AN ACT CONCERNING MORTGAGE LENDING.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. Section 36a-2 of the 2008 supplement to the general statutes, as amended by section 2 of public act 07-156, is repealed and the following is substituted in lieu thereof (Effective September 30, 2008):

As used in this title, unless the context otherwise requires:

(1) "Affiliate" of a person means any person controlling, controlled by, or under common control with, that person;

(2) "Applicant" with respect to any license or approval provision pursuant to this title means a person who applies for that license or approval;

(3) "Automated teller machine" means a stationary or mobile unattended device, including a satellite device but excluding a point of sale terminal, at which banking transactions, including, but not limited to, deposits, withdrawals, advances, payments or transfers, may be conducted;

(4) "Bank" means a Connecticut bank or a federal bank;

(5) "Bank and trust company" means an institution chartered or organized under the laws of this state as a bank and trust company;

(6) "Bank holding company" has the meaning given to that term in 12 USC Section 1841(a), as amended from time to time, [amended,] except that the term "bank", as used in 12 USC Section 1841(a) includes a bank or out-of-state bank that functions solely in a trust or fiduciary capacity;

(7) "Capital stock" when used in conjunction with any bank or out-of-state bank means a bank or out-of-state bank that is authorized to accumulate funds through the issuance of its capital stock;

(8) "Client" means a beneficiary of a trust for whom the Connecticut bank acts as trustee, a person for whom the Connecticut bank acts as agent, custodian or bailee, or other person to whom a Connecticut bank owes a duty or obligation under a trust or other account administered by such Connecticut bank, regardless of whether such Connecticut bank owes a fiduciary duty to the person;

(9) "Club deposit" means deposits to be received at regular intervals, the whole amount deposited to be withdrawn by the owner or repaid by the bank in not more than fifteen months from the date of the first deposit, and upon which no interest or dividends need to be paid;

(10) "Commissioner" means the Banking Commissioner and, with respect to any function of the commissioner, includes any person authorized or designated by the commissioner to carry out that function;

(11) "Company" means any corporation, joint stock company, trust, association, partnership, limited partnership, unincorporated organization, limited liability company or similar organization, but does not include (A) any corporation the majority of the shares of which are owned by the United States or by any state, or (B) any trust which by its terms shall terminate within twenty-five years or not later than twenty-one years and ten months after the death of beneficiaries living on the effective date of the trust;

(12) "Connecticut bank" means a bank and trust company, savings bank or savings and loan association chartered or organized under the laws of this state;

(13) "Connecticut credit union" means a cooperative, nonprofit financial institution that (A) is organized under chapter 667 and the membership of which is limited as provided in section 36a-438a, (B) operates for the benefit and general welfare of its members with the earnings, benefits or services offered being distributed to or retained for its members, and (C) is governed by a volunteer board of directors elected by and from its membership;

(14) "Connecticut credit union service organization" means a credit union service organization that is incorporated under the laws of this state, located in this state and established by at least one Connecticut credit union;

(15) "Consolidation" means a combination of two or more institutions into a new institution; all institutions party to the consolidation, other than the new institution, are "constituent" institutions; the new institution is the "resulting" institution;

(16) "Control" has the meaning given to that term in 12 USC Section 1841(a), as amended from time to time; [amended;]

(17) "Credit union service organization" means an entity organized under state or federal law to provide credit union service organization services primarily to its members, to Connecticut credit unions, federal credit unions and out-of-state credit unions other than its members, and to members of any such other credit unions;

(18) "Customer" means any person using a service offered by a financial institution;

(19) "Demand account" means an account into which demand deposits may be made;

(20) "Demand deposit" means a deposit that is payable on demand, a deposit issued with an original maturity or required notice period of less than seven days or a deposit representing funds for which the bank does not reserve the right to require at least seven days' written notice of the intended withdrawal, but does not include any time deposit;

(21) "Deposit" means funds deposited with a depository;

(22) "Deposit account" means an account into which deposits may be made;

(23) "Depositor" includes a member of a mutual savings and loan association;

(24) "Director" means a member of the governing board of a financial institution;

(25) "Equity capital" means the excess of a Connecticut bank's total assets over its total liabilities, as defined in the instructions of the federal Financial Institutions Examination Council for consolidated reports of condition and income;

