Sec. 36a-861. (Note: This section is effective July 1, 2024.) Definitions.
Sec. 36a-866. (Note: This section is effective July 1, 2024.) Disclosure of additional information.
Sec. 36a-871. (Note: This section is effective July 1, 2024.) Regulations.
Sec. 36a-872. (Note: This section is effective July 1, 2024.) Penalties.
Sec. 36a-701b. Breach of security re computerized data containing personal information. Notice of breach. Provision of identity theft prevention services and identity theft mitigation services. Delay for criminal investigation. Means of notice. Exemption from public disclosure. Unfair trade practices. (a) For purposes of this section, (1) “breach of security” means unauthorized access to or unauthorized acquisition of electronic files, media, databases or computerized data, containing personal information when access to the personal information has not been secured by encryption or by any other method or technology that renders the personal information unreadable or unusable; and (2) “personal information” means an individual's (A) first name or first initial and last name in combination with any one, or more, of the following data: (i) Social Security number; (ii) taxpayer identification number; (iii) identity protection personal identification number issued by the Internal Revenue Service; (iv) driver's license number, state identification card number, passport number, military identification number or other identification number issued by the government that is commonly used to verify identity; (v) credit or debit card number; (vi) financial account number in combination with any required security code, access code or password that would permit access to such financial account; (vii) medical information regarding an individual's medical history, mental or physical condition, or medical treatment or diagnosis by a health care professional; (viii) health insurance policy number or subscriber identification number, or any unique identifier used by a health insurer to identify the individual; (ix) biometric information consisting of data generated by electronic measurements of an individual's unique physical characteristics used to authenticate or ascertain the individual's identity, such as a fingerprint, voice print, retina or iris image; or (x) precise geolocation data, as defined in section 42-515; or (B) user name or electronic mail address, in combination with a password or security question and answer that would permit access to an online account. “Personal information” does not include publicly available information that is lawfully made available to the general public from federal, state or local government records or widely distributed media.
(b) (1) Any person who owns, licenses or maintains computerized data that includes personal information, shall provide notice of any breach of security following the discovery of the breach to any resident of this state whose personal information was breached or is reasonably believed to have been breached. Such notice shall be made without unreasonable delay but not later than sixty days after the discovery of such breach, unless a shorter time is required under federal law, subject to the provisions of subsection (d) of this section. If the person identifies additional residents of this state whose personal information was breached or reasonably believed to have been breached following sixty days after the discovery of such breach, the person shall proceed in good faith to notify such additional residents as expediently as possible. Such notification shall not be required if, after an appropriate investigation the person reasonably determines that the breach will not likely result in harm to the individuals whose personal information has been acquired or accessed.
(2) If notice of a breach of security is required by subdivision (1) of this subsection:
(A) The person who owns, licenses or maintains computerized data that includes personal information, shall, not later than the time when notice is provided to the resident, also provide notice of the breach of security to the Attorney General; and
(B) The person who owns or licenses computerized data that includes personal information, shall offer to each resident whose personal information under clause (i) or (ii) of subparagraph (A) of subdivision (2) of subsection (a) of this section was breached or is reasonably believed to have been breached, appropriate identity theft prevention services and, if applicable, identity theft mitigation services. Such service or services shall be provided at no cost to such resident for a period of not less than two years. Such person shall provide all information necessary for such resident to enroll in such service or services and shall include information on how such resident can place a credit freeze on such resident's credit file.
(c) Any person that maintains computerized data that includes personal information that the person does not own shall notify the owner or licensee of the information of any breach of the security of the data immediately following its discovery, if the personal information of a resident of this state was breached or is reasonably believed to have been breached.
(d) Any notification required by this section shall be delayed for a reasonable period of time if a law enforcement agency determines that the notification will impede a criminal investigation and such law enforcement agency has made a request that the notification be delayed. Any such delayed notification shall be made after such law enforcement agency determines that notification will not compromise the criminal investigation and so notifies the person of such determination.
(e) Any notice to a resident, owner or licensee required by the provisions of this section may be provided by one of the following methods, subject to the provisions of subsection (f) of this section: (1) Written notice; (2) telephone notice; (3) electronic notice, provided such notice is consistent with the provisions regarding electronic records and signatures set forth in 15 USC 7001; (4) substitute notice, provided such person demonstrates in the notice provided to the Attorney General that the cost of providing notice in accordance with subdivision (1), (2) or (3) of this subsection would exceed two hundred fifty thousand dollars, that the affected class of subject persons to be notified exceeds five hundred thousand persons or that the person does not have sufficient contact information. Substitute notice shall consist of the following: (A) Electronic mail notice when the person has an electronic mail address for the affected persons; (B) conspicuous posting of the notice on the web site of the person if the person maintains one; and (C) notification to major state-wide media, including newspapers, radio and television.
(f) (1) In the event of a breach of login credentials under subparagraph (B) of subdivision (2) of subsection (a) of this section, notice to a resident may be provided in electronic or other form that directs the resident whose personal information was breached or is reasonably believed to have been breached to promptly change any password or security question and answer, as applicable, or to take other appropriate steps to protect the affected online account and all other online accounts for which the resident uses the same user name or electronic mail address and password or security question and answer.
(2) Any person that furnishes an electronic mail account shall not comply with this section by providing notification to the electronic mail account that was breached or reasonably believed to have been breached if the person cannot reasonably verify the affected resident's receipt of such notification. In such an event, the person shall provide notice by another method described in this section or by clear and conspicuous notice delivered to the resident online when the resident is connected to the online account from an Internet protocol address or online location from which the person knows the resident customarily accesses the account.
(g) Any person that maintains such person's own security breach procedures as part of an information security policy for the treatment of personal information and otherwise complies with the timing requirements of this section, shall be deemed to be in compliance with the security breach notification requirements of this section, provided such person notifies, as applicable, residents of this state, owners and licensees in accordance with such person's policies in the event of a breach of security and in the case of notice to a resident, such person also notifies the Attorney General not later than the time when notice is provided to the resident. Any person that maintains such a security breach procedure pursuant to the rules, regulations, procedures or guidelines established by the primary or functional regulator, as defined in 15 USC 6809(2), shall be deemed to be in compliance with the security breach notification requirements of this section, provided (1) such person notifies, as applicable, such residents of this state, owners, and licensees required to be notified under and in accordance with the policies or the rules, regulations, procedures or guidelines established by the primary or functional regulator in the event of a breach of security, and (2) if notice is given to a resident of this state in accordance with subdivision (1) of this subsection regarding a breach of security, such person also notifies the Attorney General not later than the time when notice is provided to the resident.
(h) Any person that is subject to and in compliance with the privacy and security standards under the Health Insurance Portability and Accountability Act of 1996 and the Health Information Technology for Economic and Clinical Health Act (“HITECH”) shall be deemed to be in compliance with this section, provided that (1) any person required to provide notification to Connecticut residents pursuant to HITECH shall also provide notice to the Attorney General not later than the time when notice is provided to such residents if notification to the Attorney General would otherwise be required under subparagraph (A) of subdivision (2) of subsection (b) of this section, and (2) the person otherwise complies with the requirements of subparagraph (B) of subdivision (2) of subsection (b) of this section.
(i) All documents, materials and information provided in response to an investigative demand issued pursuant to subsection (c) of section 42-110d in connection with the investigation of a breach of security as defined by this section shall be exempt from public disclosure under subsection (a) of section 1-210, provided the Attorney General may make such documents, materials or information available to third parties in furtherance of such investigation.
