CHAPTER 668
NONDEPOSITORY FINANCIAL INSTITUTIONS

PART I
MORTGAGE LENDERS, CORRESPONDENT LENDERS, BROKERS AND LOAN ORIGINATORS

(A)

LICENSES. LOANS

      Sec. 36a-485. (Formerly Sec. 36-440). Definitions. As used in this section and sections 36a-486 to 36a-498f, inclusive, 36a-534a and 36a-534b, unless the context otherwise requires:

      (1) "Advance fee" means any consideration paid or given, directly or indirectly, to a mortgage lender, mortgage correspondent lender or mortgage broker required to be licensed pursuant to sections 36a-485 to 36a-498a, inclusive, and sections 36a-534a and 36a-534b, prior to the closing of a residential 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", "advertisement" or "advertising" means the use of 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) "Branch office" means a location other than the main office at which a licensee or any person on behalf of a licensee acts as a mortgage lender, mortgage correspondent lender or mortgage broker;

      (4) "Control person" means an individual that directly or indirectly exercises control over another person. Any person that (A) is a director, general partner or executive officer; (B) directly or indirectly has the right to vote ten per cent or more of a class of any voting security or has the power to sell or direct the sale of ten per cent or more of any class of voting securities; (C) in the case of a limited liability company, is a managing member; or (D) in the case of a partnership, has the right to receive upon dissolution, or has contributed, ten per cent or more of the capital, is presumed to be a control person. For purposes of this subdivision, "control" means the power, directly or indirectly, to direct the management or policies of a company, whether through ownership of securities, by contract or otherwise;

      (5) "Depository institution" has the same meaning as provided in Section 3 of the Federal Deposit Insurance Act, 12 USC 1813, and includes any Connecticut credit union, federal credit union or out-of-state credit union;

      (6) "Federal banking agency" means the Board of Governors of the Federal Reserve System, the Comptroller of the Currency, the Director of the Office of Thrift Supervision, the National Credit Union Administration and the Federal Deposit Insurance Corporation;

      (7) "First mortgage loan" means a residential mortgage loan that is secured by a first mortgage;

      (8) "Immediate family member" means a spouse, child, sibling, parent, grandparent or grandchild and includes stepparents, stepchildren, stepsiblings and adoptive relationships;

      (9) "Individual" means a natural person;

      (10) "Loan processor or underwriter" means an individual who performs clerical or support duties. The term "clerical or support duties" includes, subsequent to the receipt of an application, (A) the receipt, collection, distribution and analysis of information common for the processing or underwriting of a residential mortgage loan, and (B) communication with a consumer to obtain the information necessary for the processing or underwriting of a loan to the extent that such communication does not include offering or negotiating loan rates or terms or counseling consumers about residential mortgage loan rates or terms;

      (11) "Main office" means the main address designated on the system;

      (12) "Mortgage broker" means a person who, for compensation or gain or in the expectation of compensation or gain (A) takes a residential mortgage loan application, or (B) offers or negotiates terms of a residential mortgage loan, excluding an individual who is sponsored by another mortgage lender, mortgage correspondent lender or mortgage broker;

      (13) "Mortgage correspondent lender" means a person engaged in the business of making residential 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;

      (14) "Mortgage lender" means a person engaged in the business of making residential 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;

      (15) "Mortgage loan originator" means an individual who for compensation or gain or with the expectation of compensation or gain (A) takes a residential mortgage loan application, or (B) offers or negotiates terms of a residential mortgage loan. "Mortgage loan originator" does not include (i) an individual engaged solely as a loan processor or underwriter; (ii) a person who only performs real estate brokerage activities and is licensed in accordance with chapter 392, unless the person is compensated by a mortgage lender, mortgage correspondent lender, mortgage broker or other mortgage loan originator or by any agent of such mortgage lender, mortgage correspondent lender, mortgage broker or other mortgage loan originator; (iii) a person solely involved in extensions of credit relating to timeshare plans, as that term is defined in Paragraph 53D of 11 USC 101; or (iv) any individual who solely renegotiates terms for existing mortgage loans on behalf of a mortgagee and who does not otherwise act as a mortgage loan originator, unless the United States Department of Housing and Urban Development, the Bureau of Consumer Financial Protection or a court of competent jurisdiction determines that the S.A.F.E. Mortgage Licensing Act of 2008, 12 USC Section 5101 et seq., requires such individual to be licensed as a mortgage loan originator under state laws implementing said S.A.F.E. Mortgage Licensing Act;

      (16) "Office" means a branch office or a main office;

      (17) "Person" means a natural person, corporation, company, limited liability company, partnership or association;

      (18) "Principal amount of the loan" means the gross amount the borrower is obligated to repay including any prepaid finance charge that is financed, and any other charge that is financed;

      (19) "Real estate brokerage activity" means any activity that involves offering or providing real estate brokerage services to the public, including (A) acting as a real estate agent or real estate broker for a buyer, seller, lessor or lessee of real property; (B) bringing together parties interested in the sale, purchase, lease, rental or exchange of real property; (C) negotiating, on behalf of any party, any portion of a contract relating to the sale, purchase, lease, rental or exchange of real property, other than in connection with providing financing with respect to any such transaction; (D) engaging in any activity for which a person engaged in the activity is required to be registered or licensed as a real estate agent or real estate broker under any applicable law; and (E) offering to engage in any activity, or act in any capacity, described in this subdivision;

      (20) "Registered mortgage loan originator" means any individual who (A) meets the definition of mortgage loan originator and is an employee of a depository institution, a subsidiary that is owned and controlled by a depository institution and regulated by a federal banking agency, or an institution regulated by the Farm Credit Administration; and (B) is registered with and maintains a unique identifier through the system;

      (21) "Residential mortgage loan" means any loan primarily for personal, family or household use that is secured by a mortgage, deed of trust or other equivalent consensual security interest on a dwelling as defined in Section 103 of the Consumer Credit Protection Act, 15 USC 1602, or residential real estate upon which is constructed or intended to be constructed a dwelling, as so defined;

      (22) "Residential real estate" means any real property located in this state, upon which is constructed or intended to be constructed a dwelling as defined in Section 103 of the Consumer Credit Protection Act, 15 USC 1602;

      (23) "Secondary mortgage loan" means a residential mortgage loan that is secured, in whole or in part, by a mortgage, provided such property is subject to one or more prior mortgages;

      (24) "Simulated check" means a document that imitates or resembles a check but is not a negotiable instrument;

      (25) "Sponsored" means employed or retained as an independent contractor;

      (26) "System" means the Nationwide Mortgage Licensing System and Registry developed and maintained by the Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators for the licensing and registration of mortgage lenders, mortgage correspondent lenders, mortgage brokers, mortgage loan originators and loan processors or underwriters;

      (27) "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;

      (28) "Unique identifier" means a number or other identifier assigned by protocols established by the system; and

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

      (P.A. 85-399, S. 1; P.A. 87-9, S. 2, 3; P.A. 89-347, S. 9; P.A. 92-12, S. 87; 92-132, S. 3, 5; P.A. 94-122, S. 229, 340; P.A. 99-36, S. 23; 99-63, S. 2; P.A. 02-111, S. 2; P.A. 04-69, S. 1; P.A. 07-91, S. 1; 07-156, S. 4; P.A. 08-176, S. 31, 38; P.A. 09-209, S. 2; P.A. 11-110, S. 3; 11-216, S. 7-9.)

      History: (Revisor's note: Pursuant to P.A. 87-9 "banking commissioner" was changed editorially by the Revisors to "commissioner of banking"); P.A. 89-347 added Subsec. (g) defining "mortgage broker"; P.A. 92-12 redesignated Subdivs. and made technical changes; P.A. 92-132 added Subdiv. (8) defining "advance fee"; P.A. 94-122 deleted definitions of "commissioner" and "person", alphabetized remaining definitions and made technical changes, effective January 1, 1995; Sec. 36-440 transferred to Sec. 36a-485 in 1995; P.A. 99-36 made a technical change; P.A. 99-63 amended Subdiv. (2) to redefine "first mortgage loan", added new Subdivs. (7) and (8) defining "simulated check" and "advertise" or "advertisement", and made technical changes; P.A. 02-111 redefined "advance fee" and "mortgage lender", deleted definitions of "mortgage broker" and "principal officer" and added definitions of "first mortgage broker", "first mortgage correspondent lender", "first mortgage lender", "originator", "table funding agreement" and "warehouse agreement", renumbering Subdivs. accordingly; P.A. 04-69 substituted "36a-498a" for "36a-498" throughout; P.A. 07-91 redefined "originator" in Subdiv. (8); P.A. 07-156 redefined "advance fee" in Subdiv. (1) to delete "or registered", and redefined "originator" in Subdiv. (8) to insert "mortgage lender or first mortgage broker" re exclusion for officer, effective September 30, 2008; P.A. 08-176 changed effective date of P.A. 07-156, S. 4, from September 30, 2008, to July 1, 2008, redefined "advertise" or "advertisement" and "mortgage lender", deleted definitions of "first mortgage broker", "first mortgage correspondent lender" and "first mortgage lender", added definitions of "branch office", "main office", "mortgage broker", "mortgage correspondent lender", "mortgage loan", "office", "principal amount of the loan", and "secondary mortgage loan", changed defined term "originator" to "mortgage loan originator" and added arrange or find mortgage loans therein, renumbered existing Subdivs. (6), (8), (9), (10), (11) and (12) as new Subdivs. (4), (10), (13), (15), (16) and (17), respectively, and made conforming and technical changes, effective July 1, 2008; P.A. 09-209 applied definitions to other licensing provisions, redefined "advance fee" in Subdiv. (1), added reference to "advertising" in Subdiv. (2), defined "control person", "depository institution" and "federal banking agency" in new Subdivs. (4) to (6), redefined "first mortgage loan" in redesignated Subdiv. (7), defined "immediate family member", "individual" and "loan processor" or "underwriter" in new Subdivs. (8) to (10), redefined "mortgage broker", "mortgage correspondent lender" and "mortgage lender" in redesignated Subdivs. (12) to (14), deleted former Subdiv. (9) defining "mortgage loan", redefined "mortgage loan originator" in redesignated Subdiv. (15), defined "person", "real estate brokerage activity", "registered mortgage loan originator" and "residential mortgage loan" in new Subdivs. (17) and (19) to (21), deleted former Subdiv. (13) defining "residential property", defined "residential real estate" in new Subdiv. (22), redefined "secondary mortgage loan" in redesignated Subdiv. (23), defined "sponsored", "system" and "unique identifier" in new Subdivs. (25), (26) and (28), and redefined "warehouse agreement" in redesignated Subdiv. (29), effective July 31, 2009; P.A. 11-110 amended Subdiv. (15) to add reference to Bureau of Consumer Financial Protection, effective July 21, 2011; P.A. 11-216 amended Subdiv. (10) to change defined term to "loan processor or underwriter" and redefine same, amended Subdiv. (15) to redefine "mortgage loan originator" and amended Subdiv. (26) to add "loan processors or underwriters".

      Sec. 36a-486. (Formerly Sec. 36-440a). Licenses required. Exemptions. Prohibited advertisements. Violations. (a) No person shall engage in the business of making residential mortgage loans or act as a mortgage broker in this state unless such person has first obtained the required license for its main office and each branch office where such business is conducted in accordance with the provisions of sections 36a-485 to 36a-498f, inclusive, 36a-534a and 36a-534b. Effective April 1, 2010, any such person who is an individual shall also obtain a mortgage loan originator license prior to conducting such business unless such individual does not engage directly in the activities of a mortgage loan originator. A person, other than a licensed mortgage loan originator acting on behalf of a mortgage lender or mortgage correspondent lender, shall be deemed to be engaged in the business of making residential mortgage loans if such person advertises, causes to be advertised, solicits or offers to make residential mortgage loans, either directly or indirectly. A person, other than a licensed mortgage loan originator acting on behalf of a mortgage broker, shall be deemed to be acting as a mortgage broker if such person advertises or causes to be advertised that such person will negotiate, solicit, place or find a residential mortgage loan, either directly or indirectly. A mortgage correspondent lender shall not be deemed to be acting as a mortgage lender if such 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) (1) No person licensed as a mortgage lender, mortgage correspondent lender or mortgage broker shall engage the services of a mortgage loan originator or of a loan processor or underwriter required to be licensed under subdivision (3) of this subsection unless such mortgage loan originator or loan processor or underwriter is licensed under section 36a-489. An individual, unless specifically exempted under subdivision (2) of this subsection, shall not engage in the business of a mortgage loan originator on behalf of a licensee or a person exempt under section 36a-487 with respect to any residential mortgage loan without first obtaining and maintaining annually a license as a mortgage loan originator under section 36a-489. Each licensed mortgage loan originator and each loan processor or underwriter shall register with and maintain a valid unique identifier issued by the system. No individual may act as a mortgage loan originator for more than one person at the same time. The license of a mortgage loan originator or a loan processor or underwriter is not effective during any period when such mortgage loan originator or a loan processor or underwriter is not sponsored by a licensed mortgage lender, mortgage correspondent lender or mortgage broker, or by a person registered as an exempt registrant under subsection (c) of section 36a-487, or during any period in which the license of the mortgage lender, mortgage correspondent lender or mortgage broker with whom such originator or loan processor or underwriter is associated has been suspended. Either the mortgage loan originator, the loan processor or underwriter or the sponsor may file a notification of the termination of sponsorship with the system.

      (2) The following are exempt from this section: (A) A registered mortgage loan originator or an employee of an institution or subsidiary described in subdivision (20) of section 36a-485, who is not required to be registered under Section 1507 of the S.A.F.E. Mortgage Licensing Act of 2008, when acting for such institution or subsidiary, (B) an individual who offers or negotiates the terms of a residential mortgage loan with or on behalf of an immediate family member of such individual, (C) an individual who offers or negotiates the terms of a residential mortgage loan secured by a dwelling, as defined in Section 103 of the Consumer Credit Protection Act, 15 USC 1602, that served as the individual's residence, and (D) a licensed attorney who negotiates the terms of a residential mortgage loan on behalf of a client as an ancillary matter to the attorney's representation of the client, unless the attorney is compensated by a mortgage lender, mortgage correspondent lender, mortgage broker or other mortgage loan originator or by any agent of such mortgage lender, mortgage correspondent lender, mortgage broker or other mortgage loan originator.

      (3) A loan processor or underwriter who is: (A) An independent contractor, or (B) employed by any person other than: (i) A licensed mortgage lender, mortgage correspondent lender or mortgage broker; or (ii) any person exempt from such licensure under subdivision (1) of subsection (a) of section 36a-487 may not engage in the activities of a loan processor or underwriter unless such loan processor or underwriter obtains and maintains a license as a loan processor or underwriter under section 36a-489.

      (4) An individual engaging solely in loan processor or underwriter activities shall not represent to the public, through advertising or other means of communicating or providing information, including the use of business cards, stationery, brochures, signs, rate lists or other promotional items, that such individual can or will perform any of the activities of a mortgage loan originator.

      (c) If the United States Department of Housing and Urban Development, the Bureau of Consumer Financial Protection or a court of competent jurisdiction determines that the S.A.F.E. Mortgage Licensing Act of 2008, 12 USC Section 5101 et seq., requires an individual described in subparagraph (B)(iv) of subdivision (15) of section 36a-485 to be licensed as a mortgage loan originator under state laws implementing said S.A.F.E. Mortgage Licensing Act, such individual may continue to act in such individual's current capacity, provided such individual files an application for a mortgage loan originator license not later than the date sixty days from the date of such determination by the United States Department of Housing and Urban Development, the Bureau of Consumer Financial Protection or a court of competent jurisdiction.

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

      (P.A. 85-399, S. 2; P.A. 89-347, S. 10; P.A. 93-32; P.A. 94-122, S. 230, 340; P.A. 96-71, S. 1, 8; 96-109, S. 10; 96-180, S. 117, 166; P.A. 02-111, S. 3; P.A. 04-69, S. 2; P.A. 07-156, S. 5; P.A. 08-176, S. 31, 40; P.A. 09-208, S. 2; 09-209, S. 5; P.A. 11-110, S. 4; 11-216, S. 10.)