(26) "Executive officer" means every officer of a Connecticut bank who participates or has authority to participate, otherwise than in the capacity of a director, in major policy-making functions of such bank, regardless of whether such officer has an official title or whether that title contains a designation of assistant and regardless of whether such officer is serving without salary or other compensation. The president, vice president, secretary and treasurer of such bank are deemed to be executive officers, unless, by resolution of the governing board or by such bank's bylaws, any such officer is excluded from participation in major policy-making functions, otherwise than in the capacity of a director of such bank, and such officer does not actually participate in such policy-making functions;

(27) "Federal agency" has the meaning given to that term in 12 USC Section 3101, as amended from time to time; [amended;]

(28) "Federal bank" means a national banking association, federal savings bank or federal savings and loan association having its principal office in this state;

(29) "Federal branch" has the meaning given to that term in 12 USC Section 3101, as amended from time to time; [amended;]

(30) "Federal credit union" means any institution chartered or organized as a federal credit union pursuant to the laws of the United States having its principal office in this state;

(31) "Fiduciary" means a person undertaking to act alone or jointly with others primarily for the benefit of another or others in all matters connected with its undertaking and includes a person acting in the capacity of trustee, executor, administrator, guardian, assignee, receiver, conservator, agent, custodian under the Connecticut Uniform Gifts to Minors Act or the Uniform Transfers to Minors Act, and acting in any other similar capacity;

(32) "Financial institution" means any Connecticut bank, Connecticut credit union, or other person whose activities in this state are subject to the supervision of the commissioner, but does not include a person whose activities are subject to the supervision of the commissioner solely pursuant to chapter 672a, 672b or 672c or any combination thereof;

(33) "Foreign bank" has the meaning given to that term in 12 USC Section 3101, as amended from time to time; [amended;]

(34) "Foreign country" means any country other than the United States and includes any colony, dependency or possession of any such country;

(35) "Governing board" means the group of persons vested with the management of the affairs of a financial institution irrespective of the name by which such group is designated;

(36) "High cost home loan" means any loan or extension of credit, including an open-end line of credit but excluding a reverse mortgage transaction, as defined in 12 CFR 226.33, as amended from time to time:

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

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

(C) In which the loan is secured by a mortgage upon any interest in one to four-family residential property, as defined in section 36a-485 of the 2008 supplement to the general statutes, as amended by this act, located in this state that is, or, when the loan is made, intended to be used or occupied by the borrower as a principal residence;

(D) In which, in the case of:

(i) A first mortgage loan, as defined in section 36a-485 of the 2008 supplement to the general statutes, as amended by this act, that does not exceed the conforming loan limit, the APR is greater than three percentage points above the yield on United States Treasury securities having comparable periods of maturity, as of the fifteenth day of the preceding month if the rate is set between the first and the fourteenth day of the month, and as of the fifteenth day of the current month if the rate is set on or after the fifteenth day;

(ii) A secondary mortgage loan, as defined in section 36a-485 of the 2008 supplement to the general statutes, as amended by this act, that does not exceed the conforming loan limit, the APR is greater than five percentage points above the yield on United States Treasury securities having comparable periods of maturity, as of the fifteenth day of the preceding month if the rate is set between the first and the fourteenth day of the month, and as of the fifteenth day of the current month if the rate is set on or after the fifteenth day; or

(iii) A mortgage loan, as defined in section 36a-485 of the 2008 supplement to the general statutes, as amended by this act, that exceeds the conforming loan limit, the APR is greater than four percentage points above the yield on United States Treasury securities having comparable periods of maturity, as of the fifteenth day of the preceding month if the rate is set between the first and the fourteenth day of the month, and as of the fifteenth day of the current month if the rate is set on or after the fifteenth day.

(iv) As used in this subparagraph, "conforming loan limit" means the conforming loan limit as established from time to time by Fannie Mae.

