AN ACT CONCERNING MORTGAGE LENDING.

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

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 Section 36a-2 of the 2008 supplement to the general statutes, as amended by section 2 of public act 07-156, is repealed and the following is substituted in lieu thereof (Effective September 30, 2008):

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

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

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

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

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

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

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

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

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

(9) "Club deposit" means deposits to be received at regular intervals, the whole amount deposited to be withdrawn by the owner or repaid by the bank in not more than fifteen months from the date of the first deposit, and upon which no interest or dividends need to be paid;

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(D) In which, in the case of:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(b) A lender, correspondent lender or mortgage broker licensee may change the name of the licensee or [location] address of the office specified on its license if (1) at least twenty-one calendar days prior to such change, the licensee notifies the commissioner, in writing, on a form satisfactory to the commissioner, and provides a bond rider or endorsement to the surety bond on file with the commissioner that reflects the new name or [location] address of the office, and (2) the commissioner does not disapprove such change, in writing, or request further information within such twenty-one-day period. The licensee shall promptly notify the commissioner, in writing, of any other change in the information provided in the application for license or most recent renewal of such license.

(c) The mortgage lender or mortgage broker licensee shall notify the commissioner promptly, and in writing, of the occurrence of any of the following developments:

(1) Filing for bankruptcy or reorganization 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 the filing of any criminal felony indictment or 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, in any state 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) Expiration, termination or default, technical or otherwise, of 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 mortgage loans if such loans, in the aggregate, exceed the licensee's net worth exclusive of real property and fixed assets;

(8) Initiation of service of a writ of attachment or any other form of attachment on any of the licensee's assets;

(9) Existence of negative balances, exceeding one hundred dollars, in any operating or escrow account at any time; or

(10) 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.

(d) The mortgage lender or mortgage broker licensee shall notify the commissioner at least fifteen days prior to any proposed change in control in the ownership of the licensee, or among the officers, directors, members or partners of the licensee. A notice shall be promptly filed with the commissioner who may thereupon cause such investigation to be made as he deems necessary, as if it were a new license. The notice shall contain the name, home address and occupation of each proposed officer, director, member, partner or shareholder; and provide such other information as the commissioner may require. In the case of a corporation, "change in control" means a change of ownership by a person or group acting in concert to acquire ten per cent or more of any class of voting securities, or the ability of a person or group acting in concert to elect a majority of the directors or otherwise effect a change in policy of the corporation.

(e) Each originator licensee shall notify the commissioner promptly, and in writing, of the occurrence of any of the following developments:

(1) Filing for bankruptcy of the originator licensee;

(2) Filing of a criminal indictment against the originator 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, in any state against the originator licensee, and the reasons therefor; or

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

[(c)] (f) Each lender, correspondent lender, mortgage broker and originator license shall remain in force and effect until it has been surrendered, revoked, suspended or expires, or is no longer effective, in accordance with the provisions of sections 36a-485 to 36a-498a, inclusive, of the 2008 supplement to the general statutes, as amended by this act, and sections 20 to 26, inclusive, of this act.

Sec. 12. Section 36a-491 of the 2008 supplement to the general statutes, as amended by section 9 of public act 07-156 is repealed and the following is substituted in lieu thereof (Effective September 30, 2008):

(a)(1) Each applicant for [a first mortgage] an initial lender license, [a first mortgage] correspondent lender license or [a first] mortgage broker license and each licensee whose license expires on September 30, 2008, who submits a renewal application shall, at the time of making such application, pay to the [national mortgage licensing system the required license fee and processing fee for an initial or renewal application] commissioner a license fee of one thousand dollars, and each applicant for an initial mortgage broker license and each licensee whose license expires on September 30, 2008, who submits a renewal application shall, at the time of making such application, pay to the commissioner a license fee of five hundred dollars. Each mortgage lender license or mortgage broker license issued pursuant to section 36a-489 of the 2008 supplement to the general statutes, as amended by this act, prior to January 1, 2010, shall expire at the close of business on [December thirty-first of the year following its issuance unless such license is renewed] December 31, 2009. Effective January 1, 2010, each applicant for a mortgage lender license shall pay a license fee of eight hundred dollars and each applicant for a mortgage broker license shall pay a license fee of four hundred dollars, and any required processing or other fee to the nation-wide mortgage licensing system. Each mortgage lender license or mortgage broker license issued pursuant to section 36a-489 of the 2008 supplement of the general statutes, as amended by this act, on or after January 1, 2010, shall expire at the close of business on December thirty-first of the year following its issuance unless such license is renewed.

(2) Each [applicant] mortgage lender or mortgage broker applicant and each mortgage lender licensee or mortgage broker licensee whose license expires on September 30, 2008, that files an application for an originator license shall [, at the time of making such application,] pay to the [national mortgage licensing system the required] commissioner a license fee [and processing fee for an initial or renewal application] of sixty-five dollars for each originator. Effective January 1, 2010, each mortgage lender or mortgage broker filing an application for an originator license shall pay a license fee of fifty dollars for each originator and any required processing or other fee to the nation-wide mortgage licensing system. Each [such] originator license shall expire at [the close of business on December thirty-first of the year following its issuance] such time as the license of the mortgage lender or mortgage broker that currently employs or retains the originator expires, unless such originator license is renewed.

(b) [No abatement of the license fee shall be made if the license is surrendered, revoked or suspended prior to the expiration of the period for which it was issued.] All fees [required by] 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 issued.

Sec. 13. Section 36a-492 of the 2008 supplement to the general statutes, as amended by section 10 of public act 07-156, is repealed and the following is substituted in lieu thereof (Effective September 30, 2008):

(a) No [mortgage] lender, correspondent lender or [first] mortgage broker license, and no renewal thereof, shall be granted unless the applicant has filed a bond with the commissioner written by a surety authorized to write such bonds in this state, in the sum of forty thousand dollars, the form of which shall be approved by the Attorney General, provided effective January 1, 2009, the bond shall be in the sum of sixty thousand dollars. Such bond shall be conditioned upon such 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 or a [first] mortgage broker, and conducting such mortgage business consistent with the provisions of sections 36a-485 to 36a-498a, inclusive, of the 2008 supplement to the general statutes, as amended by this act, and sections 20 to 26, inclusive, of this act. 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. The commissioner may proceed on such bond against the principal or surety thereon, or both, to collect any civil penalty imposed upon the licensee pursuant to subsection (a) of section 36a-50 and any unpaid costs of examination of the licensee as determined pursuant to section 36a-65. The proceeds of the bond, even if commingled with other assets of the licensee, shall be deemed by operation of law to be held in trust for the benefit of such claimants against the licensee in the event of bankruptcy of the licensee and shall be immune from attachment by creditors and judgment creditors. The bond shall run concurrently with the period of the license granted to the applicant, and the aggregate liability under the bond shall not exceed the penal sum of the bond.

(b) The surety company shall have the right to cancel the bond at any time by a written notice to the licensee stating the date cancellation shall take effect. Such notice shall be sent by certified mail to the licensee 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. [The commissioner shall automatically suspend the license on the date the cancellation takes effect, unless the surety bond has been replaced or renewed. The commissioner shall give the licensee notice of the automatic suspension pending proceedings for revocation or refusal to renew and an opportunity for a hearing on such actions in accordance with section 36a-51.]

Sec. 14. Section 36a-493 of the 2008 supplement to the general statutes, as amended by section 11 of public act 07-156, is repealed and the following is substituted in lieu thereof (Effective September 30, 2008):

(a) Each mortgage lender and [first] mortgage broker licensee shall maintain adequate records of each loan transaction at the [location] office named in the license, or, if requested by the commissioner, shall make such records available at such [location] office or send such records to the commissioner by registered or certified mail, return receipt requested, or by any express delivery carrier that provides a dated delivery receipt, not later than five business days after requested by the commissioner to do so. Such records shall provide the following information: (1) A copy of any disclosures required under part III of chapter 669; (2) whether the licensee acted as a mortgage lender, a [first] mortgage broker or both; (3) if the licensee is acting as a mortgage lender, and retains the [first] mortgage loan or receives payments thereon, an adequate loan history for those loans retained or upon which payments are received, itemizing the amount and date of each payment and the unpaid balance at all times; (4) the purpose for which the loan was made; (5) the original or an exact copy of the note, loan agreement or other evidence of indebtedness and mortgage deed; (6) a statement signed by the [borrowers] borrower acknowledging the receipt of such statement which discloses the full amount of any fee, commission or consideration paid to the [first] mortgage lender and mortgage broker for all services in connection with the mortgage loan; [and] (7) the name and address of the mortgage lender and the mortgage broker, if any, involved in the loan transaction; (8) a copy of every mortgage loan application taken from the borrower; and (9) a copy of all information used in evaluating the application.

