
1121		-	52. 987
	1191	+	under section 36a-50, on behalf of any recipient affected by the 982
	1192	+	violation.] (b) Whenever it appears to the commissioner that any person 983
	1193	+	has violated, is violating or is about to violate the provisions of sections 984
	1194	+	36a-861 to 36a-870, inclusive, as amended by this act, the commissioner 985
	1195	+	may take action against such person in accordance with sections 36a-50 986
	1196	+	and 36a-52. 987
1122	1197		Sec. 24. Subsections (b) to (g), inclusive, of section 36a-856 of the 988
1123	1198		general statutes are repealed and the following is substituted in lieu 989
1124	1199		thereof (Effective October 1, 2025): 990
1125	1200		(b) (1) Except for a public or private nonprofit postsecondary 991
1126	1201		educational institution, for which the commissioner may prescribe an 992
1127	1202		alternative registration process and fee structure, a private education 993
1128	1203		lender or a private education loan creditor shall, prior to making a 994
1129	1204		private education loan to, or purchasing or assuming a private 995
	1205	+	Raised Bill No. 1257
	1206	+
	1207	+
	1208	+
	1209	+	LCO No. 4385 33 of 46
	1210	+
1130	1211		education loan owed by, a resident of the state, [:] (A) register with the 996
1131	1212		commissioner, and (B) renew such registration for each year that such 997
1132	1213		private education lender or private education loan creditor continues to 998
1133		-	act as a private education lender or private education loan creditor. 999 Substitute Bill No. 1257
1134		-
1135		-
1136		-	LCO 32 of 44
1137		-
	1214	+	act as a private education lender or private education loan creditor. 999
1138	1215		[(1) Register with the commissioner and pay a fee in the form and 1000
1139	1216		manner prescribed by the commissioner, which may include 1001
1140	1217		registration using the National Multistate Licensing System and 1002
1141	1218		Registry and the payment of any fees thereto; and 1003
1142	1219		(2) Renew such registration for each year that such private education 1004
1143	1220		lender or private education loan creditor continues to act as a private 1005
1144	1221		education lender or private education loan creditor.] 1006
1145	1222		(2) Each private education lender and private education loan creditor 1007
1146	1223		registration shall expire at the close of business on December thirty-first 1008
1147	1224		of the year in which such registration was approved, unless such 1009
1148	1225		registration is renewed or, if such registration is approved on or after 1010
1149	1226		November first, such registration shall expire at the close of business on 1011
1150	1227		December thirty-first of the year following the year in which such 1012
1151	1228		registration was approved. An application for renewal of a registration 1013
1152	1229		shall be filed with the commissioner between November first and 1014
1153	1230		December thirty-first of the year in which the registration expires. Each 1015
1154	1231		applicant for an initial registration or renewal of a registration shall pay 1016
1155	1232		to the system a registration fee of nine hundred dollars and any other 1017
1156		-	required fees or charges. All fees paid pursuant to this subdivision ~~shall~~ 1018
1157		-	be nonrefundable. 1019
	1233	+	required fees or charges and. All fees paid pursuant to this subdivision 1018
	1234	+	shall be nonrefundable. 1019
1158	1235		(c) For each year in which a private education lender registers with, 1020
1159	1236		or renews such registration with, the commissioner pursuant to 1021
1160	1237		subsection (b) of this section, such private education lender shall, at the 1022
1161	1238		time of such registration or renewal, and at other times upon the 1023
1162	1239		commissioner's request, provide to the commissioner, in the form and 1024
1163	1240		manner prescribed by the commissioner, the following documents and 1025
1164	1241		information: 1026
	1242	+	Raised Bill No. 1257
	1243	+
	1244	+
	1245	+
	1246	+	LCO No. 4385 34 of 46
	1247	+
1165	1248		(1) A list of all schools attended by the private education loan 1027
1166	1249		borrowers with outstanding private education loans made by such 1028
1167	1250		private education lender; 1029
1168	1251		(2) The number and dollar amount of all outstanding private 1030
1169		-	education loans such private education lender made to private 1031 Substitute Bill No. 1257
1170		-
1171		-
1172		-	LCO 33 of 44
1173		-