(v) For the purpose of this subparagraph, the dollar amount of the bona fide discount points, as defined in section 36a-485 of the 2008 supplement to the general statutes, as amended by this act, does not have to be included when calculating the APR;

[(36)] (37) "Holding company" means a bank holding company or a savings and loan holding company, except, as used in sections 36a-180 to 36a-191, inclusive, "holding company" means a company that controls a bank;

[(37)] (38) "Insured depository institution" has the meaning given to that term in 12 USC Section 1813, as amended from time to time; [amended;]

[(38)] (39) "Licensee" means any person who is licensed or required to be licensed pursuant to the applicable provisions of this title;

[(39)] (40) "Loan" includes any line of credit or other extension of credit;

[(40)] (41) "Merger" means the combination of one or more institutions with another which continues its corporate existence; all institutions party to the merger are "constituent" institutions; the merging institution which upon the merger continues its existence is the "resulting" institution;

[(41)] (42) "Mutual" when used in conjunction with any institution that is a bank or out-of-state bank means any such institution without capital stock;

[(42)] (43) "Mutual holding company" means a mutual holding company organized under sections 36a-192 to 36a-199, inclusive, and unless otherwise indicated, a subsidiary holding company controlled by a mutual holding company organized under sections 36a-192 to 36a-199, inclusive;

[(43)] (44) ["National] "Nation-wide mortgage licensing system" means the [national] nation-wide mortgage licensing system [to be] implemented pursuant to a uniform mortgage licensing project under the auspices of the Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators;

[(44)] (45) "Out-of-state" includes any state other than Connecticut and any foreign country;

[(45)] (46) "Out-of-state bank" means any institution that engages in the business of banking, but does not include a bank, Connecticut credit union, federal credit union or out-of-state credit union;

[(46)] (47) "Out-of-state credit union" means any credit union other than a Connecticut credit union or a federal credit union;

[(47)] (48) "Out-of-state trust company" means any company chartered to act as a fiduciary but does not include a company chartered under the laws of this state, a bank, an out-of-state bank, a Connecticut credit union, a federal credit union or an out-of-state credit union;

[(48)] (49) "Person" means an individual, company, including a company described in subparagraphs (A) and (B) of subdivision (11) of this section, or any other legal entity, including a federal, state or municipal government or agency or any political subdivision thereof;

[(49)] (50) "Point of sale terminal" means a device located in a commercial establishment at which sales transactions can be charged directly to the buyer's deposit, loan or credit account, but at which deposit transactions cannot be conducted;

(51) "Principal amount of the loan" means the gross loan amount the borrower is obligated to repay including any prepaid finance charge as defined in section 36a-746a, as amended by this act, and other charges that are financed;

[(50)] (52) "Reorganized savings bank" means any savings bank incorporated and organized in accordance with sections 36a-192 and 36a-193;

[(51)] (53) "Reorganized savings and loan association" means any savings and loan association incorporated and organized in accordance with sections 36a-192 and 36a-193;

[(52)] (54) "Reorganized savings institution" means any reorganized savings bank or reorganized savings and loan association;

[(53)] (55) "Representative office" has the meaning given to that term in 12 USC Section 3101, as amended from time to time; [amended;]

[(54)] (56) "Reserves for loan and lease losses" means the amounts reserved by a Connecticut bank against possible loan and lease losses as shown on the bank's consolidated reports of condition and income;

[(55)] (57) "Retail deposits" means any deposits made by individuals who are not "accredited investors", as defined in 17 CFR [Section] 230.501(a);

[(56)] (58) "Satellite device" means an automated teller machine which is not part of an office of the bank, Connecticut credit union or federal credit union which has established such machine;

[(57)] (59) "Savings account" means a deposit account, other than an escrow account established pursuant to section 49-2a, into which savings deposits may be made and which account must be evidenced by periodic statements delivered at least semiannually or by a passbook;

[(58)] (60) "Savings and loan association" means an institution chartered or organized under the laws of this state as a savings and loan association;

[(59)] (61) "Savings bank" means an institution chartered or organized under the laws of this state as a savings bank;

[(60)] (62) "Savings deposit" means any deposit other than a demand deposit or time deposit on which interest or a dividend is paid periodically;

[(61)] (63) "Savings and loan holding company" has the meaning given to that term in 12 USC Section 1467a, as amended from time to time; [amended;]

[(62)] (64) "Share account holder" means a person who maintains a share account in a Connecticut credit union, federal credit union or out-of-state credit union that maintains in this state a branch, as defined in section 36a-435b;

[(63)] (65) "State" means any state of the United States, the District of Columbia, any territory of the United States, Puerto Rico, Guam, American Samoa, the trust territory of the Pacific Islands, the Virgin Islands and the Northern Mariana Islands;

[(64)] (66) "State agency" has the meaning given to that term in 12 USC Section 3101, as amended from time to time; [amended;]

[(65)] (67) "State branch" has the meaning given to that term in 12 USC Section 3101, as amended from time to time; [amended;]