(b) For each loan that is made and serviced by a licensee, the licensee shall retain records of such loan transaction for not less than [two] five years following the final payment thereon, or the assignment of such loan, whichever occurs first, or such longer period as may be required by any other provision of law.

(c) For each loan transaction in which a licensee acts as a mortgage lender or [first] mortgage broker but does not service the loan, the licensee shall retain the records of such loan transaction for not less than [two] five years from the date of the transaction or such longer period as may be required by any other provision of law.

(d) Any person who furnishes to a licensee any records required to be maintained under this section or any information necessary to complete such records may charge a fee to the licensee in an amount not to exceed fifty dollars.

Sec. 15. Section 36a-494 of the 2008 supplement to the general statutes, as amended by section 17 of public act 07-91 and section 12 of public act 07-156, is repealed and the following is substituted in lieu thereof (Effective September 30, 2008):

(a) (1) The commissioner may suspend, revoke or refuse to renew any [mortgage] lender, correspondent lender or [first] mortgage broker license or take any other action, in accordance with the provisions of section 36a-51 of the 2008 supplement to the general statutes, for any reason which would be sufficient grounds for the commissioner to deny an application for such license under sections 36a-485 to 36a-498a, inclusive, of the 2008 supplement to the general statutes, as amended by this act, and sections 20 to 26, inclusive, of this act, or if the commissioner finds that the licensee or any proprietor, director, officer, member, partner, shareholder, 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 [first] mortgage loan transaction, including disclosures required by subdivision (6) of subsection (a) of section 36a-493 of the 2008 supplement to the general statutes, as amended by this act, 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 originator license or take any other action, in accordance with the provisions of section 36a-51 of the 2008 supplement to the general statutes, for any reason which would be sufficient grounds for the commissioner to deny an application for such license under sections 36a-485 to 36a-498a, inclusive, of the 2008 supplement to the general statutes, as amended by this act, and sections 20 to 26, inclusive, of this act, 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 [first] 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-498a, inclusive, of the 2008 supplement to the general statutes, as amended by this act, and sections 20 to 26, inclusive, of this act, 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 mortgage loan transaction, including disclosures required by subdivision (6) of subsection (a) of section 36a-493 of the 2008 supplement to the general statutes, as amended by this act, 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 of the 2008 supplement to the general statutes.

Sec. 16. Section 36a-496 of the 2008 supplement to the general statutes, as amended by section 13 of public act 07-156, is repealed and the following is substituted in lieu thereof (Effective September 30, 2008):

No person engaged in the business of making [first] mortgage loans in this state, whether licensed in accordance with the provisions of sections 36a-485 to 36a-498a, inclusive, of the 2008 supplement to the general statutes, as amended by this act, and sections 20 to 26, inclusive, of this act, or exempt from licensing, shall accept applications or referral of applicants from, or pay a fee to, any [first] mortgage broker or originator who is required to be licensed under said sections but is not licensed to act as such by the commissioner, if the mortgage lender has actual knowledge that the [first] mortgage broker or originator is not licensed by the commissioner.

Sec. 17. Section 36a-497 of the general statutes is repealed and the following is substituted in lieu thereof (Effective September 30, 2008):

No [person licensed pursuant to section 36a-489] mortgage lender licensee or mortgage broker licensee shall:

(1) Advertise or cause to be advertised in this state, any [first] mortgage loan in which such person intends to act only as a [first] mortgage broker unless the advertisement includes the following statement, clearly and conspicuously expressed: BROKER ONLY, NOT A LENDER; [or]

(2) In connection with an advertisement in this state, use (A) a simulated check; (B) a comparison between the loan payments under the [first] mortgage loan offered and the loan payments under a hypothetical loan or extension of credit, unless the advertisement includes, with respect to both the hypothetical loan or extension of credit and the [first] mortgage loan being offered, the interest rate, the loan balance, the total amount of finance charges, the total number of payments and the monthly payment amount that would be required to pay off the outstanding loan balance shown; (C) representations such as "verified as eligible", "eligible", "preapproved", "prequalified" or similar words or phrases, without also disclosing, in immediate proximity to and in similar size print, language which sets forth prerequisites to qualify for the [first] mortgage loan, including, but not limited to, income verification, credit check, and property appraisal or evaluation; or (D) any words or symbols in the advertisement or on the envelope containing the advertisement that give the appearance that the mailing was sent by a government agency; or

(3) Make any representation or statement in an advertisement if the representation or statement is false or misleading or has the tendency or capacity to be misleading, or if the mortgage lender licensee or mortgage broker licensee does not have sufficient information upon which a reasonable belief in the truth of the representation or statement could be based.

Sec. 18. Section 36a-498 of the 2008 supplement to the general statutes, as amended by section 1 of public act 07-118 and section 14 of public act 07-156, is repealed and the following is substituted in lieu thereof (Effective September 30, 2008):

(a) Except as provided in subsection (c) of this section, every advance fee paid or given, directly or indirectly, to a mortgage lender or [first] mortgage broker required to be licensed pursuant to sections 36a-485 to 36a-498a, inclusive, of the 2008 supplement to the general statutes, as amended by this act, and sections 20 to 26, inclusive, of this act, shall be refundable.

(b) No originator required to be licensed pursuant to sections 36a-485 to 36a-498a, inclusive, of the 2008 supplement to the general statutes, as amended by this act, and sections 20 to 26, inclusive, of this act, shall accept payment of any advance fee except an advance fee on behalf of a mortgage lender or [first] mortgage broker licensee. Nothing in this subsection shall be construed as prohibiting the mortgage lender or [first] mortgage broker licensee from paying an 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 or [first] 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 [licensee] mortgage 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 [licensee] mortgage 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 or [first] mortgage broker required to be licensed pursuant to sections 36a-485 to 36a-498a, inclusive, of the 2008 supplement to the general statutes, as amended by this act, and sections 20 to 26, inclusive, of this act, shall enter into an agreement with or otherwise require any person to pay the mortgage lender or [first] mortgage broker for any fee, commission or other valuable consideration lost as a result of such person failing to consummate a [first] mortgage loan, provided the mortgage lender or [first] mortgage broker may collect such fee, commission or consideration as an advance fee subject to the requirements of this section.

(2) No [first] mortgage broker required to be licensed pursuant to sections 36a-485 to 36a-498a, inclusive, of the 2008 supplement to the general statutes, as amended by this act, and sections 20 to 26, inclusive, of this act, shall enter into an agreement with or otherwise require any person to pay the [first] mortgage broker any fee, commission or other valuable consideration for the prepayment of the principal of a [first] 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 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 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 that holds or services existing indebtedness of the applicant who is the subject of the report.

(2) No mortgage lender, [or first] mortgage broker or originator shall engage in an unfair or deceptive act or practice in soliciting an application for a [first] 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.

Sec. 19. Section 36a-498a of the 2008 supplement to the general statutes, as amended by section 15 of public act 07-156, is repealed and the following is substituted in lieu thereof (Effective September 30, 2008):

(a) No mortgage lender [or first mortgage broker] licensee under section 36a-489 of the 2008 supplement to the general statutes, as amended by this act, and no person exempt from licensure under subdivisions (1), (2), (5) and (6) of section 36a-487, as amended by this act, making a first mortgage loan [shall] may charge, impose or cause to be paid, directly or indirectly, prepaid finance charges that exceed in the aggregate, the greater of five per cent of the principal amount of the loan or two thousand dollars. If the proceeds of the loan are used to refinance an existing loan, the aggregate of the prepaid finance charges for the current refinancing and any previous financings by such licensee or exempt person or affiliate of such licensee or exempt person within two years of the current refinancing shall not exceed the greater of five per cent of the principal amount of the initial loan or two thousand dollars. The provisions of this section shall not prohibit such licensee or exempt person from charging, imposing or causing to be paid, directly or indirectly, prepaid finance charges in addition to those permitted by this section in connection with any additional proceeds received by the borrower in the refinancing, provided such prepaid finance charges on the additional proceeds shall not exceed five per cent of the additional proceeds. [For purposes of this section, "additional proceeds" has the meaning given to that term in subdivision (3) of section 36a-746e and "prepaid finance charge" has the meaning given to that term in subdivision (7) of section 36a-746a.]

