Sec. 36a-800. (Formerly Sec. 42-127). Consumer collection agency. Definitions.
Sec. 36a-849. Records to be maintained by licensee.
Sec. 36a-850. Prohibited activities of student loan servicers and control persons.
Sec. 36a-850a. Required activities of a private student loan servicer. Limitations to applicability.
Sec. 36a-855. Action for damages, fees, costs and equitable relief. Class actions.
Sec. 36a-658. (Formerly Sec. 36-370). License required. Change in control persons, name or place of business. Use of name. Automatic suspension of license. Surrender of license. Required system filing or notice to commissioner. Unique identifier of license. Advertising of license. (a) Each license shall state the location at which the business is to be conducted and shall state fully the name of the licensee. If the licensee desires to engage in the business of debt adjustment in more than one location, the licensee shall procure a license for each location where the business is to be conducted. A license issued under section 36a-656 shall not be transferable or assignable. Any change in any control person of the licensee, except a change of a director, general partner or executive officer that is not the result of an acquisition or change of control of the licensee, shall be the subject of an advance change notice filed on the system at least thirty days prior to the effective date of such change and no such change shall occur without the commissioner's approval. For purposes of this section, “change of control” means any change causing the majority ownership, voting rights or control of a licensee to be held by a different control person or group of control persons.
(b) No licensee shall use any name or address other than the name and address stated on the license issued by the commissioner. No licensee may use any name other than its legal name or a fictitious name approved by the commissioner, provided such licensee may not use its legal name if the commissioner disapproves use of such name. A licensee may change the name of the licensee or address of the office specified on the most recent filing with the system if (1) at least thirty calendar days prior to such change, the licensee files such change with the system and provides to the commissioner a bond rider, endorsement or addendum, as applicable; and (2) the commissioner does not disapprove such change, in writing, or request further information from the licensee within such thirty-day period.
(c) The commissioner may automatically suspend any license for a violation of subsection (a) or (b) of this section. After a license has been automatically suspended pursuant to this subsection, the commissioner shall (1) give the licensee notice of such automatic suspension pending proceedings for revocation of or refusal to renew the license pursuant to section 36a-657 and an opportunity for a hearing in accordance with section 36a-51, and (2) require the licensee to take or refrain from taking action as the commissioner deems necessary to effectuate the purpose of this section.
(d) Not later than fifteen days after the date a licensee ceases to engage in this state in the business of debt adjustment for any reason, including a business decision to terminate operations in this state, license revocation, bankruptcy or voluntary dissolution, such licensee shall surrender to the commissioner its license for each location in which such licensee has ceased to engage in such business in accordance with subsection (c) of section 36a-51.
(e) Except as otherwise specified in subsections (a) and (b) of this section, each debt adjuster applicant or licensee, and each control person, qualified individual or branch manager of such applicant or licensee shall file on the system or, if the information cannot be filed on the system, notify the commissioner, in writing, of any change in the information such applicant, licensee, control person, qualified individual or branch manager most recently submitted to the system in connection with the application or license not later than fifteen days after the date such applicant, licensee, control person, qualified individual or branch manager had reason to know of the change.
(f) A debt adjuster licensee shall file on the system or, if the information cannot be filed on the system, notify the commissioner, in writing, of the occurrence of any of the following developments not later than fifteen days after the date the licensee had reason to know of the occurrence of any of the following developments:
(1) Filing for bankruptcy or the consummation of a corporate restructuring of the licensee;
(2) Filing of a criminal indictment against the licensee in any way related to the debt adjuster activities of the licensee, or receiving notification of the filing of any criminal felony indictment or felony conviction of any control person, branch manager or qualified individual of the licensee;
(3) Receiving notification of the institution of license denial, cease and desist, suspension or revocation procedures, or other formal or informal action by any governmental agency against the licensee or any control person, branch manager or qualified individual of the licensee and the reasons therefor;
(4) Receiving notification of the initiation of any action against the licensee or any control person, branch manager or qualified individual of the licensee by the Attorney General or the attorney general of any other state and the reasons therefor; or
(5) Receiving notification of filing for bankruptcy of any control person, branch manager or qualified individual of the licensee.
(g) Any person filing or submitting any information on the system shall do so in accordance with the procedures and requirements of the system and shall pay the applicable fees or charges to the system. Each debt adjuster licensee, to the extent required by the system, shall timely submit to the system accurate reports of condition that shall be in such form and shall contain such information as the system may require. Failure by a licensee to submit a timely and accurate report of condition shall constitute a violation of this provision.
(h) The unique identifier of any person licensed under section 36a-656 shall be clearly shown on all solicitations and advertisements, including business cards and Internet web sites, and any other documents as established by rule, regulation or order of the commissioner, and shall be clearly stated in all audio solicitations and advertisements. The solicitations or advertisements of any person licensed under section 36a-656: (1) Shall not include any statement that such person is endorsed in any way by this state, except that such solicitations and advertisements may include a statement that such person is licensed in this state; (2) shall not include any statement or claim that is deceptive, false or misleading; (3) shall otherwise conform to the requirements of sections 36a-655 to 36a-665, inclusive, any regulations issued thereunder and any other applicable law; and (4) shall be retained for two years from the date of use of such solicitation or advertisement.
(1967, P.A. 882, S. 7; P.A. 79-160, S. 4; P.A. 02-111, S. 43; P.A. 08-119, S. 14; P.A. 18-173, S. 65; P.A. 21-138, S. 12.)
History: P.A. 79-160 rephrased prior provisions, authorized conduct of business which does not conflict with interests of clients or business of debt adjustment and deleted provision prohibiting change in office location unless authorized by commissioner; Sec. 36-370 transferred to Sec. 36a-658 in 1995; P.A. 02-111 replaced former provisions with provisions re license to specify location at which business is conducted and name of licensee, procurement of license for each business location, license maintenance and availability for public inspection, license not transferable or assignable and licensee's use of stated name; P.A. 08-119 added requirement for surrender of license when licensee ceases to engage in the business of debt adjustment; P.A. 18-173 designated existing provisions re license requirements as Subsec. (a) and amended same by deleting provision re license to be made available for public inspection, adding reference to Sec. 36a-656, deleting provision re prior written notice to commissioner to change location of licensee, adding provision re filing of advance change notice on the system, designated existing provision prohibiting use of any name other than name stated on license as Subsec. (b) and amended same by adding provisions re use of name or address of licensee and requirements to change the same, added Subsec. (c) re commissioner's authority to automatically suspend a license, designated existing provisions re surrender of license as Subsec. (d) and amended same by deleting “in person or by registered or certified mail” and adding reference to Sec. 36a-51(c), added Subsec. (e) requiring system filing or notification to commissioner of change in information most recently submitted to the system in connection with application or license, added Subsec. (f) requiring system filing or notification of commissioner of certain developments, added Subsec. (g) re submission of timely and accurate report on system, added Subsec. (h) re unique identifier of licensee and solicitation or advertisements by licensee, and made technical and conforming changes; P.A. 21-138 defined “change of control” in Subsec. (a).
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Sec. 36a-671. Definitions. Debt negotiation. License application, requirements and fees. Authority of commissioner to conduct criminal history records checks and deny application for license. Abandonment of application. License renewal. Automatic suspension of license or renewal license. Notice. Opportunity for hearing. License not assignable or transferable. Use of name. Surrender of license. Required system filing or notice to commissioner. Unique identifier. Advertisements of licensee. (a) As used in this section and sections 36a-671a to 36a-671f, inclusive:
(1) “Advertise” or “advertising” has the same meaning as provided in section 36a-485.
(2) “Branch office” means a location other than the main office at which a licensee or any person on behalf of a licensee engages or offers to engage in debt negotiation.
(3) “Control person” has the same meaning as provided in section 36a-485.
(4) “Debt negotiation” means, for or with the expectation of a fee, commission or other valuable consideration, assisting a debtor in negotiating or attempting to negotiate on behalf of a debtor the terms of a debtor's obligations with one or more mortgagees or creditors of the debtor, including the negotiation of short sales of residential property or foreclosure rescue services.
(5) “Debtor” means any individual who has incurred indebtedness or owes a debt for personal, family or household purposes.
(6) “Foreclosure rescue services” means services related to or promising assistance in connection with (A) avoiding or delaying actual or anticipated foreclosure proceedings concerning residential property, or (B) curing or otherwise addressing a default or failure to timely pay with respect to a mortgage loan secured by residential property, and includes, but is not limited to, the offer, arrangement or placement of a mortgage loan secured by residential property or other extension of credit when those services are advertised, offered or promoted in the context of foreclosure related services.
(7) “Main office” has the same meaning as provided in section 36a-485.
(8) “Mortgagee” means the original lender under a mortgage loan secured by residential property or its agents, successors or assigns.
(9) “Mortgagor” means a debtor who is an owner of residential property, including, but not limited to, a single-family unit in a common interest community, who is also the borrower under a mortgage encumbering such residential property.
(10) “Residential property” means a one-to-four family owner-occupied real property.
(11) “Short sale” means the sale of residential property by a mortgagor for an amount less than the outstanding balance owed on the loan secured by such property where, prior to the sale, the mortgagee or an assignee of the mortgagee agrees to accept less than the outstanding loan balance in full or partial satisfaction of the mortgage debt and the proceeds of the sale are paid to the mortgagee or an assignee of the mortgagee.
(12) “Unique identifier” has the same meaning as provided in section 36a-485.
(b) No person shall engage or offer to engage in debt negotiation in this state unless such person has first obtained a license for its main office and for each branch office where such business is conducted in accordance with the provisions of sections 36a-671 to 36a-671f, inclusive. Any activity subject to licensure pursuant to sections 36a-671 to 36a-671f, inclusive, shall be conducted from an office located in a state, as defined in section 36a-2. A person is engaging in debt negotiation in this state if such person: (1) Has a place of business located within this state; (2) has a place of business located outside of this state and the debtor is a resident of this state who negotiates or agrees to the terms of the services in person, by mail, by telephone or via the Internet; or (3) has its place of business located outside of this state and the services concern a debt that is secured by property located within this state.
(c) An application for an original or renewal debt negotiation license shall be made and processed on the system pursuant to section 36a-24b, in the form prescribed by the commissioner. Each such form shall contain content as set forth by instruction or procedure of the commissioner and may be changed or updated as necessary by the commissioner in order to carry out the purposes of sections 36a-671 to 36a-671f, inclusive. The applicant shall, at a minimum, furnish to the system information concerning the identity of the applicant, any control person of the applicant, the qualified individual and any branch manager responsible for the actions of the applicant, including, but not limited to, information related to such person's personal history and experience, and any administrative, civil or criminal findings by any governmental jurisdiction. As part of the application, the commissioner may (1) in accordance with section 29-17a, conduct a state or national criminal history records check of the applicant, any control person of the applicant, the qualified individual or any branch manager, and (2) in accordance with section 36a-24b (A) require the submission of fingerprints of the applicant, any control person of the applicant, the qualified individual or any branch manager to the Federal Bureau of Investigation or other state, national or international criminal databases, and (B) investigate the financial condition of any such person and require authorization from any such person for the system and the commissioner to obtain an independent credit report from a consumer reporting agency, as described in Section 603(p) of the Fair Credit Reporting Act, 15 USC 1681a, as amended from time to time. The commissioner may deem an application for a debt negotiation license abandoned if the applicant fails to respond to any request for information required under sections 36a-671 to 36a-671f, inclusive, or any regulations adopted pursuant to said sections 36a-671 to 36a-671f, inclusive. The commissioner shall notify the applicant on the system that if the applicant fails to submit such information not later than sixty days after the date on which such request for information was made, the application shall be deemed abandoned. An application filing fee paid prior to the date an application is deemed abandoned pursuant to this subsection shall not be refunded. Abandonment of an application pursuant to this subsection shall not preclude the applicant from submitting a new application for a license under sections 36a-671 to 36a-671f, inclusive.
(d) (1) If the commissioner finds, upon the filing of an application for a debt negotiation license, that: (A) The financial responsibility, character, reputation, integrity and general fitness of the applicant and any control person, qualified individual and branch manager of the applicant are such as to warrant belief that the business will be operated soundly and efficiently, in the public interest and consistent with the purposes of sections 36a-671 to 36a-671f, inclusive; (B) the applicant is solvent and no proceeding in bankruptcy, receivership or assignment for the benefit of creditors has been commenced against the applicant; and (C) the applicant has the bond required by section 36a-671d, the commissioner may thereupon issue the applicant a debt negotiation license. If the commissioner fails to make such findings, the commissioner shall not issue a license and shall notify the applicant of the reasons for such denial. The commissioner may deny an application if the commissioner finds that the applicant or any control person, qualified individual or branch manager of the applicant has been convicted of any misdemeanor involving any aspect of the debt negotiation business or any felony or has made a material misstatement in the application. Any denial of an application by the commissioner shall, when applicable, be subject to the provisions of section 46a-80.
(2) The minimum standards for renewal of a debt negotiation license shall include the following: (A) The applicant continues to meet the minimum standards for license issuance under subdivision (1) of this subsection; (B) the applicant has paid all required fees for renewal of the license; and (C) the applicant has paid any outstanding examination fees or other moneys due to the commissioner. The license of a debt negotiator failing to satisfy the minimum standards for license renewal shall expire. The commissioner may adopt procedures for the reinstatement of expired licenses consistent with the standards established by the system.
(e) Each applicant for a debt negotiation license shall pay to the system any required fees or charges and a license fee of eight hundred dollars. Each such license shall expire at the close of business on December thirty-first of the year in which the license was approved, unless such license is renewed, except that any such license approved on or after November first shall expire at the close of business on December thirty-first of the year following the year in which it is approved. An application for renewal of a license shall be filed between November first and December thirty-first of the year in which the license expires. Each applicant for renewal of a debt negotiation license shall pay to the system any required fees or charges and a renewal fee of eight hundred dollars.
(f) The commissioner may automatically suspend a license if the licensee receives a deficiency on the system indicating that a required payment was Returned-ACH or returned pursuant to such other term as may be utilized by the system to indicate that the payment was not accepted. After a license has been automatically suspended pursuant to this section, the commissioner shall (1) give the licensee notice of the automatic suspension, pending proceedings for revocation or refusal to renew pursuant to section 36a-671a and an opportunity for a hearing on such action in accordance with section 36a-51, and (2) require such licensee to take or refrain from taking such action as the commissioner deems necessary to effectuate the purposes of this section.
(g) No abatement of the license fee shall be made if the application is denied or withdrawn prior to issuance of the license or if the license is surrendered, revoked or suspended prior to the expiration of the period for which it was issued. All fees required by subsection (e) of this section shall be nonrefundable.
(h) The license shall not be transferable or assignable. Any change in any control person of the licensee, except a change of a director, general partner or executive officer that is not the result of an acquisition or change of control of the licensee, shall be the subject of an advance change notice filed on the system at least thirty days prior to the effective date of such change and no such change shall occur without the commissioner's approval. For purposes of this section, “change of control” means any change causing the majority ownership, voting rights or control of a licensee to be held by a different control person or group of control persons.
(i) No licensee may use any name other than its legal name or a fictitious name approved by the commissioner, provided such licensee may not use its legal name if the commissioner disapproves use of such name. No licensee shall use any name or address other than the name and address specified on the license issued by the commissioner. A licensee may change the name of the licensee or the address of the office specified on the most recent filing with the system if, at least thirty calendar days prior to such change, the licensee files such change with the system and provides to the commissioner a bond rider, endorsement or addendum, as applicable, and the commissioner does not disapprove such change, in writing, or request further information within such thirty-day period.