[(66)] (68) "Subsidiary" has the meaning given to that term in 12 USC Section 1841(d), as amended from time to time; [amended;]

[(67)] (69) "Subsidiary holding company" means a stock holding company, controlled by a mutual holding company, that holds one hundred per cent of the stock of a reorganized savings institution;

[(68)] (70) "Supervisory agency" means: (A) The commissioner; (B) the Federal Deposit Insurance Corporation; (C) the Resolution Trust Corporation; (D) the Office of Thrift Supervision; (E) the National Credit Union Administration; (F) the Board of Governors of the Federal Reserve System; (G) the United States Comptroller of the Currency; and (H) any successor to any of the foregoing agencies or individuals;

[(69)] (71) "Time account" means an account into which time deposits may be made;

[(70)] (72) "Time deposit" means a deposit that the depositor or share account holder does not have a right and is not permitted to make withdrawals from within six days after the date of deposit, unless the deposit is subject to an early withdrawal penalty of at least seven days' simple interest on amounts withdrawn within the first six days after deposit, subject to those exceptions permissible under 12 CFR Part 204, as amended from time to time; [amended;]

[(71)] (73) "Trust bank" means a Connecticut bank organized to function solely in a fiduciary capacity; and

[(72)] (74) "Uninsured bank" means a Connecticut bank that does not accept retail deposits and for which insurance of deposits by the Federal Deposit Insurance Corporation or its successor agency is not required.

Sec. 2. Section 36a-3 of the 2008 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective September 30, 2008):

Other definitions applying to this title or to specified parts thereof and the sections in which they appear are:

Sec. 3. Subsection (d) of section 36a-21 of the 2008 supplement to the general statutes, as amended by section 3 of public act 07-156, is repealed and the following is substituted in lieu thereof (Effective September 30, 2008):

(d) The provisions of this section shall not apply to the disclosure of (1) any record that is maintained by the commissioner with the [national] nation-wide mortgage licensing system to any supervisory, governmental or law enforcement agency that is authorized to access such record on the system, provided such record shall remain the property of the Department of Banking and may not be further disclosed to any person without the consent of the commissioner, or (2) any record of a licensee that is maintained by the commissioner with such system to such licensee. No person may obtain information from the [national] nation-wide mortgage licensing system that could not otherwise be obtained under state law. No information obtained from the [national] nation-wide mortgage licensing system shall be admissible as evidence in, or used to initiate, a civil proceeding in this state unless such information would otherwise be admissible in such proceeding under state law.

Sec. 4. Section 36a-56 of the general statutes is repealed and the following is substituted in lieu thereof (Effective September 30, 2008):

Any person who knowingly makes any false statement or report, or wilfully overvalues any land, property or security, with intent to defraud and for the purpose of influencing in any way the action of a bank, out-of-state bank that maintains in this state a branch as defined in section 36a-410 of the 2008 supplement to the general statutes, Connecticut credit union, small loan licensee or any [first or secondary] person licensed as a mortgage lender or mortgage broker, [licensee,] as defined in section 36a-485 of the 2008 supplement to the general statutes, as amended by this act, upon any application, advance, commitment, loan or extension of credit, or any change, extension, renewal or refinancing thereof, or the acceptance, release or substitution of security therefor, and upon which such out-of-state bank, credit union or licensee relies in taking such action, shall be [fined not more than five hundred dollars or imprisoned not more than one year, or both] guilty of a class D felony. A finding by the commissioner as a result of an investigation of any such making or overvaluing shall be considered a violation of this section for purposes of the administrative enforcement of sections 36a-50 to 36a-53, inclusive, of the 2008 supplement to the general statutes. The commissioner shall refer to the Chief State's Attorney any evidence found by the commissioner of a criminal violation of the provisions of this section.

Sec. 5. Subdivision (6) of subsection (c) of section 36a-65 of the general statutes is repealed and the following is substituted in lieu thereof (Effective September 30, 2008):

(6) A licensee under section 36a-489 [, 36a-513] of the 2008 supplement to the general statutes, as amended by this act, 36a-541, 36a-556, 36a-581, 36a-600, 36a-628, 36a-656 or 36a-801 shall pay to the commissioner the actual cost of any examination of the licensee, as such cost is determined by the commissioner. If the licensee fails to pay such cost not later than thirty days after receipt of demand from the commissioner, the commissioner shall automatically suspend the license until such costs are paid.

