CHAPTER 668
NONDEPOSITORY FINANCIAL INSTITUTIONS

*See Sec. 36a-676 for definitions under the Truth-in-Lending Act applicable to this chapter.
Annotations to former chapter 650 (Sec. 36-254 et seq.):
Cited. 139 C. 425.

Sec. 36a-535. (Formerly Sec. 36-254). Definitions. As used in sections 36a-535 to 36a-546, inclusive, unless the context otherwise requires:
(1) The terms "goods", "retail installment sale", "retail installment contract", "installment loan contract", "retail seller" and "retail buyer" have the same meanings as provided in section 36a-770;
(2) "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 the holders thereof, by purchase, discount or pledge, or by loan or advance to the holder of either on the security thereof, or otherwise, but does not include a bank, out-of-state bank, Connecticut credit union, federal credit union, or out-of-state credit union, if so engaged.
(1949 Rev., S. 5963; 1949, 1955, S. 2767d; 1957, P.A. 356, S. 1; March, 1958, P.A. 27, S. 50; 1959, P.A. 589, S. 1; 1961, P.A. 116, S. 18; 1969, P.A. 454, S. 27; P.A. 77-604, S. 51, 84; 77-614, S. 161, 610; P.A. 78-121, S. 108, 113; P.A. 80-482, S. 256, 345, 348; P.A. 81-128, S. 5; 81-158, S. 12, 17; P.A. 82-18, S. 2, 4; P.A. 87-9, S. 2, 3; P.A. 88-65, S. 34; P.A. 91-69; P.A. 92-12, S. 74; P.A. 94-122, S. 249, 340.)
History: 1959 act amended Subdiv. (b) by specifying goods means all chattels included in one contract and raising the aggregate price to $6000; 1961 act made various changes to conform to uniform commercial code; 1969 act specified that amount for "other itemized charges ..." is part of time sale price where previously reference was to amount for insurance, other benefits and filing fees in Subsec. (c); P.A. 77-604 revised references to Sec. 42a-9-105; P.A. 77-614 replaced bank commissioner with banking commissioner within the department of business regulation and made banking department a division within said department, effective January 1, 1979; P.A. 78-121 deleted reference to private bankers in Subdiv. (h); P.A. 80-482 restored banking division as independent department and abolished the department of business regulation, allowing corresponding revision of commissioner's name; P.A. 81-128 eliminated the specific definitions for "goods", "retail instalment sale", "retail instalment contract", "instalment loan contract", "retail seller" and "retail buyer" and provided those terms would have the definitions found in Sec. 42-83; P.A. 81-158 amended Subsec. (c) 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; (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 redefined "sales finance company" by deleting reference to industrial banks; P.A. 91-69 made technical changes and amended Subsec. (c) to provide that the term "sales finance company" does not include a bank, savings bank, savings and loan association, industrial bank or credit union; P.A. 92-12 redesignated Subdivs.; P.A. 94-122 deleted the definitions of "person" and "commissioner", renumbered the remaining Subdivs. and made technical changes, effective January 1, 1995; Sec. 36-254 transferred to Sec. 36a-535 in 1995.

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Sec. 36a-536. (Formerly Sec. 36-255). License required. No person, unless excluded from the definition of a "sales finance company" as provided in section 36a-535, shall engage in the business of a sales finance company unless licensed as provided in sections 36a-535 to 36a-546, inclusive. A licensee under said sections shall not be required to obtain any other license in this state in order to perform any act permitted or required to be performed by such licensee under said sections.
(1949 Rev., S. 5964 (1), (6); March, 1958, P.A. 27, S. 32; P.A. 81-128, S. 6; P.A. 94-122, S. 250, 340.)
History: P.A. 81-128 eliminated reference to repealed Subsec. (h) of Sec. 36-254 and clarified licensing exemption; P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-255 transferred to Sec. 36a-536 in 1995.

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Sec. 36a-537. (Formerly Sec. 36-256a). Application. The application for a license as a sales finance company shall be on a form prescribed by the commissioner, in writing and under oath, together with such exhibits and other pertinent information as the commissioner may require.
(1967, P.A. 631, S. 1; P.A. 77-614, S. 161, 610; P.A. 87-9, S. 2, 3; P.A. 94-122, S. 251, 340.)
History: P.A. 77-614 replaced bank commissioner with banking commissioner, effective January 1, 1979; (Revisor's note: Pursuant to P.A. 87-9 "banking commissioner" was changed editorially by the Revisors to "commissioner of banking"); P.A. 94-122 changed "commissioner of banking" to "commissioner", effective January 1, 1995; Sec. 36-256a transferred to Sec. 36a-537 in 1995.

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Sec. 36a-538. (Formerly Sec. 36-256b). Payment of cost of investigation. Each person applying for a license as a sales finance company or a renewal thereof shall pay the actual cost, at the discretion of and as determined by the commissioner, of any investigation or examination made of such person by the commissioner.
(1967, P.A. 631, S. 7; P.A. 94-122, S. 252, 340.)
History: P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-256b transferred to Sec. 36a-538 in 1995.

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Sec. 36a-539. (Formerly Sec. 36-257). License fee. (a) Each person applying for a license under sections 36a-535 to 36a-546, inclusive, shall pay a license fee of four hundred dollars. Each license issued pursuant to said sections shall expire at the close of business on June thirtieth of each year unless such license is renewed. Whenever an application for a license is filed under this section by any person who was a licensee under sections 36a-535 to 36a-546, 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. 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 receipt of an application and the payment of the appropriate license fee.
(b) 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 and section 36a-542, shall be nonrefundable.
(1949 Rev., S. 5964 (3); 1953, S. 2768d; 1959, P.A. 204, S. 1; 1967, P.A. 631, S. 2; P.A. 73-392; P.A. 88-150, S. 4; P.A. 92-89, S. 6, 20; P.A. 94-104, S. 3; 94-122, S. 253, 340; P.A. 96-71, S. 4, 8.)
History: 1959 act increased fees by 50%; 1967 act added provision requiring applicant to pay fee for period ending June thirtieth next succeeding the issuance of license and specifying that fee will be returned if application is denied or withdrawn, retaining fee amounts and dates as before; P.A. 73-392 increased one hundred fifty and seventy-five dollars fees previously in effect to two hundred and one hundred dollars, respectively; P.A. 88-150 amended the section by providing that the license fee is nonrefundable, increasing the fee to two hundred dollars and adding the provision re expiration of licenses on June thirtieth; P.A. 92-89 increased the license fee from two hundred to four hundred dollars; P.A. 94-104 added a one-hundred-dollar processing fee for a person whose license expired within sixty days of his application; P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-257 transferred to Sec. 36a-539 in 1995; P.A. 96-71 deleted "nonrefundable" in Subsec. (a) and added Subsec. (b) to make all fees required by this section and section 36a-542 nonrefundable, effective July 1, 1996.

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Sec. 36a-540. (Formerly Sec. 36-258). Location of office. Each license shall specify the location of the office and shall be conspicuously displayed there. If such location is changed, the commissioner shall endorse the change of location on the license without charge. No other reference to the licensing or supervision by the commissioner may be made.
(1949 Rev., S. 5964 (4); 1957, P.A. 356, S. 2.)
History: Sec. 36-258 transferred to Sec. 36a-540 in 1995.