(j) The commissioner may automatically suspend any license for a violation of subsection (h) or (i) of this section. After a license has been automatically suspended pursuant to this subsection, the commissioner shall (1) give the licensee notice of the automatic suspension, pending proceedings for revocation of or refusal to renew the license pursuant to section 36a-671a and an opportunity for a hearing in accordance with section 36a-51, and (2) require the licensee to take or refrain from taking action as the commissioner deems necessary to effectuate the purpose of this section.
(k) Not later than fifteen days after the date a licensee ceases to engage in the business of debt negotiation in this state for any reason, including, but not limited to, a business decision to terminate operations in this state, bankruptcy or voluntary dissolution, such licensee shall surrender to the commissioner its license for each location in which such licensee has ceased to engage in such business in accordance with subsection (c) of section 36a-51.
(l) Except as otherwise specified in subsections (h) and (i) of this section, each debt negotiation applicant or licensee, and each individual designated as a control person, qualified individual or branch manager of such applicant or licensee, shall file on the system any change in the information most recently submitted to the system by such applicant, licensee, control person, qualified individual or branch manager in connection with the application or license, or, if the information cannot be filed on the system, notify the commissioner of such change, in writing, not later than fifteen days from the date such applicant, licensee, control person, qualified individual or branch manager had reason to know of the change. A debt negotiation licensee shall file with the system or, if the information cannot be filed on the system, notify the commissioner, in writing, not later than fifteen days after the date the licensee had reason to know of the occurrence of any of the following events:
(1) Filing for bankruptcy or the consummation of a corporate restructuring of the licensee;
(2) Filing of a criminal indictment against the licensee for activities related to debt negotiation, or receiving notification of the filing of any criminal felony indictment or felony conviction of any control person, branch manager or qualified individual of the licensee;
(3) Receiving notification of the institution of license denial, cease and desist, suspension or revocation procedures, or other formal or informal regulatory action by any governmental agency against the licensee or any control person, branch manager or qualified individual of the licensee and the reasons therefor;
(4) Receiving notification of the initiation of any action against the licensee or any control person, branch manager or qualified individual of the licensee by the Attorney General or the attorney general of any other state and the reasons therefor; or
(5) Receiving notification of filing for bankruptcy of any control person, branch manager or qualified individual of the licensee.
(m) Any person making any filing or submission of any information on the system shall do so in accordance with the procedures and requirements of the system and pay the applicable fees or charges to the system. Each debt negotiation licensee shall, to the extent required by the system, timely submit to the system accurate reports of condition that shall be in such form and shall contain such information as the system may require. Failure by a licensee to submit a timely and accurate report of condition shall constitute a violation of this provision.
(n) The unique identifier of any person licensed under section 36a-671 shall be clearly shown on all solicitations and advertisements, including business cards and Internet web sites, and any other documents as established by rule, regulation or order of the commissioner, and shall be clearly stated in all audio solicitations and advertisements. The solicitations and advertisements of any person licensed under section 36a-671: (1) Shall not include any statement that such person is endorsed in any way by this state, except that such solicitations and advertisements may include a statement that such person is licensed in this state; (2) shall not include any statement or claim that is deceptive, false or misleading; (3) shall otherwise conform to the requirements of sections 36a-671 to 36a-671f, inclusive, any regulations issued thereunder and any other applicable law; and (4) shall be retained for two years from the date of use of such solicitation or advertisement.
(P.A. 09-208, S. 29; 09-209, S. 41; P.A. 11-216, S. 40; P.A. 14-7, S. 9; P.A. 17-233, S. 24; P.A. 18-173, S. 67; P.A. 21-138, S. 13.)
History: P.A. 09-209 redefined “mortgagor” in Subsec. (a)(4) and made a technical change in Subsec. (b)(3); P.A. 11-216 amended Subsec. (b) to delete references to contract and eliminate requirement re debtor being physically present in this state, amended Subsec. (c) to delete provision re ten-year period re history of criminal convictions, add provision authorizing commissioner to conduct a state and criminal history records check of applicant and each partner, member, officer, director and principal employee of applicant and add provisions re abandonment of application, and amended Subsec. (d) to delete provision re ten-year period re misdemeanor and felony convictions; P.A. 14-7 replaced references to Sec. 36a-671d with references to Sec. 36a-671e in Subsecs. (a), (c) and (d), effective May 8, 2014; P.A. 17-233 amended Subsec. (a) to replace “36a-671e” with “36a-671f”, add new Subdiv. (1) defining “advertise” or “advertising”, add new Subdiv. (2) defining “control person”, redesignate existing Subdivs. (1) and (2) as Subdivs. (3) and (4), add new Subdiv. (5) defining “foreclosure rescue services”, redesignate existing Subdivs. (3) and (4) as Subdivs. (6) and (7), add new Subdiv. (8) defining “residential property”, redesignate existing Subdiv. (5) as Subdiv. (9), delete former Subdivs. (6) and (7), and make technical changes, and amended Subsec. (d)(1)(D) to replace “36a-671e” with “36a-671f”; P.A. 18-173 amended Subsec. (a) by adding new Subdiv. (2) re definition of “branch office”, redesignating existing Subdivs. (2) to (5) as new Subdivs. (3) to (6), adding new Subdiv. (7) re definition of “main office”, redesignating existing Subdivs. (6) to (9) as Subdivs. (8) to (11), adding Subdiv. (12) re definition of “unique identifier”, amended Subsec. (b) by replacing provisions re filing application for license with commissioner and notifying commissioner of change in applicant's business with provisions re obtaining license for main office and each branch office and activity to be conducted from office located in a state, amended Subsec. (c) by replacing provisions re application to be in writing on form provided by commissioner, information to be included and commissioner's authority to conduct criminal history records check with provisions re application to be processed on the system in form prescribed by commissioner, information to be furnished to the system, and commissioner's authority to conduct criminal history records checks, require submission of fingerprints and investigate financial condition of person, replacing references to Sec. 36a-671e with references to Sec. 36a-671f, and replacing provision re commissioner to notify applicant in writing with provision re commissioner to notify applicant on the system, amended Subsec. (d) by designating existing provisions re commissioner's findings as new Subdiv. (1) and amending same by redesignating existing Subdivs. (1) and (2) as Subparas. (A) and (B), deleting former Subpara. (A) designator, deleting former Subparas. (B) to (D) re partners, members, officers, directors and principal employees, adding references to control person, qualified individual and branch manager, adding new Subpara. (C) re applicant having required bond, deleting provisions re license not transferrable, written notice to commissioner required for change of location, licensee not to use any name unless approved, replacing “partner, member, officer, director of principal employee” with “control person, qualified individual or branch manager”, and adding provision re making material misstatement in application, deleting provision re withdrawal of application, adding new Subdiv. (2) re minimum standards for renewal of debt negotiation license, substantially amended Subsec. (e) by replacing provisions re application fees, and renewal of license with provisions re payment of required fees or charges to system, expiration of license and renewal of license, substantially amended Subsec. (f) by replacing provisions re check for application fee dishonored and automatic suspension of license with provisions re automatic suspension of license if deficiency on system indicating payment returned, amended Subsec. (g) by adding provision re application denied or withdrawn, added Subsec. (h) re license not transferable or assignable, filing of advance change notice on the system, adding Subsec. (i) re licensee's use of name other than legal name or approved fictitious name, use of name or address specified on license, and change to name or address, added Subsec. (j) re automatic suspension of license, added Subsec. (k) re surrender of license, added Subsec. (l) re change in information to be filed on the system or notification to commissioner re occurrence of certain events, added Subsec. (m) re filing or submission of information on the system, timely submission to the system of accurate reports of condition, added Subsec. (n) re solicitations and advertisements, and made technical and conforming changes; P.A. 21-138 amended Subsec. (h) by replacing “license” with “licensee” and defining “change of control”.
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Sec. 36a-701b. Breach of security re computerized data containing personal information. Notice of breach. Provision of identity theft prevention services and identity theft mitigation services. Delay for criminal investigation. Means of notice. Exeption from public disclosure. Unfair trade practices. (a) For purposes of this section, (1) “breach of security” means unauthorized access to or unauthorized acquisition of electronic files, media, databases or computerized data, containing personal information when access to the personal information has not been secured by encryption or by any other method or technology that renders the personal information unreadable or unusable; and (2) “personal information” means an individual's (A) first name or first initial and last name in combination with any one, or more, of the following data: (i) Social Security number; (ii) taxpayer identification number; (iii) identity protection personal identification number issued by the Internal Revenue Service; (iv) driver's license number, state identification card number, passport number, military identification number or other identification number issued by the government that is commonly used to verify identity; (v) credit or debit card number; (vi) financial account number in combination with any required security code, access code or password that would permit access to such financial account; (vii) medical information regarding an individual's medical history, mental or physical condition, or medical treatment or diagnosis by a health care professional; (viii) health insurance policy number or subscriber identification number, or any unique identifier used by a health insurer to identify the individual; or (ix) biometric information consisting of data generated by electronic measurements of an individual's unique physical characteristics used to authenticate or ascertain the individual's identity, such as a fingerprint, voice print, retina or iris image; or (B) user name or electronic mail address, in combination with a password or security question and answer that would permit access to an online account. “Personal information” does not include publicly available information that is lawfully made available to the general public from federal, state or local government records or widely distributed media.
(b) (1) Any person who owns, licenses or maintains computerized data that includes personal information, shall provide notice of any breach of security following the discovery of the breach to any resident of this state whose personal information was breached or is reasonably believed to have been breached. Such notice shall be made without unreasonable delay but not later than sixty days after the discovery of such breach, unless a shorter time is required under federal law, subject to the provisions of subsection (d) of this section. If the person identifies additional residents of this state whose personal information was breached or reasonably believed to have been breached following sixty days after the discovery of such breach, the person shall proceed in good faith to notify such additional residents as expediently as possible. Such notification shall not be required if, after an appropriate investigation the person reasonably determines that the breach will not likely result in harm to the individuals whose personal information has been acquired or accessed.
(2) If notice of a breach of security is required by subdivision (1) of this subsection:
(A) The person who owns, licenses or maintains computerized data that includes personal information, shall, not later than the time when notice is provided to the resident, also provide notice of the breach of security to the Attorney General; and
(B) The person who owns or licenses computerized data that includes personal information, shall offer to each resident whose personal information under clause (i) or (ii) of subparagraph (A) of subdivision (2) of subsection (a) of this section was breached or is reasonably believed to have been breached, appropriate identity theft prevention services and, if applicable, identity theft mitigation services. Such service or services shall be provided at no cost to such resident for a period of not less than twenty-four months. Such person shall provide all information necessary for such resident to enroll in such service or services and shall include information on how such resident can place a credit freeze on such resident's credit file.
(c) Any person that maintains computerized data that includes personal information that the person does not own shall notify the owner or licensee of the information of any breach of the security of the data immediately following its discovery, if the personal information of a resident of this state was breached or is reasonably believed to have been breached.
(d) Any notification required by this section shall be delayed for a reasonable period of time if a law enforcement agency determines that the notification will impede a criminal investigation and such law enforcement agency has made a request that the notification be delayed. Any such delayed notification shall be made after such law enforcement agency determines that notification will not compromise the criminal investigation and so notifies the person of such determination.
(e) Any notice to a resident, owner or licensee required by the provisions of this section may be provided by one of the following methods, subject to the provisions of subsection (f) of this section: (1) Written notice; (2) telephone notice; (3) electronic notice, provided such notice is consistent with the provisions regarding electronic records and signatures set forth in 15 USC 7001; (4) substitute notice, provided such person demonstrates that the cost of providing notice in accordance with subdivision (1), (2) or (3) of this subsection would exceed two hundred fifty thousand dollars, that the affected class of subject persons to be notified exceeds five hundred thousand persons or that the person does not have sufficient contact information. Substitute notice shall consist of the following: (A) Electronic mail notice when the person has an electronic mail address for the affected persons; (B) conspicuous posting of the notice on the web site of the person if the person maintains one; and (C) notification to major state-wide media, including newspapers, radio and television.
(f) (1) In the event of a breach of login credentials under subparagraph (B) of subdivision (2) of subsection (a) of this section, notice to a resident may be provided in electronic or other form that directs the resident whose personal information was breached or is reasonably believed to have been breached to promptly change any password or security question and answer, as applicable, or to take other appropriate steps to protect the affected online account and all other online accounts for which the resident uses the same user name or electronic mail address and password or security question and answer.
(2) Any person that furnishes an electronic mail account shall not comply with this section by providing notification to the electronic mail account that was breached or reasonably believed to have been breached if the person cannot reasonably verify the affected resident's receipt of such notification. In such an event, the person shall provide notice by another method described in this section or by clear and conspicuous notice delivered to the resident online when the resident is connected to the online account from an Internet protocol address or online location from which the person knows the resident customarily accesses the account.
(g) Any person that maintains such person's own security breach procedures as part of an information security policy for the treatment of personal information and otherwise complies with the timing requirements of this section, shall be deemed to be in compliance with the security breach notification requirements of this section, provided such person notifies, as applicable, residents of this state, owners and licensees in accordance with such person's policies in the event of a breach of security and in the case of notice to a resident, such person also notifies the Attorney General not later than the time when notice is provided to the resident. Any person that maintains such a security breach procedure pursuant to the rules, regulations, procedures or guidelines established by the primary or functional regulator, as defined in 15 USC 6809(2), shall be deemed to be in compliance with the security breach notification requirements of this section, provided (1) such person notifies, as applicable, such residents of this state, owners, and licensees required to be notified under and in accordance with the policies or the rules, regulations, procedures or guidelines established by the primary or functional regulator in the event of a breach of security, and (2) if notice is given to a resident of this state in accordance with subdivision (1) of this subsection regarding a breach of security, such person also notifies the Attorney General not later than the time when notice is provided to the resident.
(h) Any person that is subject to and in compliance with the privacy and security standards under the Health Insurance Portability and Accountability Act of 1996 and the Health Information Technology for Economic and Clinical Health Act (“HITECH”) shall be deemed to be in compliance with this section, provided that (1) any person required to provide notification to Connecticut residents pursuant to HITECH shall also provide notice to the Attorney General not later than the time when notice is provided to such residents if notification to the Attorney General would otherwise be required under subparagraph (A) of subdivision (2) of subsection (b) of this section, and (2) the person otherwise complies with the requirements of subparagraph (B) of subdivision (2) of subsection (b) of this section.
(i) All documents, materials and information provided in response to an investigative demand issued pursuant to subsection (c) of section 42-110d in connection with the investigation of a breach of security as defined by this section shall be exempt from public disclosure under subsection (a) of section 1-210, provided the Attorney General may make such documents, materials or information available to third parties in furtherance of such investigation.
(j) Failure to comply with the requirements of this section shall constitute an unfair trade practice for purposes of section 42-110b and shall be enforced by the Attorney General.
(P.A. 05-148, S. 3; 05-288, S. 231, 232; June 12 Sp. Sess. P.A. 12-1, S. 130; P.A. 15-142, S. 6; P.A. 18-90, S. 2; P.A. 19-117, S. 231; 19-196, S. 9; P.A. 21-59, S. 1.)