(j) Failure to comply with the requirements of this section shall constitute an unfair trade practice for purposes of section 42-110b and shall be enforced by the Attorney General.
(k) Any civil penalties collected for failure to comply with the requirements of this section may be deposited into the privacy protection guaranty and enforcement account established pursuant to section 42-472a.
(P.A. 05-148, S. 3; 05-288, S. 231, 232; June 12 Sp. Sess. P.A. 12-1, S. 130; P.A. 15-142, S. 6; P.A. 18-90, S. 2; P.A. 19-117, S. 231; 19-196, S. 9; P.A. 21-59, S. 1; P.A. 23-98, S. 4.)
History: P.A. 05-148 effective January 1, 2006; P.A. 05-288 made technical changes in Subsecs. (b) and (f), effective January 1, 2006; June 12 Sp. Sess. P.A. 12-1 amended Subsec. (a) by adding “unauthorized” re acquisition, amended Subsec. (b) by designating existing provisions as Subdiv. (1) and amending same to replace “disclose” with “provide notice of” and “disclosure” with “notice” and by adding Subdiv. (2) re notice of breach of security to Attorney General, amended Subsec. (c) by adding “of a resident of this state” re personal information, amended Subsec. (e) by adding “to a resident, owner or licensee” re notice, replacing “person, business or agency” with “person” and making a technical change, and amended Subsec. (f) by replacing references to subject persons with references to residents of this state, owners and licensees, as applicable, adding provisions re notice to Attorney General and deleting reference to system; P.A. 15-142 made technical changes in Subsec. (a), amended Subsec. (b) to replace “was, or is reasonably believed to have been, accessed by an unauthorized person through such breach of security” with “was breached or is reasonably believed to have been breached” and add provision re notice of breach of security not later than 90 days after discovery unless shorter time is required under federal law in Subdiv. (1), to designate existing provision re notice of breach to Attorney General as Subpara. (A) in Subdiv. (2) and amend same to add Subpara. (B) re provision of identity theft prevention services and identity theft mitigation services, and amended Subsec. (c) to replace “was, or is reasonably believed to have been accessed by an unauthorized person” with “was breached or is reasonably believed to have been breached”; P.A. 18-90 amended Subsec. (a)(1) by deleting “account number,” in Subpara. (C), adding Subpara. (D) re financial account number, and making a technical change, and amended Subsec. (b)(2)(B) by replacing “twelve months” with “twenty-four months” re period for which service is to be provided at no cost to resident; P.A. 19-117 amended Subsec. (b)(2)(B) by replacing provision re personal information under Sec. 38a-999b(a)(4)(A) with provision re nonpublic information under Sec. 38a-38(b)(9)(B)(i) and made a conforming change, effective October 1, 2020; P.A. 19-196 changed effective date of P.A. 19-117 from October 1, 2020, to October 1, 2021, effective July 8, 2019; P.A. 21-59 amended Subsec. (a)(2) to redefine “personal information”, redesignate Subpara. (A) as clause (i), Subpara. (B) as clause (iv), Subpara. (C) as clause (v), Subpara. (D) as clause (vi) and added clauses (ii), (iii) and (vii) to (ix) re additional types of personal information in Subpara. (A) and added new Subpara. (B) re user name or electronic mail address; amended Subsec. (b)(1) and (2) to delete provision re conducting business in this state and reference to “ordinary course of such person's business”, amended Subsec. (b)(1) to change 90 days to 60 days, delete provision re completion of investigation by person, add provision regarding notification of additional residents following 60 days after discovery of the breach, delete provision re consultation with law enforcement agencies, and make a technical change, amended Subsec. (b)(2)(B) to replace “nonpublic information” with “personal information” and make a technical change, amended Subsec. (e) to add “, subject to the provisions of subsection (f) of this section”, added new Subsec. (f) re breach of login credentials, redesignated existing Subsec. (f) as Subsec. (g), added Subsec. (h) re persons subject to certain privacy and security standards deemed to be in compliance, added Subsec. (i) re exemption from public disclosure and redesignated existing Subsec. (g) as Subsec. (j); P.A. 23-98 amended Subsec. (a)(2) by redefining “personal information” to include precise geolocation data, amended Subsec. (e)(4) by adding “in the notice provided to the Attorney General”, added Subsec. (k) re deposit of penalties into privacy protection guaranty and enforcement account, and made technical and conforming changes in Subsecs. (a)(2)(A)(viii) and (b)(2)(B).
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Sec. 36a-719. Mortgage servicer license. Issuance. Application. Criminal history records checks. Renewal standards. Automatic suspension of license. Abandonment of application. Schedule and report. Unique identifier of license. Advertising of license. (a) The commissioner shall issue a mortgage servicer license to an applicant for such license if the commissioner finds that: (1) The applicant has identified a qualified individual for its main office and a branch manager for each branch office where such business is conducted, provided such qualified individual and branch manager have supervisory authority over the mortgage servicer activities at the respective office location and at least three years' experience in the mortgage servicing business within the five years immediately preceding the date of the application for licensure; (2) notwithstanding the provisions of section 46a-80, the applicant, the control persons of the applicant, the qualified individual and any branch manager have not been convicted of or pled guilty or nolo contendere to, in a domestic, foreign or military court, a felony during the seven-year period preceding the date of the application for licensing or a felony involving an act of fraud or dishonesty, a breach of trust or money laundering at any time preceding the date of application, provided any pardon or expungement of a conviction shall not be a conviction for purposes of this subdivision; (3) the applicant demonstrates that the financial responsibility, character and general fitness of the applicant, the control persons of the applicant, the qualified individual and any branch manager command the confidence of the community and warrant a determination that the applicant will operate honestly, fairly and efficiently within the purposes of sections 36a-715 to 36a-719l, inclusive; (4) the applicant has met the surety bond, fidelity bond and errors and omissions coverage requirement under section 36a-719c; (5) the applicant, the control persons of the applicant, the qualified individual and any branch manager have not made a material misstatement in the application; and (6) the applicant has met any other similar requirements as determined by the commissioner. If the commissioner fails to make such findings, the commissioner shall not issue a license, and shall notify the applicant of the denial and the reasons for such denial. The commissioner may waive the requirements of subdivision (1) of this subsection relating to the supervision and experience of (A) a qualified individual where the applicant establishes to the satisfaction of the commissioner that the applicant (i) will not conduct any activity subject to licensure under sections 36a-715 to 36a-719l, inclusive, at the main office, and (ii) has designated a qualified individual who is responsible for the actions of the applicant; and (B) a qualified individual or a branch manager where the applicant establishes to the satisfaction of the commissioner that the applicant (i) holds only mortgage servicing rights at the main office or branch office and conducts no other activity at such office, and (ii) has designated a qualified individual or branch manager at such main office or branch office who is responsible for the actions of the application. No person licensed as a mortgage servicer and granted a waiver by the commissioner shall engage in any activity that would have precluded the issuance of such waiver without first designating a qualified individual or branch manager, as the case may be, who meets all applicable requirements of subdivision (1) of this subsection and is approved by the commissioner. For purposes of this subsection, the level of offense of the crime and the status of any conviction, pardon or expungement shall be determined by reference to the law of the jurisdiction where the case was prosecuted. In the event such jurisdiction does not use the term “felony”, “pardon” or “expungement”, such terms shall include legally equivalent events. For purposes of subdivision (1) of this subsection, “experience in the mortgage servicing business” means paid experience in the (I) servicing of mortgage loans, (II) accounting, receipt and processing of payments on behalf of mortgagees or creditors, or (III) supervision of such activities, or any other relevant experience as determined by the commissioner.