(b) (1) No mortgage lender making a secondary mortgage loan may (A) charge, impose or cause to be paid, directly or indirectly, in connection with any secondary mortgage loan transaction, prepaid finance charges that exceed in the aggregate eight per cent of the principal amount of the loan, or (B) include in the loan agreement, under which prepaid finance charges have been assessed, any provision that permits the mortgage lender to demand payment of the entire loan balance prior to the scheduled maturity, except that such loan agreement may contain a provision that permits the mortgage lender to demand payment of the entire loan balance if any scheduled installment is in default for more than sixty days or if any condition of default set forth in the mortgage note exists.

(2) Any mortgage lender or mortgage broker who fails to comply with the provisions of this subsection shall be liable to the borrower in an amount equal to the sum of: (A) The amount by which the total of all prepaid finance charges exceeds eight per cent of the principal amount of the loan; (B) eight per cent of the principal amount of the loan or two thousand five hundred dollars, whichever is less; and (C) the costs incurred by the borrower in bringing an action under this subsection, including reasonable attorney's fees, as determined by the court, provided no such mortgage lender or mortgage broker shall be liable for more than the amount specified in this subsection in a secondary mortgage loan transaction involving more than one borrower.

(c) For purposes of this section, "additional proceeds" has the meaning as provided in subdivision (2) of section 36a-746e, as amended by this act, and "prepaid finance charge" has the meaning as provided in subdivision (6) of section 36a-746a, as amended by this act, except that the term "broker" shall mean "mortgage broker" and the term "lender" shall mean "mortgage lender".

Sec. 20. (NEW) (Effective September 30, 2008) No mortgage loan, as defined in section 36a-485 of the 2008 supplement to the general statutes, as amended by this act, shall provide for or include the following:

(1) A payment schedule that consolidates more than two periodic payments and pays them in advance from the proceeds, unless such payments are required to be escrowed by a governmental agency;

(2) An increase in the interest rate after default or default charges in excess of five per cent of the amount in default;

(3) A refund calculated by a method less favorable than the actuarial method, as defined by the Housing and Community Development Act of 1992, 15 USC 1615(d), as amended from time to time, for rebates of interest arising from a loan acceleration due to default;

(4) (A) A prepayment penalty, as defined in section 36a-746a of the general statutes, as amended by this act, except as allowed by this subdivision. A mortgage loan other than a high cost home loan may provide for or include a prepayment penalty, including a refund calculated according to the rule of 78s, as such term is used in 12 CFR 226.32, as amended from time to time, if:

(i) The penalty can be exercised only for the first three years following consummation. No prepayment penalty shall exceed three per cent of the balance prepaid for any payment occurring earlier than one year after consummation of the loan, two per cent of the balance prepaid for any payment occurring between one and two years after consummation of the loan, and one per cent of the balance prepaid for any payment occurring between two and three years after consummation of the loan;

(ii) The prepayment penalty is based on a legitimate financial reason such as a verifiable reduction of the loan interest rate or closing costs paid by the borrower; and

(iii) The mortgage lender or mortgage broker has offered the borrower a similar mortgage loan that does not have a prepayment penalty provision and provided the borrower, in writing, the reason for the prepayment penalty provision and an itemization of the differences between the two loans offered.

(B) Notwithstanding the provisions of subparagraph (A) of this subdivision, no mortgage lender may impose, charge or collect a prepayment penalty where the loan is refinanced with the mortgage lender or affiliate of the mortgage lender; or

(5) A call provision that permits the lender, in its sole discretion, to accelerate the indebtedness, except for cases when repayment of the loan is accelerated by bona fide default, pursuant to a due-on-sale clause provision, or pursuant to another provision of the loan agreement unrelated to the payment schedule including, but not limited to, bankruptcy or receivership.

Sec. 21. (NEW) (Effective September 30, 2008) In the making of a mortgage loan, as defined in section 36a-485 of the 2008 supplement to the general statutes, as amended by this act, no mortgage lender, as defined in section 36a-485 of the 2008 supplement to the general statutes, as amended by this act, shall:

(1) Pay a contractor under a home improvement contract from the proceeds of the loan, other than:

(A) By an instrument payable to the borrower or jointly to the borrower and the contractor; or

(B) At the election of the borrower, through a third-party escrow agent in accordance with terms established in a written agreement signed by the borrower, the lender and the contractor prior to the disbursement;

(2) Make such mortgage loan unless the lender reasonably believes at the time the loan is consummated that the borrower will be able to make the scheduled payments to repay the loan based upon a consideration of the borrower's current and expected income, current obligations, employment status and other financial resources, excluding the borrower's equity in the dwelling that secures repayment of the loan. The lender may not make a mortgage loan without: (A) Sufficient documentation to verify the borrower's income if the income information provided by the borrower contradicts information previously obtained by the lender, unless the lender documents a change in the borrower's circumstances or other explanation for the discrepancy, or (B) first verifying the employment or income of the borrower if the amount of the income provided is not reasonable for the occupation or experience of the borrower, or if the borrower's employment or income information is not reasonable in light of the borrower's circumstances;

(3) Charge and retain fees paid by the borrower for services that are not actually performed or that are not bona fide and reasonable; and

(4) Offer the borrower the opportunity to pay bona fide discount points, as defined in section 36a-485 of the 2008 supplement to the general statutes, as amended by this act, unless:

(A) The lender provides the borrower, in writing, the following information: (i) The reduced interest rate or rates offered with the corresponding bona fide discount points and the dollar amounts of such points; (ii) any conditions that are applicable to the offer, including the date by which the borrower's acceptance of an offer must be received by the lender; and (iii) the nondiscounted rate and points, if any;

(B) The lender receives the written acceptance of the offer from the borrower; and

(C) The lender sends the borrower written confirmation of the reduced rate, the bona fide discount points and the dollar amount of the bona fide discount points, no later than three business days after receipt of the acceptance from the borrower.

Sec. 22. (NEW) (Effective September 30, 2008) No mortgage broker, as defined in section 36a-485 of the 2008 supplement to the general statutes, as amended by this act, shall:

(1) Submit an application for a mortgage loan, as defined in section 36a-485 of the 2008 supplement to the general statutes, as amended by this act, to a mortgage lender unless the mortgage broker reasonably believes that the borrower will be able to make the scheduled payments to repay the loan based upon a consideration of the borrower's current and expected income, current obligations, employment status and other financial resources, excluding the borrower's equity in the dwelling that secures repayment of the loan. A mortgage broker may not submit an application for a mortgage loan to a mortgage lender without: (A) Sufficient documentation to verify the borrower's income if the income information provided by the borrower contradicts information previously obtained by the mortgage broker, unless the mortgage broker documents a change in the borrower's circumstances or other explanation for the discrepancy, or (B) first verifying the employment or income of the borrower if the amount of the income provided is not reasonable for the occupation or experience of the borrower, or if the borrower's employment or income information provided is not reasonable in light of the borrower's circumstances;

(2) Charge and retain fees paid by the borrower for services that are not actually performed or that are not bona fide and reasonable; and

(3) Offer the borrower the opportunity to pay bona fide discount points unless the offer has been authorized by a lender. Any such offer shall be in writing and shall include: (A) The name of the lender; (B) the reduced interest rate or rates offered with the corresponding bona fide discount points and the dollar amounts of such points; (C) any conditions that are applicable to the offer, including the date by which the borrower's acceptance of an offer must be received by the lender; and (D) the nondiscounted rate and points, if any. Upon receipt of the borrower's written acceptance of the offer, the mortgage broker shall send the acceptance to the lender in a timely manner.