History: P.A. 05-148 effective January 1, 2006; P.A. 05-288 made technical changes in Subsecs. (b) and (f), effective January 1, 2006; June 12 Sp. Sess. P.A. 12-1 amended Subsec. (a) by adding “unauthorized” re acquisition, amended Subsec. (b) by designating existing provisions as Subdiv. (1) and amending same to replace “disclose” with “provide notice of” and “disclosure” with “notice” and by adding Subdiv. (2) re notice of breach of security to Attorney General, amended Subsec. (c) by adding “of a resident of this state” re personal information, amended Subsec. (e) by adding “to a resident, owner or licensee” re notice, replacing “person, business or agency” with “person” and making a technical change, and amended Subsec. (f) by replacing references to subject persons with references to residents of this state, owners and licensees, as applicable, adding provisions re notice to Attorney General and deleting reference to system; P.A. 15-142 made technical changes in Subsec. (a), amended Subsec. (b) to replace “was, or is reasonably believed to have been, accessed by an unauthorized person through such breach of security” with “was breached or is reasonably believed to have been breached” and add provision re notice of breach of security not later than 90 days after discovery unless shorter time is required under federal law in Subdiv. (1), to designate existing provision re notice of breach to Attorney General as Subpara. (A) in Subdiv. (2) and amend same to add Subpara. (B) re provision of identity theft prevention services and identity theft mitigation services, and amended Subsec. (c) to replace “was, or is reasonably believed to have been accessed by an unauthorized person” with “was breached or is reasonably believed to have been breached”; P.A. 18-90 amended Subsec. (a)(1) by deleting “account number,” in Subpara. (C), adding Subpara. (D) re financial account number, and making a technical change, and amended Subsec. (b)(2)(B) by replacing “twelve months” with “twenty-four months” re period for which service is to be provided at no cost to resident; P.A. 19-117 amended Subsec. (b)(2)(B) by replacing provision re personal information under Sec. 38a-999b(a)(4)(A) with provision re nonpublic information under Sec. 38a-38(b)(9)(B)(i) and made a conforming change, effective October 1, 2020; P.A. 19-196 changed effective date of P.A. 19-117 from October 1, 2020, to October 1, 2021, effective July 8, 2019; P.A. 21-59 amended Subsec. (a)(2) to redefine “personal information”, redesignate Subpara. (A) as clause (i), Subpara. (B) as clause (iv), Subpara. (C) as clause (v), Subpara. (D) as clause (vi) and added clauses (ii), (iii) and (vii) to (ix) re additional types of personal information in Subpara. (A) and added new Subpara. (B) re user name or electronic mail address; amended Subsec. (b)(1) and (2) to delete provision re conducting business in this state and reference to “ordinary course of such person's business”, amended Subsec. (b)(1) to change 90 days to 60 days, delete provision re completion of investigation by person, add provision regarding notification of additional residents following 60 days after discovery of the breach, delete provision re consultation with law enforcement agencies, and make a technical change, amended Subsec. (b)(2)(B) to replace “nonpublic information” with “personal information” and make a technical change, amended Subsec. (e) to add “, subject to the provisions of subsection (f) of this section”, added new Subsec. (f) re breach of login credentials, redesignated existing Subsec. (f) as Subsec. (g), added Subsec. (h) re persons subject to certain privacy and security standards deemed to be in compliance, added Subsec. (i) re exemption from public disclosure and redesignated existing Subsec. (g) as Subsec. (j).
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Sec. 36a-719a. License not assignable or transferable. Change in any control persons. Surrender of license. Change of name or address. Required filings on system or notification of commissioner. Automatic suspension of license. (a) A mortgage servicer license shall not be transferable or assignable. Any change in any control person of a licensee, except a change of a director, general partner or executive officer that is not the result of an acquisition or change of control of the licensee, shall be the subject of an advance change notice filed on the system at least thirty days prior to the effective date of such change and no such change shall occur without the commissioner's approval. For purposes of this section, “change of control” means any change causing the majority ownership, voting rights or control of a licensee to be held by a different control person or group of control persons. Any licensee who intends to permanently cease acting as a mortgage servicer at any time during a license period for any cause, including, but not limited to, bankruptcy or voluntary dissolution, shall file a request to surrender the license in accordance with subsection (c) of section 36a-51, for each office at which the licensee intends to cease to do business, on the system, not later than fifteen days after the date of such cessation, provided this requirement shall not apply when a license has been suspended pursuant to section 36a-51. No surrender shall be effective until accepted by the commissioner.
(b) No licensee may use any name other than its legal name or a fictitious name approved by the commissioner, provided such licensee may not use its legal name if the commissioner disapproves use of such name. No licensee shall use any name or address other than the name and address stated on the license issued by the commissioner. A mortgage servicer licensee may change the name of the licensee or address of any office specified on the most recent filing with the system if (1) at least thirty calendar days prior to such change, the licensee files such change with the system and, in the case of a main office or branch office, provides the commissioner a bond rider or endorsement, or addendum, as applicable, to any bond or evidence of errors and omissions coverage on file with the commissioner that reflects the new name or address of the main office or branch office; and (2) the commissioner does not disapprove such change, in writing, or request further information within such thirty-day period.
(c) Except as otherwise specified in subsections (a) and (b) of this section, each mortgage servicer applicant or licensee, and each individual designated as a control person, qualified individual or branch manager of such applicant or licensee, shall file to the system any change in the information most recently submitted to the system by such applicant, licensee, control person, qualified individual or branch manager in connection with the application or license, or, if the information cannot be filed on the system, notify the commissioner of such change, in writing, not later than fifteen days from the date such applicant, licensee, control person, qualified individual or branch manager had reason to know of the change. A mortgage servicer licensee shall file with the system or, if the information cannot be filed on the system, directly notify the commissioner, in writing, not later than fifteen business days after the licensee has reason to know of the occurrence of any of the following events:
(1) Filing for bankruptcy, or the consummation of a corporate restructuring, of the licensee;
(2) Filing of a criminal indictment against the licensee or receiving notification of the filing of any criminal felony indictment or felony conviction of any control person, qualified individual or branch manager of the licensee;
(3) Receiving notification of the institution of license denial, cease and desist, suspension or revocation procedures, or other formal or informal regulatory action by any governmental agency against the licensee or any control person, qualified individual or branch manager of the licensee and the reasons for such action;
(4) Receiving notification of the initiation of any action against the licensee or any control person, qualified individual or branch manager of the licensee by the Attorney General or the attorney general of any other state and the reasons for such action;
(5) Suspension or termination of the licensee's status as an approved seller or servicer by the Federal National Mortgage Association, Federal Home Loan Mortgage Corporation or Government National Mortgage Association;
(6) Receiving notification that certain servicing rights of the licensee will be rescinded or cancelled, and the reasons provided therefor;
(7) Receiving notification of filing for bankruptcy of any control person, qualified individual or branch manager of the licensee; or
(8) Receiving notification of the initiation of a class action lawsuit on behalf of consumers against the licensee that is related to the operation of the licensed business.
(d) The commissioner may automatically suspend any license for a violation of subsection (a) or (b) of this section or upon a failure of the licensee to designate a qualified individual or branch manager who meets the requirements set forth in section 36a-719 not later than thirty days after a vacancy in the position. After a license has been automatically suspended pursuant to this section, the commissioner shall (1) give such licensee notice of the automatic suspension, pending proceedings for revocation or refusal to renew pursuant to section 36a-719j and an opportunity for a hearing on such action in accordance with section 36a-51, and (2) require such licensee to take or refrain from taking such action as the commissioner deems necessary to effectuate the purposes of this section.
(P.A. 14-89, S. 6; P.A. 18-173, S. 73; P.A. 21-138, S. 14.)
History: P.A. 18-173 amended Subsec. (a) by replacing provision re licensee's use of name other than approved legal or fictitious name with provision re filing of advance change notice on the system, and adding reference to Sec. 36a-51(c), amended Subsec. (b) by adding provisions re licensee's use of approved legal or fictitious name and use of name or address stated on license, deleting “, directly to” re providing bond rider or endorsement or addendum to commissioner in Subdiv. (1), amended Subsec. (c) by adding provisions re filing change in information to the system or notification to commissioner in writing, replacing reference to 5 business days with reference to 15 business days re notice to commissioner, replacing references to officers, directors, members, partners or shareholders with references to control person, qualified individual or branch manager in Subdivs. (2) and (7), and adding references to control person, qualified individual or branch manager in Subdivs. (3) and (4), added Subsec. (d) re automatic suspension of license, and made technical changes; P.A. 21-138 defined “change of control” in Subsec. (a).
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Sec. 36a-770. (Formerly Sec. 42-83). Applicability of Uniform Commercial Code. Filing and recording. Definitions. (a) The Uniform Commercial Code. A transaction subject to sections 36a-770 to 36a-788, inclusive, 42-100b and 42-100c is also subject to the Uniform Commercial Code, title 42a, but in case of any conflict the provisions of sections 36a-770 to 36a-788, inclusive, 42-100b and 42-100c shall control.
(b) Filing and recording. Section 42a-9-310 determines the need for filing or recording to perfect a security interest, section 42a-9-317 determines the persons who take subject to an unperfected security interest, and sections 42a-9-311 and 42a-9-501 to 42a-9-526, inclusive, determine the place for such filing or recording.
(c) Definitions. As used in sections 36a-770 to 36a-788, inclusive, 42-100b and 42-100c, unless the context otherwise requires:
(1) “Boat” means any watercraft, as defined in section 22a-248, other than a seaplane, used or capable of being used as a means of transportation on water, by any power including muscular.
(2) “Cash price” means the total amount in dollars at which the seller and buyer agreed the seller would transfer unqualified title to the goods, if the transaction were a cash sale instead of a sale under a retail installment contract.
(3) “Commercial vehicle” means any domestic or foreign truck or truck tractor of ten thousand or more pounds gross vehicular weight or any trailer or semitrailer designed for use in connection with any truck or truck tractor of ten thousand or more pounds gross vehicular weight and which is not used primarily for personal, family or household use.
(4) “Filing fee” means the fee prescribed by law for filing, recording or otherwise perfecting and releasing or satisfying a security interest, as defined in subdivision (35) of subsection (b) of section 42a-1-201, retained or created by a retail installment contract or installment loan contract.
(5) “Finance charge” means the amount in excess of the cash price of the goods agreed upon by the retail seller and the retail buyer, to be paid by the retail buyer for the privilege of purchasing the goods under the retail installment contract or installment loan contract.
(6) “Goods” means (A) “consumer goods”, as defined in subdivision (23) of subsection (a) of section 42a-9-102 and motor vehicles included under such definition, having an aggregate cash price of fifty thousand dollars or less, and (B) “equipment”, as defined in subdivision (33) of subsection (a) of section 42a-9-102, having an aggregate cash price of sixteen thousand dollars or less, provided such consumer goods or such equipment is included in one retail installment contract or installment loan contract.
(7) “Installment loan contract” means any agreement made in this state to repay in installments the amount loaned or advanced to a retail buyer for the purpose of paying the retail purchase price of goods and by virtue of which a security interest, as defined in subdivision (35) of subsection (b) of section 42a-1-201, is taken in the goods for the payment of the amount loaned or advanced. For purposes of this subdivision, “installment loan contract” does not include agreements to repay in installments loans made by the United States or any department, agency or instrumentality thereof.
(8) “Lender” means a person who extends or offers to extend credit to a retail buyer under an installment loan contract.
(9) A retail installment contract or installment loan contract is “made in this state” if: (A) An offer or agreement is made in Connecticut by a retail seller or a lender to sell or extend credit to a resident retail buyer, including, but not limited to, any verbal or written solicitation or communication to sell or extend credit originating outside the state of Connecticut but forwarded to and received in Connecticut by a resident retail buyer; or (B) an offer to buy or an application for extension of credit, or an acceptance of an offer to buy or to extend credit, is made in Connecticut by a resident retail buyer, regardless of the situs of the contract which may be specified therein, including, but not limited to, any verbal or written solicitation or communication to buy or to have credit extended, originating within the state of Connecticut but forwarded to and received by a retail seller or a lender outside the state of Connecticut. For purposes of this subdivision, a “resident retail buyer” means a retail buyer who is a resident of the state of Connecticut.
(10) “Motor vehicle” means any device in, upon or by which any person or property is or may be transported or drawn upon a highway by any power other than muscular. For purposes of this subdivision, “motor vehicle” does not include self-propelled wheelchairs and invalid tricycles, tractors, power shovels, road machinery, implements of husbandry and other agricultural machinery, or other machinery not designed primarily for highway transportation but which may incidentally transport persons or property on a highway, or devices which move upon or are guided by a track or travel through the air.
(11) “Retail buyer” means a person who buys or agrees to buy one or more articles of goods from a retail seller not for the purpose of resale or lease to others in the course of business and who executes a retail installment contract or an installment loan contract in connection therewith.
(12) “Retail installment contract” means any security agreement, as defined in subdivision (74) of subsection (a) of section 42a-9-102, made in this state, including one in the form of a mortgage, conditional sale contract or other instrument evidencing an agreement to pay the retail purchase price of goods, or any part thereof, in installments over a period of time and pursuant to which a security interest, as defined in subdivision (35) of subsection (b) of section 42a-1-201, is retained or taken by the retail seller for the payment of the amount of such retail installment contract. For purposes of this subdivision, “retail installment contract” does not include a rent-to-own agreement, as defined in section 42-240.
(13) “Retail installment sale” means any sale evidenced by a retail installment contract or installment loan contract wherein a retail buyer buys goods from a retail seller at a time sale price payable in two or more installments. The cash price of the goods, the amount, if any, included for other itemized charges which are included in the amount of the credit extended but which are not part of the finance charge under sections 36a-675 to 36a-686, inclusive, and the finance charge shall together constitute the time sale price. For purposes of this subdivision, “retail installment sale” does not include a rent-to-own agreement, as defined in section 42-240.
(14) “Retail seller” means a person who sells or agrees to sell one or more articles of goods under a retail installment contract or an installment loan contract to a retail buyer.
(15) “Sales finance company” means any person engaging in this state in the business, in whole or in part, of acquiring retail installment contracts from retail sellers or installment loan contracts from holders thereof, by purchase, discount or pledge, or by loan or advance to the holder of either on the security thereof, or otherwise.
(1949 Rev., S. 6698; 1949, 1955, S. 2862d; November, 1955, N218; 1957, P.A. 357, S. 1; March, 1958, P.A. 27, S. 33; 1959, P.A. 495; 589, S. 2; 1961, P.A. 116, S. 20; 1969, P.A. 454, S. 28; P.A. 77-317; 77-604, S. 52, 84; P.A. 78-313, S. 1, 3; P.A. 81-158, S. 13, 17; P.A. 82-18, S. 2, 4; P.A. 89-210, S. 1; P.A. 91-162, S. 15, 18; P.A. 93-39; P.A. 94-122, S. 325, 340; 94-134, S. 1, 3; May 25 Sp. Sess. P.A. 94-1, S. 109, 130; P.A. 01-132, S. 170; P.A. 03-19, S. 85; 03-62, S. 21; P.A. 05-109, S. 49; P.A. 11-108, S. 28; P.A. 15-235, S. 20; P.A. 21-138, S. 15.)
