Banks Committee

JOINT FAVORABLE REPORT

Bill No.:

SB-950

Title:

AN ACT CONCERNING THE DEPARTMENT OF BANKING'S PROPOSAL FOR CONSUMER CREDIT LICENSEES.

Vote Date:

3/10/2009

Vote Action:

Joint Favorable Substitute

PH Date:

2/24/2009

File No.:

SPONSORS OF BILL:

Department of Banking

REASONS FOR BILL:

This bill gives the Banking Commissioner new authorization for consumer credit licensing, expands the definition of a debt adjuster, and amends the statutes concerning bond requirements for certain licensees. (Please note that some testimony was offered in support of HB 6366 and also applies to provisions of this bill.)

RESPONSE FROM ADMINISTRATION/AGENCY:

Alan Cicchetti for Commissioner Howard F. Pitkin, Department of Banking

This bill fills certain gaps in the agency's enforcement authority and provides the department with certain enforcement tools related to licensee and debt adjusters. The bill contains new provisions governing payday loans that the Commissioner and Attorney General have developed through joint effort.

Attorney General Richard Blumenthal

I urge the committee's favorable consideration of the bill. This legislation tightens the regulation of various consumer credit licensees including small loan lenders, check cashing facilities and mortgage loan originators. The bill clarifies restrictions on payday loans.

Timothy F. Bannon, Connecticut Housing Finance Authority

We would like to express our support of the bill which will increase the ability of the Department of Banking to enforce licenses and debt adjusters.

NATURE AND SOURCES OF SUPPORT:

Connecticut Mortgage Bankers Association, Inc.

The CMBA supports measures to maintain credit availability for the citizens of Connecticut. The CMBA proposes modifications to the Consumer Credit bill, such as a specific exclusion from “Debt Adjustment” for activities of mortgage lenders, brokers, servicers, and title companies.

NATURE AND SOURCES OF OPPOSITION:

Wesley Young, The Association of Settlement Companies

TASC opposes Raised Bill 950 as written because of its restriction to only allow non-profits as debt settlement service providers, but supports regulation and a licensing requirement for the industry consistent with standards TASC already has in place.

Reported by: Elaine Dall

Date: March 12, 2009