      History: P.A. 89-347 added requirements re mortgage brokers; P.A. 93-32 made previous provision Subsec. (a) and added new Subsec. (b) imposing civil penalty for those who do not obtain the license required; P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-440a transferred to Sec. 36a-486 in 1995; P.A. 96-71, 96-109 and 96-180 all amended Subsec. (a) to delete "loan" before "mortgage loan business in this state", effective July 1, 1996; P.A. 02-111 amended Subsec. (a) by rewriting provisions applicable to lenders and brokers and adding provisions re first mortgage correspondent lenders, added new Subsec. (b) re registration of originators, and redesignated existing Subsec. (b) as Subsec. (c), adding "or registration" therein; P.A. 04-69 amended Subsecs. (a) and (b) to substitute "36a-498a" for "36a-498"; P.A. 07-156 amended Subsecs. (b) and (c) to replace registration requirement for originators with licensing requirement and to make conforming changes, effective September 30, 2008; P.A. 08-176 changed effective date of P.A. 07-156, S. 5, from September 30, 2008, to July 1, 2008, amended Subsec. (a) to add reference to main office and each branch office, to provide that a person, other than a mortgage loan originator, "shall be deemed to be engaged in the business of making mortgage loans if such person advertises, causes to be advertised, solicits, offers to make or makes mortgage loans, either directly or indirectly", and to make conforming changes, amended Subsec. (b) to add mortgage correspondent lender, to change notification provision from "shall promptly notify the commissioner, in writing" to "may file" with Nationwide Mortgage Licensing System and to make conforming changes, and amended Subsec. (c) to add "arranged" and to make a conforming change, effective July 1, 2008; P.A. 09-208 amended Subsec. (b) by providing that license of mortgage loan originator is not effective during any period in which license of lender, correspondent lender or broker with whom originator is associated has been suspended, effective July 7, 2009; P.A. 09-209 amended Subsec. (a) to apply to persons engaged in business of making residential mortgage loans and by requiring certain individuals to obtain a mortgage loan originator license, adding provision re when a person is considered to be acting as a mortgage broker, making technical changes and inserting reference to other licensing provisions, amended Subsec. (b) by designating existing provisions as Subdiv. (1) and amending same by requiring individuals engaged in business of mortgage loan originator with respect to a dwelling to obtain and maintain a license, and by adding Subdiv. (2) re exemptions, Subdiv. (3) re loan processors or underwriters who are independent contractors and Subdiv. (4) re advertising, added new Subsec. (c) re determinations made by U.S. Department of Housing and Urban Development or court, redesignated existing Subsec. (c) as Subsec. (d) and amended same by adding "residential" re mortgage loan, effective July 31, 2009; P.A. 11-110 amended Subsec. (c) to add references to Bureau of Consumer Financial Protection, effective July 21, 2011; P.A. 11-216 amended Subsec. (b)(1) and (b)(3) to add references to loan processors or underwriters, to prohibit the engagement in business without a license of a mortgage loan originator "on behalf of a licensee or a person exempt under section 36a-487 with respect to any residential mortgage loan", to permit alternative sponsorship "by a person registered as an exempt registrant under subsection (c) of section 36a-487", to prohibit a loan processor or underwriter who is employed by any person other than a licensed mortgage lender, mortgage correspondent lender or mortgage broker or any person exempt from licensure under Sec. 36a-487(a)(1) from engaging in activities of a loan processor or underwriter without a license, to eliminate requirement of maintaining valid unique identifier issued by the system, and to make conforming and technical changes.

      Sec. 36a-487. (Formerly Sec. 36-440b). Exemptions from licensure. (a) The following are exempt from licensing as a mortgage lender, mortgage correspondent lender or mortgage broker under sections 36a-485 to 36a-498f, inclusive, 36a-534a and 36a-534b: (1) Any bank, out-of-state bank, Connecticut credit union, federal credit union or out-of-state credit union, provided such bank or credit union is federally insured, any operating subsidiary of a federal bank or federally-chartered out-of-state bank or any wholly-owned subsidiary of a Connecticut bank or a Connecticut credit union; (2) any person licensed under sections 36a-671 to 36a-671d, inclusive, or exempt from licensure under section 36a-671c, who is negotiating or offering to negotiate terms of a residential mortgage loan as authorized by said sections 36a-671 to 36a-671d, inclusive; and (3) any person engaged solely in providing loan processing or underwriting services to persons (A) licensed as a mortgage lender, mortgage correspondent lender or mortgage broker, or (B) exempt from such licensure under subdivision (1) of this subsection. Each wholly-owned subsidiary of a Connecticut bank or Connecticut credit union that engages in the business of making residential mortgage loans or acts as a mortgage broker in this state shall provide written notification to the commissioner prior to engaging in such activity.

      (b) The following are exempt from licensing as a mortgage lender or mortgage correspondent lender under sections 36a-485 to 36a-498f, inclusive, 36a-534a and 36a-534b:

      (1) Persons making five or fewer residential mortgage loans within any period of twelve consecutive months, provided nothing herein shall relieve such persons from complying with all applicable laws;

      (2) Bona fide nonprofit corporations making residential mortgage loans to promote home ownership for the economically disadvantaged;

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

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

      (5) Persons 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;

      (6) Any corporation or its affiliate that makes residential mortgage loans exclusively for the benefit of its employees or agents;

      (7) Any corporation, licensed in accordance with section 38a-41, or its affiliate or subsidiary, that makes residential mortgage loans to promote home ownership in urban areas;

      (8) 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 residential mortgage loans solely to plan participants from plan assets; and

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

      (c) Any person exempt from licensure under this section may register on the system as an exempt registrant for purposes of sponsoring a mortgage loan originator or a loan processor or underwriter pursuant to subdivision (1) of subsection (b) of section 36a-486. Such registration shall not affect the exempt status of such person.

      (P.A. 85-399, S. 3; P.A. 88-65, S. 37; P.A. 89-211, S. 41; P.A. 92-12, S. 88; P.A. 94-122, S. 231, 340; P.A. 99-36, S. 24; P.A. 02-111, S. 4; P.A. 04-69, S. 3; P.A. 08-176, S. 41; P.A. 09-209, S. 6; P.A. 11-216, S. 11.)

      History: P.A. 88-65 deleted a reference to industrial bank in Subsec. (a); P.A. 89-211 clarified reference to the Internal Revenue Code of 1986; P.A. 92-12 redesignated Subdivs.; P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-440b transferred to Sec. 36a-487 in 1995; P.A. 99-36 made a technical change; P.A. 02-111 amended Subdivs. (2), (3) and (4) by substituting "making" for "granting", amended Subdiv. (6) by changing "licensed lender" to "licensed mortgage lender" and amended Subdiv. (8) by substituting "makes" for "grants"; P.A. 04-69 substituted "36a-498a" for "36a-498"; P.A. 08-176 amended Subdiv. (1) to add reference to operating subsidiaries of federal banks and federally-chartered out-of-state banks, amended Subdiv. (2) to add "provided nothing herein shall relieve such persons from complying with all applicable laws", amended Subdiv. (6) to replace former provision with provision re owners who take back a secondary mortgage loan in lieu of any portion of purchase price, added Subdiv. (10) re making of secondary mortgage loans to relatives, and made conforming changes, effective July 1, 2008; P.A. 09-209 designated existing introductory clause and Subdiv. (1) as Subsec. (a), amended same by adding citations to additional licensing provisions and adding exemptions re certain financial institutions, added Subsec. (b) re exemptions from licensing as a lender or correspondent lender, redesignated existing Subdivs. (2) to (10) as Subsecs. (b)(1) to (b)(9) and added "residential" re mortgage loans throughout, effective July 31, 2009; P.A. 11-216 amended Subsec. (a) to add provision re exemption is from licensing as a mortgage lender, mortgage correspondent lender or mortgage broker, designate provision re exemption for banks and credit unions as Subdiv. (1), add Subdiv. (2) re exemption for any person licensed under Secs. 36a-671 to 36a-671d or exempt from licensure and add Subdiv. (3) re exemption for any person engaged solely in providing loan processing or underwriting services to persons licensed as mortgage lender, correspondent lender or broker or exempt from such licensure, and added Subsec. (c) re persons exempt from licensure registering on the system.

      Sec. 36a-488. (Formerly Sec. 36-440c). Mortgage lender, mortgage correspondent lender, mortgage broker, mortgage loan originator and loan processor or underwriter licenses. Requirements. (a)(1) The commissioner shall not issue a mortgage lender license, a mortgage correspondent lender license or a mortgage broker license 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 mortgage lender shall be two hundred fifty thousand dollars and the minimum tangible net worth requirement for a mortgage correspondent lender and a mortgage broker shall be (i) prior to March 2, 2009, twenty-five thousand dollars, and (ii) on and after March 2, 2009, fifty thousand dollars, and (B) a mortgage lender, mortgage correspondent lender or mortgage broker shall have, at the main office for which the license is sought, a qualified individual and, at each branch office, a branch manager who have supervisory authority over the lending or brokerage activities who have at least three years' experience in the mortgage business within the five years immediately preceding the date of the application for the license and who, effective April 1, 2010, have completed the prelicensing education requirement described in section 36a-489a and passed a written test that meets the test requirement described in section 36a-489a. As used in this subdivision, "experience in the mortgage business" means paid experience in the origination, processing or underwriting of residential 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.

      (3) Not later than April 1, 2010, each qualified individual and branch manager shall have completed the prelicensing education requirement described in section 36a-489a and passed a written test that meets the test requirement described in section 36a-489a.

      (b) The commissioner may issue a mortgage lender license, a mortgage correspondent lender license, or a mortgage broker license. Each mortgage lender licensee may also act as a mortgage correspondent lender and a mortgage broker, and each mortgage correspondent lender licensee may also act as a mortgage broker. On and after July 1, 2008, an application for a license as a mortgage lender, mortgage correspondent lender or mortgage broker office or renewal of such license shall be filed, in a form prescribed by the commissioner, with the system. Each such form shall contain content as set forth by instruction or procedure of the commissioner and may be changed or updated as necessary by the commissioner in order to carry out the purpose of sections 36a-21, 36a-485 to 36a-498f, inclusive, 36a-534a and 36a-534b. The applicant shall, at a minimum, furnish to the system information concerning the identity of the applicant, any control person of the applicant, the qualified individual and any branch manager, including personal history and experience in a form prescribed by the system and information related to any administrative, civil or criminal findings by any governmental jurisdiction. The following supplementary information shall be filed directly with the commissioner: (1) In the case of an initial application for a license for the main office, (A) a financial statement as of a date not more than twelve 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, and (B) a bond as required by section 36a-492; (2) evidence that the qualified individual or branch manager meets the experience required by subsection (a) of this section; and (3) such other information pertaining to the applicant, the applicant's background, the background of its principals, employees, mortgage loan originators, and loan processors or underwriters, and the applicant's activities as the commissioner may require. For the purpose of this subsection, evidence of experience of the qualified individual or branch manager 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; and (B) if required by the commissioner, copies of W-2 forms, 1099 tax forms or, if self-employed, 1120 corporate tax returns, signed letters from the employer on the employer's letterhead verifying such person's duties and responsibilities and term of employment including month and year, and if such person is unable to provide such letters, other proof satisfactory to the commissioner that such person meets the experience requirement. The commissioner may conduct a criminal history records check of the applicant, any control person of the applicant and the qualified individual or branch manager with supervisory authority at the office for which the license is sought and require the applicant to submit the fingerprints of such persons and authorization of such persons for the system and the commissioner to obtain an independent credit report from a consumer reporting agency, as described in Section 603(p) of the Fair Credit Reporting Act, 15 USC 1681a, as part of the application.

      (c) (1) The commissioner may issue a mortgage loan originator license or a loan processor or underwriter license. Each mortgage loan originator licensee may also act as a loan processor or underwriter. An application to license an individual as a mortgage loan originator or a loan processor or underwriter for a specified office or renewal of such license shall be filed, in a form prescribed by the commissioner, with the system. Each such form shall contain content as set forth by instruction or procedure of the commissioner and may be changed or updated as necessary by the commissioner in order to carry out the purpose of sections 36a-485 to 36a-498f, inclusive, 36a-534a and 36a-534b. The applicant shall, at a minimum, furnish to the system, in a form prescribed by the system, information concerning the applicant's identity, including personal history and experience and information related to any administrative, civil or criminal findings by any governmental jurisdiction. Effective April 1, 2010, each applicant for a mortgage loan originator license and, effective October 1, 2011, each applicant for a loan processor or underwriter license, shall furnish to the system fingerprints for submission to the Federal Bureau of Investigation and any governmental agency or entity authorized to receive such information for a state, national and international criminal history background check. Effective the later of July 31, 2010, or thirty days after the date the system commences accepting such authorizations for processing, each applicant shall furnish authorization for the system and the commissioner to obtain an independent credit report from a consumer reporting agency, as described in Section 603(p) of the Fair Credit Reporting Act, 15 USC 1681a.

      (2) Not later than April 1, 2010, each mortgage loan originator licensee shall furnish to the system fingerprints for submission to the Federal Bureau of Investigation and any governmental agency or entity authorized to receive such information for a state, national and international criminal history background check. By July 31, 2010, or thirty days after the system commences accepting such authorizations for processing, whichever is later, each such licensee shall furnish authorization for the system and the commissioner to obtain an independent credit report obtained from a consumer reporting agency described in Section 603(p) of the Fair Credit Reporting Act, 15 USC 1681a.

      (P.A. 85-399, S. 4; P.A. 89-347, S. 11; P.A. 94-122, S. 232, 340; P.A. 99-36, S. 25; P.A. 02-111, S. 5; P.A. 06-45, S. 1; P.A. 07-91, S. 2; 07-156, S. 6; P.A. 08-176, S. 31, 42; P.A. 09-209, S. 7; P.A. 11-216, S. 12, 13.)

      History: P.A. 89-347 amended Subsec. (b) by inserting new Subdiv. (4) re the applicant's status as a lender or a broker and renumbered the remaining Subdiv.; P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-440c transferred to Sec. 36a-488 in 1995; P.A. 99-36 made a technical change in Subsec. (a); P.A. 02-111 replaced former Subsec. (a) with new provisions re obtaining license as first mortgage lender, first mortgage correspondent lender or first mortgage broker and re obligation to notify commissioner if net worth falls below requisite net worth, amended Subsec. (b) to reflect commissioner's authority to issue first mortgage lender license, first mortgage correspondent lender license and first mortgage broker license and to revise application requirements and added new Subsec. (c) re application for registration of originator; P.A. 06-45 added Subsec. (d) to provide that filing application for registration of originator with knowledge that application contains a material misstatement by originator shall be a violation of Sec. 36a-53a, effective May 8, 2006; P.A. 07-91 amended Subsec. (d) to provide that filing application for renewal of registration of originator with knowledge that application contains a material misstatement by originator shall be a violation of Sec. 36a-53a; P.A. 07-156 amended Subsec. (a)(1) to delete proviso re inapplicability of experience requirements to any person whose license is renewed effective October 1, 2002, amended Subsec. (b) to authorize commissioner to conduct a criminal history records check of applicants and key persons of such applicants, to require applicants to submit fingerprints of such persons, and to require filing of applications with the national mortgage licensing system, amended Subsec. (c) to authorize commissioner to conduct criminal history records check of applicant for an originator license, to require applicant to submit fingerprints as part of application, and to require filing application with such system, and deleted former Subsec. (d) and language in Subsecs. (b)(8) and (c) re registration of originator and substituted language re originator license in Subsec. (c), effective September 30, 2008; P.A. 08-176 changed effective date of P.A. 07-156, S. 6, from September 30, 2008, to July 1, 2008, amended Subsec. (a)(1) to increase minimum tangible net worth requirement for a mortgage correspondent lender and a mortgage broker, on and after March 2, 2009, to $50,000, to add requirement for branch manager with supervisory authority at each branch office who has at least 3 years' experience in the mortgage business within the 5 years immediately preceding application for license, to define "experience in the mortgage business", and to make conforming changes, amended Subsec. (b) to substitute, on and after July 1, 2008, application to Nationwide Mortgage Licensing System for application to commissioner, to delete former Subdivs. (1) to (5) re requirements for application to commissioner and to renumber existing Subdiv. (6) as new Subdiv. (1) re financial statement, to change requirement for financial statement to apply to application for license for main office or renewal of license, rather than for all licenses under section, and substitute "twelve" for "six" months, to add new Subdiv. (2) re bond, to renumber existing Subdiv. (7) as new Subdiv. (3) re evidence of experience and existing Subdiv. (8) as new Subdiv. (4) re other information, to add provision re what is included in evidence of experience of the qualified individual or branch manager, and to make conforming changes, and amended Subsec. (c) to include reference to applications for specified offices, to substitute, on and after July 1, 2008, application to Nationwide Mortgage Licensing System for application to commissioner and to make conforming changes, effective July 1, 2008; P.A. 09-209 amended Subsec. (a)(1) by adding provision re branch manager at each branch office, establishing prelicensing education and written test requirements and adding "residential" re mortgage loans, amended Subsec. (a)(2) by deleting requirement that licensee notify commissioner if licensee's net worth falls below required net worth, added Subsec. (a)(3) re prelicensing education and written test requirements, amended Subsec. (b) by authorizing commissioner to create license application and renewal forms and specifying minimum requirements for such forms, by modifying criminal history records check provision and by authorizing commissioner to obtain independent credit report from a consumer reporting agency, amended Subsec. (c) by designating existing provisions as Subdiv. (1), by authorizing commissioner to create license application and renewal forms and specifying minimum application requirements, and by adding Subdiv. (2) re criminal history background checks and credit reports, and made conforming and technical changes throughout, effective July 31, 2009; P.A. 11-216 amended Subsec. (b) to add reference to loan processors or underwriters and make technical changes, effective July 13, 2011, and amended Subsec. (c)(1) to add provisions re loan processor or underwriter, to permit mortgage loan originator licensees to act as a loan processor or underwriter and to make technical changes, effective October 1, 2011.

      Sec. 36a-489. (Formerly Sec. 36-440d). Licenses: Issuance; denial; renewal; suspension; financial responsibility; withdrawal or abandonment of application. (a)(1) The commissioner shall not issue an initial license for a mortgage lender, mortgage correspondent lender or mortgage broker unless the commissioner, at a minimum, finds that: (A) The applicant meets the requirements of subsection (a) of section 36a-488; (B) notwithstanding the provisions of section 46a-80, the applicant, the control persons of the applicant and the qualified individual or branch manager with supervisory authority at the office for which the license is sought have not been convicted of, or pled guilty or nolo contendere to, a felony in a domestic, foreign or military court during the seven-year period preceding the date of the application for licensing or at any time preceding the date of application if such felony involved an act of fraud, dishonesty, a breach of trust or money laundering, provided any pardon of a conviction shall not be a conviction for purposes of this subdivision; (C) the applicant demonstrates that the financial responsibility, character and general fitness of the applicant, the control persons of the applicant and the qualified individual or branch manager having supervisory authority over the office for which the license is sought are such as to command the confidence of the community and to warrant a determination that the applicant will operate honestly, fairly and efficiently within the purposes of sections 36a-485 to 36a-498f, inclusive, 36a-534a and 36a-534b; (D) the applicant has met the surety bond requirement under section 36a-492; and (E) the applicant has not made a material misstatement in the application. If the commissioner fails to make such findings, the commissioner shall not issue a license, and shall notify the applicant of the denial and the reasons for such denial.