Sec. 23. (NEW) (Effective September 30, 2008) (a) Any mortgage lender, as defined in section 36a-485 of the 2008 supplement to the general statutes, as amended by this act, that makes a mortgage loan, as defined in section 36a-485 of the 2008 supplement to the general statutes, as amended by this act, other than a high cost home loan, to a borrower and offers such borrower the option to purchase an individual or group credit life, accident, health, disability or unemployment insurance product on a prepaid single premium basis shall also offer such borrower the option of purchasing such insurance product on a monthly premium basis. If the borrower purchases such product on a prepaid single premium basis, the lender may not, directly or indirectly, finance the premium.

(b) If a borrower purchases from the lender an individual or group credit life, accident, health, disability or unemployment insurance product, such borrower shall have the right to cancel such insurance product at any time and receive a refund of any unearned premiums paid. The notice of the right to cancel shall be in not less than twelve-point type and sent separately by mail to such borrower by the mortgage lender no earlier than ten days and no later than thirty days after consummation. Such notice shall also disclose the type of insurance product purchased, the cost of such product and the procedure for canceling such product.

Sec. 24. (NEW) (Effective September 30, 2008) (a) Each mortgage lender, as defined in section 36a-485 of the 2008 supplement to the general statutes, as amended by this act, that is licensed under section 36a-489 of the 2008 supplement to the general statutes, as amended by this act, and each mortgage broker, as defined in section 36a-485 of the 2008 supplement to the general statutes, as amended by this act, that is licensed under section 36a-489 of the 2008 supplement to the general statutes, as amended by this act, shall deliver to the mortgagor a release of a secondary mortgage: (1) Upon receipt by such licensee of cash or a certified check in the amount of the outstanding balance of the obligation secured by such mortgage; or (2) upon payment by the payor bank, as defined in section 42a-4-105 of the general statutes, of any check that is payable to such licensee or its assignee in the amount of the outstanding balance of the obligation secured by such mortgage.

(b) Each such licensee shall advise any person designated by the mortgagor of the amount of the outstanding balance of the obligation secured by the secondary mortgage granted to such licensee no later than the second business day after the licensee receives a request for such information.

Sec. 25. (NEW) (Effective September 30, 2008) Any mortgage deed to secure a secondary mortgage loan, as defined in section 36a-485 of the 2008 supplement to the general statutes, as amended by this act, that is recorded in the land records of any town shall contain the word "mortgage" in the heading, either in capital letters or underscored and shall contain the principal amount of the loan.

Sec. 26. (NEW) (Effective September 30, 2008): At least once a year, each mortgage lender, as defined in section 36a-485 of the 2008 supplement to the general statutes, as amended by this act, that is licensed under section 36a-489 of the 2008 supplement to general statutes, as amended by this act, shall adopt a mortgage loan policy based on and consistent with the most current version of the Conference of State Bank Supervisors, American Association of Residential Mortgage Regulators and National Association of Consumer Credit Administrators Statement on Subprime Mortgage Lending, and the Conference of State Bank Supervisors and American Association of Residential Mortgage Regulators Guidance on Nontraditional Mortgage Product Risks. Such licensee shall comply with such policy and develop and implement internal controls that are reasonably designed to ensure such compliance. The mortgage loan policy and any mortgage loan, as defined in section 36a-485 of the 2008 supplement to the general statutes, as amended by this act, made pursuant to the policy shall be subject to examination concerning prudent lending practices by the Banking Commissioner.

Sec. 27. Subsection (a) of section 36a-534a of the general statutes is repealed and the following is substituted in lieu thereof (Effective September 30, 2008):

(a) Any [first] mortgage broker, [or mortgage lender,] as defined in section 36a-485 of the 2008 supplement to the general statutes, as amended by this act, and licensed pursuant to section [36a-486] 36a-489 of the 2008 supplement to the general statutes, as amended by this act, and any [secondary mortgage broker or] mortgage lender, as defined in section [36a-510] 36a-485 of the 2008 supplement to the general statutes, as amended by this act, and licensed pursuant to section [36a-511] 36a-489 of the 2008 supplement to the general statutes, as amended by this act, shall notify the commissioner by written affidavit if any such broker or lender, as a result of a transaction in which such broker or lender was involved, reasonably believes that the lending practices of a financial institution or federal bank violate section 36a-737 or 46a-66. Such broker or lender shall provide the commissioner with any written document containing lending restrictions which a financial institution or federal bank has provided to such broker or lender. In the event the commissioner finds that there is a reasonable basis for said notification, the commissioner shall notify the Commission on Human Rights and Opportunities of said notification and the action the commissioner plans to take with respect thereto.

Sec. 28. Section 36a-555 of the general statutes is repealed and the following is substituted in lieu thereof (Effective September 30, 2008):

No person shall engage in the business of making loans of money or credit in the amount or to the value of fifteen thousand dollars or less for loans made under section 36a-563 of the 2008 supplement to the general statutes or section 36a-565, and charge, contract for or receive a greater rate of interest, charge or consideration than twelve per cent per annum therefor, unless licensed to do so by the commissioner pursuant to sections 36a-555 to 36a-573, inclusive. The provisions of this section shall not apply to (1) a bank, (2) an out-of-state bank, (3) a Connecticut credit union, (4) a federal credit union, (5) an out-of-state credit union, (6) a savings and loan association wholly owned subsidiary service corporation, (7) a person to the extent that such person makes loans for agricultural, commercial, industrial or governmental use or extends credit through an open-end credit plan, as defined in subdivision (8) of section 36a-676, for the retail purchase of consumer goods or services, (8) a mortgage lender licensed pursuant to sections 36a-485 to 36a-498a, inclusive, of the 2008 supplement to the general statutes, as amended by this act, and sections 20 to 26, inclusive, of this act, when making first mortgage loans, as defined in section 36a-485, [(9) a mortgage lender licensed pursuant to sections 36a-510 to 36a-524, inclusive, when making secondary mortgage loans, as defined in section 36a-510] of the 2008 supplement to the general statutes, as amended by this act, or [(10)] (9) a licensed pawnbroker.

Sec. 29. Section 36a-705 of the general statutes is repealed and the following is substituted in lieu thereof (Effective September 30, 2008):

As used in this section and sections 36a-706, 36a-707 and 36a-708, unless the context otherwise requires:

(1) "First mortgage loan" means "first mortgage loan", as defined in section 36a-485 of the 2008 supplement to the general statutes, as amended by this act;

(2) "Mortgage broker" [means "first mortgage broker", as defined] has the same meaning as provided in section 36a-485 of the 2008 supplement to the general statutes, as amended by this act, who is licensed or required to be licensed under sections 36a-485 to 36a-498a, inclusive, of the 2008 supplement to the general statutes, as amended by this act, and sections 20 to 26, inclusive, of this act;

(3) "Mortgage lender" [means "mortgage lender", as defined] has the same meaning as provided in section 36a-485 of the 2008 supplement to the general statutes, as amended by this act, who is required to be licensed under sections 36a-485 to 36a-498a, inclusive, of the 2008 supplement to the general statutes, as amended by this act, and sections 20 to 26, inclusive, of this act, except that the term shall include a bank, out-of-state bank, Connecticut credit union, federal credit union and out-of-state credit union; and

(4) "Mortgage rate lock-in" means a written or electronically transmitted confirmation issued to a mortgage applicant or the representative of such applicant by a mortgage lender or the lender's representative, prior to the issuance of a first mortgage loan commitment, stating that a particular rate, number of points or variable rate terms will be the rate, number of points, or variable rate terms at which the lender will make the loan, provided the first mortgage loan is closed by a specified date, and the applicant qualifies for the loan in accordance with the lender's standards of creditworthiness.

Sec. 30. Subdivision (1) of section 36a-715 of the general statutes is repealed and the following is substituted in lieu thereof (Effective September 30, 2008):

(1) "First mortgage loan" has the same meaning as provided in subdivision [(6)] (5) of section 36a-485 of the 2008 supplement to the general statutes, as amended by this act.