(b) An application for a license as a mortgage servicer or renewal of such license shall be made and processed on the system pursuant to section 36a-24b in a form prescribed by the commissioner and accompanied by the fees required by section 36a-719b. Each such form shall contain content as set forth by instruction or procedure of the commissioner and may be changed or updated as necessary by the commissioner in order to carry out the purpose of sections 36a-715 to 36a-719l, inclusive. The applicant shall, at a minimum, furnish to the system information concerning the identity of the applicant, any control person of the applicant, the qualified individual and any branch manager, including personal history and experience in a form prescribed by the system and information related to any administrative, civil or criminal findings by any governmental jurisdiction. For the purpose of this subsection, evidence of experience of the qualified individual and any branch manager shall include: (1) A statement specifying the duties and responsibilities of such person's employment, the term of employment, including month and year, and the name, address and telephone number of a supervisor, employer or, if self-employed, a business reference; and (2) if required by the commissioner, copies of W-2 forms, 1099 tax forms or, if self-employed, 1120 corporate tax returns, signed letters from the employer on the employer's letterhead verifying such person's duties and responsibilities and term of employment including month and year, and, if such person is unable to provide such letters, other proof satisfactory to the commissioner that such person meets the experience requirement. As part of an application, the commissioner may (A) in accordance with section 29-17a, conduct a state or national criminal history records check of the applicant, any control person of the applicant, the qualified individual and any branch manager, and (B) in accordance with section 36a-24b (i) require the submission of fingerprints of the applicant, any control person of the applicant, the qualified individual and any branch manager to the Federal Bureau of Investigation or other state, national or international criminal databases, and (ii) investigate the financial condition of any such person and require authorization from any such person for the system and the commissioner to obtain an independent credit report from a consumer reporting agency, as described in Section 603(p) of the Fair Credit Reporting Act, 15 USC 1681a, as amended from time to time.
(c) (1) The minimum standards for license renewal for a mortgage servicer shall include the following: (A) The applicant continues to meet the minimum standards under subsection (a) of this section; (B) the mortgage servicer has paid all required fees for renewal of the license; and (C) the applicant has paid any outstanding examination fees or other moneys due to the commissioner.
(2) The license of a mortgage servicer failing to satisfy the minimum standards for license renewal shall expire. The commissioner may adopt procedures for the reinstatement of expired licenses consistent with the standards established by the system. The commissioner may automatically suspend a mortgage servicer license if the licensee receives a deficiency on the system indicating that the payment required by section 36a-719b was Returned-ACH or returned pursuant to such other term as may be utilized by the system to indicate that the payment was not accepted. After a license has been automatically suspended pursuant to this section, the commissioner shall (A) give the licensee notice of the automatic suspension, pending proceedings for revocation or refusal to renew pursuant to section 36a-719j and an opportunity for a hearing on such action in accordance with section 36a-51, and (B) require such licensee to take or refrain from taking such action as the commissioner deems necessary to effectuate the purposes of this section.
(d) The commissioner may deem an application for a license under this section abandoned if the applicant fails to respond to any request for information required under sections 36a-715 to 36a-719l, inclusive, or the regulations adopted pursuant to said sections. The commissioner shall notify the applicant on the system that if such information is not submitted not later than sixty days from the date of such request, the application shall be deemed abandoned. An application filing fee paid prior to the date an application is deemed abandoned pursuant to this subsection shall not be refunded. Abandonment of an application pursuant to this subsection shall not preclude the applicant from submitting a new application for a license.
(e) As part of its application and upon a change to such information, a mortgage servicer shall file with the commissioner a current schedule of the ranges of costs and fees it charges mortgagors for its servicing-related activities.
(f) Any person making any filing or submission of any information on the system shall do so in accordance with the procedures and requirements of the system and shall pay the applicable fees or charges to the system. Each mortgage servicer licensee shall, to the extent required by the system, timely submit to the system accurate reports of condition that shall be in such form and shall contain such information as the system may require. Failure by a licensee to submit a timely and accurate report of condition shall constitute a violation of this provision. At least annually, a licensee shall file with the commissioner a report in a form and format acceptable to the commissioner detailing the mortgage servicer's activities in the state, including (1) the number of residential mortgage loans the mortgage servicer is servicing, (2) the type and characteristics of the residential mortgage loans in this state, (3) the number of serviced residential mortgage loans in default, along with a breakdown of thirty-day, sixty-day and ninety-day delinquencies, (4) information on loss mitigation activities, and (5) information on foreclosures commenced in this state.
(g) The unique identifier of any person licensed under this section shall be clearly shown on all solicitations and advertisements, including business cards and Internet web sites, and any other documents as established by rule, regulation or order of the commissioner, and shall be clearly stated in all audio solicitations and advertisements. The solicitations and advertisements of any person licensed under this section: (1) Shall not include any statement that such person is endorsed in any way by this state, except that such solicitations and advertisements may include a statement that such person is licensed in this state; (2) shall not include any statement or claim that is deceptive, false or misleading; (3) shall otherwise conform to the requirements of sections 36a-715 to 36a-719l, inclusive, any regulations issued thereunder and any other applicable law; and (4) shall be retained for two years from the date of use of such solicitation or advertisement.
(P.A. 14-89, S. 5; P.A. 17-38, S. 15, 17-233, S. 26; P.A. 18-173, S. 72; P.A. 23-126, S. 11.)
History: P.A. 17-38 amended Subsec. (d)(1) by replacing “receipt by the commissioner of a notice of intent to withdraw such application” with “the commissioner's acceptance on the system of a withdrawal request”; P.A. 17-233 amended Subsec. (f) by deleting “At least annually” and adding “and upon a change to such information” re filing with commissioner current schedule of ranges of costs and fees charged for servicing-related activities, deleting Subdiv. (1) and (2) designators and redesignating existing Subparas. (A) to (E) as Subdivs. (1) to (5), adding “At least annually, a licensee shall file with the commissioner” re report, deleting “including details on workout arrangements undertaken,” in redesignated Subdiv. (4), and making technical changes; P.A. 18-173 amended Subsec. (a) by deleting provision re branch manager to have supervisory authority over office for which license is sought in Subdivs. (2) and (3), adding “the control persons of the applicant, the qualified individual and the branch manager” in Subdiv. (5), adding provisions re commissioner's authority to waive supervision and experience requirements, replacing Subpara. (A) to (C) designators with clause (I) to (III) designators, and adding provision re establishment of “at the respective office location”, amended Subsec. (b) by replacing provision re application to be filed with the system with provision re application to be made and processed on the system pursuant to Sec. 36a-24b, deleting “36a-718, inclusive, and sections 36a-719a to”, deleting provision re applicant to notify commissioner on the system of change to information, deleting provision re commissioner's authority to conduct criminal history records check and require applicant to submit fingerprints, and adding provisions re commissioner's authority to conduct criminal history records check, require submission of fingerprints and investigate financial condition of person, amended Subsec. (c) by adding Subpara. (C) re applicant has paid outstanding examination fees or other moneys due in Subdiv. (1), adding Subpara. (A) and (B) designators and replacing “action that, in the opinion of the commissioner, will effectuate the purposes of this section” with “action as the commissioner deems necessary to effectuate the purposes of this section” in Subdiv. (2), deleted former Subsec. (d) re withdrawal of application, redesignated existing Subsecs. (e) and (f) as Subsecs. (d) and (e), amended Subsec. (f) by adding provisions re person filing or submitting information on the system to do so in accordance with procedures and requirements and timely submission of accurate reports of condition, added Subsec. (g) re unique identifier and solicitations and advertisements, and made technical and conforming changes; P.A. 23-126 amended Subsec. (a) to delete provision re “at the respective office location” may be established by residing not more than 100 miles from office or demonstrating ability to provide full-time, in-person supervision of office.