History: 1959 acts amended definitions of “goods” and “retail buyer”; 1961 act coordinated this section with Uniform Commercial Code; 1969 act redefined “retail installment sale” to include the amount of itemized charges included in amount of credit extended but excluded from finance charge rather than the amount of insurances and other benefits and filing fees; P.A. 77-317 redefined goods to raise maximum aggregate cash price from $6,000 to $25,000; P.A. 77-604 revised references to Sec. 42a-9-105; P.A. 78-313 redefined “goods” to include motor vehicles and to establish separate maximum cash value of $8,000 for equipment and added Subsec. (3)(m) and (n) defining “lender” and contracts “made in this state”; P.A. 81-158 amended Subsec. (3)(d) by replacing “section 36-396”, which had been repealed, with “chapter 657”, effective March 31, 1982; P.A. 82-18 changed effective date of P.A. 81-158 from March 31, 1982, to “the effective date of Title VI of Public Law 96-221, as contained in Section 625(a) of Public Law 96-221, as amended”, i.e. October 1, 1982; P.A. 89-210 added Subsec. (3)(o) defining “commercial vehicle”; P.A. 91-162 amended Subsec. (3)(d) and (e) to specifically exclude consumer rent-to-own agreements, as defined in Sec. 42-240, from the definitions of “retail installment sale” and “retail installment contract”; P.A. 93-39 amended Subsec. (3)(b) by increasing the aggregate cash price of a motor vehicle to be included in the definition of “consumer goods” from $25,000 to $50,000 and increasing the aggregate cash price of equipment to be included from $8,000 to $16,000; P.A. 94-122 changed Subsecs. (1), (2) and (3) to Subsecs. (a), (b) and (c), deleted the definition of “person”, reordered the definitions and made technical changes, effective January 1, 1995; P.A. 94-134 added Subsec. (p) defining “boat”, effective October 1, 1994, and applicable to retail installment contracts and installment loan contracts executed on or after that date; May 25 Sp. Sess. P.A. 94-1 made technical changes, effective January 1, 1994, and applicable January 1, 1995; Sec. 42-83 transferred to Sec. 36a-770 in 1995; (Revisor's note: In 1997 a reference in Subsec. (a) to “42-110b” was corrected editorially by the Revisors to “42-100b” thereby correcting a clerical error which occurred during the preparation of the 1995 revision); P.A. 01-132 amended Subsec. (b) to replace reference to Sec. 42a-9-302 with Sec. 42a-9-310, replace reference to Sec. 42a-9-301 with Sec. 42a-9-317 and replace reference to Secs. 42a-9-302(3)(b) and 42a-9-401 to 42a-9-409, inclusive, with Secs. 42a-9-311 and 42a-9-501 to 42a-9-518, inclusive, and amended Subsec. (c) to make a technical change in Subdiv. (4), in Subdiv. (6) replace Secs. 42a-9-105(1)(h) and 42a-9-109(1) with Sec. 42a-9-102(a)(23) as the statutory reference for the definition of “consumer goods”, make a technical change and replace Sec. 42a-9-109(2) with Sec. 42a-9-102(a)(33) as the statutory reference for the definition of “equipment”, make a technical change in Subdiv. (7) and replace in Subdiv. (12) Sec. 42a-9-105(1)(l) with Sec. 42a-9-102(a)(73) as the statutory reference for the definition of “security agreement” and make a technical change; P.A. 03-19 made a technical change in Subsec. (b), effective May 12, 2003; P.A. 03-62 amended Subsec. (b) to replace reference to Sec. 42a-9-518 with Sec. 42a-9-526 and make technical changes; P.A. 05-109 amended Subsec. (c) by replacing references to Sec. 42a-1-201(37) with references to Sec. 42a-1-201(b)(35) in Subdivs. (4), (7) and (12); P.A. 11-108 amended Subsec. (c)(12) re definition of “retail installment contract” to replace reference to Sec. 42a-9-102(a)(73) with reference to Sec. 42a-9-102(a)(74), effective July 1, 2013; P.A. 15-235 amended Subsec. (c)(13) to change “36a-685” to “36a-686”, effective August 1, 2015; P.A. 21-138 redefined “retail seller” in Subsec. (c)(14).
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Sec. 36a-800. (Formerly Sec. 42-127). Consumer collection agency. Definitions. As used in this section and sections 36a-801 to 36a-814, inclusive, unless the context otherwise requires:
(1) “Advertise” or “advertising” has the same meaning as provided in section 36a-485;
(2) “Branch office” means a location other than the main office at which a licensee or any person on behalf of a licensee acts as a consumer collection agency;
(3) “Consumer collection agency” means any person (A) engaged as a third party in the business of collecting or receiving payment for others on any account, bill or other indebtedness from a consumer debtor, (B) engaged in the business of debt buying, or (C) engaged in the business of collecting or receiving tax payments, including, but not limited to, property tax and federal income tax payments, from a property tax debtor or federal income tax debtor on behalf of a municipality or the United States Department of the Treasury, including, but not limited to, any person who, by any device, subterfuge or pretense, makes a pretended purchase or takes a pretended assignment of accounts from any other person, municipality or taxing authority of such indebtedness for the purpose of evading the provisions of this section and sections 36a-801 to 36a-814, inclusive. “Consumer collection agency” includes persons who furnish collection systems carrying a name which simulates the name of a consumer collection agency and who supply forms or form letters to be used by the creditor, even though such forms direct the consumer debtor, property tax debtor or federal income tax debtor to make payments directly to the creditor rather than to such fictitious agency. “Consumer collection agency” further includes any person who, in attempting to collect or in collecting such person's own accounts or claims from a consumer debtor, uses a fictitious name or any name other than such person's own name which would indicate to the consumer debtor that a third person is collecting or attempting to collect such account or claim. “Consumer collection agency” does not include (i) an individual employed on the staff of a licensed consumer collection agency, or by a creditor who is exempt from licensing, when attempting to collect on behalf of such consumer collection agency, (ii) persons not primarily engaged in the collection of debts from consumer debtors who receive funds in escrow for subsequent distribution to others, including, but not limited to, real estate brokers and lenders holding funds of borrowers for payment of taxes or insurance, (iii) any public officer or a person acting under the order of any court, (iv) any member of the bar of this state, (v) a person who services loans or accounts for the owners thereof when the arrangement includes, in addition to requesting payment from delinquent consumer debtors, the providing of other services such as receipt of payment, accounting, record-keeping, data processing services and remitting, for loans or accounts which are current as well as those which are delinquent, (vi) a bank or out-of-state bank, as defined in section 36a-2, and (vii) a subsidiary or affiliate of a bank or out-of-state bank, provided such affiliate or subsidiary is not primarily engaged in the business of purchasing and collecting upon delinquent debt, other than delinquent debt secured by real property. Any person not included in the definition contained in this subdivision is, for purposes of sections 36a-645 to 36a-647, inclusive, a “creditor”, as defined in section 36a-645;
(4) “Consumer debtor” means any natural person, not an organization, who has incurred indebtedness or owes a debt for personal, family or household purposes, including current or past due child support, who has incurred indebtedness or owes a debt to a municipality due to a levy by such municipality of a property tax or who has incurred indebtedness or owes a debt to the United States Department of the Treasury under the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as amended from time to time;
(5) “Control person” has the same meaning as provided in section 36a-485;
(6) “Creditor” means a person, including, but not limited to, a municipality or the United States Department of the Treasury, that retains, hires, or engages the services of a consumer collection agency;
(7) “Debt buying” means collecting or receiving payment on any account, bill or other indebtedness from a consumer debtor for such person's own account if the indebtedness was acquired from another person and if the indebtedness was either delinquent or in default at the time it was acquired;
(8) “Federal income tax” means all federal taxes levied on the income of a natural person or organization by the United States Department of the Treasury under the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as amended from time to time;
(9) “Federal income tax debtor” means any natural person or organization who owes a debt to the United States Department of the Treasury;
(10) “Main office” means the main address designated on the system;
(11) “Municipality” means any town, city or borough, consolidated town and city, consolidated town and borough, district as defined in section 7-324 or municipal special services district established under chapter 105a;
(12) “Organization” means a corporation, partnership, association, trust or any other legal entity or an individual operating under a trade name or a name having appended to it a commercial, occupational or professional designation;
(13) “Property tax” has the meaning given to the term in section 7-560;
(14) “Property tax debtor” means any natural person or organization who has incurred indebtedness or owes a debt to a municipality due to a levy by such municipality of a property tax; and
(15) “Unique identifier” has the same meaning as provided in section 36a-485.
(1953, 1955, S. 3310d; 1967, P.A. 882, S. 19; 1971, P.A. 539, S. 1; P.A. 75-486, S. 64, 69; P.A. 77-614, S. 161, 162, 610; P.A. 78-226, S. 1; 78-303, S. 54, 136; P.A. 80-482, S. 333, 348; P.A. 84-61, S. 1, 3; P.A. 87-9, S. 2, 3; P.A. 88-65, S. 56; P.A. 91-357, S. 61, 78; P.A. 92-12, S. 103; P.A. 93-127, S. 1, 3; P.A. 94-122, S. 328, 340; P.A. 01-207, S. 3, 12; P.A. 02-111, S. 46; P.A. 03-262, S. 1; P.A. 04-8, S. 11; P.A. 07-72, S. 8; P.A. 13-253, S. 22; P.A. 14-7, S. 2; P.A. 15-235, S. 33; P.A. 16-65, S. 47; P.A. 17-233, S. 29; P.A. 18-173, S. 78; P.A. 21-138, S. 16.)
History: 1967 act deleted language which had specifically included debt adjustment and prorate companies in definition of “collection agency”; 1971 act defined “consumer collection agency” rather than “collection agency”, expanding definition and specifically excluding lender licensed by banking commission under Ch. 647, and added definitions of “commissioner”, “consumer debtor” and “organization”; P.A. 75-486 substituted replaced public utilities commission with public utilities control authority in Subdiv. (b); P.A. 77-614 replaced bank commissioner and public utilities commission with banking commissioner (within the department of business regulation, the banking department having been made a division within that department) and division of public utility control within the department of business regulation, effective January 1, 1979; P.A. 78-226 defined “creditor”; P.A. 78-303 confirmed change in bank commissioner's title and replaced banking commission with banking commissioner to conform with P.A. 77-614 which abolished said commission; P.A. 80-482 restored division of banking to prior status as independent department, made division of public utility control an independent department and abolished the department of business regulation; P.A. 84-61 amended Subsec. (b) to exempt from the definition of “consumer collection agency” those persons delineated in Subdivs. (1) through (5), inclusive, replacing prior exemption provision; (Revisor's note: Pursuant to P.A. 87-9 “banking commissioner” was changed editorially by the Revisors to “commissioner of banking”); P.A. 88-65 substituted a reference to Sec. 42-133a for Sec. 42-133 in the introductory language; P.A. 91-357 made a technical change in Subsec. (c); P.A. 92-12 redesignated Subsecs. and Subdivs. and made technical changes; P.A. 93-127 amended Subdiv. (2) to include “municipality” in the definition of “consumer collection agency”, amended Subdiv. (4) to include debts owed to a municipality in the definition of “consumer debtor”, added a new Subdiv. (6) defining “municipality” and renumbered the former Subdiv. (6) as (7), effective July 1, 1993; P.A. 94-122 deleted the definitions of “person” and “commissioner”, reordered definitions and made other technical changes, effective January 1, 1995; Sec. 42-127 transferred to Sec. 36a-800 in 1995; (Revisor's note: In 1997 the Revisors editorially changed the reference at the end of Subdiv. (1) from “creditor”, as defined in “subsection (2)” of section 36a-645; to “creditor” as defined in “subdivision (3)” of section 36a-645; to reflect correctly P.A. 94-122, S. 293); P.A. 01-207 made a technical change in Subdiv. (1) and amended definition of “consumer debtor” in Subdiv. (2) to add the phrase “including current or past due child support”, effective July 1, 2001; P.A. 02-111 redefined “consumer collection agency” in Subdiv. (1) and added Subdivs. (6) and (7) defining “property tax” and “property tax debtor”, effective July 1, 2002; P.A. 03-262 redefined “consumer collection agency” in Subdiv. (1) by substituting “or receiving for payment” for “, without receiving,” effective July 9, 2003; P.A. 04-8 made a technical change in Subdiv. (3), effective April 16, 2004; P.A. 07-72 made technical changes in Subdiv. (1); P.A. 13-253 added new Subdiv. (1) defining “branch office”, redesignated existing Subdiv. (1) as Subdiv. (2) and amended same to redefine “consumer collection agency”, redesignated existing Subdivs. (2) and (3) as Subdivs. (3) and (4), added new Subdiv. (5) defining “main office” and redesignated existing Subdivs. (4) to (7) as Subdivs. (6) to (9); P.A. 14-7 amended Subdiv. (2) to redefine “consumer collection agency” by deleting reference to account, bill or other indebtedness and making technical changes, effective May 8, 2014; P.A. 15-235 changed “36a-810” to “36a-812”, effective July 7, 2015; P.A. 16-65 redefined “consumer collection agency”, “consumer debtor” and “creditor”, defined “federal income tax” and “federal income tax debtor”, and made technical and conforming changes; P.A. 17-233 deleted “directly or indirectly” in Subdiv. (2)(B), added new Subdiv. (4) defining “control person” and redesignated existing Subdivs. (4) to (11) as Subdivs. (5) to (12); P.A. 18-173 added new Subdiv. (1) defining “advertise” or “advertising”, redesignated existing Subdivs. (1) to (5) as new Subdivs. (2) to (6), amended redesignated Subdiv. (3)(B) by replacing provision re collecting on certain accounts, bills or other indebtedness with reference to debt buying, replacing reference to Sec. 36a-812 with reference to Sec. 36a-814, added new Subdiv. (7) defining “debt buying”, redesignated existing Subdivs. (6) to (12) as Subdivs. (8) to (14), amended redesignated Subdiv. (10) by replacing “application” with “system”, added Subdiv. (15) defining “unique identifier”, and made technical changes; P.A. 21-138 redefined “consumer debtor” in Subdiv. (4).
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Sec. 36a-801. (Formerly Sec. 42-127a). License required. Application, issuance, renewal. Authority to conduct criminal history records check. Examination of records. Abandonment of application. Surrender of license. Required system filing or notice of commissioner. Automatic suspension of license. Name and place of business. Change in any control persons. Unique identifier of license. Advertising of license. (a) No person shall act within this state as a consumer collection agency, directly or indirectly, unless such person has first obtained a required consumer collection agency license for such person's main office and for each branch office where such person's business is conducted. A consumer collection agency is acting within this state if it (1) has its place of business located within this state; (2) has its place of business located outside this state and (A) collects from consumer debtors, property tax debtors or federal income tax debtors who reside within this state for creditors who are located within this state, or (B) collects from consumer debtors, property tax debtors or federal income tax debtors who reside within this state for such consumer collection agency's own account; (3) has its place of business located outside this state and regularly collects from consumer debtors, property tax debtors or federal income tax debtors who reside within this state for creditors who are located outside this state; or (4) has its place of business located outside this state and is engaged in the business of collecting child support for creditors located within this state from consumer debtors who are located outside this state. Any activity subject to licensure pursuant to sections 36a-800 to 36a-814, inclusive, shall be conducted from an office located in a state, as defined in section 36a-2.