Sec. 31. Section 36a-725 of the general statutes is repealed and the following is substituted in lieu thereof (Effective September 30, 2008):

As used in this section and section 36a-726, unless the context otherwise requires:

(1) "First mortgage loan" means any loan made to an individual, the proceeds of which are to be used primarily for personal, family or household purposes, which loan is secured by a mortgage upon any interest in one-to-four-family residential, owner-occupied real property located in this state which is not subject to any prior mortgages. The term includes the renewal or refinancing of an existing first mortgage loan;

(2) "Mortgage insurance" means insurance written by an independent mortgage insurance company to protect the mortgage lender against loss incurred in the event of a default by a borrower under the mortgage loan;

(3) "Mortgage lender" means any person engaged in the business of making first mortgage loans, including, but not limited to, banks, out-of-state banks, Connecticut credit unions, federal credit unions, out-of-state credit unions, and [first] mortgage lenders required to be licensed under sections 36a-485 to 36a-498a, inclusive, of the 2008 supplement to the general statutes, as amended by this act, and sections 20 to 26, inclusive, of this act.

Sec. 32. Section 36a-736 of the general statutes is repealed and the following is substituted in lieu thereof (Effective September 30, 2008):

As used in sections 36a-735 to 36a-744, inclusive, unless the context otherwise requires:

(1) "Applicant" means any person who applies for a home purchase loan, home improvement loan or other mortgage loan as defined in sections 36a-735 to 36a-744, inclusive, whether or not the loan is granted;

(2) "Federal Home Mortgage Disclosure Act" means the Home Mortgage Disclosure Act of 1975 (12 USC Section 2801 et seq.), as amended from time to time, [amended,] and any regulations promulgated by the Federal Reserve Board pursuant to that act, except, for purposes of sections 36a-735 to 36a-744, inclusive, the supervisory agency shall be the commissioner;

(3) "Financial institution" means any Connecticut bank or Connecticut credit union which makes home purchase loans or home improvement loans or any for profit mortgage lending institution other than a Connecticut bank or Connecticut credit union, whose home purchase loan originations equaled or exceeded ten per cent of its loan origination volume, measured in dollars, in the preceding calendar year, if such mortgage lending institution is licensed under sections 36a-485 to 36a-498a, inclusive, [or 36a-510 to 36a-524, inclusive,] of the 2008 supplement to the general statutes, as amended by this act, and sections 20 to 26, inclusive, of this act;

(4) "Home improvement loan" has the same meaning as provided in the federal Home Mortgage Disclosure Act;

(5) "Home purchase loan" has the same meaning as provided in the federal Home Mortgage Disclosure Act; and

(6) "Mortgage loan" means a loan which is secured by residential real property.

Sec. 33. Section 36a-746a of the general statutes is repealed and the following is substituted in lieu thereof (Effective September 30, 2008):

As used in this section and sections 36a-746b to 36a-746g, inclusive, as amended by this act:

(1) "APR" means the annual percentage rate for the loan calculated according to the provisions of the federal Truth-in-Lending Act, 15 USC Section 1601 et seq., as from time to time amended, and the regulations promulgated thereunder. For open-end lines of credit, "APR" means the highest corresponding annual percentage rate required to be disclosed under 12 CFR [Sections] 226.6(a)(2) and 226.14(b), as amended from time to time, [amended,] excluding any maximum rates required to be disclosed or stated pursuant to 12 CFR [Sections] 226.6(a)(2) or 226.30, as amended from time to time. [amended.] For closed-end loans, "APR" means the annual percentage rate required to be disclosed under 12 CFR [Section] 226.18(e), as amended from time to time, [amended,] excluding any maximum rates required to be disclosed or stated pursuant to 12 CFR [Sections] 226.18(f) or 226.30, as amended from time to time. [amended.] For purposes of this subdivision, any variable rate calculation shall use an index value in effect within forty-five days prior to consummation;

(2) "Broker" means a person who, for a fee, commission or other valuable consideration, negotiates, solicits, arranges, places or finds a high cost home loan that is to be made by a lender;

(3) "Consummation" means the time that a borrower becomes contractually obligated on a loan or extension of credit;

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

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

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

(C) In which the loan is secured by a mortgage upon any interest in one-to-four family residential real property located in this state which is, or, when the loan is made, is intended to be occupied by the borrower as a principal residence; and

(D) In which the APR at consummation will exceed the yield on Treasury securities having comparable periods of maturity to the loan maturity as of the fifteenth day of the month immediately preceding the month in which the application for the loan or extension of credit is received by the lender, by more than the number of percentage points specified in 12 CFR 226.32(a)(1)(i), as from time to time amended;]

[(5)] (4) "Interim interest" means interest for the period from funding to the start of amortization paid by a borrower at or before consummation of a closed-end loan where such amortization begins sixty-two days or less after funding;

[(6)] (5) "Lender" means any person who originates one or more high cost home loans;

[(7)] (6) "Prepaid finance charge" means any finance charge determined in accordance with 12 CFR [Section] 226.4, as amended from time to time, [amended,] that is paid separately in cash or by check before or at consummation of a loan or extension of credit or withheld from the proceeds of such transaction at any time, except the term includes any fees or commissions payable to the lender or broker in connection with the sale of credit life, accident, health, disability or unemployment insurance products or unrelated goods or services sold in conjunction with the loan or extension of credit when the cost of such insurance products or goods or services is prepaid with the proceeds of the loan or extension of credit and financed as part of the principal amount of the loan or extension of credit, and excludes premiums, fees and any other amounts paid to a governmental agency, any amounts required to be escrowed by a governmental agency and interim interest; and

[(8)] (7) "Prepayment penalty" means any charge or penalty for paying all or part of the principal before the date on which the principal is due and includes computing a refund of unearned interest by a method that is less favorable to the borrower than the actuarial method, as defined by Section 933(d) of the Housing and Community Development Act of 1992, 15 USC 1615(d), as amended from time to time. [amended.]

Sec. 34. Section 36a-746b of the general statutes is repealed and the following is substituted in lieu thereof (Effective September 30, 2008):

[A] Three business days prior to consummation, a lender making a high cost home loan shall disclose to the prospective borrower, [:] on a separate page, in at least eleven-point type, the information described in subdivisions (1) to (6), inclusive, of this section. For purposes of this section, "business day" has the same meaning given to that term in 12 CFR 226.2(a)(6), as amended from time to time, for purposes of rescission.

(1) The following statement: "You are not required to complete this agreement merely because you have received these disclosures or have signed a loan application. If you obtain this loan, the lender will have a mortgage on your home. You could lose your home, and any money you have put into it, if you do not meet your obligations under the loan";

(2) The name of the lender, loan amount, loan term, type of loan, and APR;

(3) The amount and due date of any balloon payment;

(4) The amount of the monthly or other periodic payments for initial real estate taxes, homeowner's insurance, assessments, any applicable homeowner association fees and mortgage insurance premiums and a statement in bold face type that such amounts are subject to increase;

[(3)] (5) [The] (A) For fixed rate loans, the amount of the [regular] monthly or other periodic payment [; and] of principal and interest, and the sum total of such principal and interest and the amounts specified in subdivision (4) of this section;

[(4)] (B) For variable-rate [transactions, a] loans: (i) A statement that the interest rate and monthly payment may increase; [, and the amount of the single maximum monthly payment, based on the maximum interest rate that may be imposed during the term of the loan] (ii) the initial interest rate, the initial monthly or other periodic payment of principal and interest and the sum total of such principal and interest and the amounts specified in subdivision (4) of this section; (iii) the maximum interest rate, the maximum monthly or other periodic payment of principal and interest and the sum total of such principal and interest and the amounts specified in subdivision (4) of this section; and (iv) the earliest date on which the maximum monthly payment of principal and interest may occur; and

(6) An itemized list that contains a description and the amounts of any fees, commissions, charges and costs that the borrower is required to pay as an incident to or a condition of the loan or extension of credit, excluding any amounts required to be paid to governmental entities and any charges or costs voluntarily incurred by the borrower, and the sum total of such amounts.

