Connecticut House Bill HB05490

Connecticut 2018 Regular Session

• Introduced: 3/7/18
• Refer: 3/7/18
• Report Pass: 3/20/18
• Refer: 4/2/18
• Report Pass: 4/9/18
• Engrossed: 5/5/18
• Report Pass: 5/5/18
• Chaptered: 5/30/18
• Enrolled: 6/1/18
• Passed: 6/14/18

Caption

An Act Concerning Consumer Credit Licenses.

Impact

If enacted, HB05490 will reform the existing regulatory framework for consumer credit entities by imposing higher bond amounts based on the volume of loans originated. It also impacts the procedural aspects of licensing, including more comprehensive background checks and monitoring of licensed individuals. These changes are designed to enhance oversight of the industry and protect consumers from inadequate practices by requiring firms to maintain a bond that reflects the scale of their business activities, which serves as financial security for consumers in case of defaults or misconduct.

Summary

House Bill 05490, titled 'An Act Concerning Consumer Credit Licenses,' introduces a series of amendments to existing legislation governing consumer credit, particularly focusing on mortgage lenders and brokers. The bill aims to enhance consumer protection by requiring more stringent bonding and licensing requirements for those engaged in the consumer credit industry. Specifically, it introduces provisions for various financial professionals, establishing rules for the licensing of mortgage lenders, brokers, and loan originators to ensure that they comply with updated regulatory standards to protect consumers from potential fraud or mismanagement.

Sentiment

The sentiment surrounding HB05490 appears to be largely positive among supporters who view these reforms as necessary steps to strengthen consumer protections in the financial sector. Advocates argue that such measures will increase transparency and accountability among lenders and brokers. However, there are concerns from industry stakeholders about the potential burdens imposed on small operators, who may face challenges in meeting the increased financial requirements. This dichotomy illustrates the tension between consumer protection efforts and the operational viability for smaller businesses within the sector.

Contention

Notably, some points of contention within discussions about HB05490 center on the financial implications for smaller mortgage firms and the potential for increased costs to consumers. Opponents of the bill suggest that the increased bonding requirements might lead to higher operational costs, which could ultimately be passed down to consumers in the form of higher fees. Additionally, the burden of stringent compliance measures raises concerns about stifling competition and innovation among smaller lenders, who may struggle to adapt to the new regulatory environment without significant resources.