(b) An application for a license as a consumer collection agency or for renewal of such license shall be made and processed on the system pursuant to section 36a-24b, in the form prescribed by the commissioner. Each such form shall contain content as set forth by instruction or procedure of the commissioner and may be changed or updated as necessary by the commissioner in order to carry out the purposes of sections 36a-800 to 36a-814, inclusive. The applicant shall, at a minimum, furnish to the system information concerning the identity of the applicant, any control person of the applicant, the qualified individual and any branch manager responsible for the actions of the licensee, including, but not limited to, information related to such person's personal history and experience, and any administrative, civil or criminal findings by any governmental jurisdiction. As part of the application, the commissioner may (1) in accordance with section 29-17a, conduct a state or national criminal history records check of the applicant, any control person of the applicant, the qualified individual or any branch manager, and (2) in accordance with section 36a-24b (A) require the submission of fingerprints of the applicant, any control person of the applicant, the qualified individual or any branch manager to the Federal Bureau of Investigation or other state, national or international criminal databases, and (B) investigate the financial condition of any such person and require authorization from any such person for the system and the commissioner to obtain an independent credit report from a consumer reporting agency, as described in Section 603(p) of the Fair Credit Reporting Act, 15 USC 1681a, as amended from time to time. Such application shall be accompanied by a financial statement prepared by a certified public accountant and shall evidence that the applicant has a tangible net worth of more than zero dollars if the applicant is engaged solely in the business of debt buying, and a tangible net worth of at least fifty thousand dollars if the applicant is not engaged solely in the business of debt buying. The commissioner shall cause to be made such inquiry and examination as to the qualifications of each such applicant or any control person, qualified individual or branch manager of the applicant as the commissioner deems necessary. Each applicant shall furnish satisfactory evidence to the commissioner that the applicant is a person of good moral character and is financially responsible.
(c) (1) Each applicant for a consumer collection agency license shall pay to the system any required fees or charges and a license fee of five hundred dollars. Each such license shall expire at the close of business on December thirty-first of the year in which the license was approved, unless such license is renewed, except that any such license approved on or after November first shall expire at the close of business on December thirty-first of the year following the year in which it is approved. An application for renewal of a license shall be filed between November first and December thirty-first of the year in which the license expires. Each applicant for renewal of a consumer collection agency license shall pay to the system any required fees or charges and a renewal fee of four hundred dollars.
(2) If the commissioner finds, upon the filing of an application for a consumer collection agency, that (A) the financial responsibility, character, reputation, integrity and general fitness of the applicant, the control persons of the applicant, the qualified individual and any branch manager are such as to warrant belief that the business will be operated soundly and efficiently, in the public interest and consistent with the purposes of sections 36a-800 to 36a-814, inclusive, and (B) the applicant meets the applicable tangible net worth requirement in subsection (b) of this section and no proceeding in bankruptcy, receivership or assignment for the benefit of creditors has been commenced against the applicant, the commissioner may thereupon issue the applicant a consumer collection agency license. If the commissioner fails to make such findings, the commissioner shall not issue a license and shall notify the applicant of the reasons for such denial. The commissioner may deny an application if the commissioner finds that the applicant or any control person, qualified individual or branch manager of such applicant has been convicted of any misdemeanor involving any aspect of the consumer collection agency business, or any felony. Any denial of an application by the commissioner shall, when applicable, be subject to the provisions of section 46a-80.
(3) The minimum standards for renewal of a consumer collection agency license shall include the following: (A) The applicant continues to meet the minimum standards under this section; (B) the applicant has paid all required fees for renewal of the license; and (C) the applicant has paid all outstanding examination fees or other moneys due to the commissioner. The license of a consumer collection agency licensee failing to satisfy the minimum standards for license renewal shall expire. The commissioner may adopt procedures for the reinstatement of expired licenses consistent with the standards established by the system. Every license shall remain in force and effect until the license has been surrendered, revoked or suspended or has expired in accordance with the provisions of sections 36a-800 to 36a-814, inclusive.
(d) To further the enforcement of this section and to determine the eligibility of any person holding a license, the commissioner may, as often as the commissioner deems necessary, examine the licensee's books and records, and may, at any time, require the licensee to submit such a financial statement for the examination of the commissioner, so that the commissioner may determine whether the licensee is financially responsible to carry on a consumer collection agency business within the intents and purposes of sections 36a-800 to 36a-814, inclusive. Any financial statement submitted by a licensee shall be confidential and shall not be a public record unless introduced in evidence at a hearing conducted by the commissioner.
(e) The commissioner may deem an application for a license to act as a consumer collection agency abandoned if the applicant fails to respond to any request for information required under sections 36a-801 to 36a-814, inclusive, or any regulations adopted pursuant to said sections 36a-801 to 36a-814, inclusive. The commissioner shall notify the applicant on the system that if the applicant fails to submit such information not later than sixty days after the date on which such request for information was made, the application shall be deemed abandoned. An application filing fee paid prior to the date an application is deemed abandoned pursuant to this subsection shall not be refunded. Abandonment of an application pursuant to this subsection shall not preclude the applicant from submitting a new application for a license under sections 36a-801 to 36a-814, inclusive.
(f) (1) Not later than thirty days before a licensee ceases to engage in the business of a consumer collection agency for any reason, including, but not limited to, a business decision to terminate operations in this state, bankruptcy or voluntary dissolution, such licensee shall request surrender of the license on the system in accordance with subsection (c) of section 36a-51 for each location in which such licensee has ceased to engage in such business.
(2) Except as otherwise specified in subsection (i) of this section, each consumer collection agency applicant or licensee, and each individual designated as a control person, qualified individual or branch manager of such applicant or licensee, shall file on the system any change in the information such applicant, licensee, control person, qualified individual or branch manager most recently submitted to the system in connection with the application or license, or, if the information cannot be filed on the system, notify the commissioner of such change, in writing, not later than fifteen days after the date the applicant, licensee, control person, qualified individual or branch manager had reason to know of the change.
(3) A consumer collection agency licensee shall file on the system or, if the information cannot be filed on the system, notify the commissioner, in writing, of the occurrence of any of the following developments not later than fifteen days after the date the licensee had reason to know of the occurrence of any of the following developments:
(A) Filing for bankruptcy or the consummation of a corporate restructuring of the licensee;
(B) Filing of a criminal indictment against the licensee in any way related to the consumer collection activities of the licensee, or receiving notification of the filing of any criminal felony indictment or felony conviction of any control person, branch manager or qualified individual of the licensee;
(C) Receiving notification of the institution of license denial, cease and desist, suspension or revocation procedures, or other formal or informal action by any governmental agency against the licensee or any control person, branch manager or qualified individual of the licensee and the reasons therefor;
(D) Receiving notification of the initiation of any action against the licensee or any control person, branch manager or qualified individual of the licensee by the Attorney General or the attorney general of any other state and the reasons therefor;
(E) Receiving notification of filing for bankruptcy of any control person, branch manager or qualified individual of the licensee; or
(F) Any decrease in tangible net worth from the minimum amount required pursuant to subsection (b) of this section.
(g) The commissioner may automatically suspend a license if the licensee receives a deficiency on the system indicating that a required payment was Returned-ACH or returned pursuant to such other term as may be utilized by the system to indicate that the payment was not accepted. After a license has been automatically suspended pursuant to this section, the commissioner shall (1) give the licensee notice of the automatic suspension, pending proceedings for revocation or refusal to renew pursuant to section 36a-804 and an opportunity for a hearing on such action in accordance with section 36a-51, and (2) require such licensee to take or refrain from taking such action as the commissioner deems necessary to effectuate the purposes of this section.
(h) No abatement of the license fee shall be made if the application is denied or withdrawn prior to issuance of the license or if the license is surrendered, revoked or suspended prior to the expiration of the period for which it was issued. All fees required by this section shall be nonrefundable.
(i) No person licensed to act within this state as a consumer collection agency shall do so under any other name or at any other place of business than that named in the license. No licensee may use any name other than its legal name or a fictitious name approved by the commissioner, provided such licensee may not use its legal name if the commissioner disapproves use of such name. A licensee may change the name of the licensee or address of the office specified on the most recent filing with the system if, at least thirty calendar days prior to such change, (1) the licensee files such change with the system and provides a bond rider, endorsement or addendum, as applicable, to the surety bond on file with the commissioner that reflects the new name or address, and (2) the commissioner does not disapprove such change, in writing, or request further information from the licensee within such thirty-day period. Not more than one place of business shall be maintained under the same license but the commissioner may issue more than one license to the same licensee upon compliance with the provisions of sections 36a-800 to 36a-814, inclusive, as to each new licensee. A license shall not be transferable or assignable. Any change in any control person of the licensee, except a change of a director, general partner or executive officer that is not the result of an acquisition or change of control of the licensee, shall be the subject of an advance change notice filed on the system at least thirty days prior to the effective date of such change and no such change shall occur without the commissioner's approval. For purposes of this section, “change of control” means any change causing the majority ownership, voting rights or control of a licensee to be held by a different control person or group of control persons. Any licensee holding, applying for, or seeking renewal of more than one license may, at its option, file the bond required under section 36a-802 separately for each place of business licensed, or to be licensed, or a single bond, naming each place of business, in an amount equal to twenty-five thousand dollars for each place of business. The commissioner may automatically suspend a license for any violation of this subsection. After a license has been automatically suspended pursuant to this section, the commissioner shall (A) give the licensee notice of the automatic suspension, pending proceedings for revocation or refusal to renew pursuant to section 36a-804 and an opportunity for a hearing on such action in accordance with section 36a-51, and (B) require such licensee to take or refrain from taking such action as the commissioner deems necessary to effectuate the purposes of this section.
(j) Any person making any filing or submission of any information on the system shall do so in accordance with the procedures and requirements of the system and pay the applicable fees or charges to the system. Each consumer collection agency licensee shall, to the extent required by the system, timely submit to the system accurate reports of condition that shall be in such form and shall contain such information as the system may require. Failure by a licensee to submit a timely and accurate report of condition shall constitute a violation of this provision.
(k) The unique identifier of any person licensed under section 36a-801 shall be clearly shown on all solicitations and advertisements, including business cards and Internet web sites, and any other documents as established by rule, regulation or order of the commissioner, and shall be clearly stated in all audio solicitations and advertisements. The solicitations and advertisements of any person licensed under section 36a-801: (1) Shall not include any statement that such person is endorsed in any way by this state, except that such solicitations and advertisements may include a statement that such person is licensed in this state; (2) shall not include any statement or claim that is deceptive, false or misleading; (3) shall otherwise conform to the requirements of sections 36a-801 to 36a-814, inclusive, any regulations issued thereunder and any other applicable law; and (4) shall be retained for two years from the date of use of such solicitation or advertisement.
(1971, P.A. 539, S. 2, 3; P.A. 73-284; 73-328; 73-341; P.A. 81-292, S. 12; P.A. 88-150, S. 9; P.A. 92-89, S. 17, 20; P.A. 93-127, S. 2, 3; P.A. 94-104, S. 6; 94-122, S. 329, 340; P.A. 96-71, S. 7, 8; P.A. 01-207, S. 4, 12; P.A. 02-111, S. 47; P.A. 04-69, S. 30; P.A. 05-46, S. 15; 05-74, S. 5; P.A. 06-35, S. 11; P.A. 09-208, S. 35; Sept. Sp. Sess. P.A. 09-7, S. 101; P.A. 11-216, S. 47; P.A. 13-253, S. 23; P.A. 14-89, S. 39; P.A. 15-235, S. 34; P.A. 16-65, S. 48; P.A. 17-233, S. 30; 17-236, S. 14; P.A. 18-173, S. 79; P.A. 21-138, S. 17, 18.)
History: P.A. 73-284 required that financial statements be “prepared” rather than “certified” by accountant and required that their accuracy be sworn to by proprietor, general partner or corporate officer in Subsec. (b); P.A. 73-328 defined acting within state with regard to consumer collection agencies in Subsec. (a); P.A. 73-341 added Subsec. (c); P.A. 81-292 amended Subsec. (b) by increasing the license fee from $100 to $200 and the renewal fee from $50 to $200; P.A. 88-150 amended Subsec. (b) by providing that license and investigation fees are nonrefundable; P.A. 92-89 amended Subsec. (b) to increase the license fee from $200 to $400, to increase the investigation fee from $50 to $100 and to increase the renewal fee from $200 to $400; P.A. 93-127 amended Subsec. (a) by substituting “who are” for “whose place of business is”, effective July 1, 1993; P.A. 94-104 changed the license expiration date from May first to April thirtieth, made April first the renewal application deadline and added a $100 late fee in Subsec. (a), and made technical changes; P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 42-127a transferred to Sec. 36a-801 in 1995; P.A. 96-71 amended Subsec. (b) to make technical changes and to add Subdiv. (2) to make all fees required by this section nonrefundable, effective July 1, 1996; P.A. 01-207 amended Subsec. (a) to add Subdiv. (4) defining acting within state re consumer collection agencies to include having its place of business located outside this state and engaging in the business of collecting child support for creditors located within this state from consumer debtors located outside this state, effective July 1, 2001; P.A. 02-111 amended Subsec. (a) by replacing provision re holding a license then in force with provision re consumer collection agency license and adding references to “property tax debtors”, amended Subsec. (b) by adding reference to “a member” in Subdiv. (1)(A), by providing that license fee is $800 or, in the case of initial application filed not earlier than one year before the expiration date of license, fee is $400 in Subdiv. (1)(B), by adding provisions re expiration of license at the close of business on September thirtieth of the odd-numbered year following its issuance, renewal fee of $800 and exceptions for license, renewed effective May 1, 2003, and licenses that expire on April 30, 2003, and by adding provision re $100 processing fee and amended Subsec. (c) by adding provisions re prior written notice to commissioner of any change of location of a place of business and re license shall not be transferable or assignable; P.A. 04-69 amended Subsec. (b) by adding new Subdiv. (2), requiring commissioner to automatically suspend license or renewal license if commissioner determines that a check filed to pay fee has been dishonored and requiring commissioner to give notice of the automatic suspension pending proceedings for revocation or refusal to renew and an opportunity for a hearing in accordance with Sec. 36a-51, and redesignating existing Subdiv. (2) as Subdiv. (3); P.A. 05-46 amended Subsec. (b)(1) to make a technical change and provide that renewal application for licensees filed with commissioner after September first, accompanied by late fee, shall be deemed to be timely and sufficient for purposes of Sec. 4-182(b); P.A. 05-74 amended Subsec. (c) to make a technical change, effective June 2, 2005; P.A. 06-35 amended Subsec. (b)(1) to require applicants or licensees to notify commissioner, in writing, of any changes in information in initial or most recent renewal application for license within ten business days after occurrence of event that results in information becoming inaccurate; P.A. 09-208 amended Subsec. (b)(1) by adding new Subpara. (B) requiring applicants to submit history of criminal convictions, by redesignating existing Subparas. (B) and (C) as Subparas. (C) and (D), by authorizing commissioner to deny application or renewal application based on certain convictions, and by deleting outdated provisions re license expiration and renewal, effective July 7, 2009; Sept. Sp. Sess. P.A. 09-7 amended Subsec. (c) by changing bond amount from $5,000 to $25,000, effective October 5, 2009; P.A. 11-216 amended Subsec. (b)(1) to add provisions requiring history of criminal convictions of partners, members, officers, directors and principal employees of applicant in a form acceptable to commissioner, add provision authorizing commissioner to conduct criminal history records check of applicant and each partner, member, officer, director and principal employee of applicant, delete references to ten-year period prior to date of application and add provisions re abandonment of application; P.A. 13-253 amended Subsec. (a) to add provision re license for the main office and each branch office, designate existing provisions re collecting from in-state debtors for in-state creditors as Subpara. (A) and add Subpara. (B) re collecting for the agency's own account, amended Subsec. (b) to make technical changes and delete provision re issuance of license if commissioner is satisfied that applicant is properly qualified and trustworthy, redesignated provisions of existing Subsec. (b) re denial of application as Subsec. (c) and amended same to add provisions re commissioner's belief that the business will be operated soundly and efficiently and findings re solvency and bankruptcy proceedings, designated provisions of existing Subsec. (b) re enforcement as Subsec. (d), designated provisions of existing Subsec. (b) re notification of change in application information provided as Subsec. (e), designated provisions of existing Subsec. (b) re abandonment as Subpara. (f), designated provisions re dishonored checks as Subsec. (g), designated provisions of existing Subsec. (b) re abatement of license fee as Subsec. (h) and redesignated existing Subsec. (c) as Subsec. (i); P.A. 14-89 amended Subsec. (g) to replace “subdivision (1) of this subsection” with “subsection (b) of this section”, effective June 3, 2014; P.A. 15-235 changed “36a-810” to “36a-812”, effective July 7, 2015; P.A. 16-65 amended Subsec. (a) by adding references to federal income tax debtors; P.A. 17-233 amended Subsec. (a) by adding “, directly or indirectly,” re person acting as consumer collection agency; P.A. 17-236 amended Subsec. (b)(1) by adding provision re financial statement evidencing applicant's minimum tangible net worth of $50,000; P.A. 18-173 amended Subsec. (a) by replacing “consumer collection agency license” with “required consumer collection agency license”, and adding provision re activity to be conducted from office located in a state, substantially amended Subsec. (b) including by deleting provisions re written application to commissioner, accuracy of applicant's tangible net worth to be sworn to under oath and license fee and adding provisions re application to be made and processed on the system, information to be furnished on application, and commissioner's authority to conduct criminal history records check, require submission of fingerprints and investigate financial condition of person, deleting reference to public accountant and adding reference to applicant not solely engaged in business of debt buying re applicant's tangible net worth, and replacing “partner, member, officer, director or principal employee” with “control person, qualified individual or branch manager”, amended Subsec. (c) by adding new Subdiv. (1) re applicant's payment of fees or charges to the system, designating existing provisions re commissioner's findings as new Subdiv. (2), redesignating existing Subdivs. (1) and (2) as Subparas. (A) and (B), replacing references to partners, members, officers, directors and employees with reference to control persons, qualified individual and branch manager, replacing reference to Sec. 36a-812 with reference to Sec. 36a-814, deleting provisions re renewal of license, and adding Subdiv. (3) re renewal of license and license in force and effect until license surrendered, revoked, suspended or expired, amended Subsec. (d) by replacing reference to Sec. 36a-812 with reference to Sec. 36a-814, deleted Subsec. (e) re notification to commissioner of change in information, redesignated existing Subsec. (f) as new Subsec. (e) and amending same by replacing references to Sec. 36a-812 with references to Sec. 36a-814, replacing provision re notification to applicant in writing with provision re notification to applicant on the system, added new Subsec. (f) re surrender of license, change in information, and filing information on the system or notification to commissioner, substantially amended Subsec. (g) by replacing provisions re payment of fee dishonored and automatic suspension with provisions re automatic suspension for deficiency on the system indicating returned payment, amended Subsec. (h) by adding reference to application denied or withdrawn, amended Subsec. (i) by replacing provisions re written notice to commissioner re change of location of business with provisions re licensee's use of name other than approved legal or fictitious name, filing change of name or address with the system, replacing reference to Sec. 36a-812 with reference to Sec. 36a-814, adding provisions re change in control person to be subject of advance change notice, and automatic suspension of license for violation of subsection, added Subsec. (j) re filing of information on the system in accordance with procedures, payment of fees or charges and submission of timely and accurate report of condition, added Subsec. (k) re unique identifier and solicitations and advertisements, and made technical changes; P.A. 21-138 amended Subsec. (b) by changing tangible net worth requirement for applicants not engaged solely in debt buying from $50,000 to at least $50,000 and by adding tangible net worth requirement for applicants engaged solely in the business of debt buying, amended Subsec. (c)(2) by making technical and conforming changes, and amended Subsec. (i) by defining “change of control”.
