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General Assembly Substitute Bill No. 1398
January Session, 2025
AN ACT CONCERNING COMMUNITY REINVESTMENT BY BANKS
AND CREDIT UNIONS.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:
Section 1. Subsections (a) to (c), inclusive, of section 36a-30 of the 1
general statutes are repealed and the following is substituted in lieu 2
thereof (Effective October 1, 2025): 3
(a) As used in sections 36a-30 to 36a-33, inclusive, as amended by this 4
act, unless the context otherwise requires: 5
(1) "Bank" means any bank or out-of-state bank that maintains in this 6
state a branch as defined in section 36a-410. "Bank" does not include 7
special purpose banks that do not perform commercial or retail banking 8
services in which credit is granted to the public in the ordinary course 9
of business, other than as an incident to their specialized operations, 10
including, but not limited to, banker's banks and banks that engage only 11
in one or more of the following activities: Providing cash management 12
controlled disbursement services or serving as correspondent banks, 13
trust companies or clearing agents. 14
(2) "Federal CRA" means (A) the federal Community Reinvestment 15
Act of 1977, 12 USC Section 2901 et seq., as from time to time amended, 16
and (B) the regulations implementing said act adopted by the federal 17 Substitute Bill No. 1398
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financial supervisory agencies as set forth in 12 CFR Part 25, 12 CFR Part 18
228, 12 CFR Part 345 and 12 CFR Part 563e, as from time to time 19
amended, and as applicable to the specific type of bank. 20
(3) "Federal financial supervisory agency" means the Office of the 21
Comptroller of the Currency, the Board of Governors of the Federal 22
Reserve System, the Federal Deposit Insurance Corporation, the Office 23
of Thrift Supervision and any successor to any of the foregoing agencies, 24
as applicable to the specific type of bank. 25
(4) "Minority" means an individual whose race is defined as other 26
than white, or whose ethnicity is defined as Hispanic or Latino by the 27
federal Office of Management and Budget for use by the Bureau of 28
Census of the United States Department of Commerce. 29
(5) "Minority-owned business" means any business of which at least 30
fifty-one per cent of the capital stock, if any, or assets is owned by a 31
minority who is active in the daily affairs of the business and has the 32
power to direct the management and policies of the business. 33
(6) "Women-owned business" means any business of which at least 34
fifty-one per cent of the capital stock, if any, or assets is owned by a 35
woman who is active in the daily affairs of the business and has the 36
power to direct the management and policies of the business. 37
(b) The commissioner shall assess the record of each bank in 38
satisfying its continuing and affirmative obligations to help meet the 39
credit needs of its local communities, including low and moderate-40
income neighborhoods, minority-owned businesses and women-owned 41
businesses, consistent with the safe and sound operation of such banks, 42
and shall provide for the consideration of such records in connection 43
with any application listed in subsection (c) of section 36a-32. 44
(c) Each bank shall, in accordance with the provisions of federal CRA 45
and without excluding low and moderate-income neighborhoods, 46
minority-owned businesses or women-owned businesses, delineate the 47
local community or communities that comprise its entire community 48 Substitute Bill No. 1398
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within this state or delineate one or more assessment areas, as 49
applicable, within which the commissioner shall evaluate the bank's 50
record of helping to meet the credit needs of its entire community in this 51
state. The commissioner shall review the delineation for compliance 52
with federal CRA and this subsection in connection with an examination 53
of the bank under section 36a-17. 54
Sec. 2. Subsections (a) and (b) of section 36a-32 of the general statutes 55
are repealed and the following is substituted in lieu thereof (Effective 56
October 1, 2025): 57
(a) In connection with the examination of a bank under section 36a-58
17, the commissioner shall assess the record of the performance of the 59
bank in helping to meet the credit needs of its entire community, 60
including low and moderate-income neighborhoods, minority-owned 61
businesses and women-owned businesses, consistent with the safe and 62
sound operation of the bank. The commissioner shall assess the 63
community reinvestment performance of a bank utilizing the applicable 64
methodology set forth in federal CRA. In addition, the commissioner 65
shall consider the following in assessing a bank's record of performance: 66
(1) The bank's record of offering escrow accounts for purposes of 67
compliance with subsection (h) of section 47a-21; 68
(2) Efforts of the bank to work with delinquent residential mortgage 69
customers who are unemployed or underemployed to facilitate a 70
resolution of the delinquency; and 71
(3) Written comments received by the commissioner. 72
(b) (1) Upon the conclusion of the assessment required under 73
subsection (a) of this section, the commissioner shall prepare a written 74
evaluation of the bank's record of meeting the credit needs of its entire 75
community, including low and moderate-income neighborhoods, 76
