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repealed and the following is substituted in lieu thereof (Effective October 2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