Chapter 669 - Regulated Activities

(2) “Claimant” means an entity that has, or purports to have, a claim against a debtor arising from coerced debt or allegedly coerced debt, and includes a consumer collection agency, as defined in section 36a-800, to collect said debt, or such entity's successor or assignee;

(3) “Coerced debt” means any debt incurred in the name of a debtor who is a victim of domestic violence, as defined in subsection (b) of section 46b-1, when such debt was incurred in response to any duress, intimidation, threat of force, force or undue influence used to specifically coerce the debtor into incurring such debt;

(4) “Collection activities” means any activity of a claimant to collect or to attempt to collect a debt owed, due or asserted to be owed or due, including, but not limited to, commencing or proceeding with an action in a court of competent jurisdiction;

(5) “Credit rating agency” has the same meaning as provided in section 36a-695;

(6) “Debt” means an unsecured credit card debt, or any portion of an unsecured credit card debt, incurred on or after January 1, 2025, for personal, family or household use that was not (A) subject to a final judgment in an action for dissolution of marriage or collection matter which occurred prior to the time when a debtor requests that the claimant waive such debt; or (B) incurred more than ten years prior to the date of the request;

(7) “Debtor” means an individual against whom a claimant asserts a claim arising from coerced debt or allegedly coerced debt;

(8) “Immediate family member” has the same meaning as provided in section 36a-485;

(9) “Negative information” has the same meaning as provided in 15 USC 1681s-2, as amended from time to time;

(10) “Qualified third-party professional” means a domestic violence counselor or sexual assault counselor, as those terms are defined in section 52-146k, a psychiatrist licensed under chapter 370, a psychologist licensed under chapter 383, a clinical social worker licensed under chapter 383b, a marital and family therapist licensed under chapter 383a and a professional counselor licensed under chapter 383c; and

(11) “Requests that the claimant waive such debt” means a request that a claimant waive, forgive, excuse, write off or not collect a debt or portion of a debt.

(P.A. 24-77, S. 1; P.A. 25-91, S. 25.)

History: P.A. 24-77 effective January 1, 2025; P.A. 25-91 made technical changes in Subdiv. (6), effective June 24, 2025.

(Return to Chapter
Table of Contents)

(Return to
List of Chapters)

(Return to
List of Titles)

PART II

DEBT ADJUSTERS AND DEBT NEGOTIATION

Sec. 36a-658. (Formerly Sec. 36-370). License required. Change in control persons, name or place of business. Use of name. Automatic suspension of license. Surrender of license. Required system filing or notice to commissioner. Unique identifier of license. Advertising of license. (a) Each license shall state the location at which the business is to be conducted and shall state fully the name of the licensee. If the licensee desires to engage in the business of debt adjustment in more than one location, the licensee shall procure a license for each location where the business is to be conducted. A license issued under section 36a-656 shall not be transferable or assignable. Any change in any control person of the licensee, except a change of a director, general partner or executive officer that is not the result of an acquisition or change of control of the licensee, shall be the subject of an advance change notice filed on the system at least thirty days prior to the effective date of such change and no such change shall occur without the commissioner's approval. For purposes of this section, “change of control” means any change causing the majority ownership, voting rights or control of a licensee to be held by a different control person or group of control persons.

(b) No licensee shall use any name or address other than the name and address stated on the license issued by the commissioner. No licensee may use any name other than its legal name or a fictitious name approved by the commissioner, provided such licensee may not use its legal name if the commissioner disapproves use of such name. A licensee may change the name of the licensee or address of the office specified on the most recent filing with the system if (1) at least thirty calendar days prior to such change, the licensee files such change with the system and, in the case of a change to the legal name of the licensee, provides to the commissioner a bond rider to the surety bond on file with the commissioner that reflects the new legal name of the licensee, and (2) the commissioner does not disapprove such change, in writing, or request further information from the licensee within such thirty-day period.

(c) The commissioner may automatically suspend any license for a violation of subsection (a) or (b) of this section. After a license has been automatically suspended pursuant to this subsection, the commissioner shall (1) give the licensee notice of such automatic suspension pending proceedings for revocation of or refusal to renew the license pursuant to section 36a-657 and an opportunity for a hearing in accordance with section 36a-51, and (2) require the licensee to take or refrain from taking action as the commissioner deems necessary to effectuate the purpose of this section.

(d) Not later than fifteen days after the date a licensee ceases to engage in this state in the business of debt adjustment for any reason, including a business decision to terminate operations in this state, license revocation, bankruptcy or voluntary dissolution, such licensee shall surrender to the commissioner its license for each location in which such licensee has ceased to engage in such business in accordance with subsection (c) of section 36a-51.

(e) Except as otherwise specified in subsections (a) and (b) of this section, each debt adjuster applicant or licensee, and each control person, qualified individual or branch manager of such applicant or licensee shall file on the system or, if the information cannot be filed on the system, notify the commissioner, in writing, of any change in the information such applicant, licensee, control person, qualified individual or branch manager most recently submitted to the system in connection with the application or license not later than fifteen days after the date such applicant, licensee, control person, qualified individual or branch manager had reason to know of the change.

(f) A debt adjuster licensee shall file on the system or, if the information cannot be filed on the system, notify the commissioner, in writing, of the occurrence of any of the following developments not later than fifteen days after the date the licensee had reason to know of the occurrence of any of the following developments:

(1) Filing for bankruptcy or the consummation of a corporate restructuring of the licensee;

(2) Filing of a criminal indictment against the licensee in any way related to the debt adjuster activities of the licensee, or receiving notification of the filing of any criminal felony indictment or felony conviction of any control person, branch manager or qualified individual of the licensee;

(3) Receiving notification of the institution of license denial, cease and desist, suspension or revocation procedures, or other formal or informal action by any governmental agency against the licensee or any control person, branch manager or qualified individual of the licensee and the reasons therefor;

(4) Receiving notification of the initiation of any action against the licensee or any control person, branch manager or qualified individual of the licensee by the Attorney General or the attorney general of any other state and the reasons therefor; or

(5) Receiving notification of filing for bankruptcy of any control person, branch manager or qualified individual of the licensee.

(g) Any person filing or submitting any information on the system shall do so in accordance with the procedures and requirements of the system and shall pay the applicable fees or charges to the system. Each debt adjuster licensee, to the extent required by the system, shall timely submit to the system accurate reports of condition that shall be in such form and shall contain such information as the system may require. Failure by a licensee to submit a timely and accurate report of condition shall constitute a violation of this provision.

(h) The unique identifier of any person licensed under section 36a-656 shall be clearly shown on all solicitations and advertisements, including business cards and Internet web sites, and any other documents as established by rule, regulation or order of the commissioner, and shall be clearly stated in all audio solicitations and advertisements. The solicitations or advertisements of any person licensed under section 36a-656: (1) Shall not include any statement that such person is endorsed in any way by this state, except that such solicitations and advertisements may include a statement that such person is licensed in this state; (2) shall not include any statement or claim that is deceptive, false or misleading; (3) shall otherwise conform to the requirements of sections 36a-655 to 36a-665, inclusive, any regulations issued thereunder and any other applicable law; and (4) shall be retained for two years from the date of use of such solicitation or advertisement.

(1967, P.A. 882, S. 7; P.A. 79-160, S. 4; P.A. 02-111, S. 43; P.A. 08-119, S. 14; P.A. 18-173, S. 65; P.A. 21-138, S. 12; P.A. 25-115, S. 8.)

History: P.A. 79-160 rephrased prior provisions, authorized conduct of business which does not conflict with interests of clients or business of debt adjustment and deleted provision prohibiting change in office location unless authorized by commissioner; Sec. 36-370 transferred to Sec. 36a-658 in 1995; P.A. 02-111 replaced former provisions with provisions re license to specify location at which business is conducted and name of licensee, procurement of license for each business location, license maintenance and availability for public inspection, license not transferable or assignable and licensee's use of stated name; P.A. 08-119 added requirement for surrender of license when licensee ceases to engage in the business of debt adjustment; P.A. 18-173 designated existing provisions re license requirements as Subsec. (a) and amended same by deleting provision re license to be made available for public inspection, adding reference to Sec. 36a-656, deleting provision re prior written notice to commissioner to change location of licensee, adding provision re filing of advance change notice on the system, designated existing provision prohibiting use of any name other than name stated on license as Subsec. (b) and amended same by adding provisions re use of name or address of licensee and requirements to change the same, added Subsec. (c) re commissioner's authority to automatically suspend a license, designated existing provisions re surrender of license as Subsec. (d) and amended same by deleting “in person or by registered or certified mail” and adding reference to Sec. 36a-51(c), added Subsec. (e) requiring system filing or notification to commissioner of change in information most recently submitted to the system in connection with application or license, added Subsec. (f) requiring system filing or notification of commissioner of certain developments, added Subsec. (g) re submission of timely and accurate report on system, added Subsec. (h) re unique identifier of licensee and solicitation or advertisements by licensee, and made technical and conforming changes; P.A. 21-138 defined “change of control” in Subsec. (a); P.A. 25-115 amended Subsec. (b)(1) to delete “, in the case of a change to the legal name of the licensee,” and replace “, endorsement or addendum, as applicable;” with “to the surety bond on file with the commissioner that reflects the new legal name of the licensee,”.

(Return to Chapter
Table of Contents)

(Return to
List of Chapters)

(Return to
List of Titles)

Sec. 36a-664. (Formerly Sec. 36-380). Surety bond required. Form of surety bond. Cancellation of bond. Notice. Automatic suspension of license. Notice. Opportunity for hearing. (a)(1) Except as provided in subdivision (2) of this subsection, no such license, and no renewal thereof, shall be granted unless the applicant has filed a surety bond with the commissioner written by a surety authorized to write such bonds in this state, provided any applicant that files applications for licenses for more than one location shall file a single bond. Except as provided in this subdivision, for every applicant, the principal amount of the bond shall be the greater of (A) forty thousand dollars, or (B) (i) twice the amount of the average daily balance of the payments received by the applicant from Connecticut debtors in connection with the applicant's debt adjustment activity during the preceding twelve months ending June thirtieth of each year, or (ii) in the case of an applicant that has acquired the business of a predecessor debt adjuster, the lesser of the amount of the predecessor's debt adjustment activity during such preceding period or one million dollars. The commissioner may require a larger bond if the commissioner determines that a licensee has engaged in a pattern of conduct resulting in bona fide consumer complaints of misconduct and that such increased bond is necessary for the protection of consumers, or may increase or decrease the amount of the bond based upon the applicant's or licensee's financial condition, business plan and the actual or estimated aggregate amount of payments and fees paid by Connecticut debtors to such applicant. To the extent not captured on a required report of condition on the system, each licensee shall submit to the commissioner, by September first of each year, in a form and manner as may be prescribed by the commissioner, a report containing information on the average daily balance of the payments received by the licensee from Connecticut debtors during the preceding twelve months ending June thirtieth of each such year.

(2) If a licensee or applicant for renewal of a license establishes that such licensee or applicant is unable to comply with the bond required by subdivision (1) of this subsection, it shall file a bond for the highest principal amount it can obtain, provided such amount shall be a minimum of forty thousand dollars, and the licensee or applicant for renewal shall, in lieu of the balance of the required amount of the bond, deposit a sum equal to the amount of the bond required by subdivision (1) of this subsection, less the amount of the bond filed with the commissioner, in cash or cash equivalents, with such bank, out-of-state bank that has a branch in this state, Connecticut credit union or federal credit union as such applicant or licensee may designate and the commissioner may approve, and subject to such conditions as the commissioner deems necessary for the protection of consumers and in the public interest. No licensee or applicant shall make such deposit until the depository institution and the licensee or applicant executes a deposit agreement satisfactory to the commissioner. The deposit agreement shall pledge the amount deposited to the commissioner and provide that the depository institution shall not release any of the moneys pledged without the authorization of the commissioner. The amount deposited shall secure the same obligation as would a surety bond filed under this section and shall be held at such banks or credit unions to cover claims during the period the license remains in full force and effect and the succeeding two years after such license has been surrendered, revoked or suspended or has expired. The licensee or applicant may collect interest on such deposit in accordance with its deposit agreement. The deposits made pursuant to this section shall be deemed, by operation of law, to be held in trust for the benefit of any debtor, who may be damaged by failure of a licensee or applicant to perform any written agreements or by the wrongful conversion of funds paid to a licensee in the event of the bankruptcy of the licensee, and shall be immune from attachment by creditors or judgment creditors.

(3) The form of any surety bond submitted pursuant to this section shall be approved by the Attorney General. Any surety bond filed under this section shall be conditioned upon the licensee faithfully performing any and all written agreements with debtors, truly and faithfully accounting for all funds received by the licensee in the licensee's capacity as a debt adjuster, and conducting such business consistent with the provisions of sections 36a-655 to 36a-665, inclusive. Any debtor who may be damaged by failure to perform any written agreements, or by the wrongful conversion of funds paid to a licensee, may proceed on any such surety bond against the principal or surety thereon, or both, to recover damages. The commissioner may proceed on any such surety bond against the principal or surety thereon, or both, to collect any civil penalty imposed upon the licensee pursuant to subsection (a) of section 36a-50. On and after April 1, 2019, the commissioner may also proceed on any restitution imposed pursuant to subsection (c) of section 36a-50, and any unpaid costs of examination of a license as determined pursuant to section 36a-65. The proceeds of any bond, even if commingled with other assets of the licensee, shall be deemed by operation of law to be held in trust for the benefit of such claimants against the licensee in the event of bankruptcy of the licensee and shall be immune from attachment by creditors and judgment creditors. Any bond required by this section shall be maintained during the entire period of the license granted to the applicant, and the aggregate liability under any such bond shall not exceed the principal amount of the bond or the limit of liability.

(b) The surety shall have the right to cancel any bond filed under subsection (a) of this section at any time by a written notice to the licensee and the commissioner, stating the date cancellation shall take effect. Such written notice of cancellation shall be provided by the surety to the principal and the commissioner through the system at least thirty days prior to the date of cancellation. No such bond shall be cancelled unless the surety notifies the commissioner in writing not less than thirty days prior to the effective date of cancellation. After receipt of such notification from the surety, the commissioner shall give written notice to the licensee of the date such bond cancellation shall take effect. The commissioner shall automatically suspend the license on such date, unless prior to such date the licensee submits a letter of reinstatement of the bond from the surety or a new bond or the licensee has surrendered the license. After a license has been automatically suspended, the commissioner shall (1) give the licensee notice of the automatic suspension pending proceedings for revocation or refusal to renew and an opportunity for a hearing on such actions in accordance with section 36a-51, and (2) require the licensee to take or refrain from taking such action as the commissioner deems necessary to effectuate the purposes of this section.

(c) No licensee shall use, attempt to use or make reference to, either directly or indirectly, any word or phrase which states or implies that the licensee is endorsed, sponsored, recommended or bonded by the state.

(1967, P.A. 882, S. 17; P.A. 94-122, S. 302, 340; P.A. 02-111, S. 45; P.A. 04-69, S. 25; P.A. 06-35, S. 10; P.A. 09-23, S. 1; P.A. 09-208, S. 28; P.A. 11-216, S. 39; P.A. 18-173, S. 66; P.A. 25-115, S. 3.)

History: P.A. 94-122 changed “he” to “the licensee”, effective January 1, 1995; Sec. 36-380 transferred to Sec. 36a-664 in 1995; P.A. 02-111 added new Subsec. (a) re surety bond, designated existing provisions as Subsec. (b) and, in said Subsec., changed “bonded, approved, bonded by the state or approved by the state” to “endorsed, sponsored, recommended or bonded by the state”; P.A. 04-69 amended Subsec. (a) by designating existing provisions as Subdiv. (1) and amending same to add exception for provisions of Subdiv. (2) and reference to “surety” bond, to delete provision re approval of form by Attorney General, to replace “July thirty-first” with “March thirty-first” and provision re submission of bond or renewal thereof with provision re submission of evidence that bond complies with subdivision, to delete former requirements for bond and proceeding thereon and to make technical changes, and by adding Subdiv. (2) re supplemental bond or insurance policy and Subdiv. (3) re requirements for bond or insurance policy and proceeding thereon, added new Subsec. (b) re cancellation of bond or insurance policy and automatic suspension of license, redesignated existing Subsec. (b) as Subsec. (c) and amended same by adding “or insured”; P.A. 06-35 amended Subsec. (a)(1)(B) to substitute July thirty-first for March thirty-first of each year as date marking end of 12-month period, effective May 8, 2006; P.A. 09-23 amended Subsec. (a)(1)(B) by designating existing provision as Subsec. (a)(1)(B)(i) and replacing “highest total payments” with “average daily balance of the payments” therein, by adding Subpara. (B)(ii) re applicants that acquired business of a predecessor debt adjuster and providing that commissioner may require larger bond upon certain findings and may increase or decrease amount of bond, and by replacing requirement that licensees submit evidence that bond complies with subdivision with requirement that licensees submit annual report containing the average daily balance of payments received from Connecticut debtors, amended Subsec. (a)(2) by adding provision re depositing cash or cash equivalents with certain depository institutions and making conforming changes, and amended Subsecs. (a)(3), (b) and (c) by removing provisions re insurance policies, effective July 1, 2009; P.A. 09-208 amended Subsec. (b) by requiring commissioner to provide written notice to licensee of date a bond or insurance policy cancellation shall take effect, by providing that commissioner shall automatically suspend a license unless licensee submits letter of reinstatement prior to date on which license suspension takes effect, authorizing commissioner to require licensee to take or refrain from taking certain actions, and by making technical changes, effective July 7, 2009; P.A. 11-216 amended Subsec. (b) to delete references to insurance company and insurance policy, effective July 1, 2011; P.A. 18-173 amended Subsec. (a)(1) by replacing “July thirty-first” with “June thirtieth”, adding “To the extent not captured on a required report of condition on the system,”, adding “in a form and manner as may be prescribed by the commissioner,”, deleting provision re report to be subscribed and affirmed as true and in form prescribed by commissioner, amended Subsec. (a)(3) by adding provision re commissioner's authority to proceed on restitution imposed pursuant to Sec. 36a-50(c) and certain unpaid costs, amended Subsec. (b) by adding provision re written notice to commissioner for cancellation of bond, adding provisions re cancellation of bond issued electronically on the system, designating existing provisions re notice of automatic suspension as Subdiv. (1), designating existing provision re requiring licensee to take or refrain from taking action as Subdiv. (2), and amending same by replacing “action as in the opinion of the commissioner will effectuate the purposes of this section” with “action as the commissioner deems necessary to effectuate the purposes of this section”, and made technical and conforming changes; P.A. 25-115 amended Subsec. (b) to replace “If such bond is issued electronically on the system,” with “Such”, replace “cancellation may be provided” with “cancellation shall be provided” and delete provision re requirement that any notice of cancellation not provided through the system be sent by certified mail.

(Return to Chapter
Table of Contents)

(Return to
List of Chapters)

(Return to
List of Titles)

(1) “Advertise” or “advertising” has the same meaning as provided in section 36a-485.

(2) “Branch office” means a location other than the main office at which a licensee or any person on behalf of a licensee engages or offers to engage in debt negotiation.

(3) “Control person” has the same meaning as provided in section 36a-485.

(4) “Debt negotiation” means, for or with the expectation of a fee, commission or other valuable consideration, assisting a debtor in negotiating or attempting to negotiate on behalf of a debtor the terms of a debtor's obligations with one or more mortgagees or creditors of the debtor, including the negotiation of short sales of residential property or foreclosure rescue services.

(5) “Debtor” means any individual who has incurred indebtedness or owes a debt for personal, family or household purposes.

(6) “Foreclosure rescue services” means services related to or promising assistance in connection with (A) avoiding or delaying actual or anticipated foreclosure proceedings concerning residential property, or (B) curing or otherwise addressing a default or failure to timely pay with respect to a mortgage loan secured by residential property, and includes, but is not limited to, the offer, arrangement or placement of a mortgage loan secured by residential property or other extension of credit when those services are advertised, offered or promoted in the context of foreclosure related services.

(7) “Main office” has the same meaning as provided in section 36a-485.

(8) “Mortgagee” means the original lender under a mortgage loan secured by residential property or its agents, successors or assigns.

(9) “Mortgagor” means a debtor who is an owner of residential property, including, but not limited to, a single-family unit in a common interest community, who is also the borrower under a mortgage encumbering such residential property.

(10) “Residential property” means a one-to-four family owner-occupied real property.

(11) “Short sale” means the sale of residential property by a mortgagor for an amount less than the outstanding balance owed on the loan secured by such property where, prior to the sale, the mortgagee or an assignee of the mortgagee agrees to accept less than the outstanding loan balance in full or partial satisfaction of the mortgage debt and the proceeds of the sale are paid to the mortgagee or an assignee of the mortgagee.

(12) “Unique identifier” has the same meaning as provided in section 36a-485.

(b) No person shall engage or offer to engage in debt negotiation in this state unless such person has first obtained a license for its main office and for each branch office where such business is conducted in accordance with the provisions of sections 36a-671 to 36a-671f, inclusive. Any activity subject to licensure pursuant to sections 36a-671 to 36a-671f, inclusive, shall be conducted from an office located in a state, as defined in section 36a-2. A person is engaging in debt negotiation in this state if such person: (1) Has a place of business located within this state; (2) has a place of business located outside of this state and the debtor is a resident of this state who negotiates or agrees to the terms of the services in person, by mail, by telephone or via the Internet; or (3) has its place of business located outside of this state and the services concern a debt that is secured by property located within this state.