	1252	+	education loans such private education lender made to private 1031
1174	1253		education loan borrowers; 1032
1175	1254		(3) For each school listed pursuant to subdivision (1) of this 1033
1176	1255		subsection, the number and dollar amount of all outstanding private 1034
1177	1256		education loans such private education lender made to private 1035
1178	1257		education loan borrowers who attended such school; 1036
1179	1258		(4) The number and dollar amount of all private education loans such 1037
1180	1259		private education lender made during the prior year to private 1038
1181	1260		education loan borrowers; 1039
1182	1261		(5) For each school listed pursuant to subdivision (1) of this 1040
1183	1262		subsection, the number and dollar amount of all private education loans 1041
1184	1263		such private education lender made during the prior year to private 1042
1185	1264		education loan borrowers who attended such school; 1043
1186	1265		(6) The spread of interest rates for the private education loans such 1044
1187	1266		private education lender made during the prior year; 1045
1188	1267		(7) The percentage of private education loan borrowers who received 1046
1189	1268		each rate within the spread of interest rates provided pursuant to 1047
1190	1269		subdivision (6) of this subsection; 1048
1191	1270		(8) The number of private education loans with a cosigner that such 1049
1192	1271		private education lender made during the prior year; 1050
1193	1272		(9) The default rate for private education loan borrowers obtaining 1051
1194	1273		private education loans from the private education lender, and, for each 1052
1195	1274		school listed pursuant to subdivision (1) of this subsection, the default 1053
1196	1275		rate for private education loans made to private education loan 1054
1197	1276		borrowers who attended such school; 1055
	1277	+	Raised Bill No. 1257
	1278	+
	1279	+
	1280	+
	1281	+	LCO No. 4385 35 of 46
	1282	+
1198	1283		(10) The number of private education loan borrowers against whom 1056
1199	1284		such private education lender brought legal action in the prior year to 1057
1200	1285		collect a debt owed pursuant to a private education loan, and the 1058
1201	1286		amount sought in each such action; 1059
1202		-	(11) A copy of each model promissory note, agreement, contract or 1060 Substitute Bill No. 1257
1203		-
1204		-
1205		-	LCO 34 of 44
1206		-
	1287	+	(11) A copy of each model promissory note, agreement, contract or 1060
1207	1288		other instrument used by the private education lender during the prior 1061
1208	1289		year to substantiate that a new private education loan has been extended 1062
1209	1290		to a private education loan borrower or that a private education loan 1063
1210	1291		borrower owes a debt to such lender; and 1064
1211	1292		(12) The name and address of: (A) Such private education lender; (B) 1065
1212	1293		each officer, director or partner of such private education lender; and 1066
1213	1294		(C) each owner of a controlling interest in such private education lender. 1067
1214	1295		(d) For each year in which a private education loan creditor registers 1068
1215	1296		with, or renews such registration with, the commissioner pursuant to 1069
1216	1297		subsection (b) of this section, such private education loan creditor shall, 1070
1217	1298		at the time of such registration or renewal, and at other times upon the 1071
1218	1299		commissioner's request, provide to the commissioner, in the form and 1072
1219	1300		manner prescribed by the commissioner, the following documents and 1073
1220	1301		information: 1074
1221	1302		(1) A list of all schools attended by the private education loan 1075
1222	1303		borrowers with outstanding private education loans assumed or 1076
1223	1304		acquired by such private education loan creditor; 1077
1224	1305		(2) The number and dollar amount of all outstanding private 1078
1225	1306		education loans owed by private education loan borrowers to such 1079
1226	1307		private education loan creditor; 1080
1227	1308		(3) For each school listed pursuant to subdivision (1) of this 1081
1228	1309		subsection, the number and dollar amount of all outstanding private 1082
1229	1310		education loans owed to such private education loan creditor by private 1083
1230	1311		education loan borrowers who attended such school; 1084
	1312	+	Raised Bill No. 1257
	1313	+
	1314	+
	1315	+
	1316	+	LCO No. 4385 36 of 46
	1317	+
1231	1318		(4) The number and dollar amount of all private education loans: (A) 1085