Sec. 6. Section 36a-485 of the 2008 supplement to the general statutes, as amended by section 4 of public act 07-156, is repealed and the following is substituted in lieu thereof (Effective September 30, 2008):

As used in this section and sections 36a-486 to 36a-498a, inclusive, of the 2008 supplement to the general statutes, as amended by this act, and sections 20 to 26, inclusive, of this act, unless the context otherwise requires:

(1) "Advance fee" means any consideration paid or given, directly or indirectly, to a mortgage lender [, first] or mortgage broker [or originator] required to be licensed pursuant to sections 36a-485 to 36a-498a, inclusive, of the 2008 supplement to the general statutes, as amended by this act, and sections 20 to 26, inclusive, of this act, prior to the closing of a [first] mortgage loan to any person, including, but not limited to, loan fees, points, broker's fees or commissions, transaction fees or similar prepaid finance charges;

(2) "Advertise" or "advertisement" means the use of [media, mail, computer, telephone, personal contact or any other means to offer the opportunity for a first mortgage loan] any announcement, statement, assertion or representation that is placed before the public in a newspaper, magazine or other publication, or in the form of a notice, circular, pamphlet, letter or poster or over any radio or television station, by means of the Internet, or by other electronic means of distributing information, by personal contact, or in any other way;

[(3) "First mortgage broker" means a person who, for a fee, commission or other valuable consideration, directly or indirectly, negotiates, solicits, arranges, places or finds a first mortgage loan that is to be made by a mortgage lender, whether or not the mortgage lender is required to be licensed under sections 36a-485 to 36a-498a, inclusive;

(4) "First mortgage correspondent lender" means a person engaged in the business of making first mortgage loans in such person's own name where the loans are not held by such person for more than ninety days and are funded by another person through a warehouse agreement, table funding agreement or similar agreement;

(5) "First mortgage lender" means a person engaged in the business of making first mortgage loans: (A) In such person's own name utilizing such person's own funds, or (B) by funding loans through a table funding agreement;]

(3) "Bona fide discount points" means the points that a borrower agrees to pay for the express purpose of reducing the interest rate applicable to a mortgage loan and which results in a bona fide reduction of the interest rate;

(4) "Correspondent lender" means a person engaged in the business of making mortgage loans in such person's own name where the loans are not held by such person for more than ninety days and are funded by another person through a warehouse agreement, table funding agreement or similar agreement;

[(6)] (5) "First mortgage loan" means a loan or an extension of credit, including, but not limited to, an extension of credit pursuant to a contract or an assigned contract for the sale of goods or services, made to a natural person, the proceeds of which are to be used primarily for personal, family or household purposes, and which is secured by a first mortgage upon any interest in one-to-four-family [residential] owner-occupied [real] residential property located in this state which is not subject to any prior mortgages and includes the renewal or refinancing of an existing first mortgage loan;

(6) "Lender" means a person engaged in the business of making mortgage loans in such person's own name utilizing such person's own funds or by funding loans through a warehouse agreement, table funding agreement or similar agreement;

(7) "Mortgage broker" means a person who, for a fee, commission or other valuable consideration, directly or indirectly, negotiates, solicits, arranges, places or finds a mortgage loan that is to be made by a mortgage lender, whether or not the mortgage lender is required to be licensed under sections 36a-485 to 36a-498a, inclusive, of the 2008 supplement to the general statutes, as amended by this act, and sections 20 to 26, inclusive, of this act;

[(7)] (8) "Mortgage lender" means a [first mortgage] lender, a [first mortgage] correspondent lender, or both;

(9) "Mortgage loan" means a first mortgage loan or secondary mortgage loan;

(10) "Office" means a location at which a licensee or any person, on behalf of a licensee, acts as a mortgage lender or mortgage broker;

[(8)] (11) "Originator" means an individual who is employed or retained by, or otherwise acts on behalf of, a mortgage lender or [first] mortgage broker [that is licensed or required to be licensed under sections 36a-485 to 36a-498a, inclusive] licensee who, for, or with the expectation of, a fee, commission or other valuable consideration, [to take] takes an application for or [negotiate, solicit, arrange or find a first] negotiates, solicits, arranges or finds a mortgage loan. "Originator" does not include (1) an officer, if the [mortgage lender or first mortgage broker] licensee is a corporation; a general partner, if the licensee is a partnership; a member, if the licensee is a limited liability company; or a sole proprietor, if the licensee is a sole proprietorship, or (2) an individual whose responsibilities are limited to clerical and administrative tasks and who does not solicit borrowers, arrange or find mortgage loans, take applications or negotiate the terms of loans;