(c) An application for an original or renewal debt negotiation license shall be made and processed on the system pursuant to section 36a-24b, in the form prescribed by the commissioner. Each such form shall contain content as set forth by instruction or procedure of the commissioner and may be changed or updated as necessary by the commissioner in order to carry out the purposes of sections 36a-671 to 36a-671f, inclusive. The applicant shall, at a minimum, furnish to the system information concerning the identity of the applicant, any control person of the applicant, the qualified individual and any branch manager responsible for the actions of the applicant, including, but not limited to, information related to such person's personal history and experience, and any administrative, civil or criminal findings by any governmental jurisdiction. As part of the application, the commissioner may (1) in accordance with section 29-17a, conduct a state or national criminal history records check of the applicant, any control person of the applicant, the qualified individual or any branch manager, and (2) in accordance with section 36a-24b (A) require the submission of fingerprints of the applicant, any control person of the applicant, the qualified individual or any branch manager to the Federal Bureau of Investigation or other state, national or international criminal databases, and (B) investigate the financial condition of any such person and require authorization from any such person for the system and the commissioner to obtain an independent credit report from a consumer reporting agency, as described in Section 603(p) of the Fair Credit Reporting Act, 15 USC 1681a, as amended from time to time. The commissioner may deem an application for a debt negotiation license abandoned if the applicant fails to respond to any request for information required under sections 36a-671 to 36a-671f, inclusive, or any regulations adopted pursuant to said sections 36a-671 to 36a-671f, inclusive. The commissioner shall notify the applicant on the system that if the applicant fails to submit such information not later than sixty days after the date on which such request for information was made, the application shall be deemed abandoned. An application filing fee paid prior to the date an application is deemed abandoned pursuant to this subsection shall not be refunded. Abandonment of an application pursuant to this subsection shall not preclude the applicant from submitting a new application for a license under sections 36a-671 to 36a-671f, inclusive.

(d) (1) If the commissioner finds, upon the filing of an application for a debt negotiation license, that: (A) The financial responsibility, character, reputation, integrity and general fitness of the applicant and any control person, qualified individual and branch manager of the applicant are such as to warrant belief that the business will be operated soundly and efficiently, in the public interest and consistent with the purposes of sections 36a-671 to 36a-671f, inclusive; (B) the applicant is solvent and no proceeding in bankruptcy, receivership or assignment for the benefit of creditors has been commenced against the applicant; and (C) the applicant has the bond required by section 36a-671d, the commissioner may thereupon issue the applicant a debt negotiation license. If the commissioner fails to make such findings, the commissioner shall not issue a license and shall notify the applicant of the reasons for such denial. The commissioner may deny an application if the commissioner finds that the applicant or any control person, qualified individual or branch manager of the applicant has been convicted of any misdemeanor involving any aspect of the debt negotiation business or any felony or has made a material misstatement in the application. Any denial of an application by the commissioner shall, when applicable, be subject to the provisions of section 46a-80.

(2) The minimum standards for renewal of a debt negotiation license shall include the following: (A) The applicant continues to meet the minimum standards for license issuance under subdivision (1) of this subsection; (B) the applicant has paid all required fees for renewal of the license; and (C) the applicant has paid any outstanding examination fees or other moneys due to the commissioner. The license of a debt negotiator failing to satisfy the minimum standards for license renewal shall expire. The commissioner may adopt procedures for the reinstatement of expired licenses consistent with the standards established by the system.

(e) Each applicant for a debt negotiation license shall pay to the system any required fees or charges and a license fee of eight hundred dollars. Each such license shall expire at the close of business on December thirty-first of the year in which the license was approved, unless such license is renewed, except that any such license approved on or after November first shall expire at the close of business on December thirty-first of the year following the year in which it is approved. An application for renewal of a license shall be filed between November first and December thirty-first of the year in which the license expires. Each applicant for renewal of a debt negotiation license shall pay to the system any required fees or charges and a renewal fee of eight hundred dollars.

(f) The commissioner may automatically suspend a license if the licensee receives a deficiency on the system indicating that a required payment was Returned-ACH or returned pursuant to such other term as may be utilized by the system to indicate that the payment was not accepted. After a license has been automatically suspended pursuant to this section, the commissioner shall (1) give the licensee notice of the automatic suspension, pending proceedings for revocation or refusal to renew pursuant to section 36a-671a and an opportunity for a hearing on such action in accordance with section 36a-51, and (2) require such licensee to take or refrain from taking such action as the commissioner deems necessary to effectuate the purposes of this section.

(g) No abatement of the license fee shall be made if the application is denied or withdrawn prior to issuance of the license or if the license is surrendered, revoked or suspended prior to the expiration of the period for which it was issued. All fees required by subsection (e) of this section shall be nonrefundable.

(h) The license shall not be transferable or assignable. Any change in any control person of the licensee, except a change of a director, general partner or executive officer that is not the result of an acquisition or change of control of the licensee, shall be the subject of an advance change notice filed on the system at least thirty days prior to the effective date of such change and no such change shall occur without the commissioner's approval. For purposes of this section, “change of control” means any change causing the majority ownership, voting rights or control of a licensee to be held by a different control person or group of control persons.

(i) No licensee may use any name other than its legal name or a fictitious name approved by the commissioner, provided such licensee may not use its legal name if the commissioner disapproves use of such name. No licensee shall use any name or address other than the name and address specified on the license issued by the commissioner. A licensee may change the name of the licensee or the address of the office specified on the most recent filing with the system if (1) at least thirty calendar days prior to such change, the licensee files such change with the system and, in the case of a change to the legal name of the licensee, provides to the commissioner a bond rider to the surety bond on file with the commissioner that reflects the new legal name of the licensee, and (2) the commissioner does not disapprove such change, in writing, or request further information within such thirty-day period.

(j) The commissioner may automatically suspend any license for a violation of subsection (h) or (i) of this section. After a license has been automatically suspended pursuant to this subsection, the commissioner shall (1) give the licensee notice of the automatic suspension, pending proceedings for revocation of or refusal to renew the license pursuant to section 36a-671a and an opportunity for a hearing in accordance with section 36a-51, and (2) require the licensee to take or refrain from taking action as the commissioner deems necessary to effectuate the purpose of this section.

(k) Not later than fifteen days after the date a licensee ceases to engage in the business of debt negotiation in this state for any reason, including, but not limited to, a business decision to terminate operations in this state, bankruptcy or voluntary dissolution, such licensee shall surrender to the commissioner its license for each location in which such licensee has ceased to engage in such business in accordance with subsection (c) of section 36a-51.

(l) Except as otherwise specified in subsections (h) and (i) of this section, each debt negotiation applicant or licensee, and each individual designated as a control person, qualified individual or branch manager of such applicant or licensee, shall file on the system any change in the information most recently submitted to the system by such applicant, licensee, control person, qualified individual or branch manager in connection with the application or license, or, if the information cannot be filed on the system, notify the commissioner of such change, in writing, not later than fifteen days from the date such applicant, licensee, control person, qualified individual or branch manager had reason to know of the change. A debt negotiation licensee shall file with the system or, if the information cannot be filed on the system, notify the commissioner, in writing, not later than fifteen days after the date the licensee had reason to know of the occurrence of any of the following events:

(1) Filing for bankruptcy or the consummation of a corporate restructuring of the licensee;

(2) Filing of a criminal indictment against the licensee for activities related to debt negotiation, or receiving notification of the filing of any criminal felony indictment or felony conviction of any control person, branch manager or qualified individual of the licensee;

(3) Receiving notification of the institution of license denial, cease and desist, suspension or revocation procedures, or other formal or informal regulatory action by any governmental agency against the licensee or any control person, branch manager or qualified individual of the licensee and the reasons therefor;

(5) Receiving notification of filing for bankruptcy of any control person, branch manager or qualified individual of the licensee.

(m) Any person making any filing or submission of any information on the system shall do so in accordance with the procedures and requirements of the system and pay the applicable fees or charges to the system. Each debt negotiation licensee shall, to the extent required by the system, timely submit to the system accurate reports of condition that shall be in such form and shall contain such information as the system may require. Failure by a licensee to submit a timely and accurate report of condition shall constitute a violation of this provision.

(n) The unique identifier of any person licensed under section 36a-671 shall be clearly shown on all solicitations and advertisements, including business cards and Internet web sites, and any other documents as established by rule, regulation or order of the commissioner, and shall be clearly stated in all audio solicitations and advertisements. The solicitations and advertisements of any person licensed under section 36a-671: (1) Shall not include any statement that such person is endorsed in any way by this state, except that such solicitations and advertisements may include a statement that such person is licensed in this state; (2) shall not include any statement or claim that is deceptive, false or misleading; (3) shall otherwise conform to the requirements of sections 36a-671 to 36a-671f, inclusive, any regulations issued thereunder and any other applicable law; and (4) shall be retained for two years from the date of use of such solicitation or advertisement.

(P.A. 09-208, S. 29; 09-209, S. 41; P.A. 11-216, S. 40; P.A. 14-7, S. 9; P.A. 17-233, S. 24; P.A. 18-173, S. 67; P.A. 21-138, S. 13; P.A. 25-115, S. 9.)

History: P.A. 09-209 redefined “mortgagor” in Subsec. (a)(4) and made a technical change in Subsec. (b)(3); P.A. 11-216 amended Subsec. (b) to delete references to contract and eliminate requirement re debtor being physically present in this state, amended Subsec. (c) to delete provision re ten-year period re history of criminal convictions, add provision authorizing commissioner to conduct a state and criminal history records check of applicant and each partner, member, officer, director and principal employee of applicant and add provisions re abandonment of application, and amended Subsec. (d) to delete provision re ten-year period re misdemeanor and felony convictions; P.A. 14-7 replaced references to Sec. 36a-671d with references to Sec. 36a-671e in Subsecs. (a), (c) and (d), effective May 8, 2014; P.A. 17-233 amended Subsec. (a) to replace “36a-671e” with “36a-671f”, add new Subdiv. (1) defining “advertise” or “advertising”, add new Subdiv. (2) defining “control person”, redesignate existing Subdivs. (1) and (2) as Subdivs. (3) and (4), add new Subdiv. (5) defining “foreclosure rescue services”, redesignate existing Subdivs. (3) and (4) as Subdivs. (6) and (7), add new Subdiv. (8) defining “residential property”, redesignate existing Subdiv. (5) as Subdiv. (9), delete former Subdivs. (6) and (7), and make technical changes, and amended Subsec. (d)(1)(D) to replace “36a-671e” with “36a-671f”; P.A. 18-173 amended Subsec. (a) by adding new Subdiv. (2) re definition of “branch office”, redesignating existing Subdivs. (2) to (5) as new Subdivs. (3) to (6), adding new Subdiv. (7) re definition of “main office”, redesignating existing Subdivs. (6) to (9) as Subdivs. (8) to (11), adding Subdiv. (12) re definition of “unique identifier”, amended Subsec. (b) by replacing provisions re filing application for license with commissioner and notifying commissioner of change in applicant's business with provisions re obtaining license for main office and each branch office and activity to be conducted from office located in a state, amended Subsec. (c) by replacing provisions re application to be in writing on form provided by commissioner, information to be included and commissioner's authority to conduct criminal history records check with provisions re application to be processed on the system in form prescribed by commissioner, information to be furnished to the system, and commissioner's authority to conduct criminal history records checks, require submission of fingerprints and investigate financial condition of person, replacing references to Sec. 36a-671e with references to Sec. 36a-671f, and replacing provision re commissioner to notify applicant in writing with provision re commissioner to notify applicant on the system, amended Subsec. (d) by designating existing provisions re commissioner's findings as new Subdiv. (1) and amending same by redesignating existing Subdivs. (1) and (2) as Subparas. (A) and (B), deleting former Subpara. (A) designator, deleting former Subparas. (B) to (D) re partners, members, officers, directors and principal employees, adding references to control person, qualified individual and branch manager, adding new Subpara. (C) re applicant having required bond, deleting provisions re license not transferrable, written notice to commissioner required for change of location, licensee not to use any name unless approved, replacing “partner, member, officer, director of principal employee” with “control person, qualified individual or branch manager”, and adding provision re making material misstatement in application, deleting provision re withdrawal of application, adding new Subdiv. (2) re minimum standards for renewal of debt negotiation license, substantially amended Subsec. (e) by replacing provisions re application fees, and renewal of license with provisions re payment of required fees or charges to system, expiration of license and renewal of license, substantially amended Subsec. (f) by replacing provisions re check for application fee dishonored and automatic suspension of license with provisions re automatic suspension of license if deficiency on system indicating payment returned, amended Subsec. (g) by adding provision re application denied or withdrawn, added Subsec. (h) re license not transferable or assignable, filing of advance change notice on the system, adding Subsec. (i) re licensee's use of name other than legal name or approved fictitious name, use of name or address specified on license, and change to name or address, added Subsec. (j) re automatic suspension of license, added Subsec. (k) re surrender of license, added Subsec. (l) re change in information to be filed on the system or notification to commissioner re occurrence of certain events, added Subsec. (m) re filing or submission of information on the system, timely submission to the system of accurate reports of condition, added Subsec. (n) re solicitations and advertisements, and made technical and conforming changes; P.A. 21-138 amended Subsec. (h) by replacing “license” with “licensee” and defining “change of control”; P.A. 25-115 amended Subsec. (i) to designate existing provisions as Subdivs. (1) and (2) and in Subdiv. (1) add “, in the case of a change to the legal name of the licensee,” replace “, endorsement or addendum, as applicable” with “to the surety bond on file with the commissioner that reflects the new legal name of the licensee” and make a technical change.

(Return to Chapter
Table of Contents)

(Return to
List of Chapters)

(Return to
List of Titles)

Sec. 36a-671b. Debt negotiation service contract required. Fees, commissions and other valuable consideration. Noncompliant contracts voidable by consumer. (a) A debt negotiator shall provide to each debtor a contract that shall include a complete, detailed list of services to be performed, the costs of such services and the results to be achieved. Each debt negotiation service contract shall contain (1) a statement certifying that the person offering debt negotiation services has reviewed the consumer's debt, and (2) an individualized evaluation of the likelihood that the proposed debt negotiation services would reduce the consumer's debt or debt service or, if appropriate, prevent the consumer's residential home from being foreclosed. Each contract shall allow the consumer to cancel or rescind such contract within three business days after the date on which the consumer signed the contract. Such contract shall contain a clear and conspicuous caption that shall read, “Debtor's three-day right to cancel”, along with the following statement: “If you wish to cancel this contract, you may cancel by mailing a written notice by certified or registered mail to the address specified below. The notice shall state that you do not wish to be bound by this contract and must be delivered or mailed before midnight of the third business day after you sign this contract.” As used in this section, “business day” means any calendar day except Sunday or any of the following business holidays: New Year's Day, Washington's Birthday, Memorial Day, Independence Day, Labor Day, Columbus Day, Veterans Day, Thanksgiving Day and Christmas Day.

(b) No person offering debt negotiation services may receive a fee, commission or other valuable consideration for the performance of any service the person offering debt negotiation services has agreed to perform for any consumer until the person offering debt negotiation services has fully performed such service. A person offering debt negotiation services may receive reasonable periodic payments as services are rendered, provided such payments are clearly stated in the contract. The commissioner may establish a schedule of maximum fees that a debt negotiator may charge for specific services.

(P.A. 09-208, S. 32; P.A. 14-122, S. 160; P.A. 25-111, S. 37.)

History: P.A. 14-122 made technical changes in Subsec. (a); P.A. 25-111 redefined “business day” in Subsec. (a), effective July 1, 2025.

(Return to Chapter
Table of Contents)

(Return to
List of Chapters)

(Return to
List of Titles)

Sec. 36a-671d. Surety bond required. Form of surety bond. Cancellation of bond. Automatic suspension of license. Notice. Opportunity for hearing. Determination of penal sum. Aggregate amount of residential loans. (a)(1) No debt negotiation license, and no renewal thereof, shall be granted unless the applicant has filed the surety bond required by this section, which bond shall be written by a surety authorized to write such bonds in this state.

(2) No application for a debt negotiation license for a main office or branch office, and no renewal of such a license, shall be granted unless the applicant has filed a single surety bond with the commissioner in an aggregate amount of fifty thousand dollars for each licensed location, or such other amount required by subdivision (4) of this subsection.

(3) Each debt negotiation licensee shall file a single surety bond that complies with the requirements of this section with the commissioner in an aggregate amount of fifty thousand dollars for each licensed location, or such other amount required in subdivision (4) of this subsection.

(4) In the case of a debt negotiation licensee engaging or offering to engage in the business of negotiating residential mortgage loans on behalf of mortgagors, such debt negotiation licensee shall file a bond in the penal sum amount set forth in subsection (e) of this section based on the aggregate dollar amount of the residential mortgage loans negotiated or offered to be negotiated by its sponsored mortgage loan originator licensees. The principal on a bond required by this subdivision shall file quarterly reports on the system reflecting residential mortgage loan volume in accordance with subsection (g) of this section and subsection (m) of section 36a-671 to confirm that it maintains the required penal sum in the amount required by this subdivision.

(5) Each debt negotiation licensee shall file with the commissioner such information as the commissioner may require to confirm that the penal sum of the bond remains consistent with the amount required by this section. The principal shall file, as the commissioner may require, any bond rider or endorsement to the surety bond on file with the commissioner to reflect any changes necessary to maintain the surety bond coverage required by this section.

(b) The form of any surety bond submitted pursuant to subsection (a) of this section shall be approved by the Attorney General. Any surety bond filed under subsection (a) of this section shall be conditioned upon the debt negotiation licensee and any sponsored mortgage loan originator licensee faithfully performing any and all written agreements or commitments with or for the benefit of debtors and mortgagors, as applicable, truly and faithfully accounting for all funds received from a debtor or mortgagor by the principal or a mortgage loan originator sponsored by the principal in the principal's capacity as debt negotiation licensee, and conducting such business consistent with the provisions of sections 36a-485 to 36a-498e, inclusive, 36a-534a, 36a-534b and 36a-671 to 36a-671f, inclusive. Any debtor or mortgagor who may be damaged by a failure to perform any written agreements, by the wrongful conversion of funds paid by a debtor or mortgagor to a debt negotiation licensee or mortgage loan originator licensee, or by conduct inconsistent with the provisions of sections 36a-485 to 36a-498e, inclusive, 36a-534a, 36a-534b and 36a-671 to 36a-671f, inclusive, may proceed on any such surety bond against the principal or surety thereon, or both, to recover damages. The commissioner may proceed on any such surety bond against the principal or surety thereon, or both, to collect any civil penalty imposed upon the licensee pursuant to subsection (a) of section 36a-50 and any unpaid costs of examination of a licensee as determined pursuant to section 36a-65 and effective April 1, 2019, any restitution imposed pursuant to subsection (c) of section 36a-50. The proceeds of any bond, even if commingled with other assets of the principal, shall be deemed by operation of law to be held in trust for the benefit of such claimants against the principal in the event of bankruptcy of the principal and shall be immune from attachment by creditors and judgment creditors. Any bond required by this section shall be maintained during the entire period of the license granted to the applicant, and the aggregate liability under any such bond shall not exceed the penal amount of the bond. The principal shall notify the commissioner of the commencement of an action on the bond. When an action is commenced on a principal's bond, the commissioner may require the filing of a new bond and immediately on recovery on any action on the bond, the principal shall file a new bond. Any mortgagor or prospective mortgagor who may be damaged by a failure of the debt negotiation licensee or mortgage loan originator licensee to satisfy a judgment against the licensee arising from the negotiation of or offer to negotiate a nonprime home loan, as defined in section 36a-760, may proceed on such bond against the principal or surety on such bond, or both, to recover the amount of the judgment.

(c) The surety shall have the right to cancel any bond written or issued under subsection (a) of this section at any time by a written notice to the debt negotiation licensee and the commissioner stating the date cancellation shall take effect. Such written notice of cancellation shall be provided by the surety to the licensee and the commissioner through the system at least thirty days prior to the date of cancellation. No such bond shall be cancelled unless the surety notifies the commissioner in writing not less than thirty days prior to the effective date of cancellation. After receipt of such notification from the surety, the commissioner shall give written notice to the debt negotiation licensee of the date such bond cancellation shall take effect. The commissioner shall automatically suspend the licenses of the debt negotiation licensee on such date and inactivate the license of any sponsored mortgage loan originator, unless prior to such date the debt negotiation licensee submits a letter of reinstatement of the bond from the surety or a new bond, surrenders all licenses or, in the case of a mortgage loan originator sponsored by a debt negotiation licensee, the sponsorship has been terminated and a new sponsor has been requested and approved. After a license has been automatically suspended, the commissioner shall (1) give the debt negotiation licensee notice of the automatic suspension pending proceedings for revocation or refusal to renew and an opportunity for a hearing on such actions in accordance with section 36a-51, and (2) require the debt negotiation licensee to take or refrain from taking such action as the commissioner deems necessary to effectuate the purposes of this section.

(d) No licensee shall use, attempt to use or make reference to, either directly or indirectly, any word or phrase that states or implies that the licensee is endorsed, sponsored, recommended, bonded or insured by the state.

(e) The penal sum of the bond required by subdivision (4) of subsection (a) of this section shall be determined as follows:

(1) An initial applicant for a debt negotiation license shall file a bond in a penal sum of fifty thousand dollars.

(2) A debt negotiation licensee exempt from licensure as a mortgage lender, mortgage correspondent lender or mortgage broker pursuant to subdivision (4) of subsection (a) of section 36a-487 and sponsoring and bonding at least one mortgage loan originator as an exempt registrant under subdivision (2) of subsection (a) and subsection (d) of section 36a-487 shall file a bond with a penal sum in the following amount:

(A) If the aggregate dollar amount of all residential mortgage loans negotiated or offered to be negotiated by all sponsored mortgage loan originators during the preceding twelve-month period ending July thirty-first of the current year is less than thirty million dollars, the penal sum of the bond shall be fifty thousand dollars;

(B) If the aggregate dollar amount of all residential mortgage loans negotiated or offered to be negotiated by all sponsored mortgage loan originators during the preceding twelve-month period ending July thirty-first of the current year is thirty million dollars or more but less than fifty million dollars, the penal sum of the bond shall be one hundred thousand dollars; and

(C) If the aggregate dollar amount of all residential mortgage loans negotiated or offered to be negotiated by all sponsored mortgage loan originators during the preceding twelve-month period ending July thirty-first of the current year is fifty million dollars or more, the penal sum of the bond shall be one hundred fifty thousand dollars.

(f) For purposes of subsection (e) of this section, “the aggregate dollar amount of all residential mortgage loans negotiated or offered to be negotiated” means the aggregate underlying dollar amount of all residential mortgage loans for which a sponsored mortgage loan originator provides debt negotiation services.

(g) Financial information necessary to verify the aggregate amount of residential mortgage loans negotiated or offered to be negotiated shall be filed with the commissioner as the commissioner may require, and shall be reported on the system at such time and in such form as the system may require. The commissioner may require a change in the penal sum of the bond if the commissioner determines at any time that the aggregate dollar amount of all residential mortgage loans negotiated or offered to be negotiated warrants a change in the penal sum of the bond.