      (2) (A) The minimum standards for license renewal for a mortgage lender, mortgage correspondent lender or mortgage broker shall include the following: (i) The applicant continues to meet the minimum standards under subdivision (1) of this subsection; (ii) effective April 1, 2010, each qualified person and branch manager has completed the prelicensing education requirement described in section 36a-489a and passed a written test that meets the test requirement described in section 36a-489a, or has satisfied the annual continuing education requirements described in subsection (c) of section 36a-489a, as applicable; and (iii) the mortgage lender, mortgage correspondent lender or mortgage broker has paid all required fees for renewal of the license.

      (B) The license of a mortgage lender, mortgage correspondent lender or mortgage broker failing to satisfy the minimum standards for license renewal shall expire. The commissioner may adopt procedures for the reinstatement of expired licenses consistent with the standards established by the system. The commissioner may automatically suspend a mortgage lender, mortgage correspondent lender or mortgage broker license if the licensee receives a deficiency on the system indicating that the payment required by subparagraph (A) of this subdivision was Returned-ACH or returned pursuant to such other term as may be utilized by the system to indicate that the payment was not accepted. After a license has been automatically suspended pursuant to this section, the commissioner shall give such licensee notice of the automatic suspension, pending proceedings for revocation or refusal to renew pursuant to section 36a-494 and an opportunity for a hearing on such action in accordance with section 36a-51, and require such licensee to take or refrain from taking such action that, in the opinion of the commissioner, will effectuate the purposes of this section.

      (b) (1) The commissioner shall not issue an initial license for a mortgage loan originator or a loan processor or underwriter unless the commissioner, at a minimum, finds that the applicant has: (A) Never had a mortgage loan originator or equivalent loan processor or underwriter license revoked in any governmental jurisdiction, except that a subsequent formal vacating of such revocation shall not be deemed a revocation; (B) notwithstanding the provisions of section 46a-80, not been convicted of, or pled guilty or nolo contendere to, a felony in a domestic, foreign or military court during the seven-year period preceding the date of the application for licensing or at any time preceding such date of application if such felony involved an act of fraud, dishonesty, a breach of trust, or money laundering, provided any pardon of a conviction shall not be a conviction for purposes of this subdivision; (C) demonstrated financial responsibility, character and general fitness so as to command the confidence of the community and to warrant a determination that the mortgage loan originator or loan processor or underwriter will operate honestly, fairly and efficiently within the purposes of sections 36a-485 to 36a-498f, inclusive, 36a-534a and 36a-534b; (D) for mortgage loan originator applicants, effective April 1, 2010, and for loan processor or underwriter applicants, effective October 1, 2011, completed the prelicensing education requirement described in section 36a-489a and passed a written test that meets the test requirement described in section 36a-489a; (E) effective July 31, 2010, met the surety bond requirement under section 36a-492 and, effective October 1, 2011, in the case of a mortgage loan originator required to be licensed under section 36a-671e, met the surety bond requirements under sections 36a-492 and 36a-671d; and (F) not made a material misstatement in the application. If the commissioner denies an application for a mortgage loan originator or a loan processor or underwriter license, the commissioner shall notify the applicant and may notify the sponsor or any other person the commissioner deems appropriate of the denial and the reasons for such denial.

      (2) (A) The minimum standards for license renewal for a mortgage loan originator or a loan processor or underwriter shall include the following: (i) The licensee continues to meet the minimum standards for license issuance under subdivision (1) of this subsection; (ii) the licensee has satisfied the annual continuing education requirements described in subsection (c) of section 36a-489a; and (iii) the licensee has paid all required fees for renewal of the license.

      (B) The license of a mortgage loan originator or a loan processor or underwriter that fails to satisfy the minimum standards for license renewal shall expire. The commissioner may adopt procedures for the reinstatement of expired licenses consistent with the standards established by the system. The commissioner may automatically suspend a mortgage loan originator or a loan processor or underwriter license if the licensee receives a deficiency on the system indicating that the payment required by subparagraph (A) of subdivision (2) of this subsection was Returned-ACH or returned pursuant to such other term as may be utilized by the system to indicate that the payment was not accepted. After a license has been automatically suspended pursuant to this section, the commissioner shall give such licensee notice of the automatic suspension, pending proceedings for revocation or refusal to renew pursuant to section 36a-494 and an opportunity for a hearing on such action in accordance with section 36a-51 and require such licensee to take or refrain from taking such action that, in the opinion of the commissioner, will effectuate the purposes of this section.

      (3) Not later than April 1, 2010, each mortgage loan originator licensee shall have completed the prelicensing education requirement described in section 36a-489a and passed a written test that meets the test requirement described in section 36a-489a, provided a mortgage loan originator licensee who was licensed as of the enactment of public act 09-209* shall have completed such prelicensing education requirement and passed such written test not later than October 31, 2010.

      (c) For purposes of this section, a person has shown that such person is not financially responsible when such person has shown a disregard in the management of such person's own financial condition. A determination that a person has not shown financial responsibility may include, but is not limited to: (1) Current outstanding judgments, except judgments solely as a result of medical expenses; (2) current outstanding tax liens or other government liens and filings; (3) foreclosures during the three years preceding the date of application for an initial license or renewal of a license; or (4) a pattern of seriously delinquent accounts within the past three years.

      (d) Withdrawal of an application for a license filed under subsection (a) or (b) of this section shall become effective upon receipt by the commissioner of a notice of intent to withdraw such application. The commissioner may deny a license up to the date one year after the effective date of withdrawal.

      (e) The commissioner may deem an application for a license under this section abandoned if the applicant fails to respond to any request for information required under sections 36a-485 to 36a-498f, inclusive, 36a-534a and 36a-534b, or the regulations adopted pursuant to said sections. The commissioner shall notify the applicant in writing on the system that if such information is not submitted not later than sixty days the application shall be deemed abandoned. An application filing fee paid prior to the date an application is deemed abandoned pursuant to this subsection shall not be refunded. Abandonment of an application pursuant to this subsection shall not preclude the applicant from submitting a new application for a license under said sections 36a-485 to 36a-498f, inclusive, 36a-534a and 36a-534b.

      (P.A. 85-399, S. 5; P.A. 89-347, S. 12; P.A. 94-122, S. 233, 340; P.A. 99-36, S. 26; P.A. 02-111, S. 6; P.A. 04-69, S. 4; P.A. 06-45, S. 2; P.A. 07-156, S. 7; P.A. 08-176, S. 31, 43; P.A. 09-207, S. 5; 09-208, S. 3; 09-209, S. 8; P.A. 11-216, S. 14-16.)

      *Note: Public act 09-209 is entitled "An Act Concerning Implementation of the S.A.F.E. Mortgage Licensing Act, the Emergency Mortgage Assistance Program, Foreclosure Procedures and Technical Revisions to the Banking Statutes". (See Reference Table captioned "Public Acts of 2009" in Volume 16 of the General Statutes of Connecticut, revised to January 1, 2011, which lists the sections amended, created or repealed by the act.)

      History: P.A. 89-347 extended the application of the section to mortgage brokers; P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-440d transferred to Sec. 36a-489 in 1995; P.A. 99-36 made technical changes; P.A. 02-111 designated existing provisions as Subsec. (a) and amended same by requiring commissioner to find that applicant meets requirements of Sec. 36a-488(a), providing that application requirements extend to "partners" in a partnership, and adding provisions re extending application requirements to "members if the applicant is a limited liability company", re denial of license application based on material misstatement in application, and re denial of application subject to provisions of Sec. 46a-80 and added Subsec. (b) re application for registration of originator; P.A. 04-69 substituted "36a-498a" for "36a-498"; P.A. 06-45 amended Subsec. (a) to require commissioner to deny application for license if commissioner finds that applicant made a material misstatement in application for registration of originator or files application for such registration with knowledge that application contains a material misstatement by originator, and amended Subsec. (b) to require commissioner to register originator named in application unless commissioner finds that originator has made a material misstatement in application and to make technical changes, effective May 8, 2006; P.A. 07-156 replaced language re application for registration of originator and registration with language re application for originator license and license and made conforming changes, effective September 30, 2008; P.A. 08-176 changed effective date of P.A. 07-156, S. 7, from September 30, 2008, to July 1, 2008, amended Subsec. (a) to add mortgage correspondent lender, amended Subsecs. (a) and (b) to add references to Secs. 36a-760a to 36a-760h and to make conforming changes, and amended Subsec. (b) to delete provision re license remaining in force and effect, effective July 1, 2008; P.A. 09-207 added provisions, codified by the Revisors as Subsec. (e), re circumstances under which commissioner may consider license application to be abandoned, effective July 7, 2009; P.A. 09-208 added provisions, codified by the Revisors as Subsec. (d), re withdrawal of license application, effective July 7, 2009; P.A. 09-209 deleted former Subsecs. (a) and (b), added new Subsec. (a) re commissioner's minimum findings for issuance and renewal of mortgage lender, mortgage correspondent lender or mortgage broker license, added new Subsec. (b) re commissioner's minimum findings for issuance and renewal of mortgage loan originator license, and added Subsec. (c) re determinations of financial responsibility, effective July 31, 2009 (Revisor's note: In Subsecs. (a)(2)(A)(ii) and (b)(2)(A)(ii), references to Sec. 36a-489a(d) were changed editorially by the Revisors to Sec. 36a-489a(c) for accuracy); P.A. 11-216 amended Subsec. (e) to make technical changes, delete reference to Sec. 36a-498a, add references to Secs. 36a-498f, 36a-534a and 36a-534b and require notification to be made "on the system", effective July 13, 2011, and amended Subsec. (a)(2)(B) to permit automatic suspension of a mortgage lender, correspondent lender or broker license and amended Subsec. (b) to add provisions re loan processor or underwriter, to require that mortgage loan originator applicant meet the surety bond requirements under Secs. 36a-492 and 26a-671d in Subdiv. (1), to permit automatic suspension of a mortgagor loan originator or loan processor or underwriter license in Subdiv. (2)(B), and to make conforming changes, effective October 1, 2011.

      Sec. 36a-489a. Prelicensing education, written test and annual continuing education requirements. (a)(1) In order to meet the prelicensing education and testing requirements referred to in sections 36a-488 and 36a-489, an individual shall complete at least twenty hours of education approved in accordance with subdivision (2) of this subsection, which shall include at least (A) three hours of instruction on relevant federal law and regulations; (B) three hours of ethics, including instruction on fraud, consumer protection and fair lending issues; and (C) two hours of training related to lending standards for the nontraditional mortgage product marketplace.

      (2) For purposes of subdivision (1) of this subsection, prelicensing education courses shall be reviewed and approved by the system based upon reasonable standards. Review and approval of a prelicensing education course shall include review and approval of the course provider.

      (3) Nothing in this subsection shall preclude any prelicensing education course, as approved by the system, that is provided by the sponsor or employer of the individual or an entity which is affiliated with the individual by an agency contract, or any subsidiary or affiliate of such sponsor, employer or entity.

      (4) Prelicensing education may be offered either in a classroom, online or by any other means approved by the system.

      (5) When prelicensing education requirements described in subdivision (1) of this subsection are completed in another state, such out-of-state prelicensing education requirements shall be accepted as credit towards completion of the prelicensing education requirements of this state, provided such out-of-state prelicensing education requirements are approved by the system.

      (6) (A) An individual previously licensed under section 36a-489, subsequent to the applicable effective date of the prelicensing and testing requirements referred to in section 36a-489, who is applying to be relicensed shall prove that such individual has completed all of the continuing education requirements for the year in which the license was last held.

      (B) An individual who previously held a position as a qualified individual or branch manager subsequent to the applicable effective date of the prelicensing and testing requirements referred to in section 36a-488 may not hold such position again until such individual has completed all of the continuing education requirements for the year in which such individual last held such position.

      (b) (1) In order to meet the written test requirements referred to in sections 36a-488 and 36a-489, an individual shall pass, in accordance with the standards established under this subsection, a qualified written test developed by the system and administered by a test provider approved by the system based upon reasonable standards.

      (2) A written test shall not be treated as a qualified written test for purposes of subdivision (1) of this subsection unless the test adequately measures the individual's knowledge and comprehension in appropriate subject areas, including ethics, federal law and regulation pertaining to mortgage origination, state law and regulation pertaining to mortgage origination, and federal and state law and regulation, including instruction on fraud, consumer protection, the nontraditional mortgage marketplace and fair lending issues.

      (3) Nothing in this subsection shall prohibit a test provider approved by the system from providing a test at the location of the sponsor or employer, any subsidiary or affiliate of the sponsor or employer or any entity with which the individual holds an exclusive arrangement to conduct the business of a mortgage loan originator or acts as a qualified individual or branch manager.

      (4) (A) An individual shall not be considered to have passed a qualified written test unless the individual achieves a test score of not less than seventy-five per cent correct answers to questions.

      (B) An individual may retake a test four consecutive times with each consecutive taking occurring at least thirty days after the preceding test. After failing four consecutive tests, an individual shall wait at least six months before taking the test again.

      (C) (i) An individual who was licensed subsequent to the applicable effective date of the prelicensing and testing requirements referred to in section 36a-489 who has not been licensed as a mortgage loan originator within the five-year period preceding the date of the filing of such individual's application for a mortgage loan originator license, not taking into account any time during which such individual is a registered mortgage loan originator, shall retake such test; (ii) a qualified individual or branch manager who held such a position after the effective date of prelicensing education and testing referred to in section 36a-488 and who has not held such position within the five-year period preceding the date of the filing on the system designating such individual as a qualified individual or branch manager shall retake such test, unless such individual was licensed as a mortgage loan originator during the five-year period preceding the date of the filing on the system designating such individual as a qualified individual or branch manager, not taking into account any time during which such individual is a registered mortgage loan originator; and (iii) effective October 1, 2011, an individual licensed as a loan processor or underwriter who applies to be licensed again shall retake the test if such individual has not been licensed as a loan processor or underwriter within the five-year period preceding the date of the filing of such application, not taking into account any time during which such individual is engaged in loan processing or underwriting but not required to be licensed under subdivision (3) of subsection (b) of section 36a-486.

      (c) (1) In order to meet the annual continuing education requirements referred to in subsections (a) and (b) of section 36a-489, a licensed mortgage loan originator, a qualified individual or branch manager and, effective October 1, 2011, a licensed loan processor or underwriter, shall complete at least eight hours of education approved in accordance with subdivision (2) of this subsection. Such courses shall include at least (A) three hours of instruction on relevant federal law and regulation; (B) two hours of ethics, including instruction on fraud, consumer protection and fair lending issues; and (C) two hours of training related to lending standards for the nontraditional mortgage product marketplace.

      (2) For purposes of subdivision (1) of this subsection, continuing education courses shall be reviewed and approved by the system based upon reasonable standards. Review and approval of a continuing education course shall include review and approval of the course provider.

      (3) Nothing in this subsection shall preclude any education course approved by the system that is provided by the sponsor or employer or an entity that is affiliated with the mortgage loan originator, qualified individual or branch manager or, effective October 1, 2011, loan processor or underwriter by an agency contract, or by any subsidiary or affiliate of such sponsor, employer or entity.

      (4) Continuing education may be offered either in a classroom, online or by any other means approved by the system.

      (5) Except as provided in procedures adopted under subsections (a) and (b) of section 36a-489 or in regulations adopted under subdivision (9) of this subsection, a licensed mortgage loan originator, qualified individual or branch manager or, effective October 1, 2011, a licensed loan processor or underwriter, may only receive credit for a continuing education course in the year in which the course is taken, and may not take the same approved course in the same or successive years to meet the annual requirements for continuing education.

      (6) A licensed mortgage loan originator or a qualified individual or branch manager or, effective October 1, 2011, a licensed loan processor or underwriter who is an approved instructor of an approved continuing education course may receive credit for the licensee's own annual continuing education requirement at the rate of two hours credit for every one hour taught.

      (7) When education requirements described in subdivision (1) of subsection (a) of this section are completed in another state, such out-of-state education requirements shall be accepted as credit towards completion of the education requirements of this state, provided such out-of-state education requirements are approved by the system.

      (8) A licensed mortgage loan originator and, effective October 1, 2011, a licensed loan processor or underwriter who subsequently becomes unlicensed must complete the continuing education requirements for the last year in which the license was held prior to issuance of an initial or renewed license. A qualified individual or branch manager who ceases to hold such position shall complete the continuing education requirements for the last year in which such individual or branch manager held such position prior to holding such position again.

      (9) A person who meets the requirements of subparagraphs (A)(i) and (A)(iii) of subdivision (2) of subsection (a) or (b) of section 36a-489 may compensate for any deficiency in continuing education requirements pursuant to regulations adopted by the commissioner.

      (d) For purposes of this section "nontraditional mortgage product" means any mortgage product other than a thirty-year fixed rate mortgage.

      (P.A. 09-209, S. 9; P.A. 11-216, S. 17.)

      History: P.A. 09-209 effective July 31, 2009; P.A. 11-216 amended Subsec. (a) to add reference to Sec. 36a-488, replace "applicant" with "individual" and make a technical change in Subdiv. (1), to add "employer" and replace "applicant" with "individual" in Subdiv. (3), and to replace "person" with "individual", make technical changes and add Subpara. (B) re continuing education requirements for individuals who previously held qualified individual or branch manager positions in Subdiv. (6), amended Subsec. (b) to add reference to Sec. 36a-488 and make a technical change in Subdiv. (1), to replace "applicant's" with "individual's" in Subdiv. (2), to add "employer", delete "of the applicant", replace "applicant" with "individual" and add "or acts as a qualified individual or branch manager" in Subdiv. (3), to replace "three" with "four" in Subdiv. (4)(B), and to add clauses (i) to (iii) re requirements for retaking a test in Subdiv. (4)(C), amended Subsec. (c) to revise reference to Sec. 36a-489 and add "a qualified individual or branch manager and, effective October 1, 2011, a licensed loan processor or underwriter" in Subdiv. (1), to delete "of the mortgage loan originator" and add "employer" and "qualified individual or branch manager or, effective October 1, 2011, loan processor or underwriter" in Subdiv. (3), to make technical changes, revise reference to Sec. 36a-489 and add "qualified individual or branch manager or, effective October 1, 2011, a licensed loan processor or underwriter" in Subdiv. (5), to add "or a qualified individual or branch manager or, effective October 1, 2011, a licensed loan processor or underwriter" in Subdiv. (6), and to add "and, effective October 1, 2011, a licensed loan processor or underwriter" and add provision re continuing education requirements for qualified individuals or branch managers in Subdiv. (8), and amended Subsec. (d) to delete definition of "system", effective July 13, 2011.

