CHAPTER 669
REGULATED ACTIVITIES

PART II
DEBT ADJUSTERS AND DEBT NEGOTIATION

      Sec. 36a-656. (Formerly Sec. 36-365). Debt adjustment. License application, requirements and fees. Authority of commissioner to conduct criminal history records checks and deny application for license. Automatic suspension of license or renewal license. Notice. Opportunity for hearing. Abandonment of application. (a) No person shall engage in the business of debt adjustment in this state without a debt adjuster license. Any person desiring to obtain such a license shall file with the commissioner an application under oath, setting forth such information as the commissioner may require. Each applicant for a license and each licensee shall notify the commissioner of any change in the applicant's business from that stated in the application for the license.

      (b) An application for a debt adjuster license or renewal of such license shall be in writing on a form provided by the commissioner and shall include (1) the history of criminal convictions of the applicant; the partners, if the applicant is a partnership; the members, if the applicant is a limited liability company or association; or the officers, directors and principal employees if the applicant is a corporation, and (2) sufficient information pertaining to the history of criminal convictions, in a form acceptable to the commissioner, on such applicant, partners, members, officers, directors and principal employees as the commissioner deems necessary to make the findings under subsection (c) of this section. The commissioner, in accordance with section 29-17a, may conduct a state and national criminal history records check of the applicant and of each partner, member, officer, director and principal employee of the applicant.

      (c) If the commissioner finds, upon the filing of an application for a debt adjuster license, that: (1) The financial responsibility, character, reputation, integrity and general fitness of the applicant and of the partners thereof if the applicant is a partnership, of the members if the applicant is a limited liability company or association, and of the officers, directors and principal employees if the applicant is a corporation, 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-655 to 36a-665, inclusive; and (2) the applicant is solvent 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 debt adjuster 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 partner, member, officer, director or principal employee of the applicant has been convicted of any misdemeanor involving any aspect of the debt adjuster business, or any felony. Any denial of an application by the commissioner shall, when applicable, be subject to the provisions of section 46a-80. Withdrawal of an application for a license shall become effective upon receipt by the commissioner of a notice of intent to withdraw such application. The commissioner may deny a license up to the date one year after the effective date of withdrawal.

      (d) Each applicant for an original debt adjuster license that is a bona fide nonprofit organization shall, at the time of making such application, pay to the commissioner an application fee of two hundred fifty dollars. Each applicant for an original or a renewal of a debt adjuster license that is not a bona fide nonprofit organization shall, at the time of making such application, pay to the commissioner an application fee of one thousand six hundred dollars or, in the case of an application that is filed not earlier than the date one year before the date of expiration of such license, a license fee of eight hundred dollars. Each such license shall expire at the close of business on September thirtieth of the odd-numbered year following its issuance unless such license is renewed. Each licensee shall, on or before September first of the year in which the license expires, file such renewal application as the commissioner may require.

      (e) If the commissioner determines that a check filed with the commissioner to pay an application fee has been dishonored, the commissioner shall automatically suspend the license or a renewal license that has been issued but is not yet effective. The commissioner shall 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.

      (f) No abatement of the license fee shall be made if the license is surrendered, revoked or suspended prior to the expiration of the period for which it was issued. The fee required by subsection (d) of this section shall be nonrefundable.

      (g) The commissioner may deem an application for a license to engage in the business of debt adjustment abandoned if the applicant fails to respond to any request for information required under sections 36a-655 to 36a-665, inclusive, or any regulations adopted pursuant to said sections 36a-655 to 36a-665, inclusive. The commissioner shall notify the applicant, in writing, 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. In the event an application is deemed abandoned, any application filing fee paid prior to the date on which the application was filed is deemed abandoned and 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-655 to 36a-665, inclusive.

      (1967, P.A. 882, S. 2; P.A. 79-160, S. 2; P.A. 94-122, S. 296, 340; P.A. 02-111, S. 41; P.A. 04-69, S. 24; P.A. 09-208, S. 24; P.A. 11-216, S. 38.)

      History: P.A. 79-160 made provisions applicable to bona fide nonprofit organizations rather than to persons, firms or corporations generally, replaced detailed provisions re contents of application with statement re information required by commissioner, added provisions re notification of changes in business, location, number of offices, etc. and specified that license continues in effect as long as licensee continues in debt adjustment business, deleting former Subsecs. (b) to (e) which had required informing commissioner of contract intended to be used and any changes thereto, which had set June thirtieth as annual expiration date, which had required appointment of commissioner as applicant's agent for service of process and which had required that application contain names of persons, firms and corporations with financial interest in the business; P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-365 transferred to Sec. 36a-656 in 1995; P.A. 02-111 designated existing provisions as Subsec. (a) and added reference to "debt adjuster" license, deleted reference to Secs. 36a-655 to 36a-665, inclusive, replaced "material changes" with "change", deleted provisions re changes in location or additional locations and re effective period of license and made technical changes and added Subsecs. (b), (c) and (d) re requirements for obtaining debt adjuster license, licensing fees and renewal requirements and abatement and nonrefundability of license fee, respectively; P.A. 04-69 added new Subsec. (d), requiring commissioner to automatically suspend license or renewal license if commissioner determines that a check filed to pay application 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 redesignated existing Subsec. (d) as Subsec. (e); P.A. 09-208 amended Subsec. (a) to authorize persons, in addition to bona fide nonprofit organizations, to engage in business of debt adjustment, added new Subsec. (b) re application for debt adjuster license to include criminal conviction information, redesignated existing Subsec. (b) as Subsec. (c) and amended same by authorizing commissioner to deny application based on certain criminal convictions and by adding language re when withdrawal of application for license becomes effective, redesignated existing Subsec. (c) as Subsec. (d) and amended same by creating separate fee schedule for bona fide nonprofit organizations and by deleting provision re licenses issued prior to October 1, 2002, redesignated existing Subsecs. (d) and (e) as Subsecs. (e) and (f) and made conforming changes; P.A. 11-216 amended Subsec. (b) to delete provision re ten-year period re history of criminal convictions and requirement re criminal history of applicant's directors and add provision authorizing commissioner to conduct state and national criminal history records check of applicant and each partner, member, officer, director and principal employee of applicant, amended Subsec. (c) to delete provision re ten-year period re misdemeanor and felony convictions, and added Subsec. (g) re abandonment of application.

      Sec. 36a-663. (Formerly Sec. 36-378). Exceptions. The provisions of sections 36a-655 to 36a-665, inclusive, shall not apply to the following: (1) Any attorney admitted to the practice of law in this state who engages in debt adjustment as an ancillary matter to such attorney's representation of a client; (2) any bank, fiduciary or financing or lending institution authorized to transact business in this state or any other state, which performs debt adjustment in the regular course of its principal business; (3) any title insurance or abstract company authorized to transact business in this state or any other state, while doing an escrow business; and (4) any person acting pursuant to any law of this state or of the United States or acting under the order of a court.

      (1967, P.A. 882, S. 15; P.A. 73-357; P.A. 79-160, S. 8; P.A. 92-67, S. 8, 9; P.A. 11-216, S. 37.)

      History: P.A. 73-357 added Subsec. (b) exempting bona fide nonprofit cooperative organizations offering debt adjustment services exclusively for members from chapter provisions except Secs. 36-364, 36-371, 36-372, 36-374, 36-375, 36-376, 36-377, 36-379 and 36-381; P.A. 79-160 deleted exemption from bona fide nonprofit, religious, fraternal or cooperative organization (Subsec. (a)(5) and Subsec. (b)) and exemption for employees of licensees when acting in the regular course of employment; P.A. 92-67 added exception for banks, fiduciaries or financing or lending institutions authorized to transact business in any other state; Sec. 36-378 transferred to Sec. 36a-663 in 1995; P.A. 11-216 amended Subdiv. (1) to replace "when engaged in such practice" with "who engages in debt adjustment as an ancillary matter to such attorney's representation of a client".