Sec. 35. Section 36a-746c of the general statutes is repealed and the following is substituted in lieu thereof (Effective September 30, 2008):

A high cost home loan shall not provide for or include the following:

(1) For a loan with a term of less than seven years, a payment schedule with regular periodic payments that when aggregated do not fully amortize the outstanding principal balance, except that this limitation does not apply to a loan with maturities of less than one year if the purpose of the loan is a bridge loan, as used in 12 CFR 226.32, as amended from time to time, [amended,] connected with the acquisition or construction of a dwelling intended to become the borrower's principal dwelling;

(2) A payment schedule with regular periodic payments that cause the principal balance to increase;

[(3) A payment schedule that consolidates more than two periodic payments and pays them in advance from the proceeds, unless such payments are required to be escrowed by a governmental agency;

(4) An increase in the interest rate after default or default charges in excess of five per cent of the amount in default;

(5) A refund calculated by a method less favorable than the actuarial method, as defined by Section 933(d) of the Housing and Community Development Act of 1992, 15 USC 1615(d), as from time to time amended, for rebates of interest arising from a loan acceleration due to default;]

[(6)] (3) A prepayment penalty; [except as allowed by this subdivision. A high cost home loan may provide for or include a prepayment penalty, including a refund calculated according to the rule of 78s, as such term is used in 12 CFR 226.32, as from time to time amended, if:

(A) The penalty can be exercised only for the first three years following consummation. No prepayment penalty shall exceed three per cent of the balance prepaid for any payment occurring earlier than one year after consummation of the loan, two per cent of the balance prepaid for any payment occurring between one and two years after consummation of the loan, and one per cent of the balance prepaid for any payment occurring between two and three years after consummation of the loan;

(B) The source of the prepayment funds is not a refinancing by the lender or an affiliate of the lender; and

(C) At consummation, the borrower's total monthly debts, including amounts owed under the high cost home loan, do not exceed fifty per cent of the borrower's monthly gross income, as verified by the borrower's signed financial statement, a credit report and payment records for employment income;] or

[(7)] (4) A [mandatory arbitration clause or a] waiver of participation in a class action [;] or a provision requiring the borrower to assert a claim or defense in a forum that is less convenient, more costly or more dilatory for the resolution of a dispute than a judicial forum established in this state where a borrower may otherwise properly bring a claim or defense.

[(8) A call provision that permits the lender, in its sole discretion, to accelerate the indebtedness. This prohibition shall not apply when repayment of the loan is accelerated by bona fide default, pursuant to a due-on-sale clause provision, or pursuant to another provision of the loan agreement unrelated to the payment schedule including, but not limited to, bankruptcy or receivership.]

Sec. 36. Section 36a-746e of the general statutes is repealed and the following is substituted in lieu thereof (Effective September 30, 2008):

In the making of a high cost home loan no lender shall:

[(1) Pay a contractor under a home improvement contract from the proceeds of the loan, other than:

(A) By an instrument payable to the borrower or jointly to the borrower and the contractor; or

(B) At the election of the borrower, through a third-party escrow agent in accordance with terms established in a written agreement signed by the borrower, the lender and the contractor prior to the disbursement;]

[(2)] (1) Sell or otherwise assign such loan without furnishing the following statement to the purchaser or assignee: "Notice: This is a loan subject to special rules under the Connecticut Abusive Home Loan Lending Practices Act. Purchasers or assignees of this loan could be liable for all claims and defenses with respect to the loan that the borrower could assert against the lender";

[(3) Charge, impose or cause to be paid, directly or indirectly, prepaid finance charges that exceed in the aggregate, the greater of five per cent of the principal amount of the loan or two thousand dollars. If the proceeds of a high cost home loan are used to refinance an existing loan, the aggregate of the prepaid finance charges for the current refinancing and any previous high cost home loan financings or financings subject to the provisions of section 36a-498a, by the same lender or affiliate of the same lender within two years of the current refinancing shall not exceed the greater of five per cent of the principal amount of the initial loan, or two thousand dollars. The provisions of this subdivision do not prohibit a lender from charging, imposing or causing to be paid, directly or indirectly, prepaid finance charges in addition to those permitted by this subdivision in connection with any additional proceeds received by the borrower in the refinancing, provided such prepaid finance charges on the additional proceeds shall not exceed five per cent of the additional proceeds. For purposes of this subdivision, "additional proceeds" means: (A) For a closed-end loan, the amount by which the new loan exceeds the current principal balance of the existing loan, and (B) for an open-end loan, the amount by which the line of credit on the new loan exceeds the maximum credit limit of the existing loan;]

[(4)] (2) Charge a borrower any fees to modify, renew, extend or amend a high cost home loan or defer any payment due under a high cost home loan, if after the modification, renewal, extension or amendment, the loan is still a high cost home loan, or if no longer a high cost home loan, the APR has not been reduced by at least two percentage points. For purposes of this subdivision, "fees" does not include interest that is otherwise payable and consistent with the provisions of the loan documents. The provisions of this subdivision do not prohibit a lender from charging, imposing or causing to be paid, directly or indirectly, prepaid finance charges in connection with any additional proceeds [, as defined in subdivision (3) of this section,] received by the borrower in connection with the modification, renewal, extension or amendment, provided the prepaid finance charges on the additional proceeds do not exceed five per cent of the additional proceeds. The provisions of this subdivision do not apply if the existing high cost home loan is sixty or more days delinquent and the modification, renewal, extension, amendment or deferral is part of a work-out process. For purposes of this subdivision, "additional proceeds" means: (A) For a closed-end loan, the amount by which the new loan exceeds the current principal balance of the existing loan, and (B) for an open-end loan, the amount by which the line of credit on the new loan exceeds the maximum credit limit of the existing loan;

[(5)] (3) Make such loan unless, based upon a consideration of the borrower's current and expected income, current obligations, employment status and other financial resources, excluding the borrower's equity in the dwelling that secures repayment of the loan, the lender reasonably believes at the time the loan is consummated that the borrower will be able to make the scheduled payments [to repay the loan based upon a consideration of the borrower's current and expected income, current obligations, employment status, and other financial resources, excluding the borrower's equity in the dwelling that secures repayment of the loan] of the following, as applicable: Principal, interest, real estate taxes, homeowner's insurance, assessments, homeowner association fees and mortgage insurance premiums. For loans in which the interest rate may vary, the reasonable ability to pay shall be determined based on a fully indexed rate and a repayment schedule that achieves full amortization over the life of the loan. The borrower's income and financial resources, if relied upon in determining the borrower's ability to make the scheduled payments, shall be verified by tax returns, payroll receipts, bank records or other similarly reliable documents. The borrower shall be presumed to be able to make the scheduled payments [to repay the loan] if at the time the loan is consummated, or at the time of the [first] final rate adjustment in the case of a lower introductory interest rate, the borrower's monthly debts, including [amounts owed under the mortgage] the scheduled payments, do not exceed fifty per cent of the borrower's monthly gross income, as verified by the borrower's signed financial statement, a credit report [,] and payment records for employment income;

[(6)] (4) Advertise that refinancing preexisting debt with a high cost home loan will reduce a borrower's aggregate monthly debt payment without also disclosing that the high cost home loan may increase both the borrower's aggregate number of monthly debt payments and the aggregate amount paid by the borrower over the term of the high cost home loan;

[(7)] (5) Recommend or encourage default or further default by a borrower on an existing loan or other debt, prior to the closing of a high cost home loan that refinances all or any portion of such existing loan or debt;

[(8)] (6) Make such loan to a borrower that refinances an existing loan unless the high cost home loan provides a benefit to the borrower considering all of the circumstances, including the terms of both the new and refinanced loans, the cost of the new loan, and the borrower's circumstances;

[(9)] (7) Make such loan with an interest rate that is unconscionable. A lender shall base the interest rate for a high cost home loan on proper and reasonable factors including, but not limited to, creditworthiness, other risk related standards and sound underwriting. For purposes of this subdivision, an interest rate that is not based on such factors, or that significantly deviates from industry standards for making that type of high cost home loan, shall be deemed unconscionable; [and] or

[(10) Charge and retain fees paid by the borrower for services that are not actually performed, or which are not bona fide and reasonable.]

(8) Offer the borrower an individual or group credit life, accident, health, disability or unemployment insurance product on a prepaid single premium basis.

Sec. 37. (NEW) (Effective September 30, 2008): A high cost home loan shall require the mortgagor to pay the holder of the mortgage funds for the payment of real estate taxes and insurance premiums and such funds shall be held in escrow for distribution to the taxing authority and insurance company.