      Sec. 36a-490. (Formerly Sec. 36-440e). License requirements. Request to surrender license. Requirements for filing information with system. (a)(1) A mortgage lender, mortgage correspondent lender and mortgage broker license shall not be transferable or assignable. No licensee may use any name other than its legal name or a fictitious name approved by the commissioner, provided such licensee may not use its legal name if the commissioner disapproves use of such name. Any licensee who intends to permanently cease engaging in the business of making residential mortgage loans or acting as a mortgage broker at any time during a license period for any cause, including, but not limited to, bankruptcy or voluntary dissolution, shall file a request to surrender the license for each office at which the licensee intends to cease to do business, on the system, not later than fifteen days after the date of such cessation, provided this requirement shall not apply when a license has been suspended pursuant to section 36a-51. No surrender shall be effective until accepted by the commissioner.

      (2) A mortgage loan originator licensee who intends to permanently cease engaging in the business of a mortgage loan originator at any time during a license period for any cause, including, but not limited to, bankruptcy, shall file a request to surrender the license on the system not later than fifteen days after the date of such cessation, provided this requirement shall not apply when a license has been suspended pursuant to section 36a-51. No surrender shall be effective until accepted by the commissioner.

      (3) Effective October 1, 2011, a loan processor or underwriter licensee who intends to permanently cease engaging in the activities of a loan processor or underwriter at any time during a license period for any cause, including, but not limited to, bankruptcy, shall file a request to surrender the license on the system not later than fifteen days after the date of such cessation, provided this requirement shall not apply when a license has been suspended pursuant to section 36a-51. No surrender shall be effective until accepted by the commissioner.

      (b) A mortgage lender, mortgage correspondent lender or mortgage broker licensee may change the name of the licensee or address of the office specified on the most recent filing with the system if (1) at least thirty calendar days prior to such change, the licensee files such change with the system and, in the case of a main or branch office, provides, directly to the commissioner, a bond rider or endorsement, or addendum, as applicable, to the surety bond on file with the commissioner that reflects the new name or address of the main or branch office, and (2) the commissioner does not disapprove such change, in writing, or request further information within such thirty-day period. The licensee shall promptly file any change in the information most recently submitted in connection with the license with the system or, if the information cannot be filed on the system, directly notify the commissioner, in writing, of such change in the information.

      (c) The mortgage lender, mortgage correspondent lender or mortgage broker licensee shall promptly file with the system or, if the information cannot be filed on the system, directly notify the commissioner, in writing, of the occurrence of any of the following developments:

      (1) Filing for bankruptcy, or the consummation of a corporate restructuring, of the licensee;

      (2) Filing of a criminal indictment against the licensee in any way related to the lending or brokerage activities of the licensee, or receiving notification of the filing of any criminal felony indictment or felony conviction of any of the licensee's officers, directors, members, partners or shareholders owning ten per cent or more of the outstanding stock;

      (3) Receiving notification of the institution of license denial, cease and desist, suspension or revocation procedures, or other formal or informal regulatory action by any governmental agency against the licensee and the reasons therefor;

      (4) Receiving notification of the initiation of any action by the Attorney General or the attorney general of any other state and the reasons therefor;

      (5) Receiving notification of a material adverse action with respect to any existing line of credit or warehouse credit agreement;

      (6) Suspension or termination of the licensee's status as an approved seller or servicer by the Federal National Mortgage Association, Federal Home Loan Mortgage Corporation or Government National Mortgage Association;

      (7) Exercise of recourse rights by investors or subsequent assignees of residential mortgage loans if such loans for which the recourse rights are being exercised, in the aggregate, exceed the licensee's net worth exclusive of real property and fixed assets;

      (8) Receiving notification of filing for bankruptcy of any of the licensee's officers, directors, members, partners or shareholders owning ten per cent or more of the outstanding stock of the licensee; or

      (9) A decrease in the net worth required by subsection (a) of section 36a-488.

      (d) Each mortgage loan originator licensee and, effective October 1, 2011, each loan processor or underwriter licensee shall promptly file with the system or, if the information cannot be filed on the system, directly notify the commissioner, in writing, of any change in the information most recently submitted in connection with the license and of the occurrence of any of the following developments:

      (1) Filing for bankruptcy of the licensee;

      (2) Filing of a criminal indictment against the licensee;

      (3) Receiving notification of the institution of license or registration denial, cease and desist, suspension or revocation procedures, or other formal or informal regulatory action by any governmental agency against the licensee and the reasons therefor; or

      (4) Receiving notification of the initiation of any action against the licensee by the Attorney General or the attorney general of any other state and the reasons therefor.

      (e) Each mortgage lender, mortgage correspondent lender, mortgage broker, mortgage loan originator and loan processor or underwriter license shall remain in force and effect until it has been surrendered, revoked or suspended, or until it expires or is no longer effective, in accordance with the provisions of this title.

      (P.A. 85-399, S. 6; P.A. 89-347, S. 13; P.A. 94-122, S. 234, 340; P.A. 97-22, S. 1; P.A. 02-111, S. 7; P.A. 04-69, S. 5; P.A. 07-91, S. 3; 07-156, S. 8; P.A. 08-176, S. 31, 44; P.A. 09-208, S. 4; 09-209, S. 10; P.A. 10-32, S. 112; P.A. 11-216, S. 18, 19.)

      History: P.A. 89-347 amended Subsec. (a) by adding the reference to a licensee acting as a mortgage broker in more than one location; P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-440e transferred to Sec. 36a-490 in 1995; P.A. 97-22 made a technical change in Subsec. (a); P.A. 02-111 amended Subsec. (a) by changing requirement re license from "prominently posted in each place of business of the licensee" to "maintained at the location for which the license was issued and shall be available for public inspection", by changing requirement re change of location from prior approval to prior written notice and by making technical changes, amended Subsec. (b) by deleting former notice requirements and adding provision requiring licensee to promptly notify commissioner of any change in the information provided in the application and amended Subsec. (c) by replacing reference to Sec. 36a-495 with reference to Sec. 36a-498; P.A. 04-69 amended Subsec. (c) to substitute "36a-498a" for "36a-498"; P.A. 07-91 amended Subsec. (a) to delete provision requiring only prior written notice to commissioner for any change of location of a licensee, and amended Subsec. (b) to allow licensee to change name or location specified on its license if, at least 21 calendar days prior to change, licensee provides written notice to commissioner on a form satisfactory to commissioner and a bond rider or endorsement to surety bond on file and commissioner does not disapprove change, in writing, or request further information within such 21-day period; P.A. 07-156 amended Subsec. (a) to insert "mortgage lender and first mortgage broker" re license, effective September 30, 2008; P.A. 08-176 changed effective date of P.A. 07-156, S. 8, from September 30, 2008, to July 1, 2008, amended Subsec. (a) to add mortgage correspondent lender, to delete provisions re business at more than one location, to substitute legal name or fictitious name approved by commissioner for name stated on license, to add provisions re licensee who ceases to engage in business and to make conforming changes, amended Subsec. (b) to substitute "thirty" for "twenty-one" calendar days and "thirty-day" for "twenty-one-day" period and provide for filing with Nationwide Mortgage Licensing System, added new Subsecs. (c) and (d) re notification requirements, redesignated existing Subsec. (c) as Subsec. (e) and made conforming changes therein, effective July 1, 2008; P.A. 09-208 amended Subsec. (e) by substituting "this title" for "sections 36a-485 to 36a-498a, inclusive", effective July 7, 2009; P.A. 09-209 changed "mortgage loan" to "residential mortgage loan" and "Nationwide Mortgage Licensing System" to "system" throughout, amended Subsec. (a) to provide that no surrender of license is effective until accepted by commissioner, amended Subsec. (b) to reposition and revise provision re prompt filing of change in information, amended Subsec. (c) by deleting former Subdiv. (9) re notifying commissioner of change in control and adding new Subdiv. (9) re decrease in net worth, and amended Subsec. (e) by inserting reference to other licensing provisions, effective July 31, 2009; P.A. 10-32 made technical changes in Subsec. (e), effective May 10, 2010; P.A. 11-216 amended Subsec. (a) to designate existing provisions as Subdiv. (1) and delete "license revocation" therein and add Subdivs. (2) and (3) re filing request to surrender a license, amended Subsec. (b) to add references to main or branch office and addendum, amended Subsec. (d) to add reference to loan processor or underwriter, require notification of any change in information most recently submitted and delete "mortgage loan originator" in Subdivs. (1) to (4) and amended Subsec. (e) to add reference to loan processor or underwriter, effective July 13, 2011.

      Sec. 36a-491. (Formerly Sec. 36-440f). Expiration of licenses. Applications for renewal. Fees. (a) The expiration date of any mortgage lender, mortgage correspondent lender and mortgage broker license that expires on September 30, 2008, shall be extended to the close of business on December 31, 2008. On and after July 1, 2008, each mortgage lender, mortgage correspondent lender, mortgage broker, mortgage loan originator and, on and after October 1, 2011, each loan processor or underwriter license shall expire at the close of business on December thirty-first of the year in which it is approved, unless such license is renewed, and provided any such license that is approved on or after November first shall expire at the close of business on December thirty-first of the year following the year in which it is approved. An application for renewal of a license shall be filed between November first and December thirty-first of the year in which the license expires. Each applicant for an initial license or renewal of a license as a mortgage lender or mortgage correspondent lender shall pay to the system any required fees or charges and a license fee of one thousand dollars, and each applicant for an initial or renewal license as a mortgage broker shall pay to the system any required fees or charges and a license fee of five hundred dollars, provided each mortgage lender or mortgage correspondent lender licensee who is a licensee on September 30, 2008, who submits a renewal application shall, at the time of making such application, pay to the system any required fees or charges and a license fee of one thousand one hundred twenty-five dollars and each mortgage broker who was a licensee on June 30, 2008, who submits a renewal application shall, at the time of making such application, pay to the system any required fees or charges and a license fee of five hundred sixty-five dollars. Effective November 1, 2009, each applicant for an initial license or renewal of a license as a mortgage loan originator and, effective October 1, 2011, as a loan processor or underwriter, shall pay to the system any required fees or charges and a license fee of three hundred dollars.

      (b) All fees paid pursuant to this section, including fees paid in connection with an application that is denied or withdrawn prior to the issuance of the license, shall be nonrefundable. No fee paid pursuant to this section shall be prorated if the license is surrendered, revoked or suspended prior to the expiration of the period for which it was approved.

      (P.A. 85-399, S. 7; P.A. 88-150, S. 5; P.A. 89-347, S. 14; P.A. 92-89, S. 7, 20; P.A. 94-104, S. 5; P.A. 96-71, S. 2, 8; P.A. 99-36, S. 27; P.A. 02-111, S. 8; P.A. 04-69, S. 6; P.A. 05-46, S. 2; P.A. 06-45, S. 3; P.A. 07-156, S. 9; P.A. 08-176, S. 31, 45; P.A. 09-209, S. 11; June Sp. Sess. P.A. 09-3, S. 380; P.A. 11-216, S. 20.)

      History: P.A. 88-150 amended Subsec. (a) by providing that the license fee is nonrefundable and adding the provision re the expiration of licenses on September thirtieth; P.A. 89-347 added references to mortgage brokers, establishing license fee for mortgage brokers; P.A. 92-89 increased the fee applicable to lender's and combination licenses from $250 to $400 and increased the fee applicable to broker's licenses from $100 to $200; P.A. 94-104 changed the license renewal deadline from September tenth to September first and added a $100 late fee in Subsec. (a), and added Subsec. (a)(2) re applications filed by a licensee whose license expired within 60 days of his application; Sec. 36-440f transferred to Sec. 36a-491 in 1995; P.A. 96-71 clarified that all license fees required by this section are nonrefundable, effective July 1, 1996; P.A. 99-36 made a technical change in Subsec. (a); P.A. 02-111 amended Subsec. (a) by providing for license expiration at the close of business on September thirtieth of the even-numbered year following its issuance unless renewed, adding provisions re fee of $800 for first mortgage lender and first mortgage correspondent lender licenses and fee of $400 for first mortgage broker license, adding provisions re lesser fee if application filed not earlier than one year before expiration date, making conforming and technical changes and incorporating provisions of existing Subdiv. (2) into Subdiv. (1) and adding new Subdiv. (2) re application and fees for registration of originator, and amended Subsec. (b) by adding "or registration"; P.A. 04-69 amended Subsec. (a) to change reference to each license issued pursuant to section "36a-489", in lieu of "this" section, and to substitute "36a-498a" for "36a-498" in Subdiv. (1), and add Subdiv. (3) requiring commissioner to automatically suspend license or registration if commissioner determines that a check filed to pay the license or registration fee has been dishonored and requiring commissioner to give notice of the automatic suspension pending proceedings for revocation or refusal to renew and an opportunity for a hearing in accordance with Sec. 36a-51; P.A. 05-46 amended Subsec. (a)(1) to provide that renewal application filed with commissioner after September first, accompanied by late fee, shall be deemed to be timely and sufficient for purposes of Sec. 4-182(b); P.A. 06-45 amended Subsec. (a)(2) to delete proviso re prorated registration fee of $50 for originator for application filed not earlier than one year before date license expires; P.A. 07-156 amended Subsec. (a)(1) to delete requirement that applicants pay various license fees to commissioner and substitute requirement that applicants, including applicants for a first mortgage broker license, pay the required license fee and processing fee for an initial or renewal application to the national mortgage licensing system and to change date of expiration of licenses issued pursuant to Sec. 36a-489 from September 30th of even-numbered year following issuance to December 31 of year following issuance, amended Subsec. (a)(2) to delete references to registration and to substitute references to license re originators, to require applicants for originator license to pay required license and processing fees for an initial or renewal application to the national mortgage licensing system in lieu of commissioner and to provide that license shall expire on December 31 of year following issuance, deleted former Subsec. (a)(3), and amended Subsec. (b) to delete references to registration, effective September 30, 2008; P.A. 08-176 changed effective date of P.A. 07-156, S. 9, from September 30, 2008, to July 1, 2008, amended Subsec. (a) to expand provisions re date of expiration of licenses, add time frame for renewal of licenses and license fees and make conforming changes, and amended Subsec. (b) to add provisions allowing certain originator fees to be refundable and preventing prorating, effective July 1, 2008; P.A. 09-209 changed "Nationwide Mortgage Licensing System" to "system" and "license or renewal" to "initial license or renewal" throughout, amended Subsec. (a) by deleting Subdiv. (1) designator, applying provisions to mortgage loan originator license, deleting provision re licensee filing renewal application not later than March first of year following year of expiration, replacing former Subdiv. (2) re expiration of mortgage loan originator license with provision, effective November 1, 2009, increasing license fee for originators from $100 to $300, and amended Subsec. (b) by changing "such fees" to "any license fee", effective July 31, 2009; June Sp. Sess. P.A. 09-3 amended Subsec. (a) to increase fees; P.A. 11-216 amended Subsec. (a) to add references to loan processor or underwriter and amended Subsec. (b) to delete provision re license fee paid by originator for license not sponsored by mortgage lender, correspondent lender or broker.

      Sec. 36a-492. (Formerly Sec. 36-440g). Surety bond required. Cancellation of bond. Automatic suspension of license. Notices. (a)(1) Each licensed mortgage lender, mortgage correspondent lender and mortgage broker shall file with the commissioner a single surety bond, written by a surety authorized to write such bonds in this state, covering its main office and file an addendum to such bond to cover any branch office, in a penal sum determined in accordance with subsection (d) of this section, provided the penal sum of the bond for licensed mortgage lenders and mortgage correspondent lenders shall be not less than one hundred thousand dollars and the penal sum of the bond for mortgage brokers shall be not less than fifty thousand dollars. The bond shall cover all mortgage loan originators sponsored by such licensee.

      (2) Each mortgage loan originator licensee shall be covered by a surety bond with a penal sum in an amount that reflects the dollar amount of loans originated by such mortgage loan originator in accordance with subsection (d) of this section, provided such coverage shall be provided through a single surety bond filed with the commissioner by the person who sponsors such mortgage loan originator.

      (3) Effective October 1, 2011, (A) in the case of an exempt registrant under subdivision (1) of subsection (a) of section 36a-487, (i) the surety bond shall cover all mortgage loan originators sponsored by such exempt registrant and comply with the requirements set forth in this section, and (ii) the penal sum of such bond shall be in an amount determined in accordance with subsection (d) of this section, provided the penal sum of the bond shall be not less than one hundred thousand dollars; (B) in the case of an exempt registrant under subsection (b) of section 36a-487, (i) the surety bond shall cover all mortgage loan originators sponsored by such exempt registrant and comply with the requirements set forth in this section, and (ii) the penal sum of the bond shall be in an amount determined in accordance with subsection (d) of this section, provided the penal sum shall be not less than fifty thousand dollars; and (C) in the case of an exempt registrant under subdivision (2) of subsection (a) of section 36a-487, the surety bond shall cover all mortgage loan originators sponsored by such exempt registrant and comply with the requirements set forth in section 36a-671d.