1232	1319		Such private education loan creditor assumed or acquired during the 1086
1233	1320		prior year; and (B) owed to such private education loan creditor by 1087
1234	1321		private education loan borrowers; 1088
1235	1322		(5) For each school listed pursuant to subdivision (1) of this 1089
1236		-	subsection, the number and dollar amount of all private education 1090 Substitute Bill No. 1257
1237		-
1238		-
1239		-	LCO 35 of 44
1240		-
	1323	+	subsection, the number and dollar amount of all private education 1090
1241	1324		loans: (A) Such private education loan creditor assumed or acquired 1091
1242	1325		during the prior year; and (B) owed to such private education loan 1092
1243	1326		creditor by private education loan borrowers who attended such school; 1093
1244	1327		(6) The number of private education loans with a cosigner that such 1094
1245	1328		private education loan creditor assumed or acquired during the prior 1095
1246	1329		year; 1096
1247	1330		(7) The default rate for private education loan borrowers whose 1097
1248	1331		private education loans were assumed or acquired by such private 1098
1249	1332		education loan creditor, and, for each school listed pursuant to 1099
1250	1333		subdivision (1) of this subsection, the default rate for private education 1100
1251	1334		loans owed by private education loan borrowers who attended such 1101
1252	1335		school; 1102
1253	1336		(8) The number of private education loan borrowers against whom 1103
1254	1337		such private education loan creditor brought legal action in the prior 1104
1255	1338		year to collect a debt owed pursuant to a private education loan, and the 1105
1256	1339		amount sought in each such action; and 1106
1257	1340		(9) The name and address of: (A) Such private education loan 1107
1258	1341		creditor; (B) each officer, director or partner of such private education 1108
1259	1342		loan creditor; and (C) each owner of a controlling interest in such private 1109
1260	1343		education loan creditor. 1110
1261	1344		(e) The commissioner shall create, and periodically update, a publicly 1111
1262	1345		accessible Internet web site that includes the following information 1112
1263	1346		about private education lenders and private education loan creditors 1113
1264	1347		registered in the state: 1114
	1348	+	Raised Bill No. 1257
	1349	+
	1350	+
	1351	+
	1352	+	LCO No. 4385 37 of 46
	1353	+
1265	1354		(1) The name, address, telephone number and Internet web site 1115
1266	1355		address for all registered private education lenders and private 1116
1267	1356		education loan creditors; 1117
1268	1357		(2) A summary of the information and documents provided pursuant 1118
1269	1358		to subsections (c) and (d) of this section; and 1119
1270		-	(3) Copies of all model promissory notes, agreements, contracts and 1120 Substitute Bill No. 1257
1271		-
1272		-
1273		-	LCO 36 of 44
1274		-
	1359	+	(3) Copies of all model promissory notes, agreements, contracts and 1120
1275	1360		other instruments provided to the commissioner in accordance with 1121
1276	1361		subdivision (11) of subsection (c) of this section. 1122
1277	1362		(f) The commissioner may [take action pursuant to section 36a-50 to 1123
1278	1363		enforce the provisions of this section.] suspend, revoke or refuse to 1124
1279	1364		renew any registration issued under subsection (b) of this section or take 1125
1280	1365		any other action in accordance with the provisions of section 36a-51, as 1126
1281	1366		amended by this act, if the commissioner finds that the registrant or any 1127
1282	1367		control person, trustee, employee or agent of such registrant has done 1128
1283	1368		any of the following: (1) Made any material misstatement in the 1129
1284	1369		application; (2) committed any fraud or misappropriated funds; or (3) 1130
1285		-	violated (A) any provision of this title or any regulation or order 1131
	1370	+	violated (A) any provision of this title or of any regulation or order 1131
1286	1371		adopted or issued pursuant thereto pertaining to such registrant or any 1132
1287	1372		control person, trustee, employee or agent of such registrant, or (B) any 1133
1288	1373		other law or regulation applicable to the conduct of such registrant's 1134
1289	1374		business. 1135
1290	1375		(g) Whenever it appears to the commissioner that any person has 1136
1291	1376		violated, is violating or is about to violate the provisions of this section, 1137
1292	1377		the commissioner may take action against such person in accordance 1138