minority-owned businesses and women-owned businesses. Each 77
community reinvestment performance evaluation prepared under this 78
subsection shall have a public section and a confidential section. 79 Substitute Bill No. 1398
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(2) The public section of the performance evaluation shall (A) state 80
the commissioner's assessment of the community reinvestment 81
performance of the bank utilizing the applicable methodology set forth 82
in federal CRA, (B) discuss the facts supporting such assessment, and 83
(C) contain the bank's rating and a statement describing the basis for the 84
rating. The rating shall be one of the following: (i) Outstanding record 85
of meeting community credit needs; (ii) satisfactory record of meeting 86
community credit needs; (iii) needs to improve record of meeting 87
community credit needs; or (iv) substantial noncompliance in meeting 88
community credit needs. The commissioner shall furnish a copy of the 89
public portion of the performance evaluation to the bank upon its 90
completion. 91
(3) The confidential section of the performance evaluation shall 92
contain all references that identify any customer of the bank, any 93
employee or officer of the bank, or any person that has provided 94
information in confidence to the commissioner or to any federal 95
financial supervisory agency. The confidential section shall also contain 96
any statements obtained or made by the commissioner in the course of 97
an examination under section 36a-17 which, in the judgment of the 98
commissioner, are too sensitive or speculative in nature to disclose to 99
the bank or the public. The confidential section may be disclosed, in 100
whole or in part, to the bank if the commissioner determines that such 101
disclosure will promote the objectives of sections 36a-30 to 36a-33, 102
inclusive, as amended by this act, provided any such disclosure shall 103
not identify a person that has provided information in confidence to the 104
commissioner or to any federal financial supervisory agency. 105
Sec. 3. Subsections (a) to (c), inclusive, of section 36a-34 of the general 106
statutes are repealed and the following is substituted in lieu thereof 107
(Effective October 1, 2025): 108
(a) As used in subsection (b) of this section: 109
(1) "Eligible entity" means any entity that (A) received a composite 110
rating of one or two under the Uniform Financial Institutions Rating 111 Substitute Bill No. 1398
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System as a result of its most recent safety and soundness examination; 112
(B) received a compliance rating of one or two on its most recent 113
compliance examination; (C) received a satisfactory or better rating on 114
its most recent community reinvestment performance evaluation; (D) is 115
well capitalized, as defined in 12 CFR 324.403(b)(1), as amended from 116
time to time; (E) is not subject to a cease and desist order, consent order, 117
prompt correction action directive, written agreement, memorandum of 118
understanding or other administrative agreement with its primary state 119
or federal banking regulator; and (F) is not subject to any formal or 120
informal administrative action by its primary state or federal banking 121
regulator. 122
(2) "Entity" means the applicant or applicants except, in the case of an 123
approval pursuant to section 36a-411, "entity" means the subsidiaries of 124
the applicant holding company. 125
(3) "Federal CRA" has the same meaning as provided in subsection 126
(a) of section 36a-30, as amended by this act. 127
(4) "Minority" means an individual whose race is defined as other 128
than white, or whose ethnicity is defined as Hispanic or Latino by the 129
federal Office of Management and Budget for use by the Bureau of 130
Census of the United States Department of Commerce. 131
(5) "Minority-owned business" means any business of which at least 132
fifty-one per cent of the capital stock, if any, or assets is owned by a 133
minority who is active in the daily affairs of the business and has the 134
power to direct the management and policies of the business. 135
[(4)] (6) "Resulting entity" means: (A) In the case of an approval 136
pursuant to section 36a-145 and subdivision (2) of subsection (a) of 137
section 36a-412, the applicant; (B) in the case of an approval pursuant to 138
section 36a-125, the resulting Connecticut bank; (C) in the case of an 139
approval pursuant to section 36a-181, the Connecticut bank; (D) in the 140
case of an approval pursuant to section 36a-411, the bank to be acquired 141
or established; and (E) in the case of an approval pursuant to 142
subdivision (1) of subsection (a) of section 36a-412, the bank to be 143 Substitute Bill No. 1398
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acquired or the resulting bank. 144
(7) "Women-owned business" means any business of which at least 145
fifty-one per cent of the capital stock, if any, or assets is owned by a 146
woman who is active in the daily affairs of the business and has the 147
power to direct the management and policies of the business. 148
(b) The commissioner shall not grant any approval under section 36a-149
125, subsections (b), (c) and (d) of section 36a-145, section 36a-181, 150
section 36a-411 or subdivisions (1) and (2) of subsection (a) of section 151
36a-412 unless the commissioner finds, in accordance with regulations 152
adopted pursuant to chapter 54, that (1) based on the most recent 153