(h) The commissioner may adopt regulations in accordance with chapter 54 with respect to the requirements for such surety bonds.

(P.A. 09-208, S. 30; P.A. 11-216, S. 44; P.A. 14-7, S. 3, 4; 14-122, S. 161; P.A. 18-173, S. 69; P.A. 22-94, S. 7; P.A. 25-115, S. 4.)

History: P.A. 11-216 amended Subsec. (a) to make a conforming change in Subdiv. (1) and add new Subdivs. (2) to (4) re surety bond requirements, redesignated existing Subsec. (a)(2) as Subsec. (b) and amended same to add references to debt negotiation and sponsored mortgage loan originator licensees, require a true and faithful accounting for all funds received from a debtor or mortgagor, add references to Secs. 36a-485 to 36a-498f, 36a-534a and 36a-534b, to permit debtor or mortgagor damaged by wrongful conversion of funds paid by a debtor or mortgagor to a debt negotiation or mortgage loan originator licensee to proceed on surety bond to recover damages, to permit commissioner to collect unpaid costs of examination of a licensee, to require principal to notify commissioner of commencement of action on the bond, to permit commissioner to require filing of a new bond when action is commenced, to permit any negotiator or prospective mortgagor damaged by failure to satisfy a judgment to proceed on surety to recover amount of judgment and to make conforming changes, redesignated existing Subsec. (b) as Subsec. (c) and amended same to add references to debt negotiation and mortgage loan originator licensees and make conforming changes, redesignated existing Subsec. (c) as Subsec. (d), and added Subsec. (e) re penal sum of bond, Subsec. (f) re aggregate dollar amount of all residential mortgage loans negotiated or offered to be negotiated, Subsec. (g) re financial information required to verify aggregate amount and Subsec. (h) re regulations; P.A. 14-7 amended Subsec. (a)(4) to replace reference to Subsec. (f) with reference to Subsec. (e) and replace reference to Subsec. (h) with reference to Subsec. (g), amended Subsec. (b) to replace references to Sec. 36a-671d with references to Sec. 36a-671e and amended Subsec. (e)(2) to replace reference to Sec. 36a-487(c) with reference to Sec. 36a-487(d), effective May 8, 2014; P.A. 14-122 made a technical change in Subsec. (f); P.A. 18-173 amended Subsec. (a) by replacing provision re principal on bond to confirm annually that it maintains required penal sum with provision re principal on bond to file quarterly reports on the system to confirm it maintains required penal sum, designating existing provisions re licensee to file information with commissioner as Subdiv. (5) and amending same by deleting reference to September 1, 2012 and each September first thereafter, and deleting reference to Subsec. (g), amended Subsec. (b) by replacing references to Sec. 36a-498f with references to Sec. 36a-498e, replacing references to Sec. 36a-671e with references to Sec. 36a-671f, and adding “and effective April 1, 2019, any restitution imposed pursuant to subsection (c) of section 36a-50”, amended Subsec. (c) by adding references to commissioner, adding provision re notice of cancellation if bond issued electronically, designating existing provisions re notice of automatic suspension as Subdiv. (1), designating existing provisions re commissioner's authority to require licensee to take or refrain from taking action as Subdiv. (2), and amending same to replace “action as, in the opinion of the commissioner, will effectuate the purposes of this section” with “action as the commissioner deems necessary to effectuate the purposes of this section”, amended Subsec. (e)(2) by adding provision re exemption from licensure as mortgage lender, mortgage correspondent lender or mortgage broker, and amended Subsec. (g) by deleting reference to Sec. 36a-485, and made technical and conforming changes; P.A. 22-94 amended Subsec. (a)(2) by adding reference to “or branch office” and adding reference to “for each licensed location” and deleting provision re no application for debt negotiation license branch office and no renewal being granted unless applicant identified branch office as bonded location by addendum to main office surety bond, and amended Subsec. (a)(3) by deleting “in connection with the main office license”, adding “for each licensed location,” and deleting provision re bond identifying any licensed branch office as bonded location on bond by addendum, effective May 24, 2022; P.A. 25-115 amended Subsec. (c) to replace “If such bond is issued electronically on the system,” with “Such”, replace “cancellation may be provided” with “cancellation shall be provided” and delete provision re requirement that any notice of cancellation not provided through the system be sent by certified mail.

(Return to Chapter
Table of Contents)

(Return to
List of Chapters)

(Return to
List of Titles)

PART VII

MORTGAGE SERVICING

Sec. 36a-715. (Formerly Sec. 36-442m). Definitions. As used in sections 36a-715 to 36a-719l, inclusive, unless the context otherwise requires:

(1) “Advertise” or “advertising”, “control person”, “individual”, “main office”, “mortgage broker”, “mortgage correspondent lender”, “mortgage lender”, “office”, “person” and “unique identifier” have the same meanings as provided in section 36a-485.

(2) “Branch office” means a location other than the main office at which a licensee or any person on behalf of a licensee acts as a mortgage servicer.

(3) “Mortgage servicer” (A) means any person, wherever located, who, for such person or on behalf of the holder of a residential mortgage loan, receives payments, including, but not limited to, payments for principal, interest or fees, in connection with a residential mortgage loan, records such payments on such person's books and records and performs such other administrative functions as may be necessary to properly carry out the mortgage holder's obligations under the mortgage agreement including, when applicable, the receipt of funds from the mortgagor to be held in escrow for payment of real estate taxes and insurance premiums and the distribution of such funds to the taxing authority and insurance company, and (B) includes a person who makes payments to borrowers pursuant to the terms of a home equity conversion mortgage or reverse mortgage.

(4) “Mortgagee” means the grantee of a residential mortgage, provided if the residential mortgage has been assigned of record, “mortgagee” means the last person to whom the residential mortgage has been assigned of record.

(5) “Mortgagor” means any person obligated to repay a residential mortgage loan.

(6) “Residential mortgage loan” means any loan primarily for personal, family or household use that is secured by a mortgage, deed of trust or other equivalent consensual security interest on a dwelling, as defined in Section 103 of the Consumer Credit Protection Act, 15 USC 1602, located in this state, or real property located in this state upon which is constructed or intended to be constructed a dwelling.

(P.A. 89-347, S. 3; P.A. 92-12, S. 90; P.A. 94-122, S. 312, 340; P.A. 04-257, S. 107; P.A. 08-176, S. 60; P.A. 14-89, S. 1; P.A. 18-173, S. 70; P.A. 25-115, S. 18.)

History: P.A. 92-12 made technical changes; P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-442m transferred to Sec. 36a-715 in 1995; P.A. 04-257 made a technical change in Subdiv. (1), effective June 14, 2004; P.A. 08-176 made a technical change in Subdiv. (1), effective July 1, 2008; P.A. 14-89 added reference to Secs. 36a-719 to 36a-719l, deleted former Subdiv. (1) re definition of “first mortgage loan”, added new Subdiv. (1) defining “branch office” and new Subdiv. (2) defining “control person”, “individual”, “main office”, “mortgage broker”, “mortgage correspondent lender”, “mortgage lender”, “office” and “person”, redesignated existing Subdiv. (2) as Subdiv. (3) and amended same to replace “mortgage servicing company” with “mortgage servicer”, added new Subdiv. (4) defining “mortgagee”, redesignated existing Subdiv. (3) as Subdiv. (5), added Subdiv. (6) defining “residential mortgage loan” and made technical and conforming changes; P.A. 18-173 amended Subdiv. (2) by adding “advertise or advertising,” and “unique identifier” and made technical changes; P.A. 25-115 reordered Subdivs. (1) and (2), made a technical change in redesignated Subdiv. (1), and redefined “mortgage servicer” in Subdiv. (3).

(Return to Chapter
Table of Contents)

(Return to
List of Chapters)

(Return to
List of Titles)

Sec. 36a-718. (Formerly Sec. 36-442p). Licenses required. Exemptions. (a) On and after January 1, 2015, no person shall act as a mortgage servicer, directly or indirectly, without first obtaining a license under section 36a-719 from the commissioner for its main office and for each branch office where such business is conducted, unless such person is exempt from licensure pursuant to subsection (b) of this section. Any activity subject to licensure pursuant to sections 36a-715 to 36a-719l, inclusive, shall be conducted from an office located in a state, as defined in section 36a-2.

(b) The following persons are exempt from mortgage servicer licensing requirements: (1) Any bank, out-of-state bank, Connecticut credit union, federal credit union or out-of-state credit union, provided such bank or credit union is federally insured; (2) any wholly-owned subsidiary of such bank or credit union; (3) any operating subsidiary where each owner of such operating subsidiary is wholly owned by the same such bank or credit union; (4) any person registered as an exempt mortgage servicer registrant pursuant to subsection (d) of this section and acting as a mortgage servicer from a location licensed as a main office or branch office under sections 36a-485 to 36a-498e, inclusive, 36a-534a and 36a-534b during any period that the registration of the exempt mortgage servicer registrant in this state has not been suspended; and (5) any person licensed as a mortgage correspondent lender in this state while acting as a mortgage servicer with respect to any residential mortgage loan it has made and during the permitted ninety-day holding period for such loan from a location licensed as a main office or branch office under sections 36a-485 to 36a-498e, inclusive, 36a-534a and 36a-534b, provided during any period the license of the mortgage correspondent lender in this state has been suspended, such exemption shall not be effective.

(c) The provisions of sections 36a-719e to 36a-719h, inclusive, shall apply to any person, including a person exempt from licensure pursuant to subsection (b) of this section, who acts as a mortgage servicer in this state on or after January 1, 2015.

(d) (1) Any person licensed as a mortgage lender in this state shall register on the system as an exempt mortgage servicer registrant prior to acting as a mortgage servicer from any location licensed as a main office or branch office under sections 36a-485 to 36a-498e, inclusive, 36a-534a and 36a-534b. Each registration shall expire at the close of business on December thirty-first of the year in which such registration was approved, unless such registration is renewed or, if such registration is approved on or after November first, such registration shall expire at the close of business on December thirty-first of the year following the year in which such registration was approved. An application for renewal of a registration shall be filed on the system between November first and December thirty-first of the year in which the registration expires. Each applicant for an initial registration or renewal of a registration shall meet the supplemental mortgage servicer surety bond, fidelity bond and errors and omissions coverage requirements under section 36a-719c and pay to the system any required fees or charges. All fees paid pursuant to this subdivision shall be nonrefundable.

(2) The commissioner may suspend, revoke or refuse to renew any exempt mortgage servicer registration or take any other action, in accordance with the provisions of section 36a-51, if the commissioner finds that the registrant no longer meets the requirements for registration or if the registrant or any control person, trustee, employee or agent of such registrant has: (A) Made any material misstatement in an application; (B) committed any fraud or misappropriated funds; or (C) violated any provision of this title or any regulation or order adopted or issued pursuant thereto pertaining to such person, or any other law or regulation applicable to the conduct of such registrant's business.

(P.A. 88-230, S. 1, 12; P.A. 89-347, S. 6; P.A. 90-98, S. 1, 2; P.A. 93-142, S. 4, 7, 8; P.A. 94-122, S. 313, 340; P.A. 01-48, S. 13; P.A. 09-208, S. 34; P.A. 14-89, S. 4; P.A. 15-53, S. 1; P.A. 18-173, S. 71; P.A. 25-115, S. 13.)

History: (Revisor's note: P.A. 88-230 authorized substitution of “judicial district of Hartford” for “judicial district of Hartford-New Britain” in the public and special acts of 1989, effective September 1, 1991); P.A. 90-98 changed the effective date of P.A. 88-230 from September 1, 1991, to September 1, 1993; P.A. 93-142 changed the effective date of P.A. 88-230 from September 1, 1993, to September 1, 1996, effective June 14, 1993; P.A. 94-122 deleted provisions allowing the commissioner to bring an enforcement action in superior court and to fine violators up to $2,500 and made technical changes, effective January 1, 1995; Sec. 36-442p transferred to Sec. 36a-718 in 1995; P.A. 01-48 added provision re express delivery; P.A. 09-208 added “take action against such mortgage servicing company” and reference to Sec. 36a-50 and deleted “, order the mortgage servicing company to cease and desist from such violation”, effective July 7, 2009; P.A. 14-89 replaced former provisions re violation by mortgage servicing company with Subsec. (a) re mortgage servicers to be licensed, Subsec. (b) re exemptions from licensure and Subsec. (c) re application of requirements to person acting as a mortgage servicer in this state on or after January 1, 2015; P.A. 15-53 amended Subsec. (b) to add Subdiv. (5) re exemption for licensed mortgage correspondent lender, effective June 19, 2015; P.A. 18-173 amended Subsec. (a) by adding provision re activity subject to licensure to be conducted from an office located in a state, and amended Subsec. (b) by replacing references to Sec. 36a-498f with references to Sec. 36a-498e in Subdivs. (4) and (5); P.A. 25-115 amended Subsec. (b)(4) to replace “licensed as a mortgage lender in this state while” with “registered as an exempt mortgage servicer registrant pursuant to subsection (d) of this section and”, delete provision requiring supplemental mortgage servicer surety bond, fidelity bond and errors and omissions coverage requirements under Sec. 36a-719c to be met, delete Subpara. (A) and (B) designators, replace “the license of the mortgage lender in this state has been suspended” with “the registration of the exempt mortgage servicer registrant in this state has not been suspended”, delete “such exemption shall not be effective” and make technical changes, and added Subsec. (d) re requirement that person licensed as mortgage lender register on system as exempt mortgage servicer registrant, expiration of such registration, renewal of such registration and surety bond, fidelity bond and errors and omissions coverage requirements and fees applicable to each applicant for registration as Subdiv. (1) and re authority of commissioner to suspend, revoke or refuse to renew any exempt mortgage servicer registration or take any other action in accordance with Sec. 36a-51 as Subdiv. (2).

(Return to Chapter
Table of Contents)

(Return to
List of Chapters)

(Return to
List of Titles)

Sec. 36a-719. Mortgage servicer license. Issuance. Application. Criminal history records checks. Renewal standards. Automatic suspension of license. Abandonment of application. Schedule and report. Unique identifier of license. Advertising of license. (a) The commissioner shall issue a mortgage servicer license to an applicant for such license if the commissioner finds that: (1) The applicant has identified a qualified individual for its main office and a branch manager for each branch office where such business is conducted, provided such qualified individual and branch manager have supervisory authority over the mortgage servicer activities at the respective office location and at least three years' experience in the mortgage servicing business within the five years immediately preceding the date of the application for licensure; (2) notwithstanding the provisions of section 46a-80, the applicant, the control persons of the applicant, the qualified individual and any branch manager have not been convicted of or pled guilty or nolo contendere to, in a domestic, foreign or military court, a felony during the seven-year period preceding the date of the application for licensing or a felony involving an act of fraud or dishonesty, a breach of trust or money laundering at any time preceding the date of application, provided any pardon or expungement of a conviction shall not be a conviction for purposes of this subdivision; (3) the applicant demonstrates that the financial responsibility, character and general fitness of the applicant, the control persons of the applicant, the qualified individual and any branch manager command the confidence of the community and warrant a determination that the applicant will operate honestly, fairly and efficiently within the purposes of sections 36a-715 to 36a-719l, inclusive; (4) the applicant has met the surety bond, fidelity bond and errors and omissions coverage requirement under section 36a-719c; (5) the applicant, the control persons of the applicant, the qualified individual and any branch manager have not made a material misstatement in the application; and (6) the applicant has met any other similar requirements as determined by the commissioner. If the commissioner fails to make such findings, the commissioner shall not issue a license, and shall notify the applicant of the denial and the reasons for such denial. The commissioner may waive the requirements of subdivision (1) of this subsection relating to the supervision and experience of (A) a qualified individual where the applicant establishes to the satisfaction of the commissioner that the applicant (i) will not conduct any activity subject to licensure under sections 36a-715 to 36a-719l, inclusive, at the main office, and (ii) has designated a qualified individual who is responsible for the actions of the applicant; and (B) a qualified individual or a branch manager where the applicant establishes to the satisfaction of the commissioner that the applicant (i) holds only mortgage servicing rights at the main office or branch office and conducts no other activity at such office, and (ii) has designated a qualified individual or branch manager at such main office or branch office who is responsible for the actions of the applicant. No person licensed as a mortgage servicer and granted a waiver by the commissioner shall engage in any activity that would have precluded the issuance of such waiver without first designating a qualified individual or branch manager, as the case may be, who meets all applicable requirements of subdivision (1) of this subsection and is approved by the commissioner. For purposes of this subsection, the level of offense of the crime and the status of any conviction, pardon or expungement shall be determined by reference to the law of the jurisdiction where the case was prosecuted. In the event such jurisdiction does not use the term “felony”, “pardon” or “expungement”, such terms shall include legally equivalent events. For purposes of subdivision (1) of this subsection, “experience in the mortgage servicing business” means paid experience in the (I) servicing of mortgage loans, (II) accounting, receipt and processing of payments on behalf of mortgagees or creditors, or (III) supervision of such activities, or any other relevant experience as determined by the commissioner.

(b) An application for a license as a mortgage servicer or renewal of such license shall be made and processed on the system pursuant to section 36a-24b in a form prescribed by the commissioner and accompanied by the fees required by section 36a-719b. Each such form shall contain content as set forth by instruction or procedure of the commissioner and may be changed or updated as necessary by the commissioner in order to carry out the purpose of sections 36a-715 to 36a-719l, inclusive. The applicant shall, at a minimum, furnish to the system information concerning the identity of the applicant, any control person of the applicant, the qualified individual and any branch manager, including personal history and experience in a form prescribed by the system and information related to any administrative, civil or criminal findings by any governmental jurisdiction. For the purpose of this subsection, evidence of experience of the qualified individual and any branch manager shall include: (1) A statement specifying the duties and responsibilities of such person's employment, the term of employment, including month and year, and the name, address and telephone number of a supervisor, employer or, if self-employed, a business reference; and (2) if required by the commissioner, copies of W-2 forms, 1099 tax forms or, if self-employed, 1120 corporate tax returns, signed letters from the employer on the employer's letterhead verifying such person's duties and responsibilities and term of employment including month and year, and, if such person is unable to provide such letters, other proof satisfactory to the commissioner that such person meets the experience requirement. As part of an application, the commissioner may (A) in accordance with section 29-17a, conduct a state or national criminal history records check of the applicant, any control person of the applicant, the qualified individual and any branch manager, and (B) in accordance with section 36a-24b (i) require the submission of fingerprints of the applicant, any control person of the applicant, the qualified individual and any branch manager to the Federal Bureau of Investigation or other state, national or international criminal databases, and (ii) investigate the financial condition of any such person and require authorization from any such person for the system and the commissioner to obtain an independent credit report from a consumer reporting agency, as described in Section 603(p) of the Fair Credit Reporting Act, 15 USC 1681a, as amended from time to time.

(c) (1) The minimum standards for license renewal for a mortgage servicer shall include the following: (A) The applicant continues to meet the minimum standards under subsection (a) of this section; (B) the mortgage servicer has paid all required fees for renewal of the license; and (C) the applicant has paid any outstanding examination fees or other moneys due to the commissioner.

(2) The license of a mortgage servicer failing to satisfy the minimum standards for license renewal shall expire. The commissioner may adopt procedures for the reinstatement of expired licenses consistent with the standards established by the system. The commissioner may automatically suspend a mortgage servicer license if the licensee receives a deficiency on the system indicating that the payment required by section 36a-719b was Returned-ACH or returned pursuant to such other term as may be utilized by the system to indicate that the payment was not accepted. After a license has been automatically suspended pursuant to this section, the commissioner shall (A) give the licensee notice of the automatic suspension, pending proceedings for revocation or refusal to renew pursuant to section 36a-719j and an opportunity for a hearing on such action in accordance with section 36a-51, and (B) require such licensee to take or refrain from taking such action as the commissioner deems necessary to effectuate the purposes of this section.

(d) The commissioner may deem an application for a license under this section abandoned if the applicant fails to respond to any request for information required under sections 36a-715 to 36a-719l, inclusive, or the regulations adopted pursuant to said sections. The commissioner shall notify the applicant on the system that if such information is not submitted not later than sixty days from the date of such request, the application shall be deemed abandoned. An application filing fee paid prior to the date an application is deemed abandoned pursuant to this subsection shall not be refunded. Abandonment of an application pursuant to this subsection shall not preclude the applicant from submitting a new application for a license.

(e) As part of its application and upon a change to such information, a mortgage servicer shall file with the commissioner a current schedule of the ranges of costs and fees it charges mortgagors for its servicing-related activities.

(f) Any person making any filing or submission of any information on the system shall do so in accordance with the procedures and requirements of the system and shall pay the applicable fees or charges to the system. Each mortgage servicer licensee shall, to the extent required by the system, timely submit to the system accurate reports of condition that shall be in such form and shall contain such information as the system may require. Failure by a licensee to submit a timely and accurate report of condition shall constitute a violation of this provision. At least annually, a licensee shall file with the commissioner a report in a form and format acceptable to the commissioner detailing the mortgage servicer's activities in the state, including (1) the number of residential mortgage loans the mortgage servicer is servicing, (2) the type and characteristics of the residential mortgage loans in this state, (3) the number of serviced residential mortgage loans in default, along with a breakdown of thirty-day, sixty-day and ninety-day delinquencies, (4) information on loss mitigation activities, and (5) information on foreclosures commenced in this state.

(g) The unique identifier of any person licensed under this section shall be clearly shown on all solicitations and advertisements, including business cards and Internet web sites, and any other documents as established by rule, regulation or order of the commissioner, and shall be clearly stated in all audio solicitations and advertisements. The solicitations and advertisements of any person licensed under this section: (1) Shall not include any statement that such person is endorsed in any way by this state, except that such solicitations and advertisements may include a statement that such person is licensed in this state; (2) shall not include any statement or claim that is deceptive, false or misleading; (3) shall otherwise conform to the requirements of sections 36a-715 to 36a-719l, inclusive, any regulations issued thereunder and any other applicable law; and (4) shall be retained for two years from the date of use of such solicitation or advertisement.

(P.A. 14-89, S. 5; P.A. 17-38, S. 15; 17-233, S. 26; P.A. 18-173, S. 72; P.A. 23-126, S. 11; P.A. 25-115, S. 29.)