      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 July thirty-first 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. Each licensee shall submit to the commissioner, by September first of each year, 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 July thirty-first of each such year. The report shall be subscribed and affirmed as true by the licensee and shall be in a form prescribed by the commissioner.

      (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. 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, stating the date cancellation shall take effect. Such notice shall be sent by certified mail to the licensee 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 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 require the licensee to take or refrain from taking such action as in the opinion of the commissioner will 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.)

      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.

      Sec. 36a-671. Definitions. Debt negotiation. License application, requirements and fees. Authority of commissioner to conduct criminal history records checks and deny application for license. Abandonment of application. Automatic suspension of license or renewal license. Notice. Opportunity for hearing. (a) As used in this section and sections 36a-671a to 36a-671d, inclusive, (1) "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; (2) "debtor" means any individual who has incurred indebtedness or owes a debt for personal, family or household purposes; (3) "mortgagee" means the original lender under a mortgage loan secured by residential property or its agents, successors or assigns; (4) "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; (5) "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; (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; and (7) "residential property" means one-to-four family owner-occupied real property.

      (b) No person shall engage or offer to engage in debt negotiation in this state without a license issued under this section for each location where debt negotiation will be conducted. Any person desiring to obtain such a license shall file with the commissioner an application under oath, setting forth such information as the commissioner may require. Each applicant for a license and each licensee shall notify the commissioner of any change in the applicant's business from that stated in the application for the license. 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 in writing on a form provided by the commissioner and shall include (1) the history of criminal convictions of the (A) applicant, (B) partners, if the applicant is a partnership, (C) members, if the applicant is a limited liability company or association, or (D) officers, directors and principal employees, if the applicant is a corporation; and (2) sufficient information pertaining to the history of criminal convictions, in a form acceptable to the commissioner, on such applicant, partners, members, officers, directors and principal employees as the commissioner deems necessary to make the findings under subsection (d) of this section. The commissioner, in accordance with section 29-17a, may conduct a state and national criminal history records check of the applicant and of each partner, member, officer, director and principal employee of the applicant. 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-671d, inclusive, or any regulations adopted pursuant to said sections 36a-671 to 36a-671d, inclusive. The commissioner shall notify the applicant, in writing, 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-671d, inclusive.

      (d) If the commissioner finds, upon the filing of an application for a debt negotiation license, that: (1) The financial responsibility, character, reputation, integrity and general fitness of the (A) applicant, (B) partners thereof, if the applicant is a partnership, (C) members, if the applicant is a limited liability company or association, and (D) officers, directors and principal employees, if the applicant is a corporation, 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-671d, inclusive; and (2) the applicant is solvent 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 debt negotiation license. Such debt negotiation license shall not be transferable. Any change of location of a licensee shall require prior written notice to the commissioner. No licensee shall use any name unless such name has been approved 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 reasons for such denial. The commissioner may deny an application if the commissioner finds that the applicant or any partner, member, officer, director or principal employee of the applicant has been convicted of any misdemeanor involving any aspect of the debt negotiation business or any felony. Any denial of an application by the commissioner shall, when applicable, be subject to the provisions of section 46a-80. Withdrawal of an application for a license shall become effective upon receipt by the commissioner of a notice of intent to withdraw such application. The commissioner may deny a license up to the date one year after the effective date of withdrawal.

      (e) Each applicant for an original or renewal debt negotiation license shall, at the time of making such application, pay to the commissioner an application fee of one thousand six hundred dollars, provided, if such application is filed not earlier than one year before the date such license will expire, such person shall pay a license fee of eight hundred dollars. Each such license shall expire at the close of business on September thirtieth of the odd-numbered year following its issuance unless such license is renewed. Each licensee shall, on or before September first of the year in which the license expires, file such renewal application as the commissioner may require. Whenever an application for a license is filed under this section by any person who was a licensee under this section and whose license expired less than sixty days prior to the date such application was filed, such application shall be accompanied by a one-hundred-dollar processing fee in addition to the application fee.

      (f) If the commissioner determines that a check filed with the commissioner to pay an application fee has been dishonored, the commissioner shall automatically suspend the license or a renewal license that has been issued but is not yet effective. The commissioner shall 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.

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

      (P.A. 09-208, S. 29; 09-209, S. 41; P.A. 11-216, S. 40.)

      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.

      Sec. 36a-671a. Suspension, revocation or refusal to renew license or taking of other action. Enforcement powers of commissioner. (a) The commissioner may suspend, revoke or refuse to renew any license or take any other action, in accordance with the provisions of section 36a-51, for any reason that would be sufficient grounds for the commissioner to deny application for a license under sections 36a-671 to 36a-671e, inclusive, or if the commissioner finds that the licensee or any proprietor, director, officer, member, partner, shareholder, trustee, employee or agent of such licensee has done any of the following: (1) Made any material misstatement in the application; (2) committed any fraud or misappropriated funds; (3) violated any of the provisions of sections 36a-671 to 36a-671d, inclusive, or any other law or regulation applicable to the conduct of its business; or (4) failed to perform any agreement with a debtor.

      (b) Whenever it appears to the commissioner that any person has violated, is violating or is about to violate the provisions of sections 36a-671 to 36a-671e, inclusive, or any licensee or any proprietor, director, officer, member, partner, shareholder, trustee, employee or agent of such licensee has committed any fraud, misappropriated funds or failed to perform any agreement with a debtor, the commissioner may take action against such person or licensee in accordance with sections 36a-50 and 36a-52. For purposes of sections 36a-671 to 36a-671e, inclusive, each engagement and each offer to engage in debt negotiation shall constitute a separate violation.

      (c) Upon complaint, the commissioner may review any fees or charges assessed by a person engaging or offering to engage in debt negotiation services and order the reduction of such fees or charges or repayment of such amount of the fees or charges that the commissioner deems excessive, taking into consideration the fees that other persons performing similar debt negotiation services charge for such services and the benefit to the consumer of such services. In conducting an investigation pursuant to this subsection, the commissioner shall have the same authority as specified in section 36a-17.

      (P.A. 09-208, S. 33; P.A. 11-216, S. 42.)

      History: P.A. 11-216 amended Subsec. (a) to add reference to Sec. 36a-671e, amended Subsec. (b) to add references to Sec. 36a-671e and add provision re each engagement and offer to engage in debt negotiation to constitute a separate violation, and amended Subsec. (c) to make technical changes, effective July 13, 2011.

      Sec. 36a-671c. Exceptions. The provisions of sections 36a-671 to 36a-671d, inclusive, shall not apply to the following: (1) Any attorney admitted to the practice of law in this state who engages or offers to engage in debt negotiation as an ancillary matter to such attorney's representation of a client; (2) any bank, out-of-state bank, Connecticut credit union, federal credit union or out-of-state credit union, provided subsidiaries of such institutions other than operating subsidiaries of federal banks and federally-chartered out-of-state banks are not exempt from licensure; (3) any person licensed as a debt adjuster pursuant to sections 36a-655 to 36a-665, inclusive, while performing debt adjuster services; (4) any person acting under the order of a court; or (5) any bona fide nonprofit organization organized under Section 501(c)(3) of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as amended from time to time.

      (P.A. 09-208, S. 31; P.A. 11-216, S. 43.)

      History: P.A. 11-216 amended Subdiv. (1) to replace "when engaged in such practice" with "who engages or offers to engage in debt negotiation as an ancillary matter to such attorney's representation of a client".

      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, 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, or such other amount required by subdivision (4) of this subsection. No application for a debt negotiation license branch office, and no renewal of such a license, shall be granted unless the applicant has identified such branch office as a bonded location by addendum to the main office surety bond required by this section.