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Sec. 36a-770. (Formerly Sec. 42-83). Applicability of Uniform Commercial Code. Filing and recording. Definitions. (a) The Uniform Commercial Code. A transaction subject to sections 36a-770 to 36a-788, inclusive, 42-100b and 42-100c is also subject to the Uniform Commercial Code, title 42a, but in case of any conflict the provisions of sections 36a-770 to 36a-788, inclusive, 42-100b and 42-100c shall control.
(b) Filing and recording. Section 42a-9-310 determines the need for filing or recording to perfect a security interest, section 42a-9-317 determines the persons who take subject to an unperfected security interest, and sections 42a-9-311 and 42a-9-501 to 42a-9-526, inclusive, determine the place for such filing or recording.
(c) Definitions. As used in this section and sections 36a-771 to 36a-788, inclusive, 42-100b and 42-100c, unless the context otherwise requires:
(1) “Boat” means any watercraft, as defined in section 22a-248, other than a seaplane, used or capable of being used as a means of transportation on water, by any power including muscular.
(2) “Cash price” means the total amount in dollars at which the seller and buyer agreed the seller would transfer unqualified title to the goods, if the transaction were a cash sale instead of a sale under a retail installment contract.
(3) “Commercial vehicle” means any domestic or foreign truck or truck tractor of ten thousand or more pounds gross vehicular weight or any trailer or semitrailer designed for use in connection with any truck or truck tractor of ten thousand or more pounds gross vehicular weight and which is not used primarily for personal, family or household use.
(4) “Filing fee” means the fee prescribed by law for filing, recording or otherwise perfecting and releasing or satisfying a security interest, as defined in 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 seventy-five 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 twenty-five thousand dollars or less, provided such consumer goods or such equipment is included in one retail installment contract or installment loan contract.
(7) “Installment loan contract” means any agreement made in this state to repay in installments the amount loaned or advanced to a retail buyer for the purpose of paying the retail purchase price of goods and by virtue of which a security interest, as defined in 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 (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.
(13) “Retail installment sale” means any sale evidenced by a retail installment contract or installment loan contract wherein a retail buyer buys goods from a retail seller at a time sale price payable in two or more installments. The cash price of the goods, the amount, if any, included for other itemized charges which are included in the amount of the credit extended but which are not part of the finance charge under sections 36a-675 to 36a-686, inclusive, and the finance charge shall together constitute the time sale price. For purposes of this subdivision, “retail installment sale” does not include a rent-to-own agreement, as defined in section 42-240.
(14) “Retail seller” means a person who sells or agrees to sell one or more articles of goods under a retail installment contract or an installment loan contract to a retail buyer.
(15) “Sales finance company” means any person engaging in this state in the business, in whole or in part, of (A) acquiring retail installment contracts or installment loan contracts from holders thereof, by purchase, discount or pledge, or by loan or advance to the holder of either on the security thereof, or otherwise, or (B) receiving payments of principal and interest from a retail buyer under a retail installment contract or installment loan contract.
(1949 Rev., S. 6698; 1949, 1955, S. 2862d; November, 1955, N218; 1957, P.A. 357, S. 1; March, 1958, P.A. 27, S. 33; 1959, P.A. 495; 589, S. 2; 1961, P.A. 116, S. 20; 1969, P.A. 454, S. 28; P.A. 77-317; 77-604, S. 52, 84; P.A. 78-313, S. 1, 3; P.A. 81-158, S. 13, 17; P.A. 82-18, S. 2, 4; P.A. 89-210, S. 1; P.A. 91-162, S. 15, 18; P.A. 93-39; P.A. 94-122, S. 325, 340; 94-134, S. 1, 3; May 25 Sp. Sess. P.A. 94-1, S. 109, 130; P.A. 01-132, S. 170; P.A. 03-19, S. 85; 03-62, S. 21; P.A. 05-109, S. 49; P.A. 11-108, S. 28; P.A. 15-235, S. 20; P.A. 21-138, S. 15; P.A. 23-126, S. 6.)
History: 1959 acts amended definitions of “goods” and “retail buyer”; 1961 act coordinated this section with Uniform Commercial Code; 1969 act redefined “retail installment sale” to include the amount of itemized charges included in amount of credit extended but excluded from finance charge rather than the amount of insurances and other benefits and filing fees; P.A. 77-317 redefined goods to raise maximum aggregate cash price from $6,000 to $25,000; P.A. 77-604 revised references to Sec. 42a-9-105; P.A. 78-313 redefined “goods” to include motor vehicles and to establish separate maximum cash value of $8,000 for equipment and added Subsec. (3)(m) and (n) defining “lender” and contracts “made in this state”; P.A. 81-158 amended Subsec. (3)(d) by replacing “section 36-396”, which had been repealed, with “chapter 657”, effective March 31, 1982; P.A. 82-18 changed effective date of P.A. 81-158 from March 31, 1982, to “the effective date of Title VI of Public Law 96-221, as contained in Section 625(a) of Public Law 96-221, as amended”, i.e. October 1, 1982; P.A. 89-210 added Subsec. (3)(o) defining “commercial vehicle”; P.A. 91-162 amended Subsec. (3)(d) and (e) to specifically exclude consumer rent-to-own agreements, as defined in Sec. 42-240, from the definitions of “retail installment sale” and “retail installment contract”; P.A. 93-39 amended Subsec. (3)(b) by increasing the aggregate cash price of a motor vehicle to be included in the definition of “consumer goods” from $25,000 to $50,000 and increasing the aggregate cash price of equipment to be included from $8,000 to $16,000; P.A. 94-122 changed Subsecs. (1), (2) and (3) to Subsecs. (a), (b) and (c), deleted the definition of “person”, reordered the definitions and made technical changes, effective January 1, 1995; P.A. 94-134 added Subsec. (p) defining “boat”, effective October 1, 1994, and applicable to retail installment contracts and installment loan contracts executed on or after that date; May 25 Sp. Sess. P.A. 94-1 made technical changes, effective January 1, 1994, and applicable January 1, 1995; Sec. 42-83 transferred to Sec. 36a-770 in 1995; (Revisor's note: In 1997 a reference in Subsec. (a) to “42-110b” was corrected editorially by the Revisors to “42-100b” thereby correcting a clerical error which occurred during the preparation of the 1995 revision); P.A. 01-132 amended Subsec. (b) to replace reference to Sec. 42a-9-302 with Sec. 42a-9-310, replace reference to Sec. 42a-9-301 with Sec. 42a-9-317 and replace reference to Secs. 42a-9-302(3)(b) and 42a-9-401 to 42a-9-409, inclusive, with Secs. 42a-9-311 and 42a-9-501 to 42a-9-518, inclusive, and amended Subsec. (c) to make a technical change in Subdiv. (4), in Subdiv. (6) replace Secs. 42a-9-105(1)(h) and 42a-9-109(1) with Sec. 42a-9-102(a)(23) as the statutory reference for the definition of “consumer goods”, make a technical change and replace Sec. 42a-9-109(2) with Sec. 42a-9-102(a)(33) as the statutory reference for the definition of “equipment”, make a technical change in Subdiv. (7) and replace in Subdiv. (12) Sec. 42a-9-105(1)(l) with Sec. 42a-9-102(a)(73) as the statutory reference for the definition of “security agreement” and make a technical change; P.A. 03-19 made a technical change in Subsec. (b), effective May 12, 2003; P.A. 03-62 amended Subsec. (b) to replace reference to Sec. 42a-9-518 with Sec. 42a-9-526 and make technical changes; P.A. 05-109 amended Subsec. (c) by replacing references to Sec. 42a-1-201(37) with references to Sec. 42a-1-201(b)(35) in Subdivs. (4), (7) and (12); P.A. 11-108 amended Subsec. (c)(12) re definition of “retail installment contract” to replace reference to Sec. 42a-9-102(a)(73) with reference to Sec. 42a-9-102(a)(74), effective July 1, 2013; P.A. 15-235 amended Subsec. (c)(13) to change “36a-685” to “36a-686”, effective August 1, 2015; P.A. 21-138 redefined “retail seller” in Subsec. (c)(14); P.A. 23-126 amended Subsec. (c) by making technical changes, redefining “goods” in Subdiv. (6) and redefining “sales finance company” in Subdiv. (15).