1293	1378		with sections 36a-50 and 36a-52. 1139
1294	1379		[(g)] (h) (1) The commissioner may order that any person who has 1140
1295	1380		been found to have violated any provision of this section and has 1141
1296	1381		thereby caused financial harm to a consumer be barred for a term not 1142
1297	1382		exceeding ten years from [acting as a private education lender, private 1143
1298	1383		education loan creditor or] engaging in any activity requiring a license 1144
1299	1384		or registration under this title, or acting as a stockholder, officer, 1145
	1385	+	Raised Bill No. 1257
	1386	+
	1387	+
	1388	+
	1389	+	LCO No. 4385 38 of 46
	1390	+
1300	1391		director, partner or other owner or employee of [a private education 1146
1301	1392		lender or private education loan creditor] an entity requiring such a 1147
1302	1393		license or registration, by sending a notice to such person by registered 1148
1303	1394		or certified mail, return receipt requested, or by any express delivery 1149
1304	1395		carrier that provides a dated delivery receipt, or by personal delivery, 1150
1305	1396		as defined in section 4-166, in accordance with section 36a-52a. The 1151
1306	1397		notice shall be deemed received by such person on the earlier of the date 1152
1307		-	of actual receipt or seven days after mailing or sending, and in the case 1153 Substitute Bill No. 1257
1308		-
1309		-
1310		-	LCO 37 of 44
1311		-
	1398	+	of actual receipt or seven days after mailing or sending, and in the case 1153
1312	1399		of a notice sent by electronic mail, the notice shall be deemed received 1154
1313	1400		by such person in accordance with section 36a-52a. Such notice shall 1155
1314	1401		include: (A) A statement of the time, place and nature of a hearing to be 1156
1315	1402		held upon the matters asserted in the notice; (B) a statement of the legal 1157
1316	1403		authority and jurisdiction under which the hearing is to be held; (C) a 1158
1317	1404		reference to the particular sections of the general statutes, regulations of 1159
1318	1405		Connecticut state agencies, rules or orders that such person is alleged to 1160
1319	1406		have violated; (D) a short and plain statement of the matters asserted; 1161
1320	1407		and (E) a statement indicating that such person may file a written 1162
1321	1408		request for a hearing on the matters asserted within fourteen days of 1163
1322	1409		receipt of the notice. 1164
1323	1410		(2) If a hearing is requested within the time specified in the notice, the 1165
1324	1411		commissioner shall hold a hearing upon the matters asserted in the 1166
1325	1412		notice unless such person fails to appear at the hearing. After the 1167
1326	1413		hearing, the commissioner shall determine whether to issue an order 1168
1327	1414		barring such person, for a term not to exceed ten years, from engaging 1169
1328	1415		in any activity requiring a license or registration under this title, or from 1170
1329	1416		acting as a stockholder, officer, director, partner or other owner or 1171
1330	1417		employee of an entity requiring such a license or registration. The 1172
1331	1418		commissioner may also issue such an order if such person does not 1173
1332	1419		request a hearing within the time specified in the notice or fails to appear 1174
1333	1420		at the hearing. No order shall be issued under this subsection except in 1175
1334	1421		accordance with the provisions of chapter 54. 1176
1335	1422		Sec. 25. (NEW) (Effective October 1, 2025) Any mortgage lender, as 1177
1336	1423		defined in section 36a-485 of the general statutes, that offers to make a 1178
	1424	+	Raised Bill No. 1257
	1425	+
	1426	+
	1427	+
	1428	+	LCO No. 4385 39 of 46
	1429	+
1337	1430		shared appreciation agreement, as defined in section 36a-485 of the 1179
1338	1431		general statutes, shall, not later than three business days after the 1180
1339	1432		prospective borrower under such proposed agreement submits an 1181
1340	1433		application to such mortgage lender for such proposed agreement, 1182
1341	1434		disclose to such prospective borrower, in writing: 1183
1342	1435		(1) The following statement, which shall be clear, conspicuous and in 1184
1343	1436		at least twelve-point font: "You are not required to complete this 1185
1344		-	agreement merely because you have received these disclosures or have 1186 Substitute Bill No. 1257
1345		-
1346		-
1347		-	LCO 38 of 44
1348		-
	1437	+	agreement merely because you have received these disclosures or have 1186