      (3) Each debt negotiation licensee shall file a single surety bond that complies with the requirements of this section in connection with the main office license with the commissioner in an aggregate amount of fifty thousand dollars or such other amount required in subdivision (4) of this subsection, which bond shall identify any licensed branch office as a bonded location on such bond by addendum.

      (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 (f) 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 annually confirm that it maintains the required penal sum in the amount required by this subdivision. Not later than September 1, 2012, and each September first thereafter, a 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 not later than September first of the applicable year, or on such other date as the commissioner may require pursuant to subsection (h) of this section, 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-498f, inclusive, 36a-534a, 36a-534b and 36a-671 to 36a-671d, 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-498f, inclusive, 36a-534a, 36a-534b and 36a-671 to 36a-671d, 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. 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 stating the date cancellation shall take effect. Such notice shall be sent by certified mail to the licensee 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 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 shall require the debt negotiation licensee to take or refrain from taking such action as, in the opinion of the commissioner, will 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 sponsoring and bonding at least one mortgage loan originator as an exempt registrant under subdivision (2) of subsection (a) and subsection (c) 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 shall mean 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, as defined in section 36a-485, 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.)

      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.

      Sec. 36a-671e. Requirements re mortgage loan originator license. (a) No person licensed to engage or offer to engage in debt negotiation or exempt from such licensure shall permit any individual to engage or offer to engage in debt negotiation of a residential mortgage loan on behalf of a mortgagor for compensation or gain or with the expectation of compensation or gain unless such individual is licensed as a mortgage loan originator under section 36a-489 or exempt from such licensure under subdivision (2) of subsection (b) of section 36a-486.

      (b) No individual shall engage or offer to engage in debt negotiation of a residential mortgage loan on behalf of a mortgagor for compensation or gain or with the expectation of compensation or gain without first obtaining and maintaining annually a license as a mortgage loan originator under section 36a-489 unless such individual is exempt from such licensure under subdivision (2) of subsection (b) of section 36a-486.

      (c) Any individual required to obtain and annually maintain a license as a mortgage loan originator under subsection (b) of this section shall comply with all requirements imposed on a mortgage loan originator licensee under chapter 668.

      (P.A. 11-216, S. 41.)

PART III
TRUTH-IN-LENDING ACT

      Sec. 36a-676. (Formerly Sec. 36-393). Definitions. (a) As used in part II of chapter 668, sections 36a-675 to 36a-685, inclusive, 36a-770 to 36a-788, inclusive, 42-100b and 42-100c, unless the context otherwise requires:

      (1) "Consumer" means "consumer" as defined in Section 103 of the Consumer Credit Protection Act (15 USC 1602);

      (2) "Consumer Credit Protection Act" means Title I of the Consumer Credit Protection Act, 15 USC 1601 et seq., as from time to time amended, and includes regulations adopted by the Federal Reserve Board or the Bureau of Consumer Financial Protection pursuant to said act;

      (3) "Credit" means "credit" as defined in Section 103 of the Consumer Credit Protection Act (15 USC 1602);

      (4) "Credit card", "cardholder" and "card issuer" mean "credit card", "cardholder" and "card issuer" as defined in Section 103 of the Consumer Credit Protection Act (15 USC 1602);

      (5) "Creditor" means "creditor" as defined in Section 103 of the Consumer Credit Protection Act (15 USC 1602), but does not include any department or agency of the United States;

      (6) "Credit sale" means "credit sale" as defined in Section 103 of the Consumer Credit Protection Act (15 USC 1602);

      (7) "Lessor" means "lessor" as defined in Section 181 of the Consumer Credit Protection Act (15 USC 1667), but does not include any department or agency of the United States; and

      (8) "Open-end credit plan" means "open-end credit plan" as defined in Section 103 of the Consumer Credit Protection Act (15 USC 1602).

      (b) Any word or phrase in sections 36a-675 to 36a-685, inclusive, which is not defined in said sections but which is defined in the Consumer Credit Protection Act (15 USC 1601 et seq.) shall have the meaning set forth in the Consumer Credit Protection Act.

      (1969, P.A. 454, S. 1; P.A. 76-169, S. 1; P.A. 77-614, S. 161, 610; P.A. 80-482, S. 260, 345, 348; P.A. 81-158, S. 1, 17; P.A. 82-18, S. 2, 4; P.A. 83-136, S. 1, 2; P.A. 85-613, S. 104, 154; P.A. 87-9, S. 2, 3; P.A. 88-65, S. 40; P.A. 90-230, S. 55, 101; P.A. 92-12, S. 81; P.A. 94-122, S. 303, 340; P.A. 11-110, S. 5.)

      History: P.A. 76-169 redefined "creditor" to include credit card issuers and to specify credit "payable by agreement in more than four installments"; P.A. 77-614 replaced bank commissioner with banking commissioner within the department of business regulation, reflecting incorporation of banking department as division within that department, effective January 1, 1979; P.A. 80-482 abolished department of business regulation and restored banking division to prior status as independent department, thus allowing omission of reference to business regulation department in commissioner's title; P.A. 81-158 redefined the terms to make them conform to the definitions in the Consumer Credit Protection Act, 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 Sec. 625(a) of Public Law 96-221, as amended", i.e. October 1, 1982; P.A. 83-136 corrected reference to public law in Subsec. (i), substituting "97-320" for "96-221"; P.A. 85-613 made technical changes; (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 made a technical change by adding U.S. code citations; P.A. 90-230 made technical changes; P.A. 92-12 redesignated Subsecs. and Subdivs.; P.A. 94-122 deleted the definitions of "commissioner", "organization", and "person" and alphabetized the remainder, effective January 1, 1995; Sec. 36-393 transferred to Sec. 36a-676 in 1995; P.A. 11-110 amended Subsec. (a)(2) to delete reference to Public Law 90-321, add references to Consumer Credit Protection Act and Bureau of Consumer Financial Protection and make a technical change, effective July 21, 2011.

      Sec. 36a-681. (Formerly Sec. 36-399). Penalty. Any person who wilfully and knowingly (1) gives false or inaccurate information or fails to provide information which such person is required to disclose under the provisions of sections 36a-567, 36a-568 and 36a-675 to 36a-685, inclusive, subdivision (13) of subsection (c) of section 36a-770, and sections 36a-771, 36a-774, 36a-777 and 36a-786, or any regulation adopted thereunder, (2) uses any chart or table authorized by the Federal Reserve Board or the Bureau of Consumer Financial Protection under Section 107 of the Consumer Credit Protection Act (15 USC 1606) in such manner as to consistently understate the annual percentage rate determined under said sections, or (3) otherwise fails to comply with any requirement imposed under said sections shall be fined not more than five thousand dollars or imprisoned not more than one year or both.

      (1949 Rev., S. 6699, (a) 6; 1957, P.A. 361, S. 1 (a) 6; P.A. 94-122, S. 307, 340; P.A. 96-109, S. 12; P.A. 11-110, S. 6.)

      History: P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 42-94 transferred to Sec. 36a-681 in 1995; P.A. 96-109 made technical changes, deleting reference to Sec. 36a-535(c) and substituting reference to Subdiv. (13) for Subdiv. (12) of Sec. 36a-770(c); P.A. 11-110 added reference to Bureau of Consumer Financial Protection, effective July 21, 2011.