(12) "Points" means the percentage of the principal amount of a mortgage loan payable by the borrower in connection with the loan;

[(9)] (13) "Residential property" means improved real property used or occupied, or intended to be used or occupied, for residential purposes;

(14) "Secondary mortgage loan" means (A) a loan or an extension of credit, including, but not limited to, an extension of credit pursuant to a contract or an assigned contract for the sale of goods or services, made to a natural person, the proceeds of which are to be used primarily for personal, family or household purposes, and that is secured in whole or in part by a mortgage upon any interest in one to four-family owner-occupied residential property located in this state, provided such property is subject to one or more prior mortgages, and (B) the renewal or refinancing of any existing loan or extension of credit described in subparagraph (A) of this subdivision;

[(10)] (15) "Simulated check" means a document that imitates or resembles a check but is not a negotiable instrument;

[(11)] (16) "Table funding agreement" means an agreement wherein a person agrees to fund mortgage loans to be made in another person's name and to purchase such loans after they are made; and

[(12)] (17) "Warehouse agreement" means an agreement to provide credit to a person to enable the person to have funds to make mortgage loans and hold such loans pending sale to other persons.

Sec. 7. Section 36a-486 of the 2008 supplement to the general statutes, as amended by section 5 of public act 07-156, is repealed and the following is substituted in lieu thereof (Effective September 30, 2008):

(a) No person shall engage in the business of making [first] mortgage loans or act as a [first] mortgage broker in this state unless such person has first obtained the required license for each office where such business is conducted in accordance with the provisions of sections 36a-485 to 36a-498a, inclusive, of the 2008 supplement to the general statutes, as amended by this act, and sections 20 to 26, inclusive, of this act. A person shall be deemed to be engaged in the business of making mortgage loans if such person advertises, causes to be advertised, solicits or offers to make or makes mortgage loans, either directly or indirectly, provided this provision shall not apply to a licensed originator acting on behalf of the lender or broker that employs or retains such originator. A [first mortgage] correspondent lender shall not be deemed to be acting as a [first mortgage] lender if such [first mortgage] correspondent lender makes a loan utilizing its own funds in a situation where another person does not honor such person's commitment to fund the loan.

(b) No person licensed as a mortgage lender or [first] mortgage broker shall employ or retain an originator unless such originator is licensed under sections 36a-485 to 36a-498a, inclusive, [provided such licensure shall not be required for any originator who is licensed under sections 36a-510 to 36a-524, inclusive] of the 2008 supplement to the general statutes, as amended by this act and sections 20 to 26, inclusive, of this act. No individual may act as an originator without being licensed, or act as an originator [, as defined in sections 36a-485 and 36a-510,] for more than one person. The license of an originator is not effective during any period when such originator is not associated with a licensed mortgage lender or [first] mortgage broker. Both the originator and the mortgage lender [and first] or mortgage broker shall promptly notify the commissioner, in writing, of the termination of employment or [services] retention of an originator.

(c) Each [first] mortgage loan negotiated, solicited, arranged, placed, found or made without a license shall constitute a separate violation for purposes of section 36a-50.

Sec. 8. Section 36a-487 of the general statutes is repealed and the following is substituted in lieu thereof (Effective September 30, 2008):

The following are exempt from licensing under sections 36a-485 to 36a-498a, inclusive, of the 2008 supplement to the general statutes, as amended by this act, and sections 20 to 26, inclusive, of this act:

(1) Any bank, out-of-state bank, Connecticut credit union, federal credit union, or out-of-state credit union, provided subsidiaries of such institutions other than operating subsidiaries of federal banks and federally-chartered out-of-state banks are not exempt from licensure;

(2) Persons making five or fewer [first] mortgage loans within any period of twelve consecutive months, provided such mortgage loans are written in compliance with all applicable laws;

(3) Bona fide nonprofit corporations making [first] mortgage loans to promote home ownership for the economically disadvantaged;

(4) Agencies of the federal government, or any state or municipal government, or any quasi-governmental agency making [first] mortgage loans under the specific authority of the laws of any state or the United States;

