Connecticut Seal

General Assembly

 

Raised Bill No. 6482

January Session, 2009

 

LCO No. 3648

 

*03648_______BA_*

Referred to Committee on Banks

 

Introduced by:

 

(BA)

 

AN ACT CONCERNING THE UNIFORM DEBT-MANAGEMENT SERVICES ACT.

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

Section 1. (NEW) (Effective October 1, 2009) Sections 1 to 40, inclusive, of this act may be cited as the Uniform Debt-Management Services Act.

Sec. 2. (NEW) (Effective October 1, 2009) As used in sections 1 to 40, inclusive, of this act:

(1) "Affiliate": (A) With respect to an individual, means: (i) the spouse of the individual; (ii) a sibling of the individual or the spouse of a sibling; (iii) an individual or the spouse of an individual who is a lineal ancestor or lineal descendant of the individual or the individual's spouse; (iv) an aunt, uncle, great aunt, great uncle, first cousin, niece, nephew, grandniece or grandnephew, whether related by the whole or the half blood or adoption, or the spouse of any of such relatives; or (v) any other individual occupying the residence of the individual; and (B) with respect to an entity, means: (i) A person that directly or indirectly controls, is controlled by or is under common control with the entity; (ii) an officer of, or an individual performing similar functions with respect to, the entity; (iii) a director of, or an individual performing similar functions with respect to, the entity; (iv) a person that receives or received more than twenty-five thousand dollars from the entity in either the current year or the year preceding the current year or a person that owns more than ten per cent of, or an individual who is employed by or is a director of, a person that receives or received more than twenty-five thousand dollars from the entity in either the current year or the preceding year; (v) an officer or director of, or an individual performing similar functions with respect to, a person described in subparagraph (B)(i) of this subdivision; (vi) the spouse of, or an individual occupying the residence of, an individual described in subparagraphs (B)(i) to (B)(v), inclusive, of this subdivision; or (vii) an individual who has the relationship specified in subparagraph (A)(iv) of this subdivision to an individual or the spouse of an individual described in subparagraphs (B)(i) to (B)(v), inclusive, of this subdivision.

(2) "Agreement" means an agreement between a provider and an individual for the performance of debt-management services.

(3) "Business address" means the physical location of a business, including the name and number of a street.

(4) "Certified counselor" means an individual certified by a training program or certifying organization, approved by the commissioner, that authenticates the competence of individuals providing education and assistance to other individuals in connection with debt-management services.

(5) "Commissioner" means the Banking Commissioner.

(6) "Concessions" means assent to repayment of a debt on terms more favorable to an individual than the terms of the contract between the individual and a creditor.

(7) "Day" means calendar day.

(8) "Debt-management services" means services as an intermediary between an individual and one or more creditors of the individual for the purpose of obtaining concessions, but does not include: (A) Legal services provided in an attorney-client relationship by an attorney licensed or otherwise authorized to practice law in this state; (B) accounting services provided in an accountant-client relationship by a certified public accountant licensed to provide accounting services in this state; or (C) financial-planning services provided in a financial planner-client relationship by a member of a financial-planning profession whose members the commissioner determines are (i) licensed by this state; (ii) subject to a disciplinary mechanism; (iii) subject to a code of professional responsibility; and (iv) subject to a continuing-education requirement.

(9) "Entity" means a person other than an individual.

(10) "Good faith" means honesty in fact and the observance of reasonable standards of fair dealing.

(11) "Person" (A) means an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture or any other legal or commercial entity, and (B) does not include a public corporation, government or governmental subdivision, agency or instrumentality.

(12) "Plan" means a program or strategy in which a provider furnishes debt-management services to an individual and which includes a schedule of payments to be made by or on behalf of the individual and used to pay debts owed by the individual.

(13) "Principal amount of the debt" means the amount of a debt at the time of an agreement.

(14) "Provider" means a person that provides, offers to provide or agrees to provide debt-management services directly or through others.

(15) "Record" means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.

(16) "Settlement fee" means a charge imposed on or paid by an individual in connection with a creditor's assent to accept in full satisfaction of a debt an amount less than the principal amount of the debt.

(17) "Sign" means, with present intent to authenticate or adopt a record: (A) To execute or adopt a tangible symbol; or (B) to attach to or logically associate with the record an electronic sound, symbol or process.

(18) "State" means a state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States.

(19) "Trust account" means an account held by a provider that is: (A) Established in an insured bank; (B) separate from other accounts of the provider, or its designee; (C) designated as a trust account or other account designated to indicate that the money in the account is not the money of the provider, or its designee; and (D) used to hold money of one or more individuals for disbursement to creditors of the individuals.

Sec. 3. (NEW) (Effective October 1, 2009) The Uniform Debt-Management Services Act does not apply:

(1) To an agreement with an individual who the provider has no reason to know resides in this state at the time of the agreement;

(2) To a provider to the extent that the provider: (A) Provides or agrees to provide debt-management, educational or counseling services to an individual who the provider has no reason to know resides in this state at the time the provider agrees to provide the services; or (B) receives no compensation for debt-management services from or on behalf of the individuals to whom it provides the services or from their creditors.

(3) To the following persons or their employees when the person or the employee is engaged in the regular course of the person's business or profession: (A) A judicial officer, a person acting under an order of a court or an administrative agency, or an assignee for the benefit of creditors; (B) a bank; (C) an affiliate of a bank if the affiliate is regulated by a federal or state banking regulatory authority; or (D) a title insurer, escrow company or other person that provides bill-paying services if the provision of debt-management services is incidental to the bill-paying services.

Sec. 4. (NEW) (Effective October 1, 2009) (a) No provider shall provide debt-management services to an individual who the provider reasonably should know resides in this state at the time the provider agrees to provide the services, unless the provider is registered under sections 1 to 40, inclusive, of this act.

(b) If a provider is registered under sections 1 to 40, inclusive, of this act, an employee or agent of the provider may provide debt-management services on behalf of such provider.

(c) The commissioner shall maintain and publicize a list of the names of all registered providers.

(d) A provider whose plans contemplate that creditors will reduce finance charges or fees for late payment, default or delinquency may be registered only if it is: (1) Organized and properly operating as a not-for-profit entity under the law of the state in which it was formed; and (2) exempt from taxation under Section 501 of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as amended from time to time.

Sec. 5. (NEW) (Effective October 1, 2009) (a) Application for registration as a provider shall be made on forms prescribed by the commissioner.

(b) An application for registration as a provider shall be accompanied by: (1) A fee of ____ dollars; (2) the bond required by section 13 of this act; (3) identification of all trust accounts required by section 22 of this act and an irrevocable consent authorizing the commissioner to review and examine the trust accounts; (4) evidence of insurance in the amount of two hundred fifty thousand dollars: (A) Against the risks of dishonesty, fraud, theft and other misconduct on the part of the applicant or a director, employee or agent of the applicant; (B) issued by an insurance company authorized to do business in this state and rated at least A by a nationally recognized rating organization; (C) with no deductible; (D) payable to the applicant, the individuals who have agreements with the applicant and this state, as their interests may appear; and (E) not subject to cancellation by the applicant without the approval of the commissioner; (5) if the applicant is an entity, proof of the applicant's compliance with laws concerning registration with the Secretary of the State; and (6) if the applicant is organized as a not-for-profit entity or is exempt from taxation, evidence of not-for-profit and tax-exempt status applicable to the applicant under Section 501 of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as amended from time to time.

Sec. 6. (NEW) (Effective October 1, 2009) An application for registration shall be signed under penalty of false statement and include:

(1) The applicant's name, principal business address and telephone number, and all other business addresses in this state, electronic-mail addresses, and Internet web site addresses;

(2) All names under which the applicant conducts business;

(3) The address of each location in this state at which the applicant will provide debt-management services or a statement that the applicant will have no such location;

(4) The name and home address of each officer and director of the applicant and each person that owns at least ten per cent of the applicant;

(5) Identification of every jurisdiction in which, during the five years immediately preceding the application: (A) The applicant or any of its officers or directors has been licensed or registered to provide debt-management services; or (B) individuals have resided when they received debt-management services from the applicant;

(6) A statement describing, to the extent it is known or should be known by the applicant, any material civil or criminal judgment or litigation and any material administrative or enforcement action by a governmental agency in any jurisdiction against the applicant, any of its officers, directors, owners or agents, or any person who is authorized to have access to the trust account required by section 22 of this act;

(7) The applicant's financial statements, audited by an accountant licensed to conduct audits, for each of the two years immediately preceding the date of the application or, if it has not been in operation for the two years preceding the application, for the period of its existence;

(8) Evidence of accreditation by an independent accrediting organization approved by the commissioner;

(9) Evidence that, no later than twelve months after the date of initial employment, each of the applicant's counselors is required to become certified as a certified counselor;

(10) A description of the three most commonly used educational programs that the applicant provides or intends to provide to individuals who reside in this state and a copy of any materials used or to be used in those programs;

(11) A description of the applicant's financial analysis and initial budget plan, including any form or electronic model, used to evaluate the financial condition of individuals;

(12) A copy of each form of agreement that the applicant will use with individuals who reside in this state;

(13) The schedule of fees and charges that the applicant will use with individuals who reside in this state;

(14) At the applicant's expense, the results of a criminal records check, including fingerprints, conducted during the year prior to the date of application, covering every officer of the applicant and every employee or agent of the applicant who is authorized to have access to the trust account required by section 22 of this act;

(15) The names and addresses of all employers of each director during the ten years prior to the date of application;

(16) A description of any ownership interest of at least ten per cent by a director, owner or employee of the applicant in: (A) Any affiliate of the applicant; or (B) any entity that provides products or services to the applicant or any individual relating to the applicant's debt-management services;

(17) A statement of the amount of compensation of the applicant's five most highly compensated employees for each of the three years prior to the date of application or, if the applicant has not been in operation for the three years prior to the date of application, for the period of its existence;

(18) The identity of each director who is an affiliate of the applicant; and

(19) Any other information that the commissioner reasonably requires to evaluate the applicant under section 9 of this act.