applicable performance evaluation and any related information 154
required by the commissioner, the entity has a record of compliance 155
with the requirements of federal CRA, sections 36a-30 to 36a-33, 156
inclusive, as amended by this act, to the extent applicable, and 157
applicable consumer protection laws; and (2) except as otherwise 158
provided in this subsection, if the entity, and in the case of an approval 159
pursuant to section 36a-411, the bank or any subsidiary bank of the 160
Connecticut holding company, received any overall rating other than an 161
assigned rating of "outstanding" on its most recent applicable 162
community reinvestment performance evaluation, the resulting entity 163
will provide adequate services to meet the banking needs of all of the 164
community [residents] of such resulting entity, including low-income 165
residents, [and] moderate-income residents, minority-owned 166
businesses and women-owned businesses to the extent permitted by its 167
charter, in accordance with a plan submitted by the applicant to the 168
commissioner, in such form and containing such information as the 169
commissioner may require, or, if acceptable to the commissioner, in 170
accordance with an approved strategic plan prepared under federal 171
CRA, or the relevant portion thereof, that is submitted by the applicant 172
to the commissioner. Upon receiving any such plan, the commissioner 173
shall make the plan available for public inspection and comment at the 174
Department of Banking and cause notice of its submission and 175
availability for inspection and comment to be published in the 176
department's weekly bulletin. With the concurrence of the 177 Substitute Bill No. 1398
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commissioner, the applicant or applicants shall publish, in the form of a 178
legal advertisement in a newspaper having a substantial circulation in 179
the area, notice of such plan's submission and availability for public 180
inspection and comment. The notice shall state that the inspection and 181
comment period will last for a period of thirty days from the date of 182
publication. The commissioner shall not make such finding until the 183
expiration of such thirty-day period. In making such finding, the 184
commissioner shall, unless clearly inapplicable, consider, among other 185
factors, whether the plan identifies specific unmet credit and consumer 186
banking needs in the local community and specifies how such needs will 187
be satisfied, provides for sufficient distribution of banking services 188
among branches or satellite devices, or both, located in low-income 189
neighborhoods, contains adequate assurances that banking services will 190
be offered on a nondiscriminatory basis and demonstrates a 191
commitment to extend credit for housing, small business, minority-192
owned businesses, women-owned businesses and consumer purposes 193
in low-income neighborhoods. The submission of such plan shall not be 194
required in the case of an approval under subsection (d) of section 36a-195
145, provided, the commissioner may require the filing of such 196
information in lieu of a plan as the commissioner deems appropriate. If 197
the commissioner determines that an applicant is an eligible entity, the 198
commissioner may (A) exempt such applicant from the requirement that 199
such applicant file a plan, or (B) require such information in lieu of a 200
plan as the commissioner deems appropriate. Except with respect to an 201
approval pursuant to section 36a-145 and section 36a-181, the 202
commissioner shall not approve the transaction if the transaction would 203
result in a monopoly, or would be in furtherance of any combination or 204
conspiracy to monopolize or attempt to monopolize the business of 205
banking in this state or if the commissioner determines that the effect of 206
the proposed transaction may be to substantially lessen competition, or 207
would tend to create a monopoly, or would be in restraint of trade, 208
unless the commissioner finds that the anticompetitive effects of the 209
proposed transaction are clearly outweighed in the public interest by 210
the probable effect of the transaction in meeting the convenience and 211
needs of the community to be served. 212 Substitute Bill No. 1398
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(c) The commissioner shall not make a determination stating that the 213
commissioner does not disapprove an offer, invitation, request, 214
agreement or acquisition pursuant to section 36a-185 unless the 215
commissioner finds, in accordance with regulations adopted pursuant 216
to chapter 54, that (1) based on the most recent applicable performance 217
evaluation and any related information required by the commissioner, 218
the acquiring person, if such person is a bank or out-of-state bank, and 219
the acquiring person's subsidiaries, if such person is a holding company, 220
has a record of compliance with the requirements of federal CRA, 221
sections 36a-30 to 36a-33, inclusive, as amended by this act, to the extent 222
applicable, and applicable consumer protection laws; and (2) except as 223
otherwise provided in this subsection, if the bank or any banking 224
subsidiary of the holding company referred to in the acquisition 225
statement received any overall rating other than an assigned rating of 226
"outstanding" on its most recent applicable community reinvestment 227
performance evaluation, such bank or banking subsidiary will provide 228
