PA 08-119—sSB 182

Banks Committee

AN ACT CONCERNING BANK AND CREDIT UNION AUTHORITY AND NONDEPOSITORY LICENSES

SUMMARY: This act allows the banking commissioner to approve temporary offices or other facilities to provide banking and credit union services to customers of certain banks or credit unions affected by an emergency. The commissioner may take this action in response to emergencies in Connecticut or other specified states. By law, an emergency includes conditions arising from shortages of fuel, housing, food, transportation, or labor, or arising from: (1) enemy action or threat of enemy action, (2) fire or other casualty, (3) robbery or other crime, (4) a riot or threat of riot, or (5) extreme weather conditions. The act allows a temporary office to remain open for the period the commissioner specifies, but he may extend this period if he finds that the condition continues. The act allows the temporary office to be converted into a permanent one as the law allows.

The act also allows the commissioner to waive or suspend statutory or regulatory requirements for up to 90 days to further rapid restoration of services after an emergency if these laws might impede the recovery and restoration of financial services.

The act also:

1. allows a subsidiary holding company in a mutual stock structure to acquire and dispose of its own stock, subject to the commissioner's approval and provided it does not result in anyone other than the mutual holding company parent owning a greater percentage of common stock than is permissible;

2. eliminates a mutual savings bank report publishing requirement;

3. requires parties, in order to be exempt from certain requirements, to provide information to the commissioner on persons acquiring the beneficial ownership of the voting securities or securities convertible into voting securities of a bank or a bank holding company by operation of law, will, gift, or intestacy;

4. specifically requires that certain licensees surrender their licenses within 15 days if they stop doing business in the state;

5. requires information about limited liability company members, instead of their managers, when the entity is applying for certain licenses; and

6. gives the banking commissioner access to certain information provided to federal agencies under the federal Home Mortgage Disclosure Act when he is unable to obtain it from federal agencies.

EFFECTIVE DATE: October 1, 2008

TEMPORARY OFFICES DURING AN EMERGENCY

Banks and Credit Unions with Offices in Connecticut

The act allows the commissioner, under specific emergency circumstances, to authorize the approval of temporary offices or other facilities needed to restore banking or credit union services to existing customers. It allows the commissioner to take this action when he determines that an emergency or subsequent recovery efforts have affected and will continue to affect a Connecticut bank or credit union, or an office of an out-of-state bank or foreign credit union in this state. The act allows the temporary office to be used to solicit and service new customers if they are in the affected office's market area.

Banks and Credit Unions without Offices in the State

The act authorizes the commissioner, upon the request of the applicable state or federal banking regulatory agency, to allow foreign banks and out-of-state banks and credit unions (1) whose home state or main office is in Massachusetts, New Jersey, New York, or Rhode Island and (2) that do not have an office in Connecticut, to open a temporary office in Connecticut in an emergency in the home or main office state. The commissioner may do this to restore the institution's services to existing customers. The office may be used to solicit and service new customers as long as they are outside Connecticut.

MUTUAL SAVINGS BANK REPORT REQUIREMENT

The act eliminates the requirement that each mutual savings bank publish reports of condition and income annually and furnish proof of publication. Under prior law, such banks had to publish reports for the period ending December 31 each year in a newspaper published in the county where the bank's main office is located in the form required by the commissioner within 10 days of the report's date. They must still file these reports with the commissioner.

CHANGE OF CONTROL OF CERTAIN SECURITIES

By law, an acquisition or transfer, by operation of law, gift, will, or intestacy, of the beneficial interest in voting securities or securities convertible into voting securities of a bank holding company or bank are exempt from the statutes governing their change of control. The act provides that, to be exempt from these provisions, the acquiror or transferee must provide written notice of the acquisition or transfer to the commissioner within 30 days of the transaction. The notice must include:

1. the name of the acquiror or transferee and the person from whom the securities are being acquired or transferred,

2. the number of shares of securities being acquired or transferred,

3. the number of securities owned by the acquiror or transferee on the date of acquisition or transfer,

4. the date of acquisition or transfer, and

5. whether the acquiror or transferee is an officer or director of the bank or bank holding company whose voting securities or securities convertible into voting securities are being acquired or transferred.

LIMITED LIABILITY COMPANY APPLICANT INFORMATION

The act requires any limited liability company (LLC) applicant for a check cashing license or renewal to provide the name and address of each LLC member instead of each manager. It requires any LLC applicant for a payment instrument or money transmitter license to provide the name, home address, and any history of material litigation and criminal convictions for the previous five years for the members of the company, rather than its managers.

The act also requires that the commissioner find that each member of any LLC applicant for a (1) check cashing license or (2) payment instrument or money transmitter license is in all respects properly qualified and of good character before issuing such licenses.

SURRENDERING LICENSES

The act requires any licensed sales finance company, small loan lender, check casher, money transmitter, or debt adjuster who stops engaging in his or her respective business for any reason to surrender its license for each location or facility where it ceases to do business, if applicable, within 15 days of the cessation. The license must be surrendered in person or by registered or certified mail.

HOME MORTGAGE DISCLOSURE ACT

The act requires all financial institutions to provide the commissioner, upon request, any information required to be disclosed to a federal agency under the federal Home Mortgage Disclosure Act, in any case where he is unable to obtain this information from the applicable federal agency. Under prior law, he could obtain from them any such information that he required.

BACKGROUND

Home Mortgage Disclosure Act

The Home Mortgage Disclosure Act (HMDA) was enacted by the Congress in 1975 and is implemented by the Federal Reserve Board's Regulation C (12 CFR 203). It requires institutions to report data used to determine if (1) they are serving the housing needs of their communities, (2) discriminatory lending practices are being used, and (3) public or private sector investments are necessary in certain areas.

OLR Tracking: SC: JR: PF: dw