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Sec. 36a-541. (Formerly Sec. 36-259a). Refusal or issuance of license. Transaction of business under other name prohibited. (a) Upon the filing of an application for a license as a sales finance company and receipt of the fee therefor, the commissioner (1) may refuse to issue the license if the commissioner finds that the applicant, or any person who at the time of the filing of such application is an owner, director, officer, member, partner, employee, agent or spouse of the applicant, has suffered revocation of a license under sections 36a-535 to 36a-546, inclusive, or has been found to have violated any of the provisions of sections 36a-535 to 36a-546, inclusive, or part XI of chapter 669 or of any other law regulating retail installment sales contracts, or has been responsible for any act or omission in consequence of which a license issued under sections 36a-535 to 36a-546, inclusive, to any person was revoked. The commissioner may likewise refuse to issue a license if the commissioner finds the experience, character or general fitness of the applicant are not such as to command the confidence of the community and to warrant the belief that the business will be conducted honestly and fairly within the purposes and intent of sections 36a-535 to 36a-546, inclusive. For the purpose of this subsection, the applicant shall be deemed to include all the members of the applicant if it is a partnership or an unincorporated association, and all the trustees, officers and directors of the applicant if it is a corporation; or (2) shall issue and deliver to the applicant a nonassignable license to engage in the business of a sales finance company in accordance with the provisions of sections 36a-535 to 36a-546, inclusive, for a period which shall expire on June thirtieth next following the date of its issuance.
(b) No licensee shall transact any business provided for by sections 36a-535 to 36a- 546, inclusive, under any other name.
(1967, P.A. 631, S. 3; P.A. 94-122, S. 254, 340.)
History: P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-259a transferred to Sec. 36a-541 in 1995.

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Sec. 36a-542. (Formerly Sec. 36-259b). Renewal of license. Each person licensed as a sales finance company may renew such license for the succeeding year commencing July first by filing with the commissioner on or before June first a form prescribed by the commissioner, in writing and under oath, together with such exhibits and other pertinent information as the commissioner may require. The license fee shall be four hundred dollars. Any renewal application filed with the commissioner under this section after June first shall be accompanied by a one-hundred-dollar late fee.
(1967, P.A. 631, S. 4; P.A. 74-235, S. 1, 2; P.A. 94-104, S. 4; 94-122, S. 255, 340; P.A. 96-71, S. 5, 8.)
History: P.A. 74-235 raised fee from one hundred fifty to two hundred dollars; P.A. 94-104 changed fee to nonrefundable fee, increased the fee from two to four hundred dollars and added a one-hundred-dollar late fee; P.A. 94-122 changed "him" to "the commissioner", effective January 1, 1995; Sec. 36-259b transferred to Sec. 36a-542 in 1995; P.A. 96-71 substituted "license fee" for "nonrefundable fee", effective July 1, 1996.

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Sec. 36a-543. (Formerly Sec. 36-260a). Suspension, revocation or refusal to renew license. Enforcement powers of commissioner. (a) The commissioner may suspend, revoke or refuse to renew any license, in accordance with section 36a-51 if the commissioner finds that: (1) The licensee, knowingly or without the exercise of due care to prevent such violation, has violated any provision of sections 36a-535 to 36a- 546, inclusive, or of any other law regulating installment sales financing, or has failed to comply with any demand or requirement, made by the commissioner under and within the authority of sections 36a-535 to 36a-546, inclusive; or (2) there has been any material misstatement or failure to give a true reply to a question in the application for the license; or (3) the licensee has defrauded any retail buyer to the buyer's damage; or wilfully failed to perform any written agreement with any retail buyer; or (4) any fact or condition exists which, if it had existed at the time of the original application for such license, would have warranted the commissioner's refusal to issue such license originally; or (5) in the case of a licensee other than a natural person, (A) any officer, director, trustee or partner of such licensee has been guilty of any act or omission which would be cause for revoking or suspending a license of such party as an individual; or (B) any other agent or employee of such licensee has been guilty of such act or omission and the licensee has approved or had knowledge thereof and, after such approval or knowledge, has retained the benefit, proceeds, profit or advantage of such act or omission or otherwise ratified it.
(b) The commissioner in the commissioner's discretion may revoke or suspend only the particular license with respect to which grounds for revocation or suspension are of general application to all places of business, or if to more than one place of business, operated by such licensee, the commissioner shall revoke or suspend all of the licenses issued to such licensee or those licenses to which the grounds for revocation or suspension apply, as the case may be.
(c) No suspension, revocation or surrender of any license shall impair or affect the obligation of any installment contract, obligation or credit agreement lawfully acquired previously thereto by the licensee.
(d) The commissioner shall establish rules as to the form of hearings, findings and orders, which shall be reasonable and in the public interest.
(e) Whenever it appears to the commissioner that any person has violated, is violating or is about to violate any provision of sections 36a-535 to 36a-546, inclusive, or any regulation adopted under said sections, the commissioner may take action against such person in accordance with section 36a-50.
(1967, P.A. 631, S. 5; 1971, P.A. 179, S. 22; 870, S. 93; P.A. 74-254, S. 11; P.A. 82-174, S. 4, 13, 14; P.A. 92-12, S. 75; P.A. 93-194, S. 3, 7; P.A. 94-122, S. 256, 340.)
History: 1971 acts required appeal to return day between twelve and thirty days after service rather than to "next" or "next but one" return day after service and, effective September 1, 1971, replaced superior court with court of common pleas except that courts with cases pending retain jurisdiction unless pending matters deemed transferable; P.A. 74-254 repealed Subsec. (g) which had contained appeal provisions; P.A. 82-174 amended Subsec. (a) by authorizing the commissioner to "refuse to renew" a license and providing that after ten days written notice and allowing the licensee a reasonable opportunity to be heard the commissioner may suspend, revoke or refuse to renew a license repealing former Subsec. (b) re mandatory hearing prior to revocation or suspension; P.A. 92-12 redesignated Subsecs. and made technical changes; P.A. 93-194 amended Subsec. (c) re effectiveness of a surrender of any license by a licensee when the commissioner has instituted a proceeding to suspend, revoke or refuse to renew such license, effective June 23, 1993; P.A. 94-122 deleted Subsec. (c) re surrender of licenses, relettered former Subsecs. (d) and (e) as Subsecs. (c) and (d), deleted Subsec. (f) re investigating complaints of violations by licensees, added new Subsec. (e) re enforcement actions against violators and made technical changes, effective January 1, 1995; Sec. 36-260a transferred to Sec. 36a-543 in 1995.

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Sec. 36a-544. (Formerly Sec. 36-260b). Regulations. (a) The commissioner may adopt regulations, in accordance with chapter 54, as necessary to carry out the provisions of sections 36a-535 to 36a-546, inclusive, including the defining of any terms, whether or not used in said sections, so far as the definitions are not inconsistent with the provisions of said sections.
(b) No regulation may be adopted under this section unless the commissioner finds that the action is necessary or appropriate in the public interest or for the protection of purchasers and consistent with the purposes fairly intended by the policy and provisions of sections 36a-535 to 36a-546, inclusive.
(1967, P.A. 631, S. 6; P.A. 94-122, S. 257, 340.)
History: P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-260b transferred to Sec. 36a-544 in 1995.

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Sec. 36a-545. (Formerly Sec. 36-262a). Books and records. Each applicant or licensee shall have established bookkeeping methods and shall keep books and records at the place of business specified in the license in a form and manner satisfactory to the commissioner, or shall make such books and records available at such place of business not later than five business days after requested by the commissioner. All such books and records shall be preserved for at least two years after the making of the final entry therein.
(1967, P.A. 631, S. 8; P.A. 00-61, S. 4, 9.)
History: Sec. 36-262a transferred to Sec. 36a-545 in 1995; P.A. 00-61 added provision re availability of books and records at place of business, effective July 1, 2000..

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Sec. 36a-546. (Formerly Sec. 36-263). Penalty. Any individual, corporation, partnership, limited partnership, association or other unincorporated enterprise, and any responsible officer, partner or employee thereof, who wilfully fails to comply with or violates any of the provisions of sections 36a-535 to 36a-545, inclusive, or who engages in business as a sales finance company without being licensed as a sales finance company by the commissioner in accordance with the provisions of said sections, shall be fined not more than five hundred dollars or imprisoned not more than six months or both.
(1949 Rev., S. 5968.)
History: Sec. 36-263 transferred to Sec. 36a-546 in 1995.
Annotations to former section 36-263:
Cited. 139 C. 425.