(5) Persons licensed under sections 36a-555 to 36a-573, inclusive, when making mortgage loans authorized by said sections;

(6) Persons [licensed under sections 36a-510 to 36a-524, inclusive, when making loans authorized by said sections, provided such licensed mortgage lender makes less than twelve first mortgage loans within any period of twelve consecutive months] owning real property who take back from the buyer of such property a secondary mortgage loan in lieu of any portion of the purchase price of the property;

(7) Any corporation or its affiliate which makes [first] mortgage loans exclusively for the benefit of its employees or agents;

(8) Any corporation, licensed in accordance with section 38a-41, or its affiliate or subsidiary, which makes [first] mortgage loans to promote home ownership in urban areas; [and]

(9) Persons acting as fiduciaries with respect to any employee pension benefit plan qualified under the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended, who make [first] mortgage loans solely to plan participants from plan assets; and

(10) Persons making secondary mortgage loans to individuals related to the maker by blood or marriage.

Sec. 9. Section 36a-488 of the 2008 supplement to the general statutes, as amended by section 2 of public act 07-91 and section 6 of public act 07-156, is repealed and the following is substituted in lieu thereof (Effective September 30, 2008):

(a) (1) The commissioner shall not issue a license as a [first mortgage] lender, a [first mortgage] correspondent lender or a [first] mortgage broker to any person unless such person meets the following tangible net worth and experience requirements, as applicable: (A) The minimum tangible net worth requirement for a [first mortgage] lender shall be two hundred fifty thousand dollars and the minimum tangible net worth requirement for a [first mortgage] correspondent lender and a [first] mortgage broker shall be twenty-five thousand dollars, provided any person that files an application for a license or renewal of a license as a correspondent lender or mortgage broker on or after January 1, 2009, shall have a minimum tangible net worth of fifty thousand dollars, and (B) a mortgage lender or mortgage broker shall have, at the [location] office for which the license is sought, a person with supervisory authority over the lending or brokerage activities who has at least three years' experience in the mortgage [lending] business within the five years immediately preceding the application for the license. [and a first mortgage broker shall have, at the location for which the license is sought, a person with supervisory authority over the brokerage activities who has at least three years' experience in the mortgage lending or mortgage brokerage business within the five years immediately preceding the application for the license.] As used in this subdivision, "experience in the mortgage business" means paid experience in the origination, processing or underwriting of mortgage loans, the marketing of such loans in the secondary market or in the supervision of such activities, or any other relevant experience as determined by the commissioner.

(2) Each licensee shall maintain the net worth required by this subsection and shall promptly notify the commissioner if such licensee's net worth falls below the net worth required by this subsection.

(b) The commissioner may issue a [first mortgage] lender license, a [first mortgage] correspondent lender license, or a [first] mortgage broker license. Each [first mortgage] lender licensee may also act as a [first mortgage] correspondent lender and a [first] mortgage broker, and each [first mortgage] correspondent lender licensee may also act as a [first] mortgage broker. An application for a license as a mortgage lender or mortgage broker or renewal of such license shall be made under oath and on a form provided by the commissioner. The application shall include: (1) The type of license sought; (2) the name and main address of the applicant; (3) the [location] address of the office for which the license is sought; (4) the name and home address of each member, partner, officer, director, authorized agent and shareholder owning ten per cent or more of the outstanding stock, as applicable; (5) if the applicant is a trust or the lead lender in one or more participation loans, the name and business address of each trustee or lead lender and each beneficiary of the trust or other participant lenders in all outstanding participation loans; (6) a financial statement as of a date not more than six months prior to the filing of the application which reflects tangible net worth, and if such financial statement is unaudited, the proprietor, general partner, or duly authorized officer, trustee or member shall swear to its accuracy under oath before a notary public; (7) evidence that the person with supervisory authority over the lending or brokerage activities at the [location] office for which the license is sought meets the experience required by subsection (a) of this section; [and] (8) an application for licensing of each originator of the applicant at such office filed pursuant to subsection (c) of this section; and (9) such other information pertaining to the applicant, the applicant's background, the background of its principals, [and] employees, and originators, and the applicant's activities as the commissioner may require. For the purpose of this subsection, evidence of experience of the person having supervisory authority shall include: (A) 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; (B) copies of W-2 forms, 1099 tax forms or, if self-employed, 1120 corporate tax returns; and (C) 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, or if such person is unable to provide such letters, other proof satisfactory to the commissioner that such person meets the experience requirement. The commissioner may conduct a criminal history records check of the applicant, of each member, partner, officer or director of the applicant and of the person with supervisory authority at the [location] office for which the license is sought, and require the applicant to submit the fingerprints of such persons as part of the application. [The] Effective January 1, 2010, the application shall be filed with the [national] nation-wide mortgage licensing system [, which shall process the fingerprints through the Federal Bureau of Investigation] and the applicant shall submit such fingerprints for processing with the nation-wide mortgage licensing system.