Sec. 38. Section 36a-758 of the 2008 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective September 30, 2008):

Any person who makes any first mortgage loan, as defined in section 36a-485 of the 2008 supplement to the general statutes, as amended by this act or any secondary mortgage loan, as defined in section [36a-510] 36a-485 of the 2008 supplement to the general statutes, as amended by this act, shall, at the time of consummation of such loan or at the termination of any right to rescind the loan transaction under 12 CFR 226, as amended from time to time, [amended,] whichever is later, pay the loan proceeds to the mortgagor, to the mortgagor's attorney, to the mortgagee's attorney or to any other person specified in any settlement statement, any written agreement between the mortgagor and the mortgagee or any written instruction of the mortgagor, by a certified, bank treasurer's or cashier's check or by means of wire transfer.

Sec. 39. Section 36a-534g of the 2008 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective September 30, 2008):

The Banking Commissioner may participate in the [national] nation-wide mortgage licensing system and permit such system to process applications for [first mortgage] lender, [first mortgage] correspondent lender, [first] mortgage broker [, secondary mortgage lender, secondary mortgage correspondent lender, secondary mortgage broker] and originator licenses in this state and receive and maintain records related to such licenses that are allowed or required to be maintained by the commissioner.

Sec. 40. Section 25 of public act 07-156 is repealed and the following is substituted in lieu thereof (Effective September 30, 2008):

The Banking Commissioner shall submit to the joint standing committee of the General Assembly having cognizance of matters relating to banks three annual reports that shall include financial statements of the State Regulatory Registry, LLC, concerning the [national] nation-wide mortgage licensing system described in section 1 of [this act] public act 07-156. Each such financial statement shall cover a twelve-month period. The commissioner shall submit such reports for three consecutive years not later than ten days after receipt of such financial statements by the commissioner.

Sec. 41. Subsection (g) of section 19a-343a of the general statutes is repealed and the following is substituted in lieu thereof (Effective September 30, 2008):

(g) If the defendant is a financial institution and the record owner of the real property, or if the defendant is a financial institution claiming an interest of record pursuant to a bona fide mortgage, assignment of lease or rent, lien or security in the real property and is not determined to be a principal or an accomplice in the conduct constituting the public nuisance, the court shall not enter any order against such defendant. The state shall have the burden of proving by clear and convincing evidence that any such defendant claiming an interest of record under this subsection is a principal or an accomplice in the alleged conduct constituting the public nuisance. For the purposes of this subsection, "financial institution" means a bank, as defined in subdivision (4) of section 36a-2 of the 2008 supplement to the general statutes, as amended by this act, an out-of-state bank, as defined in subdivision [(44)] (46) of section 36a-2 of the 2008 supplement to the general statutes, as amended by this act, an institutional lender or any subsidiary or affiliate of such bank, out-of-state bank or institutional lender that directly or indirectly acquires the real property pursuant to strict foreclosure, foreclosure by sale or deed-in-lieu of foreclosure, and with the intent of ultimately transferring the property, or other lender licensed by the Department of Banking.

Sec. 42. Subdivision (17) of section 36a-316 of the general statutes is repealed and the following is substituted in lieu thereof (Effective September 30, 2008):

(17) "Savings deposit" means a savings deposit, as defined in subdivision [(59)] (62) of section 36a-2 of the 2008 supplement to the general statutes, as amended by this act, and the payment on shares at a Connecticut credit union or federal credit union, and a "savings account" is a deposit account which contains savings deposits.

Sec. 43. Section 20-329 of the general statutes is repealed and the following is substituted in lieu thereof (Effective September 30, 2008):

The provisions of this chapter concerning the licensure of real estate brokers and real estate salespersons shall not apply to: (1) Any person who as owner or lessor performs any of the acts enumerated in section 20-311, with reference to property owned, leased or sought to be acquired or leased by the person, or to the person's regular employees who are employed as on-site residential superintendents or custodians, with respect to the property so owned or leased or sought to be acquired or leased when such acts are performed in the regular course of, or incident to, the management of such property and the investment therein; (2) any person acting as attorney-in-fact under a duly executed power of attorney from the owner authorizing the final consummation by performance of any contract for the sale, leasing or exchange of real estate, or to service rendered by any attorney-at-law in the performance of the attorney-at-law's duties as such attorney-at-law; (3) a receiver, trustee in bankruptcy, administrator, executor or other fiduciary, while acting as such, or any person selling real estate under order of any court, or to a trustee acting under a trust agreement, deed of trust or will, or the regular salaried employees thereof; (4) witnesses in court as to the values of real estate; (5) persons in the employ of the federal or state government or any political subdivision thereof while acting in the course of such employment; (6) any employee of any nonprofit housing corporation that (A) has been certified as a tax-exempt organization under Section 501(c)(3) of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended, and manages a housing project, or (B) manages a housing project assisted in whole or in part by the federal government pursuant to Section 8 of The United States Housing Act of 1937, as from time to time amended, while such employee is performing duties in the regular course of, or incidental to, the management of such housing project; (7) [any person licensed as a broker in accordance with sections 36a-510 to 36a-524, inclusive, who engages solely in the activities described in subsection (6) of section 36a-510; (8)] any person licensed to maintain or operate a mobile manufactured home park under chapter 412 who performs any of the acts enumerated in section 20-311, with reference to lots or mobile manufactured homes within the park or to the person's employees with respect to lots or mobile manufactured homes within such park when such acts are performed in the regular course of, or incidental to, the management of such property and the investment therein; [(9)] (8) persons licensed as sellers of mobile manufactured homes under section 21-67; or [(10)] (9) any person or such person's regular employee who, as owner, lessor, licensor, manager, representative or agent manages, leases, or licenses space on or in a tower, building or other structure for (A) "personal wireless services facilities" or facilities for "private mobile service" as those terms are defined in 47 USC 332, which facilities shall be unattended, and the installation and maintenance of related devices authorized by the Federal Communications Commission, and ancillary equipment used to operate such devices and equipment shelters therefor, in an area not to exceed three hundred sixty square feet for any one service established by the Federal Communications Commission in 47 CFR, as amended from time to time, by a provider of any such service, and (B) any right appropriate to access such facilities and connect or use utilities in connection with such facilities.

Sec. 44. Subsection (a) of section 51-81c of the 2008 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective September 30, 2008):

(a) A program for the use of interest earned on lawyers' clients' funds accounts is hereby established. The organization administering the program shall use such interest to provide funding for (1) the delivery of legal services to the poor by nonprofit corporations whose principal purpose is providing legal services to the poor and (2) law school scholarships based on financial need. Each lawyer and law firm having a clients' funds account shall participate in the program. On and after July 1, 2005, each entity, other than a borrower, having an account established to receive loan proceeds from a mortgage lender, as defined in this subsection, shall participate in the program. Under the program, funds in accounts established to receive such loan proceeds, regardless of the amount or period held, and clients' funds that are less than ten thousand dollars in amount or expected to be held for a period of not more than sixty business days, shall be deposited by participating lawyers, law firms and entities in interest-bearing accounts specifically established pursuant to the program. Funds deposited in such accounts shall be subject to withdrawal upon request by the depositor and without delay. The interest earned on such accounts shall be paid to an organization qualified under Section 501(c)(3) of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended, which shall be designated to administer the program by the judges of the Superior Court pursuant to subsection (b) of this section. Nothing in this section shall prevent (A) a lawyer or law firm from depositing a client's funds, regardless of the amount of such funds or the period for which such funds are expected to be held, in a separate interest-bearing account established on behalf of and for the benefit of the client, or (B) an entity from depositing a person's loan proceeds, regardless of the amount of such proceeds or the period for which such proceeds are expected to be held, in a separate interest-bearing account established on behalf of and for the benefit of the person. The organization administering the program shall mail to each lawyer, law firm and entity participating in the program a detailed annual report of all funds disbursed under the program including the amount disbursed to each recipient of funds. Any recipient of funds under the program which, using program funds, represents a party in an action filed after July 1, 1992, against the state or any officer or agency thereof and is awarded attorney's fees in such action by the court, shall reimburse the program for the amount of attorney's fees received in proportion to the percentage of program funds used for the litigation. No recipient of funds under the program may use such funds to pay the occupational tax imposed pursuant to section 51-81b of the 2008 supplement to the general statutes, on behalf of any attorney. As used in this section, "mortgage lender" means any person engaged in the business of making [first] mortgage loans, [or secondary mortgage loans,] including, but not limited to, a bank, out-of-state bank, Connecticut credit union, federal credit union, out-of-state credit union, [first] mortgage lender required to be licensed under sections 36a-485 to 36a-498a, inclusive, [or secondary mortgage lender required to be licensed under sections 36a-510 to 36a-524, inclusive,] of the 2008 supplement to the general statutes, as amended by this act.