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Secs. 36a-547 to 36a-554. Reserved for future use.
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PART III*
SMALL LOAN LENDERS

*See Sec. 42a-9-203 (2) re attachment of security interest.
Annotations to former chapter 647 (Sec. 36-225 et seq.):
Cited. 23 CS 184.

Sec. 36a-555. (Formerly Sec. 36-225). Loan business to be licensed. No person shall engage in the business of making loans of money or credit in the amount or to the value of fifteen thousand dollars or less for loans made under section 36a-563 or section 36a-565, and charge, contract for or receive a greater rate of interest, charge or consideration than twelve per cent per annum therefor, except (1) a bank, (2) an out-of-state bank, (3) a Connecticut credit union, (4) a federal credit union, (5) an out-of-state credit union, (6) a savings and loan association wholly owned subsidiary service corporation, (7) a person to the extent that such person makes loans for agricultural, commercial, industrial or governmental use or extends credit through an open-end credit plan, as defined in subdivision (8) of section 36a-676, for the retail purchase of consumer goods or services, (8) a nondepository first mortgage lender licensed pursuant to sections 36a- 485 to 36a-498, inclusive, (9) a secondary mortgage lender licensed pursuant to sections 36a-510 to 36a-524, inclusive, or (10) a licensed pawnbroker, unless licensed to do so by the commissioner as provided in sections 36a-555 to 36a-573, inclusive.
(1949 Rev., S. 5937; 1949, S. 2753d; 1957, P.A. 439, S. 1; 1963, P.A. 175, S. 1; 1969, P.A. 242, S. 1; P.A. 77-129, S. 1; 77-183, S. 1, 2; P.A. 78-121, S. 71, 113; 78-303, S. 50, 136; P.A. 87-9, S. 2, 3; P.A. 88-65, S. 33; P.A. 89-338, S. 1; P.A. 92-12, S. 65; P.A. 94-122, S. 258, 340; P.A. 97-13, S. 1; P.A. 98-264.)
History: 1963 act increased limit from six hundred to one thousand dollars and added reference to charge or consideration in provision re twelve per cent interest; 1969 act increased limit to one thousand eight hundred dollars and deleted reference to loans of "goods or things in action"; P.A. 77-129 increased limit to five thousand dollars; P.A. 77-183 authorized loans by building or savings and loan associations and wholly owned subsidiary service corporations; P.A. 78-121 included federal credit unions, deleted private bankers and referred to savings and loan associations rather than "building or" savings and loan associations in authority to make loans; P.A. 78-303 replaced banking commission with banking commissioner in keeping with requirements of P.A. 77-614 which repealed the commission; (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 deleted a reference to industrial banks; P.A. 89-338 increased the limit from five thousand to ten thousand dollars for loans made under Sec. 36-233b, clarified that the section applies to out-of-state institutions and added the exception for entities making loans for agricultural, commercial, industrial or governmental use or extending credit through certain open-end credit plans; P.A. 92-12 made technical changes; P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-225 transferred to Sec. 36a-555 in 1995; P.A. 97-13 increased limit from five thousand to fifteen thousand dollars for loans made under Sec. 36a-563, deleted reference to limit of ten thousand dollars for loans made under Sec. 36a-565, and made reference to limit of fifteen thousand dollars applicable to loans made under Sec. 36a-565 to conform to existing provisions of Sec. 36a-565; P.A. 98-264 added exceptions for licensed nondepository first mortgage lenders and secondary mortgage lenders and made technical changes.
Annotations to former section 36-225:
Cited. 149 C. 158.

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Sec. 36a-556. (Formerly Sec. 36-226). Requirements for granting license. Before filing an application for a license under sections 36a-555 to 36a-573, inclusive, the applicant shall give public notice of the applicant's intention to apply for a license by advertising daily, in a newspaper published or having a circulation in the town where the applicant's place of business is to be located, for two successive weeks, in a manner approved by the commissioner, and satisfactory proof of such advertising shall be filed with the commissioner. Upon the filing of the required application and license fee, the commissioner shall investigate the facts and, if the commissioner finds that (1) the experience, character and general fitness of the applicant, and of the members thereof if the applicant is a partnership or association, and of the officers and directors thereof if the applicant is a corporation, are satisfactory, (2) a license to such applicant will be for the convenience and advantage of the community in which the applicant's business is to be conducted and (3) the applicant has the capital investment required by this section, the commissioner shall issue a license to the applicant to make loans in accordance with sections 36a-555 to 36a-573, inclusive. The capital investment shall be not less than twenty-five thousand dollars for each licensed place of business in a city or town with a population of ten thousand or more inhabitants and ten thousand dollars for each licensed place of business in a city or town with a smaller population. Population shall be determined according to the last United States census at the time a license is granted. The required capital investment shall be maintained permanently at the licensed place of business. The requirement for a capital investment shall not apply to any person who has been continuously licensed under sections 36a-555 to 36a-573, inclusive, on and after May 14, 1929.
(1949 Rev., S. 5940; 1949, S. 2756d; P.A. 78-303, S. 51, 136; P.A. 87-9, S. 2, 3; P.A. 91-357, S. 52, 78; P.A. 92-12, S. 66; P.A. 94-122, S. 259, 340.)
History: P.A. 78-303 specified commissioner referred to in section as banking commissioner and substituted banking commissioner for banking commission elsewhere in section in keeping with P.A. 77-614 which repealed the banking commission; (Revisor's note: Pursuant to P.A. 87-9 "banking commissioner" was changed editorially by the Revisors to "commissioner of banking"); P.A. 91-357 made technical changes; P.A. 92-12 made technical changes; P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-226 transferred to Sec. 36a-556 in 1995.

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Sec. 36a-557. (Formerly Sec. 36-227). Application. An application for such license shall be in writing, under oath and in the form prescribed by the commissioner. The application shall contain the full name and the address, both of the residence and place of business, of the applicant, and, if the applicant is a partnership, of each member thereof, or, if a corporation, of each director and officer thereof. The application shall also contain the county and municipality, with street and number, if any, where the business is to be conducted and such other pertinent information as the commissioner may require.
(1949 Rev., S. 5938; 1949, S. 2754d; P.A. 94-122 S. 260, 340.)
History: P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-227 transferred to Sec. 36a-557 in 1995.

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Sec. 36a-558. (Formerly Sec. 36-228). Fees. Examination expenses. (a) Each applicant for a license, at the time of making such application, shall pay to the commissioner a license fee of four hundred dollars. Each license issued pursuant to sections 36a-555 to 36a-573, inclusive, shall expire at the close of business on June thirtieth of each year, unless such license is renewed. Each licensee shall, on or before June first of each year, file a renewal application and pay to the commissioner a four-hundred- dollar license fee to renew the license for the succeeding year, commencing July first. Any renewal application filed with the commissioner after June first shall be accompanied by a one-hundred-dollar late fee. Whenever an application for a license, other than a renewal application, is filed under this section by any person who was a licensee under sections 36a-555 to 36a-573, 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. Each applicant shall pay the expenses of any examination or investigation made under sections 36a- 555 to 36a-573, inclusive.
(b) 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.
(1949 Rev., S. 5938; 1949, S. 2754d; March, 1958, P.A. 27, S. 47; P.A. 88-150, S. 3; P.A. 92-89, S. 5, 20; P.A. 94- 104, S. 2; 94-122, S. 338, 340; P.A. 96-71, S. 6, 8.)
History: P.A. 88-150 specified that the license fee is nonrefundable and added the provision re expiration of licenses on June thirtieth; P.A. 92-89 increased the license fees from two hundred to four hundred dollars; P.A. 94-104 changed the license renewal deadline from June twentieth to June first, added a one-hundred-dollar late fee and added a one-hundred- dollar processing fee for a person whose license expired within sixty days of his application; P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-228 transferred to Sec. 36a-558 in 1995; P.A. 96-71 amended Subsec. (a) to delete "nonrefundable" modifying "license fee" and added Subsec. (b) to make all fees required by this section nonrefundable, effective July 1, 1996.