      (4) (A) The principal on a bond required by subdivisions (1) and (2) of this subsection shall annually confirm that it maintains the required penal sum in an amount required by subsection (d) of this section. Not later than September 1, 2011, and every September first thereafter, such principal shall file such information as the commissioner may require under subsection (d) of this section and shall file, not later than September first of the applicable year, or on such other date as the commissioner may require, pursuant to subdivision (d) of this section, any bond rider or endorsement to the surety bond on file with the commissioner to reflect any changes necessary to maintain the surety bond coverage required by this section.

      (B) Effective October 1, 2011, the principal on a bond required by subdivision (3) of this section shall annually confirm that it maintains the required penal sum in an amount required by subsection (d) of this section. Not later than September 1, 2012, and every September first thereafter, such principal shall file such information as the commissioner may require under subsection (d) of this section and shall file, not later than September first of the applicable year, or on such other date as the commissioner may require pursuant to subdivision (d) of this section, any bond rider or endorsement to the surety bond on file with the commissioner to reflect any changes necessary to maintain the surety bond coverage required by this section.

      (5) The commissioner may adopt regulations in accordance with chapter 54 with respect to the requirements for such surety bonds.

      (b) The bond required by subsection (a) of this section shall be (1) in a form approved by the Attorney General, and (2) conditioned upon the mortgage lender, mortgage correspondent lender or mortgage broker licensee and any mortgage loan originator licensee sponsored by such mortgage lender, mortgage correspondent lender or mortgage broker or, in the case of a mortgage loan originator licensee sponsored after October 1, 2011, by an exempt registrant, upon such mortgage loan originator licensee faithfully performing any and all written agreements or commitments with or for the benefit of borrowers and prospective borrowers, truly and faithfully accounting for all funds received from a borrower or prospective borrower by the licensee in the licensee's capacity as a mortgage lender, mortgage correspondent lender, mortgage broker or mortgage loan originator, and conducting such mortgage business consistent with the provisions of sections 36a-485 to 36a-498f, inclusive, 36a-534a and 36a-534b. Any borrower or prospective borrower who may be damaged by failure to perform any written agreements or commitments, or by the wrongful conversion of funds paid by a borrower or prospective borrower to a licensee, may proceed on such bond against the principal or surety thereon, or both, to recover damages. Commencing August 1, 2009, any borrower or prospective borrower who may be damaged by a mortgage lender, mortgage correspondent lender, mortgage broker or mortgage loan originator licensee's failure to satisfy a judgment against the licensee arising from the making or brokering of a nonprime home loan, as defined in section 36a-760, may proceed on such bond against the principal or surety thereon, or both, to recover the amount of the judgment. The commissioner may proceed on such bond against the principal or surety thereon, or both, to collect any civil penalty imposed upon a licensee pursuant to subsection (a) of section 36a-50 and any unpaid costs of examination of a licensee as determined pursuant to section 36a-65. The proceeds of the bond, even if commingled with other assets of the principal, shall be deemed by operation of law to be held in trust for the benefit of such claimants against the principal in the event of bankruptcy of the principal and shall be immune from attachment by creditors and judgment creditors. The bond shall run concurrently with the period of the license for the main office and the aggregate liability under the bond shall not exceed the penal sum of the bond. The principal shall notify the commissioner of the commencement of an action on the bond. When an action is commenced on a principal's bond, the commissioner may require the filing of a new bond and immediately on recovery on any action on the bond, the principal shall file a new bond.

      (c) The surety company shall have the right to cancel the bond at any time by a written notice to the principal stating the date cancellation shall take effect. Such notice shall be sent by certified mail to the principal at least thirty days prior to the date of cancellation. A surety bond shall not be cancelled unless the surety company notifies the commissioner in writing not less than thirty days prior to the effective date of cancellation. After receipt of such notification from the surety company, the commissioner shall give written notice to the principal of the date such bond cancellation shall take effect and such notice shall be deemed notice to each mortgage loan originator licensee sponsored by such principal. The commissioner shall automatically suspend the licenses of a mortgage lender, mortgage correspondent lender or mortgage broker on such date and inactivate the licenses of the mortgage loan originators sponsored by such lender, correspondent lender or broker. On and after October 1, 2011, in the case of a cancellation of an exempt registrant's bond, the commissioner shall inactivate the licenses of the mortgage loan originators sponsored by such exempt registrant. No automatic suspension or inactivation shall occur if, prior to the date that the bond cancellation shall take effect, (1) the principal submits a letter of reinstatement of the bond from the surety company or a new bond, (2) the mortgage lender, mortgage correspondent lender or mortgage broker licensee has ceased business and has surrendered all licenses in accordance with subsection (a) of section 36a-490, or (3) in the case of a mortgage loan originator licensee, the sponsorship with the mortgage lender, mortgage correspondent lender or mortgage broker who was automatically suspended pursuant to this section or, after October 1, 2011, with the exempt registrant who failed to provide the bond required by this section, has been terminated and a new sponsor has been requested and approved. After a mortgage lender, mortgage correspondent lender or mortgage broker license has been automatically suspended pursuant to this section, the commissioner shall give such licensee notice of the automatic suspension, pending proceedings for revocation or refusal to renew pursuant to section 36a-494 and an opportunity for a hearing on such action in accordance with section 36a-51 and require such licensee to take or refrain from taking such action as in the opinion of the commissioner will effectuate the purposes of this section. Effective October 1, 2011, the commissioner may provide information to an exempt registrant concerning actions taken by the commissioner pursuant to this subsection against any mortgage loan originator licensee that was sponsored and bonded by such exempt registrant.

      (d) The penal sum of the bond required by subdivisions (1) to (3), inclusive, of subsection (a) of this section shall be determined as follows:

      (1) An applicant for an initial mortgage lender license or mortgage correspondent lender license shall file a bond in a penal sum of one hundred thousand dollars in connection with its application for the main office.

      (2) An applicant for an initial mortgage broker license shall file a bond in a penal sum of fifty thousand dollars in connection with its application for the main office.

      (3) Effective October 1, 2011, an exempt registrant under subsection (c) of section 36a-487 who is exempt from licensing under subdivision (1) of subsection (a) of section 36a-487 shall file a bond in a penal sum of one hundred thousand dollars the first time such exempt registrant sponsors a mortgage loan originator.

      (4) Effective October 1, 2011, an exempt registrant under subsection (c) of section 36a-487 who is exempt from licensure under subsection (b) of section 36a-487 shall file a bond in a penal sum of fifty thousand dollars the first time such exempt registrant sponsors a mortgage loan originator.

      (5) Effective October 1, 2011, an exempt registrant under subsection (c) of section 36a-487, as who is exempt from licensure under subdivision (2) of subsection (a) of section 36a-487 shall file a bond in a penal sum as set forth in section 36a-671d.

      (6) (A) For mortgage lender and mortgage correspondent lender licensees, and, after October 1, 2011, persons sponsoring and bonding at least one mortgage loan originator as an exempt registrant under subsection (c) of section 36a-487 and who are exempt from licensing under subdivision (1) of subsection (a) of section 36a-487 if (i) the aggregate dollar amount of all residential mortgage loans originated by such licensee at all licensed locations or by the exempt registrant during the preceding twelve-month period ending July thirty-first of the current year is less than thirty million dollars, the penal sum of the bond shall be one hundred thousand dollars; (ii) the aggregate dollar amount of all residential mortgage loans originated by such licensee at all licensed locations or by the exempt registrant during the preceding twelve-month period ending July thirty-first of the current year is thirty million dollars or more but less than one hundred million dollars, the penal sum of the bond shall be two hundred thousand dollars; (iii) the aggregate dollar amount of all residential mortgage loans originated by such licensee at all licensed locations or by the exempt registrant during the preceding twelve-month period ending July thirty-first of the current year is one hundred million dollars or more but less than two hundred fifty million dollars, the penal sum of the bond shall be three hundred thousand dollars; and (iv) the aggregate dollar amount of all residential mortgage loans originated by such licensee at all licensed locations or by the exempt registrant during the preceding twelve-month period ending July thirty-first of the current year is two hundred fifty million dollars or more, the penal sum of the bond shall be five hundred thousand dollars.

      (B) For mortgage broker licensees and, after October 1, 2011, persons who are sponsoring and bonding at least one mortgage loan originator as an exempt registrant under subsection (c) of section 36a-487 and who are exempt from licensing under subsection (b) of section 36a-487 if (i) the aggregate dollar amount of all residential mortgage loans originated by such licensee at all licensed locations or by the exempt registrant during the preceding twelve-month period ending July thirty-first of the current year is less than thirty million dollars, the penal sum of the bond shall be fifty thousand dollars; (ii) the aggregate dollar amount of all residential mortgage loans originated by such licensee at all licensed locations or by the exempt registrant during the preceding twelve-month period ending July thirty-first of the current year is thirty million dollars or more but less than fifty million dollars, the penal sum of the bond shall be one hundred thousand dollars; and (iii) the aggregate dollar amount of all residential mortgage loans originated by such licensee at all licensed locations or by the exempt registrant during the preceding twelve-month period ending July thirty-first of the current year is fifty million dollars or more, the penal sum of the bond shall be one hundred fifty thousand dollars.

      (7) For purposes of this subsection, the aggregate dollar amount of all residential mortgage loans originated by such licensee or, after October 1, 2011, such exempt registrant, includes the aggregate dollar amount of all closed residential mortgage loans that the licensee or exempt registrant originated, brokered or made, as applicable.

      (8) Financial information necessary to verify the aggregate dollar amount of residential mortgage loans originated shall be filed with the commissioner, as the commissioner may require, and shall be reported on the system at such time and in such form as the system may require.

      (9) The commissioner may require a change in the penal sum of the bond if the commissioner determines at any time that the aggregate dollar amount of all residential mortgage loans originated warrants a change in the penal sum of the bond.

      (P.A. 85-399, S. 8; P.A. 89-347, S. 15; P.A. 90-277; P.A. 94-122, S. 235, 340; P.A. 99-36, S. 28; P.A. 02-111, S. 9; P.A. 04-69, S. 7; P.A. 07-156, S. 10; P.A. 08-176, S. 31, 46, 47; P.A. 09-208, S. 5; 09-209, S. 12; P.A. 11-216, S. 21.)

      History: P.A. 89-347 extended the application of the section to mortgage brokers; P.A. 90-277 reduced the required bond sum from $50,000 to $40,000; P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-440g transferred to Sec. 36a-492 in 1995; P.A. 99-36 made technical changes; P.A. 02-111 added provision re performance "for the benefit" of borrowers and prospective borrowers, changed any "person" to any "borrower or perspective borrower", added provisions re commissioner to proceed on bond to collect civil penalty imposed pursuant to Sec. 36a-50(a) and re bond proceeds deemed to be held in trust and immune from attachment, and made conforming and technical changes; P.A. 04-69 designated existing provisions as Subsec. (a), substituting "36a-498a" for "36a-498" therein, and added Subsec. (b) giving surety company the right to cancel the bond at any time by written notice to licensee, specifying manner of notice, requiring surety company to notify commissioner in writing prior to cancellation, requiring commissioner to automatically suspend license on date cancellation takes effect, unless bond has been replaced or renewed, and requiring commissioner to give licensee notice of automatic suspension pending proceedings for revocation or refusal to renew and an opportunity for a hearing in accordance with Sec. 36a-51; P.A. 07-156 amended Subsec. (a) to insert "mortgage lender or first mortgage broker" re license, effective September 30, 2008; P.A. 08-176 changed effective date of P.A. 07-156, S. 10, from September 30, 2008, to July 1, 2008, amended Subsec. (a) to add "mortgage correspondent lender", to increase amount of bond to $80,000 on and after August 1, 2009, to add provision, commencing August 1, 2009, for borrower or prospective borrower of nonprime home loan to proceed on bond to recover amount of judgment, to allow commissioner to proceed on bond to collect any unpaid costs of examination of licensee and to make conforming changes, and amended Subsec. (b) to delete provision re automatic suspension of license when bond is cancelled, effective July 1, 2008; P.A. 09-208 amended Subsec. (b) by adding provisions re automatic suspension of license and opportunity for hearing upon cancellation of bond; P.A. 09-209 amended Subsec. (a) by designating existing provisions as Subdiv. (1), deleting provisions re conditions of surety bond and proceeding on bonds, adding provision re penal sum of bond reflecting dollar amount of loans originated by lender or broker as determined by commissioner and adding Subdiv. (2) re surety bonds for originators, added new Subsec. (b) re conditions of surety bond and proceeding on bonds and redesignated existing Subsec. (b) as Subsec. (c), effective July 31, 2009; P.A. 11-216 replaced former Subsec. (a)(1) and (2) with new Subsec. (a)(1) to (5) re surety bond requirements, amended Subsec. (b) to require bond to be in form approved by Attorney General, add provision re mortgage loan originator licensee sponsored by an exempt registrant, make technical changes, and replace "licensee" with "principal", amended Subsec. (c) to replace "licensee" with "principal", permit notice from commissioner to principal of bond cancellation to be deemed notice to each mortgage loan originator licensee sponsored by such principal, add requirements re suspension or inactivation of license and prevention of suspension or inactivation for mortgage loan originator licensees whose sponsorship has been terminated and who have requested and received approval for new sponsor, permit commissioner to provide information re exempt registrants concerning actions taken against any mortgage loan originator licensees sponsored by such registrants and make technical changes, and added Subsec. (d) re determination of penal sum of bond required, effective July 1, 2011.

      Sec. 36a-494. (Formerly Sec. 36-440i). Suspension, revocation or refusal to renew license or taking of other action. Removal from office and from employment or retention. Temporary order to cease business. Hearings. (a)(1) The commissioner may suspend, revoke or refuse to renew any mortgage lender, mortgage correspondent lender or mortgage broker license or take any other action, in accordance with the provisions of section 36a-51, for any reason which would be sufficient grounds for the commissioner to deny an application for such license under sections 36a-485 to 36a-498f, inclusive, 36a-534a and 36a-534b, or if the commissioner finds that the licensee, any control person of the licensee, the qualified individual or branch manager with supervisory authority, trustee, employee or agent of such licensee has done any of the following: (A) Made any material misstatement in the application; (B) committed any fraud, misappropriated funds or misrepresented, concealed, suppressed, intentionally omitted or otherwise intentionally failed to disclose any of the material particulars of any residential mortgage loan transaction, including disclosures required by subdivision (6) of subsection (a) of section 36a-493, or part III of chapter 669 or regulations adopted pursuant thereto, to anyone entitled to such information; (C) violated any of the provisions of this title or of any regulations adopted pursuant thereto, or any other law or regulation applicable to the conduct of its business; or (D) failed to perform any agreement with a licensee or a borrower.

      (2) The commissioner may suspend, revoke or refuse to renew any mortgage loan originator license or any loan processor or underwriter license or take any other action, in accordance with the provisions of section 36a-51, for any reason which would be sufficient grounds for the commissioner to deny an application for such license under sections 36a-485 to 36a-498f, inclusive, 36a-534a and 36a-534b, or if the commissioner finds that the licensee has committed any fraud, misappropriated funds, misrepresented, concealed, suppressed, intentionally omitted or otherwise intentionally failed to disclose any of the material particulars of any residential mortgage loan transaction or has violated any of the provisions of this title or of any regulations adopted pursuant to such title or any other law or regulation applicable to the conduct of such licensee's business.

      (b) Whenever it appears to the commissioner that any person has violated, is violating or is about to violate any of the provisions of sections 36a-485 to 36a-498f, inclusive, 36a-534a and 36a-534b, or any regulation adopted pursuant thereto, or any licensee has failed to perform any agreement with a borrower, committed any fraud, misappropriated funds or misrepresented, concealed, suppressed, intentionally omitted or otherwise intentionally failed to disclose any of the material particulars of any residential mortgage loan transaction, including disclosures required by subdivision (6) of subsection (a) of section 36a-493, or part III of chapter 669 or regulations adopted pursuant thereto, to anyone entitled to such information, the commissioner may take action against such person or licensee in accordance with sections 36a-50 and 36a-52.

      (c) (1) The commissioner may remove any individual conducting business under sections 36a-485 to 36a-498f, inclusive, 36a-534a and 36a-534b from office and from employment or retention as an independent contractor in the mortgage business in this state whenever the commissioner finds as the result of an investigation that such person: (A) Has violated any of said sections or any regulation or order issued thereunder; or (B) for any reason that would be sufficient grounds for the commissioner to deny a license under section 36a-489, by sending a notice to such person by registered or certified mail, return receipt requested, or by any express delivery carrier that provides a dated delivery receipt. The notice shall be deemed received by such person on the earlier of the date of actual receipt or seven days after mailing or sending. Any such notice shall include: (i) A statement of the time, place and nature of the hearing; (ii) a statement of the legal authority and jurisdiction under which the hearing is to be held; (iii) a reference to the particular sections of the general statutes, regulations or orders alleged to have been violated; (iv) a short and plain statement of the matters asserted; and (v) a statement indicating that such person may file a written request for a hearing on the matters asserted not later than fourteen days after receipt of the notice. If the commissioner finds that the protection of borrowers requires immediate action, the commissioner may suspend any such person from office and require such person to take or refrain from taking such action as in the opinion of the commissioner will effectuate the purposes of this subsection, by incorporating a finding to that effect in such notice. The suspension or prohibition shall become effective upon receipt of such notice and, unless stayed by a court, shall remain in effect until the entry of a permanent order or the dismissal of the matters asserted.

      (2) If a hearing is requested within the time specified in the notice, the commissioner shall hold a hearing upon the matters asserted in the notice unless such person fails to appear at the hearing. After the hearing, if the commissioner finds that any of the grounds set forth in subparagraph (A) or (B), of subdivision (1) of this subsection exist with respect to such person, the commissioner may order the removal of such person from office and from any employment in the mortgage business in this state. If such person fails to appear at the hearing, the commissioner may order the removal of such person from office and from employment in the mortgage business in this state.