Sec. 7. (NEW) (Effective October 1, 2009) An applicant or registered provider shall notify the commissioner of a change in the information specified in section 5 or 6 of this act no later than ten days following the date of such change.

Sec. 8. (NEW) (Effective October 1, 2009) Except for the information required by subdivisions (4), (7), (14) and (17) of section 6 of this act, the commissioner shall make the information in an application for registration as a provider available to the public.

Sec. 9. (NEW) (Effective October 1, 2009) (a) Except as otherwise provided in subsections (b) and (c) of this section, the commissioner shall issue a certificate of registration as a provider to a person that complies with sections 5 and 6 of this act.

(b) The commissioner may deny registration if: (1) The application contains information that is materially erroneous or incomplete; (2) an officer, director or owner of the applicant has been convicted of a crime or suffered a civil judgment, involving dishonesty or the violation of state or federal securities laws; (3) the applicant or any of its officers, directors or owners has defaulted in the payment of money collected for others; or (4) the commissioner finds that the financial responsibility, experience, character or general fitness of the applicant or its owners, directors, employees or agents does not warrant belief that the business will be operated in compliance with sections 1 to 40, inclusive, of this act.

(c) The commissioner shall deny registration if: (1) The application is not accompanied by the fee provided in section 5 of this act; or (2) with respect to an applicant that is organized as a not-for-profit entity or has obtained tax-exempt status under Section 501 of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as amended from time to time, the applicant's board of directors is not independent of the applicant's employees and agents.

(d) A board of directors is not independent for purposes of subsection (c) of this section if more than one-fourth of its members: (1) Are affiliates of the applicant; or (2) ten years prior to the date on which they first became directors of the applicant, were employed by or directors of a person that received from the applicant more than twenty-five thousand dollars in the twenty-four months prior to such date.

Sec. 10. (NEW) (Effective October 1, 2009) (a) The commissioner shall approve or deny an initial registration as a provider no later than one hundred twenty days after the date an application is filed. In connection with a request for additional information pursuant to subdivision (19) of section 6 of this act, the commissioner may extend the one-hundred-twenty-day period for not more than sixty days. The commissioner shall inform the applicant of the reasons for denial in writing no later than seven days after the date of the commissioner's decision under this subsection.

(b) If the commissioner denies an application for registration as a provider or does not act on an application within the time prescribed in subsection (a) of this section, the applicant may appeal and request a hearing pursuant to section 36a-24 of the general statutes.

(c) Subject to subsection (d) of section 11 of this act and section 34 of this act, a registration as a provider is valid for one year.

Sec. 11. (NEW) (Effective October 1, 2009) (a) A provider shall obtain a renewal of its registration annually.

(b) An application for renewal of registration as a provider shall be in a form prescribed by the commissioner, signed under penalty of false statement and:

(1) Be filed no fewer than thirty days nor more than sixty days before the date the registration expires;

(2) Be accompanied by the fee established by the commissioner and the bond required by section 13 of this act;

(3) Contain the matter required for initial registration as a provider by subdivisions (8) and (9) of section 6 of this act and a financial statement, audited by an accountant licensed to conduct audits, for the applicant's fiscal year prior to the date of the application;

(4) Disclose any changes in the information contained in the applicant's application for registration or its immediately previous application for renewal, as applicable;

(5) Supply evidence of insurance in an amount equal to the larger of two hundred fifty thousand dollars or the highest daily balance in the trust account required by section 22 of this act during the six-month period immediately preceding the date of the application: (A) Against risks of dishonesty, fraud, theft and other misconduct on the part of the applicant or a director, employee or agent of the applicant; (B) issued by an insurance company authorized to do business in this state and rated at least A by a nationally recognized rating organization; (C) with no deductible; (D) payable to the applicant, the individuals who have agreements with the applicant and this state, as their interests may appear; and (E) not subject to cancellation by the applicant without the approval of the commissioner;

(6) Disclose the total amount of money received by the applicant pursuant to plans during the year prior to the date of the application from or on behalf of individuals who reside in this state and the total amount of money distributed to creditors of those individuals during that period;

(7) Disclose, to the best of the applicant's knowledge, the gross amount of money accumulated during the year prior to the date of the application pursuant to plans by or on behalf of individuals who reside in this state and with whom the applicant has agreements; and

(8) Provide any other information that the commissioner reasonably requires to perform the commissioner's duties under this section.

(c) Except for the information required by subdivisions (4), (7), (14) and (17), of section 6 of this act, the commissioner shall make the information in an application for renewal of registration as a provider available to the public.

(d) If a registered provider files a timely and complete application for renewal of registration, the registration remains effective until the commissioner, in a record, notifies the applicant of a denial and states the reasons for the denial.

(e) If the commissioner denies an application for renewal of registration as a provider, the applicant, no later than thirty days after the date the applicant received notice of the denial, may appeal and request a hearing pursuant to section 36a-24 of the general statutes. Subject to section 34 of this act, while the appeal is pending, the applicant shall continue to provide debt-management services to individuals with whom it has agreements. If the denial is affirmed, subject to the commissioner's order and section 34 of this act, the applicant shall continue to provide debt-management services to individuals with whom it has agreements until, with the approval of the commissioner, it transfers the agreements to another registered provider or returns to the individuals all unexpended money that is under the applicant's control.

Sec. 12. (NEW) (Effective October 1, 2009) If a provider holds a license or certificate of registration in another state authorizing it to provide debt-management services, the provider may submit a copy of that license or certificate and the application for it instead of an application in the form prescribed by section 5, 6 or 11 of this act. The commissioner shall accept the application and the license or certificate from the other state as an application for registration as a provider or for renewal of registration as a provider, as appropriate, in this state if:

(1) The application in the other state contains information substantially similar to or more comprehensive than that required in an application submitted in this state;

(2) The applicant provides the information required by subdivisions (1), (3), (10), (12) and (13) of section 6 of this act; and

(3) The applicant, under penalty of false statement, certifies that the information contained in the application is current or, to the extent it is not current, supplements the application to make the information current.

Sec. 13. (NEW) (Effective October 1, 2009) (a) Except as otherwise provided in section 14 of this act, a provider that is required to be registered under sections 1 to 40, inclusive, of this act shall file a surety bond with the commissioner, which shall: (1) Be in effect during the period of registration and for two years after the date the provider ceases providing debt-management services to individuals in this state; and (2) run to this state for the benefit of this state and of individuals who reside in this state when they agree to receive debt-management services from the provider, as their interests may appear.

(b) A surety bond filed pursuant to subsection (a) of this section shall: (1) Be in the amount of fifty thousand dollars or other larger or smaller amount that the commissioner determines is warranted by the financial condition and business experience of the provider, the history of the provider in performing debt-management services, the risk to individuals and any other factor the commissioner considers appropriate; (2) be issued by a bonding, surety or insurance company authorized to do business in this state and rated at least A by a nationally recognized rating organization; and (3) have payment conditioned upon noncompliance of the provider or its agent with sections 1 to 40, inclusive, of this act.

(c) If the principal amount of a surety bond is reduced by payment of a claim or a judgment, the provider shall immediately notify the commissioner and, no later than thirty days after the date the commissioner provides notice, file a new or additional surety bond in an amount set by the commissioner. The amount of the new or additional bond shall be at least the amount of the bond immediately before payment of the claim or judgment. If for any reason a surety terminates a bond, the provider shall immediately file a new surety bond in the amount of fifty thousand dollars or other amount determined pursuant to subsection (b) of this section.

(d) The commissioner or an individual may obtain satisfaction out of the surety bond procured pursuant to this section if: (1) The commissioner assesses expenses under subdivision (1) of subsection (b) of section 32 of this act, issues a final order under subdivision (2) of subsection (a) of section 33 of this act or recovers a final judgment under subdivision (4) or (5) of subsection (a) or subsection (d) of section 33 of this act; or (2) an individual recovers a final judgment pursuant to subsection (a) or (b) or subdivision (1), (2) or (4) of subsection (c) of section 35 of this act.

(e) If claims against a surety bond exceed or are reasonably expected to exceed the amount of the bond, the commissioner, on the initiative of the commissioner or on petition of the surety, shall, unless the proceeds are adequate to pay all costs, judgments and claims, distribute the proceeds in the following order: (1) To satisfaction of a final order or judgment under subdivision (2), (4) or (5) of subsection (a) or subsection (d) of section 33 of this act; (2) to final judgments recovered by individuals pursuant to subsection (a) or (b) or subdivision (1), (2) or (4) of subsection (c) of section 35 of this act, pro rata; (3) to claims of individuals established to the satisfaction of the commissioner, pro rata; and (4) if a final order or judgment is issued under subsection (a) of section 33 of this act, to the expenses charged pursuant to subdivision (1) of subsection (b) of section 32 of this act.