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Sec. 36a-559. (Formerly Sec. 36-229). Miscellaneous license provisions. No license shall be assignable nor shall any license be transferable to cover a place of business not located in either the same or an adjacent city or town. Such license shall be kept conspicuously posted in the place of business of the licensee. Every license shall remain in force and effect until the same has been surrendered, revoked or suspended in accordance with the provisions of sections 36a-555 to 36a-573, inclusive. Any license which is revoked or suspended shall be immediately surrendered to the commissioner. If any change occurs in the personnel of the partners, principals, directors, officers or managers of any licensee, the licensee shall forthwith notify the commissioner, and the commissioner may require a statement under oath giving such information as the commissioner may reasonably require with respect to such change.
(1949 Rev., S. 5940; 1949, S. 2756d; P.A. 84-32, S. 2; P.A. 94-122, S. 261, 340.)
History: P.A. 84-32 permitted a license to be transferred to cover a place of business located in an adjacent city or town; P.A. 94-122 changed "he" to "the commissioner", effective January 1, 1995; Sec. 36-229 transferred to Sec. 36a-559 in 1995.

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Sec. 36a-560. (Formerly Sec. 36-230). Separate license for each place of business. No licensee shall make any loan provided for by sections 36a-555 to 36a-573, inclusive, under any other name or at any other place of business than that named in the license. 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-555 to 36a-573, inclusive, as to each new license.
(1949 Rev., S. 5943; P.A. 78-303, S. 52, 136; P.A. 87-9, S. 2, 3; P.A. 94-122, S. 262, 340.)
History: P.A. 78-303 replaced banking commission with banking commissioner in keeping with provisions of P.A. 77- 614; (Revisor's note: Pursuant to P.A. 87-9 "banking commissioner" was changed editorially by the Revisors to "commissioner of banking"); P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-230 transferred to Sec. 36a- 560 in 1995.

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Sec. 36a-561. (Formerly Sec. 36-231). Conduct of business in association with other business. No licensee shall conduct the business of making loans under the provisions of sections 36a-555 to 36a-573, inclusive, in association or conjunction with any other type of business or within any office or room where any other type of business is solicited or engaged in, except as may be authorized in writing by the commissioner upon being satisfied that such other business is of such a character that the granting of such authority would not permit or easily facilitate evasions of the provisions of sections 36a-555 to 36a-573, inclusive, or of any regulations adopted under section 36a-570.
(1949 Rev., S. 5948 (1); P.A. 94-122, S. 263, 340.)
History: P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-231 transferred to Sec. 36a-561 in 1995.

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Sec. 36a-562. (Formerly Sec. 36-232). Change of location. Whenever the licensee wishes to change the licensee's place of business either within the same city or town or to an adjacent city or town, the licensee shall give written notice thereof to the commissioner, who shall investigate the facts and, if the commissioner finds (1) that allowing the licensee to engage in business in the proposed location is not detrimental to the convenience and advantage of the community and (2) that the proposed location is reasonably accessible to borrowers under existing loan contracts, the commissioner shall enter an order permitting the change and shall amend the license accordingly. If the commissioner does not so find, the commissioner shall enter an order denying the licensee such permission.
(1949 Rev., S. 5944; 1949, S. 2759d; P.A. 84-32, S. 1; P.A. 92-12, S. 67; P.A. 94-122, S. 264, 340.)
History: P.A. 84-32 permitted a licensee to change his place of business to an adjacent city or town with the approval of the banking commissioner; P.A. 92-12 made technical changes; P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-232 transferred to Sec. 36a-562 in 1995.