      (d) The commissioner may issue a temporary order to cease business under a license if the commissioner determines that such license was issued erroneously. The commissioner shall give the licensee an opportunity for a hearing on such action in accordance with section 36a-52. Such temporary order shall become effective upon receipt by the licensee and, unless set aside or modified by a court, shall remain in effect until the effective date of a permanent order or dismissal of the matters asserted in the notice.

      (P.A. 85-399, S. 10; P.A. 86-403, S. 78, 132; P.A. 88-230, S. 1, 12; P.A. 89-347, S. 17; P.A. 90-98, S. 1, 2; P.A. 93-142, S. 4, 7, 8; 93-194, S. 5, 7; P.A. 94-122, S. 237, 340; P.A. 99-36, S. 29; P.A. 00-61, S. 2, 9; P.A. 02-111, S. 11; P.A. 04-69, S. 8; P.A. 05-46, S. 3; P.A. 06-45, S. 4; P.A. 07-91, S. 17; 07-156, S. 12; P.A. 08-176, S. 31, 50; P.A. 09-209, S. 14; P.A. 11-216, S. 22.)

      History: P.A. 86-403 deleted reference to chapter 657a in Subsec. (a); P.A. 88-230 replaced "judicial district of Hartford-New Britain" with "judicial district of Hartford", effective September 1, 1991; P.A. 89-347 amended Subsec. (a) by adding failure to make disclosures required by Sec. 36-440h(a)(6) as grounds for suspending, revoking or refusing to renew a license; P.A. 90-98 changed the effective date of P.A. 88-230 from September 1, 1991, to September 1, 1993; P.A. 93-142 changed the effective date of P.A. 88-230 from September 1, 1993, to September 1, 1996, effective June 14, 1993; P.A. 93-194 specified that provisions apply to persons who are not licensed as well as to licensees, effective June 23, 1993; P.A. 94-122 deleted Subsec. (c) re cease and desist provisions and made technical changes, effective January 1, 1995; Sec. 36-440i transferred to Sec. 36a-494 in 1995; P.A. 99-36 made technical changes; P.A. 00-61 amended Subsec. (b) by adding language re licensee's failure to perform an agreement with a borrower, effective July 1, 2000; P.A. 02-111 amended Subsec. (a) by designating existing provisions as Subdiv. (1) and, within said Subdiv., redesignating existing Subdivs. (1) to (4) as Subparas. (A) to (D), replacing "owner" with "proprietor", adding reference to misappropriated funds in Subpara. (B), replacing former statutory references with reference to "this title" in Subpara. (C) and adding reference to licensee in Subpara. (D), and by adding new Subdiv. (2) re commissioner's authority to suspend, revoke or refuse to renew registration of originator; P.A. 04-69 substituted "36a-498a" for "36a-498" throughout and amended Subsec. (b) to allow commissioner to take action against violator or licensee in accordance with Sec. 36a-52; P.A. 05-46 amended Subsec. (b) to allow commissioner to impose civil penalty or issue cease and desist order against licensees and registrants who commit fraud, misappropriate funds or misrepresent, conceal, suppress, intentionally omit or otherwise intentionally fail to disclose any material particulars of mortgage loan transaction to anyone entitled to such information; P.A. 06-45 amended Subsec. (a)(2) to provide that violations of title 36a or regulations or any other law applicable to conduct of registrant's business are grounds for suspension, revocation or refusal to renew registration of originator, effective May 8, 2006; P.A. 07-91 amended Subsec. (a)(1) and (2) to authorize commissioner to take any other action, in accordance with provisions of Sec. 36a-51, effective June 5, 2007; P.A. 07-156 amended Subsec. (a)(1) to insert "mortgage lender or first mortgage broker" re license, amended Subsec. (a)(2) to substitute "license" and "licensee" for "registration" and "registrant", and amended Subsec. (b) to delete references to "registrant", effective September 30, 2008; P.A. 08-176 changed effective date of P.A. 07-156, S. 12, from September 30, 2008, to July 1, 2008, and amended Subsec. (a) to add "mortgage correspondent lender", make conforming changes and, in Subdiv. (2), include findings that licensee has "concealed, suppressed, intentionally omitted or otherwise intentionally failed to disclose" any material particulars, effective July 1, 2008; P.A. 09-209 changed "mortgage loan" to "residential mortgage loan" throughout, amended Subsec. (a) by changing "proprietor, director, officer, member, partner, shareholder" to "any control person of the licensee, the qualified individual or branch manager with supervisory authority", added Subsec. (c) re removal from office and from employment or retention as independent contractor and opportunity for hearing, added Subsec. (d) re temporary order to cease business under license and opportunity for hearing, and inserted references to other licensing provisions throughout, effective July 31, 2009; P.A. 11-216 amended Subsec. (a)(2) to add "any loan processor or underwriter licensee or".

      Sec. 36a-498. (Formerly Sec. 36-440m). Refundability of advance fees. Exceptions. Prohibited acts by mortgage lenders, correspondent lenders, brokers and loan originators re borrowers. (a) Except as provided in subsection (c) of this section, every advance fee paid or given, directly or indirectly, to a mortgage lender, mortgage correspondent lender or mortgage broker required to be licensed pursuant to sections 36a-485 to 36a-498f, inclusive, 36a-534a and 36a-534b shall be refundable.

      (b) No mortgage loan originator required to be licensed pursuant to sections 36a-485 to 36a-498f, inclusive, 36a-534a and 36a-534b shall accept payment of any advance fee except an advance fee on behalf of a mortgage lender, mortgage correspondent lender or mortgage broker licensee. Nothing in this subsection shall be construed as prohibiting the mortgage lender, mortgage correspondent lender or mortgage broker licensee from paying a mortgage loan originator all or part of an advance fee, provided such advance fee paid is not refundable under this section.

      (c) Subsection (a) of this section shall not apply if: (1) The person providing the advance fee and the mortgage lender, mortgage correspondent lender or mortgage broker agree in writing that the advance fee shall not be refundable, in whole or in part; and (2) the written agreement complies in all respects with the provisions of subsection (d) of this section.

      (d) An agreement under subsection (c) of this section shall meet all of the following requirements to be valid and enforceable: (1) The agreement shall be dated, signed by both parties, and be executed prior to the payment of any advance fee; (2) the agreement shall expressly state the total advance fee required to be paid and any amount of the advance fee that shall not be refundable; (3) the agreement shall clearly and conspicuously state any conditions under which the advance fee will be retained by the mortgage lender, mortgage correspondent lender or mortgage broker; (4) the term "nonrefundable" shall be used to describe each advance fee or portion thereof to which the term is applicable, and shall appear in boldface type in the agreement each time it is used; and (5) the form of the agreement shall (A) be separate from any other forms, contracts, or applications utilized by the mortgage lender, mortgage correspondent lender or mortgage broker, (B) contain a heading in a size equal to at least ten-point boldface type that shall title the form "AGREEMENT CONCERNING NONREFUNDABILITY OF ADVANCE FEE", (C) provide for a duplicate copy which shall be given to the person paying the advance fee at the time of payment of the advance fee, and (D) include such other specifications as the commissioner may by regulation prescribe.

      (e) An agreement under subsection (c) of this section that does not meet the requirements of subsection (d) of this section shall be voidable at the election of the person paying the advance fee.

      (f) (1) No mortgage lender, mortgage correspondent lender or mortgage broker required to be licensed pursuant to sections 36a-485 to 36a-498f, inclusive, 36a-534a and 36a-534b shall enter into an agreement with or otherwise require any person to pay the mortgage lender, mortgage correspondent lender or mortgage broker for any fee, commission or other valuable consideration lost as a result of such person failing to consummate a residential mortgage loan, provided the mortgage lender, mortgage correspondent lender or mortgage broker may collect such fee, commission or consideration as an advance fee subject to the requirements of this section.

      (2) No mortgage broker required to be licensed pursuant to sections 36a-485 to 36a-498f, inclusive, 36a-534a and 36a-534b shall enter into an agreement with or otherwise require any person to pay the mortgage broker any fee, commission or other valuable consideration for the prepayment of the principal of a residential mortgage loan by such person before the date on which the principal is due.

      (g) (1) For the purposes of this subsection:

      (A) "Unfair or deceptive act or practice" means (i) the failure to clearly and conspicuously state in the initial phase of the solicitation that the solicitor is not affiliated with the mortgage lender, mortgage correspondent lender or mortgage broker with which the consumer initially applied, (ii) the failure to clearly and conspicuously state in the initial phase of the solicitation that the solicitation is based on personal information about the consumer that was purchased, directly or indirectly, from a consumer reporting agency without the knowledge or permission of the mortgage lender, mortgage correspondent lender or mortgage broker with which the consumer initially applied, (iii) the failure in the initial solicitation to comply with the provisions of the federal Fair Credit Reporting Act relating to prescreening solicitations that use consumer reports, including the requirement to make a firm offer of credit to the consumer, or (iv) knowingly or negligently using information from a mortgage trigger lead (I) to solicit consumers who have opted out of prescreened offers of credit under the federal Fair Credit Reporting Act, or (II) to place telephone calls to consumers who have placed their contact information on a federal or state Do Not Call list; and

      (B) "Mortgage trigger lead" means a consumer report obtained pursuant to Section 604(c)(1)(B) of the federal Fair Credit Reporting Act, 15 USC 1681b, where the issuance of the report is triggered by an inquiry made with a consumer reporting agency in response to an application for credit. "Mortgage trigger lead" does not include a consumer report obtained by a mortgage lender or mortgage correspondent lender that holds or services existing indebtedness of the applicant who is the subject of the report.

      (2) No mortgage lender, mortgage correspondent lender, mortgage broker or mortgage loan originator shall engage in an unfair or deceptive act or practice in soliciting an application for a residential mortgage loan when such solicitation is based, in whole or in part, on information contained in a mortgage trigger lead. Any violation of this subsection shall be deemed an unfair or deceptive trade practice under subsection (a) of section 42-110b.

      (h) No mortgage lender or mortgage correspondent lender shall include in a residential mortgage loan for which an application is received by such lender on or after October 1, 2009, a provision that increases the interest rate as a result of a default other than a failure to comply with a provision to maintain an automatic electronic payment feature where such maintenance provision has been provided in return for an interest rate reduction and the increase is no greater than such reduction.

      (P.A. 92-132, S. 4, 5; P.A. 94-122, S. 239, 340; P.A. 02-111, S. 14; P.A. 04-69, S. 10; P.A. 06-45, S. 5; P.A. 07-118, S. 1; 07-156, S. 14; P.A. 08-176, S. 31, 53; P.A. 09-207, S. 6; 09-209, S. 17; Sept. Sp. Sess. P.A. 09-7, S. 100; P.A. 11-216, S. 23.)

      History: P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-440m transferred to Sec. 36a-498 in 1995; P.A. 02-111 replaced references to "mortgage broker" with references to "first mortgage broker" throughout, added new Subsec. (b) re acceptance of advance fee by originator, redesignated existing Subsecs. (b) to (d) as Subsecs. (c) to (e) and made technical changes throughout; P.A. 04-69 amended Subsecs. (a) and (b) to substitute "36a-498a" for "36a-498"; P.A. 06-45 added Subsec. (f) to prohibit mortgage lenders and first mortgage brokers from entering into agreements with borrowers to compensate licensees for fees, commissions or other valuable consideration lost if borrowers fail to close loan unless compensation is collected as advance fee and to prohibit first mortgage brokers from imposing fees, commissions or other valuable consideration on borrowers for prepayment of principal of loan, effective May 8, 2006; P.A. 07-118 added Subsec. (g) to define "unfair or deceptive act or practice" and "mortgage trigger lead", to prohibit mortgage lenders and first mortgage brokers from engaging in an unfair or deceptive act or practice in soliciting application for a first mortgage loan if solicitation is based in any way on a mortgage trigger lead, and to provide that violation is deemed an unfair or deceptive trade practice under Sec. 42-110b(a); P.A. 07-156 amended Subsec. (b) to substitute "licensed" for "registered" and to insert "mortgage lender or first mortgage broker" re licensee, effective September 30, 2008; P.A. 08-176 changed effective date of P.A. 07-156, S. 14, from September 30, 2008, to July 1, 2008, added references to "mortgage correspondent lender" and "mortgage loan originator" and made conforming changes, effective July 1, 2008; P.A. 09-207 added Subsec. (h) re prohibition against mortgage loan provisions that increase interest rate as result of default other than failure to comply with provision to maintain an automatic electronic payment feature; P.A. 09-209 changed "mortgage loan" to "residential mortgage loan" in Subsecs. (f) and (g)(2) and inserted references to other licensing provisions in Subsecs. (a), (b) and (f), effective July 31, 2009; Sept. Sp. Sess. P.A. 09-7 amended Subsec. (h) to add "for which an application is received by such lender on or after October 1, 2009", effective October 5, 2009; P.A. 11-216 amended Subsec. (h) to add "residential" re mortgage loan, effective July 13, 2011.

      Sec. 36a-498d. Unique identifier. The unique identifier of any mortgage loan originator or loan processor or underwriter licensed under section 36a-489 shall be clearly shown on all residential mortgage loan application forms, solicitations or advertisements, including business cards or web sites, and any other documents as established by rule, regulation or order of the commissioner.

      (P.A. 09-209, S. 21; P.A. 11-216, S. 24.)

      History: P.A. 09-209 effective July 31, 2009; P.A. 11-216 deleted reference to Sec. 36a-485, added reference to loan processor or underwriter, deleted "originating a residential mortgage loan" and made technical changes.

      Sec. 36a-498e. Prohibited acts. No person or individual who is required to be licensed and who is subject to sections 36a-485 to 36a-498f, inclusive, 36a-534a and 36a-534b may:

      (1) Directly or indirectly employ any scheme, device or artifice to defraud or mislead borrowers or lenders or to defraud any person;

      (2) Engage in any unfair or deceptive practice toward any person;

      (3) Obtain property by fraud or misrepresentation;

      (4) Solicit or enter into a contract with a borrower that provides in substance that such person or individual may earn a fee or commission through "best efforts" to obtain a loan even though no loan is actually obtained for the borrower;

      (5) Solicit, advertise or enter into a contract for specific interest rates, points or other financing terms unless the terms are actually available at the time of soliciting, advertising or contracting;

      (6) Conduct any business as a mortgage lender, mortgage correspondent lender, mortgage broker, mortgage loan originator or loan processor or underwriter without holding a valid license as required under sections 36a-485 to 36a-498f, inclusive, 36a-534a and 36a-534b or assist or aide and abet any person in the conduct of business as a mortgage lender, mortgage correspondent lender, mortgage broker, mortgage loan originator or loan processor or underwriter without a valid license as required under said sections;

      (7) Fail to make disclosures as required by sections 36a-485 to 36a-498f, inclusive, 36a-534a and 36a-534b and any other applicable state or federal law including regulations thereunder;

      (8) Fail to comply with sections 36a-485 to 36a-498f, inclusive, 36a-534a and 36a-534b or rules or regulations adopted under said sections or fail to comply with any other state or federal law, including the rules and regulations thereunder, applicable to any business authorized or conducted under said sections;

      (9) Make, in any manner, any false or deceptive statement or representation including, with regard to the rates, points or other financing terms or conditions for a residential mortgage loan, or engage in bait and switch advertising;

      (10) Negligently make any false statement or knowingly and wilfully make any omission of material fact in connection with any information or reports filed with a governmental agency or the system, as defined in section 36a-485, or in connection with any investigation conducted by the Banking Commissioner or another governmental agency;

      (11) Make any payment, threat or promise, directly or indirectly, to any person for the purposes of influencing the independent judgment of the person in connection with a residential mortgage loan as defined in section 36a-485 or make any payment, threat or promise, directly or indirectly, to any appraiser of a property, for the purposes of influencing the independent judgment of the appraiser with respect to the value of the property;

      (12) Collect, charge, attempt to collect or charge or use or propose any agreement purporting to collect or charge any fee prohibited by sections 36a-485 to 36a-498f, inclusive, 36a-534a and 36a-534b;

      (13) Cause or require a borrower to obtain property insurance coverage in an amount that exceeds the replacement cost of the improvements as established by the property insurer; or

      (14) Fail to truthfully account for moneys belonging to a party to a residential mortgage loan transaction.

      (P.A. 09-209, S. 20; Sept. Sp. Sess. P.A. 09-7, S. 96; P.A. 11-216, S. 25.)

      History: P.A. 09-209 effective July 31, 2009; Sept. Sp. Sess. P.A. 09-7 added "who is required to be licensed and who is" in introductory language, effective October 5, 2009; P.A. 11-216 amended Subdiv. (6) to add references to loan processor or underwriter.

(C)

GENERAL PROVISIONS

      Sec. 36a-534b. Participation in system. Authority of commissioner to establish requirements. Reports. (a)(1) In addition to any other duties imposed upon the commissioner by law, the commissioner shall require mortgage lenders, mortgage correspondent lenders, mortgage brokers, mortgage loan originators and loan processors or underwriters to be licensed and registered through the system. In order to carry out this requirement, the commissioner shall participate in the system and permit the system to process applications for mortgage lender, mortgage correspondent lender, mortgage broker, mortgage loan originator and loan processor or underwriter licenses in this state and receive and maintain records related to such licenses that are allowed or required to be maintained by the commissioner. For this purpose, the commissioner may establish requirements as necessary for participation in the system, including: (A) Background checks for criminal history through (i) fingerprint or other databases, (ii) civil or administrative records, or (iii) credit history or any other information as deemed necessary by the system; (B) the payment of fees to apply for or renew licenses through the system; (C) the setting or resetting of renewal or reporting dates; and (D) the requirements for amending or surrendering a license or any other such activities as the commissioner deems necessary for participation in the system. For the purpose of participating in the system, the commissioner may waive or modify, in whole or in part, by regulation or order, any requirement of sections 36a-485 to 36a-498f, inclusive, 36a-534a and 36a-534b and to establish new requirements as reasonably necessary to participate in the system. For the purposes of implementing an orderly and efficient licensing process, the commissioner may adopt licensing regulations, in accordance with the provisions of chapter 54, and interim procedures for licensing and acceptance of applications. For previously licensed individuals, the commissioner may establish expedited review and licensing procedures.