Sec. 14. (NEW) (Effective October 1, 2009) (a) Instead of the surety bond required by section 13 of this act, a provider may deliver to the commissioner, in the amount required by subsection (b) of section 13 of this act, and, except as otherwise provided in subparagraph (A) of subdivision (2) of this subsection, payable or available to this state and to individuals who reside in this state when they agree to receive debt-management services from the provider, as their interests may appear, if the provider or its agent does not comply with sections 1 to 40, inclusive, of this act: (1) A certificate of insurance issued by an insurance company authorized to do business in this state and rated at least A by a nationally recognized rating organization, with no deductible; or (2) with the approval of the commissioner: (A) An irrevocable letter of credit, issued or confirmed by a bank approved by the commissioner, payable upon presentation of a certificate by the commissioner stating that the provider or its agent has not complied with sections 1 to 40, inclusive, of this act; or (B) bonds or other obligations of the United States or guaranteed by the United States or bonds or other obligations of this state or a political subdivision of this state, to be deposited and maintained with a bank approved by the commissioner for this purpose.

(b) If a provider furnishes a substitute pursuant to subsection (a) of this section, the provisions of subsections (a), (c), (d) and (e) of section 13 of this act apply to the substitute.

Sec. 15. (NEW) (Effective October 1, 2009) A provider shall act in good faith in all matters under sections 1 to 40, inclusive, of this act.

Sec. 16. (NEW) (Effective October 1, 2009) A provider that is required to be registered under sections 1 to 40, inclusive, of this act shall maintain a toll-free communication system, staffed at a level that reasonably permits an individual to speak to a certified counselor or customer-service representative, as appropriate, during ordinary business hours.

Sec. 17. (NEW) (Effective October 1, 2009) (a) Before providing debt-management services, a registered provider shall give the individual an itemized list of goods and services and the charges for each. The list shall be clear and conspicuous, be in a record the individual may keep whether or not the individual assents to an agreement, and describe the goods and services the provider offers: (1) Free of additional charge if the individual enters into an agreement; (2) for a charge if the individual does not enter into an agreement; and (3) for a charge if the individual enters into an agreement, using the following terminology, as applicable, and format:

Set-up fee ___________________________________________

Monthly service fee___________________________________________

Settlement fee ___________________________________________

Goods and services in addition to those provided in connection with a plan:

__________ ___________________________________________

(item) dollar amount or method of determining amount

__________ ___________________________________________

(item) dollar amount or method of determining amount.

(b) A provider may not furnish debt-management services unless the provider, through the services of a certified counselor: (1) Provides the individual with reasonable education about the management of personal finance; (2) has prepared a financial analysis; and (3) if the individual is to make regular, periodic payments: (A) Has prepared a plan for the individual; (B) has made a determination, based on the provider's analysis of the information provided by the individual and otherwise available to it, that the plan is suitable for the individual and the individual will be able to meet the payment obligations under the plan; and (C) believes that each creditor of the individual listed as a participating creditor in the plan will accept payment of the individual's debts as provided in the plan.

(c) Before an individual assents to an agreement to engage in a plan, a provider shall: (1) Provide the individual with a copy of the analysis and plan required by subsection (b) of this section in a record that identifies the provider and that the individual may keep whether or not the individual assents to the agreement; (2) inform the individual of the availability, at the individual's option, of assistance by a toll-free communication system or in person to discuss the financial analysis and plan required by subsection (b) of this section; and (3) with respect to all creditors identified by the individual or otherwise known by the provider to be creditors of the individual, provide the individual with a list of: (A) Creditors that the provider expects to participate in the plan and grant concessions; (B) creditors that the provider expects to participate in the plan but not grant concessions; (C) creditors that the provider expects not to participate in the plan; and (D) all other creditors.

(d) Before an individual assents to an agreement to engage in a plan, the provider shall inform the individual, in a record that contains nothing else, that is given separately, and that the individual may keep whether or not the individual assents to the agreement: (1) Of the name and business address of the provider; (2) that plans are not suitable for all individuals and the individual may ask the provider about other ways, including bankruptcy, to deal with indebtedness; (3) that establishment of a plan may adversely affect the individual's credit rating or credit scores; (4) that nonpayment of debt may lead creditors to increase finance and other charges or undertake collection activity, including litigation; (5) unless it is not true, that the provider may receive compensation from the creditors of the individual; and (6) that, unless the individual is insolvent, if a creditor settles for less than the full amount of the debt, the plan may result in the creation of taxable income to the individual, even though the individual does not receive any money.

(e) If a provider may receive payments from an individual's creditors and the plan contemplates that the individual's creditors will reduce finance charges or fees for late payment, default or delinquency, the provider may comply with subsection (d) of this section by providing the following disclosure, surrounded by black lines:

IMPORTANT INFORMATION FOR YOU TO CONSIDER

(1) Debt-management plans are not right for all individuals and you may ask us to provide information about other ways, including bankruptcy, to deal with your debts.

(2) Using a debt-management plan may hurt your credit rating or credit scores.

(3) We may receive compensation for our services from your creditors.

_______________________________________

Name and business address of provider

(f) If a provider will not receive payments from an individual's creditors and the plan contemplates that the individual's creditors will reduce finance charges or fees for late payment, default or delinquency, a provider may comply with subsection (d) of this section by providing the following disclosure, surrounded by black lines:

IMPORTANT INFORMATION FOR YOU TO CONSIDER

(1) Debt-management plans are not right for all individuals and you may ask us to provide information about other ways, including bankruptcy, to deal with your debts.

(2) Using a debt-management plan may hurt your credit rating or credit scores.

______________________________________

Name and business address of provider

(g) If a plan contemplates that creditors will settle debts for less than the full principal amount of debt owed, a provider may comply with subsection (d) of this section by providing the following disclosure, surrounded by black lines:

IMPORTANT INFORMATION FOR YOU TO CONSIDER

(1) Our program is not right for all individuals and you may ask us to provide information about bankruptcy and other ways to deal with your debts.

(2) Nonpayment of your debts under our program may

(A) Hurt your credit rating or credit scores;

(B) Lead your creditors to increase finance and other charges; and

(C) Lead your creditors to undertake activity, including lawsuits, to collect the debts.

(3) Reduction of debt under our program may result in taxable income to you, even though you will not actually receive any money.

_________________________________________

Name and business address of provider

Sec. 18. (NEW) (Effective October 1, 2009) (a) As used in this section:

(1) "Federal act" means the Electronic Signatures in Global and National Commerce Act, 15 USC 7001, as amended from time to time.

(2) "Consumer" means an individual who seeks or obtains goods or services that are used primarily for personal, family or household purposes.

(b) A provider may satisfy the requirements of section 17, 19 or 27 of this act by means of the Internet or other electronic means if the provider obtains a consumer's consent in the manner provided by Section 101(c)(1) of the federal act.

(c) The disclosures and materials required by sections 17, 19 and 27 shall be presented in a form that is capable of being accurately reproduced for later reference.

(d) With respect to disclosure by means of an Internet web site, the disclosure of the information required by subsection (d) of section 17 of this act shall appear on one or more screens that: (1) Contain no other information; and (2) the individual must see before proceeding to assent to formation of a plan.

(e) At the time of providing the materials and agreement required by subsections (c) and (d) of section 17 of this act, and sections 19 and 27 of this act, a provider shall inform the individual that upon electronic, telephonic or written request, it will send the individual a written copy of the materials and shall comply with a request as provided in subsection (f) of this section.

(f) If a provider is requested, before the expiration of ninety days after the date on which a plan is completed or terminated, to send a written copy of the materials required by subsections (c) and (d) of section 17 of this act, and sections 19 and 27 of this act, the provider shall send them at no charge no later than three business days after the date of the request, but the provider need not comply with a request more than once per calendar month or if it reasonably believes the request is made for purposes of harassment. If a request is made more than ninety days after the date on which a plan is completed or terminated, the provider shall send within a reasonable time a written copy of the materials requested.

(g) A provider that maintains an Internet web site shall disclose on the home page of its web site or on a page that is clearly and conspicuously connected to the home page by a link that clearly reveals its contents: (1) Its name and all names under which it does business; (2) its principal business address, telephone number and electronic-mail address, if any; and (3) the names of its principal officers.

(h) Subject to subsection (i) of this section, if a consumer who has consented to electronic communication in the manner provided by Section 101 of the federal act withdraws consent as provided in the federal act, a provider may terminate its agreement with the consumer.

(i) If a provider wishes to terminate an agreement with a consumer pursuant to subsection (h) of this section, it shall notify the consumer that it will terminate the agreement unless the consumer, no later than thirty days after the date of receipt of such notification, consents to electronic communication in the manner provided in Section 101(c) of the federal act. If the consumer consents, the provider may terminate the agreement only as permitted by subparagraph (G) of subdivision (6) of subsection (a) of section 19 of this act.