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Sec. 36a-563. (Formerly Sec. 36-233). Charges. Loan restrictions. (a) Every licensee under sections 36a-555 to 36a-573, inclusive, may loan any sum of money not exceeding fifteen thousand dollars, excluding charges, and may charge, contract for and receive thereon charges at a rate not to exceed the following: (1) On any loan which does not exceed one thousand eight hundred dollars, excluding charges, or on any unsecured loan or on any loan secured only by credit life insurance, seventeen dollars per one hundred dollars on that part of the cash advance, not exceeding six hundred dollars, and eleven dollars per one hundred dollars on any remainder when the loan is made payable over a period of one year, and proportionately at those rates over a longer or shorter term of loan; (2) on a loan which exceeds one thousand eight hundred dollars, excluding charges, and which is secured by property other than credit life insurance, eleven dollars per one hundred dollars on the entire cash advance when the loan is made payable over a period of one year, and proportionately at that rate over a longer or shorter term of loan. Such charges shall be computed at the time the loan is made on the full amount of the cash advance for the full term of the loan contract, notwithstanding any agreement to repay the loan in installments. Such charges shall be added to the cash advance and the resulting sum may become the face amount of the note. All payments made on account of any loan, except those applied to default and deferment charges, shall be deemed to be applied to the unpaid installments in the order in which they are due.
(b) For the purpose of computations, whether at the maximum rate or less, a month shall be that period of time from any date in one month to the corresponding date in the next month, but if there is no such corresponding date, then to the last day of the next month, and a day shall be considered one-thirtieth of a month when such computation is made for a fraction of a month. For loans originally scheduled to be repaid over a period of forty-eight months and fifteen days or less, the portion of the charges applicable to any particular monthly installment period, as originally scheduled or following a deferment, shall bear the same ratio to the total charges, excluding any adjustment made under subsection (c) of this section, as the balance scheduled to be outstanding during that monthly period bears to the sum of all the monthly balances scheduled originally by the contract of loan. For loans originally scheduled to be repaid over a period in excess of forty-eight months and fifteen days, the portion of the charges applicable to any particular monthly installment period, as originally scheduled or following a deferment, shall be the charges which would be incurred for that monthly installment period if the annual percentage rate disclosed to the borrower pursuant to sections 36a- 675 to 36a-685, inclusive, were charged, by the actuarial method, on the disclosed amount financed and all payments were made according to schedule.
(c) Notwithstanding the requirement in subsection (a), a borrower and licensee may agree that the first installment due date may be not more than fifteen days more than one month, and the charge for each day in excess of one month shall be one-thirtieth of the portion of the charges applicable to a first installment period of one month. The charges for the extra days shall be added to the first installment, but shall be excluded in computing deferment charges and refunds. When a loan contract provides for extra days in a first installment period, for the purposes of sections 36a-555 to 36a-573, inclusive, such extra days shall be treated as the first days in the first installment period and the due dates of the remaining installments shall be calculated from the due date of such first installment.
(d) If any installment remains unpaid for ten or more consecutive days, including Sundays and holidays, after it is due, the licensee may charge and collect a default charge not exceeding the lesser of seven dollars and fifty cents or five cents per dollar, or fraction thereof, of such scheduled installment, except a minimum default charge of three dollars may be charged and collected. Default charges may be collected when due or at any time thereafter, but may not be accumulated until the last payment date.
(e) If, as of an installment due date, the payment date of all wholly unpaid installments is deferred one or more full months and the maturity of the contract is extended for a corresponding period, the licensee may charge and collect a deferment charge not exceeding the charge applicable to the first of the installments deferred, multiplied by the number of months in the deferment period. The deferment period is that period during which no payment is made or required by reason of such deferment, except that no deferment made pursuant to this subsection shall extend the maturity of any contract made under sections 36a-555 to 36a-573, inclusive, for more than (1) three months, for loans originally repayable in twenty-four months or less, (2) five months, for loans originally repayable in more than twenty-four months but not more than forty-eight months, and (3) eight months, for loans originally repayable in more than forty-eight months. The deferment charge may be collected at the time of deferment or at any time thereafter. The portion of the charges contracted for under subsection (a) applicable to each deferred balance and installment period following the deferment period shall remain the same as that applicable to such balance and period under the original contract of loan. No installment on which a default charge has been collected, or on account of which any partial payment has been made, shall be deferred or included in the computation of the deferment charge unless such default charge or partial payment is refunded to the borrower or credited to the deferment charge. Any payment received at the time of deferment may be applied first to the deferment charge and the remainder, if any, applied to the unpaid balance of the contract, but if such payment is sufficient to pay, in addition to the appropriate deferment charge, any installment which is in default and the applicable default charge, it shall be first so applied and any such installment shall not be deferred or subject to the deferment charge. If a loan is prepaid in full during the deferment period, the borrower shall receive, in addition to the refund required under subsection (f) of this section, a refund of that portion of the deferment charge applicable to any unexpired full month or months of such deferment period.
(f) If the contract of loan is prepaid in full by cash, a new loan or otherwise, before the final installment date, the portion of the charges applicable to the full installment periods, as scheduled originally in the loan contract or as rescheduled by reason of any deferment made pursuant to sections 36a-555 to 36a-573, inclusive, following the date of prepayment shall be refunded or credited to the borrower. Where prepayment occurs on other than a monthly installment due date, it shall be deemed to have occurred on the preceding or succeeding installment due date nearest to the date of prepayment. Where prepayment occurs on a date midpoint between the preceding and succeeding monthly installment due dates, it shall be deemed to have occurred on the preceding monthly due date. In all cases where prepayment occurs before the first monthly installment due date, it shall be deemed to have occurred on the first monthly installment due date. If judgment is obtained before the final installment date, the judgment shall reflect the refund which would be required for prepayment in full as of the date judgment is obtained. No refund of less than one dollar or for partial prepayments need be made.
(g) If part or all of the consideration for a loan contract is the unpaid balance, excluding default charges, of a prior loan with the same licensee, the cash advance under such new loan contract may include the balance of the prior contract which remains after giving the required refund.
(h) In addition to the charges provided for by sections 36a-555 to 36a-573, inclusive, and service charges that are imposed for a check that is dishonored as provided in subsection (i) of section 52-565a, no further or other charge or amount for any examination, service, brokerage, commission or other thing, or otherwise, shall be directly or indirectly charged, contracted for or received. If interest or any other charges in excess of those permitted by said sections are charged, contracted for or received, except as the result of a bona fide error, the contract of loan shall be void and the licensee shall have no right to collect or receive any principal, interest or charges. No person shall owe any licensee, as such, at any time more than fifteen thousand dollars for principal as a borrower, comaker or guarantor for loans made under said sections. No licensee shall induce or permit any borrower or borrowers to split or divide any loan or loans made under said sections, or permit any borrower to become obligated, directly or indirectly, under more than one contract of loan under said sections at the same time primarily for the purpose of obtaining a higher rate of charge than would otherwise be permitted by said sections. No contract made under said sections, except as deferred in accordance with subsection (e) of this section, shall provide for a greater rate of interest than twelve per cent per annum on the balance remaining unpaid twenty-four months and fifteen days after the date of making such contract if the original cash advance was one thousand dollars or less or thirty-six months and fifteen days if the original cash advance was in excess of one thousand dollars but not in excess of one thousand eight hundred dollars. No contract made under said sections with an original cash advance in excess of one thousand eight hundred dollars, except as deferred in accordance with subsection (e) of this section, shall provide for a greater rate of interest than twelve per cent per annum on the balance remaining unpaid on the scheduled maturity date of said contract. No part of the principal balance remaining unpaid by a borrower twenty-four months and fifteen days after making such contract where the original cash advance was one thousand dollars or less or thirty-six months and fifteen days where the original cash advance was in excess of one thousand dollars but not in excess of one thousand eight hundred dollars, shall directly or indirectly be renewed or refinanced by the lender who made such loan. If the maturity date of a loan made under said sections has been extended by deferred payments, the maximum renewal period that such loan may be extended shall be the number of months such loan is deferred. When a contract is renewed or refinanced prior to twenty-four months and fifteen days where the original cash advance was one thousand dollars or less or thirty-six months and fifteen days where the original cash advance exceeded one thousand dollars but did not exceed one thousand eight hundred dollars, from the date of making such contract, such renewal or refinancing shall, for the purposes of this section, be deemed a separate loan transaction.
(i) Notwithstanding the provisions of subsection (a) of this section, on any loan secured by real property a licensee may include in the amount of the loan the following closing costs, provided such costs are bona fide, reasonable in amount and not assessed for the purpose of circumventing or otherwise limiting any applicable provision of sections 36a-555 to 36a-573, inclusive: (1) Fees or premiums for title examination, abstract of title, title insurance, surveys, or similar purposes; (2) appraisals, if made by a person who is not an employee or affiliated with the licensee, and (3) fees and taxes paid to public officials for the recording and release of any document related to the real estate security. A licensee may collect costs incurred in the event of foreclosure which shall not include any attorney's fee.
(j) No agreement with respect to a loan under sections 36a-555 to 36a-573, inclusive, may provide for charges resulting from default by the borrower, other than those authorized by said sections.
(1949 Rev., S. 5949; 1949, S. 2762d; 1957, P.A. 439, S. 3; 1963, P.A. 175, S. 2; 1969, P.A. 242, S. 2, 3; P.A. 73-419; P.A. 75-99, S. 1−4, 6; P.A. 77-129, S. 2−5; P.A. 80-45, S. 1, 2; P.A. 81-102, S. 1−3; P.A. 83-358, S. 1, 2; P.A. 92-12, S. 68; P.A. 97-13, S. 2; P.A. 00-164, S. 1.)
History: 1963 act incorporated previous provisions as Subsecs. (a) and (h) substituting "charges" for "interest" where occurring, raised loan limit in Subsec. (a) from six hundred to one thousand dollars "excluding charges" and changing method of calculating charges, raised limit in Subsec. (h) from six hundred to one thousand dollars, substituted twenty- four months and fifteen days for twenty months, deleted prohibition against granting additional loan to borrower until unpaid balance of previous loan is paid in full and required consideration of renewed or refinanced contract as separate loan transaction in same Subsec. and inserted Subsecs. (b) to (g); 1969 act increased loan limit in Subsecs. (a) and (h) to one thousand eight hundred dollars, raised amount charged on excess of three hundred dollars from nine to eleven dollars per hundred in Subsec. (a), specified applicability of provisions to loans under chapter in Subsec. (h) and made twenty- four month and fifteen day period applicable where cash advance was one thousand dollars or less and allowed thirty-six month and fifteen day period where advance exceeded that amount; P.A. 73-419 added provisions governing date when prepayment is deemed to have occurred in Subsec. (f); P.A. 75-99 raised loan limit in Subsecs. (a) and (h) from one thousand eight hundred to five thousand dollars and in Subsec. (a) made previous charge rates applicable to loans not exceeding former limit and added rates for other allowed loans, amending Subsec. (h) accordingly and adding reference to loans secured by real estate, replaced default charge of five cents per dollar with charge consisting of the lesser of five dollars or five cents per dollar and added Subsec. (i) authorizing loans in excess of one thousand eight hundred dollars if secured by real estate; P.A. 77-129 clarified loan limits in Subsec. (a) by referring to unsecured or secured loans and to types of security, made previous provisions of Subsec. (b) applicable to loans originally scheduled for repayment within forty-eight months and fifteen days and added provisions re loans with longer repayment period, deleted references to loans secured by real estate in Subsec. (h) and added provision which allowed extension of renewal period to the number of months loan maturity day has been extended through deferred payments and repealed Subsec. (i); P.A. 80-45 raised amount which determines charge rate in Subsec. (a)(1) from three hundred to six hundred dollars; P.A. 81-102 amended Subsec. (d) by increasing the maximum default charge from five dollars to seven dollars and fifty cents and establishing a minimum default charge of three dollars, and amended Subsec. (e) to make the length of the extension of the maturity of a contract subject to the original repayment period of the loan; P.A. 83-358 added Subsec. (j) concerning allowable closing costs on loans secured by real estate and added Subsec. (k) prohibiting unauthorized charges for default on any loan; P.A. 92-12 made technical changes; Sec. 36-233 transferred to Sec. 36a-563 in 1995; P.A. 97-13 increased limit from five thousand to fifteen thousand dollars in Subsecs. (a) and (h) and made technical changes (Revisor's note: A reference in Subsec. (a) to Secs. "36-555 to 36a-573", inclusive, was changed editorially by the Revisors to Secs. "36a-555 to 36a-573", inclusive; P.A. 00-164 amended Subsec. (h) by adding provision re service charges imposed for dishonored checks.
See Sec. 36a-565 (j) re inapplicability of section to certain open-end loans.
Annotations to former section 36-233:
Annotations to former statute which applied to loans not exceeding three hundred dollars. Loan violates this section and is void where it results in accommodation comaker becoming obligated for more than $300. 109 C. 116. Cited. 115 C. 104; 120 C. 155. Provision in chattel mortgage for attorney's fees in case of reclamation will render note void. 120 C. 193. Effect of receipt showing more than 3% interest was charged. 124 C. 349. Where no security was in fact given, erroneous printed statement as to security was not fatal. Id., 353.
Cited. 149 C. 159.
Subsec. (a):
Cited. 201 C. 89, 98.