Sec. 45. Subsection (a) of section 51-344a of the general statutes is repealed and the following is substituted in lieu thereof (Effective September 30, 2008):

(a) Whenever the term "judicial district of Hartford-New Britain" or "judicial district of Hartford-New Britain at Hartford" is used or referred to in the following sections of the general statutes, it shall be deemed to mean or refer to the judicial district of Hartford on and after September 1, 1998: Sections 1-205 of the 2008 supplement to the general statutes, 1-206 of the 2008 supplement to the general statutes, 2-48, 3-21a, 3-62d, 3-70a, 3-71a, 4-61, 4-160, 4-164, 4-177b, 4-180, 4-183, 4-197, 5-202, 5-276a, 8-30g, 9-7a, 9-7b, 9-369b, 10-153e, 12-208, 12-237, 12-268l, 12-312, 12-330m, 12-405k, 12-422, 12-448, 12-454, 12-456, 12-463, 12-489, 12-522, 12-554, 12-565, 12-572, 12-586f, 12-597, 12-730, 13b-34, 13b-235, 13b-315, 13b-375, 14-57, 14-66 of the 2008 supplement to the general statutes, 14-67u, 14-110, 14-195, 14-311, 14-311c, 14-324, 14-331, 15-125, 15-126, 16-41 of the 2008 supplement to the general statutes, 16a-5, 17b-60, 17b-100, 17b-238, 17b-531, 19a-85, 19a-86, 19a-123d, 19a-425, 19a-498, 19a-517, 19a-526, 19a-633, 20-12f, 20-13e of the 2008 supplement to the general statutes, 20-29, 20-40, 20-45, 20-59 of the 2008 supplement to the general statutes, 20-73a, 20-86f, 20-99, 20-114, 20-133, 20-154, 20-156, 20-162p, 20-192, 20-195p, 20-202, 20-206c, 20-227, 20-238, 20-247, 20-263, 20-271, 20-307, 20-341f, 20-363 of the 2008 supplement to the general statutes, 20-373, 20-404, 20-414, 21a-55, 21a-190i, 22-7, 22-64, 22-228, 22-248, 22-254, 22-320d, 22-326a, 22-344b, 22-386, 22a-6b of the 2008 supplement to the general statutes, 22a-7, 22a-16, 22a-30, 22a-34, 22a-53, 22a-60, 22a-62, 22a-63 of the 2008 supplement to the general statutes, 22a-66h, 22a-106a, 22a-119, 22a-167, 22a-180, 22a-182a, 22a-184, 22a-220a, 22a-220d, 22a-225, 22a-226, 22a-226c, 22a-227, 22a-250, 22a-255l, 22a-276, 22a-285a, 22a-285g of the 2008 supplement to the general statutes, 22a-285j, 22a-310, 22a-342a, 22a-344, 22a-361a, 22a-374, 22a-376, 22a-408, 22a-430, 22a-432, 22a-438, 22a-449f of the 2008 supplement to the general statutes, 22a-449g, 22a-459, 23-5e, 23-65m, 25-32e, 25-36, 28-5, 29-143j of the 2008 supplement to the general statutes, 29-158, 29-161z, 29-317, 29-323, 29-329, 29-334, 29-340, 29-369, 30-8, 31-109, 31-249b of the 2008 supplement to the general statutes, 31-266, 31-266a, 31-270, 31-273, 31-284, 31-285, 31-339, 31-355a, 31-379, 35-3c, 35-42, 36a-186, 36a-187, 36a-471a, 36a-494 [, 36a-517] of the 2008 supplement to the general statutes, as amended by this act, 36a-587 of the 2008 supplement to the general statutes, 36a-647, 36a-684, 36a-718, 36a-807, 36b-26, 36b-27 of the 2008 supplement to the general statutes, 36b-30, 36b-50, 36b-71, 36b-72, 36b-74, 36b-76, 38a-41, 38a-52, 38a-134, 38a-139, 38a-140, 38a-147, 38a-150, 38a-185, 38a-209, 38a-225, 38a-226b, 38a-241, 38a-337, 38a-470, 38a-620, 38a-657, 38a-687, 38a-774, 38a-776, 38a-817, 38a-843, 38a-868, 38a-906, 38a-994, 42-103c, 42-110d, 42-110k, 42-110p, 42-182, 46a-5, 46a-56 of the 2008 supplement to the general statutes, 46a-100, 47a-21, 49-73, 51-44a, 51-81b of the 2008 supplement to the general statutes, 51-194, 52-146j, 53-392d and 54-211a.

Sec. 45. Subdivision (2) of section 42-287 of the general statutes is repealed and the following is substituted in lieu thereof (Effective September 30, 2008):

(2) Any transaction between a consumer and a bank, out-of-state bank, Connecticut credit union, federal credit union or out-of-state credit union as each is defined in section 36a-2 of the 2008 supplement to the general statutes, as amended by this act, or a [first] mortgage broker or lender, [second mortgage broker or lender,] sales finance company or small loan lender licensed under chapter 668 in which any such person, or such person's subsidiary, affiliate or agent markets its own services to a consumer.

Sec. 46. Subdivision (2) of section 36a-615 of the general statutes is repealed and the following is substituted in lieu thereof (Effective September 30, 2008):

(2) "Loan broker" means any person who: (A) For or in expectation of a fee (i) arranges, negotiates, places, solicits or finds an unsecured loan; (ii) assists or advises a person in obtaining an unsecured loan; or (iii) offers or attempts to engage in the activities described in subparagraph (i) or (ii) of this subdivision; (B) acts for or on behalf of a loan broker; (C) holds himself out to the public generally as a person engaging in the activities described in subdivision (A) of this subsection. A principal, officer, director, partner, joint venturer, manager or other person with similar supervisory or managerial responsibility for persons engaging in the activities described in subdivisions (A) to (C), inclusive, of this subsection shall be deemed to be a loan broker. "Loan broker" shall not include any bank, out-of-state bank, Connecticut credit union, federal credit union, out-of-state credit union, small loan licensee, nondepository [first] mortgage lender or broker, [secondary mortgage loan lender or broker,] sales finance company, securities broker-dealer or investment adviser, investment company as defined in the Investment Company Act of 1940, as from time to time amended, forwarder of money, trustee under a mortgage or deed of trust of real property, corporation exercising fiduciary powers, money order and travelers check licensee, check cashing licensee, real estate broker or agent, attorney, Federal Housing Authority or Veterans' Administration approved lender, or insurance company; provided any such person or entity so excluded is licensed by and subject to the regulation and supervision of the appropriate regulatory agency of the United States or this state or any other state and is acting within the scope of the license.

Sec. 47. Subdivision (2) of section 36a-755 of the general statutes is repealed and the following is substituted in lieu thereof (Effective September 30, 2008):

(2) "Financial institution" means a bank, out-of-state bank, Connecticut credit union, federal credit union, out-of-state credit union, [secondary mortgage loan licensee and first] mortgage lender or mortgage broker licensee.

Sec. 48. Subdivision (2) of section 49-6a of the general statutes is repealed and the following is substituted in lieu thereof (Effective September 30, 2008):

(1) "Creditor" means any state bank and trust company or national banking association, state or federal savings bank, state or federal savings and loan association, state or federal credit union, licensed [first] mortgage lender or other financial institution.

Sec. 49. (Effective September 30, 2008) Sections 36a-510, 36a-511, 36a-513, 36a-514, 36a-515, 36a-516, 36a-517, 36a-521, and 36a-523 of the 2008 supplement to the general statutes are repealed.

Sec. 50. (Effective September 30, 2008) Sections 36a-512, 36a-519, 36a-520, 36a-522, 36a-524 and 36a-746f of the general statutes are repealed.

Statement of Purpose:

To implement the Governor's budget recommendations.

[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not underlined.]