adequate services to meet the banking needs of all of the community 229
[residents] of such bank or banking subsidiary, including low-income 230
residents, [and] moderate-income residents, minority-owned 231
businesses and women-owned businesses to the extent permitted by its 232
charter or their charters. If the acquiring person is not a natural person, 233
or if the acquiring person is a natural person who would be the 234
beneficial owner of twenty-five per cent or more of any class of voting 235
securities of the bank or holding company referred to in the acquisition 236
statement, the finding as to the adequacy of services to be provided shall 237
be based on a plan submitted by the acquiring person to the 238
commissioner, in such form and containing such information as the 239
commissioner may require, or, if acceptable to the commissioner, in 240
accordance with an approved strategic plan prepared under federal 241
CRA, or the relevant portion thereof, that is submitted by the acquiring 242
person to the commissioner. Upon receiving any such plan, the 243
commissioner shall make the plan available for public inspection and 244
comment at the Department of Banking and cause notice of its 245
submission and availability for inspection and comment to be published 246
in the department's weekly bulletin. With the concurrence of the 247 Substitute Bill No. 1398
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commissioner, the acquiring person shall publish, in the form of a legal 248
advertisement in a newspaper having a substantial circulation in the 249
area, notice of such plan's submission and availability for public 250
inspection and comment. The notice shall state that the inspection and 251
comment period will last for a period of thirty days from the date of 252
publication. The commissioner shall not make such finding until the 253
expiration of such thirty-day period. In making such finding, the 254
commissioner shall consider, among other factors, whether the plan 255
identifies specific unmet credit and consumer banking needs in the local 256
community and specifies how such needs will be satisfied, provides for 257
sufficient distribution of banking services among branches or satellite 258
devices, or both, located in low-income neighborhoods, contains 259
adequate assurances that banking services will be offered on a 260
nondiscriminatory basis and demonstrates a commitment to extend 261
credit for housing, small business, minority-owned businesses, women-262
owned businesses and consumer purposes in low -income 263
neighborhoods. The commissioner may exempt an acquiring person 264
from the requirement that such acquiring person file a plan if the 265
commissioner determines that the bank or banking subsidiary referred 266
to in the acquisition statement is an eligible entity. If the acquiring 267
person is a natural person who would be the beneficial owner of less 268
than twenty-five per cent of all classes of voting securities of the bank or 269
holding company referred to in the acquisition statement, the 270
commissioner shall make the finding as to adequacy of services to be 271
provided based on the commitment of the acquiring person to use the 272
acquiring person's best efforts to cause such bank or banking 273
subsidiaries of such holding company to provide such services. The 274
commissioner shall not make a determination stating that the 275
commissioner does not disapprove such offer, invitation, request, 276
agreement or acquisition if such offer, invitation, request, agreement or 277
acquisition would result in a monopoly, or would be in furtherance of 278
any combination or conspiracy to monopolize or attempt to monopolize 279
the business of banking in this state or if the commissioner should 280
determine that the effect of the proposed offer, invitation, request, 281
agreement or acquisition may be to substantially lessen competition, or 282 Substitute Bill No. 1398
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would tend to create a monopoly, or would be in restraint of trade, 283
unless the commissioner finds that the anticompetitive effects of the 284
proposed transaction are clearly outweighed in the public interest by 285
the probable effect of the transaction in meeting the convenience and 286
needs of the community to be served. 287
Sec. 4. Section 36a-37 of the general statutes is repealed and the 288
following is substituted in lieu thereof (Effective October 1, 2025): 289
As used in sections 36a-37 to 36a-37e, inclusive, as amended by this 290
act: 291
(1) "Assessment area" means one or more of the geographic areas as 292
delineated by a community credit union that (A) consist of one or more 293
metropolitan statistical areas or one or more contiguous political 294
subdivisions, including, but not limited to, counties, cities or towns, (B) 295
include geographies in which the community credit union has its 296
principal office, subsidiary offices and share-taking automated teller 297
machines, and (C) include the surrounding geographies in which the 298
community credit union originates or purchases a substantial portion of 299
its loans. 300
(2) "Community credit union" means a Connecticut credit union that 301
has ten million dollars or more in total assets and the membership of 302
which is limited to persons within a well-defined community, 303
neighborhood or rural district as provided in subsection (a) of section 304
36a-438a. 305
(3) "Community reinvestment performance" means the performance 306