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Sec. 36a-789. Definitions. Debt waiver not insurance. Amount charged or financed for debt waiver. Cancellation and refund. (a) As used in this section:
(1) “Borrower” means a debtor, retail buyer or lessee under a loan, retail installment contract or lease for the purchase, refinancing or lease of a motor vehicle;
(2) “Creditor” means a lender, retail seller or lessor under a loan, retail installment contract or lease for the purchase, refinancing or lease of a motor vehicle;
(3) “Debt waiver” means an excess wear and use waiver or guaranteed asset protection waiver other than an excess wear and use waiver or guaranteed asset protection waiver offered by any bank, Connecticut credit union or federal credit union, as those terms are defined in section 36a-2;
(4) “Excess wear and use waiver” means a contractual agreement, entered into on or after January 1, 2024, in which a creditor agrees, with or without a separate charge, to cancel or waive all or part of the amounts that may become due from a borrower under a motor vehicle lease agreement as a result of excessive wear and use of a leased motor vehicle, including, but not limited to, excess mileage, which contractual agreement is a part of, or a separate addendum to, the lease agreement; and
(5) “Guaranteed asset protection waiver” means a contractual agreement, entered into on or after January 1, 2024, in which a creditor agrees, with or without a separate charge, to cancel or waive all or part of the amounts due from a borrower under a retail installment contract or an installment loan contract in the event of a total physical damage loss or an unrecovered theft of a motor vehicle, which agreement is a part of, or a separate addendum to, the retail installment contract or installment loan contract, and which may provide, with or without a separate charge, a benefit that waives an amount or provides a borrower with a credit toward the purchase of a replacement motor vehicle.
(b) A debt waiver shall not be considered insurance for any purpose and shall not be subject to the refund requirements set forth in section 36a-773.
(c) Any amount charged or financed for a debt waiver is an authorized charge that shall be separately stated and shall not be construed to be a finance charge or interest.
(d) (1) Each debt waiver shall be cancellable and shall provide the following:
(A) If the borrower cancels such waiver not later than the sixtieth day after the effective date of such waiver and no benefits have been provided under such waiver, the borrower shall be entitled to a full refund of the amount the borrower paid for such waiver;
(B) If the borrower cancels such waiver later than the sixtieth day after the effective date of such waiver, or if there is an early termination of the retail installment contract, installment loan or motor vehicle lease agreement, and no benefits have been provided under such waiver, the borrower shall be entitled to a pro rata refund of the amount the borrower paid for such waiver, less any cancellation fee included in the terms of the waiver; and
(C) If the borrower cancels such waiver at any time during its term and benefits have been provided under such waiver, the borrower shall not be entitled to any refund.
(2) Any debt waiver cancellation fee shall be included in the terms of the waiver and shall not exceed fifty dollars.
(e) A creditor shall provide, or shall cause a retail seller to provide, a refund due to a borrower pursuant to this section not later than sixty days after the creditor receives the borrower's cancellation concerning such refund, without requiring the borrower to request the refund.
(P.A. 23-126, S. 7.)
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Sec. 36a-846. Definitions. As used in this section and sections 36a-847 to 36a-855, inclusive:
(1) “Advertise” or “advertising” has the same meaning as provided in section 36a-485;
(2) “Branch office” means a location other than the main office at which a licensee or any person on behalf of a licensee acts as a student loan servicer;
(3) “Consumer report” has the same meaning as provided in Section 603(d) of the Fair Credit Reporting Act, 15 USC, 1681a, as amended from time to time;
(4) “Control person” has the same meaning as provided in section 36a-485;
(5) “Cosigner” has the same meaning as provided in 15 USC 1650(a), as amended from time to time;
(6) “Federal student education loan” means any student education loan (A) (i) made pursuant to the William D. Ford Federal Direct Loan Program, 20 USC 1087a, et seq., as amended from time to time, or (ii) purchased by the United States Department of Education pursuant to 20 USC 1087i-1(a), as amended from time to time, and (B) owned by the United States Department of Education;
(7) “Federal student loan servicer” means any student loan servicer responsible for the servicing of a federal student education loan to a student loan borrower pursuant to a contract awarded by the United States Department of Education under 20 USC 1087f, as amended from time to time;
(8) “Main office” has the same meaning as provided in section 36a-485;
(9) “Private student education loan” means any student education loan that is not a federal student education loan;
(10) “Private student education loan servicer” means any student loan servicer responsible for the servicing of a private student education loan to a student loan borrower;
(11) “Student loan borrower” means any individual who resides within this state who has agreed to repay a student education loan;
(12) “Student loan servicer” means any person, wherever located, responsible for the servicing of any student education loan to any student loan borrower;
(13) “Servicing” means (A) receiving any scheduled periodic payments from a student loan borrower pursuant to the terms of a student education loan; (B) applying the payments of principal and interest and such other payments with respect to the amounts received from a student loan borrower, as may be required pursuant to the terms of a student education loan; (C) maintaining account records for and communicating with the student loan borrower concerning the student education loan during the period when no scheduled periodic payments are required; (D) interacting with a student loan borrower for purposes of facilitating the servicing of a student education loan, including, but not limited to, assisting a student loan borrower to prevent such borrower from defaulting on obligations arising from the student education loan; or (E) performing other administrative services with respect to a student education loan;
(14) “Student education loan” means any loan primarily for personal use to finance education or other school-related expenses; and
(15) “Unique identifier” has the same meaning as provided in section 36a-485.
(P.A. 15-162, S. 2; P.A. 17-233, S. 32; P.A. 18-173, S. 84; P.A. 21-130, S. 1; 21-190, S. 1; P.A. 23-204, S. 168.)