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Sec. 36a-564. (Formerly Sec. 36-233a). "Cash advance" defined. As used in section 36a-563 and section 36a-568, "cash advance" means the cash or its equivalent received by the borrower or paid out on the borrower's behalf or at the borrower's direction or request.
(1963, P.A. 175, S. 8; P.A. 94-122, S. 265, 340.)
History: P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-233a transferred to Sec. 36a-564 in 1995.

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Sec. 36a-565. (Formerly Sec. 36-233b). Open-end loans. Annual percentage rate. Computation of interest. Loan charges. Credit life, accident and health insurance. (a) "Open-end loan" means a loan made by a licensee under sections 36a-555 to 36a-573, inclusive, pursuant to an agreement between the licensee and the borrower whereby: (1) The licensee may permit the borrower to obtain advances of money from the licensee from time to time or the licensee may advance money on behalf of the borrower from time to time as directed by the borrower, not exceeding at any one time an unpaid principal balance of fifteen thousand dollars; (2) the amount of each advance and permitted interest, charges and costs are debited to the borrower's account and payments and other credits are credited to the same account; (3) the interest is computed on the unpaid principal balance or balances of the account from time to time; (4) the borrower has the privilege of paying the account in full at any time or, if the account is not in default, in monthly installments of fixed or determinable amounts as provided in the agreement; and (5) the agreement expressly states that it covers open-end loans pursuant to said sections.
(b) "Billing cycle" means the time interval between periodic billing dates. A billing cycle shall be considered monthly if the closing date of the cycle is the same date each month or does not vary by more than four days from such date.
(c) A licensee may make open-end loans and may charge, contract for and receive thereon interest at an annual percentage rate not to exceed nineteen and eight-tenths per cent for any open-end loan agreement entered into on and after July 1, 1991. A licensee may also receive, pursuant to any such agreement entered into on and after July 1, 1991, one or more of the following charges if the agreement so provides: (1) An annual fee not to exceed fifty dollars for the privileges made available to the borrower under the open-end loan agreement; (2) a default charge subject to the conditions and restrictions set forth in subsection (d) of section 36a-563; (3) service charges that are imposed for a check that is dishonored as provided in subsection (i) of section 52-565a; and (4) reasonable attorneys' fees subject to the conditions and restrictions set forth in section 42-150aa. In addition to the charges provided for by this section, no further or other charge or amount for any examination, service, brokerage, commission or other thing, or otherwise, shall be directly or indirectly charged, contracted for or received. If interest or any charges in excess of those permitted by this section are charged, contracted for or received, except as the result of a bona fide error, the contract of loan shall be void and the licensee shall have no right to collect or receive any principal, interest or charges. No person shall owe any licensee, as such, at any time more than fifteen thousand dollars for principal as a borrower, comaker or guarantor for loans made under this section. As used in this section, the term "bona fide error" includes, but shall not be limited to, clerical, calculation, computer malfunction and programming and printing errors, but does not include an error of legal judgment with respect to a person's obligations under sections 36a-555 to 36a-573, inclusive.
(d) A licensee shall not compound interest or charges by adding any unpaid interest or charges authorized by this section to the unpaid principal balance of the borrower's account.
(e) Interest authorized by this section shall be computed in each billing cycle by any of the following methods: (1) By converting the annual percentage rate to a daily rate and multiplying such daily rate by the daily unpaid principal balance of the account, in which case the daily rate is determined by dividing the annual percentage rate by three hundred and sixty-five; or (2) by converting the annual percentage rate to a monthly rate and multiplying the monthly rate by the average daily unpaid principal balance of the account in the billing cycle, in which case the monthly rate is determined by dividing the annual percentage rate by twelve and the average daily unpaid principal balance is the sum of the amount unpaid each day during the cycle divided by the number of days in the cycle.
(f) For all of the methods of computation specified in subsection (e) of this section, the billing cycle shall be monthly and the unpaid principal balance on any day shall be determined by adding to any balance unpaid as of the beginning of that day all advances and other permissible amounts charged to the borrower and deducting all payments and other credits made or received that day.
(g) Credit life insurance and credit accident and health insurance may be sold to the borrower on open-end loans subject to the conditions and restrictions set forth in section 36a-566. In the case of credit life insurance, the amount of the insurance shall be sufficient to pay the total balance of the loan due on the date of the insured's death. The additional charge for credit life insurance and credit accident and health insurance shall be calculated in each billing cycle by applying the current monthly premium rate for such insurance, as such rate may be determined by the Insurance Commissioner, to the unpaid balances in the account, using any of the methods specified in subsection (e) of this section for the calculation of loan charges. No credit life insurance or credit accident and health insurance written in connection with an open-end loan shall be cancelled by the licensee because of delinquency of the borrower in the making of the required minimum payments on the loan unless one or more of such payments is past due for a period of ninety days or more; and the licensee shall advance to the insurer the amounts required to keep the insurance in force during such period, which amounts may be debited to the borrower's account. The borrower shall have the right to cancel credit accident and health insurance at any time by giving written notice of cancellation to the licensee. Such cancellation shall be effective at the end of the billing cycle in which the notice is received and the licensee shall discontinue any further charges for credit accident and health insurance.
(h) No licensee shall take any confession of judgment or any power of attorney. No licensee shall take a mortgage, lien, security interest in or assignment or pledge of household goods or assignment of wages as security for any open-end loan made pursuant to this section. No licensee shall take a security interest in chattels, tangible or intangible personal property, motor vehicles or real property to secure an open-end loan made pursuant to this section.
(i) A copy of the open-end loan agreement shall be delivered by the licensee to the borrower at the time the open-end account is opened.
(j) Sections 36a-563, 36a-567 and 36a-568 shall not apply to open-end loans made in accordance with the provisions of this section.
(P.A. 79-249; P.A. 89-338, S. 2; P.A. 90-99, S. 1, 2; P.A. 91-25, S. 1, 2; P.A. 95-28; P.A. 96-38; P.A. 00-164, S. 2.)
History: P.A. 89-338 increased the loan limit in Subsecs. (a) and (c) from five to ten thousand dollars and made one- hundred-twenty-month and fifteen-day payment period where a cash advance brought the balance in excess of five thousand dollars; P.A. 90-99 amended Subsec. (c) by defining "bona fide error" and amended Subsec. (h) by authorizing the sale of credit accident and health insurance on open-end loans and specifying borrowers right to terminate coverage; P.A. 91- 25 amended Subsec. (a) by adding "interest" to Subdiv. (2) and changing "charges are" to read "interest is" in Subdiv. (3), amended Subsec. (c) by limiting interest on open-end loans to an annual percentage rate not to exceed nineteen and eight- tenths per cent and adding Subdivs. (1) to (4), inclusive, re permissible loan charges, amended Subsec. (d) by adding "interest or", amended Subsec. (e) by changing "charges" to read "interest" and made technical changes to Subdivs. (f) and (g); Sec. 36-233b transferred to Sec. 36a-565 in 1995; P.A. 95-28 changed "ten" to "fifteen" in Subsecs. (a)(1), defining "open-end loan", and (c), deleted Subsec. (g) re maximum term for full payment and re maximum specified annual percentage rates, and relettered Subsecs. (h) to (k), inclusive, as Subsecs. (g) to (j) (Revisor's note: A reference in Subsec. (g) to "Commissioner of Insurance" was changed editorially by the Revisors to "Insurance Commissioner" for consistency with customary statutory usage; P.A. 96-38 amended Subsec. (c)(1) to increase permitted annual fee from "thirty-five" to "fifty" dollars; P.A. 00-164 amended Subsec. (c)(3) by replacing language re bad check charge with language re service charges for dishonored check.