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Sec. 36a-846. Definitions. As used in this section and sections 36a-847 to 36a-855, inclusive:
(1) “Advertise” or “advertising” has the same meaning as provided in section 36a-485;
(2) “Branch office” means a location other than the main office at which a licensee or any person on behalf of a licensee acts as a student loan servicer;
(3) “Consumer report” has the same meaning as provided in Section 603(d) of the Fair Credit Reporting Act, 15 USC, 1681a, as amended from time to time;
(4) “Control person” has the same meaning as provided in section 36a-485;
(5) “Cosigner” has the same meaning as provided in 15 USC 1650(a), as amended from time to time;
(6) “Federal student education loan” means any student education loan (A) (i) made pursuant to the William D. Ford Federal Direct Loan Program, 20 USC 1087a, et seq., as amended from time to time, or (ii) purchased by the United States Department of Education pursuant to 20 USC 1087i-1(a), as amended from time to time, and (B) owned by the United States Department of Education;
(7) “Federal student loan servicer” means any student loan servicer responsible for the servicing of a federal student education loan to a student loan borrower pursuant to a contract awarded to such person by the United States Department of Education under 20 USC 1087f, as amended from time to time;
(8) “Main office” has the same meaning as provided in section 36a-485;
(9) “Private student education loan” means any student education loan that is not a federal student education loan;
(10) “Private student education loan servicer” means any student loan servicer responsible for the servicing of a private student education loan to a student loan borrower;
(11) “Student loan borrower” means any individual who resides within this state who has agreed to repay a student education loan;
(12) “Student loan servicer” means any person, wherever located, responsible for the servicing of any student education loan to any student loan borrower;
(13) “Servicing” means (A) receiving any scheduled periodic payments from a student loan borrower pursuant to the terms of a student education loan; (B) applying the payments of principal and interest and such other payments with respect to the amounts received from a student loan borrower, as may be required pursuant to the terms of a student education loan; (C) maintaining account records for and communicating with the student loan borrower concerning the student education loan during the period when no scheduled periodic payments are required; (D) interacting with a student loan borrower for purposes of facilitating the servicing of a student education loan, including, but not limited to, assisting a student loan borrower to prevent such borrower from defaulting on obligations arising from the student education loan; or (E) performing other administrative services with respect to a student education loan;
(14) “Student education loan” means any loan primarily for personal use to finance education or other school-related expenses;
(15) “Unique identifier” has the same meaning as provided in section 36a-485.
(P.A. 15-162, S. 2; P.A. 17-233, S. 32; P.A. 18-173, S. 84; P.A. 21-130, S. 1; 21-190, S. 1.)
History: P.A. 17-233 added new Subdiv. (1) defining “advertise” or “advertising”, added new Subdiv. (2) defining “control person” and redesignated existing Subdivs. (1) to (4) as Subdivs. (3) to (6); P.A. 18-173 added new Subdiv. (2) defining “branch office”, redesignated existing Subdiv. (2) as new Subdiv. (3), added new Subdiv. (4) defining “main office”, redesignated existing Subdiv. (3) as new Subdiv. (5) and amended same to redefine “student loan borrower”, redesignated existing Subdivs. (4) to (6) as Subdivs. (6) to (8), and added Subdiv. (9) defining “unique identifier”; P.A. 21-130 expanded applicability of definitions to Secs. 36a-847a, 36a-847b and 36a-855, defined “federal student education loan”, “federal student loan servicer”, “private student education loan” and “private student education loan servicer”, effective July 1, 2021; P.A. 21-190 added the same definitions as P.A. 21-130 and defined “consumer report” and “cosigner” and redefined “servicing”, effective July 1, 2021.
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Sec. 36a-847. Private student loan services license required. Application. Authority to conduct criminal history records check. Fees. Examination of records. Automatic suspension of license. Abandonment of application. (a) Except as provided in section 36a-847b, no person shall act as a private student loan servicer, directly or indirectly, unless such person obtains from the commissioner pursuant to subsection (b) of this section a license for such person's main office and for each branch office where such business is conducted. Any activity subject to licensure pursuant to sections 36a-846 to 36a-854, inclusive, shall be conducted from an office located in a state, as defined in section 36a-2.
(b) (1) An application for a license as a private student loan servicer or for renewal of such license shall be made and processed on the system pursuant to section 36a-24b, in the form prescribed by the commissioner. Each such form shall contain content as set forth by instruction or procedure of the commissioner and may be changed or updated as necessary by the commissioner in order to carry out the purposes of sections 36a-846 to 36a-854, inclusive. The applicant shall, at a minimum, furnish to the system information concerning the identity of the applicant, any control person of the applicant, the qualified individual and any branch manager responsible for the actions of the licensee, including, but not limited to, information related to such person's personal history and experience, and any administrative, civil or criminal findings by any governmental jurisdiction. As part of the application the commissioner may (A) in accordance with section 29-17a, conduct a state or national criminal history records check of the applicant, any control person of the applicant, the qualified individual or any branch manager, and (B) in accordance with section 36a-24b, (i) require the submission of fingerprints of the applicant, any control person of the applicant, the qualified individual or any branch manager to the Federal Bureau of Investigation or other state, national or international criminal databases, and (ii) investigate the financial condition of any such person and require authorization from any such person for the system and the commissioner to obtain an independent credit report from a consumer reporting agency, as described in Section 603(p) of the Fair Credit Reporting Act, 15 USC 1681a, as amended from time to time. Such application shall be accompanied by a financial statement prepared by a certified public accountant, except that the commissioner may waive such requirement in connection with any renewal application, provided the system requires annual reports of condition that capture financial statement information and the applicant has filed such information in accordance with section 36a-848.
(2) Each applicant for a private student loan servicer license shall pay to the system any required fees or charges and a license fee of nine hundred dollars. Each such license shall expire at the close of business on December thirty-first of the year in which the license was approved, unless such license is renewed, except that any such license approved on or after November first shall expire at the close of business on December thirty-first of the year following the year in which it is approved. An application for renewal of a license shall be filed between November first and December thirty-first of the year in which the license expires. Each applicant for renewal of a license shall pay to the system any required fees or charges and a renewal fee of nine hundred dollars.
(3) Each license shall remain in force and effect until the license has been surrendered, revoked or suspended or has expired in accordance with the provisions of sections 36a-846 to 36a-854, inclusive. No abatement of the license fee shall be made if the application is denied or withdrawn prior to issuance of the license or if the license is surrendered, revoked or suspended prior to the expiration of the period for which it was issued. All fees required by this section shall be nonrefundable.
(c) Upon the filing of an application for an initial license and the payment of required fees, the commissioner shall investigate the financial condition and responsibility, financial and business experience, character and general fitness of the applicant. The commissioner may issue a license if the commissioner finds that:
(1) The applicant's financial condition is sound;
(2) The applicant's business will be conducted honestly, fairly, equitably, carefully and efficiently within the purposes and intent of sections 36a-846 to 36a-854, inclusive, and in a manner commanding the confidence and trust of the community;
(3) Each control person, qualified individual, branch manager and trustee of the applicant is in all respects properly qualified and of good character, including, but not limited to, assessment of such person's financial responsibility and any criminal convictions, provided any license denial based on a criminal conviction shall be subject to the provisions of section 46a-80;
(4) No control person, qualified individual, branch manager or other person on behalf of the applicant knowingly has made any incorrect statement of a material fact in the application, or in any report or statement made pursuant to sections 36a-846 to 36a-854, inclusive;
(5) No control person, qualified individual, branch manager or other person on behalf of the applicant knowingly has omitted to state any material fact necessary to give the commissioner any information lawfully required by the commissioner;
(6) The applicant has paid the fees required under subsection (b) of this section; and
(7) The applicant has met any other similar requirements as determined by the commissioner.
(d) Not later than fifteen days after the date a licensee ceases to engage in the business of servicing private student education loans in this state for any reason, including a business decision to terminate operations in this state, license revocation, bankruptcy or voluntary dissolution, such licensee shall surrender to the commissioner, in accordance with subsection (c) of section 36a-51, its license for each location in which such licensee has ceased to engage in such business. The licensee shall also identify to the commissioner, in writing, the location where the records of the licensee will be stored and the name, address and telephone number of an individual authorized to provide access to the records. The surrender of a license does not reduce or eliminate the licensee's civil or criminal liability arising from acts or omissions occurring prior to the surrender of the license, including any administrative actions undertaken by the commissioner to revoke or suspend a license, assess a civil penalty, order restitution or exercise any other authority provided to the commissioner.
(e) If an application for a renewal license has been filed with the commissioner on or before the date the license expires, the license sought to be renewed shall continue in full force and effect until the issuance by the commissioner of the renewal license applied for or until the commissioner has notified the licensee in writing of the commissioner's refusal to issue such renewal license together with the grounds upon which such refusal is based. The commissioner may refuse to issue a renewal license (1) on any ground on which the commissioner might refuse to issue an initial license, or (2) if the applicant has not paid any required fee for renewal or has not paid any outstanding examination fees or other moneys due to the commissioner. The license of a private student loan servicer failing to satisfy the minimum standards for license renewal shall expire. The commissioner may adopt procedures for the reinstatement of expired licenses consistent with the standards established by the system.
(f) The commissioner may automatically suspend a license if the licensee receives a deficiency on the system indicating that a required payment was Returned-ACH or returned pursuant to such other term as may be utilized by the system to indicate that the payment was not accepted. After a license has been automatically suspended pursuant to this section, the commissioner shall (1) give the licensee notice of the automatic suspension, pending proceedings for revocation or refusal to renew pursuant to section 36a-852 and an opportunity for a hearing on such action in accordance with section 36a-51, and (2) require such licensee to take or refrain from taking such action as the commissioner deems necessary to effectuate the purposes of this section.
(g) Except as specified in section 36a-848, the applicant or licensee, and each individual designated as a control person, qualified individual or branch manager, shall file on the system any change in the information such applicant, licensee, control person, qualified individual or branch manager most recently submitted to the system in connection with the application or license, or, if the information cannot be filed on the system, notify the commissioner of such change, in writing, not later than fifteen days after the date the applicant, licensee, control person, qualified individual or branch manager had reason to know of the change.
(h) The commissioner may deem an application for a license abandoned if the applicant fails to respond to any request for information required under sections 36a-846 to 36a-854, inclusive, or any regulations adopted pursuant to said sections. The commissioner shall notify the applicant on the system that if the applicant fails to submit such information not later than sixty days after the date on which such request for information was made, the application shall be deemed abandoned. An application filing fee paid prior to the date an application is deemed abandoned pursuant to this subsection shall not be refunded. Abandonment of an application pursuant to this subsection shall not preclude the applicant from submitting a new application for a license under the provisions of sections 36a-846 to 36a-854, inclusive.
(P.A. 15-162, S. 3; P.A. 18-173, S. 85; P.A. 21-130, S. 2.)