History: P.A. 17-233 added new Subdiv. (1) defining “advertise” or “advertising”, added new Subdiv. (2) defining “control person” and redesignated existing Subdivs. (1) to (4) as Subdivs. (3) to (6); P.A. 18-173 added new Subdiv. (2) defining “branch office”, redesignated existing Subdiv. (2) as new Subdiv. (3), added new Subdiv. (4) defining “main office”, redesignated existing Subdiv. (3) as new Subdiv. (5) and amended same to redefine “student loan borrower”, redesignated existing Subdivs. (4) to (6) as Subdivs. (6) to (8), and added Subdiv. (9) defining “unique identifier”; P.A. 21-130 expanded applicability of definitions to Secs. 36a-847a, 36a-847b and 36a-855, defined “federal student education loan”, “federal student loan servicer”, “private student education loan” and “private student education loan servicer”, effective July 1, 2021; P.A. 21-190 added the same definitions as P.A. 21-130 and defined “consumer report” and “cosigner” and redefined “servicing”, effective July 1, 2021; P.A. 23-204 redefined “federal student loan servicer” in Subdiv. (7) and made a technical change in Subdiv. (14).
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Sec. 36a-847a. Federal student loan servicer registration required. Fees. Service of process and communication with commissioner. Civil penalty. (a) Except as provided in section 36a-847b, no person shall act as a federal student loan servicer, directly or indirectly, unless such person has registered as a federal student loan servicer on the system, pursuant to section 36a-24b, in the form prescribed by the commissioner.
(b) Each registrant shall pay to the system any required fees or charges and a registration fee of nine hundred dollars. Each registration shall be effective on the date the registration is filed to the system and shall remain in force and effect until the registration has been surrendered, revoked or suspended or has expired in accordance with the provisions of this section. Each registration shall expire at the close of business on December thirty-first of the year in which the registration is filed, unless such registration is renewed, except that any such registration filed on or after November first shall expire at the close of business on December thirty-first of the year following the year in which it is filed. Any request to renew a registration shall be filed on the system between November first and December thirty-first of the year in which the registration expires and shall be accompanied by payment of any required fees or charges and a renewal fee of nine hundred dollars.
(c) (1) Each registrant shall appoint an agent to accept service of process in this state on behalf of the registrant. Service of process made upon such agent shall be deemed service of process upon the registrant. If such agent cannot with reasonable diligence be found, or if the registrant has failed to appoint an agent as required by this subdivision, service of process may be made upon a control person of the registrant, as the agent of the registrant.
(2) Each registrant shall designate an individual to represent the registrant in communications with the commissioner and provide contact information for such individual to the commissioner at the time of registration. The registrant shall notify the commissioner of any change of such individual or information not later than ten days after the change.
(d) Each registrant shall notify the commissioner in writing of the expiration, revocation or termination of any contract awarded by the United States Department of Education pursuant to 20 USC 1087f, as amended from time to time, pursuant to which such registrant performs student loan servicing activities, not later than seven days after such expiration, revocation or termination. Any registration based solely upon such contract shall be deemed expired upon the effective date of such expiration, revocation or termination by the United States Department of Education.
(e) The commissioner may impose a civil penalty, after notice and an opportunity for a hearing in accordance with section 36a-50 on any person that acts as a federal student loan servicer for thirty or more days in violation of this section.
(P.A. 21-130, S. 3; P.A. 23-204, S. 169.)
History: P.A. 21-130 effective July 1, 2021; P.A. 23-204 amended Subsec. (d) by deleting “to the registrant” and adding “pursuant to which such registrant performs student loan servicing activities,”.
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Sec. 36a-856. Definitions. Registration. Disclosures. Internet web site. Enforcement powers of commissioner. Penalty. (a) For purposes of this section:
(1) “Commissioner” means the Banking Commissioner;
(2) “Consumer collection agency” has the same meaning as provided in section 36a-800;
(3) “Postsecondary education expense” means any expense associated with a student's enrollment in, or attendance at, a postsecondary educational institution;
(4) “Private education lender” means any person engaged in the business of making or extending private education loans. “Private education lender” does not include: (A) Any bank, out-of-state bank, Connecticut credit union, federal credit union or out-of-state credit union; (B) any wholly owned subsidiary of any such bank or credit union; (C) any operating subsidiary where each owner of such operating subsidiary is wholly owned by the same bank or credit union; or (D) the Connecticut Higher Education Supplemental Loan Authority, as described in section 10a-179a;
(5) “Private education loan” means credit that: (A) Is extended to a consumer expressly, in whole or in part, for postsecondary educational expenses, regardless of whether the credit is provided by the postsecondary educational institution that the student attends; and (B) is not made, insured or guaranteed under Title IV of the Higher Education Act of 1965, as amended from time to time. “Private education loan” does not include a loan that is secured by real property, regardless of the purpose of the loan;
(6) “Private education loan borrower” means any resident of the state, including a student loan borrower, who has received or agreed to pay a private education loan for the resident's own postsecondary education expenses;
(7) “Private education loan creditor” means any person to whom a private education loan is sold or assigned, or any person who otherwise acquires a private education loan. “Private education loan creditor” does not include: (A) A bank, as defined in 12 USC 1841(c), as amended from time to time; (B) a Connecticut credit union, a federal credit union or an out-of-state credit union, as those terms are defined in section 36a-2; (C) a consumer collection agency licensed pursuant to section 36a-801; (D) a private student loan servicer licensed pursuant to section 36a-847; or (E) any department or agency of the United States, this state, any other state or any political subdivision thereof; and
(8) “Student loan servicer” has the same meaning as provided in section 36a-846.
(b) Except for a public or private nonprofit postsecondary educational institution, for which the commissioner may prescribe an alternative registration process and fee structure, a private education lender or a private education loan creditor shall, prior to making a private education loan to, or purchasing or assuming a private education loan owed by, a resident of the state:
(1) Register with the commissioner and pay a fee in the form and manner prescribed by the commissioner, which may include registration using the National Multistate Licensing System and Registry and the payment of any fees thereto; and
(2) Renew such registration for each year that such private education lender or private education loan creditor continues to act as a private education lender or private education loan creditor.
(c) For each year in which a private education lender registers with, or renews such registration with, the commissioner pursuant to subsection (b) of this section, such private education lender shall, at the time of such registration or renewal, and at other times upon the commissioner's request, provide to the commissioner, in the form and manner prescribed by the commissioner, the following documents and information:
(1) A list of all schools attended by the private education loan borrowers with outstanding private education loans made by such private education lender;
(2) The number and dollar amount of all outstanding private education loans such private education lender made to private education loan borrowers;
(3) For each school listed pursuant to subdivision (1) of this subsection, the number and dollar amount of all outstanding private education loans such private education lender made to private education loan borrowers who attended such school;
(4) The number and dollar amount of all private education loans such private education lender made during the prior year to private education loan borrowers;
(5) For each school listed pursuant to subdivision (1) of this subsection, the number and dollar amount of all private education loans such private education lender made during the prior year to private education loan borrowers who attended such school;
(6) The spread of interest rates for the private education loans such private education lender made during the prior year;
(7) The percentage of private education loan borrowers who received each rate within the spread of interest rates provided pursuant to subdivision (6) of this subsection;
(8) The number of private education loans with a cosigner that such private education lender made during the prior year;
(9) The default rate for private education loan borrowers obtaining private education loans from the private education lender, and, for each school listed pursuant to subdivision (1) of this subsection, the default rate for private education loans made to private education loan borrowers who attended such school;
(10) The number of private education loan borrowers against whom such private education lender brought legal action in the prior year to collect a debt owed pursuant to a private education loan, and the amount sought in each such action;
(11) A copy of each model promissory note, agreement, contract or other instrument used by the private education lender during the prior year to substantiate that a new private education loan has been extended to a private education loan borrower or that a private education loan borrower owes a debt to such lender; and
(12) The name and address of: (A) Such private education lender; (B) each officer, director or partner of such private education lender; and (C) each owner of a controlling interest in such private education lender.