1349	1438		signed a loan application. If you obtain this loan, the lender will have a 1187
1350	1439		mortgage and shared interest in your home. You could lose your home, 1188
1351	1440		and any money you have put into it, if you do not meet your obligations 1189
1352	1441		under the loan. You may wish to consult an attorney."; 1190
1353	1442		(2) Financial information relevant to the proposed shared 1191
1354	1443		appreciation agreement, including, but not limited to, whether such 1192
1355	1444		proposed agreement is terminated through repayment, which 1193
1356	1445		repayment may include the mortgage lender's receipt of some or all of 1194
1357	1446		the proceeds from a sale of the dwelling or residential real estate that is 1195
1358	1447		the subject of such proposed agreement if such proposed agreement is 1196
1359	1448		terminated by such sale; 1197
1360	1449		(3) Agreement and transaction details for the proposed shared 1198
1361	1450		appreciation agreement, including, but not limited to, the mortgage 1199
1362	1451		lender's contact information, the transaction amount, the sum of cash to 1200
1363	1452		be paid to the prospective borrower, the starting value for appreciation 1201
1364	1453		sharing, the term of the proposed agreement and the estimated current 1202
1365	1454		fair market value of the dwelling or residential real estate that is the 1203
1366	1455		subject of such proposed agreement; 1204
1367	1456		(4) The method of determining the current fair market value of the 1205
1368	1457		dwelling or residential real estate that is the subject of the proposed 1206
1369	1458		shared appreciation agreement; 1207
1370	1459		(5) The method of determining the final value of the dwelling or 1208
1371	1460		residential real estate that is the subject of the proposed shared 1209
	1461	+	Raised Bill No. 1257
	1462	+
	1463	+
	1464	+
	1465	+	LCO No. 4385 40 of 46
	1466	+
1372	1467		appreciation agreement upon termination of such proposed agreement; 1210
1373	1468		(6) The interest charged, if applicable; 1211
1374	1469		(7) The limit of the mortgage lender's share of appreciation or equity 1212
1375	1470		in the dwelling or residential real estate that is the subject of the 1213
1376	1471		proposed shared appreciation agreement; 1214
1377	1472		(8) An advisory that the prospective borrower consult such 1215
1378		-	borrower's tax advisor on the potential tax implications of the proposed 1216 Substitute Bill No. 1257
1379		-
1380		-
1381		-	LCO 39 of 44
1382		-
	1473	+	borrower's tax advisor on the potential tax implications of the proposed 1216
1383	1474		shared appreciation agreement; 1217
1384	1475		(9) Repayment examples for the proposed shared appreciation 1218
1385	1476		agreement based upon, at minimum: 1219
1386	1477		(A) Settlement of such proposed agreement after five years, ten years, 1220
1387	1478		fifteen years and thirty years, in each case up to the maximum term of 1221
1388	1479		such proposed agreement; and 1222
1389	1480		(B) (i) No change in the market value of the dwelling or residential 1223
1390	1481		real estate that is the subject of such proposed agreement, and (ii) 1224
1391	1482		changes in the market value of the dwelling or residential real estate that 1225
1392	1483		is the subject of such proposed agreement (I) at the rate of ten per cent 1226
1393	1484		total depreciation over the term of such proposed agreement, (II) at the 1227
1394	1485		rate of three and one-half per cent total appreciation over such term, (III) 1228
1395	1486		at the rate of five and one-half per cent total appreciation over such term, 1229
1396	1487		and (IV) reflecting the actual average rate of appreciation or 1230
1397	1488		depreciation for all dwellings or residential real estate in this state 1231
1398	1489		during the period that is equal to the term of such proposed agreement 1232
1399	1490		and that occurred immediately prior to such term; and 1233
1400	1491		(10) The following information and corresponding calculations for 1234
1401	1492		the proposed shared appreciation agreement, if applicable: 1235
1402	1493		(A) The calculated appreciation amount; 1236
1403	1494		(B) The appreciation-based charge; 1237
	1495	+	Raised Bill No. 1257
	1496	+
	1497	+
	1498	+
	1499	+	LCO No. 4385 41 of 46
	1500	+
1404	1501		(C) The accrued or charged interest; 1238
1405	1502		(D) The principal amount to be repaid; 1239
1406	1503		(E) The mortgage lender's total calculated share of appreciation or 1240