Sec. 19. (NEW) (Effective October 1, 2009) (a) An agreement shall: (1) Be in a record; (2) be dated and signed by the provider and the individual; (3) include the name of the individual and the address where the individual resides; (4) include the name, business address and telephone number of the provider; (5) be delivered to the individual immediately upon formation of the agreement; and (6) disclose: (A) The services to be provided; (B) the amount or method of determining the amount of all fees, individually itemized, to be paid by the individual; (C) the schedule of payments to be made by or on behalf of the individual, including the amount of each payment, the date on which each payment is due and an estimate of the date of the final payment; (D) if a plan provides for regular periodic payments to creditors: (i) Each creditor of the individual to which payment will be made, the amount owed to each creditor and any concessions the provider reasonably believes each creditor will offer; and (ii) the schedule of expected payments to each creditor, including the amount of each payment and the date on which it will be made; (E) each creditor that the provider believes will not participate in the plan and to which the provider will not direct payment; (F) how the provider will comply with its obligations under subsection (a) of section 27 of this act; (G) that the provider may terminate the agreement for good cause, upon return of unexpended money of the individual; (H) that the individual may cancel the agreement as provided in section 20 of this act; (I) that the individual may contact the commissioner with any questions or complaints regarding the provider; and (J) the address, telephone number and Internet address or web site of the commissioner.

(b) For purposes of subdivision (5) of subsection (a) of this section, delivery of an electronic record occurs when it is made available in a format in which the individual may retrieve, save and print it and the individual is notified that it is available.

(c) If the commissioner supplies the provider with any information required under subparagraph (J) of subdivision (6) of subsection (a) of this section, the provider may comply with that requirement only by disclosing the information supplied by the commissioner.

(d) An agreement shall provide that:

(1) The individual has a right to terminate the agreement at any time, without penalty or obligation, by giving the provider written or electronic notice, in which event: (A) The provider will refund all unexpended money that the provider or its agent has received from or on behalf of the individual for the reduction or satisfaction of the individual's debt; (B) with respect to an agreement that contemplates that creditors will settle debts for less than the principal amount of debt, the provider will refund sixty-five per cent of any portion of the set-up fee that has not been credited against the settlement fee; and (C) all powers of attorney granted by the individual to the provider are revoked and ineffective;

(2) The individual authorizes any bank in which the provider or its agent has established a trust account to disclose to the commissioner any financial records relating to the trust account; and

(3) The provider will notify the individual no later than five days after the date it learns of a creditor's decision to reject or withdraw from a plan and that this notice will include: (A) The identity of the creditor; and (B) the right of the individual to modify or terminate the agreement.

(e) An agreement may confer on a provider a power of attorney to settle the individual's debt for no more than fifty per cent of the principal amount of the debt. An agreement may not confer a power of attorney to settle a debt for more than fifty per cent of that amount, but may confer a power of attorney to negotiate with creditors of the individual on behalf of the individual. An agreement shall provide that the provider will obtain the assent of the individual after a creditor has assented to a settlement for more than fifty per cent of the principal amount of the debt.

(f) An agreement may not: (1) Provide for application of the law of any jurisdiction other than the United States and this state; (2) except as permitted by Section 2 of the Federal Arbitration Act, 9 USC 2, as amended from time to time, contain a provision that modifies or limits otherwise available forums or procedural rights, including the right to trial by jury, that are generally available to the individual under law other than sections 1 to 40, inclusive, of this act; (3) contain a provision that restricts the individual's remedies under sections 1 to 40, inclusive, of this act or law other than sections 1 to 40, inclusive, of this act; or (4) contain a provision that: (A) Limits or releases the liability of any person for not performing the agreement or for violating sections 1 to 40, inclusive, of this act; or (B) indemnifies any person for liability arising under the agreement or sections 1 to 40, inclusive, of this act.

(g) All rights and obligations specified in subsection (d) of this section and section 20 of this act exist even if not provided in the agreement. A provision in an agreement that violates subsection (d), (e) or (f) of this section is void.

Sec. 20. (NEW) (Effective October 1, 2009) (a) An individual may cancel an agreement before midnight of the third business day after the date on which the individual assents to it, unless the agreement does not comply with subsection (b) of this section or section 19 or 28 of this act, in which case the individual may cancel the agreement no later than thirty days after the date on which the individual assents to it. To exercise the right to cancel, the individual shall give notice in a record to the provider. Notice by mail is given when mailed.

(b) An agreement shall be accompanied by a form that contains in bold-face type, surrounded by bold black lines:

Notice of Right to Cancel

You may cancel this agreement, without any penalty or obligation, at any time before midnight of the third business day after the date on which you agree to it by electronic communication or by signing it.

To cancel this agreement during this period, send an e-mail to ____________________________ or mail or deliver a signed, dated

E-mail address of provider

copy of this notice or any other written notice to ___________________________________ at

Name of provider

_______________________________ before midnight on

Address of provider

____________________.

Date

If you cancel this agreement within the 3-day period, we will refund all money you already have paid us.

You also may terminate this agreement at any later time, but we are not required to refund fees you have paid us.

I cancel this agreement,

__________________________________

Print your name

__________________________________

Signature

__________________________________

Date

(c) If a personal financial emergency necessitates the disbursement of an individual's money to one or more of the individual's creditors before the expiration of three days after the date on which an agreement is signed, an individual may waive the right to cancel. To waive the right, the individual shall send or deliver a signed, dated statement in the individual's own words describing the circumstances that necessitate a waiver. The waiver shall explicitly waive the right to cancel. A waiver by means of a standard-form record is void.

Sec. 21. (NEW) (Effective October 1, 2009) Unless the commissioner, in regulations adopted pursuant to subsection (c) of section 32 of this act, provides otherwise, the disclosures and documents required by sections 1 to 40, inclusive, of this act shall be in English. If a provider communicates with an individual primarily in a language other than English, the provider shall furnish a translation into the other language of the disclosures and documents required by sections 1 to 40, inclusive, of this act.

Sec. 22. (NEW) (Effective October 1, 2009) (a) All money paid to a provider by or on behalf of an individual pursuant to a plan for distribution to creditors is held in trust. Within two business days after receipt, the provider shall deposit the money in a trust account established for the benefit of individuals to whom the provider is furnishing debt-management services.

(b) Money held in trust by a provider is not property of the provider or its designee. The money is not available to creditors of the provider or designee, except an individual from whom or on whose behalf the provider received money, to the extent that the money has not been disbursed to creditors of the individual.

(c) A provider shall: (1) Maintain separate records of account for each individual to whom the provider is furnishing debt-management services; (2) disburse money paid by or on behalf of the individual to creditors of the individual as disclosed in the agreement, except that: (A) The provider may delay payment to the extent that a payment by the individual is not final; and (B) if a plan provides for regular periodic payments to creditors, the disbursement shall comply with the due dates established by each creditor; and (3) promptly correct any payments that are not made or that are misdirected as a result of an error by the provider or other person in control of the trust account and reimburse the individual for any costs or fees imposed by a creditor as a result of the failure to pay or misdirection.

(d) A provider may not commingle money in a trust account established for the benefit of individuals to whom the provider is furnishing debt-management services with money of other persons.

(e) A trust account shall at all times have a cash balance equal to the sum of the balances of each individual's account.

(f) If a provider has established a trust account pursuant to subsection (a) of this section, the provider shall reconcile the trust account at least once a month. The reconciliation shall compare the cash balance in the trust account with the sum of the balances in each individual's account. If the provider or its designee has more than one trust account, each trust account shall be individually reconciled.

(g) If a provider discovers or has a reasonable suspicion of embezzlement or other unlawful appropriation of money held in trust, the provider immediately shall notify the commissioner by a method approved by the commissioner. Unless the commissioner in regulations adopted pursuant to subsection (c) of section 32 of this act provides otherwise, no later than five days after the date on which the provider gives such notice, the provider shall give notice to the commissioner describing the remedial action taken or to be taken.

(h) If an individual terminates an agreement or it becomes reasonably apparent to a provider that a plan has failed, the provider shall promptly refund to the individual all money paid by or on behalf of the individual which has not been paid to creditors, less fees that are payable to the provider under section 23 of this act.

(i) Before relocating a trust account from one bank to another, a provider shall inform the commissioner of the name, business address and telephone number of the new bank. As soon as practicable, the provider shall inform the commissioner of the account number of the trust account at the new bank.

Sec. 23. (NEW) (Effective October 1, 2009) (a) A provider may not impose directly or indirectly a fee or other charge on an individual or receive money from or on behalf of an individual for debt-management services except as permitted by this section.

(b) A provider may not impose charges or receive payment for debt-management services until the provider and the individual have signed an agreement that complies with sections 19 and 28 of this act.

(c) If an individual assents to an agreement, a provider may not impose a fee or other charge for educational or counseling services or the like, except as otherwise provided in this subsection and subsection (d) of section 28 of this act. The commissioner may authorize a provider to charge a fee based on the nature and extent of the educational or counseling services furnished by the provider.

(d) Providers shall comply with the provisions of this subsection:

(1) If an individual assents to a plan that contemplates that creditors will reduce finance charges or fees for late payment, default or delinquency, the provider may charge: (A) A fee not exceeding fifty dollars for consultation, obtaining a credit report, setting up an account and the like; and (B) a monthly service fee, not to exceed ten dollars times the number of creditors remaining in a plan at the time the fee is assessed, but not more than fifty dollars in any month.