History: P.A. 15-162 effective July 1, 2016; P.A. 18-173 amended Subsec. (a)(1) by adding “for its main office and for each branch office where such business is conducted” re obtaining license, and adding provision re activity to be conducted from office located in a state, substantially amended Subsec. (b) including by deleting provisions re written application to commissioner, financial statement to be sworn to under oath, fees and commissioner's authority to conduct criminal history records check, and adding provisions re application to be made and processed on the system, commissioner's authority to conduct criminal history records check, require submission of fingerprints, and investigate financial condition of person, and commissioner's authority to waive requirement of financial statement prepared by certified public accountant in connection with renewal application in new Subdiv. (1), adding new Subdiv. (2) re applicant to pay to system fees and charges, expiration of license, and renewal, and adding new Subdiv. (3) re license to remain in force and effect until surrendered, revoked, suspended or expired, no abatement of licensee fee to be made if application is denied or withdrawn, and fees are nonrefundable, amended Subsec. (c) by replacing “payment of the fees for license and investigation,” with “payment of the required fees,”, replacing provisions re applicant properly qualified and of good character with provisions re same in Subdiv. (3), adding “control person, qualified individual, branch manager or other” in Subdivs. (4) and (5), and replacing “paid the investigation fee and the license fee” with “paid the fees” in Subdiv. (6), amended Subsec. (d) by deleting provisions re expiration of license at close of business September thirtieth of odd-numbered year, and written notice of surrender, adding reference to Sec. 36a-51(c), and adding reference to commissioner, substantially amended Subsec. (e) by deleting provisions re renewal of license, designating existing provision re ground on which commissioner might refuse initial license as Subdiv. (1), and adding Subdiv. (2) re applicant has not paid required fee, failure of student loan servicer to satisfy minimum standards, and commissioner's adoption of procedures for reinstatement of expired licenses, substantially amended Subsec. (f) by replacing provisions re check to pay fee dishonored and automatic suspension with provisions re automatic suspension of license if deficiency on system indicating returned payment, substantially amended Subsec. (g) by replacing provision re notice to commissioner in writing of change in information provided on application with provision re filing to system change in information, and amended Subsec. (h) by replacing provision re notice to applicant in writing with provision re notice to applicant on the system, and made technical and conforming changes; P.A. 21-130 amended Subsec. (a) by deleting Subdiv. (1) designator, adding provision re exception provided in Sec. 36a-847b, limiting applicability of license requirement to private student loan servicers, replacing “without first obtaining” with “unless such person obtains from the commissioner pursuant to subsection (b) of this section”, deleting provision re requirement to obtain license from the commissioner unless exempt from licensure and deleting former Subdiv. (2) re persons exempt from student loan servicer licensing requirements, amended Subsec. (b) by adding “private” in Subdivs. (1) and (2) and deleting “student loan servicer” in Subdiv. (2), amended Subsec. (d) by changing “the business of student loan servicing” to “the business of servicing private student education loans”, and amended Subsec. (e) by inserting “private”, and made technical changes, effective July 1, 2021.
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Sec. 36a-847a. Federal student loan servicer registration required. Fees. Service of process and communication with commissioner. Civil penalty. (a) Except as provided in section 36a-847b, no person shall act as a federal student loan servicer, directly or indirectly, unless such person has registered as a federal student loan servicer on the system, pursuant to section 36a-24b, in the form prescribed by the commissioner.
(b) Each registrant shall pay to the system any required fees or charges and a registration fee of nine hundred dollars. Each registration shall be effective on the date the registration is filed to the system and shall remain in force and effect until the registration has been surrendered, revoked or suspended or has expired in accordance with the provisions of this section. Each registration shall expire at the close of business on December thirty-first of the year in which the registration is filed, unless such registration is renewed, except that any such registration filed on or after November first shall expire at the close of business on December thirty-first of the year following the year in which it is filed. Any request to renew a registration shall be filed on the system between November first and December thirty-first of the year in which the registration expires and shall be accompanied by payment of any required fees or charges and a renewal fee of nine hundred dollars.
(c) (1) Each registrant shall appoint an agent to accept service of process in this state on behalf of the registrant. Service of process made upon such agent shall be deemed service of process upon the registrant. If such agent cannot with reasonable diligence be found, or if the registrant has failed to appoint an agent as required by this subdivision, service of process may be made upon a control person of the registrant, as the agent of the registrant.
(2) Each registrant shall designate an individual to represent the registrant in communications with the commissioner and provide contact information for such individual to the commissioner at the time of registration. The registrant shall notify the commissioner of any change of such individual or information not later than ten days after the change.
(d) Each registrant shall notify the commissioner in writing of the expiration, revocation or termination of any contract awarded to the registrant by the United States Department of Education pursuant to 20 USC 1087f, as amended from time to time, not later than seven days after such expiration, revocation or termination. Any registration based solely upon such contract shall be deemed expired upon the effective date of such expiration, revocation or termination by the United States Department of Education.
(e) The commissioner may impose a civil penalty, after notice and an opportunity for a hearing in accordance with section 36a-50 on any person that acts as a federal student loan servicer for thirty or more days in violation of this section.
(P.A. 21-130, S. 3.)
History: P.A. 21-130 effective July 1, 2021.
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Sec. 36a-847b. Exemptions. The provisions of sections 36a-846 to 36a-855, inclusive, shall not apply to the following persons: (1) Any bank, out-of-state bank, Connecticut credit union, federal credit union or out-of-state credit union; (2) any wholly owned subsidiary of any such bank or credit union; and (3) any operating subsidiary where each owner of such operating subsidiary is wholly owned by the same bank or credit union.
(P.A. 21-130, S. 4.)
History: P.A. 21-130 effective July 1, 2021.
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Sec. 36a-848. Name and place of business. Change of name or location. License and registration not transferable or assignable. Change in any control persons. Automatic suspension of license and civil penalty against registrant. Required system filing or notice of commissioner. Unique identifier of licensee or registrant. Advertisements of licensee or registrant. (a) No person licensed to act as a private student loan servicer under section 36a-847 or registered to act as a federal student loan servicer under section 36a-847a shall do so under any other name or at any other place of business than that named in the license or registration. No such licensee or registrant may use any name other than its legal name or a fictitious name approved by the commissioner, provided such licensee or registrant may not use its legal name if the commissioner disapproves use of such name. A licensee or registrant may change the name of the licensee or registrant or the address of the office specified on the most recent filing with the system if, at least thirty calendar days prior to such change, the licensee or registrant files such change with the system and the commissioner does not disapprove such change, in writing, or request further information from the licensee or registrant within such thirty-day period. Not more than one place of business shall be maintained under the same license or registration but the commissioner may issue more than one license or registration to the same licensee or registrant upon compliance with the provisions of sections 36a-846 to 36a-854, inclusive, as to each new licensee or registrant.
(b) No such license or registration shall be transferable or assignable. Any change in any control person of the licensee or registrant, except a change of a director, general partner or executive officer that is not the result of an acquisition or change of control of the licensee or registrant, shall be the subject of an advance change notice filed on the system at least thirty days prior to the effective date of such change and no such change shall occur without the commissioner's approval. For purposes of this section, “change of control” means any change causing the majority ownership, voting rights or control of a licensee or registrant to be held by a different control person or group of control persons.
(c) (1) The commissioner may automatically suspend any license for a violation of subsection (a) or (b) of this section. After a license has been automatically suspended pursuant to this subsection, the commissioner shall (A) give the licensee notice of such automatic suspension pending proceedings for revocation of or refusal to renew the license pursuant to section 36a-852 and an opportunity for a hearing in accordance with section 36a-51, and (B) require the licensee to take or refrain from taking action as the commissioner deems necessary to effectuate the purpose of this section.
(2) The commissioner may impose a civil penalty against any registrant for a violation of subsection (a) or (b) of this section after notice and an opportunity for a hearing in accordance with section 36a-50.
(d) Each private student loan servicer licensee and each federal student loan servicer registrant shall file on the system or, if the information cannot be filed on the system, notify the commissioner, in writing, of the occurrence of any of the following developments not later than fifteen days after the date the licensee or registrant had reason to know of the occurrence of any of the following developments:
(1) Filing for bankruptcy or the consummation of a corporate restructuring of the licensee or registrant;
(2) Filing of a criminal indictment against the licensee or registrant in any way related to the student loan servicer activities of the licensee or registrant, or receiving notification of the filing of any criminal felony indictment or felony conviction of any control person, branch manager or qualified individual of the licensee or registrant;
(3) Receiving notification of the institution of license denial, cease and desist, suspension or revocation procedures, or other formal or informal action by any governmental agency against the licensee or registrant, or any control person, branch manager or qualified individual of the licensee or registrant and the reasons therefor;
(4) Receiving notification of the initiation of any action against the licensee or registrant, or any control person, branch manager or qualified individual of the licensee or registrant by the Attorney General or the attorney general of any other state and the reasons therefor; or
(5) Receiving notification of filing for bankruptcy of any control person, branch manager or qualified individual of the licensee or registrant.
(e) Any person filing or submitting any information on the system shall do so in accordance with the procedures and requirements of the system and shall pay the applicable fees or charges to the system. Each private student loan servicer licensee and each federal student loan servicer registrant shall, to the extent required by the system, timely submit to the system accurate reports of condition that shall be in such form and shall contain such information as the system may require. Failure by a licensee or registrant to submit a timely and accurate report of condition shall constitute a violation of this provision.
(f) The unique identifier of any person licensed as a private student loan servicer or registered as a federal student loan servicer shall be clearly shown on all solicitations and advertisements, including business cards and Internet web sites, and any other documents as established by rule, regulation or order of the commissioner, and shall be clearly stated in all audio solicitations and advertisements. The solicitations and advertisements of any such licensee or registrant: (1) Shall not include any statement that such person is endorsed in any way by this state, except that such solicitations and advertisements may include a statement that such person is licensed or registered in this state; (2) shall not include any statement or claim that is deceptive, false or misleading; (3) shall otherwise conform to the requirements of sections 36a-846 to 36a-854, inclusive, any regulations issued thereunder and any other applicable law; and (4) shall be retained for two years from the date of use of such solicitation or advertisement.
(P.A. 15-162, S. 4; P.A. 18-173, S. 86; P.A. 21-130, S. 5; 21-138, S. 19.)
History: P.A. 15-162 effective July 1, 2016; P.A. 18-173 designated existing provisions re person licensed to act as student loan servicer as Subsec. (a) and amended same by deleting provision re written notice to commissioner re change of location of business and adding provisions re licensee's use of name other than approved legal name or fictitious name, filing change of name or address of licensee with the system, designated existing provisions re license not transferable or assignable as Subsec. (b) and amended same by adding provisions re change in control person to be subject of advance change notice, added Subsec.(c) re automatic suspension of license for violation of section, adding Subsec. (d) re filing information on the system or notifying commissioner in writing of occurrence of certain developments, added Subsec. (e) re filing or submitting information on system in accordance with procedures and requirements of system, payment of fees, and timely submission of accurate reports of condition to the system, added Subsec. (f) re unique identifier and solicitations and advertisements; P.A. 21-130 amended Subsec. (a) by deleting “within this state”, adding “private” re student loan servicers licensed under Sec. 36a-847 and adding “under section 36a-847 or registered to act as a federal student loan servicer under section 36a-847a”, amended Subsec. (b) by adding definition of “change of control”, amended Subsec. (c) by designating existing provision re automatic suspension of license as new Subdiv. (1), redesignating existing Subdivs. (1) and (2) as Subparas. (A) and (B) and adding new Subdiv. (2) re commissioner's authority to impose civil penalty against registrants, amended Subsecs. (d) and (e) by adding “private” re student loan servicer licensees and adding “and each federal student loan servicer registrant”, amended Subsec. (f) by replacing “under section 36a-847” with “as a private student loan servicer or registered as a federal student loan servicer”, replacing “person licensed under section 36a-847” with “such licensee or registrant” and adding “or registered” in Subdiv. (1), added references to “registrant” and “registration” throughout, and made technical and conforming changes; P.A. 21-138 defined “change of control” in Subsec (b).
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Sec. 36a-849. Records to be maintained by licensee. (a) Except as otherwise required pursuant to federal law, a federal student loan agreement or by a contract with the United States Department of Education, each private student loan servicer licensee and each federal student loan servicer registrant shall maintain adequate records of each student education loan transaction for not less than two years following the final payment on such student education loan or the assignment of such student education loan, whichever occurs first, or such longer period as may be required by any other provision of law.
(b) Except as otherwise required pursuant to federal law, a federal student loan agreement or by a contract with the United States Department of Education, each private student loan servicer licensee and each federal student loan servicer registrant shall, if requested by the commissioner, make such records available or send such records to the commissioner by registered or certified mail, return receipt requested, or by any express delivery carrier that provides a dated delivery receipt, not later than five business days after requested by the commissioner to do so. Upon request, the commissioner may grant a licensee or registrant additional time to make such records available or send the records to the commissioner.
(P.A. 15-162, S. 5; P.A. 16-65, S. 61; P.A. 21-130, S. 6.)
History: P.A. 15-162 effective July 1, 2016; P.A. 16-65 amended Subsec. (a) by deleting provision re persons exempt from licensure and amended Subsec. (b) by adding “licensee” re student loan servicer, effective July 1, 2016; P.A. 21-130 amended Subsec. (a) by replacing “Each” with “Except as otherwise required pursuant to federal law, a federal student loan agreement or by a contract with the United States Department of Education, each private” and adding “and each federal student loan servicer registrant”, and amended Subsec. (b) by replacing “If requested by the commissioner, each” with “Except as otherwise required pursuant to federal law, a federal student loan agreement or by a contract with the United States Department of Education, each private”, replacing “shall” with “and each federal student loan registrant shall, if requested by the commissioner,” and adding “or registrant”, effective July 1, 2021.
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Sec. 36a-850. Prohibited activities of student loan servicers and control persons. No student loan servicer and no control person of a student loan servicer shall, directly or indirectly:
(1) Employ any scheme, device or artifice to defraud or mislead student loan borrowers;
(2) Engage in any unfair or deceptive practice toward any person or misrepresent or omit any material information in connection with the servicing of a student education loan, including, but not limited to, misrepresenting the amount, nature or terms of any fee or payment due or claimed to be due on a student education loan, the terms and conditions of the loan agreement or the borrower's obligations under the loan;
(3) Obtain property by fraud or misrepresentation;
(4) Knowingly misapply or recklessly apply student education loan payments to the outstanding balance of a student education loan;
(5) Knowingly or recklessly provide inaccurate information to a credit bureau, thereby harming a student loan borrower's creditworthiness;
(6) Fail to report both the favorable and unfavorable payment history of the student loan borrower to a nationally recognized consumer credit bureau at least annually if the student loan servicer regularly reports information to a credit bureau;
(7) Refuse to communicate with an authorized representative of the student loan borrower who provides a written authorization signed by the student loan borrower, provided the student loan servicer may adopt procedures reasonably related to verifying that the representative is in fact authorized to act on behalf of the student loan borrower;
(8) Negligently make any false statement or knowingly and wilfully make any omission of a material fact in connection with any information or reports filed with a governmental agency or in connection with any investigation conducted by the commissioner or another governmental agency; or
(9) Unless otherwise required pursuant to federal law, a federal student loan agreement or by a contract between a federal student loan servicer and the United States Department of Education, fail to establish, enforce and maintain policies and procedures for supervising employees, agents and office operations that are reasonably designed to achieve compliance with applicable student loan servicing laws and regulations or fail to comply with the service standards set by the commissioner in accordance with section 59 of public act 16-65*; or
(10) Engage in an abusive act or practice, as described in Section 1031 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, P.L. 111-203, as amended from time to time, when servicing a student education loan.
(P.A. 15-162, S. 6; P.A. 16-65, S. 62; P.A. 17-233, S. 33; P.A. 18-173, S. 87; P.A. 21-130, S. 7; 21-190, S. 2.)
*Note: Section 59 of public act 16-65 is special in nature and therefore has not been codified but remains in full force and effect according to its terms.