1407	1504		equity; 1241
1408	1505		(F) Any limit to the mortgage lender's share of appreciation or equity; 1242
1409	1506		and 1243
1410		-	(G) For each of the repayment scenarios specified in subdivision (9) 1244 Substitute Bill No. 1257
1411		-
1412		-
1413		-	LCO 40 of 44
1414		-
	1507	+	(G) For each of the repayment scenarios specified in subdivision (9) 1244
1415	1508		of this section: 1245
1416	1509		(i) The actual amount of money to be paid by the prospective 1246
1417	1510		borrower to the mortgage lender, inclusive of any unconditional 1247
1418	1511		administrative fees or reimbursement of protective advances that are 1248
1419	1512		required to be paid at the time of the settlement of such proposed 1249
1420	1513		agreement; and 1250
1421	1514		(ii) The total cost to the prospective borrower expressed as an annual 1251
1422	1515		percentage rate, to allow the prospective borrower to compare, under 1252
1423	1516		each such repayment scenario, the cost at the time of the settlement of 1253
1424	1517		such proposed agreement with the cost of a traditional mortgage loan. 1254
1425	1518		Sec. 26. Subdivision (1) of subsection (b) of section 36a-498e of the 1255
1426	1519		general statutes is repealed and the following is substituted in lieu 1256
1427	1520		thereof (Effective October 1, 2025): 1257
1428	1521		(b) (1) No person, other than an individual, who is required to be 1258
1429	1522		licensed and is subject to sections 36a-485 to 36a-498h, inclusive, 36a-1259
1430	1523		534a and 36a-534b, and no [qualifying] qualified individual or branch 1260
1431	1524		manager shall fail to establish, enforce and maintain policies and 1261
1432	1525		procedures reasonably designed to achieve compliance with subsection 1262
1433	1526		(a) of this section. 1263
1434	1527		Sec. 27. Subsection (b) of section 36a-719h of the general statutes is 1264
1435	1528		repealed and the following is substituted in lieu thereof (Effective October 1265
	1529	+	Raised Bill No. 1257
	1530	+
	1531	+
	1532	+
	1533	+	LCO No. 4385 42 of 46
	1534	+
1436	1535		1, 2025): 1266
1437	1536		(b) No mortgage servicer shall fail to establish, enforce and maintain 1267
1438	1537		policies and procedures reasonably designed to achieve compliance 1268
1439	1538		with subsection (a) of this section, and no [qualifying] qualified 1269
1440	1539		individual or branch manager for such mortgage servicer shall fail to 1270
1441	1540		enforce such policies and procedures. No violation of this subsection 1271
1442	1541		shall be found unless the mortgage servicer, qualifying individual or 1272
1443	1542		branch manager's failure to establish, enforce or maintain policies and 1273
1444	1543		procedures resulted in conduct in violation of sections 36a-715 to 36a-1274
1445		-	724, inclusive, as amended by this act, or rules or regulations adopted 1275 Substitute Bill No. 1257
1446		-
1447		-
1448		-	LCO 41 of 44
1449		-
	1544	+	724, inclusive, as amended by this act, or rules or regulations adopted 1275
1450	1545		under said sections or any other state or federal law, including the rules 1276
1451	1546		and regulations thereunder, applicable to any business authorized or 1277
1452	1547		conducted under said sections. 1278
1453	1548		Sec. 28. Subdivision (72) of section 36a-2 of the general statutes is 1279
1454	1549		repealed and the following is substituted in lieu thereof (Effective October 1280
1455	1550		1, 2025): 1281
1456	1551		(72) "System" means the Nationwide [Mortgage] Multistate Licensing 1282
1457	1552		System and Registry, NMLS, NMLSR or such other name or acronym as 1283
1458	1553		may be assigned to the multistate system developed by the Conference 1284
1459	1554		of State Bank Supervisors and the American Association of Residential 1285
1460	1555		Mortgage Regulators and owned and operated by the State Regulatory 1286
1461	1556		Registry, LLC, or any successor or affiliated entity, for the licensing and 1287
1462	1557		registration of persons in the mortgage and other financial services 1288
1463	1558		industries; 1289
1464	1559		Sec. 29. Subsection (a) of section 36a-719 of the general statutes is 1290
1465	1560		repealed and the following is substituted in lieu thereof (Effective October 1291
1466	1561		1, 2025): 1292
1467	1562		(a) The commissioner shall issue a mortgage servicer license to an 1293
1468	1563		applicant for such license if the commissioner finds that: (1) The 1294
1469	1564		applicant has identified a qualified individual for its main office and a 1295