      (2) The commissioner shall report regularly to the system violations of and enforcement actions under sections 36a-485 to 36a-498f, inclusive, 36a-534a and 36a-534b and other relevant information.

      (3) The commissioner may establish relationships or enter into contracts with the system or other entities designated by the system to collect and maintain records and process transaction fees or other fees related to licensees or other persons subject to sections 36a-485 to 36a-498f, inclusive, 36a-534a and 36a-534b.

      (4) For the purposes of sections 36a-485 to 36a-498f, inclusive, 36a-534a and 36a-534b, and to reduce the points of contact that the Federal Bureau of Investigation may have to maintain for purposes of subsections (b) and (c) of section 36a-488, the commissioner may use the system as a channeling agent for requesting information from and distributing information to the United States Department of Justice or any governmental agency.

      (5) For the purposes of sections 36a-485 to 36a-498f, inclusive, 36a-534a and 36a-534b, and to reduce the points of contact that the commissioner may have to maintain for purposes of subsections (b) and (c) of section 36a-488, the commissioner may use the system as a channeling agent for requesting and distributing information to and from any source, as directed by the commissioner.

      (6) Mortgage lenders, mortgage correspondent lenders, mortgage brokers, mortgage loan originators and, effective October 1, 2011, individuals licensed as loan processors or underwriters may challenge information entered into the system by the commissioner. Such challenge shall (A) be made in writing to the commissioner, (B) set forth the specific information being challenged, and (C) include any evidence which supports the challenge. Challenges shall be limited to the factual accuracy of information within the system. If the commissioner determines that the information entered into the system is factually inaccurate, the commissioner shall take prompt action to correct such information. Nothing in this subdivision shall be construed to permit a challenge under this section to the merits or factual basis of any administrative action taken by the commissioner pursuant to this title.

      (b) (1) Each first mortgage lender license and secondary mortgage lender license in existence on June 30, 2008, shall be deemed on and after July 1, 2008, to be a mortgage lender license, as defined in section 36a-485; (2) each first mortgage correspondent lender license and secondary mortgage correspondent lender license in existence on June 30, 2008, shall be deemed on and after July 1, 2008, to be a mortgage correspondent lender license, as defined in section 36a-485; (3) each first mortgage broker license and secondary mortgage broker license in existence on June 30, 2008, shall be deemed on and after July 1, 2008, to be a mortgage broker license, as defined in section 36a-485; and (4) each originator registration in existence on June 30, 2008, shall be deemed on and after July 1, 2008, to be a mortgage loan originator license, as defined in section 36a-485.

      (c) (1) Each person licensed on July 1, 2008, as a mortgage lender, mortgage correspondent lender, mortgage broker or mortgage loan originator shall, prior to October 1, 2008, transition on to the system by submitting all licensing and license-related information required by the system for this state.

      (2) On and after July 1, 2008, any licensing or license-related filings shall be submitted exclusively through the system.

      (3) Any person making any filing or submission of any information on the system shall do so in accordance with the procedures and requirements of the system and pay the applicable fees or charges to the system. Each mortgage lender, mortgage correspondent lender, mortgage broker, mortgage loan originator and loan processor or underwriter licensee shall submit to the system reports of condition that shall be in such form and shall contain such information as the system may require.

      (d) Notwithstanding the provisions of this section, any initial application for a license submitted on the system between October 1, 2008, and December 31, 2008, shall not be approved by the commissioner prior to January 1, 2009.

      (P.A. 08-176, S. 39; P.A. 09-209, S. 3; P.A. 11-216, S. 26-28.)

      History: P.A. 08-176 effective July 1, 2008; P.A. 09-209 amended Subsec. (a) by designating existing provisions as Subdiv. (1) and amending same to add provisions re system licensing and participation requirements for mortgage lenders, mortgage correspondent lenders, mortgage brokers and mortgage loan originators to be established by commissioner, and by adding Subdivs. (2) to (6) re collecting and sharing information and establishing process by which to challenge information entered into system, amended Subsec. (c)(3) by requiring lenders, brokers and loan originators to submit reports of condition to system, and changed "Nationwide Mortgage Licensing System" to "system" in Subsecs. (a), (c) and (d), effective July 31, 2009; P.A. 11-216 amended Subsec. (a)(6) to delete provision requiring commissioner to establish process, add provision re loan processors or underwriters licensees and add requirements re challenge of information, effective July 13, 2011, and amended Subsecs. (a)(1) and (c)(3) to add references to loan processor or underwriter and make technical changes, effective October 1, 2011.

PART II
FINANCE COMPANIES

      Sec. 36a-537. (Formerly Sec. 36-256a). Application. Criminal history records check. Abandonment of 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. The application shall include (1) the history of criminal convictions of the applicant; and the partners, if the applicant is a partnership; the members, if the applicant is a limited liability company or association; or the officers, directors and principal employees if the applicant is a corporation; and (2) sufficient information pertaining to the history of criminal convictions, in a form acceptable to the commissioner, on such applicant, partners, directors, members, officers, and principal employees as the commissioner deems necessary to make findings under section 36a-541. The commissioner, in accordance with section 29-17a, may conduct a state and national criminal history records check of the applicant and of each partner, member, officer, director and principal employee of the applicant. The commissioner may deem an application for a license as a sales finance company abandoned if the applicant fails to respond to any request for information required under sections 36a-535 to 36a-546, inclusive, or any regulations adopted pursuant to said sections 36a-535 to 36a-546, inclusive. The commissioner shall notify the applicant, in writing, that if such information is not submitted not later than sixty days after such request, the application shall be deemed abandoned. An application filing fee paid prior to the date an application is deemed abandoned pursuant to this section shall not be refunded. Abandonment of an application pursuant to this section shall not preclude the applicant from submitting a new application for a license under sections 36a-535 to 36a-546, inclusive.

      (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; P.A. 09-208, S. 6; 09-209, S. 39; P.A. 11-216, S. 29.)

      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; P.A. 09-208 added requirements that application include a history of criminal convictions and sufficient information pertaining to such convictions, effective July 7, 2009; P.A. 09-209 made technical changes, effective July 9, 2009; P.A. 11-216 deleted provision re ten-year period re history of criminal convictions, added provision authorizing commissioner to conduct state and national criminal history records checks of applicant and each partner, member, officer, director and principal employee of applicant and added provisions re abandonment of application.

      Sec. 36a-541. (Formerly Sec. 36-259a). Authority of commissioner to issue license or deny application for license. Withdrawal of application. If the commissioner finds, upon the filing of an application for a license as a sales finance company, 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-535 to 36a-546, inclusive, 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 any material misstatement in the application, the commissioner shall not issue a license, and shall notify the applicant of the denial and the reasons for such denial. The commissioner may deny an application if the commissioner finds that the applicant or any partner, member, officer, director or principal employee of the applicant has been convicted of any misdemeanor involving any aspect of the sales finance business, or any felony. Any denial of an application by the commissioner shall, when applicable, be subject to the provisions of section 46a-80. Withdrawal of an application for a license shall become effective upon receipt by the commissioner of a notice of intent to withdraw such application. The commissioner may deny a license up to the date one year after the date the withdrawal became effective.

      (1967, P.A. 631, S. 3; P.A. 94-122, S. 254, 340; P.A. 02-111, S. 31; P.A. 09-208, S. 7; P.A. 11-216, S. 30.)

      History: P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-259a transferred to Sec. 36a-541 in 1995; P.A. 02-111 replaced former Subsecs. (a) and (b) with provisions re findings, issuance of license and denial of application; P.A. 09-208 authorized commissioner to deny application based on certain criminal convictions, specified when withdrawal of application becomes effective, and provided that commissioner may deny license up to 1 year after date the withdrawal became effective, effective July 7, 2009; P.A. 11-216 deleted provision re ten-year period re misdemeanor and felony convictions.

PART III
SMALL LOAN LENDERS

      Sec. 36a-556. (Formerly Sec. 36-226). Requirements for granting license. Authority of commissioner to deny application for license. Withdrawal of application. 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, limited liability company 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. If the commissioner fails to make such findings or finds that the applicant made a material misstatement in the application, the commissioner shall not issue a license and shall notify the applicant of the denial and the reasons for such denial. The commissioner may deny an application if the commissioner finds that the applicant or any member, officer, or director of the applicant has been convicted of any misdemeanor involving any aspect of the small loan lender business, or any felony. Any denial of an application by the commissioner shall, when applicable, be subject to the provisions of section 46a-80. Withdrawal of an application for a license shall become effective upon receipt by the commissioner of a notice of intent to withdraw such application. The commissioner may deny a license up to the date one year after the date the withdrawal became effective. The capital investment shall be not less than twenty-five thousand dollars for each licensed location in a city or town with a population of ten thousand or more inhabitants and ten thousand dollars for each licensed location 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.

      (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; P.A. 02-111, S. 35; P.A. 09-208, S. 8; P.A. 11-216, S. 31.)

      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; P.A. 02-111 deleted provisions re public notice, added "limited liability company" in Subdiv. (1), added provisions re commissioner's authority to deny application for license, changed "place of business" to "location", and deleted provisions re maintenance of capital investment and exception; P.A. 09-208 authorized commissioner to deny application based on certain criminal convictions, specified when withdrawal of application becomes effective, and provided that commissioner may deny license up to 1 year after date the withdrawal became effective, effective July 7, 2009; P.A. 11-216 deleted provision re ten-year period re misdemeanor and felony convictions.

      Sec. 36a-557. (Formerly Sec. 36-227). Application. Criminal history records check. Abandonment and withdrawal of application. (a) An application for such license shall be in writing, under oath and in the form prescribed by the commissioner, and shall include (1) the history of criminal convictions of the applicant; the members, if the applicant is a partnership, limited liability company or association; or the officers and directors, if the applicant is a corporation, and (2) sufficient information pertaining to the history of criminal convictions, in a form acceptable to the commissioner, on such applicant, members, officers and directors as the commissioner deems necessary to make the findings under section 36a-556. The commissioner, in accordance with section 29-17a, may conduct a state and national criminal history records check of the applicant and of each member, officer and director of the applicant. The commissioner may deem an application for a license as a small loan lender abandoned if the applicant fails to respond to any request for information required under sections 36a-555 to 36a-573, inclusive, or any regulations adopted pursuant to said sections 36a-555 to 36a-573, inclusive. The commissioner shall notify the applicant, in writing, that if such information is not submitted not later than sixty days after such request, the application shall be deemed abandoned. An application filing fee paid prior to the date an application is deemed abandoned pursuant to this subsection shall not be refunded. Abandonment of an application pursuant to this subsection shall not preclude the applicant from submitting a new application for a license under sections 36a-555 to 36a-573, inclusive.

      (b) Withdrawal of an application for a license filed under subsection (a) of this section shall become effective upon receipt by the commissioner of a notice of intent to withdraw such application. The commissioner may deny a license up to the date one year after the date the withdrawal became effective.

      (1949 Rev., S. 5938; 1949, S. 2754d; P.A. 94-122 S. 260, 340; P.A. 02-111, S. 36; P.A. 09-208, S. 9; P.A. 11-216, S. 32.)

      History: P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-227 transferred to Sec. 36a-557 in 1995; P.A. 02-111 deleted provisions re content of application; P.A. 09-208 designated existing provisions as Subsec. (a), added Subdivs. (1) and (2) therein re criminal conviction information to be included in application and added Subsec. (b) specifying when withdrawal of application becomes effective and providing that commissioner may deny license up to 1 year after date the withdrawal became effective, effective July 7, 2009; P.A. 11-216 amended Subsec. (a) to delete provision re ten-year period re history of criminal convictions, add provisions authorizing commissioner to conduct state and national criminal history records check of applicant and each member, officer and director of applicant and add provisions re abandonment of application.

      Sec. 36a-573. (Formerly Sec. 36-243). Charge of greater than legal interest. Enforcement. (a) 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.

      (b) The provisions of subsection (a) of this section shall apply to any loan made or renewed in this state if the loan is made to a borrower who resides in or maintains a domicile in this state and such borrower (1) negotiates or agrees to the terms of the loan in person, by mail, by telephone or via the Internet while physically present in this state; (2) enters into or executes a loan agreement with the lender in person, by mail, by telephone or via the Internet while physically present in this state; or (3) makes a payment of the loan in this state. As used in this subsection, "payment of the loan" includes a debit on an account the borrower holds in a branch of a financial institution or the use of a negotiable instrument drawn on an account at a financial institution, and "financial institution" means any bank or credit union chartered or licensed under the laws of this state, any other state or the United States and having its main office or a branch office in this state.

      (c) Whenever it appears to the commissioner that any person has violated the provisions of subsection (a) of this section or offered a loan that violates the provisions of subsection (a) of this section, the commissioner may investigate, take administrative action or assess civil penalties and restitution in accordance with the provisions of sections 36a-50 and 36a-52.

      (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; P.A. 09-208, S. 41; P.A. 11-216, S. 33.)

      History: 1963 act included "charge" in provision re 12% interest and raised applicable loan limit from $600 to $1,000; 1969 act raised limit to $1,800 and deleted reference to loan, etc. of "goods or things in action"; P.A. 77-129 raised limit to $5,000 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 $5,000 to $15,000 for loan transactions entered into on and after October 1, 1997; P.A. 09-208 designated existing provisions as Subsec. (a) and added Subsecs. (b) and (c) re applicability to loans made or renewed in this state and enforcement of provisions; P.A. 11-216 amended Subsec. (c) to make a technical change, effective July 13, 2011.

PART IV
CHECK CASHING SERVICES

      Sec. 36a-581. (Formerly Sec. 36-565). License required. Application. Criminal history records check. Authority of commissioner to deny application for license. Abandonment of application. (a) Except as provided for in section 36a-580, no person shall engage in the business of cashing checks, drafts or money orders for consideration without obtaining a license to operate a general facility or a license to operate a limited facility for each location where such business is to be conducted.

      (b) Each licensee of a limited facility shall continuously maintain at least one operating general facility. A licensee of a limited facility shall not pay any compensation or consideration to any employer.

      (c) An application for a check cashing license or renewal of such license shall be in writing, under oath and on a form provided by the commissioner. The application shall set forth: (1) The name and address of the applicant; (2) if the applicant is a firm or partnership, the names and addresses of each member of the firm or partnership; (3) if the applicant is a corporation, the names and addresses of each officer, director, authorized agent and each shareholder owning ten per cent or more of the outstanding stock of such corporation; (4) if the applicant is a limited liability company, the names and addresses of each member and authorized agent of such limited liability company; (5) (A) the history of criminal convictions of the applicant; the members, if the applicant is a firm or partnership; the officers, directors, authorized agent and each shareholder owning ten per cent or more of the outstanding stock of the applicant, if the applicant is a corporation, and (B) sufficient information pertaining to the history of criminal convictions in a form acceptable to the commissioner on such applicant, members, officers, directors, authorized agent and shareholders as the commissioner deems necessary to make the findings under subsection (e) of this section; (6) each location where the check cashing business is to be conducted and the type of facility that will be operated at that location; (7) the business plan, which shall include the proposed days and hours of operation; (8) the amount of liquid assets available for each location which shall not be less than the amount specified in subdivision (7) of subsection (e) of this section; (9) for each limited facility, a copy of the executed contract evidencing the proposed arrangement between the applicant and the employer; and (10) any other information the commissioner may require. The commissioner, in accordance with section 29-17a, may conduct a state and national criminal history records check of the applicant and of each member, officer, director, authorized agent and shareholder owning ten per cent or more of the outstanding stock of the applicant.

      (d) A licensee shall not change the name or the location specified on its license unless, prior to such change in name or location, the licensee files an application with the commissioner accompanied by the applicable name change fee or location transfer fee specified in section 36a-582 and receives the approval of the commissioner. A licensee of a limited facility shall not change its approved days and hours of operation unless, prior to any such change, the licensee files an application with and receives the approval of the commissioner. No licensee shall use any name other than the name specified on the license issued by the commissioner.

      (e) Upon the filing of the required application and the applicable license and location fees, the commissioner shall investigate the facts and may issue a license if the commissioner finds that (1) the applicant is in all respects properly qualified and of good character, (2) if the applicant is a firm or partnership, each member of the firm or partnership is in all respects properly qualified and of good character, (3) if the applicant is a corporation, each officer, director, authorized agent and each shareholder owning ten per cent or more of the outstanding stock of such corporation is in all respects properly qualified and of good character, (4) if the applicant is a limited liability company, each member and authorized agent is in all respects properly qualified and of good character, (5) granting such license would not be against the public interest, (6) the applicant has a feasible plan for conducting business, and (7) the applicant has available and shall continuously maintain liquid assets of at least ten thousand dollars for each general facility location and at least two thousand five hundred dollars for each limited facility location specified in the application. The commissioner may deny an application if the commissioner finds that the applicant or any member, officer, director or authorized agent or shareholder owning ten per cent or more of the outstanding stock of the applicant has been convicted of any misdemeanor involving any aspect of the check cashing services business, or any felony. Any denial of an application by the commissioner shall, when applicable, be subject to the provisions of section 46a-80.

      (f) An applicant or licensee shall promptly notify the commissioner, in writing, of any change in the information provided in its initial or renewal application for licensure or most recent renewal of such license.