History: P.A. 17-38 amended Subsec. (d)(1) by replacing “receipt by the commissioner of a notice of intent to withdraw such application” with “the commissioner's acceptance on the system of a withdrawal request”; P.A. 17-233 amended Subsec. (f) by deleting “At least annually” and adding “and upon a change to such information” re filing with commissioner current schedule of ranges of costs and fees charged for servicing-related activities, deleting Subdiv. (1) and (2) designators and redesignating existing Subparas. (A) to (E) as Subdivs. (1) to (5), adding “At least annually, a licensee shall file with the commissioner” re report, deleting “including details on workout arrangements undertaken,” in redesignated Subdiv. (4), and making technical changes; P.A. 18-173 amended Subsec. (a) by deleting provision re branch manager to have supervisory authority over office for which license is sought in Subdivs. (2) and (3), adding “the control persons of the applicant, the qualified individual and the branch manager” in Subdiv. (5), adding provisions re commissioner's authority to waive supervision and experience requirements, replacing Subpara. (A) to (C) designators with clause (I) to (III) designators, and adding provision re establishment of “at the respective office location”, amended Subsec. (b) by replacing provision re application to be filed with the system with provision re application to be made and processed on the system pursuant to Sec. 36a-24b, deleting “36a-718, inclusive, and sections 36a-719a to”, deleting provision re applicant to notify commissioner on the system of change to information, deleting provision re commissioner's authority to conduct criminal history records check and require applicant to submit fingerprints, and adding provisions re commissioner's authority to conduct criminal history records check, require submission of fingerprints and investigate financial condition of person, amended Subsec. (c) by adding Subpara. (C) re applicant has paid outstanding examination fees or other moneys due in Subdiv. (1), adding Subpara. (A) and (B) designators and replacing “action that, in the opinion of the commissioner, will effectuate the purposes of this section” with “action as the commissioner deems necessary to effectuate the purposes of this section” in Subdiv. (2), deleted former Subsec. (d) re withdrawal of application, redesignated existing Subsecs. (e) and (f) as Subsecs. (d) and (e), amended Subsec. (f) by adding provisions re person filing or submitting information on the system to do so in accordance with procedures and requirements and timely submission of accurate reports of condition, added Subsec. (g) re unique identifier and solicitations and advertisements, and made technical and conforming changes; P.A. 23-126 amended Subsec. (a) to delete provision re “at the respective office location” may be established by residing not more than 100 miles from office or demonstrating ability to provide full-time, in-person supervision of office; P.A. 25-115 amended Subsec. (a)(6)(B)(ii) to replace “application” with “applicant”.

(Return to Chapter
Table of Contents)

(Return to
List of Chapters)

(Return to
List of Titles)

Sec. 36a-719a. License not assignable or transferable. Change in any control persons. Surrender of license. Change of name or address. Required filings on system or notification of commissioner. Automatic suspension of license. (a) A mortgage servicer license shall not be transferable or assignable. Any change in any control person of a licensee, except a change of a director, general partner or executive officer that is not the result of an acquisition or change of control of the licensee, shall be the subject of an advance change notice filed on the system at least thirty days prior to the effective date of such change and no such change shall occur without the commissioner's approval. For purposes of this section, “change of control” means any change causing the majority ownership, voting rights or control of a licensee to be held by a different control person or group of control persons. Any licensee who intends to permanently cease acting as a mortgage servicer at any time during a license period for any cause, including, but not limited to, bankruptcy or voluntary dissolution, shall file a request to surrender the license in accordance with subsection (c) of section 36a-51, for each office at which the licensee intends to cease to do business, on the system, not later than fifteen days after the date of such cessation, provided this requirement shall not apply when a license has been suspended pursuant to section 36a-51. No surrender shall be effective until accepted by the commissioner.

(b) No licensee may use any name other than its legal name or a fictitious name approved by the commissioner, provided such licensee may not use its legal name if the commissioner disapproves use of such name. No licensee shall use any name or address other than the name and address stated on the license issued by the commissioner. A mortgage servicer licensee may change the name of the licensee or address of any office specified on the most recent filing with the system if (1) at least thirty calendar days prior to such change, the licensee files such change with the system and, in the case of a change to the legal name of the licensee, provides the commissioner a bond rider to the surety bond on file with the commissioner that reflects the new legal name of the licensee, and (2) the commissioner does not disapprove such change, in writing, or request further information within such thirty-day period.

(c) Except as otherwise specified in subsections (a) and (b) of this section, each mortgage servicer applicant or licensee, and each individual designated as a control person, qualified individual or branch manager of such applicant or licensee, shall file to the system any change in the information most recently submitted to the system by such applicant, licensee, control person, qualified individual or branch manager in connection with the application or license, or, if the information cannot be filed on the system, notify the commissioner of such change, in writing, not later than fifteen days from the date such applicant, licensee, control person, qualified individual or branch manager had reason to know of the change. A mortgage servicer licensee shall file with the system or, if the information cannot be filed on the system, directly notify the commissioner, in writing, not later than fifteen business days after the licensee has reason to know of the occurrence of any of the following events:

(1) Filing for bankruptcy, or the consummation of a corporate restructuring, of the licensee;

(2) Filing of a criminal indictment against the licensee or receiving notification of the filing of any criminal felony indictment or felony conviction of any control person, qualified individual or branch manager of the licensee;

(3) Receiving notification of the institution of license denial, cease and desist, suspension or revocation procedures, or other formal or informal regulatory action by any governmental agency against the licensee or any control person, qualified individual or branch manager of the licensee and the reasons for such action;

(4) Receiving notification of the initiation of any action against the licensee or any control person, qualified individual or branch manager of the licensee by the Attorney General or the attorney general of any other state and the reasons for such action;

(5) Suspension or termination of the licensee's status as an approved seller or servicer by the Federal National Mortgage Association, Federal Home Loan Mortgage Corporation or Government National Mortgage Association;

(6) Receiving notification that certain servicing rights of the licensee will be rescinded or cancelled, and the reasons provided therefor;

(7) Receiving notification of filing for bankruptcy of any control person, qualified individual or branch manager of the licensee; or

(8) Receiving notification of the initiation of a class action lawsuit on behalf of consumers against the licensee that is related to the operation of the licensed business.

(d) The commissioner may automatically suspend any license for a violation of subsection (a) or (b) of this section or upon a failure of the licensee to designate a qualified individual or branch manager who meets the requirements set forth in section 36a-719 not later than thirty days after a vacancy in the position. After a license has been automatically suspended pursuant to this section, the commissioner shall (1) give such licensee notice of the automatic suspension, pending proceedings for revocation or refusal to renew pursuant to section 36a-719j and an opportunity for a hearing on such action in accordance with section 36a-51, and (2) require such licensee to take or refrain from taking such action as the commissioner deems necessary to effectuate the purposes of this section.

(P.A. 14-89, S. 6; P.A. 18-173, S. 73; P.A. 21-138, S. 14; P.A. 25-115, S. 10.)

History: P.A. 18-173 amended Subsec. (a) by replacing provision re licensee's use of name other than approved legal or fictitious name with provision re filing of advance change notice on the system, and adding reference to Sec. 36a-51(c), amended Subsec. (b) by adding provisions re licensee's use of approved legal or fictitious name and use of name or address stated on license, deleting “, directly to” re providing bond rider or endorsement or addendum to commissioner in Subdiv. (1), amended Subsec. (c) by adding provisions re filing change in information to the system or notification to commissioner in writing, replacing reference to 5 business days with reference to 15 business days re notice to commissioner, replacing references to officers, directors, members, partners or shareholders with references to control person, qualified individual or branch manager in Subdivs. (2) and (7), and adding references to control person, qualified individual or branch manager in Subdivs. (3) and (4), added Subsec. (d) re automatic suspension of license, and made technical changes; P.A. 21-138 defined “change of control” in Subsec. (a); P.A. 25-115 amended Subsec. (b)(1) to replace “main office or branch office” with “change to the legal name of the licensee”, replace “or endorsement, or addendum, as applicable, to any” with “to the surety”, delete “or evidence of errors and omissions coverage” and replace “new name or address of the main office or branch office;” with “new legal name of the licensee,”.

(Return to Chapter
Table of Contents)

(Return to
List of Chapters)

(Return to
List of Titles)

Sec. 36a-719c. Surety bond, fidelity bond and errors and omissions coverage. Cancellation. Automatic suspension of license or registration. Notices. (a) Each mortgage servicer applicant or licensee and exempt mortgage servicer registrant shall file with the commissioner (1) a surety bond, written by a surety authorized to write such bonds in this state, covering its main office and any branch office from which it acts as mortgage servicer, in a penal sum of one hundred thousand dollars per office location in accordance with subsection (b) of this section, (2) a fidelity bond, written by a surety authorized to write such bonds in this state, in accordance with the requirements of subsection (c) of this section, and (3) evidence of errors and omissions coverage, written by a surety authorized to write such coverage in this state, in accordance with the requirements of subsection (c) of this section. No mortgage servicer licensee and no exempt mortgage servicer registrant shall act as a mortgage servicer in this state without maintaining the surety bond, fidelity bond and errors and omissions coverage required by this section.

(b) The surety bond required by subsection (a) of this section shall be (1) in a form approved by the Attorney General, and (2) conditioned upon the mortgage servicer licensee or exempt mortgage servicer registrant faithfully performing any and all written agreements or commitments with or for the benefit of mortgagors and mortgagees, truly and faithfully accounting for all funds received from a mortgagor or mortgagee in such person's capacity as a mortgage servicer, and conducting such mortgage business consistent with the provisions of sections 36a-715 to 36a-719l, inclusive. Any mortgagor that may be damaged by the failure of a mortgage servicer licensee or exempt mortgage servicer registrant to perform any written agreements or commitments, or by the wrongful conversion of funds paid by a mortgagor to such licensee or registrant, may proceed on such bond against the principal or surety thereon, or both, to recover damages. The commissioner may proceed on such bond against the principal or surety on such bond, or both, to collect any civil penalty imposed pursuant to subsection (a) of section 36a-50, any restitution imposed pursuant to subsection (c) of section 36a-50 and any unpaid costs of examination of a licensee as determined pursuant to section 36a-65. The proceeds of the bond, even if commingled with other assets of the principal, shall be deemed by operation of law to be held in trust for the benefit of such claimants against the principal in the event of bankruptcy of the principal and shall be immune from attachment by creditors and judgment creditors. The surety bond shall run concurrently with the period of the license or registration for the main office of the mortgage servicer or exempt mortgage servicer registrant and the aggregate liability under the bond shall not exceed the penal sum of the bond. The principal shall notify the commissioner of the commencement of an action on the bond. When an action is commenced on a principal's bond, the commissioner may require the filing of a new bond and immediately on recovery on any action on the bond, the principal shall file a new bond.

(c) (1) The fidelity bond and errors and omissions coverage required by subsection (a) of this section shall name the commissioner as an additional loss payee on drafts the surety issues to pay for covered losses directly or indirectly incurred by mortgagors of residential mortgage loans serviced by the mortgage servicer or exempt mortgage servicer registrant. The fidelity bond shall cover losses arising from dishonest and fraudulent acts, embezzlement, misplacement, forgery and similar events committed by employees of the mortgage servicer or exempt mortgage servicer registrant. The errors and omissions coverage shall cover losses arising from negligence, errors and omissions by the mortgage servicer or exempt mortgage servicer registrant with respect to the payment of real estate taxes and special assessments, hazard and flood insurance or the maintenance of mortgage and guaranty insurance. The fidelity bond and errors and omissions coverage shall each be in the following principal amounts based on the mortgage servicer's or exempt mortgage servicer registrant's volume of servicing activity most recently reported to the commissioner:

(A) If the amount of the residential mortgage loans serviced is one hundred million dollars or less, the principal amount shall be at least three hundred thousand dollars; or

(B) If the amount of such loans exceeds one hundred million dollars, the principal amount shall be at least three hundred thousand dollars plus (i) three-twentieths of one per cent of the amount of residential mortgage loans serviced greater than one hundred million dollars but less than or equal to five hundred million dollars; (ii) plus one-eighth of one per cent of the amount of residential mortgage loans serviced greater than five hundred million dollars but less than or equal to one billion dollars; and (iii) plus one-tenth of one per cent of the amount of residential mortgage loans serviced greater than one billion dollars.

(2) The fidelity bond and errors and omissions coverage may provide for a deductible amount not to exceed the greater of one hundred thousand dollars or five per cent of the face amount of such bond or coverage.

(d) A surety shall have the right to cancel the surety bond, fidelity bond and errors and omissions coverage required by this section at any time by a written notice to the principal and the commissioner stating the date cancellation shall take effect. Such written notice of cancellation shall be provided by the surety company to the principal and the commissioner through the system at least thirty days prior to the date of cancellation. A surety bond, fidelity bond or errors and omissions coverage shall not be cancelled unless the surety notifies the commissioner, in writing, not less than thirty days prior to the effective date of cancellation. After receipt of such notification from the surety, the commissioner shall give written notice to the principal of the date such cancellation shall take effect. The commissioner shall automatically suspend the license of a mortgage servicer licensee or registration of an exempt mortgage servicer registrant on such date or on any date when a fidelity bond or errors and omissions coverage expires or is no longer in effect. No automatic suspension or inactivation shall occur if, prior to the date that such bond or errors and omissions coverage cancellation or expiration shall take effect, (1) the principal submits a letter of reinstatement of the bond or errors and omissions coverage, or a new bond or errors and omissions policy, or (2) the mortgage servicer licensee or exempt mortgage servicer registrant has ceased business in this state and has surrendered all (A) licenses in accordance with section 36a-51 and section 36a-719a, and (B) registrations in accordance with section 36a-718. After a mortgage servicer license or exempt mortgage servicer registration has been automatically suspended pursuant to this section, the commissioner shall (i) give the licensee or registrant notice of the automatic suspension, pending proceedings for revocation or refusal to renew pursuant to section 36a-719j or subsection (d) of section 36a-718 and an opportunity for a hearing on such action in accordance with section 36a-51, and (ii) require such licensee or registrant to take or refrain from taking such action as the commissioner deems necessary to effectuate the purposes of this section. Any exempt mortgage servicer registrant acting as a mortgage servicer from a location licensed as a main office or branch office under sections 36a-485 to 36a-498e, inclusive, 36a-534a and 36a-534b shall cease to be exempt from mortgage servicer licensing requirements in this state upon cancellation or expiration of any surety bond, fidelity bond or errors and omissions coverage required by this section.

(e) If the commissioner finds that the financial condition of a mortgage servicer licensee or exempt mortgage servicer registrant so requires, as evidenced by the reduction of tangible net worth, financial losses or potential losses as a result of a violation of sections 36a-715 to 36a-719k, inclusive, the commissioner may require one or more additional bonds meeting the standards set forth in this section. The mortgage servicer licensee or exempt mortgage servicer registrant shall file any such additional bonds not later than ten days after receipt of the commissioner's written notice of such requirement. A mortgage servicer licensee or exempt mortgage servicer registrant shall file, as the commissioner may require, any bond rider or endorsement or addendum, as applicable, to any bond or evidence of errors and omissions coverage on file with the commissioner to reflect any changes necessary to maintain the surety bond, fidelity bond and errors and omissions coverage required by this section.

(P.A. 14-89, S. 8; P.A. 15-53, S. 2; P.A. 18-173, S. 74; P.A. 25-115, S. 14.)

History: P.A. 15-53 amended Subsec. (c) by adding “at least” re principal amount of bond and replacing “principal amount” with “face amount of such bond or coverage”, effective June 19, 2015; P.A. 18-173 amended Subsec. (d) by adding references to commissioner re cancellation of surety bond by written notice, adding provision re written notice of cancellation through the system if surety bond was issued electronically, adding provision re on date when fidelity bond or errors and omissions coverage expires or is no longer in effect re automatic suspension of license, designating existing provisions re notice of automatic suspension as Subpara. (A), designating existing provisions re requiring licensee to take or refrain from taking action as Subpara. (B) and amending same to replace “action as in the opinion of the commissioner will effectuate the purposes of this section” with “action as the commissioner deems necessary to effectuate the purposes of this section”, and replacing reference to Sec. 36a-498f with reference to Sec. 36a-498e, and made technical and conforming changes; P.A. 25-115 amended Subsecs. (a) and (b) to replace references to persons exempt from mortgage servicer licensure pursuant to Sec. 36a-718(b)(4) with references to exempt mortgage servicer registrants, amended Subsec. (b) to replace “person” with “registrant” and replace “license for the main office of the mortgage servicer or mortgage lender and the aggregate” with “license or registration for the main office of the mortgage servicer or exempt mortgage servicer registrant and the aggregate”, amended Subsec. (c) to designate existing provisions in introductory language as new Subdiv. (1), existing provisions in Subdiv. (1) as Subdiv. (1)(A), existing provisions in Subdiv. (2) as Subdiv. (1)(B) and Subdiv. (2) and existing provisions in Subdiv. (2)(A) to (C) as Subdiv. (1)(B)(i) to (iii) and add references to “exempt mortgage servicer registrant” in redesignated Subdiv. (1), amended Subsec. (d) to replace “If the surety bond required by this section was issued electronically on the system,” with “Such”, replace “cancellation may be provided” with “cancellation shall be provided”, delete provision re requirement that any notice of cancellation not provided through the system be sent by certified mail, add “licensee or registration of an exempt mortgage servicer registrant”, add “or exempt mortgage servicer registrant” in Subdiv. (2), designate existing provisions in introductory language of Subdiv. (2) as Subdiv. (2)(A) and (B) and existing provisions in Subdiv. (2)(A) and (B) as Subdiv. (2)(B)(i) and (ii), add “registrations in accordance with section 36a-718” in Subdiv. (2)(B), add “or exempt mortgage servicer registration”, add “or registrant” and “or subsection (d) of section 36a-718” in Subdiv. (2)(B)(i), add “or registrant” in Subdiv. (2)(B)(ii) and replace “A person licensed as a mortgage lender in this state” with “Any exempt mortgage servicer registrant”, amended Subsec. (e) to replace “mortgage servicer or mortgage lender licensee so requires” with “mortgage servicer licensee or exempt mortgage servicer registrant so requires”, replace “The licensee shall file” with “The mortgage servicer licensee or exempt mortgage servicer registrant shall file” and replace “A mortgage servicer or mortgage lender licensee shall file” with “A mortgage servicer licensee or exempt mortgage servicer registrant shall file” and made technical changes.

(Return to Chapter
Table of Contents)

(Return to
List of Chapters)

(Return to
List of Titles)

Sec. 36a-719h. Prohibited acts. Duty to establish, enforce and maintain policies and procedures for compliance. (a) No mortgage servicer shall, directly or indirectly:

(1) Employ any scheme, device or artifice to defraud or mislead mortgagors or mortgagees or to defraud any person;

(2) Engage in any unfair or deceptive practice toward any person or misrepresent or omit any material information in connection with the servicing of the residential mortgage loan, including, but not limited to, misrepresenting the amount, nature or terms of any fee or payment due or claimed to be due on a residential mortgage loan, the terms and conditions of the servicing agreement or the mortgagor's obligations under the residential mortgage loan;

(3) Obtain property by fraud or misrepresentation;

(4) Recklessly apply residential mortgage loan payments or knowingly misapply residential mortgage loan payments to the outstanding balance of a residential mortgage loan;

(5) Recklessly apply payments or knowingly misapply payments to escrow accounts;

(6) Place hazard, homeowners or flood insurance on the mortgaged property when the mortgage servicer knew or should have known that the mortgagor has an effective policy for such insurance;

(7) Fail to comply with section 49-10a;

(8) Knowingly or recklessly provide inaccurate information to a credit bureau that results in harm to a mortgagor's creditworthiness;

(9) Fail to report both the favorable and unfavorable payment history of the mortgagor to a nationally recognized consumer credit bureau at least annually if the mortgage servicer regularly reports information to a credit bureau;

(10) Collect private mortgage insurance beyond the date for which private mortgage insurance is required;

(11) Fail to issue a release of mortgage in accordance with section 49-8;

(12) Fail to provide written notice to a mortgagor upon taking action to place hazard, homeowners or flood insurance on the mortgaged property, including a clear and conspicuous statement of the procedures by which the mortgagor may demonstrate that he or she has the required insurance coverage and by which the mortgage servicer shall terminate the insurance coverage placed by it and refund or cancel any insurance premiums and related fees paid by or charged to the mortgagor;

(13) Place hazard, homeowners or flood insurance on a mortgaged property, or require a mortgagor to obtain or maintain such insurance, in excess of the replacement cost of the improvements on the mortgaged property as established by the property insurer;

(14) Fail to provide to the mortgagor a refund of unearned premiums paid by a mortgagor or charged to the mortgagor for hazard, homeowners or flood insurance placed by a mortgagee or the mortgage servicer if the mortgagor provides reasonable proof that the mortgagor has obtained coverage such that the forced placement insurance is no longer necessary and the property is insured. If the mortgagor provides reasonable proof that no lapse in coverage occurred such that the forced placement was not necessary, the mortgage servicer shall promptly refund the entire premium;

(15) Require any amount of funds to be remitted by means more costly to the mortgagor than a bank or certified check or attorney's check from an attorney's account to be paid by the mortgagor;

(16) Refuse to communicate with an authorized representative of the mortgagor who provides a written authorization signed by the mortgagor, provided the mortgage servicer may adopt procedures reasonably related to verifying that the representative is in fact authorized to act on behalf of the mortgagor;

(17) Conduct any business covered by sections 36a-715 to 36a-719l, inclusive, without holding a valid license as required under said sections, or assist or aid and abet any person in the conduct of business without a valid license as required under this title;

(18) Negligently make any false statement or knowingly and wilfully make any omission of a material fact in connection with any information or reports filed with a governmental agency or the system or in connection with any investigation conducted by the commissioner or another governmental agency; or

(19) Collect, charge, attempt to collect or charge or use or propose any agreement purporting to collect or charge any fee prohibited by sections 36a-485 to 36a-498e, inclusive, 36a-534a and 36a-534b.

(b) No mortgage servicer shall fail to establish, enforce and maintain policies and procedures reasonably designed to achieve compliance with subsection (a) of this section, and no qualified individual or branch manager for such mortgage servicer shall fail to enforce such policies and procedures. No violation of this subsection shall be found unless the mortgage servicer, qualified individual or branch manager's failure to establish, enforce or maintain policies and procedures resulted in conduct in violation of sections 36a-715 to 36a-724, inclusive, or rules or regulations adopted under said sections or any other state or federal law, including the rules and regulations thereunder, applicable to any business authorized or conducted under said sections.