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Sec. 36a-566. (Formerly Sec. 36-234). Credit life and accident and health insurance. (a) Subject to the conditions provided in this section, insurance may be sold to the borrower at his request (1) for insuring the life of persons obligated on a loan pursuant to sections 38a-645 to 38a-658, inclusive, and (2) providing accident and health insurance covering one person on a loan pursuant to sections 38a-645 to 38a-658, inclusive. Credit accident and health insurance shall not provide indemnity against the risk of a borrower becoming disabled for a period of less than fourteen days, except that it may provide for retroactive coverage if the disability continues for the period stated in the policy. Irrespective of the number of obligors only one obligor may be insured, except that life insurance may cover both a borrower and such borrower's spouse where both are obligors on a loan. A licensee shall not require the purchasing of insurance as a condition precedent to the making of a loan. A licensee shall, both verbally and in writing, inform the borrower prior to his entering into any loan contract of his right not to purchase credit insurance. Any gain or benefit to the licensee directly or indirectly from such insurance or the sale or provision thereof shall not be deemed to be additional or further charges, interest or consideration in connection with a loan made under sections 36a-555 to 36a-573, inclusive, nor a charge in excess of that permitted by said sections.
(b) If a borrower obtains credit accident and health insurance, the borrower shall have the right for a period of fifteen days after the loan is made to cancel the entire insurance coverage. Notification of this right shall be made in the borrower's insurance election. All persons obligated on the loan must agree in writing to the cancellation and return all certificates. Upon cancellation, the licensee shall, at his option, either refund the insurance charges to the borrower or apply them to the unpaid balance of the loan.
(1957, P.A. 439, S. 5; 1959, P.A. 555; 1963, P.A. 175, S. 3; 1969, P.A. 242, S. 4; P.A. 79-134; P.A. 83-345, S. 1, 2.)
History: 1959 act expanded and clarified insurance refund provisions; 1963 act clarified provision re amount of life insurance required; 1969 act deleted detailed provisions re insurance amounts, charges and refunds and specified that gain or benefit to licensee not deemed additional or excess charges; P.A. 79-134 added exception re coverage of married couple; P.A. 83-345 authorized the providing of accident and health insurance covering one person on a loan, required licensees to inform the borrower of his right not to purchase credit insurance and permitted borrowers to cancel any insurance coverage up to fifteen days after the loan is made; Sec. 36-234 transferred to Sec. 36a-566 in 1995.

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Sec. 36a-567. (Formerly Sec. 36-235). Prepayment of loan; receipts to borrower. Every licensee shall (1) permit payment of the loan in whole or in part prior to its maturity, and (2) upon repayment of the loan in full, mark indelibly each paper signed by the borrower with the word "paid" or "cancelled", and cancel and return any note or, in lieu thereof, transmit or deliver to the borrower a duplicate of the original document clearly identifying the loan, showing such loan has been paid in full and the note cancelled.
(1949 Rev., S. 5950; 1949, S. 2763d; 1963, P.A. 175, S. 4; 1969, P.A. 454, S. 35; P.A. 92-12, S. 69; P.A. 94-84.)
History: 1963 act specified in Subdiv. (a) that only certain Subsecs. of Sec. 36-233 need be stated, and amended Subdiv. (b) to require receipt for cash payments only where previously receipt required for all forms of payments; 1969 act deleted former Subdivs. (a) and (b) which required delivery to borrower of statement containing amount owed, scheduled payments, etc. and receipts for cash payments, relettering accordingly; P.A. 92-12 made technical changes; P.A. 94-84 authorized returning to the borrower a duplicate of the original document clearly identifying the loan, showing such loan has been paid in full and the note cancelled; Sec. 36-235 transferred to Sec. 36a-567 in 1995.
See Sec. 36a-565 (j) re inapplicability of section to certain open-end loans.
Annotations to former section 36-235:
Actual amount of loan must be stated; "for value received" and amount of note are not sufficient. 115 C. 102. Rate of interest must be clearly stated. Id. Under former requirement of statement re maturity, failure to state all contingencies which would accelerate payment of principal rendered note unenforceable. 120 C. 152; 124 C. 349. Not necessary that receipt state period for which interest was due or state balance due. 124 C. 351. Statement held insufficient because it stated different day of week for instalment payments from day designated in note. 127 C. 523.

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Sec. 36a-568. (Formerly Sec. 36-236). Form of security restricted. Loan contract. No licensee shall take any confession of judgment or any power of attorney, nor shall he take any note or promise to pay that does not state the actual amount of the loan, the time for which it is made and the charges, or any instrument in which blanks are left to be filled after the loan is made. No licensee shall take a mortgage, lien, security interest in or assignment or pledge of household goods or an assignment of wages as security for any loan made under sections 36a-555 to 36a-573, inclusive. A licensee may take a security interest in chattels or personal property other than household goods, except a security interest in an automobile may not be taken as security for any loan where the cash advance is one thousand eight hundred dollars or less. A licensee may take a security interest in real estate on loans made under said sections where the cash advance is in excess of one thousand eight hundred dollars, but may not take such a security interest in real estate where the cash advance is one thousand eight hundred dollars or less. A contract for a loan under said sections shall not originally schedule any repayment of the cash advance over a period in excess of twenty-four months and fifteen days if the amount of the original cash advance was one thousand dollars or less or thirty-six months and fifteen days if the amount of the original cash advance was more than one thousand dollars but not in excess of one thousand eight hundred dollars or seventy-two months and fifteen days if the amount of the original cash advance was in excess of one thousand eight hundred dollars, and shall be repayable in installments of cash advance and charges combined which are substantially equal in amount or so arranged that no installment is substantially greater in amount than any preceding installment and which are payable at approximately equal intervals not exceeding one month, except that the first installment may be payable not more than one month and fifteen days after the date of such contract. The requirements of section 36a-785 shall apply to any repossession under sections 36a-555 to 36a-573, inclusive, of property other than real estate.
(1949 Rev., S. 5951; 1949, S. 2764d; 1963, P.A. 175, S. 5; 1969, P.A. 242, S. 5; 454, S. 36; P.A. 75-99, S. 5, 6; P.A. 77-129, S. 6.)
History: 1963 act rephrased provisions and increased maximum repayment period from twenty months to twenty-four months and fifteen days and time for payment of first instalment from forty-five days to one month and fifteen days; 1969 acts prohibited taking mortgage or lien except as authorized in Sec. 36-234, made previous repayment period applicable to loans not exceeding one thousand dollars and allowed thirty-six months and fifteen days for larger loans and deleted provision prohibiting licensee from taking any note or promise to pay which "does not state the actual amount of the loan, the time for which it is made and the charges" and from taking "any instrument in which blanks are left to be filled after the loan is made"; P.A. 75-99 specified conditions for taking security interest in real estate and stated that time for repayment of loan secured by real estate may not be restricted; P.A. 77-129 clarified use of chattels and personal property as loan security and deleted reference to security authorized in Sec. 36-234, allowed repayment period of seventy-two months and fifteen days in cases where cash advance exceeded one thousand eight hundred dollars, deleted statement that time for loan repayment where loan secured by real estate is not to be limited and added provision re applicability of Sec. 42-98 to repossession of property other than real estate; Sec. 36-236 transferred to Sec. 36a-568 in 1995.
See Sec. 36a-564 re definition of "cash advance".
See Sec. 36a-565(j) re inapplicability of section to certain open-end loans.
Annotations to former section 36-236:
Cited. 115 C. 105.