History: P.A. 15-162 effective July 1, 2016; P.A. 16-65 added “licensee” re student loan servicer, effective July 1, 2016; P.A. 17-233 replaced “No student loan servicer licensee shall” with “No person who is required to be licensed and who is subject to the provisions of sections 36a-846 to 36a-854, inclusive, and no control person shall, directly or indirectly”, amended Subdiv. (1) by deleting “Directly or indirectly”, amended Subdiv. (8) by replacing “Banking Commissioner” with “commissioner”, added Subdiv. (9) re the failure to establish, enforce and maintain policies and procedures, and made technical changes; P.A. 18-173 added Subdiv. (10) re failure to comply with standards set by commissioner and made a technical change; P.A. 21-130 replaced “person who is required to be licensed and who is subject to the provisions of sections 36a-846 to 36a-854, inclusive,” with “student loan servicer”, added “of a student loan servicer” re control persons, deleted “licensee” in Subdivs. (6) and (7), added “Unless otherwise required pursuant to federal law, a federal student loan agreement or by a contract between a federal student loan servicer and the United States Department of Education” in Subdiv. (9), redesignated former Subdiv. (10) re failure to comply with service standards set by commissioner as Subdiv. (9), and made technical changes, effective July 1, 2021; P.A. 21-190 amended Subdiv. (9) by adding “Unless otherwise required pursuant to federal law, a federal student loan agreement or by a contract between a federal student loan servicer and the United States Department of Education” and the provisions of former Subdiv. (10) re failure to comply with the service standards set by the commissioner, deleted former Subdiv. (10) and added new Subdiv. (10) re engagement in an abusive act or practice under the Dodd-Frank Wall Street Reform and Consumer Protection Act and made a conforming change, effective July 1, 2021
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Sec. 36a-850a. Required activities of a private student loan servicer. Limitations to applicability. (a) In servicing a private student education loan, a private student education loan servicer shall:
(1) Prior to sending the first billing statement on a private student education loan or immediately upon receipt of a private student education loan following the transfer or assignment of such private student education loan, provide to the student loan borrower, and to any cosigner of such private student education loan, information concerning the rights and responsibilities of such student loan borrower and cosigner, including information regarding (A) how such private student education loan obligation will appear on the cosigner's consumer report, (B) how the cosigner will be notified if the private student education loan becomes delinquent, including how the cosigner can cure the delinquency in order to avoid negative credit furnishing and loss of cosigner release eligibility, and (C) eligibility for release of the cosigner's obligation on such private student education loan, including number of on-time payments and any other criteria required to approve the release of the cosigner from the loan obligation;
(2) Send annual written notice to all student loan borrowers and cosigners relating to information about cosigner release, including the criteria the private student education loan servicer requires to approve the release of a cosigner from a private student education loan obligation and the process for applying for cosigner release;
(3) Upon satisfaction by the student loan borrower of the applicable consecutive on-time payment requirement for purposes of cosigner release eligibility, send, in writing, to such student loan borrower and cosigner (A) a notification that such consecutive on-time payment requirement has been satisfied and that such cosigner may be eligible for cosigner release, and (B) information relating to the procedure for applying for cosigner release and any additional criteria that a cosigner must satisfy in order to be eligible for cosigner release. Such notification and information shall be sent by either United States mail or electronic mail, provided such student loan borrower has elected to receive electronic communications from the private student education loan servicer;
(4) In the event that an application for a cosigner release is incomplete, provide, in writing, (A) notice to the student loan borrower and cosigner that such application is incomplete, and (B) a description of the information that is missing or the additional information that is needed to consider the application complete and the date by which the borrower or cosigner are required to provide such information;
(5) Not later than thirty days following the submission of an application for cosigner release, send to the student loan borrower and cosigner a written notice of the decision that such application has been approved or denied. If the application for cosigner release has been denied, such written notice shall inform such student loan borrower and cosigner that such student loan borrower and cosigner have the right to request all documents and information used by the private student education loan servicer in its decision to deny such application, including the credit score threshold used by the private student education loan servicer, the consumer report of such student loan borrower or cosigner, the credit score of such student loan borrower or cosigner, and any other documents that are relevant or specific to such student loan borrower or cosigner. The private student education loan servicer shall provide such student loan borrower and cosigner with any adverse action notices required under federal law if the denial of such application was based in whole or in part on any information contained in a consumer report;
(6) Include the information described in subdivision (2) of this section in any response to an application for cosigner release;
(7) Refrain from imposing any restrictions on a student loan borrower or cosigner that may permanently prevent such student loan borrower or cosigner from qualifying for a cosigner release, including, but not limited to, restrictions on the number of times a student loan borrower or cosigner may apply for cosigner release;
(8) Refrain from imposing any negative consequences on a student loan borrower or cosigner during the sixty days following issuance of the notice described in subdivision (4) of this section, or until a final decision concerning a student loan borrower or cosigner's application for cosigner release is made. For purposes of this subdivision, “negative consequences” includes, but is not limited to, the imposition of additional eligibility criteria, negative credit reporting, lost eligibility for a cosigner release, late fees, interest capitalization or other financial penalties or injury;
(9) Refrain from requiring a student loan borrower to make more than twelve consecutive on-time payments as part of the eligibility criteria for cosigner release. Such private student education loan servicer shall consider any student loan borrower who has paid the equivalent of twelve months of principal and interest during any twelve-month period to have satisfied the consecutive on-time payment requirement, even if such student loan borrower has not made payments monthly during such twelve-month period;
(10) Upon receipt of a request by a student loan borrower or cosigner to a change that results in restarting the count of consecutive on-time payments required for cosigner release eligibility, provide to such student loan borrower and cosigner written notification of the impact of such change on cosigner release eligibility and an opportunity to withdraw or reverse such change for purposes of avoiding such impact;
(11) Provide a student loan borrower or cosigner (A) the right to request an appeal of a determination to deny a cosigner release application, (B) an opportunity to submit additional information or documentation evidencing that such student loan borrower has the ability, willingness and stability to make his or her payment obligations, and (C) the right to request that a different employee of the private student education loan servicer review and make a determination on the application for a cosigner release;
(12) Establish and maintain a comprehensive record management system reasonably designed to ensure the accuracy, integrity and completeness of data and other information about cosigner release applications. Such system shall include the number of cosigner release applications received, the approval and denial rate of such applications and the primary reasons for denial of such applications;
(13) In the event that a cosigner has a total and permanent disability, as determined by any federal or state agency or doctor of medicine or osteopathy legally authorized to practice in the state, and unless otherwise expressly prohibited under the terms of a private student education loan agreement, (A) release the cosigner from his or her obligation to repay the private student education loan upon receipt of notification that such cosigner has a total and permanent disability, and (B) refrain from requiring that a new cosigner be added to such private student education loan after the original cosigner has been released from such private student education loan;
(14) Provide the cosigner of a private student education loan with access to the same documents and records associated with the private student education loan that are available to the student loan borrower of such private student education loan; and
(15) If a student loan borrower has electronic access to documents and records associated with a private student education loan, provide equivalent electronic access to such documents and records to the cosigner of such private student education loan.
(b) The provisions of subsection (a) of this section shall not apply to the following persons: (1) Any bank, out-of-state bank that has a physical presence in the state, Connecticut credit union, federal credit union or out-of-state credit union; (2) any wholly owned subsidiary of any such bank or credit union; (3) any operating subsidiary where each owner of such operating subsidiary is wholly owned by the same bank or credit union; and (4) the Connecticut Higher Education Supplemental Loan Authority.
(P.A. 21-190, S. 3, 4.)
History: P.A. 21-190, S. 3, codified by the Revisors as Subsec. (a), and S. 4, codified by the Revisors as Subsec. (b), effective July 1, 2021.
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Sec. 36a-851. Commissioner's authority re investigations and examinations. Prohibited acts by subjects of investigation or examination. (a) In addition to any authority provided under this title, the commissioner shall have the authority to conduct investigations and examinations as follows:
(1) For purposes of initial licensing or registration, license renewal, license suspension, license revocation or termination, or general or specific inquiry or investigation to determine compliance with sections 36a-846 to 36a-854, inclusive, the commissioner may access, receive and use any books, accounts, records, files, documents, information or evidence including, but not limited to, (A) criminal, civil and administrative history information; (B) personal history and experience information, including independent credit reports obtained from a consumer reporting agency described in Section 603(p) of the Fair Credit Reporting Act, 15 USC 1681a; and (C) any other documents, information or evidence the commissioner deems relevant to the inquiry or investigation regardless of the location, possession, control or custody of such documents, information or evidence.
(2) For the purposes of investigating violations or complaints arising under sections 36a-846 to 36a-854, inclusive, or for the purposes of examination, the commissioner may review, investigate or examine any student loan servicer or person subject to said sections as often as necessary in order to carry out the purposes of said sections. The commissioner may direct, subpoena or order the attendance of and examine under oath all persons whose testimony may be required about the student education loan or the business or subject matter of any such examination or investigation, and may direct, subpoena or order such person to produce books, accounts, records, files and any other documents the commissioner deems relevant to the inquiry.
(b) In making any examination or investigation authorized by this section, the commissioner may control access to any documents and records of the student loan servicer or person under examination or investigation. The commissioner may take possession of the documents and records or place a person in exclusive charge of the documents and records in the place where they are usually kept. During the period of control, no person shall remove or attempt to remove any of the documents and records except pursuant to a court order or with the consent of the commissioner. Unless the commissioner has reasonable grounds to believe the documents or records of the student loan servicer or person have been, or are at risk of being, altered or destroyed for purposes of concealing a violation of sections 36a-846 to 36a-854, inclusive, the student loan servicer or owner of the documents and records shall have access to the documents or records as necessary to conduct its ordinary business affairs.
(c) In order to carry out the purposes of this section, the commissioner may:
(1) Retain attorneys, accountants or other professionals and specialists as examiners, auditors or investigators to conduct or assist in the conduct of examinations or investigations;
(2) Enter into agreements or relationships with other government officials or regulatory associations in order to improve efficiencies and reduce regulatory burden by sharing resources, standardized or uniform methods or procedures, and documents, records, information or evidence obtained under this section;
(3) Use, hire, contract or employ public or privately available analytical systems, methods or software to examine or investigate the student loan servicer or person subject to sections 36a-846 to 36a-854, inclusive;
(4) Accept and rely on examination or investigation reports made by other government officials, within or without this state; and
(5) Accept audit reports made by an independent certified public accountant for the student loan servicer or person subject to sections 36a-846 to 36a-854, inclusive, in the course of that part of the examination covering the same general subject matter as the audit and may incorporate the audit report in the report of examination, report of investigation or other writing of the commissioner.
(d) The authority of this section shall remain in effect, whether such student loan servicer or person subject to sections 36a-846 to 36a-854, inclusive, acts or claims to act under any licensing or registration law of this state, or claims to act without such authority.
(e) No student loan servicer or person subject to investigation or examination under this section may knowingly withhold, abstract, remove, mutilate, destroy or secrete any books, records, computer records or other information.
(P.A. 15-162, S. 7; P.A. 21-130, S. 8.)
History: P.A. 15-162 effective July 1, 2016; P.A. 21-130 replaced “Banking Commissioner” with “commissioner” in Subsec. (a), added “or registration” in Subsec. (a)(1), and deleted references to “licensee” throughout, effective July 1, 2021.
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Sec. 36a-852. Suspension, revocation or refusal to renew license or registration. Removal from office and from employment or retention. Temporary order to cease business. (a) The commissioner may suspend, revoke or refuse to renew any license issued under section 36a-847, or take any other action, in accordance with section 36a-51, if the commissioner finds that (1) the licensee or any control person, qualified individual, branch manager, trustee, employee or agent of the licensee has violated any provision of this title or any regulation or order adopted or issued pursuant thereto pertaining to such person, or any other law or regulation applicable to the conduct of such licensee's student loan servicing business, or (2) any fact or condition exists which, if it had existed at the time of the original application for the license, clearly would have warranted a denial of such license.
(b) The commissioner may suspend, revoke or refuse to renew any registration filed pursuant to section 36a-847a if any fact or condition exists which, if it had existed at the time of filing for registration, would have precluded eligibility for such registration.
(c) Whenever it appears to the commissioner that any (1) person has violated, is violating or is about to violate any of the provisions of sections 36a-846 to 36a-854, inclusive, or any regulation adopted pursuant to said sections, (2) person is, was or would be a cause of the violation of any such provision or regulation due to an act or omission such person knew or should have known would contribute to such violation, or (3) any licensee or registrant or any control person, qualified individual, branch manager, trustee, employee or agent of such licensee or registrant has committed any fraud, engaged in dishonest activities or made any misrepresentation, the commissioner may take action against such person, licensee or registrant in accordance with sections 36a-50 and 36a-52.
(d) The commissioner may order a licensee to remove any individual conducting business under sections 36a-846 to 36a-854, inclusive, from office and from employment or retention as an independent contractor in the student loan servicer business in this state in accordance with section 36a-51a.
(e) The commissioner may issue a temporary order to cease business under a license if the commissioner determines that such license was issued erroneously. Such temporary order shall be issued in accordance with subsection (j) of section 36a-24b.
(P.A. 15-162, S. 8; P.A. 18-173, S. 88; P.A. 21-130, S. 9.)
History: P.A. 15-162 effective July 1, 2016; P.A. 18-173 amended Subsec. (a) by replacing reference to Sec. 36a-847(c) with reference to Sec. 36a-847, adding reference to control person, qualified individual, branch manager, trustee, employee or agent of licensee, replacing “any provision of sections 36a-846 to 36a-854, inclusive, or any regulation or order lawfully made pursuant to and within the authority of said sections” with “any provision of this title or any regulation or order adopted or issued pursuant thereto pertaining to such person, or any other law or regulation applicable to the conduct of such licensee's student loan servicing business” in Subdiv. (1), and deleting provision re abatement of license fee in Subdiv. (2), amended Subsec. (b) by designating existing provision re violation of sections or regulation as Subdiv. (1), adding Subdiv. (2) re person is, was or would be cause of violation of provision of section or regulation, designating existing provision re fraud, dishonest activities or misrepresentation as Subdiv. (3) and amending same by replacing owner, director, officer, member, partner, shareholder” with “control person, qualified individual, branch manager”, added Subsec. (c) re commissioner's authority to order licensee to remove individual from office, employment or retention as independent contractor, and added Subsec. (d) re temporary order; P.A. 21-130 added new Subsec. (b) re commissioner's authority to suspend, revoke or refuse to renew registration, redesignated existing Subsec. (b) as new Subsec. (c) and amended same by adding references to “or registrant”, and redesignated existing Subsecs. (c) and (d) as new Subsec. (d) and Subsec. (e), effective July 1, 2021.
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Sec. 36a-855. Action for damages, fees, costs and equitable relief. Class actions. (a) Any student loan borrower, class of student loan borrowers or the legal representative of such borrower or borrowers aggrieved by a violation of any provision of sections 36a-846 to 36a-854, inclusive, by a student loan servicer, may bring an action in the Superior Court. Upon finding that a student loan servicer has violated any provision of said sections, the court may award a prevailing party actual damages, reasonable attorneys' fees and court costs, and may, in its discretion, award punitive damages and restitution of property and may provide such equitable relief as it deems appropriate.
(b) In addition to the judicial relief provided under subsection (a) of this section, in any civil action brought under this section in which the student loan borrower prevails, the court may award treble damages upon a finding that the student loan servicer has engaged in conduct that substantially interferes with (1) such student loan borrower's right to an alternative payment arrangement, loan forgiveness, cancellation or discharge of the student loan borrower's student education loan, or (2) any other financial benefit (A) established under the terms of such student loan borrower's promissory note, or (B) pursuant to the Higher Education Act of 1965, as amended from time to time, or the regulations adopted thereunder.
(c) Any student loan borrower, or the legal representative of such borrower, entitled to bring an action under subsection (a) of this section may, pursuant to rules established by the judges of the Superior Court, bring a class action on behalf of themselves and other similarly situated student loan borrowers to recover damages.
(d) The remedies provided under this section shall be in addition to any other remedies provided under state or federal law, and a student loan borrower shall not be required to exhaust any administrative remedies established pursuant to sections 36a-846 to 36a-854, inclusive, prior to bringing an action under this section.
(P.A. 21-130, S. 17.)
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