(P.A. 14-89, S. 13; P.A. 15-118, S. 29; P.A. 16-65, S. 46; P.A. 17-233, S. 28; P.A. 18-173, S. 76; P.A. 25-115, S. 27.)

History: P.A. 14-89 effective January 1, 2015; P.A. 15-118 made technical changes in Subdivs. (6), (12), (13) and (14); P.A. 16-65 made technical changes in Subdivs. (4), (5), (6) and (8); P.A. 17-233 designated existing provisions re acts by mortgage servicer as Subsec. (a) and amended same to add “, directly or indirectly”, delete “directly or indirectly” in Subdiv. (1), and replace “Banking Commissioner” with “commissioner” in Subdiv. (18), and added Subsec. (b) re failure to establish, enforce and maintain policies and procedures, effective July 1, 2018; P.A. 18-173 amended Subsec. (a)(19) by replacing “36a-498f” with “36a-498e”, effective July 1, 2018; P.A. 25-115 amended Subsec. (b) to replace references to “qualifying” with references to “qualified”.

(Return to Chapter
Table of Contents)

(Return to
List of Chapters)

(Return to
List of Titles)

PART XI

RETAIL INSTALLMENT SALES FINANCING

Sec. 36a-770. (Formerly Sec. 42-83). Applicability of Uniform Commercial Code. Filing and recording. Definitions. (a) The Uniform Commercial Code. A transaction subject to sections 36a-770 to 36a-788, inclusive, 42-100b and 42-100c is also subject to the Uniform Commercial Code, title 42a, but in case of any conflict the provisions of sections 36a-770 to 36a-788, inclusive, 42-100b and 42-100c shall control.

(b) Filing and recording. Section 42a-9-310 determines the need for filing or recording to perfect a security interest, section 42a-9-317 determines the persons who take subject to an unperfected security interest, and sections 42a-9-311 and 42a-9-501 to 42a-9-526, inclusive, determine the place for such filing or recording.

(c) Definitions. As used in this section and sections 36a-771 to 36a-788, inclusive, 42-100b and 42-100c, unless the context otherwise requires:

(1) “Boat” means any watercraft, as defined in section 22a-248, other than a seaplane, used or capable of being used as a means of transportation on water, by any power including muscular.

(2) “Cash price” means the total amount in dollars at which the seller and buyer agreed the seller would transfer unqualified title to the goods, if the transaction were a cash sale instead of a sale under a retail installment contract.

(3) “Commercial vehicle” means any domestic or foreign truck or truck tractor of ten thousand or more pounds gross vehicular weight or any trailer or semitrailer designed for use in connection with any truck or truck tractor of ten thousand or more pounds gross vehicular weight and which is not used primarily for personal, family or household use.

(4) “Filing fee” means the fee prescribed by law for filing, recording or otherwise perfecting and releasing or satisfying a security interest, as defined in section 42a-1-201, retained or created by a retail installment contract or installment loan contract.

(5) “Finance charge” means the amount in excess of the cash price of the goods agreed upon by the retail seller and the retail buyer, to be paid by the retail buyer for the privilege of purchasing the goods under the retail installment contract or installment loan contract.

(6) “Goods” means (A) “consumer goods”, as defined in section 42a-9-102, and motor vehicles included under such definition, having an aggregate cash price of seventy-five thousand dollars or less, and (B) “equipment”, as defined in section 42a-9-102, having an aggregate cash price of twenty-five thousand dollars or less, provided such consumer goods or such equipment is included in one retail installment contract or installment loan contract.

(7) “Installment loan contract” means any agreement made in this state to repay in installments the amount loaned or advanced to a retail buyer for the purpose of paying the retail purchase price of goods and by virtue of which a security interest, as defined in section 42a-1-201, is taken in the goods for the payment of the amount loaned or advanced. For purposes of this subdivision, “installment loan contract” does not include agreements to repay in installments loans made by the United States or any department, agency or instrumentality thereof.

(8) “Lender” means a person who extends or offers to extend credit to a retail buyer under an installment loan contract.

(9) A retail installment contract or installment loan contract is “made in this state” if: (A) An offer or agreement is made in Connecticut by a retail seller or a lender to sell or extend credit to a resident retail buyer, including, but not limited to, any verbal or written solicitation or communication to sell or extend credit originating outside the state of Connecticut but forwarded to and received in Connecticut by a resident retail buyer; or (B) an offer to buy or an application for extension of credit, or an acceptance of an offer to buy or to extend credit, is made in Connecticut by a resident retail buyer, regardless of the situs of the contract which may be specified therein, including, but not limited to, any verbal or written solicitation or communication to buy or to have credit extended, originating within the state of Connecticut but forwarded to and received by a retail seller or a lender outside the state of Connecticut. For purposes of this subdivision, a “resident retail buyer” means a retail buyer who is a resident of the state of Connecticut.

(10) “Motor vehicle” means any device in, upon or by which any person or property is or may be transported or drawn upon a highway by any power other than muscular. For purposes of this subdivision, “motor vehicle” does not include self-propelled wheelchairs and invalid tricycles, tractors, power shovels, road machinery, implements of husbandry and other agricultural machinery, or other machinery not designed primarily for highway transportation but which may incidentally transport persons or property on a highway, or devices which move upon or are guided by a track or travel through the air.

(11) “Retail buyer” means a person who buys or agrees to buy one or more articles of goods from a retail seller not for the purpose of resale or lease to others in the course of business and who executes a retail installment contract or an installment loan contract in connection therewith.

(12) “Retail installment contract” means any security agreement, as defined in section 42a-9-102, made in this state, including one in the form of a mortgage, conditional sale contract or other instrument evidencing an agreement to pay the retail purchase price of goods, or any part thereof, in installments over a period of time and pursuant to which a security interest, as defined in section 42a-1-201, is retained or taken by the retail seller for the payment of the amount of such retail installment contract. For purposes of this subdivision, “retail installment contract” does not include a rent-to-own agreement, as defined in section 42-240.

(13) “Retail installment sale” means any sale evidenced by a retail installment contract or installment loan contract wherein a retail buyer buys goods from a retail seller at a time sale price payable in two or more installments. The cash price of the goods, the amount, if any, included for other itemized charges which are included in the amount of the credit extended but which are not part of the finance charge under sections 36a-675 to 36a-686, inclusive, and the finance charge shall together constitute the time sale price. For purposes of this subdivision, “retail installment sale” does not include a rent-to-own agreement, as defined in section 42-240.

(14) “Retail seller” means a person who sells or agrees to sell one or more articles of goods under a retail installment contract or an installment loan contract to a retail buyer.

(15) “Sales finance company” means any person engaging in this state in the business, in whole or in part, of (A) acquiring retail installment contracts or installment loan contracts from holders thereof, by purchase, discount or pledge, or by loan or advance to the holder of either on the security thereof, or otherwise, or (B) receiving payments of principal and interest from a retail buyer under a retail installment contract or installment loan contract.

(1949 Rev., S. 6698; 1949, 1955, S. 2862d; November, 1955, N218; 1957, P.A. 357, S. 1; March, 1958, P.A. 27, S. 33; 1959, P.A. 495; 589, S. 2; 1961, P.A. 116, S. 20; 1969, P.A. 454, S. 28; P.A. 77-317; 77-604, S. 52, 84; P.A. 78-313, S. 1, 3; P.A. 81-158, S. 13, 17; P.A. 82-18, S. 2, 4; P.A. 89-210, S. 1; P.A. 91-162, S. 15, 18; P.A. 93-39; P.A. 94-122, S. 325, 340; 94-134, S. 1, 3; May 25 Sp. Sess. P.A. 94-1, S. 109, 130; P.A. 01-132, S. 170; P.A. 03-19, S. 85; 03-62, S. 21; P.A. 05-109, S. 49; P.A. 11-108, S. 28; P.A. 15-235, S. 20; P.A. 21-138, S. 15; P.A. 23-126, S. 6; P.A. 25-145, S. 113.)

History: 1959 acts amended definitions of “goods” and “retail buyer”; 1961 act coordinated this section with Uniform Commercial Code; 1969 act redefined “retail installment sale” to include the amount of itemized charges included in amount of credit extended but excluded from finance charge rather than the amount of insurances and other benefits and filing fees; P.A. 77-317 redefined goods to raise maximum aggregate cash price from $6,000 to $25,000; P.A. 77-604 revised references to Sec. 42a-9-105; P.A. 78-313 redefined “goods” to include motor vehicles and to establish separate maximum cash value of $8,000 for equipment and added Subsec. (3)(m) and (n) defining “lender” and contracts “made in this state”; P.A. 81-158 amended Subsec. (3)(d) by replacing “section 36-396”, which had been repealed, with “chapter 657”, effective March 31, 1982; P.A. 82-18 changed effective date of P.A. 81-158 from March 31, 1982, to “the effective date of Title VI of Public Law 96-221, as contained in Section 625(a) of Public Law 96-221, as amended”, i.e. October 1, 1982; P.A. 89-210 added Subsec. (3)(o) defining “commercial vehicle”; P.A. 91-162 amended Subsec. (3)(d) and (e) to specifically exclude consumer rent-to-own agreements, as defined in Sec. 42-240, from the definitions of “retail installment sale” and “retail installment contract”; P.A. 93-39 amended Subsec. (3)(b) by increasing the aggregate cash price of a motor vehicle to be included in the definition of “consumer goods” from $25,000 to $50,000 and increasing the aggregate cash price of equipment to be included from $8,000 to $16,000; P.A. 94-122 changed Subsecs. (1), (2) and (3) to Subsecs. (a), (b) and (c), deleted the definition of “person”, reordered the definitions and made technical changes, effective January 1, 1995; P.A. 94-134 added Subsec. (p) defining “boat”, effective October 1, 1994, and applicable to retail installment contracts and installment loan contracts executed on or after that date; May 25 Sp. Sess. P.A. 94-1 made technical changes, effective January 1, 1994, and applicable January 1, 1995; Sec. 42-83 transferred to Sec. 36a-770 in 1995; (Revisor's note: In 1997 a reference in Subsec. (a) to “42-110b” was corrected editorially by the Revisors to “42-100b” thereby correcting a clerical error which occurred during the preparation of the 1995 revision); P.A. 01-132 amended Subsec. (b) to replace reference to Sec. 42a-9-302 with Sec. 42a-9-310, replace reference to Sec. 42a-9-301 with Sec. 42a-9-317 and replace reference to Secs. 42a-9-302(3)(b) and 42a-9-401 to 42a-9-409, inclusive, with Secs. 42a-9-311 and 42a-9-501 to 42a-9-518, inclusive, and amended Subsec. (c) to make a technical change in Subdiv. (4), in Subdiv. (6) replace Secs. 42a-9-105(1)(h) and 42a-9-109(1) with Sec. 42a-9-102(a)(23) as the statutory reference for the definition of “consumer goods”, make a technical change and replace Sec. 42a-9-109(2) with Sec. 42a-9-102(a)(33) as the statutory reference for the definition of “equipment”, make a technical change in Subdiv. (7) and replace in Subdiv. (12) Sec. 42a-9-105(1)(l) with Sec. 42a-9-102(a)(73) as the statutory reference for the definition of “security agreement” and make a technical change; P.A. 03-19 made a technical change in Subsec. (b), effective May 12, 2003; P.A. 03-62 amended Subsec. (b) to replace reference to Sec. 42a-9-518 with Sec. 42a-9-526 and make technical changes; P.A. 05-109 amended Subsec. (c) by replacing references to Sec. 42a-1-201(37) with references to Sec. 42a-1-201(b)(35) in Subdivs. (4), (7) and (12); P.A. 11-108 amended Subsec. (c)(12) re definition of “retail installment contract” to replace reference to Sec. 42a-9-102(a)(73) with reference to Sec. 42a-9-102(a)(74), effective July 1, 2013; P.A. 15-235 amended Subsec. (c)(13) to change “36a-685” to “36a-686”, effective August 1, 2015; P.A. 21-138 redefined “retail seller” in Subsec. (c)(14); P.A. 23-126 amended Subsec. (c) by making technical changes, redefining “goods” in Subdiv. (6) and redefining “sales finance company” in Subdiv. (15); P.A. 25-145 amended Subsec. (c)(4), (6), (7) and (12) by deleting references to section subdesignators set forth in defined terms while retaining references to section numbers, effective January 1, 2026.

(Return to Chapter
Table of Contents)

(Return to
List of Chapters)

(Return to
List of Titles)

Sec. 36a-779. (Formerly Sec. 42-92). Assignment of contract. Any sales finance company may purchase or acquire from the original holder thereof or from any other sales finance company any retail installment contract or any installment loan contract on such terms and conditions as may be mutually agreed upon not inconsistent with the provisions of sections 36a-770 to 36a-788, inclusive, 42-100b and 42-100c. Such contracts constitute chattel paper, as defined in section 42a-9-102, and are governed by article 9 of title 42a, except as otherwise provided in said sections.

(1949 Rev., S. 6699, (d); 1957, P.A. 361, S. 1 (e); 1961, P.A. 116, S. 21; P.A. 01-132, S. 171; P.A. 25-145, S. 114.)

History: 1961 act coordinated this section with the Uniform Commercial Code; Sec. 42-92 transferred to Sec. 36a-779 in 1995; P.A. 01-132 replaced reference to Sec. 42a-9-105(1)(b) with Sec. 42a-9-102(a)(11); P.A. 25-145 deleted “subdivision (11) of subsection (a)” in reference to Sec. 42a-9-102, effective January 1, 2026.

(Return to Chapter
Table of Contents)

(Return to
List of Chapters)

(Return to
List of Titles)

PART XII

CONSUMER COLLECTION AGENCIES

Sec. 36a-800. (Formerly Sec. 42-127). Consumer collection agency. Definitions. As used in this section and sections 36a-801 to 36a-814, inclusive, unless the context otherwise requires:

(1) “Advertise” or “advertising” has the same meaning as provided in section 36a-485;

(2) “Branch office” means a location other than the main office at which a licensee or any person on behalf of a licensee acts as a consumer collection agency;

(3) “Consumer collection agency” means any person (A) engaged as a third party in the business of collecting or receiving payment for others on any account, bill or other indebtedness from a consumer debtor, (B) engaged in the business of debt buying, including, but not limited to, buying property tax debt in accordance with section 12-195h, or (C) engaged in the business of collecting or receiving tax payments, including, but not limited to, property tax and federal income tax payments, from a property tax debtor or federal income tax debtor on behalf of a municipality or the United States Department of the Treasury, including, but not limited to, any person who, by any device, subterfuge or pretense, makes a pretended purchase or takes a pretended assignment of accounts from any other person, municipality or taxing authority of such indebtedness for the purpose of evading the provisions of this section and sections 36a-801 to 36a-814, inclusive. “Consumer collection agency” includes persons who furnish collection systems carrying a name which simulates the name of a consumer collection agency and who supply forms or form letters to be used by the creditor, even though such forms direct the consumer debtor, property tax debtor or federal income tax debtor to make payments directly to the creditor rather than to such fictitious agency. “Consumer collection agency” further includes any person who, in attempting to collect or in collecting such person's own accounts or claims from a consumer debtor, uses a fictitious name or any name other than such person's own name which would indicate to the consumer debtor that a third person is collecting or attempting to collect such account or claim. “Consumer collection agency” does not include (i) an individual employed on the staff of a licensed consumer collection agency, or by a creditor who is exempt from licensing, when attempting to collect on behalf of such consumer collection agency, (ii) persons not primarily engaged in the collection of debts from consumer debtors who receive funds in escrow for subsequent distribution to others, including, but not limited to, real estate brokers and lenders holding funds of borrowers for payment of taxes or insurance, (iii) any public officer or a person acting under the order of any court, (iv) any member of the bar of this state, (v) a person who services loans or accounts for the owners thereof when the arrangement includes, in addition to requesting payment from delinquent consumer debtors, the providing of other services such as receipt of payment, accounting, record-keeping, data processing services and remitting, for loans or accounts which are current as well as those which are delinquent, (vi) a bank or out-of-state bank, as defined in section 36a-2, and (vii) a subsidiary or affiliate of a bank or out-of-state bank, provided such affiliate or subsidiary is not primarily engaged in the business of purchasing and collecting upon delinquent debt, other than delinquent debt secured by real property. Any person not included in the definition contained in this subdivision is, for purposes of sections 36a-645 to 36a-647, inclusive, a “creditor”, as defined in section 36a-645;

(4) “Consumer debtor” means any natural person, not an organization, who has incurred indebtedness or owes a debt for personal, family or household purposes, including current or past due child support, who has incurred indebtedness or owes a debt to a municipality due to a levy by such municipality of a property tax or who has incurred indebtedness or owes a debt to the United States Department of the Treasury under the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as amended from time to time;

(5) “Control person” has the same meaning as provided in section 36a-485;

(6) “Creditor” means a person, including, but not limited to, a municipality or the United States Department of the Treasury, that retains, hires, or engages the services of a consumer collection agency;

(7) “Debt buying” means collecting or receiving payment on any account, bill or other indebtedness, including, but not limited to, property tax debt, from a consumer debtor for such person's own account if the indebtedness was acquired from another person, including, but not limited to, a municipality, and if the indebtedness was either delinquent or in default at the time it was acquired;

(8) “Federal income tax” means all federal taxes levied on the income of a natural person or organization by the United States Department of the Treasury under the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as amended from time to time;

(9) “Federal income tax debtor” means any natural person or organization who owes a debt to the United States Department of the Treasury;

(10) “Main office” means the main address designated on the system;

(11) “Municipality” means any town, city or borough, consolidated town and city, consolidated town and borough, district as defined in section 7-324 or municipal special services district established under chapter 105a;

(12) “Organization” means a corporation, partnership, association, trust or any other legal entity or an individual operating under a trade name or a name having appended to it a commercial, occupational or professional designation;

(13) “Property tax” has the meaning given to the term in section 7-560;

(14) “Property tax debtor” means any natural person or organization who has incurred indebtedness or owes a debt to a municipality due to a levy by such municipality of a property tax; and

(15) “Unique identifier” has the same meaning as provided in section 36a-485.

(1953, 1955, S. 3310d; 1967, P.A. 882, S. 19; 1971, P.A. 539, S. 1; P.A. 75-486, S. 64, 69; P.A. 77-614, S. 161, 162, 610; P.A. 78-226, S. 1; 78-303, S. 54, 136; P.A. 80-482, S. 333, 348; P.A. 84-61, S. 1, 3; P.A. 87-9, S. 2, 3; P.A. 88-65, S. 56; P.A. 91-357, S. 61, 78; P.A. 92-12, S. 103; P.A. 93-127, S. 1, 3; P.A. 94-122, S. 328, 340; P.A. 01-207, S. 3, 12; P.A. 02-111, S. 46; P.A. 03-262, S. 1; P.A. 04-8, S. 11; P.A. 07-72, S. 8; P.A. 13-253, S. 22; P.A. 14-7, S. 2; P.A. 15-235, S. 33; P.A. 16-65, S. 47; P.A. 17-233, S. 29; P.A. 18-173, S. 78; P.A. 21-138, S. 16; P.A. 25-168, S. 447.)

History: 1967 act deleted language which had specifically included debt adjustment and prorate companies in definition of “collection agency”; 1971 act defined “consumer collection agency” rather than “collection agency”, expanding definition and specifically excluding lender licensed by banking commission under Ch. 647, and added definitions of “commissioner”, “consumer debtor” and “organization”; P.A. 75-486 substituted replaced public utilities commission with public utilities control authority in Subdiv. (b); P.A. 77-614 replaced bank commissioner and public utilities commission with banking commissioner (within the department of business regulation, the banking department having been made a division within that department) and division of public utility control within the department of business regulation, effective January 1, 1979; P.A. 78-226 defined “creditor”; P.A. 78-303 confirmed change in bank commissioner's title and replaced banking commission with banking commissioner to conform with P.A. 77-614 which abolished said commission; P.A. 80-482 restored division of banking to prior status as independent department, made division of public utility control an independent department and abolished the department of business regulation; P.A. 84-61 amended Subsec. (b) to exempt from the definition of “consumer collection agency” those persons delineated in Subdivs. (1) through (5), inclusive, replacing prior exemption provision; (Revisor's note: Pursuant to P.A. 87-9 “banking commissioner” was changed editorially by the Revisors to “commissioner of banking”); P.A. 88-65 substituted a reference to Sec. 42-133a for Sec. 42-133 in the introductory language; P.A. 91-357 made a technical change in Subsec. (c); P.A. 92-12 redesignated Subsecs. and Subdivs. and made technical changes; P.A. 93-127 amended Subdiv. (2) to include “municipality” in the definition of “consumer collection agency”, amended Subdiv. (4) to include debts owed to a municipality in the definition of “consumer debtor”, added a new Subdiv. (6) defining “municipality” and renumbered the former Subdiv. (6) as (7), effective July 1, 1993; P.A. 94-122 deleted the definitions of “person” and “commissioner”, reordered definitions and made other technical changes, effective January 1, 1995; Sec. 42-127 transferred to Sec. 36a-800 in 1995; (Revisor's note: In 1997 the Revisors editorially changed the reference at the end of Subdiv. (1) from “creditor”, as defined in “subsection (2)” of section 36a-645; to “creditor” as defined in “subdivision (3)” of section 36a-645; to reflect correctly P.A. 94-122, S. 293); P.A. 01-207 made a technical change in Subdiv. (1) and amended definition of “consumer debtor” in Subdiv. (2) to add the phrase “including current or past due child support”, effective July 1, 2001; P.A. 02-111 redefined “consumer collection agency” in Subdiv. (1) and added Subdivs. (6) and (7) defining “property tax” and “property tax debtor”, effective July 1, 2002; P.A. 03-262 redefined “consumer collection agency” in Subdiv. (1) by substituting “or receiving for payment” for “, without receiving,” effective July 9, 2003; P.A. 04-8 made a technical change in Subdiv. (3), effective April 16, 2004; P.A. 07-72 made technical changes in Subdiv. (1); P.A. 13-253 added new Subdiv. (1) defining “branch office”, redesignated existing Subdiv. (1) as Subdiv. (2) and amended same to redefine “consumer collection agency”, redesignated existing Subdivs. (2) and (3) as Subdivs. (3) and (4), added new Subdiv. (5) defining “main office” and redesignated existing Subdivs. (4) to (7) as Subdivs. (6) to (9); P.A. 14-7 amended Subdiv. (2) to redefine “consumer collection agency” by deleting reference to account, bill or other indebtedness and making technical changes, effective May 8, 2014; P.A. 15-235 changed “36a-810” to “36a-812”, effective July 7, 2015; P.A. 16-65 redefined “consumer collection agency”, “consumer debtor” and “creditor”, defined “federal income tax” and “federal income tax debtor”, and made technical and conforming changes; P.A. 17-233 deleted “directly or indirectly” in Subdiv. (2)(B), added new Subdiv. (4) defining “control person” and redesignated existing Subdivs. (4) to (11) as Subdivs. (5) to (12); P.A. 18-173 added new Subdiv. (1) defining “advertise” or “advertising”, redesignated existing Subdivs. (1) to (5) as new Subdivs. (2) to (6), amended redesignated Subdiv. (3)(B) by replacing provision re collecting on certain accounts, bills or other indebtedness with reference to debt buying, replacing reference to Sec. 36a-812 with reference to Sec. 36a-814, added new Subdiv. (7) defining “debt buying”, redesignated existing Subdivs. (6) to (12) as Subdivs. (8) to (14), amended redesignated Subdiv. (10) by replacing “application” with “system”, added Subdiv. (15) defining “unique identifier”, and made technical changes; P.A. 21-138 redefined “consumer debtor” in Subdiv. (4); P.A. 25-168 redefined “consumer collection agency” in Subdiv. (3) and “debt buying” in Subdiv. (7).