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Sec. 36a-569. (Formerly Sec. 36-237). Records. Reports to commissioner. Each licensee shall keep books and records at the place of business specified in the license in such form and in such manner as the commissioner prescribes and shall preserve all books, accounts and records, including cards used in the card system, if any, for at least two years after making the final entry recorded therein. Each such licensee shall, annually, on or before January thirtieth, furnish a sworn statement of the condition of the business of such licensee as of December thirty-first, together with such other information and statements as the commissioner may, from time to time, require. Each licensee which fails to furnish any such sworn statement or required information in connection with this section, shall pay to the state ten dollars for each day that such failure continues, unless excused by the commissioner for cause. The commissioner may, upon the failure of any such licensee to furnish such sworn statement or other information, after a hearing thereon, cancel the license of such licensee.
(1949 Rev., S. 5946; 1951, S. 2760d; 1971, P.A. 199.)
History: 1971 act imposed ten-dollar penalty for each day that licensee fails to furnish required information or sworn statement; Sec. 36-237 transferred to Sec. 36a-569 in 1995.

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Sec. 36a-570. (Formerly Sec. 36-239). Regulations. The commissioner may adopt such regulations, in accordance with chapter 54, and make such findings as may be necessary for the conduct of the small loan business and the enforcement of the provisions of sections 36a-555 to 36a-573, inclusive.
(1949 Rev., S. 5948 (3); P.A. 94-122, S. 266, 340.)
History: P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-239 transferred to Sec. 36a-570 in 1995.

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Sec. 36a-571. (Formerly Sec. 36-241). License suspension. At any time during any investigation of any licensee under the provisions of sections 36a-555 to 36a-573, inclusive, the commissioner may, without notice or hearing, suspend any license for a period not to exceed fifteen days. Nothing herein shall prevent any licensee, during any period his license may be suspended, from collecting any interest or principal payments on loans lawfully made under the provisions of said sections.
(1949 Rev., S. 5948 (2).)
History: Sec. 36-241 transferred to Sec. 36a-571 in 1995.

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Sec. 36a-572. (Formerly Sec. 36-242). License revocation. The commissioner may, in accordance with section 36a-51, revoke any license issued under the provisions of section 36a-556 if the commissioner finds that the licensee has failed to pay the annual license fee or has violated any provision of sections 36a-555 to 36a-573, inclusive, or any regulation or order lawfully made pursuant to and within the authority of said sections, or if the commissioner finds that any fact or condition exists which, if it had existed at the time of the original application for the license, clearly would have warranted refusing to issue such license.
(1949 Rev., 5942; 1949, S. 2758d; P.A. 74-254, S. 5; P.A. 78-303, S. 53, 136; P.A. 94-122, S. 267, 340.)
History: P.A. 74-254 required that notice be in form required in Sec. 4-177(b) rather than that it state "the contemplated action and in general the grounds therefor"; P.A. 78-303 deleted requirement that at least one member of banking commission (in addition to commissioner) find fact or condition which would warrant refusal to issue license as ground for revocation, that commission having been abolished by P.A. 77-614; P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-242 transferred to Sec. 36a-572 in 1995.

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Sec. 36a-573. (Formerly Sec. 36-243). Charge of greater than legal interest. No person, except as authorized by the provisions of sections 36a-555 to 36a-573, inclusive, shall, directly or indirectly, charge, contract for or receive any interest, charge or consideration greater than twelve per cent per annum upon the loan, use or forbearance of money or credit of the amount or value of (1) five thousand dollars or less for any such transaction entered into before October 1, 1997, and (2) fifteen thousand dollars or less for any such transaction entered into on and after October 1, 1997. The provisions of this section shall apply to any person who, as security for any such loan, use or forbearance of money or credit, makes a pretended purchase of property from any person and permits the owner or pledgor to retain the possession thereof, or who, by any device or pretense of charging for the person's services or otherwise, seeks to obtain a greater compensation than twelve per cent per annum. No loan for which a greater rate of interest or charge than is allowed by the provisions of sections 36a-555 to 36a-573, inclusive, has been contracted for or received, wherever made, shall be enforced in this state, and any person in any way participating therein in this state shall be subject to the provisions of said sections, provided, a loan lawfully made after June 5, 1986, in compliance with a validly enacted licensed loan law of another state to a borrower who was not, at the time of the making of such loan, a resident of Connecticut but who has become a resident of Connecticut, may be acquired by a licensee and its interest provision shall be enforced in accordance with its terms.
(1949 Rev., S. 5952; 1949, S. 2765d; 1957, P.A. 439, S. 4; 1963, P.A. 175, S. 7; 1969, P.A. 242, S. 7; P.A. 77-129, S. 7; P.A. 86-216, S. 1, 3; P.A. 94-122, S. 268, 340; P.A. 97-13, S. 3.)
History: 1963 act included "charge" in provision re twelve per cent interest and raised applicable loan limit from six hundred to one thousand dollars; 1969 act raised limit to one thousand eight hundred dollars and deleted reference to loan, etc. of "goods or things in action"; P.A. 77-129 raised limit to five thousand dollars and added proviso re loans exceeding allowed interest rate or charge; P.A. 86-216 amended section to permit a licensed small loan company to enforce an interest provision against an out of state borrower who becomes a Connecticut resident, even if the interest rate exceeds the maximum rate permitted under Connecticut law; P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36- 243 transferred to Sec. 36a-573 in 1995; P.A. 97-13 increased limit from five thousand to fifteen thousand dollars for loan transactions entered into on and after October 1, 1997.
Annotations to former section 36-243:
Under former statute note is void and unenforceable if maker owes licensee more than $300. 109 C. 116. Cited. 115 C. 106; 149 C. 159.
Cited. 149 C. 159. Cited. 201 C. 89, 99.

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Secs. 36a-574 to 36a-579. Reserved for future use.

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CHAPTER 668NONDEPOSITORY FINANCIAL INSTITUTIONS

PART IMORTGAGE LENDERS AND BROKERS

(A)NONDEPOSITORY FIRST MORTGAGE LENDERS AND BROKERS

(B)*SECONDARY MORTGAGE LENDERS

(C)GENERAL PROVISIONS

PART II*FINANCE COMPANIES

PART III*SMALL LOAN LENDERS

PART IVCHECK CASHING SERVICES

PART VMONEY ORDERS, TRAVELERS CHECKS AND ELECTRONIC PAYMENT INSTRUMENTS

PART VILOAN BROKERS

PART VIICONNECTICUT BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATION ACT

CHAPTER 668
NONDEPOSITORY FINANCIAL INSTITUTIONS

PART I
MORTGAGE LENDERS AND BROKERS

(A)
NONDEPOSITORY FIRST MORTGAGE LENDERS AND BROKERS

(B)*
SECONDARY MORTGAGE LENDERS

(C)
GENERAL PROVISIONS

PART II*
FINANCE COMPANIES

PART III*
SMALL LOAN LENDERS

PART IV
CHECK CASHING SERVICES

PART V
MONEY ORDERS, TRAVELERS CHECKS
AND ELECTRONIC PAYMENT INSTRUMENTS

PART VI
LOAN BROKERS

PART VII
CONNECTICUT BUSINESS AND INDUSTRIAL
DEVELOPMENT CORPORATION ACT