      Sec. 36a-683. (Formerly Sec. 36-407). Failure to disclose. (a) Liability of creditor. Except as otherwise provided in this section, any creditor who fails to comply with any requirement of sections 36a-675 to 36a-685, inclusive, including Section 125 of the Consumer Credit Protection Act (15 USC 1635), or of section 36a-771 or 36a-774, with respect to any person is liable to that person in an amount equal to the sum of (1) any actual damage sustained by such person as a result of the failure; (2) (A) (i) in the case of an individual action other than as provided in this subparagraph (A) (ii) and (iii) twice the amount of any finance charge in connection with the transaction, (ii) in the case of an individual action relating to a consumer lease under Chapter 5 of the Consumer Credit Protection Act (15 USC Sections 1667 to 1667E, inclusive) twenty-five per cent of the total amount of monthly payments under the lease, except that the liability under this subparagraph (A) (i) or (ii) shall not be less than one hundred dollars nor greater than one thousand dollars, or (iii) in the case of an individual action related to a credit transaction not under an open end credit plan that is secured by real property or a dwelling, not less than two hundred dollars nor more than two thousand dollars; (B) in the case of a class action, such amount as the court may allow, except that as to each member of the class no minimum recovery shall be applicable, and the total recovery under this subparagraph in any class action or series of class actions arising out of the same failure to comply by the same creditor shall not be more than the lesser of five hundred thousand dollars or one per cent of the net worth of the creditor; and (3) in the case of any successful action to enforce the foregoing liability, or in any action in which a person is determined to have a right of rescission under Section 125 of the Consumer Credit Protection Act (15 USC 1635), the costs of the action, together with a reasonable attorney's fee as determined by the court. In determining the amount of award in any class action, the court shall consider, among other relevant factors, the amount of any actual damages awarded, the frequency and persistence of failures of compliance by the creditor, the resources of the creditor, the number of persons adversely affected, and the extent to which the creditor's failure of compliance was intentional. In connection with the disclosures referred to in Section 127 of the Consumer Credit Protection Act (15 USC 1637) a creditor shall have a liability determined under subdivision (2) of this subsection only for failing to comply with the requirements of Section 125 or 127(a) of said act (15 USC 1635) or (15 USC 1637(a)) or of paragraph (4), (5), (6), (7), (8), (9) or (10) of Section 127(b) of said act (15 USC 1637(b)). In connection with the disclosures referred to in Section 128 of said act (15 USC 1638) a creditor shall have a liability determined under subdivision (2) of this subsection only for failing to comply with the requirements of Section 125 of said act (15 USC 1635) or of paragraph (2), insofar as it requires a disclosure of the "amount financed", or paragraph (3), (4), (5), (6) or (9) of Section 128 (a) of said act (15 USC 1638(a)). With respect to any failure to make disclosures required under Chapter 2, 4 or 5 of said act, liability shall be imposed only upon the creditor required to make disclosure, except as provided in Section 131 of said act (15 USC 1641).

      (b) Adjustment of error. A creditor or assignee has no liability under this section or section 36a-681 or 36a-684 for any failure to comply with any requirement imposed under sections 36a-675 to 36a-685, inclusive, if within sixty days after discovering an error, whether pursuant to a final written examination report or notice issued under subsection (d) of section 36a-684, or through the creditor's or assignee's own procedures, and prior to the institution of an action under this section or the receipt of written notice of the error from the obligor, the creditor or assignee notifies the person concerned of the error and makes whatever adjustments in the appropriate account are necessary to insure that the person will not be required to pay an amount in excess of the charge actually disclosed, or the dollar equivalent of the annual percentage rate actually disclosed, whichever is lower.

      (c) Bona fide errors. A creditor or assignee may not be held liable in any action brought under this section for a violation of sections 36a-675 to 36a-685, inclusive, if the creditor or assignee shows by a preponderance of evidence that the violation was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid any such error. Examples of a bona fide error include, but are not limited to, clerical, calculation, computer malfunction and programming, and printing errors, except that an error of legal judgment with respect to a person's obligations under said sections is not a bona fide error.

      (d) Multiple obligors. When there are multiple obligors in a consumer credit transaction or consumer lease, there shall be no more than one recovery of damages under subdivision (2) of subsection (a) of this section for a violation of sections 36a-675 to 36a-685, inclusive.

      (e) Time limit for bringing action. Any action under this section shall be brought in any court of competent jurisdiction within one year from the date of the occurrence of the violation. This subsection does not bar a person from asserting a violation of sections 36a-675 to 36a-685, inclusive, in an action to collect the debt which was brought more than one year from the date of the occurrence of the violation as a matter of defense by recoupment or set-off in such action.

      (f) Good faith conformance. No provision of this section, subsection (d) of section 36a-684 or section 36a-681 imposing any liability shall apply to any act done or omitted in good faith in conformity with any provision of sections 36a-675 to 36a-685, inclusive, or with any rule, regulation, approval or formal interpretation thereof by the commissioner, or in conformity with the Consumer Credit Protection Act (15 USC 1601 et seq.), including any rule or regulation adopted by the Federal Reserve Board or the Bureau of Consumer Financial Protection pursuant to said act, or in conformity with any interpretation of said act by the Federal Reserve Board or the Bureau of Consumer Financial Protection or in conformity with any interpretation or approval by an official or employee of the Federal Reserve System or the Bureau of Consumer Financial Protection duly authorized by the Federal Reserve Board or the Bureau of Consumer Financial Protection to issue such interpretations or approvals under such procedures as said board or bureau may prescribe therefor, notwithstanding that after such act or omission has occurred, such statute, rule, regulation, approval or interpretation is amended, rescinded or determined by judicial or other authority to be invalid for any reason.

      (g) Multiple failure to disclose. The multiple failure to disclose to any person any information required under sections 36a-675 to 36a-685, inclusive, to be disclosed in connection with a single account under an open-end consumer credit plan, other single consumer credit sale, consumer loan, other extension of consumer credit or consumer lease, shall entitle the person to a single recovery under this section but continued failure to disclose after a recovery has been granted shall give rise to rights to additional recoveries. This subsection does not bar any remedy permitted by subsection (j) of this section.

      (h) Offsets. A person may not take any action to offset any amount for which a creditor or assignee is potentially liable to such person under subdivision (2) of subsection (a) of this section against any amount owed by such person, unless the amount of the creditor's or assignee's liability under sections 36a-675 to 36a-685, inclusive, has been determined by judgment of a court of competent jurisdiction in an action to which such person was a party. This subsection does not bar a consumer then in default on the obligation from asserting a violation of said sections as an original action, or as a defense or counterclaim to an action to collect amounts owed by the consumer brought by a person liable under said sections.

      (i) Duplicate recovery prohibited. Notwithstanding any other provision of sections 36a-675 to 36a-685, inclusive, (1) no person shall be entitled in any action to a recovery under this section for the failure to disclose any information required under said sections if a recovery is awarded in the same action under Section 130 of the Consumer Credit Protection Act (15 USC 1640) for the failure to disclose any information required under said sections; and (2) no person shall be entitled in any action brought under this section to a recovery if, prior to an award in any such action, a recovery has been awarded to such person in any action brought under Section 130 of the Consumer Credit Protection Act (15 USC 1640) in which the same act or omission was the basis of that action.

      (j) Rescission. (1) When an obligor exercises his right to rescind under Section 125 of the Consumer Credit Protection Act (15 USC 1635), he is not liable for any finance or other charge, and any security interest given by the obligor, including any such interest arising by operation of law, becomes void upon such a rescission. Within twenty days after receipt of a notice of rescission, the creditor shall return to the obligor any money or property given as earnest money, down payment or otherwise, and shall take any action necessary or appropriate to reflect the termination of any security interest created under the transaction. If the creditor has delivered any property to the obligor, the obligor may retain possession of it. Upon the performance of the creditor's obligations under this subsection and Section 125 of the Consumer Credit Protection Act (15 USC 1635), the obligor shall tender the property to the creditor, except that if return of the property in kind would be impracticable or inequitable, the obligor shall tender its reasonable value. Tender shall be made at the location of the property or at the residence of the obligor, at the option of the obligor. If the creditor does not take possession of the property within twenty days after tender by the obligor, ownership of the property vests in the obligor without obligation on his part to pay for it. The procedures described by this subdivision shall apply except when otherwise ordered by a court.