(2) If an individual assents to a plan that contemplates that creditors will settle debts for less than the principal amount of the debt, a provider may charge: (A) Subject to subsection (d) of section 19 of this act, a fee for consultation, obtaining a credit report, setting up an account and the like, in an amount not exceeding the lesser of four hundred dollars or four per cent of the debt in the plan at the inception of the plan; and (B) a monthly service fee, not to exceed ten dollars times the number of creditors remaining in a plan at the time the fee is assessed, but not more than fifty dollars in any month.

(3) A provider may not impose or receive fees under both subdivisions (1) and (2) of this subsection.

(4) Except as otherwise provided in subsection (d) of section 28 of this act, if an individual does not assent to an agreement, a provider may receive for educational and counseling services it provides to the individual a fee not exceeding one hundred dollars or, with the approval of the commissioner, a larger fee. The commissioner may approve a fee larger than one hundred dollars if the nature and extent of the educational and counseling services warrant the larger fee.

(e) If, before the expiration of ninety days after the date of completion or termination of educational or counseling services, an individual assents to an agreement, the provider shall refund to the individual any fee paid pursuant to subdivision (4) of subsection (d) of this section.

(f) Except as otherwise provided in subsections (c) and (d) of this section, if a plan contemplates that creditors will settle an individual's debts for less than the principal amount of the debt, compensation for services in connection with settling a debt may not exceed, with respect to each debt, thirty per cent of the excess of the principal amount of the debt over the amount paid the creditor pursuant to the plan, less, to the extent it has not been credited against an earlier settlement fee:

(1) The fee charged pursuant to subparagraph (A) of subdivision (2) of subsection (d) of this section; and

(2) The aggregate of fees charged pursuant to subparagraph (B) of subdivision (2) of subsection (d) of this section.

(g) If a payment to a provider by an individual under sections 1 to 40, inclusive, of this act is dishonored, a provider may impose a reasonable charge on the individual, not to exceed the lesser of twenty-five dollars or the amount permitted by law other than sections 1 to 40, inclusive, of this act.

Sec. 24. (NEW) (Effective October 1, 2009) A provider may not solicit a voluntary contribution from an individual or an affiliate of the individual for any service provided to the individual. A provider may accept voluntary contributions from an individual but, until thirty days after the date of completion or termination of a plan, the aggregate amount of money received from or on behalf of the individual may not exceed the total amount the provider may charge the individual under section 23 of this act.

Sec. 25. (NEW) (Effective October 1, 2009) (a) If a provider imposes a fee or other charge or receives money or other payments not authorized by section 23 or 24 of this act, the individual may void the agreement and recover as provided in section 35 of this act.

(b) If a provider is not registered as required by sections 1 to 40, inclusive, of this act when an individual assents to an agreement, the agreement is voidable by the individual.

(c) If an individual voids an agreement under subsection (b) of this section, the provider shall not have a claim against the individual for breach of contract or for restitution.

Sec. 26. (NEW) (Effective October 1, 2009) (a) If an individual who has entered into an agreement fails to make payments required by the agreement for sixty days after the date the payment is due under such agreement, a provider may terminate the agreement.

(b) If a provider or an individual terminates an agreement, the provider shall immediately return to the individual: (1) Any money of the individual held in trust for the benefit of the individual; and (2) sixty-five per cent of any portion of the set-up fee received pursuant to subdivision (2) of subsection (d) of section 23 of this act which has not been credited against settlement fees.

Sec. 27. (NEW) (Effective October 1, 2009) (a) A provider shall provide the accounting required by subsection (b) of this section: (1) Upon cancellation or termination of an agreement; and (2) before cancellation or termination of any agreement: (A) At least once each month; and (B) no later than five business days after the date of a request by an individual, but the provider need not comply with more than one request in any calendar month.

(b) A provider, in a record, shall provide each individual for whom it has established a plan an accounting of the following information:

(1) The amount of money received from the individual since the last report;

(2) The amounts and dates of disbursement made on the individual's behalf, or by the individual upon the direction of the provider, since the last report to each creditor listed in the plan;

(3) The amounts deducted from the amount received from the individual;

(4) The amount held in reserve; and

(5) If, since the last report, a creditor has agreed to accept as payment in full an amount less than the principal amount of the debt owed by the individual: (A) The total amount and terms of the settlement; (B) the amount of the debt when the individual assented to the plan; (C) the amount of the debt when the creditor agreed to the settlement; and (D) the calculation of a settlement fee.

(c) A provider shall maintain records for each individual for whom it provides debt-management services for five years after the final payment made by the individual and produce a copy of them to the individual within a reasonable time after a request for them. The provider may use electronic or other means for storage of the records.

Sec. 28. (NEW) (Effective October 1, 2009) (a) A provider may not, directly or indirectly:

(1) Misappropriate or misapply money held in trust;

(2) Settle a debt on behalf of an individual for more than fifty per cent of the principal amount of the debt owed a creditor, unless the individual assents to the settlement after the creditor has assented;

(3) Take a power of attorney that authorizes it to settle a debt, unless the power of attorney expressly limits the provider's authority to settle debts for not more than fifty per cent of the principal amount of the debt owed a creditor;

(4) Exercise or attempt to exercise a power of attorney after an individual has terminated an agreement;

(5) Initiate a transfer from an individual's account at a bank or with another person unless the transfer is: (A) A return of money to the individual; or (B) before termination of an agreement, properly authorized by the agreement and sections 1 to 40, inclusive, of this act, and for: (i) Payment to one or more creditors pursuant to a plan; or (ii) payment of a fee;

(6) Offer a gift or bonus, premium, reward or other compensation to an individual for executing an agreement;

(7) Offer, pay or give a gift or bonus, premium, reward or other compensation to a person for referring a prospective customer, if the person making the referral has a financial interest in the outcome of debt-management services provided to the customer, unless neither the provider nor the person making the referral communicates to the prospective customer the identity of the source of the referral;

(8) Receive a bonus, commission or other benefit for referring an individual to a person;

(9) Structure a plan in a manner that would result in a negative amortization of any of an individual's debts, unless a creditor that is owed a negatively amortizing debt agrees to refund or waive the finance charge upon payment of the principal amount of the debt;

(10) Compensate its employees on the basis of a formula that incorporates the number of individuals the employee induces to enter into agreements;

(11) Settle a debt or lead an individual to believe that a payment to a creditor is in settlement of a debt to the creditor, unless, at the time of settlement, the individual receives a certification by the creditor that the payment is in full settlement of the debt;

(12) Make a representation that: (A) The provider will furnish money to pay bills or prevent attachments; (B) payment of a certain amount will permit satisfaction of a certain amount or range of indebtedness; or (C) participation in a plan will or may prevent litigation, garnishment, attachment, repossession, foreclosure, eviction or loss of employment;

(13) Misrepresent that it is authorized or competent to furnish legal advice or perform legal services;

(14) Represent that it is a not-for-profit entity unless it is organized and properly operating as a not-for-profit under the law of the state in which it was formed or that it is a tax-exempt entity unless it has received certification of tax-exempt status from the Internal Revenue Service;

(15) Take a confession of judgment or power of attorney to confess judgment against an individual; or

(16) Employ an unfair, unconscionable or deceptive act or practice, including the knowing omission of any material information.

(b) If a provider furnishes debt-management services to an individual, the provider may not, directly or indirectly:

(1) Purchase a debt or obligation of the individual;

(2) Receive from or on behalf of the individual: (A) A promissory note or other negotiable instrument other than a check or a demand draft; or (B) a post-dated check or demand draft;

(3) Lend money or provide credit to the individual, except as a deferral of a settlement fee at no additional expense to the individual;

(4) Obtain a mortgage or other security interest from any person in connection with the services provided to the individual;

(5) Except as permitted by federal law, disclose the identity or identifying information of the individual or the identity of the individual's creditors, except to: (A) The commissioner, upon proper demand; (B) a creditor of the individual, to the extent necessary to secure the cooperation of the creditor in a plan; or (C) the extent necessary to administer the plan;

(6) Except as otherwise provided in subsection (f) of section 23 of this act, provide the individual less than the full benefit of a compromise of a debt arranged by the provider;

(7) Charge the individual for or provide credit or other insurance, coupons for goods or services, membership in a club, access to computers or the Internet, or any other matter not directly related to debt-management services or educational services concerning personal finance; or

(8) Furnish legal advice or perform legal services, unless the person furnishing that advice to or performing those services for the individual is licensed to practice law.

(c) Sections 1 to 40, inclusive, of this act shall not be construed to authorize any person to engage in the practice of law.

(d) A provider may not receive a gift or bonus, premium, reward or other compensation, directly or indirectly, for advising, arranging or assisting an individual in connection with obtaining an extension of credit or other service from a lender or service provider, except for educational or counseling services required in connection with a government-sponsored program.

(e) Unless a person supplies goods, services or facilities generally and supplies them to the provider at a cost no greater than the cost the person generally charges to others, a provider may not purchase goods, services or facilities from the person if an employee or a person that the provider should reasonably know is an affiliate of the provider: (1) Owns more than ten per cent of the person; or (2) is an employee or affiliate of the person.