1470	1565		branch manager for each branch office where such business is 1296
	1566	+	Raised Bill No. 1257
	1567	+
	1568	+
	1569	+
	1570	+	LCO No. 4385 43 of 46
	1571	+
1471	1572		conducted, provided such qualified individual and branch manager 1297
1472	1573		have supervisory authority over the mortgage servicer activities at the 1298
1473	1574		respective office location and at least three years' experience in the 1299
1474	1575		mortgage servicing business within the five years immediately 1300
1475	1576		preceding the date of the application for licensure; (2) notwithstanding 1301
1476	1577		the provisions of section 46a-80, the applicant, the control persons of the 1302
1477	1578		applicant, the qualified individual and any branch manager have not 1303
1478	1579		been convicted of or pled guilty or nolo contendere to, in a domestic, 1304
1479	1580		foreign or military court, a felony during the seven-year period 1305
1480	1581		preceding the date of the application for licensing or a felony involving 1306
1481		-	an act of fraud or dishonesty, a breach of trust or money laundering at 1307 Substitute Bill No. 1257
1482		-
1483		-
1484		-	LCO 42 of 44
1485		-
	1582	+	an act of fraud or dishonesty, a breach of trust or money laundering at 1307
1486	1583		any time preceding the date of application, provided any pardon or 1308
1487	1584		expungement of a conviction shall not be a conviction for purposes of 1309
1488	1585		this subdivision; (3) the applicant demonstrates that the financial 1310
1489	1586		responsibility, character and general fitness of the applicant, the control 1311
1490	1587		persons of the applicant, the qualified individual and any branch 1312
1491	1588		manager command the confidence of the community and warrant a 1313
1492	1589		determination that the applicant will operate honestly, fairly and 1314
1493	1590		efficiently within the purposes of sections 36a-715 to 36a-719l, inclusive, 1315
1494	1591		as amended by this act; (4) the applicant has met the surety bond, 1316
1495	1592		fidelity bond and errors and omissions coverage requirement under 1317
1496	1593		section 36a-719c, as amended by this act; (5) the applicant, the control 1318
1497	1594		persons of the applicant, the qualified individual and any branch 1319
1498	1595		manager have not made a material misstatement in the application; and 1320
1499	1596		(6) the applicant has met any other similar requirements as determined 1321
1500	1597		by the commissioner. If the commissioner fails to make such findings, 1322
1501	1598		the commissioner shall not issue a license, and shall notify the applicant 1323
1502	1599		of the denial and the reasons for such denial. The commissioner may 1324
1503	1600		waive the requirements of subdivision (1) of this subsection relating to 1325
1504	1601		the supervision and experience of (A) a qualified individual where the 1326
1505	1602		applicant establishes to the satisfaction of the commissioner that the 1327
1506	1603		applicant (i) will not conduct any activity subject to licensure under 1328
1507	1604		sections 36a-715 to 36a-719l, inclusive, as amended by this act, at the 1329
1508	1605		main office, and (ii) has designated a qualified individual who is 1330
	1606	+	Raised Bill No. 1257
	1607	+
	1608	+
	1609	+
	1610	+	LCO No. 4385 44 of 46
	1611	+
1509	1612		responsible for the actions of the applicant; and (B) a qualified 1331
1510	1613		individual or a branch manager where the applicant establishes to the 1332
1511	1614		satisfaction of the commissioner that the applicant (i) holds only 1333
1512	1615		mortgage servicing rights at the main office or branch office and 1334
1513	1616		conducts no other activity at such office, and (ii) has designated a 1335
1514	1617		qualified individual or branch manager at such main office or branch 1336
1515	1618		office who is responsible for the actions of the [application] applicant. 1337
1516	1619		No person licensed as a mortgage servicer and granted a waiver by the 1338
1517	1620		commissioner shall engage in any activity that would have precluded 1339
1518	1621		the issuance of such waiver without first designating a qualified 1340
1519	1622		individual or branch manager, as the case may be, who meets all 1341
1520		-	applicable requirements of subdivision (1) of this subsection and is 1342 Substitute Bill No. 1257
1521		-
1522		-
1523		-	LCO 43 of 44
1524		-
	1623	+	applicable requirements of subdivision (1) of this subsection and is 1342