(Return to Chapter
Table of Contents)

(Return to
List of Chapters)

(Return to
List of Titles)

Sec. 36a-801. (Formerly Sec. 42-127a). License required. Application, issuance, renewal. Authority to conduct criminal history records check. Examination of records. Abandonment of application. Surrender of license. Required system filing or notice of commissioner. Automatic suspension of license. Name and place of business. Change in any control persons. Unique identifier of license. Advertising of license. (a) No person shall act within this state as a consumer collection agency, directly or indirectly, unless such person has first obtained a required consumer collection agency license for such person's main office and for each branch office where such person's business is conducted. A consumer collection agency is acting within this state if it (1) has its place of business located within this state; (2) has its place of business located outside this state and (A) collects from consumer debtors, property tax debtors or federal income tax debtors who reside within this state for creditors who are located within this state, or (B) collects from consumer debtors, property tax debtors or federal income tax debtors who reside within this state for such consumer collection agency's own account; (3) has its place of business located outside this state and regularly collects from consumer debtors, property tax debtors or federal income tax debtors who reside within this state for creditors who are located outside this state; or (4) has its place of business located outside this state and is engaged in the business of collecting child support for creditors located within this state from consumer debtors who are located outside this state. Any activity subject to licensure pursuant to sections 36a-800 to 36a-814, inclusive, shall be conducted from an office located in a state, as defined in section 36a-2.

(b) An application for a license as a consumer collection agency or for renewal of such license shall be made and processed on the system pursuant to section 36a-24b, in the form prescribed by the commissioner. Each such form shall contain content as set forth by instruction or procedure of the commissioner and may be changed or updated as necessary by the commissioner in order to carry out the purposes of sections 36a-800 to 36a-814, inclusive. The applicant shall, at a minimum, furnish to the system information concerning the identity of the applicant, any control person of the applicant, the qualified individual and any branch manager responsible for the actions of the licensee, including, but not limited to, information related to such person's personal history and experience, and any administrative, civil or criminal findings by any governmental jurisdiction. As part of the application, the commissioner may (1) in accordance with section 29-17a, conduct a state or national criminal history records check of the applicant, any control person of the applicant, the qualified individual or any branch manager, and (2) in accordance with section 36a-24b (A) require the submission of fingerprints of the applicant, any control person of the applicant, the qualified individual or any branch manager to the Federal Bureau of Investigation or other state, national or international criminal databases, and (B) investigate the financial condition of any such person and require authorization from any such person for the system and the commissioner to obtain an independent credit report from a consumer reporting agency, as described in Section 603(p) of the Fair Credit Reporting Act, 15 USC 1681a, as amended from time to time. Such application shall be accompanied by a financial statement prepared by a certified public accountant and shall evidence that the applicant has a tangible net worth of more than zero dollars if the applicant is engaged solely in the business of debt buying, and a tangible net worth of at least fifty thousand dollars if the applicant is not engaged solely in the business of debt buying. The commissioner shall cause to be made such inquiry and examination as to the qualifications of each such applicant or any control person, qualified individual or branch manager of the applicant as the commissioner deems necessary. Each applicant shall furnish satisfactory evidence to the commissioner that the applicant is a person of good moral character and is financially responsible.

(c) (1) Each applicant for a consumer collection agency license shall pay to the system any required fees or charges and a license fee of five hundred dollars. Each such license shall expire at the close of business on December thirty-first of the year in which the license was approved, unless such license is renewed, except that any such license approved on or after November first shall expire at the close of business on December thirty-first of the year following the year in which it is approved. An application for renewal of a license shall be filed between November first and December thirty-first of the year in which the license expires. Each applicant for renewal of a consumer collection agency license shall pay to the system any required fees or charges and a renewal fee of four hundred dollars.

(2) If the commissioner finds, upon the filing of an application for a consumer collection agency, that (A) the financial responsibility, character, reputation, integrity and general fitness of the applicant, the control persons of the applicant, the qualified individual and any branch manager are such as to warrant belief that the business will be operated soundly and efficiently, in the public interest and consistent with the purposes of sections 36a-800 to 36a-814, inclusive, and (B) the applicant meets the applicable tangible net worth requirement in subsection (b) of this section and no proceeding in bankruptcy, receivership or assignment for the benefit of creditors has been commenced against the applicant, the commissioner may thereupon issue the applicant a consumer collection agency license. If the commissioner fails to make such findings, the commissioner shall not issue a license and shall notify the applicant of the reasons for such denial. The commissioner may deny an application if the commissioner finds that the applicant or any control person, qualified individual or branch manager of such applicant has been convicted of any misdemeanor involving any aspect of the consumer collection agency business, or any felony. Any denial of an application by the commissioner shall, when applicable, be subject to the provisions of section 46a-80.

(3) The minimum standards for renewal of a consumer collection agency license shall include the following: (A) The applicant continues to meet the minimum standards under this section; (B) the applicant has paid all required fees for renewal of the license; and (C) the applicant has paid all outstanding examination fees or other moneys due to the commissioner. The license of a consumer collection agency licensee failing to satisfy the minimum standards for license renewal shall expire. The commissioner may adopt procedures for the reinstatement of expired licenses consistent with the standards established by the system. Every license shall remain in force and effect until the license has been surrendered, revoked or suspended or has expired in accordance with the provisions of sections 36a-800 to 36a-814, inclusive.

(d) To further the enforcement of this section and to determine the eligibility of any person holding a license, the commissioner may, as often as the commissioner deems necessary, examine the licensee's books and records, and may, at any time, require the licensee to submit such a financial statement for the examination of the commissioner, so that the commissioner may determine whether the licensee is financially responsible to carry on a consumer collection agency business within the intents and purposes of sections 36a-800 to 36a-814, inclusive. Any financial statement submitted by a licensee shall be confidential and shall not be a public record unless introduced in evidence at a hearing conducted by the commissioner.

(e) The commissioner may deem an application for a license to act as a consumer collection agency abandoned if the applicant fails to respond to any request for information required under sections 36a-801 to 36a-814, inclusive, or any regulations adopted pursuant to said sections 36a-801 to 36a-814, inclusive. The commissioner shall notify the applicant on the system that if the applicant fails to submit such information not later than sixty days after the date on which such request for information was made, the application shall be deemed abandoned. An application filing fee paid prior to the date an application is deemed abandoned pursuant to this subsection shall not be refunded. Abandonment of an application pursuant to this subsection shall not preclude the applicant from submitting a new application for a license under sections 36a-801 to 36a-814, inclusive.

(f) (1) Not later than thirty days before a licensee ceases to engage in the business of a consumer collection agency for any reason, including, but not limited to, a business decision to terminate operations in this state, bankruptcy or voluntary dissolution, such licensee shall request surrender of the license on the system in accordance with subsection (c) of section 36a-51 for each location in which such licensee has ceased to engage in such business.

(2) Except as otherwise specified in subsection (i) of this section, each consumer collection agency applicant or licensee, and each individual designated as a control person, qualified individual or branch manager of such applicant or licensee, shall file on the system any change in the information such applicant, licensee, control person, qualified individual or branch manager most recently submitted to the system in connection with the application or license, or, if the information cannot be filed on the system, notify the commissioner of such change, in writing, not later than fifteen days after the date the applicant, licensee, control person, qualified individual or branch manager had reason to know of the change.

(3) A consumer collection agency licensee shall file on the system or, if the information cannot be filed on the system, notify the commissioner, in writing, of the occurrence of any of the following developments not later than fifteen days after the date the licensee had reason to know of the occurrence of any of the following developments:

(A) Filing for bankruptcy or the consummation of a corporate restructuring of the licensee;

(B) Filing of a criminal indictment against the licensee in any way related to the consumer collection activities of the licensee, or receiving notification of the filing of any criminal felony indictment or felony conviction of any control person, branch manager or qualified individual of the licensee;

(C) Receiving notification of the institution of license denial, cease and desist, suspension or revocation procedures, or other formal or informal action by any governmental agency against the licensee or any control person, branch manager or qualified individual of the licensee and the reasons therefor;

(D) Receiving notification of the initiation of any action against the licensee or any control person, branch manager or qualified individual of the licensee by the Attorney General or the attorney general of any other state and the reasons therefor;

(E) Receiving notification of filing for bankruptcy of any control person, branch manager or qualified individual of the licensee; or

(F) Any decrease in tangible net worth from the minimum amount required pursuant to subsection (b) of this section.

(g) The commissioner may automatically suspend a license if the licensee receives a deficiency on the system indicating that a required payment was Returned-ACH or returned pursuant to such other term as may be utilized by the system to indicate that the payment was not accepted. After a license has been automatically suspended pursuant to this section, the commissioner shall (1) give the licensee notice of the automatic suspension, pending proceedings for revocation or refusal to renew pursuant to section 36a-804 and an opportunity for a hearing on such action in accordance with section 36a-51, and (2) require such licensee to take or refrain from taking such action as the commissioner deems necessary to effectuate the purposes of this section.

(h) No abatement of the license fee shall be made if the application is denied or withdrawn prior to issuance of the license or if the license is surrendered, revoked or suspended prior to the expiration of the period for which it was issued. All fees required by this section shall be nonrefundable.

(i) No person licensed to act within this state as a consumer collection agency shall do so under any other name or at any other place of business than that named in the license. No licensee may use any name other than its legal name or a fictitious name approved by the commissioner, provided such licensee may not use its legal name if the commissioner disapproves use of such name. A licensee may change the name of the licensee or address of the office specified on the most recent filing with the system if, at least thirty calendar days prior to such change, (1) the licensee files such change with the system and, in the case of a change to the legal name of the licensee, provides a bond rider to the surety bond on file with the commissioner that reflects the new legal name of the licensee, and (2) the commissioner does not disapprove such change, in writing, or request further information from the licensee within such thirty-day period. Not more than one place of business shall be maintained under the same license but the commissioner may issue more than one license to the same licensee upon compliance with the provisions of sections 36a-800 to 36a-814, inclusive, as to each new licensee. A license shall not be transferable or assignable. Any change in any control person of the licensee, except a change of a director, general partner or executive officer that is not the result of an acquisition or change of control of the licensee, shall be the subject of an advance change notice filed on the system at least thirty days prior to the effective date of such change and no such change shall occur without the commissioner's approval. For purposes of this section, “change of control” means any change causing the majority ownership, voting rights or control of a licensee to be held by a different control person or group of control persons. The commissioner may automatically suspend a license for any violation of this subsection. After a license has been automatically suspended pursuant to this section, the commissioner shall (A) give the licensee notice of the automatic suspension, pending proceedings for revocation or refusal to renew pursuant to section 36a-804 and an opportunity for a hearing on such action in accordance with section 36a-51, and (B) require such licensee to take or refrain from taking such action as the commissioner deems necessary to effectuate the purposes of this section.

(j) Any person making any filing or submission of any information on the system shall do so in accordance with the procedures and requirements of the system and pay the applicable fees or charges to the system. Each consumer collection agency licensee shall, to the extent required by the system, timely submit to the system accurate reports of condition that shall be in such form and shall contain such information as the system may require. Failure by a licensee to submit a timely and accurate report of condition shall constitute a violation of this provision.

(k) The unique identifier of any person licensed under section 36a-801 shall be clearly shown on all solicitations and advertisements, including business cards and Internet web sites, and any other documents as established by rule, regulation or order of the commissioner, and shall be clearly stated in all audio solicitations and advertisements. The solicitations and advertisements of any person licensed under section 36a-801: (1) Shall not include any statement that such person is endorsed in any way by this state, except that such solicitations and advertisements may include a statement that such person is licensed in this state; (2) shall not include any statement or claim that is deceptive, false or misleading; (3) shall otherwise conform to the requirements of sections 36a-801 to 36a-814, inclusive, any regulations issued thereunder and any other applicable law; and (4) shall be retained for two years from the date of use of such solicitation or advertisement.

(1971, P.A. 539, S. 2, 3; P.A. 73-284; 73-328; 73-341; P.A. 81-292, S. 12; P.A. 88-150, S. 9; P.A. 92-89, S. 17, 20; P.A. 93-127, S. 2, 3; P.A. 94-104, S. 6; 94-122, S. 329, 340; P.A. 96-71, S. 7, 8; P.A. 01-207, S. 4, 12; P.A. 02-111, S. 47; P.A. 04-69, S. 30; P.A. 05-46, S. 15; 05-74, S. 5; P.A. 06-35, S. 11; P.A. 09-208, S. 35; Sept. Sp. Sess. P.A. 09-7, S. 101; P.A. 11-216, S. 47; P.A. 13-253, S. 23; P.A. 14-89, S. 39; P.A. 15-235, S. 34; P.A. 16-65, S. 48; P.A. 17-233, S. 30; 17-236, S. 14; P.A. 18-173, S. 79; P.A. 21-138, S. 17, 18; P.A. 22-94, S. 8; P.A. 25-115, S. 11.)

History: P.A. 73-284 required that financial statements be “prepared” rather than “certified” by accountant and required that their accuracy be sworn to by proprietor, general partner or corporate officer in Subsec. (b); P.A. 73-328 defined acting within state with regard to consumer collection agencies in Subsec. (a); P.A. 73-341 added Subsec. (c); P.A. 81-292 amended Subsec. (b) by increasing the license fee from $100 to $200 and the renewal fee from $50 to $200; P.A. 88-150 amended Subsec. (b) by providing that license and investigation fees are nonrefundable; P.A. 92-89 amended Subsec. (b) to increase the license fee from $200 to $400, to increase the investigation fee from $50 to $100 and to increase the renewal fee from $200 to $400; P.A. 93-127 amended Subsec. (a) by substituting “who are” for “whose place of business is”, effective July 1, 1993; P.A. 94-104 changed the license expiration date from May first to April thirtieth, made April first the renewal application deadline and added a $100 late fee in Subsec. (a), and made technical changes; P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 42-127a transferred to Sec. 36a-801 in 1995; P.A. 96-71 amended Subsec. (b) to make technical changes and to add Subdiv. (2) to make all fees required by this section nonrefundable, effective July 1, 1996; P.A. 01-207 amended Subsec. (a) to add Subdiv. (4) defining acting within state re consumer collection agencies to include having its place of business located outside this state and engaging in the business of collecting child support for creditors located within this state from consumer debtors located outside this state, effective July 1, 2001; P.A. 02-111 amended Subsec. (a) by replacing provision re holding a license then in force with provision re consumer collection agency license and adding references to “property tax debtors”, amended Subsec. (b) by adding reference to “a member” in Subdiv. (1)(A), by providing that license fee is $800 or, in the case of initial application filed not earlier than one year before the expiration date of license, fee is $400 in Subdiv. (1)(B), by adding provisions re expiration of license at the close of business on September thirtieth of the odd-numbered year following its issuance, renewal fee of $800 and exceptions for license, renewed effective May 1, 2003, and licenses that expire on April 30, 2003, and by adding provision re $100 processing fee and amended Subsec. (c) by adding provisions re prior written notice to commissioner of any change of location of a place of business and re license shall not be transferable or assignable; P.A. 04-69 amended Subsec. (b) by adding new Subdiv. (2), requiring commissioner to automatically suspend license or renewal license if commissioner determines that a check filed to pay fee has been dishonored and requiring commissioner to give notice of the automatic suspension pending proceedings for revocation or refusal to renew and an opportunity for a hearing in accordance with Sec. 36a-51, and redesignating existing Subdiv. (2) as Subdiv. (3); P.A. 05-46 amended Subsec. (b)(1) to make a technical change and provide that renewal application for licensees filed with commissioner after September first, accompanied by late fee, shall be deemed to be timely and sufficient for purposes of Sec. 4-182(b); P.A. 05-74 amended Subsec. (c) to make a technical change, effective June 2, 2005; P.A. 06-35 amended Subsec. (b)(1) to require applicants or licensees to notify commissioner, in writing, of any changes in information in initial or most recent renewal application for license within ten business days after occurrence of event that results in information becoming inaccurate; P.A. 09-208 amended Subsec. (b)(1) by adding new Subpara. (B) requiring applicants to submit history of criminal convictions, by redesignating existing Subparas. (B) and (C) as Subparas. (C) and (D), by authorizing commissioner to deny application or renewal application based on certain convictions, and by deleting outdated provisions re license expiration and renewal, effective July 7, 2009; Sept. Sp. Sess. P.A. 09-7 amended Subsec. (c) by changing bond amount from $5,000 to $25,000, effective October 5, 2009; P.A. 11-216 amended Subsec. (b)(1) to add provisions requiring history of criminal convictions of partners, members, officers, directors and principal employees of applicant in a form acceptable to commissioner, add provision authorizing commissioner to conduct criminal history records check of applicant and each partner, member, officer, director and principal employee of applicant, delete references to ten-year period prior to date of application and add provisions re abandonment of application; P.A. 13-253 amended Subsec. (a) to add provision re license for the main office and each branch office, designate existing provisions re collecting from in-state debtors for in-state creditors as Subpara. (A) and add Subpara. (B) re collecting for the agency's own account, amended Subsec. (b) to make technical changes and delete provision re issuance of license if commissioner is satisfied that applicant is properly qualified and trustworthy, redesignated provisions of existing Subsec. (b) re denial of application as Subsec. (c) and amended same to add provisions re commissioner's belief that the business will be operated soundly and efficiently and findings re solvency and bankruptcy proceedings, designated provisions of existing Subsec. (b) re enforcement as Subsec. (d), designated provisions of existing Subsec. (b) re notification of change in application information provided as Subsec. (e), designated provisions of existing Subsec. (b) re abandonment as Subpara. (f), designated provisions re dishonored checks as Subsec. (g), designated provisions of existing Subsec. (b) re abatement of license fee as Subsec. (h) and redesignated existing Subsec. (c) as Subsec. (i); P.A. 14-89 amended Subsec. (g) to replace “subdivision (1) of this subsection” with “subsection (b) of this section”, effective June 3, 2014; P.A. 15-235 changed “36a-810” to “36a-812”, effective July 7, 2015; P.A. 16-65 amended Subsec. (a) by adding references to federal income tax debtors; P.A. 17-233 amended Subsec. (a) by adding “, directly or indirectly,” re person acting as consumer collection agency; P.A. 17-236 amended Subsec. (b)(1) by adding provision re financial statement evidencing applicant's minimum tangible net worth of $50,000; P.A. 18-173 amended Subsec. (a) by replacing “consumer collection agency license” with “required consumer collection agency license”, and adding provision re activity to be conducted from office located in a state, substantially amended Subsec. (b) including by deleting provisions re written application to commissioner, accuracy of applicant's tangible net worth to be sworn to under oath and license fee and adding provisions re application to be made and processed on the system, information to be furnished on application, and commissioner's authority to conduct criminal history records check, require submission of fingerprints and investigate financial condition of person, deleting reference to public accountant and adding reference to applicant not solely engaged in business of debt buying re applicant's tangible net worth, and replacing “partner, member, officer, director or principal employee” with “control person, qualified individual or branch manager”, amended Subsec. (c) by adding new Subdiv. (1) re applicant's payment of fees or charges to the system, designating existing provisions re commissioner's findings as new Subdiv. (2), redesignating existing Subdivs. (1) and (2) as Subparas. (A) and (B), replacing references to partners, members, officers, directors and employees with reference to control persons, qualified individual and branch manager, replacing reference to Sec. 36a-812 with reference to Sec. 36a-814, deleting provisions re renewal of license, and adding Subdiv. (3) re renewal of license and license in force and effect until license surrendered, revoked, suspended or expired, amended Subsec. (d) by replacing reference to Sec. 36a-812 with reference to Sec. 36a-814, deleted Subsec. (e) re notification to commissioner of change in information, redesignated existing Subsec. (f) as new Subsec. (e) and amending same by replacing references to Sec. 36a-812 with references to Sec. 36a-814, replacing provision re notification to applicant in writing with provision re notification to applicant on the system, added new Subsec. (f) re surrender of license, change in information, and filing information on the system or notification to commissioner, substantially amended Subsec. (g) by replacing provisions re payment of fee dishonored and automatic suspension with provisions re automatic suspension for deficiency on the system indicating returned payment, amended Subsec. (h) by adding reference to application denied or withdrawn, amended Subsec. (i) by replacing provisions re written notice to commissioner re change of location of business with provisions re licensee's use of name other than approved legal or fictitious name, filing change of name or address with the system, replacing reference to Sec. 36a-812 with reference to Sec. 36a-814, adding provisions re change in control person to be subject of advance change notice, and automatic suspension of license for violation of subsection, added Subsec. (j) re filing of information on the system in accordance with procedures, payment of fees or charges and submission of timely and accurate report of condition, added Subsec. (k) re unique identifier and solicitations and advertisements, and made technical changes; P.A. 21-138 amended Subsec. (b) by changing tangible net worth requirement for applicants not engaged solely in debt buying from $50,000 to at least $50,000 and by adding tangible net worth requirement for applicants engaged solely in the business of debt buying, amended Subsec. (c)(2) by making technical and conforming changes, and amended Subsec. (i) by defining “change of control”; P.A. 22-94 amended Subsec. (i) by deleting provision re licensee holding, applying for, or seeking renewal of more than one license, at its option, filing bond separately for each place of business licensed, or to be licensed, or a single bond, naming each place of business, in an amount equal to $25,000 for each place of business; P.A. 25-115 amended Subsec. (i)(1) to add “, in the case of a change to the legal name of the licensee,”, delete “, endorsement or addendum, as applicable,” and replace “new name or address” with “new legal name of the licensee”.