      (g) The commissioner may deem an application for a license for a general facility or limited facility abandoned if the applicant fails to respond to any request for information required under sections 36a-580 to 36a-589, inclusive, or any regulations adopted pursuant to said sections 36a-580 to 36a-589, inclusive. The commissioner shall notify the applicant, in writing, that if such information is not submitted not later than sixty days after such request, the application shall be deemed abandoned. An application filing fee paid prior to the date an application is deemed abandoned pursuant to this subsection shall not be refunded. Abandonment of an application pursuant to this subsection shall not preclude the applicant from submitting a new application for a license under sections 36a-560 to 36a-589, inclusive.

      (P.A. 88-200, S. 2; P.A. 89-178, S. 2, 8; P.A. 91-11, S. 1; P.A. 94-122, S. 270, 340; P.A. 95-253, S. 13, 19; P.A. 04-14, S. 1; P.A. 05-46, S. 8; 05-288, S. 223; P.A. 06-35, S. 4; P.A. 08-119, S. 8, 9; P.A. 09-208, S. 10, 12; 09-209, S. 40; P.A. 11-216, S. 34.)

      History: P.A. 89-178 substituted the commissioner of banking for the commissioner of consumer protection in Subsec. (a); Sec. 21-112 transferred to Sec. 36-565 in 1991; P.A. 91-11 amended Subsec. (c) to insert Subdiv. indicators, adding provisions to require the commissioner, prior to issuing a license, to find a need in the community for the services to be provided by the applicant and that the applicant has a feasible business plan; P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-565 transferred to Sec. 36a-581 in 1995; P.A. 95-253 amended Subsec. (a) to provide for separate licenses for general and limited facilities, added a new Subsec. (b) to require a licensee of a limited facility to maintain at least one general facility, relettered Subsec. (b) as (c) and amended Subsec. (c) by providing for the form of application and by adding Subdivs. (4) to (7), inclusive, re the contents of the application, added a new Subsec. (d) re change in location, in type of facility or in time of operation, relettered Subsec. (c) as (e) and amended Subsec. (e) by adding new Subdivs. (2) and (3) re applications by firms, partnerships or corporations, deleting former Subdiv. (3) re need for services, renumbering Subdivs. (4) and (5) as (5) and (6), respectively, and adding a fee for each limited facility in Subdiv. (6), effective July 6, 1995; P.A. 04-14 amended Subsec. (c) to insert new Subdiv. (4) requiring application to set forth the names and addresses of each manager and authorized agent if applicant is a limited liability company and to redesignate existing Subdivs. (4) to (8) as Subdivs. (5) to (9), respectively, amended Subsec. (d) to restate provisions and require approval of the commissioner for application for change in location, to provide that licensee of limited facility shall not change approved days and hours of operation unless licensee files application with and receives approval of commissioner, and to eliminate prohibition re change in the type of facility, amended Subsec. (e) to insert new Subdiv. (4) authorizing commissioner to issue license if commissioner finds that each manager and authorized agent is in all respects properly qualified and of good character if applicant is a limited liability company and to redesignate existing Subdivs. (4) to (6) as Subdivs. (5) to (7), respectively, and added Subsec. (f) requiring applicant or licensee to notify commissioner of any change in information provided; P.A. 05-46 amended Subsec. (d) to prohibit licensee from changing the name specified on license unless licensee files application, pays applicable name change fee specified in Sec. 36a-582 and receives approval of commissioner; P.A. 05-288 made a technical change in Subsec. (c)(7), effective July 13, 2005; P.A. 06-35 amended Subsec. (d) to prohibit licensee from using any name other than the name specified on the license issued by commissioner, and amended Subsec. (e) to delete reference to application fees and to insert reference to location fees; P.A. 08-119 amended Subsec. (c)(4) and Subsec. (e)(4) by replacing "manager" with "member"; P.A. 09-208 amended Subsec. (c) by adding new Subdiv. (5) requiring license application to include a history of criminal convictions and by redesignating existing Subdivs. (5) to (9) as Subdivs. (6) to (10), and amended Subsec. (e) by authorizing commissioner to deny application based on certain criminal convictions, effective July 7, 2009; P.A. 09-209 made a technical change, effective July 9, 2009; P.A. 11-216 amended Subsec. (c) to delete provision re ten-year period re history of criminal convictions and add provision authorizing commissioner to conduct state and national criminal history records check of applicant and each member, officer, director, authorized agent and shareholder owning at least 10% of outstanding stock of applicant, amended Subsec. (e) to delete provision re ten-year period re misdemeanor and felony convictions, and added Subsec. (g) re abandonment of application.

PART V
PAYMENT INSTRUMENTS. MONEY TRANSMISSION

      Sec. 36a-598. (Formerly Sec. 36-533). Application. Notice to commissioner required. Criminal history records check. Abandonment of application. (a) Each application for an original or renewal license required under sections 36a-595 to 36a-610, inclusive, shall be made in writing and under oath to the commissioner in such form as the commissioner may prescribe. The application shall include:

      (1) The exact name of the applicant and, if incorporated, the date of incorporation and the state where incorporated;

      (2) The complete address of the principal office from which the business is to be conducted and of the office where the books and records of the applicant are to be maintained;

      (3) The complete name and address of each of the applicant's branches, subsidiaries, affiliates and agents, if any, engaging in this state in the business of selling or issuing Connecticut payment instruments, or engaging in the business of money transmission;

      (4) The name, title, address and telephone number of the person to whom notice of the commissioner's approval or disapproval of the application shall be sent and to whom any inquiries by the commissioner concerning the application shall be directed;

      (5) The name and residence address of the individual, if the applicant is an individual; the partners, if the applicant is a partnership; the directors, trustees, principal officers, and any shareholder owning ten per cent or more of each class of its securities, if the applicant is a corporation or association; or the members, if the applicant is a limited liability company;

      (6) The most recently audited unconsolidated financial statement of the applicant, including its balance sheet and receipts and disbursements for the preceding year, prepared by an independent certified public accountant acceptable to the commissioner;

      (7) A list of the applicant's permissible investments, the book and market values of such investments, and the dollar amount of the applicant's aggregate outstanding payment instruments (A) as of the date of the financial statement filed in accordance with subdivision (6) of this subsection; and (B) as of a date no earlier than thirty business days prior to the filing of the application;

      (8) The history of material litigation for the five-year period prior to the date of the application of the individual, if the applicant is an individual; the partners, if the applicant is a partnership; the directors, trustees, principal officers and any shareholder owning ten per cent or more of each class of its securities, if the applicant is a corporation or association; or the members, if the applicant is a limited liability company, and sufficient information pertaining to the history of material litigation, in a form acceptable to the commissioner, on such individual or the partners, directors, trustees, principal officers, members and any shareholder owning ten per cent or more of each class of the applicant's securities;

      (9) (A) The history of criminal convictions of the individual, if the applicant is an individual; the partners, if the applicant is a partnership; the directors, trustees, principal officers and any shareholder owning ten per cent or more of each class of its securities if the applicant is a corporation or association; or the members, if the applicant is a limited liability company, and (B) sufficient information pertaining to the history of criminal convictions, in a form acceptable to the commissioner, on such individual or the partners, directors, trustees, principal officers, members and any shareholder owning ten per cent or more of each class of the applicant's securities;

      (10) (A) The surety bond required by subsection (a) of section 36a-602, if applicable;

      (B) A list of the investments maintained in accordance with subsection (c) of section 36a-602, if applicable, and the book and market values of any such investments (i) as of the date of the financial statement filed in accordance with subdivision (6) of this subsection; and (ii) as of a date no earlier than thirty business days prior to the filing of the application;

      (11) A statement of whether the applicant will engage in the business of issuing money orders, travelers checks or electronic payment instruments or engage in the business of money transmission in this state; and

      (12) Any other information the commissioner may require.

      (b) The commissioner, in accordance with section 29-17a, may conduct a state and national criminal history records check of the individual applicant and of each partner, director, trustee, principal officer, member and shareholder owning ten per cent or more of each class of the securities of the applicant. The commissioner may deem an application for a license to engage in the business of issuing Connecticut payment instruments or engage in the business of money transmission abandoned if the applicant fails to respond to any request for information required under sections 36a-595 to 36a-610, inclusive, or any regulations adopted pursuant to said sections. The commissioner shall notify the applicant, in writing, that if the applicant fails to submit such information not later than sixty days after such request, the application shall be deemed abandoned. An application filing fee paid prior to the date an application is deemed abandoned pursuant to this subsection shall not be refunded. Abandonment of an application pursuant to this subsection shall not preclude the applicant from submitting a new application for a license under sections 36a-595 to 36a-610, inclusive.

      (c) An applicant or licensee shall promptly notify the commissioner, in writing, of any change in the information provided in the application for license or most recent renewal of such license.

      (d) A licensee shall not change the name specified on its license unless, prior to such change in name, the licensee files an application with the commissioner accompanied by the name change fee specified in subsection (a) of section 36a-599 and receives the approval of the commissioner.

      (e) A licensee shall provide a written notice to the commissioner no later than one business day after the licensee has reason to know of the occurrence of any of the following events:

      (1) The filing of a petition by or against the licensee under the United States Bankruptcy Code for bankruptcy or reorganization;

      (2) The filing of a petition by or against the licensee for receivership, the commencement of any other judicial or administrative proceeding for its dissolution or reorganization, or the making of a general assignment for the benefit of its creditors;

      (3) The commencement of a proceeding to revoke or suspend its license to engage in money transmission in another state or a foreign country, or other formal or informal regulatory action by any governmental agency against the licensee and the reasons therefor;

      (4) The commencement of any action by the Attorney General or the attorney general of any other state and the reasons therefor;

      (5) The cancellation or other impairment of the licensee's bond or other security, including notice of claims filed against the licensee's bond or other security;

      (6) A conviction of the licensee or of a partner, director, trustee, principal officer, member or shareholder owning ten per cent or more of each class of the licensee's securities for a misdemeanor involving the money transmission business or the business of issuing Connecticut payment instruments, or a felony; or

      (7) A conviction of its agent for a felony.

      (P.A. 81-264, S. 4; P.A. 92-12, S. 97; P.A. 94-122, S. 277, 340; P.A. 98-192, S. 4; P.A. 01-56, S. 5; P.A. 03-19, S. 84; P.A. 04-14, S. 4; P.A. 05-46, S. 11; P.A. 08-119, S. 11; P.A. 09-208, S. 15; P.A. 11-216, S. 35.)

      History: P.A. 92-12 redesignated Subsecs. and Subdivs.; P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-533 transferred to Sec. 36a-598 in 1995; P.A. 98-192 amended Subdiv. (9) by adding reference to electronic payment instrument and making conforming changes; P.A. 01-56 amended Subdiv. (5) by changing 20% stock ownership threshold to 10% ownership of securities and required name and addresses of persons holding securities, added new Subdiv. (8) re history of material litigation and criminal convictions, renumbered existing Subdivs. (8) to (10) as Subdivs. (9) to (11), added language re money transmission in Subdivs. (3) and (10) and made technical and conforming changes throughout; P.A. 03-19 made a technical change in Subdiv. (10), effective May 12, 2003; P.A. 04-14 designated existing provisions as Subsec. (a), and amended same by inserting in Subdivs. (5) and (8) new Subpara. (D) re managers, if applicant is a limited liability company, inserting reference to "managers" in Subdiv. (5), and making technical changes in Subdivs. (7)(A) and (9)(B), and inserted new Subsec. (b) requiring applicant or licensee to notify commissioner of any change in information provided; P.A. 05-46 added Subsec. (c) to prohibit licensee from changing the name specified on license unless licensee files application, pays name change fee specified in Sec. 36a-599(a) and receives approval of commissioner; P.A. 08-119 amended Subsec. (a) to make a technical change and to replace "managers" with "members" in Subdivs. (5)(D) and (8)(D) ; P.A. 09-208 amended Subsec. (a) by deleting provision in Subdiv. (5) requiring applicants to submit sufficient information to commissioner as commissioner deems necessary to make the findings required under Sec. 36a-600, adding new Subdiv. (9) requiring applicants to submit information concerning criminal convictions, redesignating existing Subdiv. (9) as Subdiv. (10), deleting Subpara. (C) therein re commissioner to defer compliance, redesignating existing Subdivs. (10) and (11) as Subdivs. (11) and (12), and making conforming and technical changes, and added Subsec. (d) requiring licensee to provide written notice to commissioner upon the occurrence of events listed in Subdivs. (1) to (7); P.A. 11-216 amended Subsec. (a)(9) to delete provision re ten-year period re history of criminal convictions, added new Subsec. (b) authorizing commissioner to conduct state and national criminal history records check of applicant and each partner, director, trustee, principal officer, member and shareholder owning at least 10% of each class of securities of applicant and re abandonment of application, and redesignated existing Subsecs. (b) to (d) as Subsecs. (c) to (e).

      Sec. 36a-600. (Formerly Sec. 36-536). Investigation of applicant. Issuance of license. Authority of commissioner to deny application for license. (a) Upon the filing of an application for an original license, and the payment of the fees for investigation and license, the commissioner shall investigate the financial condition and responsibility, financial and business experience, character and general fitness of the applicant. The commissioner shall approve conditionally any application, if the commissioner finds that:

      (1) The applicant's financial condition is sound;

      (2) The applicant's business will be conducted honestly, fairly, equitably, carefully and efficiently within the purposes and intent of sections 36a-595 to 36a-610, inclusive, and in a manner commanding the confidence and trust of the community;

      (3) (A) If the applicant is an individual, such individual is in all respects properly qualified and of good character, (B) if the applicant is a partnership, each partner is in all respects properly qualified and of good character, (C) if the applicant is a corporation or association, each president, chairperson of the executive committee, senior officer responsible for the corporation's business, chief financial officer or any other person who performs similar functions as determined by the commissioner, director, trustee and each shareholder owning ten per cent or more of each class of the securities of such corporation is in all respects properly qualified and of good character, or (D) if the applicant is a limited liability company, each member is in all respects properly qualified and of good character;

      (4) The applicant is in compliance with the provisions of sections 36a-603 and 36a-604;

      (5) No person on behalf of the applicant knowingly has made any incorrect statement of a material fact in the application, or in any report or statement made pursuant to sections 36a-595 to 36a-610, inclusive; and

      (6) No person on behalf of the applicant knowingly has omitted to state any material fact necessary to give the commissioner any information lawfully required by the commissioner.

      (b) If the commissioner conditionally approves an application, the applicant shall have thirty days, which the commissioner may extend for cause, to comply with the requirements of section 36a-602. Upon such compliance, the commissioner's conditional approval shall become final, and the commissioner shall issue a license to the applicant. The commissioner shall not issue a license to any applicant unless the applicant is in compliance with all the requirements of subsection (a) of this section and section 36a-602 and has paid the investigation and license fee required under section 36a-599.

      (c) The commissioner may deny an application if the commissioner finds that the applicant or any of its partners, directors, trustees, principal officers or shareholders owning ten per cent or more of the shares of the applicant or members have been convicted of any misdemeanor involving any aspect of the money transmission business or the business of issuing payment instruments, or any felony. Any denial of an application by the commissioner shall, when applicable, be subject to the provisions of section 46a-80.

      (P.A. 81-264, S. 7; P.A. 94-122, S. 278, 340; P.A. 01-56, S. 7; P.A. 04-14, S. 5; P.A. 08-119, S. 13; P.A. 09-208, S. 16; P.A. 11-216, S. 36.)

      History: P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-536 transferred to Sec. 36a-600 in 1995; P.A. 01-56 amended Subsec. (a) by adding new Subdiv. (3) re good character of various persons as applicants and by renumbering existing Subdivs. (3) to (5) as Subdivs. (4) to (6); P.A. 04-14 amended Subsec. (b) to require that applicant pay investigation and license fee required under Sec. 36a-599; P.A. 08-119 added Subsec. (a)(3)(D) re applicant that is a limited liability company; P.A. 09-208 added Subsec. (c) authorizing commissioner to deny application based on certain convictions; P.A. 11-216 amended Subsec. (c) to delete provision re ten-year period re misdemeanor and felony convictions and delete "Connecticut" re payment instruments.

PART VII
CONNECTICUT BUSINESS AND INDUSTRIAL
DEVELOPMENT CORPORATION ACT

      Sec. 36a-628. Application. Fee. Examination. Criminal history records check. (a) An application for a license shall be in writing upon forms to be furnished by the commissioner and shall contain the full name and address of the applicant and, if the applicant is a corporation, each of the officers and directors thereof, and a statement of the assets and liabilities of the applicant in such form as the commissioner requires. Such application shall be accompanied by a copy of the applicant's business plan and such other information and exhibits as the commissioner shall require.

      (b) Upon the filing of the required application and license fee, the commissioner shall investigate the facts and may issue a license if the commissioner finds that:

      (1) The applicant has a net worth which is not less than two million five hundred thousand dollars and which is adequate for the applicant to transact business as a business and industrial development corporation;

      (2) If the applicant is a corporation, the directors and officers of the applicant are each of good character, each competent to perform their functions with respect to the applicant and collectively adequate to manage the business of the applicant as a business and industrial development corporation;

      (3) It is reasonable to believe that the applicant, if licensed, will comply with all applicable provisions of sections 36a-625 to 36a-634, inclusive, and of any regulation adopted pursuant to said sections; and

      (4) The licensing of the applicant will promote the public convenience and advantage.

      (c) In connection with an application for such license and at any other time, the commissioner may, in accordance with section 29-17a, arrange for a criminal history records check requiring the fingerprinting of each principal, executive officer and director of the business and individual development corporation or for conducting any other method of positive identification of such individuals required by the State Police Bureau of Identification.

      (P.A. 93-382, S. 59, 69; P.A. 94-122, S. 290, 340; P.A. 11-50, S. 14.)

      History: P.A. 93-382 effective July 1, 1993; P.A. 94-122 made technical changes, effective January 1, 1995; P.A. 11-50 added Subsec. (c) authorizing commissioner to arrange for criminal history records check of each principal, executive officer and director, effective July 1, 2011.