Sec. 29. (NEW) (Effective October 1, 2009) No later than thirty days after the date on which a provider has been served with notice of a civil action for violation of sections 1 to 40, inclusive, of this act by or on behalf of an individual who resides in this state at either the time of an agreement or the time the notice is served, the provider shall notify the commissioner in a record that it has been sued.

Sec. 30. (NEW) (Effective October 1, 2009) A provider that advertises debt-management services shall disclose, in an easily comprehensible manner, the information specified in subdivisions (3) and (4) of subsection (d) of section 17 of this act.

Sec. 31. (NEW) (Effective October 1, 2009) If a provider delegates any of its duties or obligations under an agreement or sections 1 to 40, inclusive, of this act to another person, including an independent contractor, the provider shall be liable for conduct of the person which, if done by the provider, would violate the agreement or sections 1 to 40, inclusive, of this act.

Sec. 32. (NEW) (Effective October 1, 2009) (a) The commissioner may enforce the provisions of sections 1 to 40, inclusive, of this act in accordance with the provisions of sections 36a-50 to 36a-52, inclusive, of the general statutes.

(b) The commissioner may investigate and examine, in this state or elsewhere, by subpoena or otherwise, the activities, books, accounts and records of a person who provides or offers to provide debt-management services, or a person to whom a provider has delegated its obligations under an agreement or sections 1 to 40, inclusive, of this act, to determine compliance with sections 1 to 40, inclusive, of this act. Information that identifies individuals who have agreements with the provider shall not be disclosed to the public. In connection with the investigation, the commissioner may:

(1) Charge the person reasonable expenses necessarily incurred to conduct the examination;

(2) Require or permit a person to file a statement under oath as to all the facts and circumstances of a matter to be investigated; and

(3) Seek a court order authorizing seizure from a bank at which the person maintains a trust account required by section 22 of this act, any or all money, books, records, accounts and other property of the provider that is in the control of the bank and relates to individuals who reside in this state.

(c) The commissioner may adopt regulations, in accordance with the provisions of chapter 54 of the general statutes, to undertake the requirements established in sections 1 to 40, inclusive, of this act.

(d) The commissioner may enter into cooperative arrangements with any other federal or state agency having authority over providers and may exchange with any of those agencies information about a provider, including information obtained during an examination of the provider.

Sec. 33. (NEW) (Effective October 1, 2009) (a) The commissioner may enforce sections 1 to 40, inclusive, of this act and regulations adopted pursuant to subsection (c) of section 32 of this act by taking one or more of the following actions: (1) Ordering a provider or a director, employee or other agent of a provider to cease and desist from any violations; (2) ordering a provider or a person that has caused a violation to correct the violation, including making restitution of money or property to a person aggrieved by a violation; (3) imposing on a provider or a person that has caused a violation a civil penalty not exceeding ten thousand dollars for each violation; (4) prosecuting a civil action to: (A) Enforce an order; or (B) obtain restitution or an injunction or other equitable relief, or both; or (5) intervening in an action brought under section 35 of this act.

(b) If a person violates or knowingly authorizes, directs or aids in the violation of a final order issued under subdivision (1) or (2) of subsection (a) of this section, the commissioner may impose a civil penalty not exceeding twenty thousand dollars for each violation.

(c) The commissioner may maintain an action to enforce sections 1 to 40, inclusive, of this act in any judicial district having jurisdiction over the defendant or defendants.

(d) The commissioner may recover the reasonable costs of enforcing sections 1 to 40, inclusive, of this act under subsections (a) to (c), inclusive, of this section, including attorney's fees based on the hours reasonably expended and the hourly rates for attorneys of comparable experience in the community.

(e) In determining the amount of a civil penalty to impose under subsection (a) or (b) of this section, the commissioner shall consider the seriousness of the violation, the good faith of the violator, any previous violations by the violator, the deleterious effect of the violation on the public, the net worth of the violator and any other factor the commissioner considers relevant to the determination of the civil penalty.

Sec. 34. (NEW) (Effective October 1, 2009) (a) As used in this section, "insolvent" means: (1) Having generally ceased to pay debts in the ordinary course of business other than as a result of good-faith dispute; (2) being unable to pay debts as they become due; or (3) being insolvent within the meaning of the federal bankruptcy law, 11 USC 101., as amended from time to time.

(b) The commissioner may suspend, revoke or deny renewal of a provider's registration if: (1) A fact or condition exists that, if it had existed when the registrant applied for registration as a provider, would have been a reason for denying registration; (2) the provider has committed a material violation of sections 1 to 40, inclusive, of this act or a regulation adopted pursuant to subsection (c) of section 32 of this act or an order of the commissioner under sections 1 to 40, inclusive, of this act; (3) the provider is insolvent; (4) the provider or an employee or affiliate of the provider has refused to permit the commissioner to make an examination authorized by sections 1 to 40, inclusive, of this act, failed to comply with subdivision (2) of subsection (b) of section 32 of this act no later than fifteen days after the date of request, or made a material misrepresentation or omission in complying with subdivision (2) of subsection (b) of section 32 of this act; or (5) the provider has not responded within a reasonable time and in an appropriate manner to communications from the commissioner.

(c) If a provider does not comply with subsection (f) of section 22 of this act or if the commissioner otherwise finds that the public health or safety or general welfare requires emergency action, the commissioner may order a summary suspension of the provider's registration, effective on the date specified in the order.

(d) If the commissioner suspends, revokes or denies renewal of the registration of a provider, the commissioner may seek a court order authorizing seizure of any or all of the money in a trust account required by section 22 of this act, books, records, accounts and other property of the provider which are located in this state.

(e) If the commissioner suspends or revokes a provider's registration, the provider may appeal and request a hearing pursuant to section 36a-51 of the general statutes.

Sec. 35. (NEW) (Effective October 1, 2009) (a) If an individual voids an agreement pursuant to subsection (b) of section 25 of this act, the individual may recover in a civil action all money paid or deposited by or on behalf of the individual pursuant to the agreement, except amounts paid to creditors, in addition to the recovery under subdivisions (3) and (4) of subsection (c) of this section.

(b) If an individual voids an agreement pursuant to subsection (a) of section 25 of this act, the individual may recover in a civil action three times the total amount of the fees, charges, money and payments made by the individual to the provider, in addition to the recovery under subdivision (4) of subsection (c) of this section.

(c) Subject to subsection (d) of this section, an individual with respect to whom a provider violates sections 1 to 40, inclusive, of this act may recover in a civil action from the provider and any person that caused the violation: (1) Compensatory damages for injury, including noneconomic injury, caused by the violation; (2) except as otherwise provided in subsection (d) of this section and, with respect to a violation of section 17, 19, 20, 21, 22, 23, 24 or 27 of this act, or subsection (a), (b) or (d) of section 28 of this act, the greater of the amount recoverable under subdivision (1) of this subsection or five thousand dollars; (3) punitive damages; and (4) reasonable attorney's fees and costs.

(d) In a class action, except for a violation of subdivision (5) of subsection (a) of section 28 of this act, the minimum damages provided in subdivision (2) of subsection (c) of this section shall not apply.

(e) In addition to the remedy available under subsection (c) of this section, if a provider violates an individual's rights under section 20 of this act, the individual may recover in a civil action all money paid or deposited by or on behalf of the individual pursuant to the agreement, except for amounts paid to creditors.

(f) A provider is not liable under this section for a violation of sections 1 to 40, inclusive, of this act if the provider proves that the violation was not intentional and resulted from a good-faith error notwithstanding the maintenance of procedures reasonably adapted to avoid the error. An error of legal judgment with respect to a provider's obligations under sections 1 to 40, inclusive, of this act is not a good-faith error. If, in connection with a violation, the provider has received more money than authorized by an agreement or sections 1 to 40, inclusive, of this act, the defense provided by this subsection is not available unless the provider refunds the excess no later than two business days after learning of the violation.

(g) The commissioner shall assist an individual in enforcing a judgment against the surety bond or other security provided under section 13 or 14 of this act.

Sec. 36. (NEW) (Effective October 1, 2009) If an act or practice of a provider violates both sections 1 to 40, inclusive, of this act and the Connecticut Unfair Trade Practices Act, an individual may not recover under both for the same act or practice.

Sec. 37. (NEW) (Effective October 1, 2009) (a) An action or proceeding brought pursuant to subsection (a), (b) or (c) of section 33 of this act is required to be commenced within four years after the conduct that is the basis of the commissioner's complaint.

(b) An action brought pursuant to section 35 of this act is required to be commenced no later than two years after the latest of: (1) The date of the individual's last transmission of money to a provider; (2) the date of the individual's last transmission of money to a creditor at the direction of the provider; (3) the date of the provider's last disbursement to a creditor of the individual; (4) the date of the provider's last accounting to the individual pursuant to subsection (a) of section 27 of this act; (5) the date on which the individual discovered or reasonably should have discovered the facts giving rise to the individual's claim; or (6) the date on which actions or proceedings by the commissioner terminated with respect to a violation of sections 1 to 40, inclusive, of this act.

(c) The period prescribed in subdivision (5) of subsection (b) of this act is tolled during any period during which the provider or, if different, the defendant has materially and wilfully misrepresented information required by sections 1 to 40, inclusive, of this act to be disclosed to the individual, if the information so misrepresented is material to the establishment of the liability of the defendant under sections 1 to 40, inclusive, of this act.