(d) For each year in which a private education loan creditor registers with, or renews such registration with, the commissioner pursuant to subsection (b) of this section, such private education loan creditor shall, at the time of such registration or renewal, and at other times upon the commissioner's request, provide to the commissioner, in the form and manner prescribed by the commissioner, the following documents and information:
(1) A list of all schools attended by the private education loan borrowers with outstanding private education loans assumed or acquired by such private education loan creditor;
(2) The number and dollar amount of all outstanding private education loans owed by private education loan borrowers to such private education loan creditor;
(3) For each school listed pursuant to subdivision (1) of this subsection, the number and dollar amount of all outstanding private education loans owed to such private education loan creditor by private education loan borrowers who attended such school;
(4) The number and dollar amount of all private education loans: (A) Such private education loan creditor assumed or acquired during the prior year; and (B) owed to such private education loan creditor by private education loan borrowers;
(5) For each school listed pursuant to subdivision (1) of this subsection, the number and dollar amount of all private education loans: (A) Such private education loan creditor assumed or acquired during the prior year; and (B) owed to such private education loan creditor by private education loan borrowers who attended such school;
(6) The number of private education loans with a cosigner that such private education loan creditor assumed or acquired during the prior year;
(7) The default rate for private education loan borrowers whose private education loans were assumed or acquired by such private education loan creditor, and, for each school listed pursuant to subdivision (1) of this subsection, the default rate for private education loans owed by private education loan borrowers who attended such school;
(8) The number of private education loan borrowers against whom such private education loan creditor brought legal action in the prior year to collect a debt owed pursuant to a private education loan, and the amount sought in each such action; and
(9) The name and address of: (A) Such private education loan creditor; (B) each officer, director or partner of such private education loan creditor; and (C) each owner of a controlling interest in such private education loan creditor.
(e) The commissioner shall create, and periodically update, a publicly accessible Internet web site that includes the following information about private education lenders and private education loan creditors registered in the state:
(1) The name, address, telephone number and Internet web site address for all registered private education lenders and private education loan creditors;
(2) A summary of the information and documents provided pursuant to subsections (c) and (d) of this section; and
(3) Copies of all model promissory notes, agreements, contracts and other instruments provided to the commissioner in accordance with subdivision (11) of subsection (c) of this section.
(f) The commissioner may take action pursuant to section 36a-50 to enforce the provisions of this section.
(g) The commissioner may order that any person who has been found to have violated any provision of this section and has thereby caused financial harm to a consumer be barred for a term not exceeding ten years from acting as a private education lender, private education loan creditor or a stockholder, officer, director, partner or other owner or employee of a private education lender or private education loan creditor.
(P.A. 23-204, S. 166.)
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Sec. 36a-861. (Note: This section is effective July 1, 2024.) Definitions. As used in this section and sections 36a-862 to 36a-872, inclusive:
(1) “Commercial financing” means any extension of sales-based financing by a provider in an amount not exceeding two hundred fifty thousand dollars, the proceeds of which the recipient does not intend to use primarily for personal, family or household purposes;
(2) “Commercial financing broker” means a person, other than a financer, who, for compensation or the expectation of compensation, offers, or offers to obtain, commercial financing for a recipient from a provider that is not exempt;
(3) “Finance charge” means the cost of financing expressed as a dollar amount, including (A) any charge payable directly or indirectly by the recipient and imposed directly or indirectly by the provider as an incident to, or a condition of, the extension of financing, and (B) all charges that would be included under the definition of “finance charge” in 12 CFR 1026.4, as amended from time to time, as if the transaction were subject to said section;
(4) “Financer” means a person who provides, or will provide, commercial financing to a recipient;
(5) “Person” means an individual, corporation, partnership, limited liability company, joint venture, association, joint stock company, trust or unincorporated organization, including, but not limited to, a sole proprietorship;
(6) “Provider” means a person who extends a specific offer of commercial financing to a recipient and includes, unless otherwise exempt under this section, a commercial financing broker, but does not include any (A) bank, out-of-state bank, bank holding company, Connecticut credit union, federal credit union, out-of-state credit union or any subsidiary or affiliate of the foregoing, as those terms are defined in section 36a-2, (B) person acting in such person's capacity as a technology services provider to an entity exempt under this section for use as part of the exempt entity's commercial financing program, provided such person has no interest, arrangement or agreement to purchase any interest in the commercial financing extended by the exempt entity in connection with such program, (C) lender regulated under the federal Farm Credit Act, 12 USC 2001 et seq., as amended from time to time, (D) person or provider who extends or brokers a commercial financing transaction secured by real property, (E) person or provider who extends or brokers a lease, as defined in section 42a-2A-102, (F) person or provider who extends or brokers a purchase-money obligation, as defined in section 42a-9-103a, (G) person or provider who extends not more than five commercial financing transactions in this state in a twelve-month period, (H) person or provider who extends or brokers a commercial financing transaction entered into pursuant to a commercial financing agreement or commercial open-end credit plan of at least fifty thousand dollars, in which the recipient is (i) a dealer, as defined in section 14-1, or an affiliate of such a dealer, or (ii) a motor vehicle rental company, or an affiliate of such a company, or (I) person or provider who extends or brokers a commercial financing transaction in connection with the sale of products or services that such person or provider manufactures, licenses or distributes, or whose parent company, subsidiary or affiliate manufactures, licenses or distributes;
(7) “Recipient” means a person, or the authorized representative of a person, who applies for commercial financing and is made a specific offer of commercial financing by a provider, but does not include a person acting as a commercial financing broker;
(8) “Sales-based financing” means a transaction that is repaid by the recipient to the provider over time (A) as a percentage of sales or revenue, in which the payment amount may increase or decrease according to the volume of sales made or revenue received by the recipient, or (B) according to a fixed payment mechanism that provides for a reconciliation process that adjusts the payment to an amount that is a percentage of sales or revenue; and
(9) “Specific offer” means the specific terms of commercial financing, including, but not limited to, a price or amount, that is quoted to a recipient based on information obtained from or about the recipient, which, if accepted by the recipient, would be binding on the provider, subject to any specific requirements stated in such terms.
(P.A. 23-201, S. 1.)
History: P.A. 23-201 effective July 1, 2024.
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Sec. 36a-862. (Note: This section is effective July 1, 2024.) Reliance on statement of intended purpose made by recipient. For purposes of determining whether financing is commercial financing, a provider may rely on any statement of intended purpose made by the recipient. The statement may be (1) a separate statement signed by the recipient, (2) contained in the financing application, financing agreement or other document signed or consented to by the recipient, or (3) provided orally by the recipient if such oral statement is documented in the recipient's application file by the provider. Electronic signatures and consents are valid for purposes of this section. A provider shall not be required to ascertain that the proceeds of commercial financing are used in accordance with the recipient's statement of intended purpose.
(P.A. 23-201, S. 2.)
History: P.A. 23-201 effective July 1, 2024.
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Sec. 36a-863. (Note: This section is effective July 1, 2024.) Disclosures required when specific offer extended. A provider shall provide to a recipient, when the provider extends a specific offer for sales-based financing, the following disclosures in a format prescribed by the Banking Commissioner:
(1) The total amount of the commercial financing.