      (2) Notwithstanding any rule of evidence, written acknowledgment of receipt of any disclosures required under sections 36a-675 to 36a-685, inclusive, by a person to whom information, forms and a statement is required to be given pursuant to this subsection and Section 125 of the Consumer Credit Protection Act (15 USC 1635), does no more than create a rebuttable presumption of delivery thereof.

      (3) An obligor's right of rescission shall expire three years after the date of consummation of the transaction or upon the sale of the property, whichever occurs earlier, notwithstanding the fact that the information and forms required under this section and Section 125 of the Consumer Credit Protection Act (15 USC 1635), or any other disclosures required under sections 36a-675 to 36a-685, inclusive, have not been delivered to the obligor, except that if (A) the commissioner institutes a proceeding to enforce the provisions of this section, or Section 125 of the Consumer Credit Protection Act (15 USC 1635), made a part of said sections as provided in section 36a-678, within three years after the date of consummation of the transaction, (B) the commissioner finds a violation of this subsection or Section 125 of the Consumer Credit Protection Act (15 USC 1635), and (C) the obligor's right to rescind is based in whole or in part on any matter involved in such proceeding, then the obligor's right of rescission shall expire three years after the date of consummation of the transaction or upon the earlier sale of the property, or upon the expiration of one year following the conclusion of the proceeding or any judicial review or period for judicial review thereof, whichever is later.

      (4) (A) In any credit transaction in which an obligor has the right to rescind under Section 125 of the Consumer Credit Protection Act (15 USC 1635), and the obligor does not exercise that right, a finance charge may not begin to accrue in connection with such transaction until after midnight of the third business day following the consummation of the transaction. (B) Any obligor required to pay a finance charge, in violation of the provisions of this subdivision, may recover from the creditor twice the amount of such finance charge, costs and reasonable attorney's fees.

      (5) In any action in which it is determined that a creditor has violated subdivision (1), (2) or (3) of this subsection, in addition to rescission the court may award relief under other subsections of this section for violations of sections 36a-675 to 36a-685, inclusive, not relating to the right to rescind.

      (6) An obligor shall have no rescission rights arising solely from the form of written notice used by the creditor to inform the obligor of the rights of the obligor under this subsection and Section 125 of the Consumer Credit Protection Act (15 USC 1635), if the creditor provided the obligor the appropriate form of written notice published and adopted by the Federal Reserve Board or the Bureau of Consumer Financial Protection, or a comparable written notice of the rights of the obligor, that was properly completed by the creditor, and otherwise complied with all other requirements of this subsection and Section 125 of the Consumer Credit Protection Act (15 USC 1635) regarding notice.

      (7) Notwithstanding the provisions of subsection (n) of this section, and subject to the time period provided in subdivision (3) of this subsection, an obligor shall have the rescission rights in foreclosure set forth in Subsection (i) of Section 125 of the Consumer Credit Protection Act (15 USC 1635(i)). This subdivision shall apply to all consumer credit transactions in existence or consummated on or after September 30, 1995.

      (k) Action against assignee. (1) Except as otherwise specifically provided in sections 36a-675 to 36a-685, inclusive, any civil action for a violation of said sections or proceeding by the commissioner which may be brought against a creditor, other than with respect to a consumer credit transaction secured by real property, may be maintained against any assignee of that creditor only if the violation for which such action or proceeding is brought is apparent on the face of the disclosure statement, except where the assignment was involuntary. For the purpose of this subdivision, a violation apparent on the face of the disclosure statement includes, but is not limited to, (A) a disclosure which can be determined to be incomplete or inaccurate from the face of the disclosure statement or other documents assigned, or (B) a disclosure not made in the terms required to be used by said sections.

      (2) Except as provided in subdivision (2) of subsection (j) of this section, in any action or proceeding by or against any subsequent assignee of the original creditor without knowledge to the contrary by the assignee when he acquires the obligation, written acknowledgment of receipt by a person to whom a statement is required to be given pursuant to sections 36a-675 to 36a-685, inclusive, shall be conclusive proof of the delivery thereof and, except as provided in subdivision (1) of this subsection, of compliance with Chapter 2 of the Consumer Credit Protection Act. This subsection does not affect the rights of the obligor in any action against the original creditor.

      (3) Any consumer who has the right to rescind a transaction under subsection (j) of this section or Section 125 of the Consumer Credit Protection Act (15 USC 1635) may rescind the transaction as against any assignee of the obligation.

      (4) (A) Except as otherwise specifically provided in sections 36a-675 to 36a-685, inclusive, any civil action against a creditor for a violation of said sections and any proceeding brought by the commissioner against a creditor, with respect to a consumer credit transaction secured by real property, may be maintained against any assignee of such creditor only if (i) the violation for which such action or proceeding was brought is apparent on the face of the disclosure statement provided in connection with such transaction pursuant to sections 36a-675 to 36a-685, inclusive, and the Consumer Credit Protection Act (15 USC 1601 et seq.), and (ii) the assignment to the assignee was voluntary. (B) For purposes of this subdivision, a violation is "apparent on the face of the disclosure statement" if (i) the disclosure can be determined to be incomplete or inaccurate by a comparison among the disclosure statement, any itemization of the amount financed, the note, or any other disclosure of disbursement, or (ii) the disclosure statement does not use the terms or format required to be used by sections 36a-675 to 36a-685, inclusive, and the Consumer Credit Protection Act (15 USC 1601 et seq.).

      (5) A servicer of a consumer obligation arising from a consumer credit transaction shall be treated as an assignee of such obligation to the extent provided in Subsection (f) of Section 131 of the Consumer Credit Protection Act (15 USC 1641(f)). This subdivision applies to all consumer credit transactions in existence or consummated on or after September 30, 1995.

      (l) Liability of credit card issuer. (1) Subject to the limitation contained in subdivision (2) of this subsection, a card issuer who has issued a credit card to a cardholder pursuant to an open-end consumer credit plan shall be subject to all claims, other than tort claims, and defenses arising out of any transaction in which the credit card is used as a method of payment or extension of credit if (A) the obligor has made a good faith attempt to obtain satisfactory resolution of a disagreement or problem relative to the transaction from the person honoring the credit card; (B) the amount of the transaction exceeds fifty dollars; and (C) the transaction took place wholly within this state, provided the mailing address previously provided by the cardholder was within this state and provided the state of billing of the transaction shall not be considered in determining where the transaction took place, or the transaction took place within one hundred miles from the mailing address within this state previously provided by the cardholder, except that the limitations set forth in subparagraphs (B) and (C) of this subdivision with respect to an obligor's right to assert claims and defenses against a card issuer shall not be applicable to any transaction in which the person honoring the credit card (i) is the same person as the card issuer, (ii) is controlled by the card issuer, (iii) is under direct or indirect common control with the card issuer, (iv) is a franchised dealer in the card issuer's products or services, or (v) has obtained the order for such transaction through a mail solicitation made by or participated in by the card issuer in which the cardholder is solicited to enter into such transaction by using the credit card issued by the card issuer.

      (2) The amount of claims or defenses asserted by the cardholder may not exceed the amount of credit outstanding with respect to such transaction at the time the cardholder first notifies the card issuer or the person honoring the credit card of such claim or defense. For the purpose of determining the amount of credit outstanding in this subdivision, payments and credits to the cardholder's account are deemed to have been applied, in the order indicated, to the payment of: (A) Late charges in the order of their entry to the account; (B) finance charges in order of their entry to the account; and (C) debits to the account other than those set forth in subparagraphs (A) and (B) of this subdivision, in the order in which each debit entry to the account was made.