(Return to Chapter
Table of Contents)

(Return to
List of Chapters)

(Return to
List of Titles)

Sec. 36a-802. (Formerly Sec. 42-128a). Surety bond required. Authority of commissioner to proceed on bond. Cancellation of bond; notice. Automatic suspension of license; notice. Opportunity for hearing. (a) No such license and no renewal thereof shall be granted to a consumer collection agency, except a consumer collection agency engaged solely in the business of debt buying, unless the applicant has filed with the commissioner a bond to the people of the state in the penal sum of fifty thousand dollars for the main office and fifty thousand dollars for each branch office, approved by the Attorney General as to form and by the commissioner as to sufficiency of the security thereof. Such bond shall be conditioned that such licensee shall well, truly and faithfully account for all funds entrusted to the licensee and collected and received by the licensee in the licensee's capacity as a consumer collection agency. Any person who may be damaged by the wrongful conversion of any creditor, consumer debtor, property tax debtor or federal income tax debtor funds received by such consumer collection agency may proceed on such bond against the principal or surety thereon, or both, to recover damages. The commissioner may proceed on such bond against the principal or surety thereon, or both, to collect any civil penalty imposed upon the licensee pursuant to subsection (a) of section 36a-50 and, effective April 1, 2019, any restitution imposed pursuant to subsection (c) of section 36a-50, and any unpaid costs of examination as determined pursuant to section 36a-65. The proceeds of the bond, even if commingled with other assets of the licensee, shall be deemed by operation of law to be held in trust for the benefit of such claimants against the licensee in the event of bankruptcy of the licensee and shall be immune from attachment by creditors and judgment creditors. The bond shall run concurrently with the period of the license granted to the applicant, and the aggregate liability under the bond shall not exceed the penal sum of the bond.

(b) The surety company shall have the right to cancel the bond at any time by a written notice to the licensee and the commissioner stating the date cancellation shall take effect. Such written notice of cancellation shall be provided by the surety company to the licensee and the commissioner through the system at least thirty days prior to the date of cancellation. A surety bond shall not be cancelled unless the surety company notifies the commissioner in writing not less than thirty days prior to the effective date of cancellation. After receipt of such notification from the surety company, the commissioner shall give written notice to the licensee of the date such bond cancellation shall take effect. The commissioner shall automatically suspend the license on such date, unless the licensee prior to such date submits a letter of reinstatement of the bond from the surety company or a new bond or the licensee has ceased business and has surrendered its license. After a license has been automatically suspended, the commissioner shall (1) give the licensee notice of the automatic suspension pending proceedings for revocation or refusal to renew and an opportunity for a hearing on such actions in accordance with section 36a-51, and (2) require the licensee to take or refrain from taking such action as the commissioner deems necessary to effectuate the purposes of this section.

(1971, P.A. 539, S. 4; P.A. 02-111, S. 48; P.A. 03-262, S. 2; P.A. 04-69, S. 31; P.A. 09-208, S. 36; P.A. 13-253, S. 29; P.A. 16-65, S. 49; P.A. 18-173, S. 80; P.A. 22-94, S. 9; P.A. 25-115, S. 5.)

History: Sec. 42-128a transferred to Sec. 36a-802 in 1995; P.A. 02-111 amended section by changing “him” to “the licensee”, changing “him in his” to “the licensee in the licensee's”, changing “trust funds” to “creditor, consumer debtor or property tax debtor funds” and adding provision authorizing commissioner to proceed on bond to collect civil penalty imposed on licensee pursuant to Sec. 36a-50(a); P.A. 03-262 substituted “funds received” for “funds held” and made a technical change, effective July 9, 2003; P.A. 04-69 designated existing provisions as Subsec. (a) and added Subsec. (b) re cancellation of surety bond and automatic suspension of license; P.A. 09-208 amended Subsec. (a) by changing amount of required bond from $5,000 to $25,000 and amended Subsec. (b) by requiring commissioner to give written notice to licensee of effective date of a bond cancellation and to automatically suspend a license on effective date of a bond cancellation unless licensee takes certain actions before such date, and by authorizing commissioner to require licensee to take or refrain from taking certain actions; P.A. 13-253 amended Subsec. (a) to add “to a third party consumer collection agency”; P.A. 16-65 amended Subsec. (a) by adding reference to federal income tax debtor; P.A. 18-173 amended Subsec. (a) by replacing “third party consumer collection agency” with “consumer collection agency, except a consumer collection agency engaged solely in the business of debt buying,”, and adding provision effective April 1, 2019 re restitution imposed and unpaid costs of examination, amended Subsec. (b) by adding reference to commissioner, deleting provision re sending notice by certified mail, adding provisions re notice of cancellation if bond issued electronically on the system, adding provision re notice of cancellation not provided through the system to be sent by certified mail to licensee and commissioner, designated existing provisions re notice to licensee of automatic suspension as Subdiv. (1), and provision re commissioner's authority to require licensee to take or refrain from taking action as Subdiv. (2) and amending same by replacing “action as in the opinion of the commissioner will effectuate the purposes of this section” with “action as the commissioner deems necessary to effectuate the purposes of this section”; P.A. 22-94 amended Subsec. (a) by changing “twenty-five thousand dollars” to “fifty thousand dollars for the main office and fifty thousand dollars for each branch office”; P.A. 25-115 amended Subsec. (b) to replace “If the bond is issued electronically on the system,” with “Such”, replace “cancellation may be provided” with “cancellation shall be provided” and delete provision re requirement that any notice of cancellation not provided through the system be sent by certified mail.

(Return to Chapter
Table of Contents)

(Return to
List of Chapters)

(Return to
List of Titles)

Sec. 36a-805. (Formerly Sec. 42-131). Prohibited practices. Exception. (a) No consumer collection agency or control person shall: (1) Furnish legal advice or perform legal services or represent that it is competent to do so, or institute judicial proceedings on behalf of others; (2) communicate with consumer debtors, property tax debtors or federal income tax debtors in the name of an attorney or upon the stationery of an attorney, or prepare any forms or instruments which only attorneys are authorized to prepare; (3) assume authority on behalf of a creditor to employ or terminate the services of an attorney unless such creditor has authorized such agency in writing to act as such creditor's agent in the selection of an attorney to collect the creditor's accounts; (4) demand or obtain in any manner a share of the proper compensation for services performed by an attorney in collecting a claim, whether or not such agency has previously attempted collection thereof; (5) solicit claims for collection under an ambiguous or deceptive contract; (6) refuse to return any claim or claims upon written request of the creditor, claimant or forwarder, which claims are not in the process of collection after the tender of such amounts, if any, as may be due and owing to the agency; (7) advertise or threaten to advertise for sale any claim as a means of forcing payment thereof, unless such agency is acting as the assignee for the benefit of creditors; (8) refuse or fail to account for and remit to its clients all money collected which is not in dispute within sixty days from the last day of the month in which said money is collected; (9) refuse or intentionally fail to return to the creditor all valuable papers deposited with a claim when such claim is returned; (10) refuse or fail to furnish at intervals of not less than ninety days, upon the written request of the creditor, claimant or forwarder, a written report upon claims received from such creditor, claimant or forwarder; (11) add any post-charge-off charge or fee for cost of collection, unless such cost is a court cost, to the amount of any claim which it receives for collection, including, but not limited to, a claim received pursuant to an assignment for the collection of property tax, or knowingly accept for collection any claim to which any such charge or fee has already been added to the amount of the claim unless (A) the consumer debtor is legally liable for such charge or fee as determined by a contract or other evidence of an agreement between the consumer debtor and creditor, a copy of which shall be obtained by or available to the consumer collection agency from the creditor and maintained as part of the records of the consumer collection agency or the creditor, or both, and (B) the total charge or fee for cost of collection does not exceed fifteen per cent of the total amount actually collected and accepted as payment in full satisfaction of the debt. As used in this subdivision, “post-charge-off charge or fee for cost of collection” does not include costs or attorney's fees to the extent allowed under section 52-249; (12) use or attempt to use or make reference to the term “bonded by the state of Connecticut”, “bonded” or “bonded collection agency” or any combination of such terms or words, except the word “bonded” may be used on the stationery of any such agency in type not larger than twelve-point; (13) when the debt is beyond the statute of limitations, fail to provide the following disclosure in type not less than ten-point informing the consumer debtor in its initial communication with such consumer debtor that (A) when collecting on debt that is not past the date for obsolescence provided for in Section 605(a) of the Fair Credit Reporting Act, 15 USC 1681c: “The law limits how long you can be sued on a debt. Because of the age of your debt, (INSERT OWNER NAME) will not sue you for it. If you do not pay the debt, (INSERT OWNER NAME) may report or continue to report it to the credit reporting agencies as unpaid”; and (B) when collecting on debt that is past the date for obsolescence provided for in Section 605(a) of the Fair Credit Reporting Act, 15 USC 1681c: “The law limits how long you can be sued on a debt. Because of the age of your debt, (INSERT OWNER NAME) will not sue you for it and (INSERT OWNER NAME) will not report it to any credit reporting agencies.”; (14) engage in any activities prohibited by sections 36a-800 to 36a-814, inclusive; or (15) fail to establish, enforce and maintain policies and procedures for supervising employees, agents and office operations that are reasonably designed to achieve compliance with applicable consumer collection laws and regulations.

(b) No consumer collection agency shall impose a charge or fee for any child support payments collected through the efforts of a governmental agency. If the imposition of a charge or fee is permitted under section 36a-801b, no consumer collection agency shall impose a charge or fee for the collection of any child support overdue at the time of the contract in excess of twenty-five per cent of overdue support actually collected.

(c) (1) No consumer collection agency shall receive any property tax on behalf of a creditor that is a municipality, unless the consumer collection agency has procured from an insurer authorized to transact business in this state an insurance policy providing coverage against loss of money, securities or other property, including loss arising from any fraudulent or dishonest act of any employee, officer or director of the consumer collection agency, with limits of at least two million dollars. It shall be the obligation of the municipality to ensure compliance with the requirements of this subdivision.

(2) A municipality that enters into an agreement with a consumer collection agency to collect and receive for payment property tax on behalf of the municipality may also require such consumer collection agency to file a bond with the municipality in an amount not exceeding the total amount of the property tax to be collected on behalf of the municipality. Such bond, the form of which shall be approved by the municipality, shall be written by a surety authorized to write bonds in this state and shall contain a provision requiring the surety to provide the municipality with written notice of cancellation of such bond. Such notice shall be sent by certified mail to the municipality at least thirty days prior to the date of cancellation. The bond shall be conditioned that such consumer collection agency shall well, truly and faithfully account for all funds collected and received by the consumer collection agency for the municipality pursuant to such agreement. If the municipality is damaged by the wrongful conversion of any property tax debtor funds received by the consumer collection agency, the municipality may proceed on such bond against the principal or surety on the bond, or both, to recover damages. The proceeds of the bond, even if commingled with the other assets of the consumer collection agency, shall be deemed by operation of law to be held in trust for the benefit of the municipality in the event of bankruptcy of the consumer collection agency and shall be immune from attachment by creditors and judgment creditors.

(1953, S. 3314d; 1971, P.A. 539, S. 8; P.A. 81-183; P.A. 84-61, S. 2, 3; P.A. 92-12, S. 104; P.A. 01-207, S. 6, 12; P.A. 02-111, S. 50; P.A. 03-262, S. 3; P.A. 13-253, S. 26; P.A. 15-235, S. 36; P.A. 16-65, S. 50; P.A. 17-233, S. 31; 17-236, S. 11; P.A. 18-173, S. 82; P.A. 25-168, S. 448.)

History: 1971 act specified applicability to “consumer” collection agencies, deleted provisions prohibiting use of slogans in collection letters, etc., which threaten legal suit or wage garnishment or list attorney name and title, use of justices of the peace, constables, sheriffs, etc., for claims collection, use or threat of physical violence, use of instruments simulating judicial process, publication of list of debtors and threats to do so and use of “shame cards”, “shame automobiles”, etc., intimidation or methods in violation of postal regulations, clarified remaining provisions and required accounting to clients of moneys collected within sixty rather than 90 days from end of month in which collected and added prohibitions contained in Subdivs. (l) to (r); P.A. 81-183 required that consumer collection agencies not add any charge or collection fee to the amount of a claim greater than 15% of amount actually collected on the debt; P.A. 84-61 amended Subdiv. (i) to provide that no agency shall refuse or fail to remit as well as account for all money collected which is not in dispute and amended Subdiv. (m) to prohibit such agency from knowingly accepting for collection any claim to which any fee or charge has been already added to the amount of the claim; P.A. 92-12 redesignated Subdivs.; Sec. 42-131 transferred to Sec. 36a-805 in 1995; P.A. 01-207 designated existing provisions as Subsec. (a) and made a technical change therein for purposes of gender neutrality and added Subsec. (b) re charge or fee for collection of child support payments, effective July 1, 2001 (Revisor's note: In codifying Subsec. (b), the reference to “section 10 of this act” was deemed by the Revisors to be a reference to “section 7 of this act”, codified as Sec. 36a-801b, since section “10” of P.A. 01-207 had been renumbered as section “7” during the amendment process); P.A. 02-111 amended Subsec. (a)(2) by changing “communicate with debtors” to “communicate with consumer debtors or property tax debtors” and (a)(13) by changing “charge or collection fee” to “collection charge or fee” and added new Subsec. (c) prohibiting consumer collection agency from receiving property tax on behalf of creditor that is a municipality, effective July 1, 2002; P.A. 03-262 amended Subsec. (c) by designating existing provisions as Subdiv. (1), amending Subdiv. (1) to add exception re procurement of insurance policy, and adding Subdiv. (2) authorizing municipality that enters into agreement with consumer collection agency to require agency to file bond, effective July 9, 2003; P.A. 13-253 amended Subsec. (a) to delete “purchase or” and add “as a third party” in Subdiv. (3), delete former Subdiv. (12) re comingling of money, redesignate existing Subdiv. (13) as Subdiv. (12) and amend same by adding “post charge-off”, adding provision re fee for cost of collection other than a court cost, designating provision re consumer debtor being legally liable for charge or fee as Subpara. (A) and amending same to add provision re determination by contract or other evidence of agreement between consumer debtor and creditor, and adding Subpara. (B) re total charge or fee for cost of collection not to exceed 15 per cent of total amount collected and accepted as payment in full satisfaction of the debt, redesignate existing Subdiv. (14) as Subdiv. (13), and add new Subdiv. (14) re disclosure when debt is beyond statute of limitations; P.A. 15-235 amended Subsec. (a) to change “36a-810” to “36a-812”, effective July 7, 2015; P.A. 16-65 amended Subsec. (a) by adding reference to federal income tax debtors and making a technical change; P.A. 17-233 amended Subsec. (a) by adding reference to control persons, adding new Subdiv. (16) re failure to establish, enforce and maintain policies and procedures, and making a technical change; P.A. 17-236 amended Subsec. (a)(12) to make a technical change, effective July 11, 2017; P.A. 18-173 amended Subsec. (a)(15) by replacing reference to Sec. 36a-812 with reference to Sec. 36a-814; P.A. 25-168 amended Subsec. (a) to delete former Subdiv. (3) re receiving assignments as a third party of claims for the purpose of collection or instituting suit thereon and redesignate Subdivs. (4) to (16) as Subdivs. (3) to (15) and amended redesignated Subdiv. (11) to add “, including, but not limited to, a claim received pursuant to an assignment for the collection of property tax,”, replace “determined by the contract” with “determined by a contract”, add provision re “post-charge-off charge or fee for cost of collection” not including costs or attorney's fees to the extent allowed under Sec. 52-249 and make a technical change.

(Return to Chapter
Table of Contents)

(Return to
List of Chapters)

(Return to
List of Titles)

PART XIV

STUDENT LOANS

Sec. 36a-846. Definitions. As used in this section and sections 36a-847 to 36a-855, inclusive:

(1) “Advertise” or “advertising” has the same meaning as provided in section 36a-485;

(2) “Branch office” means a location other than the main office at which a licensee or any person on behalf of a licensee acts as a student loan servicer;

(3) “Consumer report” has the same meaning as provided in Section 603(d) of the Fair Credit Reporting Act, 15 USC 1681a, as amended from time to time;

(4) “Control person” has the same meaning as provided in section 36a-485;

(5) “Cosigner” has the same meaning as provided in 15 USC 1650(a), as amended from time to time;

(6) “Federal student education loan” means any student education loan (A) (i) made pursuant to the William D. Ford Federal Direct Loan Program, 20 USC 1087a, et seq., as amended from time to time, or (ii) purchased by the United States Department of Education pursuant to 20 USC 1087i-1(a), as amended from time to time, and (B) owned by the United States Department of Education;

(7) “Federal student loan servicer” means any student loan servicer responsible for the servicing of a federal student education loan to a student loan borrower pursuant to a contract awarded by the United States Department of Education under 20 USC 1087f, as amended from time to time;

(8) “Main office” has the same meaning as provided in section 36a-485;

(9) “Private education lender” has the same meaning as provided in section 36a-856;

(10) “Private education loan creditor” has the same meaning as provided in section 36a-856;

(11) “Private student education loan” means any student education loan that is not a federal student education loan;

(12) “Private student education loan servicer” means any student loan servicer responsible for the servicing of a private student education loan to a student loan borrower;

(13) “Student loan borrower” means any individual who resides within this state who has agreed to repay a student education loan;

(14) “Student loan servicer” means any person, wherever located, responsible for the servicing of any student education loan to any student loan borrower;

(15) “Servicing” means (A) receiving any payments from a student loan borrower pursuant to the terms of a student education loan, (B) applying the payments of principal and interest and such other payments with respect to the amounts received from a student loan borrower, as may be required pursuant to the terms of a student education loan, (C) maintaining account records for and communicating with the student loan borrower concerning the student education loan during the period when no payments are required, (D) interacting with a student loan borrower for purposes of facilitating the servicing of a student education loan, including, but not limited to, assisting a student loan borrower to prevent such borrower from defaulting on obligations arising from the student education loan, or (E) performing other administrative services with respect to a student education loan;

(16) “Student education loan” means any loan primarily for personal use to finance education or other school-related expenses; and

(17) “Unique identifier” has the same meaning as provided in section 36a-485.

(P.A. 15-162, S. 2; P.A. 17-233, S. 32; P.A. 18-173, S. 84; P.A. 21-130, S. 1; 21-190, S. 1; P.A. 23-204, S. 168; P.A. 25-115, S. 19.)

History: P.A. 17-233 added new Subdiv. (1) defining “advertise” or “advertising”, added new Subdiv. (2) defining “control person” and redesignated existing Subdivs. (1) to (4) as Subdivs. (3) to (6); P.A. 18-173 added new Subdiv. (2) defining “branch office”, redesignated existing Subdiv. (2) as new Subdiv. (3), added new Subdiv. (4) defining “main office”, redesignated existing Subdiv. (3) as new Subdiv. (5) and amended same to redefine “student loan borrower”, redesignated existing Subdivs. (4) to (6) as Subdivs. (6) to (8), and added Subdiv. (9) defining “unique identifier”; P.A. 21-130 expanded applicability of definitions to Secs. 36a-847a, 36a-847b and 36a-855, defined “federal student education loan”, “federal student loan servicer”, “private student education loan” and “private student education loan servicer”, effective July 1, 2021; P.A. 21-190 added the same definitions as P.A. 21-130 and defined “consumer report” and “cosigner” and redefined “servicing”, effective July 1, 2021; P.A. 23-204 redefined “federal student loan servicer” in Subdiv. (7) and made a technical change in Subdiv. (14); P.A. 25-115 added new Subdivs. (9) and (10) defining “private education lender” and “private education loan creditor”, redesignated existing Subdivs. (9) to (15) as Subdivs. (11) to (17), and redefined “servicing” in redesignated Subdiv. (15) and made technical changes.

(Return to Chapter
Table of Contents)

(Return to
List of Chapters)

(Return to
List of Titles)

Sec. 36a-850a. Required activities of a person servicing a private student education loan. Options for cosigner release required. Prohibitions re making, extending or owning private student education loan. Limitations to applicability. (a) Any person servicing a private student education loan, including, but not limited to, a private student education loan servicer, private education lender and private education loan creditor, shall:

(1) Prior to sending the first billing statement on a private student education loan or immediately upon receipt of a private student education loan following the transfer or assignment of such private student education loan, provide to the student loan borrower, and to any cosigner of such private student education loan, information concerning the rights and responsibilities of such student loan borrower and cosigner, including information regarding (A) how such private student education loan obligation will appear on the cosigner's consumer report, (B) how the cosigner will be notified if the private student education loan becomes delinquent, including how the cosigner can cure the delinquency in order to avoid negative credit furnishing and loss of cosigner release eligibility, and (C) eligibility for release of the cosigner's obligation on such private student education loan, including number of on-time payments and any other criteria required to approve the release of the cosigner from the loan obligation;

(2) Send annual written notice to all student loan borrowers and cosigners relating to information about cosigner release, including the criteria necessary to approve the release of a cosigner from a private student education loan obligation and the process for applying for cosigner release;

(3) Upon satisfaction by the student loan borrower of the applicable consecutive on-time payment requirement for purposes of cosigner release eligibility, send, in writing, to such student loan borrower and cosigner (A) a notification that such consecutive on-time payment requirement has been satisfied and that such cosigner may be eligible for cosigner release, and (B) information relating to the procedure for applying for cosigner release and any additional criteria that a cosigner must satisfy in order to be eligible for cosigner release. Such notification and information shall be sent by either United States mail or electronic mail, provided such student loan borrower has elected to receive electronic communications from the person servicing the private student education loan;

(4) In the event that an application for a cosigner release is incomplete, provide, in writing, (A) notice to the student loan borrower and cosigner that such application is incomplete, and (B) a description of the information that is missing or the additional information that is needed to consider the application complete and the date by which the borrower or cosigner are required to provide such information;

(5) Not later than thirty days following the submission of an application for cosigner release, send to the student loan borrower and cosigner a written notice of the decision that such application has been approved or denied. If the application for cosigner release has been denied, such written notice shall (A) inform such student loan borrower and cosigner that such student loan borrower and cosigner have the right to request all documents and information used in the decision to deny such application, including any credit score threshold used, the consumer report of such student loan borrower or cosigner, the credit score of such student loan borrower or cosigner and any other documents that are relevant or specific to such student loan borrower or cosigner, and (B) include (i) any adverse action notices required under federal law if the denial of such application was based in whole or in part on any information contained in a consumer report, and (ii) the information described in subdivision (2) of this subsection;

(6) Upon receipt of a request by a student loan borrower or cosigner to a change that results in restarting the count of consecutive on-time payments required for cosigner release eligibility, provide to such student loan borrower and cosigner written notification of the impact of such change on cosigner release eligibility and an opportunity to withdraw or reverse such change for purposes of avoiding such impact;

(7) Provide a student loan borrower or cosigner (A) the right to request an appeal of a determination to deny a cosigner release application, (B) an opportunity to submit additional information or documentation evidencing that such student loan borrower has the ability, willingness and stability to make his or her payment obligations, and (C) the right to request that a different employee review and make a determination on the application for a cosigner release;

(8) Establish and maintain a comprehensive record management system reasonably designed to ensure the accuracy, integrity and completeness of data and other information about cosigner release applications. Such system shall include the number of cosigner release applications received, the approval and denial rate of such applications and the primary reasons for denial of such applications;

(9) Provide the cosigner of a private student education loan with access to the same documents and records associated with the private student education loan that are available to the student loan borrower of such private student education loan; and

(10) If a student loan borrower has electronic access to documents and records associated with a private student education loan, provide equivalent electronic access to such documents and records to the cosigner of such private student education loan.