(c) An application for a license as an originator [license] or renewal of such license shall be made under oath on a form provided by the commissioner. The commissioner may conduct a criminal history records check of the applicant and require the applicant to submit fingerprints as part of the application. [The] Effective January 1, 2010, the application shall be filed with the [national] nation-wide mortgage licensing system [, which shall process the fingerprints through the Federal Bureau of Investigation] and the applicant shall submit such fingerprints for processing with the nation-wide mortgage licensing system.

Sec. 10. Section 36a-489 of the 2008 supplement to the general statutes, as amended by section 7 of public act 07-156, is repealed and the following is substituted in lieu thereof (Effective September 30, 2008):

(a) If the commissioner finds, upon the filing of an application for a [mortgage] license as a lender, correspondent lender or [first] mortgage broker, [license,] that the applicant meets the requirements of subsection (a) of section 36a-488 of the 2008 supplement to the general statutes, as amended by this act, and that the financial responsibility, character, reputation, integrity and general fitness of the applicant and of the partners thereof if the applicant is a partnership, of the members if the applicant is a limited liability company or association, and of the officers, directors and principal employees if the applicant is a corporation, are such as to warrant belief that the business will be operated soundly and efficiently, in the public interest and consistent with the purposes of sections 36a-485 to 36a-498a, inclusive, of the 2008 supplement to the general statutes, as amended by this act, and sections 20 to 26, inclusive, of this act, the commissioner may thereupon issue the applicant the license. If the commissioner fails to make such findings, or if the commissioner finds that the applicant has made a material misstatement in such application, the commissioner shall not issue a license, and shall notify the applicant of the denial and the reasons for such denial. Any denial of an application by the commissioner shall, when applicable, be subject to the provisions of section 46a-80.

(b) Upon the filing of an application for an originator license, the commissioner shall license the originator named in the application unless the commissioner finds that such applicant or originator has made a material misstatement in the application or that the financial responsibility, character, reputation, integrity and general fitness of such originator are not such as to warrant belief that granting such license would be in the public interest and consistent with the purposes of sections 36a-485 to 36a-498a, inclusive, of the 2008 supplement to the general statutes, as amended by this act, and sections 20 to 26, inclusive, of this act. If the commissioner denies an application for an originator license, the commissioner shall notify [such] the applicant and the proposed originator of the denial and the reasons for such denial. Any denial of an application by the commissioner shall, when applicable, be subject to the provisions of section 46a-80. [A license shall remain in force and effect until it has been surrendered, revoked, suspended or expires in accordance with the provisions of sections 36a-485 to 36a-498a, inclusive.]

Sec. 11. Section 36a-490 of the 2008 supplement to the general statutes, as amended by section 3 of public act 07-91 and section 8 of public act 07-156, is repealed and the following is substituted in lieu thereof (Effective September 30, 2008):

(a) Each [mortgage] lender, correspondent lender and [first] mortgage broker license shall state the [location] address of the office at which the business is to be conducted and shall state fully the name of the licensee. If the licensee desires to make [first] mortgage loans in more than one [location] office or to act as a [first] mortgage broker in more than one [location] office, the licensee shall procure a license for each [location where the business is to be conducted] office. Each license shall be maintained at the [location] office for which the license was issued and shall be available for public inspection. Such license shall not be transferable or assignable. No licensee shall use any name other than the name stated on the license issued by the commissioner. Any licensee who ceases to engage in the business of making mortgage loans or acting as a mortgage broker at any time during a license period for any cause, including, but not limited to, bankruptcy, license revocation or voluntary dissolution, shall surrender its license for each office at which the licensee ceases to do business, in person or by registered or certified mail, to the commissioner not later than fifteen days after such cessation, provided this requirement shall not apply when a license has been suspended pursuant to section 36a-51.