of a community credit union in helping to meet the credit needs of its 307
entire community, including low-income and moderate-income 308
neighborhoods, minority-owned businesses and women-owned 309
businesses. 310
(4) "Minority" means an individual whose race is defined as other 311
than white, or whose ethnicity is defined as Hispanic or Latino by the 312
federal Office of Management and Budget for use by the Bureau of 313 Substitute Bill No. 1398
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Census of the United States Department of Commerce. 314
(5) "Minority-owned business" means any business of which at least 315
fifty-one per cent of the capital stock, if any, or assets is owned by a 316
minority who is active in the daily affairs of the business and has the 317
power to direct the management and policies of the business. 318
(6) "Women-owned business" means any business of which at least 319
fifty-one per cent of the capital stock, if any, or assets is owned by a 320
woman who is active in the daily affairs of the business and has the 321
power to direct the management and policies of the business. 322
Sec. 5. Subsections (a) to (c), inclusive, of section 36a-37a of the 323
general statutes are repealed and the following is substituted in lieu 324
thereof (Effective October 1, 2025): 325
(a) Each community credit union shall satisfy its continuing and 326
affirmative obligation to help meet the credit needs of its community, 327
including low-income and moderate-income neighborhoods, minority-328
owned businesses and women-owned businesses, consistent with the 329
safe and sound operation of such community credit union. 330
(b) Not later than six months following July 1, 2001, each community 331
credit union shall delineate one or more assessment areas within which 332
the commissioner shall evaluate the community credit union's 333
community reinvestment performance in this state and shall file such 334
delineations with the commissioner. An assessment area shall consist 335
only of whole geographies, and may not (1) reflect illegal 336
discrimination, (2) arbitrarily exclude low-income or moderate-income 337
geographies, or (3) extend substantially beyond a consolidated 338
metropolitan statistical area boundary or beyond a state boundary, 339
unless the assessment area is located in a multistate metropolitan 340
statistical area. A community credit union may adjust the boundaries of 341
its assessment areas to include only the portion of a political subdivision 342
that it reasonably can be expected to serve. A community credit union 343
shall immediately file an amendment with the commissioner reflecting 344
an adjustment of the boundaries of an assessment area. 345 Substitute Bill No. 1398
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(c) The commissioner shall assess periodically the community 346
reinvestment performance of a community credit union consistent with 347
the safe and sound operation of the community credit union. The 348
commissioner shall assess the community reinvestment performance of 349
such community credit union based on: (1) The community credit 350
union's record of helping to meet the credit needs of its assessment area 351
or areas through qualified investments that benefit its assessment area 352
or areas or a broader state-wide or regional area that includes its 353
assessment area or areas; (2) the community credit union's record of 354
helping to meet the credit needs of its assessment area or areas, by 355
analyzing both the availability and effectiveness of its systems for 356
delivering retail credit union services and the extent and innovativeness 357
of its community development services; (3) loan-to-share ratio given the 358
community credit union's size and financial condition, credit needs of 359
the assessment area or areas, other lending-related activities, 360
considering seasonal variations, as used in 12 CFR 228.26; (4) percentage 361
of total loans and other lending-related activities within the assessment 362
area or areas; (5) record of lending and other lending-related activities 363
to borrowers of different income levels, minority-owned businesses, 364
women-owned businesses and businesses and farms of different sizes; 365
(6) geographic distribution of loans; (7) action taken in response to 366
written complaints with respect to community reinvestment 367
performance; (8) efforts of the community credit union to work with 368
delinquent residential mortgage customers who are unemployed or 369
underemployed to facilitate a resolution of the delinquency; and (9) 370
written comments received by the commissioner. 371
This act shall take effect as follows and shall amend the following
sections:
Section 1 October 1, 2025 36a-30(a) to (c)
Sec. 2 October 1, 2025 36a-32(a) and (b)
Sec. 3 October 1, 2025 36a-34(a) to (c)
Sec. 4 October 1, 2025 36a-37
Sec. 5 October 1, 2025 36a-37a(a) to (c)
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Statement of Legislative Commissioners:
In Sections 1(a)(5), 3(a)(5) and 4(5), the definition of "minority-owned
business" was redrafted for clarity; in Sections 1(a)(6), 3(a)(7) and 4(6),
the definition of "women-owned business" was redrafted for clarity; in
Sections 1(b) and (c), 2(a) and (b)(1), 3(b)(2) and (c)(2), 4(3) and 5(a) and
(c)(5), provisions concerning minority-owned businesses and women-
owned businesses were rewritten for clarity and internal consistency.
BA Joint Favorable Subst.