(b) Any person that makes or extends a private student education loan on or after October 1, 2025, shall provide, consistent with the terms of this subsection, options for cosigner release on such private student education loan upon the satisfaction of certain criteria, including, but not limited to, twelve consecutive on-time payments by the student loan borrower or in the event of total and permanent disability of the cosigner. On and after October 1, 2025, no person that makes, extends or owns one or more private student education loans, including, but not limited to, any private education lender or private education loan creditor, directly or indirectly, shall:

(1) Impose any restriction on a student loan borrower or cosigner that may permanently prevent such student loan borrower or cosigner from qualifying for a cosigner release, including, but not limited to, any restriction on the number of times a student loan borrower or cosigner may apply for a cosigner release;

(2) Impose any negative consequence on a student loan borrower or cosigner during the sixty-day period following issuance of the notice described in subparagraph (A) of subdivision (4) of subsection (a) of this section, or until a final decision concerning a student loan borrower or cosigner's application for a cosigner release has been made. For purposes of this subdivision, “negative consequence” includes, but is not limited to, the imposition of any additional eligibility criteria, negative credit reporting, lost eligibility for a cosigner release, late fee, interest capitalization or any other financial penalty or injury;

(3) Require a student loan borrower to make more than twelve consecutive on-time payments as part of the eligibility criteria for a cosigner release. A private student education loan servicer shall consider any student loan borrower who has paid the equivalent of twelve months of principal and interest during any twelve-month period to have satisfied the consecutive on-time payment requirement, even if such student loan borrower has not made monthly payments during such twelve-month period; or

(4) In the event that a cosigner is totally and permanently disabled, as determined by any federal or state agency or doctor of medicine or osteopathy legally authorized to practice in this state, (A) refuse to release the cosigner from his or her obligation to repay the private student education loan upon receipt of notification that such cosigner is totally and permanently disabled, or (B) require that a new cosigner be added to such private student education loan after the original cosigner has been released.

(c) The provisions of subsections (a) and (b) of this section shall not apply to the following persons: (1) Any bank, out-of-state bank that has a physical presence in the state, Connecticut credit union, federal credit union or out-of-state credit union; (2) any wholly owned subsidiary of any such bank or credit union; (3) any operating subsidiary where each owner of such operating subsidiary is wholly owned by the same bank or credit union; and (4) the Connecticut Higher Education Supplemental Loan Authority.

(P.A. 21-190, S. 3, 4; P.A. 25-115, S. 15.)

History: P.A. 21-190, S. 3, codified by the Revisors as Subsec. (a), and S. 4, codified by the Revisors as Subsec. (b), effective July 1, 2021; P.A. 25-115 amended the introductory language of Subsec. (a) to replace “In servicing” with “Any person servicing”, add “including, but not limited to,” and add “, private education lender and private education loan creditor,” amended Subsec. (a)(2) to replace “the private student education loan servicer requires” with “necessary” in Subdiv. (2), amended Subsec. (a)(3) to replace “private student education loan servicer” with “person servicing the private student education loan”, amended Subsec. (a)(5) to designate existing provisions as Subparas. (A), (B)(i) and (ii), replace “by the private student education loan servicer in its decision” with “in the decision”, replace “the credit score” with “any credit score”, delete “by the private student education loan servicer” and make technical changes in Subpara. (A), replace “The private student education loan servicer shall provide such student loan borrower and cosigner with” with “and (B) include (i)” and add “the information described in subdivision (2) of this subsection” in Subpara. (B)(ii), deleted former Subsec. (a)(6) re including certain information in response to application for cosigner release, deleted former Subsec. (a)(7) re refraining from restrictions for cosigner release, deleted former Subsec. (a)(8) re refraining from negative consequences during 60 days following issuance of certain notice, or until final decision is made, deleted former Subsec. (a)(9) re refraining from requiring borrower to make more than 12 consecutive on-time payments for cosigner release and requirement that borrower who paid equivalent of 12 months of principal and interest during 12-month period be considered to have satisfied payment requirement, redesignated Subsec. (a)(10) to (12), (14) and (15) as Subsec. (a)(6) to (8), (9) and (10), deleted “of the private student education loan servicer” in redesignated Subsec. (a)(7), deleted former Subsec. (a)(13) re releasing cosigner from obligation to repay upon receipt of notification re total and permanent disability and refraining from requiring new cosigner, added new Subsec. (b)(1) to (4) re requirement person that makes or extends private student education loan on or after October 1, 2025, provide options for cosigner release and prohibitions applicable on and after October 1, 2025, to person that makes, extends or owns one or more private student education loans, redesignated Subsec. (b) as Subsec. (c) and replaced “subsection (a)” with “subsections (a) and (b)” in Subsec. (c).

(Return to Chapter
Table of Contents)

(Return to
List of Chapters)

(Return to
List of Titles)

Sec. 36a-856. Definitions. Registration. Disclosures. Internet web site. Suspension, revocation or refusal to renew registration. Action by commissioner. Penalty. Notice. Hearing. Order. (a) For purposes of this section:

(1) “Commissioner” means the Banking Commissioner;

(2) “Consumer collection agency” has the same meaning as provided in section 36a-800;

(3) “Postsecondary education expense” means any expense associated with a student's enrollment in, or attendance at, a postsecondary educational institution;

(4) “Private education lender” means any person engaged in the business of making or extending private education loans. “Private education lender” does not include: (A) Any bank, out-of-state bank, Connecticut credit union, federal credit union or out-of-state credit union; (B) any wholly owned subsidiary of any such bank or credit union; (C) any operating subsidiary where each owner of such operating subsidiary is wholly owned by the same bank or credit union; or (D) the Connecticut Higher Education Supplemental Loan Authority, as described in section 10a-179a;

(5) “Private education loan” means credit that: (A) Is extended to a consumer expressly, in whole or in part, for postsecondary educational expenses, regardless of whether the credit is provided by the postsecondary educational institution that the student attends; and (B) is not made, insured or guaranteed under Title IV of the Higher Education Act of 1965, as amended from time to time. “Private education loan” does not include a loan that is secured by real property, regardless of the purpose of the loan;

(6) “Private education loan borrower” means any resident of the state, including a student loan borrower, who has received or agreed to pay a private education loan for the resident's own postsecondary education expenses;

(7) “Private education loan creditor” means any person to whom a private education loan is sold or assigned, or any person who otherwise acquires a private education loan. “Private education loan creditor” does not include: (A) A bank, as defined in 12 USC 1841(c), as amended from time to time; (B) a Connecticut credit union, a federal credit union or an out-of-state credit union, as those terms are defined in section 36a-2; (C) a consumer collection agency licensed pursuant to section 36a-801; (D) a private student loan servicer licensed pursuant to section 36a-847; or (E) any department or agency of the United States, this state, any other state or any political subdivision thereof; and

(8) “Student loan servicer” has the same meaning as provided in section 36a-846.

(b) (1) Except for a public or private nonprofit postsecondary educational institution, for which the commissioner may prescribe an alternative registration process and fee structure, a private education lender or a private education loan creditor shall, prior to making a private education loan to, or purchasing or assuming a private education loan owed by, a resident of the state, (A) register with the commissioner, and (B) renew such registration for each year that such private education lender or private education loan creditor continues to act as a private education lender or private education loan creditor.

(2) Each private education lender and private education loan creditor registration shall expire at the close of business on December thirty-first of the year in which such registration was approved, unless such registration is renewed or, if such registration is approved on or after November first, such registration shall expire at the close of business on December thirty-first of the year following the year in which such registration was approved. An application for renewal of a registration shall be filed with the commissioner between November first and December thirty-first of the year in which the registration expires. Each applicant for an initial registration or renewal of a registration shall pay to the system a registration fee of nine hundred dollars and any other required fees or charges. All fees paid pursuant to this subdivision shall be nonrefundable.

(c) For each year in which a private education lender registers with, or renews such registration with, the commissioner pursuant to subsection (b) of this section, such private education lender shall, at the time of such registration or renewal, and at other times upon the commissioner's request, provide to the commissioner, in the form and manner prescribed by the commissioner, the following documents and information:

(1) A list of all schools attended by the private education loan borrowers with outstanding private education loans made by such private education lender;

(2) The number and dollar amount of all outstanding private education loans such private education lender made to private education loan borrowers;

(3) For each school listed pursuant to subdivision (1) of this subsection, the number and dollar amount of all outstanding private education loans such private education lender made to private education loan borrowers who attended such school;

(4) The number and dollar amount of all private education loans such private education lender made during the prior year to private education loan borrowers;

(5) For each school listed pursuant to subdivision (1) of this subsection, the number and dollar amount of all private education loans such private education lender made during the prior year to private education loan borrowers who attended such school;

(6) The spread of interest rates for the private education loans such private education lender made during the prior year;

(7) The percentage of private education loan borrowers who received each rate within the spread of interest rates provided pursuant to subdivision (6) of this subsection;

(8) The number of private education loans with a cosigner that such private education lender made during the prior year;

(9) The default rate for private education loan borrowers obtaining private education loans from the private education lender, and, for each school listed pursuant to subdivision (1) of this subsection, the default rate for private education loans made to private education loan borrowers who attended such school;

(10) The number of private education loan borrowers against whom such private education lender brought legal action in the prior year to collect a debt owed pursuant to a private education loan, and the amount sought in each such action;

(11) A copy of each model promissory note, agreement, contract or other instrument used by the private education lender during the prior year to substantiate that a new private education loan has been extended to a private education loan borrower or that a private education loan borrower owes a debt to such lender; and

(12) The name and address of: (A) Such private education lender; (B) each officer, director or partner of such private education lender; and (C) each owner of a controlling interest in such private education lender.

(d) For each year in which a private education loan creditor registers with, or renews such registration with, the commissioner pursuant to subsection (b) of this section, such private education loan creditor shall, at the time of such registration or renewal, and at other times upon the commissioner's request, provide to the commissioner, in the form and manner prescribed by the commissioner, the following documents and information:

(1) A list of all schools attended by the private education loan borrowers with outstanding private education loans assumed or acquired by such private education loan creditor;

(2) The number and dollar amount of all outstanding private education loans owed by private education loan borrowers to such private education loan creditor;

(3) For each school listed pursuant to subdivision (1) of this subsection, the number and dollar amount of all outstanding private education loans owed to such private education loan creditor by private education loan borrowers who attended such school;

(4) The number and dollar amount of all private education loans: (A) Such private education loan creditor assumed or acquired during the prior year; and (B) owed to such private education loan creditor by private education loan borrowers;

(5) For each school listed pursuant to subdivision (1) of this subsection, the number and dollar amount of all private education loans: (A) Such private education loan creditor assumed or acquired during the prior year; and (B) owed to such private education loan creditor by private education loan borrowers who attended such school;

(6) The number of private education loans with a cosigner that such private education loan creditor assumed or acquired during the prior year;

(7) The default rate for private education loan borrowers whose private education loans were assumed or acquired by such private education loan creditor, and, for each school listed pursuant to subdivision (1) of this subsection, the default rate for private education loans owed by private education loan borrowers who attended such school;

(8) The number of private education loan borrowers against whom such private education loan creditor brought legal action in the prior year to collect a debt owed pursuant to a private education loan, and the amount sought in each such action; and

(9) The name and address of: (A) Such private education loan creditor; (B) each officer, director or partner of such private education loan creditor; and (C) each owner of a controlling interest in such private education loan creditor.

(e) The commissioner shall create, and periodically update, a publicly accessible Internet web site that includes the following information about private education lenders and private education loan creditors registered in the state:

(1) The name, address, telephone number and Internet web site address for all registered private education lenders and private education loan creditors;

(2) A summary of the information and documents provided pursuant to subsections (c) and (d) of this section; and

(3) Copies of all model promissory notes, agreements, contracts and other instruments provided to the commissioner in accordance with subdivision (11) of subsection (c) of this section.

(f) The commissioner may suspend, revoke or refuse to renew any registration issued under subsection (b) of this section or take any other action in accordance with the provisions of section 36a-51, if the commissioner finds that the registrant or any control person, trustee, employee or agent of such registrant has done any of the following: (1) Made any material misstatement in the application; (2) committed any fraud or misappropriated funds; or (3) violated (A) any provision of this title or any regulation or order adopted or issued pursuant thereto pertaining to such registrant or any control person, trustee, employee or agent of such registrant, or (B) any other law or regulation applicable to the conduct of such registrant's business.

(g) Whenever it appears to the commissioner that any person has violated, is violating or is about to violate the provisions of this section, the commissioner may take action against such person in accordance with sections 36a-50 and 36a-52.

(h) (1) The commissioner may order that any person who has been found to have violated any provision of this section and has thereby caused financial harm to a consumer be barred for a term not exceeding ten years from engaging in any activity requiring a license or registration under this title, or acting as a stockholder, officer, director, partner or other owner or employee of an entity requiring such a license or registration, by sending a notice to such person by registered or certified mail, return receipt requested, or by any express delivery carrier that provides a dated delivery receipt, or by personal delivery, as defined in section 4-166, in accordance with section 36a-52a. The notice shall be deemed received by such person on the earlier of the date of actual receipt or seven days after mailing or sending, and in the case of a notice sent by electronic mail, the notice shall be deemed received by such person in accordance with section 36a-52a. Such notice shall include: (A) A statement of the time, place and nature of a hearing to be held upon the matters asserted in the notice; (B) a statement of the legal authority and jurisdiction under which the hearing is to be held; (C) a reference to the particular sections of the general statutes, regulations of Connecticut state agencies, rules or orders that such person is alleged to have violated; (D) a short and plain statement of the matters asserted; and (E) a statement indicating that such person may file a written request for a hearing on the matters asserted within fourteen days of receipt of the notice.

(2) If a hearing is requested within the time specified in the notice, the commissioner shall hold a hearing upon the matters asserted in the notice unless such person fails to appear at the hearing. After the hearing, the commissioner shall determine whether to issue an order barring such person, for a term not to exceed ten years, from engaging in any activity requiring a license or registration under this title, or from acting as a stockholder, officer, director, partner or other owner or employee of an entity requiring such a license or registration. The commissioner may also issue such an order if such person does not request a hearing within the time specified in the notice or fails to appear at the hearing. No order shall be issued under this subsection except in accordance with the provisions of chapter 54.

(P.A. 23-204, S. 166; P.A. 25-115, S. 24.)

History: P.A. 25-115 amended Subsec. (b) to designate existing provisions in introductory language as Subdiv. (1), add Subdiv. (1)(A) re registration with commissioner, add Subdiv. (1)(B) re renewal of registration, delete former Subdiv. (1) re registration with commissioner and payment of a fee, delete former Subdiv. (2) re renewal of registration, add new Subdiv. (2) re expiration of registration on December 31, requirement that application for renewal of registration be filed between November 1 and December 31, requirement that applicant pay $900 registration fee and any other required fees or charges and nonrefundable fees, amended Subsec. (f) to replace provision re commissioner may take action pursuant to Sec. 36a-50 with provisions re commissioner may suspend, revoke or refuse to renew registration or take other action in accordance with Sec. 36a-51, added new Subsec. (g) re commissioner may take action in accordance with Secs. 36a-50 and 36a-52, redesignated existing Subsec. (g) as Subsec. (h)(1)(A) to (E), amended redesignated Subsec. (h)(1) to replace “acting as a private education lender, private education loan creditor or” with “engaging in any activity requiring a license or registration under this title, or acting as”, replace “a private education lender or private education loan creditor” with “an entity requiring such a license or registration,” and add provisions re commissioner sending notice, notice deemed received and requirements in Subparas. (A) to (E) that notice include statement of the time, place and nature of a hearing, statement of legal authority and jurisdiction, reference to particular sections of general statutes, regulations, rules or orders alleged to have been violated, statement of matters asserted and statement that request for a hearing may be filed within 14 days and added Subsec. (h)(2) re commissioner holding a hearing upon matters asserted and order by commissioner barring activity requiring license or registration under title 36a or acting as stockholder, officer, director, partner or owner or employee of entity requiring such license or registration.

(Return to Chapter
Table of Contents)

(Return to
List of Chapters)

(Return to
List of Titles)

PART XVI

COMMERCIAL FINANCING

Sec. 36a-868. Waiver provisions re provider obtaining prejudgment remedy. Unenforceable provisions. No commercial financing contract entered into on or after July 1, 2024, shall contain any provision waiving a recipient's right to notice, judicial hearing or prior court order under chapter 903a in connection with the provider obtaining any prejudgment remedy, including, but not limited to, attachment, execution, garnishment or replevin upon commencing any litigation against the recipient. Any such provision in a commercial financing contract entered into on or after July 1, 2024, shall be unenforceable.

(P.A. 23-201, S. 8; P.A. 25-115, S. 21.)

History: P.A. 23-201 effective July 1, 2024; P.A. 25-115 made a technical change, effective July 1, 2025.

(Return to Chapter
Table of Contents)

(Return to
List of Chapters)

(Return to
List of Titles)

Sec. 36a-870. Registration. Authority to transact business. Application. Expiration and renewal of registration. Fee. (a) Not later than October 1, 2024, each provider and commercial financing broker shall: (1) Register with the Banking Commissioner in a manner prescribed by the commissioner; and (2) unless such provider or broker is organized under the laws of this state or is otherwise not required to obtain authority to transact business in this state as a foreign entity, shall obtain authority to transact business in this state.

(b) An application for registration by a provider or commercial financing broker shall disclose any judgment, memorandum of understanding, cease and desist order or conviction that involves a crime or an act of fraud, breach of trust or money laundering with respect to such provider or broker or any officer, director, manager, operator or individual who otherwise controls the operations of such provider or broker.

(c) Each provider and commercial financing broker registration shall expire at the close of business on December thirty-first of the year in which such registration was approved, unless such registration is renewed or, if such registration is approved on or after November first, such registration shall expire at the close of business on December thirty-first of the year following the year in which such registration was approved. An application for renewal of a registration shall be filed with the commissioner between November first and December thirty-first of the year in which the registration expires. Each applicant for an initial registration or renewal of a registration shall pay to the system a registration fee of one thousand dollars and any other required fees or charges. All fees paid pursuant to this subsection shall be nonrefundable.

(P.A. 23-201, S. 10; P.A. 25-115, S. 22.)

History: P.A. 23-201 effective July 1, 2024; P.A. 25-115 amended Subsec. (c) to replace provisions re initial registration fee, annual registration fee and automatic expiration of registration if provider or commercial financing broker fails to timely pay annual registration fee with provisions re expiration of registration on December 31, requirement that application for renewal of registration be filed between November 1 and December 31, requirement that applicant pay $1,000 registration fee and any other required fees or charges and nonrefundable fees, effective July 1, 2025.

(Return to Chapter
Table of Contents)

(Return to
List of Chapters)

(Return to
List of Titles)

Sec. 36a-872. Suspension, revocation or refusal to renew registration. Action by commissioner. (a) The commissioner may suspend, revoke or refuse to renew any registration issued pursuant to section 36a-870, or take any other action in accordance with the provisions of section 36a-51, if the commissioner finds that the registrant or any control person, trustee, employee or agent of such registrant has done any of the following: (1) Made any material misstatement in the application; (2) committed any fraud or misappropriated funds; or (3) violated (A) any provision of this title or any regulation or order adopted or issued pursuant thereto pertaining to such registrant or any control person, trustee, employee or agent of such registrant, or (B) any other law or regulation applicable to the conduct of such registrant's business.

(b) Whenever it appears to the commissioner that any person has violated, is violating or is about to violate the provisions of sections 36a-861 to 36a-870, inclusive, the commissioner may take action against such person in accordance with sections 36a-50 and 36a-52.

(P.A. 23-201, S. 12; P.A. 25-115, S. 23.)

History: P.A. 23-201 effective July 1, 2024; P.A. 25-115 amended Subsec. (a) to replace provisions re provider who violates provision of Secs. 36a-861 to 36a-870 liable for civil penalty pursuant to Sec. 36a-50 with provisions re commissioner may suspend, revoke or refuse to renew registration or take other action in accordance with Sec. 36a-51 and amended Subsec. (b) to replace provisions re commissioner may seek injunction and exercise powers under Sec. 36a-50 if commissioner finds that provider knowingly violated Secs. 36a-861 to 36a-870 or regulation adopted pursuant to Sec. 36a-871 with provisions re commissioner may take action in accordance with Secs. 36a-50 and 36a-52, effective July 1, 2025.

(Return to Chapter
Table of Contents)

(Return to
List of Chapters)

(Return to
List of Titles)