      (m) Liability of lessor. (1) For the purpose of this subsection, the term "creditor" in this section shall include a lessor.

      (2) Any lessor who fails to comply with any requirement imposed under Section 182 or 183 of the Consumer Credit Protection Act (15 USC 1667a or 1667b) with respect to any person is liable to such person as provided in this section.

      (3) Any lessor who fails to comply with any requirement imposed under Section 184 of the Consumer Credit Protection Act (15 USC 1667c) with respect to any person who suffers actual damage from the violation is liable to such person as provided in this section.

      (n) Limitations on rights of creditors, assignees and consumers. In the case of any consumer credit transaction subject to the provisions of sections 36a-675 to 36a-685, inclusive, that is consummated before September 30, 1995, the civil, administrative and criminal liability of a creditor or any assignee of a creditor under sections 36a-675 to 36a-685, inclusive, and a consumer's extended rescission rights under subdivision (3) of subsection (j) of this section, shall be limited to the extent provided in and subject to the exceptions contained in Section 139 of the Consumer Credit Protection Act (15 USC 1649).

      (1969, P.A. 454, S. 15; P.A. 75-55; 75-436, S. 6, 7; P.A. 77-315, S. 1; P.A. 81-158, S. 8, 17; P.A. 82-18, S. 2, 4; P.A. 87-65; P.A. 88-65, S. 45; P.A. 96-40, S. 1, 2; 96-109, S. 14; 96-180, S. 119, 166; P.A. 11-110, S. 7, 8.)

      History: P.A. 75-55 required that action be brought within three years, rather than one year, in Subsec. (e); P.A. 75-436 rewrote Subsec. (a) to distinguish between class actions and individual actions, returned time for bringing action to one year in Subsec. (e) and added Subsecs. (f) to (j); P.A. 77-315 specified applicability in Subsec. (a) to failure to comply with requirements of chapter 657a, this chapter and previously listed sections rather than to failure to disclose information required under this chapter and listed sections; P.A. 81-158 inserted new Subsecs. (i) to (m) and made extensive changes to the existing Subsecs. to make the provisions of the section conform to federal law, 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. 87-65 added Subsec. (j)(4) re the accrual of finance charges during the rescission period; P.A. 88-65 made technical changes by adding U.S. code citations; Sec. 36-407 transferred to Sec. 36a-683 in 1995; P.A. 96-40 made technical changes, and made specific changes to conform with the federal Truth in Lending Act by amending Subsecs. (a) and (k) re consumer credit secured by real property, adding Subdivs. (j)(6) and (7) re obligor rescission rights, adding Subdivs. (k)(4) and (5) re assignments, and adding Subsec. (n) re consumer rescission rights and re liability of creditors and assignees for transactions before September 30, 1995, effective May 2, 1996; P.A. 96-109 and 96-180 both substituted "36a-675 to 36a-685" for "36a-665 to 36a-675" where appearing and substituted references to Subsec. (d) for Subsec. (g) of Sec. 36a-684, effective June 3, 1996; P.A. 11-110 amended Subsecs. (f) and (j)(6) to add references to Bureau of Consumer Financial Protection, effective July 21, 2011.

PART V
CONSUMER CREDIT REPORTS

      Sec. 36a-696. (Formerly Sec. 36-432). Disclosure to consumer of information re credit report. (a) No creditor shall take adverse action based wholly or in part on a credit report on any consumer applying to such creditor for credit for personal, family or household purposes without first disclosing to the consumer the name and address of the credit rating agency which issued the report.

      (b) Upon written request and proper identification of any consumer, a credit rating agency shall disclose to the consumer, within five business days of receipt of the consumer's request, the nature and substance of all information in its files, including (1) any credit score or predictor relating to the consumer, as required by and in a form and manner that complies with the federal Fair Credit Reporting Act and commentary adopted and enforced by the Federal Trade Commission or the Bureau of Consumer Financial Protection; (2) a record of all inquiries, by recipient, including the recipient's name which resulted in providing a credit report concerning the consumer during the preceding twelve-month period; (3) a clear and concise explanation of the information; and (4) a written summary of the consumer's rights under state and federal consumer credit reporting statutes in a form substantially similar to the summary in section 36a-699a. The credit rating agency may charge no more than five dollars for the first request for such information within the preceding twelve months and no more than seven dollars and fifty cents for any additional request within the same twelve-month period for such information, provided such disclosure shall be made without charge to the consumer if the request for disclosure is made not more than sixty days after notification to the consumer of an adverse action by a creditor.

      (1971, P.A. 868, S. 2; P.A. 87-146, S. 2; P.A. 92-12, S. 86; P.A. 95-104, S. 1; P.A. 11-110, S. 9.)

      History: P.A. 87-146 amended Subsec. (b) by requiring disclosure to be made without charge to the consumer if the request for disclosure is made not more than 30 days after notification to the consumer of an adverse action by a creditor; P.A. 92-12 made technical changes; Sec. 36-432 transferred to Sec. 36a-696 in 1995; P.A. 95-104 divided section into Subsecs. and amended Subsec. (b) by adding a 5-day disclosure deadline, adding Subdiv. (1) providing for disclosure of any credit score or predictor relating to the customer, Subdiv. (2) requiring a record of all inquiries by recipient, Subdiv. (3) requiring a clear and concise explanation of the information and Subdiv. (4) requiring a written summary of the consumer's rights, and adding the maximum charge by the credit rating agency and changing the request period from 30 to 60 days for disclosures without charge; P.A. 11-110 amended Subsec. (b)(1) to add reference to Bureau of Consumer Financial Protection, effective July 21, 2011.

PART IX
HOME MORTGAGE DISCLOSURE

      Sec. 36a-736. (Formerly Sec. 36-444). Definitions. As used in sections 36a-735 to 36a-744, inclusive, unless the context otherwise requires:

      (1) "Applicant" means any person who applies for a home purchase loan, home improvement loan or other mortgage loan as defined in sections 36a-735 to 36a-744, inclusive, whether or not the loan is granted;

      (2) "Federal Home Mortgage Disclosure Act" means the Home Mortgage Disclosure Act of 1975 (12 USC Section 2801 et seq.), as amended from time to time, and any regulations promulgated by the Federal Reserve Board or the Bureau of Consumer Financial Protection pursuant to that act, except, for purposes of sections 36a-735 to 36a-744, inclusive, the supervisory agency shall be the commissioner;

      (3) "Financial institution" means any Connecticut bank or Connecticut credit union which makes home purchase loans or home improvement loans or any for profit mortgage lending institution other than a Connecticut bank or Connecticut credit union, whose home purchase loan originations equaled or exceeded ten per cent of its loan origination volume, measured in dollars, in the preceding calendar year, if such mortgage lending institution is licensed under sections 36a-485 to 36a-498a, inclusive;

      (4) "Home improvement loan" has the same meaning as provided in the federal Home Mortgage Disclosure Act;

      (5) "Home purchase loan" has the same meaning as provided in the federal Home Mortgage Disclosure Act; and

      (6) "Mortgage loan" means a loan which is secured by residential real property.

      (P.A. 77-153, S. 2; 77-614, S. 161, 587, 610; P.A. 78-303, S. 85, 136; P.A. 80-482, S. 262, 345, 348; P.A. 87-9, S. 2, 3; P.A. 90-34, S. 1, 5; P.A. 93-186, S. 1, 9; P.A. 94-122, S. 316, 340; 94-161, S. 1; May 25 Sp. Sess. 94-1, S. 107, 130; P.A. 96-109, S. 16; 96-180, S. 120, 166; P.A. 04-69, S. 28; P.A. 08-176, S. 62; P.A. 11-110, S. 10.)