1525	1624		approved by the commissioner. For purposes of this subsection, the 1343
1526	1625		level of offense of the crime and the status of any conviction, pardon or 1344
1527	1626		expungement shall be determined by reference to the law of the 1345
1528	1627		jurisdiction where the case was prosecuted. In the event such 1346
1529	1628		jurisdiction does not use the term "felony", "pardon" or "expungement", 1347
1530	1629		such terms shall include legally equivalent events. For purposes of 1348
1531	1630		subdivision (1) of this subsection, "experience in the mortgage servicing 1349
1532	1631		business" means paid experience in the (I) servicing of mortgage loans, 1350
1533	1632		(II) accounting, receipt and processing of payments on behalf of 1351
1534	1633		mortgagees or creditors, or (III) supervision of such activities, or any 1352
1535	1634		other relevant experience as determined by the commissioner. 1353
1536	1635		This act shall take effect as follows and shall amend the following
1537	1636		sections:
1538	1637
1539	1638		Section 1 October 1, 2025 36a-492(c)
1540	1639		Sec. 2 October 1, 2025 36a-602(c)
1541	1640		Sec. 3 October 1, 2025 36a-664(b)
1542	1641		Sec. 4 October 1, 2025 36a-671d(c)
1543	1642		Sec. 5 October 1, 2025 36a-802(b)
1544	1643		Sec. 6 October 1, 2025 36a-490(b)(2)
1545	1644		Sec. 7 October 1, 2025 36a-598(d)(2)
1546	1645		Sec. 8 October 1, 2025 36a-658(b)
1547	1646		Sec. 9 October 1, 2025 36a-671(i)
	1647	+	Raised Bill No. 1257
	1648	+
	1649	+
	1650	+
	1651	+	LCO No. 4385 45 of 46
	1652	+
1548	1653		Sec. 10 October 1, 2025 36a-719a(b)
1549	1654		Sec. 11 October 1, 2025 36a-801(i)
1550	1655		Sec. 12 October 1, 2025 36a-535(2)
1551	1656		Sec. 13 October 1, 2025 36a-718
1552	1657		Sec. 14 October 1, 2025 36a-719c
1553	1658		Sec. 15 October 1, 2025 36a-850a
1554	1659		Sec. 16 October 1, 2025 36a-51
1555	1660		Sec. 17 October 1, 2025 36a-556(a)
1556	1661		Sec. 18 October 1, 2025 36a-715
1557	1662		Sec. 19 October 1, 2025 36a-846
1558	1663		Sec. 20 October 1, 2025 36a-487(d)
1559	1664		Sec. 21 from passage 36a-868
1560	1665		Sec. 22 July 1, 2025 36a-870(c)
1561	1666		Sec. 23 July 1, 2025 36a-872
1562		-	Sec. 24 October 1, 2025 36a-856(b) to (g) Substitute Bill No. 1257
1563		-
1564		-
1565		-	LCO 44 of 44
1566		-
	1667	+	Sec. 24 October 1, 2025 36a-856(b) to (g)
1567	1668		Sec. 25 October 1, 2025 New section
1568	1669		Sec. 26 October 1, 2025 36a-498e(b)(1)
1569	1670		Sec. 27 October 1, 2025 36a-719h(b)
1570	1671		Sec. 28 October 1, 2025 36a-2(72)
1571	1672		Sec. 29 October 1, 2025 36a-719(a)
1572	1673
1573		-	Statement of Legislative Commissioners:
1574		-	In Sections 13(d)(2)(C), 23(a)(3)(A) and 24(f)(3)(A), "any provision of this
1575		-	title or of any regulation" was changed to "any provision of this title or
1576		-	any regulation" for conciseness; and in Section 24(b)(2), "required fees
1577		-	or charges and" was changed to "required fees or charges" for clarity.
	1674	+	Statement of Purpose:
	1675	+	To: (1) Require cancellations of certain surety bonds to be submitted
	1676	+	electronically; (2) modify procedures regarding changes to the legal
	1677	+	names of certain licensees; (3) redefine "sales finance company"; (4)
	1678	+	establish procedures for registering as an exempt mortgage servicer
	1679	+	registrant; (5) establish requirements regarding private student
	1680	+	education loan cosigner releases; (6) establish enforcement authority
	1681	+	regarding registrants; (7) prohibit receiving fees in connection with
	1682	+	small loans without a license; (8) redefine "mortgage servicer" and
	1683	+	"servicing"; (9) define "private education lender" and "private education
	1684	+	loan creditor"; (10) establish requirements regarding timelines and fees
	1685	+	for certain registrants that are exempt from licensing; (11) modify
	1686	+	various statutes relating to commercial financing; (12) modify
	1687	+	registration and enforcement procedures regarding private education
	1688	+	lenders and private education loan creditors; (13) require certain
	1689	+	disclosures in connection with shared appreciation agreements; (14)
	1690	+	make technical changes to various statutes regarding consumer credit;
	1691	+	and (15) redefine "system".
	1692	+	Raised Bill No. 1257
1578	1693
1579		-	BA Joint Favorable Subst. -LCO
	1694	+
	1695	+
	1696	+	LCO No. 4385 46 of 46
	1697	+
	1698	+
	1699	+	[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except
	1700	+	that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not
	1701	+	underlined.]
1580	1702