Sec. 38. (NEW) (Effective October 1, 2009) In applying and construing sections 1 to 40, inclusive, of this act, consideration shall be given to the need to promote uniformity of the law with respect to its subject matter among states that enact sections 1 to 40, inclusive, of this act.

Sec. 39. (NEW) (Effective October 1, 2009) Sections 1 to 40, inclusive, of this act modifies, limits and supersedes the federal Electronic Signatures in Global and National Commerce Act, 15 USC 7001, but does not modify, limit or supersede Section 101(c) of said act or authorize electronic delivery of any of the notices described in Section 103(b) of said act.

Sec. 40. (NEW) (Effective October 1, 2009) Transactions entered into before sections 1 to 40, inclusive, of this act takes effect and the rights, duties and interests resulting from them may be completed, terminated or enforced as required or permitted by a law amended, repealed or modified by sections 1 to 40, inclusive, of this act as though the amendment, repeal or modification had not occurred.

Sec. 41. Section 36a-3 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2009):

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

T1

"Account". Sections 36a-155 and 36a-365.

T2

"Additional proceeds". Section 36a-746e.

T3

"Administrative expense". Section 36a-237.

T4

"Advance fee". Sections 36a-485 and 36a-615.

T5

"Advertise" or "advertisement". Section 36a-485.

T6

"Agency bank". Section 36a-285.

T7

"Alternative mortgage loan". Section 36a-265.

T8

"Amount financed". Section 36a-690.

T9

"Annual percentage rate". Section 36a-690.

T10

"Annual percentage yield". Section 36a-316.

T11

"Annuities". Section 36a-455a.

T12

"Applicant". Section 36a-736.

T13

"APR". Section 36a-746a.

T14

"Assessment area". Section 36a-37.

T15

"Assets". Section 36a-70.

T16

"Associate". Section 36a-184.

T17

"Associated member". Section 36a-458a.

T18

"Bank". Section 36a-30.

T19

"Bankers' bank". Section 36a-70.

T20

"Banking business". Section 36a-425.

T21

"Basic services". Section 36a-437a.

T22

"Billing cycle". Section 36a-565.

T23

["Bona fide nonprofit organization". Section 36a-655.]

T24

"Branch". Sections 36a-145, 36a-410 and 36a-435b.

T25

"Branch office". Section 36a-485.

T26

"Branch or agency net payment entitlement". Section 36a-428n.

T27

"Branch or agency net payment obligation". Section 36a-428n.

T28

"Broker". Section 36a-746a.

T29

"Business and industrial development corporation". Section

T30

36a-626.

T31

"Business and property in this state". Section 36a-428n.

T32

"Capital". Section 36a-435b.

T33

"Cash advance". Section 36a-564.

T34

"Cash price". Section 36a-770.

T35

"Certificate of incorporation". Section 36a-435b.

T36

"CHFA loan". Section 36a-760.

T37

"Closely related activities". Sections 36a-250 and 36a-455a.

T38

"Collective managing agency account". Section 36a-365.

T39

"Commercial vehicle". Section 36a-770.

T40

"Community bank". Section 36a-70.

T41

"Community credit union". Section 36a-37.

T42

"Community development bank". Section 36a-70.

T43

"Community reinvestment performance". Section 36a-37.

T44

"Connecticut holding company". Sections 36a-53 and 36a-410.

T45

"Consolidate". Section 36a-145.

T46

"Construction loan". Section 36a-458a.

T47

"Consumer". Sections 36a-155, 36a-676 and 36a-695.

T48

"Consumer Credit Protection Act". Section 36a-676.

T49

"Consumer debtor" and "debtor". Sections 36a-645 and

T50

36a-800.

T51

"Consumer collection agency". Section 36a-800.

T52

"Consummation". Section 36a-746a.

T53

"Controlling interest". Section 36a-276.

T54

"Conventional mortgage rate". Section 36a-760.

T55

"Corporate". Section 36a-435b.

T56

"Credit". Sections 36a-645 and 36a-676.

T57

"Credit manager". Section 36a-435b.

T58

"Creditor". Sections 36a-676, 36a-695 and 36a-800.

T59

"Credit card", "cardholder" and "card issuer". Section 36a-676.

T60

"Credit clinic". Section 36a-700.

T61

"Credit rating agency". Section 36a-695.

T62

"Credit report". Section 36a-695.

T63

"Credit sale". Section 36a-676.

T64

"Credit union service organization". Section 36a-435b.

T65

"Credit union service organization services". Section 36a-435b.

T66

"De novo branch". Section 36a-410.

T67

"Debt". Section 36a-645.

T68

["Debt adjustment". Section 36a-655.]

T69

"Debt mutual fund". Sections 36a-275 and 36a-459a.

T70

"Debt securities". Sections 36a-275 and 36a-459a.

T71

["Debtor". Section 36a-655.]

T72

"Deliver". Section 36a-316.

T73

"Deposit". Section 36a-316.

T74

"Deposit account". Section 36a-316.

T75

"Deposit account charge". Section 36a-316.

T76

"Deposit account disclosures". Section 36a-316.

T77

"Deposit contract". Section 36a-316.

T78

"Deposit services". Section 36a-425.

T79

"Depositor". Section 36a-316.

T80

"Director". Section 36a-435b.

T81

"Earning period". Section 36a-316.

T82

"Electronic payment instrument". Section 36a-596.

T83

"Eligible collateral". Section 36a-330.

T84

"Equity mutual fund". Sections 36a-276 and 36a-459a.

T85

"Equity security". Sections 36a-276 and 36a-459a.

T86

"Executive officer". Sections 36a-263 and 36a-469c.

T87

"Federal Credit Union Act". Section 36a-435b.

T88

"Federal Home Mortgage Disclosure Act". Section 36a-736.

T89

"FHA loan". Section 36a-760.

T90

"Fiduciary". Section 36a-365.

T91

"Filing fee". Section 36a-770.

T92

"Finance charge". Sections 36a-690 and 36a-770.

T93

"Financial institution". Sections 36a-41, 36a-44a, 36a-155, 36a-316,

T94

36a-330, 36a-435b, 36a-736 and 36a-755.

T95

"Financial records". Section 36a-41.

T96

"First mortgage loan". Sections 36a-485, 36a-705, 36a-715 and

T97

36a-725.

T98

"Foreign banking corporation". Section 36a-425.

T99

"Fully indexed rate". Section 36a-760b.

T100

"General facility". Section 36a-580.

T101

"Global net payment entitlement". Section 36a-428n.

T102

"Global net payment obligation". Section 36a-428n.

T103

"Goods". Sections 36a-535 and 36a-770.

T104

"Graduated payment mortgage loan". Section 36a-265.

T105

"Guardian". Section 36a-365.

T106

"High cost home loan". Section 36a-746a.

T107

"Holder". Section 36a-596.

T108

"Home banking services". Section 36a-170.

T109

"Home banking terminal". Section 36a-170.

T110

"Home improvement loan". Section 36a-736.

T111

"Home purchase loan". Section 36a-736.

T112

"Home state". Section 36a-410.

T113

"Immediate family member". Section 36a-435b.

T114

"Insider". Section 36a-454b.

T115

"Installment loan contract". Sections 36a-535 and 36a-770.

T116

"Insurance". Section 36a-455a.

T117

"Insurance bank". Section 36a-285.

T118

"Insurance department". Section 36a-285.

T119

"Interest". Section 36a-316.

T120

"Interest rate". Section 36a-316.

T121

"Interim interest". Section 36a-746a.

T122

"Lender". Sections 36a-746a, 36a-760 and 36a-770.

T123

"Lessor". Section 36a-676.

T124

"License". Section 36a-626.

T125

"Licensee". Sections 36a-596 and 36a-626.

T126

"Limited branch". Section 36a-145.

T127

"Limited facility". Section 36a-580.

T128

"Loan broker". Section 36a-615.

T129

"Loss". Section 36a-330.

T130

"Made in this state". Section 36a-770.

T131

"Main office". Section 36a-485.

T132

"Managing agent". Section 36a-365.

T133

"Manufactured home". Section 36a-457b.

T134

"Material litigation". Section 36a-596.

T135

"Member". Section 36a-435b.

T136

"Member business loan". Section 36a-458a.

T137

"Member in good standing". Section 36a-435b.

T138

"Membership share". Section 36a-435b.

T139

"Mobile branch". Section 36a-435b.

T140

"Money order". Section 36a-596.

T141

"Money transmission". Section 36a-365.

T142

"Mortgage". Section 36a-760g.

T143

"Mortgage broker". Sections 36a-485, 36a-705 and 36a-760.

T144

"Mortgage correspondent lender". Section 36a-485.

T145

"Mortgage insurance". Section 36a-725.

T146

"Mortgage lender". Sections 36a-485, 36a-705 and 36a-725.

T147

"Mortgage loan". Sections 36a-261, 36a-265, 36a-457b,

T148

36a-485 and 36a-736.

T149

"Mortgage loan originator". Section 36a-485.

T150

"Mortgage rate lock-in". Section 36a-705.

T151

"Mortgage servicing company". Section 36a-715.

T152

"Mortgagor". Section 36a-715.

T153

"Motor vehicle". Section 36a-770.

T154

"Multiple common bond membership". Section 36a-435b.

T155

"Municipality". Section 36a-800.