      History: P.A. 77-614 and P.A. 78-303 replaced bank commissioner with banking commissioner within the department of business regulation, reflecting incorporation of banking department as a division within that department, effective January 1, 1979; P.A. 80-482 restored banking division as an independent department and abolished the department of business regulation, allowing omission of reference to abolished department in commissioner's title; (Revisor's note: Pursuant to P.A. 87-9 "banking commissioner" was changed editorially by the Revisors to "commissioner of banking"); P.A. 90-34 amended the definitions of "financial institution" and "home improvement loan", deleted the definition of "census tract", added a definition of "federal Home Mortgage Disclosure Act" and renumbered each Subsec., effective May 2, 1990, and applicable to all reports and disclosures required under chapter 661 concerning loans originated or purchased, and loan applications received on and after January 1, 1990; P.A. 93-186 amended the definitions of "financial institution", "federal Home Mortgage Disclosure Act" and "applicant", deleted the definition of "mortgage loan" and added definition of "home purchase loan" and renumbered Subdivs. accordingly, effective June 23, 1993; P.A. 94-122 deleted the definition of "commissioner" and reordered the definitions, effective January 1, 1995; P.A. 94-161 inserted new Subdiv. (2) defining "mortgage loan", renumbered the remaining Subdivs., included "or other mortgage loan" in the definition of "applicant" and made technical changes; May 25 Sp. Sess. P.A. 94-1 made technical changes, effective January 1, 1994 and applicable January 1, 1995; Sec. 36-444 transferred to Sec. 36a-736 in 1995; P.A. 96-109 and 96-180 both made technical change in definition of "financial institution", substituting "or" for "and" in reference to licensure under specified sections; P.A. 04-69 amended Subdiv. (3) to substitute "36a-498a" for "36a-498"; P.A. 08-176 made technical changes, effective July 1, 2008; P.A. 11-110 amended Subdiv. (2) to add reference to Bureau of Consumer Financial Protection, effective July 21, 2011.

PART X
OTHER MORTGAGE AND LOAN PRACTICES

      Sec. 36a-760. Nonprime home loans: Definitions; applicability. (a) As used in this section and sections 36a-760a to 36a-760j, inclusive:

      (1) "APR" has the same meaning as provided in section 36a-746a;

      (2) "CHFA loan" means a loan made, insured, purchased, subsidized or guaranteed by the Connecticut Housing Finance Authority;

      (3) "FHA loan" means a loan made, insured, purchased, subsidized or guaranteed by the Federal Housing Administration;

      (4) "First mortgage loan" has the same meaning as provided in section 36a-485;

      (5) "Lender" means any person engaged in the business of the making of mortgage loans who is required to be licensed by the Department of Banking under chapter 668, or such person's successors or assigns, and also means any bank, out-of-state bank, Connecticut credit union, federal credit union, out-of-state credit union, or an operating subsidiary of a federal bank or a federally chartered out-of-state bank where such subsidiary engages in the business of making mortgage loans, and their successors and assigns, but does not include any mortgage broker, as defined in this section, or any mortgage loan originator, as defined in section 36a-485;

      (6) "Mortgage broker" means any person, other than a lender, who (A) for a fee, commission or other valuable consideration, negotiates, solicits, arranges, places or finds a mortgage, and (B) who is required to be licensed by the Department of Banking under chapter 668, or such person's successors or assigns;

      (7) "Nonprime home loan" means any loan or extension of credit, excluding an open-end line of credit, and further excluding a reverse mortgage transaction, as defined in 12 CFR 226.33, as amended from time to time:

      (A) In which the borrower is a natural person;

      (B) The proceeds of which are to be used primarily for personal family or household purposes;

      (C) In which the loan is secured by a mortgage upon any interest in one-to-four family residential real property located in this state which is, or when the loan is made, intended to be used or occupied by the borrower as a principal residence;

      (D) In which the principal amount of the loan does not exceed four hundred seventeen thousand dollars;

      (E) Where the loan is not a CHFA loan; and

      (F) In which the conditions set forth in clauses (i) and (ii) of this subparagraph apply, subject to any adjustments made pursuant to clause (iii) of this subparagraph:

      (i) The difference, at the time of consummation, between the APR for the loan and the conventional mortgage rate is either equal to or greater than (I) one and three-quarters percentage points, if the loan is a first mortgage loan, or (II) three and three-quarters percentage points, if the loan is a secondary mortgage loan. For purposes of such calculation, "conventional mortgage rate" means the most recent contract interest rate on commitments for fixed-rate mortgages published by the Board of Governors of the Federal Reserve System in its statistical release H.15, or any publication that may supersede it, during the week preceding the week in which the interest rate for the loan is set. For purposes of determining the beginning of each weekly period, the first day of each week shall be the effective date for the applicable prime offer rate, as of the date the interest rate is set, as determined in accordance with subparagraph (F)(ii) of this subdivision.

      (ii) The difference, at the time of consummation, between the APR for the loan or extension of credit and the average prime offer rate for a comparable transaction, as of the date the interest rate is set, is greater than one and one-half percentage points if the loan is a first mortgage loan or three and one-half percentage points if the loan is a secondary mortgage loan. For purposes of this subparagraph, "average prime offer rate" has the meaning as provided in 12 CFR 226.35, as amended from time to time. For purposes of subparagraphs (F)(i) and (F)(ii) of this subdivision, the date the interest rate is set is the last date the interest rate is set, provided the rate is adjusted on or before consummation.

      (iii) The commissioner shall have the authority, after consideration of the relevant factors, to increase the percentages set forth in clauses (i) and (ii) of this subparagraph. For purposes of this clause, the relevant factors to be considered by the commissioner shall include, but not be limited to, the existence and amount of increases in fees or charges in connection with purchases of mortgages by the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation and increases in fees or charges imposed by mortgage insurers and the impact, including the magnitude of the impact, that such increases have had, or will likely have, on APRs for mortgage loans in this state. When considering such factors, the commissioner shall focus on those increases that are related to the deterioration in the housing market and credit conditions. The commissioner may refrain from increasing such percentages if it appears that lenders are increasing interest rates or fees in bad faith or if increasing the percentages would be contrary to the purposes of sections 36a-760 to 36a-760f, inclusive. No increase authorized by the commissioner to a particular percentage shall exceed one-quarter of one percentage point, and the total of all increases to a particular percentage under this clause shall not exceed one-half of one percentage point. No increase shall be made unless: (I) The increase is noticed in the Banking Department Bulletin and the Connecticut Law Journal, and (II) a public comment period of twenty days is provided. Any increase made under this clause shall be reduced proportionately when the need for the increase has diminished or no longer exists. The commissioner, in the exercise of his discretion, may authorize an increase in the percentages with respect to all loans or just with respect to a certain class or classes of loans;

      (8) "Open-end line of credit" means a mortgage extended by a lender under a plan in which: (A) The lender reasonably contemplates repeated transactions; (B) the lender may impose a finance charge from time to time on an outstanding unpaid balance; (C) the amount of credit that may be extended to the consumer during the term of the plan, up to any limit set by the lender, is generally made available to the extent that any outstanding balance is repaid; and (D) none of the proceeds of the open-end line of credit are used at closing to (i) purchase the borrower's primary residence, or (ii) refinance a mortgage loan that had been used by the borrower to purchase the borrower's primary residence;

      (9) "Secondary mortgage loan" has the same meaning as provided in section 36a-485.

      (b) The provisions of sections 36a-760a to 36a-760i, inclusive, shall be applicable to nonprime home loans and mortgages, as appropriate, for which applications have been received on or after August 1, 2008.