(2) The disbursement amount, which is the amount paid to the recipient or on the recipient's behalf, excluding any finance charges that are deducted or withheld at disbursement.
(3) The finance charge.
(4) The total repayment amount, which is the disbursement amount plus the finance charge.
(5) The estimated time period required for the periodic payments to equal the total repayment amount.
(6) The payment amounts as follows:
(A) For payment amounts that are fixed, the payment amounts and frequency; or
(B) For payment amounts that are variable, a payment schedule or a description of the method used to calculate the amounts and frequency of payments, and the amount of the average projected payments per month.
(7) A description of all other potential fees and charges not included in the finance charge, including, but not limited to, draw fees, late payment fees and returned payment fees.
(8) (A) Any finance charge the recipient will be required to pay if the recipient elects to pay off or refinance the commercial financing prior to full repayment, other than interest accrued since the recipient's last payment, and the percentage of any unpaid portion of such finance charge and the maximum dollar amount of such finance charge the recipient will be required to pay; and
(B) Any additional fees, not already included in the finance charge, the recipient will be required to pay if the recipient elects to pay off or refinance the commercial financing prior to full repayment.
(9) A description of collateral requirements or security interests, if any.
(10) Whether, in connection with the specific offer of sales-based financing, the provider will pay compensation directly to a commercial financing broker out of the financed amount and, if so, the amount of such compensation.
(P.A. 23-201, S. 3.)
History: P.A. 23-201 effective July 1, 2024.
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Sec. 36a-864. (Note: This section is effective July 1, 2024.) Disclosures required if recipient required to pay off existing commercial financing as condition. If as a condition of obtaining commercial financing the provider requires the recipient to pay off the balance of existing commercial financing from the same provider, the provider shall disclose to the recipient:
(1) The amount of the new commercial financing used to pay off the portion of the existing commercial financing that consists of prepayment charges required to be paid and any unpaid interest expense that was not forgiven at the time of renewal. For financing for which the total repayment amount is calculated as a fixed amount, the prepayment charge is equal to the original finance charge multiplied by the amount of the renewal used to pay off existing financing as a percentage of the total repayment amount, minus any portion of the total repayment amount forgiven by the provider at the time of prepayment.
(2) If the disbursement amount will be reduced to pay down any unpaid portion of the outstanding balance, the actual dollar amount by which such disbursement amount will be reduced.
(P.A. 23-201, S. 4.)
History: P.A. 23-201 effective July 1, 2024.
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Sec. 36a-865. (Note: This section is effective July 1, 2024.) Signature of recipient required on disclosures. The provider shall obtain the recipient's signature, which may be fulfilled by an electronic signature, on all disclosures required to be presented to the recipient pursuant to sections 36a-861 to 36a-866, inclusive, before authorizing the recipient to proceed further with the commercial financing transaction application.
(P.A. 23-201, S. 5.)
History: P.A. 23-201 effective July 1, 2024.
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Sec. 36a-866. (Note: This section is effective July 1, 2024.) Disclosure of additional information. Nothing in this section or sections 36a-861 to 36a-865, inclusive, shall prevent a provider from providing or disclosing additional information concerning commercial financing offered to a recipient, provided such additional information shall not be disclosed as part of any disclosure required pursuant to this section or sections 36a-861 to 36a-865, inclusive.
(P.A. 23-201, S. 6.)
History: P.A. 23-201 effective July 1, 2024.
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Sec. 36a-867. (Note: This section is effective July 1, 2024.) Use of commercial financing disclosure form approved by another state. If the Banking Commissioner determines that the laws of another state require commercial financing disclosures that meet or exceed the commercial financing disclosure requirements established under sections 36a-861 to 36a-866, inclusive, any commercial financing disclosure form that such other state approves for the purposes of complying with such other state's commercial financing disclosure laws may be used for the purposes of complying with the commercial financing disclosure requirements established under sections 36a-861 to 36a-866, inclusive.
(P.A. 23-201, S. 7.)
History: P.A. 23-201 effective July 1, 2024.
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Sec. 36a-868. (Note: This section is effective July 1, 2024.) Waiver provisions re provider obtaining prejudgment remedy. Unenforceable provisions. No commercial financing contract entered into on or after July 1, 2024, shall contain any provision waiving a recipient's right to notice, judicial hearing or prior court order under chapter 903a in connection with the provider obtaining any prejudgment remedy, including, but not limited to, attachment, execution, garnishment or replevin, upon commencing any litigation against the recipient. Any such provision in a commercial financing contract entered into on or after July 1, 2024, shall be unenforceable.
(P.A. 23-201, S. 8.)
History: P.A. 23-201 effective July 1, 2024.
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Sec. 36a-869. (Note: This section is effective July 1, 2024.) Revocation, withdrawal or modification of specific offer based on preliminary review. (a) A provider shall not revoke, withdraw or modify a specific offer made on or after July 1, 2024, until midnight of the third calendar day after the date of the specific offer. A specific offer may be revoked, withdrawn or modified (1) based on information obtained in the underwriting process, including, but not limited to, verification of any information provided by the recipient, or (2) at the request of the recipient.
(b) A specific offer may state that it is based on the provider's preliminary review of application information only and is not a final approval or commitment to provide sales-based financing.
(P.A. 23-201, S. 9.)
History: P.A. 23-201 effective July 1, 2024.
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Sec. 36a-870. (Note: This section is effective July 1, 2024.) Registration. Authority to transact business. Application. Fees. (a) Not later than October 1, 2024, each provider and commercial financing broker shall: (1) Register with the Banking Commissioner in a manner prescribed by the commissioner; and (2) unless such provider or broker is organized under the laws of this state or is otherwise not required to obtain authority to transact business in this state as a foreign entity, shall obtain authority to transact business in this state.
(b) An application for registration by a provider or commercial financing broker shall disclose any judgment, memorandum of understanding, cease and desist order or conviction that involves a crime or an act of fraud, breach of trust or money laundering with respect to such provider or broker or any officer, director, manager, operator or individual who otherwise controls the operations of such provider or broker.
(c) Each provider and commercial financing broker shall pay an initial registration fee of one thousand dollars and an annual registration fee of five hundred dollars by the fifteenth of September each year thereafter. If a provider or commercial financing broker fails to timely pay any such annual registration fee, its registration shall automatically expire by operation of law.
(P.A. 23-201, S. 10.)
History: P.A. 23-201 effective July 1, 2024.
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Sec. 36a-871. (Note: This section is effective July 1, 2024.) Regulations. The Banking Commissioner may adopt regulations, in accordance with the provisions of chapter 54, to carry out the provisions of sections 36a-861 to 36a-872, inclusive.
(P.A. 23-201, S. 11.)
History: P.A. 23-201 effective July 1, 2024.
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Sec. 36a-872. (Note: This section is effective July 1, 2024.) Penalties. (a) Any provider who violates any provision of sections 36a-861 to 36a-870, inclusive, or any regulation adopted pursuant to section 36a-871 shall be liable for a civil penalty pursuant to section 36a-50.
(b) In addition to any civil penalty imposed under subsection (a) of this section, if the Banking Commissioner finds that a provider has knowingly violated any provision of sections 36a-861 to 36a-870, inclusive, or any regulation adopted pursuant to section 36a-871, the commissioner may seek an injunction in a court of competent jurisdiction, and may exercise the powers granted to the commissioner under section 36a-50, on behalf of any recipient affected by the violation.
(P.A. 23-201, S. 12.)
History: P.A. 23-201 effective July 1, 2024.
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