T156

"Net outstanding member business loan balance". Section 36a-458a.

T157

"Net worth". Sections 36a-441a, 36a-458a and 36a-596.

T158

"Network". Section 36a-155.

T159

"Nonprime home loan". Section 36a-760.

T160

"Nonrefundable". Section 36a-498.

T161

"Note account". Sections 36a-301 and 36a-456b.

T162

"Office". Sections 36a-23, 36a-316 and 36a-485.

T163

"Officer". Section 36a-435b.

T164

"Open-end credit plan". Section 36a-676.

T165

"Open-end line of credit". Section 36a-760.

T166

"Open-end loan". Section 36a-565.

T167

"Organization". Section 36a-800.

T168

"Out-of-state holding company". Section 36a-410.

T169

"Outstanding". Section 36a-596.

T170

"Passbook savings account". Section 36a-316.

T171

"Payment instrument". Section 36a-596.

T172

"Periodic statement". Section 36a-316.

T173

"Permissible investment". Section 36a-596.

T174

"Person". Section 36a-184.

T175

"Post". Section 36a-316.

T176

"Prepaid finance charge". Section 36a-746a.

T177

"Prime quality". Section 36a-596.

T178

"Principal amount of the loan". Section 36a-485.

T179

"Processor". Section 36a-155.

T180

"Public deposit". Section 36a-330.

T181

"Purchaser". Section 36a-596.

T182

"Qualified financial contract". Section 36a-428n.

T183

"Qualified public depository" and "depository". Section 36a-330.

T184

"Real estate". Section 36a-457b.

T185

"Records". Section 36a-17.

T186

"Related person". Section 36a-53.

T187

"Relocate". Sections 36a-145 and 36a-462a.

T188

"Residential property". Section 36a-485.

T189

"Retail buyer". Sections 36a-535 and 36a-770.

T190

"Retail credit transaction". Section 42-100b.

T191

"Retail installment contract". Sections 36a-535 and 36a-770.

T192

"Retail installment sale". Sections 36a-535 and 36a-770.

T193

"Retail seller". Sections 36a-535 and 36a-770.

T194

"Reverse annuity mortgage loan". Section 36a-265.

T195

"Sales finance company". Sections 36a-535 and 36a-770.

T196

"Savings department". Section 36a-285.

T197

"Savings deposit". Section 36a-316.

T198

"Secondary mortgage loan". Section 36a-485.

T199

"Security convertible into a voting security". Section 36a-184.

T200

"Senior management". Section 36a-435b.

T201

"Share". Section 36a-435b.

T202

"Simulated check". Section 36a-485.

T203

"Single common bond membership". Section 36a-435b.

T204

"Special mortgage". Section 36a-760c.

T205

"Social purpose investment". Section 36a-277.

T206

"Standard mortgage loan". Section 36a-265.

T207

"Table funding agreement". Section 36a-485.

T208

"Tax and loan account". Sections 36a-301 and 36a-456b.

T209

"The Savings Bank Life Insurance Company". Section 36a-285.

T210

"Time account". Section 36a-316.

T211

"Travelers check". Section 36a-596.

T212

"Troubled Connecticut credit union". Section 36a-448a.

T213

"Unsecured loan". Section 36a-615.

T214

"Warehouse agreement". Section 36a-485.

Sec. 42. Section 52-352b of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2009):

The following property of any natural person shall be exempt:

(a) Necessary apparel, bedding, foodstuffs, household furniture and appliances;

(b) Tools, books, instruments, farm animals and livestock feed, which are necessary to the exemptioner in the course of his or her occupation, profession or farming operation;

(c) Burial plot for the exemptioner and his or her immediate family;

(d) Public assistance payments and any wages earned by a public assistance recipient under an incentive earnings or similar program;

(e) Health and disability insurance payments;

(f) Health aids necessary to enable the exemptioner to work or to sustain health;

(g) Workers' compensation, Social Security, veterans and unemployment benefits;

(h) Court-approved payments for child support;

(i) Arms and military equipment, uniforms or musical instruments owned by any member of the militia or armed forces of the United States;

(j) One motor vehicle to the value of three thousand five hundred dollars, provided value shall be determined as the fair market value of the motor vehicle less the amount of all liens and security interests which encumber it;

(k) Wedding and engagement rings;

(l) Residential utility deposits for one residence, and one residential security deposit;

(m) Any assets or interests of an exemptioner in, or payments received by the exemptioner from, a plan or arrangement described in section 52-321a;

(n) Alimony and support, other than child support, but only to the extent that wages are exempt from execution under section 52-361a;

(o) An award under a crime reparations act;

(p) All benefits allowed by any association of persons in this state towards the support of any of its members incapacitated by sickness or infirmity from attending to his usual business;

(q) All moneys due the exemptioner from any insurance company on any insurance policy issued on exempt property, to the same extent that the property was exempt;

(r) Any interest of the exemptioner in any property not to exceed in value one thousand dollars;

(s) Any interest of the exemptioner not to exceed in value four thousand dollars in any accrued dividend or interest under, or loan value of, any unmatured life insurance contract owned by the exemptioner under which the insured is the exemptioner or an individual of whom the exemptioner is a dependent;

(t) The homestead of the exemptioner to the value of seventy-five thousand dollars, or, in the case of a money judgment arising out of services provided at a hospital, to the value of one hundred twenty-five thousand dollars, provided value shall be determined as the fair market value of the real property less the amount of any statutory or consensual lien which encumbers it; and

(u) Irrevocable transfers of money to an account held by a bona fide nonprofit [debt adjuster licensed] entity providing debt-management services registered pursuant to sections [36a-655 to 36a-665] 4 to 11, inclusive, of this act, for the benefit of creditors of the exemptioner.

Sec. 43. Subsection (c) of section 36a-65 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2009):

(c) (1) The fee for an examination of a trust department of a Connecticut bank shall be the actual cost of the examination, as such cost is determined by the commissioner.

(2) The fee for an examination of a trust bank shall be the actual cost of the examination, as such cost is determined by the commissioner.

(3) The fee for an examination of a Connecticut credit union service organization is the actual cost of the examination, as such cost is determined by the commissioner.

(4) The fee for an examination of an out-of-state branch of a Connecticut bank or a branch in this state of an out-of-state bank shall be the actual cost of the examination, as such cost is determined by the commissioner, and the commissioner may share any such fee with other banking regulators in accordance with agreements entered into by the commissioner pursuant to subsection (j) of section 36a-145 and subdivision (5) of subsection (a) and subsection (b) of section 36a-412.

(5) The fee for an examination of an out-of-state branch of a Connecticut credit union or a branch in this state of an out-of-state credit union shall be the actual cost of the examination, as such cost is determined by the commissioner, and the commissioner may share any such fee with other state or federal credit union regulators in accordance with agreements entered into by the commissioner pursuant to subsection (f) of section 36a-462a and subsection (b) of section 36a-462b.

(6) A licensee under section 36a-489, 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 sixty days after receipt of demand from the commissioner, the commissioner may suspend the license until such costs are paid.

Sec. 44. Sections 36a-655 to 36a-665, inclusive, of the general statutes are repealed. (Effective October 1, 2009)

This act shall take effect as follows and shall amend the following sections:

Section 1

October 1, 2009

New section

Sec. 2

October 1, 2009

New section

Sec. 3

October 1, 2009

New section

Sec. 4

October 1, 2009

New section

Sec. 5

October 1, 2009

New section

Sec. 6

October 1, 2009

New section

Sec. 7

October 1, 2009

New section

Sec. 8

October 1, 2009

New section

Sec. 9

October 1, 2009

New section

Sec. 10

October 1, 2009

New section

Sec. 11

October 1, 2009

New section

Sec. 12

October 1, 2009

New section

Sec. 13

October 1, 2009

New section

Sec. 14

October 1, 2009

New section

Sec. 15

October 1, 2009

New section

Sec. 16

October 1, 2009

New section

Sec. 17

October 1, 2009

New section

Sec. 18

October 1, 2009

New section

Sec. 19

October 1, 2009

New section

Sec. 20

October 1, 2009

New section

Sec. 21

October 1, 2009

New section

Sec. 22

October 1, 2009

New section

Sec. 23

October 1, 2009

New section

Sec. 24

October 1, 2009

New section

Sec. 25

October 1, 2009

New section

Sec. 26

October 1, 2009

New section

Sec. 27

October 1, 2009

New section

Sec. 28

October 1, 2009

New section

Sec. 29

October 1, 2009

New section

Sec. 30

October 1, 2009

New section

Sec. 31

October 1, 2009

New section

Sec. 32

October 1, 2009

New section

Sec. 33

October 1, 2009

New section

Sec. 34

October 1, 2009

New section

Sec. 35

October 1, 2009

New section

Sec. 36

October 1, 2009

New section

Sec. 37

October 1, 2009

New section

Sec. 38

October 1, 2009

New section

Sec. 39

October 1, 2009

New section

Sec. 40

October 1, 2009

New section

Sec. 41

October 1, 2009

36a-3

♣Sec.

October 1, 2009

52-352b

Sec. 43

October 1, 2009

36a-65(c)

Sec. 44

October 1, 2009

Repealer section

Statement of Purpose:

To adopt the Uniform Debt-Management Services Act.

[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.]