      (P.A. 08-176, S. 21; P.A. 09-207, S. 3; 09-209, S. 43; P.A. 10-32, S. 114; June Sp. Sess. P.A. 10-1, S. 47; P.A. 11-216, S. 45.)

      History: P.A. 08-176 effective July 1, 2008; P.A. 09-207 amended Subsec. (a) by deleting former Subdiv. (1) defining "commissioner", adding new Subdiv. (1) defining "APR" and redefining "nonprime home loan" in Subdiv. (7); P.A. 09-209 deleted former Subdiv. (1) defining "commissioner" and added new Subdiv. (1) defining "APR" in Subsec. (a); P.A. 10-32 made technical changes in Subsec. (a)(5) and (6), effective May 10, 2010; June Sp. Sess. P.A. 10-1 amended Subsec. (a)(7) (D) to delete provision re period applicable to $417,000 loan limit and delete provision re conforming loan limit for loan originated on or after July 1, 2010, effective June 22, 2010; P.A. 11-216 amended Subsec. (a) by redefining "nonprime home loan" in Subdiv. (7), deleting former Subdiv. (9) re definition of "residential property" and redesignating existing Subdiv. (10) as Subdiv. (9), effective July 13, 2011.

      Sec. 36a-760j. Prohibition against influencing real estate appraisals. No person shall influence real estate appraisals of residential property. For the purposes of this section, "influence residential real estate appraisals" means to directly or indirectly coerce, influence or otherwise encourage an appraiser to misstate or misrepresent the value of residential property and includes, but is not limited to: (1) Refusal, or intentional failure, to pay an appraiser for an appraisal that reflects a fair market value estimate that is less than the sale contract price; or (2) refusal, or intentional failure, to utilize, or encouraging other mortgage brokers not to utilize, an appraiser based solely on the fact that the appraiser provided an appraisal reflecting a fair market value estimate that was less than the sale contract price.

      (P.A. 08-176, S. 81; P.A. 09-209, S. 26; P.A. 11-216, S. 46.)

      History: P.A. 08-176 effective July 1, 2008; P.A. 09-209 changed "A mortgage broker shall not influence" to "No person shall influence", effective July 31, 2009; P.A. 11-216 added "means to directly or indirectly coerce, influence or otherwise encourage an appraiser to misstate or misrepresent the value of residential property and", effective July 13, 2011.

PART XI
RETAIL INSTALLMENT SALES FINANCING

      Sec. 36a-770. (Formerly Sec. 42-83).*(See end of section for amended version of subdivision (12) of subsection (c) and effective date.) 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 sections 36a-770 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 subdivision (35) of subsection (b) of 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 subdivision (23) of subsection (a) of section 42a-9-102 and motor vehicles included under such definition, having an aggregate cash price of fifty thousand dollars or less, and (B) "equipment", as defined in subdivision (33) of subsection (a) of section 42a-9-102, having an aggregate cash price of sixteen 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 subdivision (35) of subsection (b) of 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 subdivision (73) of subsection (a) of 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 subdivision (35) of subsection (b) of 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-685, 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 to a retail buyer.

      (15) "Sales finance company" means any person engaging in this state in the business, in whole or in part, of acquiring retail installment contracts from retail sellers 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.

      (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.)

      *Note: On and after July 1, 2013, subdivision (12) of subsection (c) of this section, as amended by section 28 of public act 11-108, is to read as follows:

      "(12) "Retail installment contract" means any security agreement, as defined in subdivision (74) of subsection (a) of 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 subdivision (35) of subsection (b) of 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."

      (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.)

      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.

PART XII
CONSUMER COLLECTION AGENCIES

      Sec. 36a-801. (Formerly Sec. 42-127a). License required. Application, issuance, renewal. Examination of records. Authority to conduct criminal history records check. Abandonment of application. Automatic suspension of license or renewal license. Notice. Opportunity for hearing. (a) No person shall act within this state as a consumer collection agency without a consumer collection agency license. 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 collects from consumer debtors or property tax debtors who reside within this state for creditors who are located within this state; (3) has its place of business located outside this state and regularly collects from consumer debtors or property 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.

      (b) (1) Any person desiring to act within this state as a consumer collection agency shall make a written application to the commissioner for such license in such form as the commissioner prescribes. Such application shall be accompanied by (A) a financial statement prepared by a certified public accountant or a public accountant, the accuracy of which is sworn to under oath before a notary public by the proprietor, a general partner or a corporate officer or a member duly authorized to execute such documents, (B) (i) the history of criminal convictions of the (I) applicant; (II) partners, if the applicant is a partnership; (III) members, if the applicant is a limited liability company or association; or (IV) officers, directors and principal employees, if the applicant is a corporation, and (ii) sufficient information pertaining to the history of criminal convictions of such applicant, partners, members, officers, directors and principal employees in a form acceptable to the commissioner, (C) a license fee of eight hundred dollars, or in the case of an initial application that is filed not earlier than one year before the date such license will expire, a license fee of four hundred dollars, and (D) an investigation fee of one hundred dollars. The commissioner shall cause to be made such inquiry and examination as to the qualifications of each such applicant or any partner, member, officer, director or principal employee of the applicant as the commissioner deems necessary. The commissioner, in accordance with section 29-17a, may conduct a state and national criminal history records check of the applicant and of each partner, member, officer, director and principal employee of such applicant. Each applicant shall furnish satisfactory evidence to the commissioner that the applicant is a person of good moral character and is financially responsible. If the commissioner is satisfied that such applicant is in all respects properly qualified and trustworthy and that the granting of such license is not against the public interest, the commissioner may issue to such applicant a license, in such form as the commissioner may adopt, to act within this state as a consumer collection agency. The commissioner may deny an application if the commissioner finds that the applicant or any partner, member, officer, director or principal employee 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. Any such license issued by the commissioner shall expire at the close of business on September thirtieth of the odd-numbered year following its issuance, unless such license is renewed. The commissioner may renew such application, in the commissioner's discretion, upon filing of a proper renewal application accompanied by a license fee of eight hundred dollars, and satisfactory proof that such applicant at that time possesses the required qualifications for the license. The commissioner may deny a renewal application if the commissioner finds that the 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. Such renewal application shall be filed with the commissioner on or before September first of the year in which the license expires. Any renewal application filed with the commissioner after September first shall be accompanied by a one-hundred-dollar late fee and any such filing shall be deemed to be timely and sufficient for purposes of subsection (b) of section 4-182. Whenever an application for a license, other than a renewal application, is filed under sections 36a-800 to 36a-810, inclusive, by any person who was a licensee under said sections 36a-800 to 36a-810, inclusive, and whose license expired less than sixty days prior to the date such application was filed, such application shall be accompanied by a one-hundred-dollar processing fee in addition to the application fee. 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-810, 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. The applicant or licensee shall notify the commissioner, in writing, of any change in the information provided in its initial application for a license or most recent renewal application for such license, as applicable, not later than ten business days after the occurrence of the event that results in such information becoming inaccurate. 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-810, inclusive, or any regulations adopted pursuant to said sections 36a-801 to 36a-810, inclusive. The commissioner shall notify the applicant, in writing, 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-810, inclusive.

      (2) If the commissioner determines that a check filed with the commissioner to pay a fee under subdivision (1) of this subsection has been dishonored, the commissioner shall automatically suspend the license or a renewal license that has been issued but is not yet effective. The commissioner shall 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.

      (3) No abatement of the license fee shall be made 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.

      (c) 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. Any change of location of a place of business of a licensee shall require prior written notice to the commissioner. 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-810, inclusive, as to each new licensee. A license shall not be transferable or assignable. Any licensee holding, applying for, or seeking renewal of more than one license may, at its option, file the bond required under section 36a-802 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 twenty-five thousand dollars for each place of business.

      (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.)

      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.