18 Sep Connecticut Legislative Update
The Connecticut legislature recently amended its laws concerning discrimination and enacted a new section to the state Penal Code relating to foreclosed real estate. Certain provisions of Connecticut’s laws related to the Department of Banking, and certain laws related to licensed mortgage lenders, mortgage correspondent lenders, mortgage brokers, mortgage loan originators, mortgage loan processors, underwriters and mortgage servicers were also amended. All the legislation discussed in this memorandum is effective October 1, 2017.
Connecticut Senate Bill 917
“Veteran” means any person honorably discharged from, or released under honorable conditions from active service in, the armed forces.
Current law states that it is a discriminatory practice for any person to subject, or cause to be subjected, any other person to the deprivation of any rights, privileges or immunities, secured or protected by the Constitution or laws of Connecticut or of the United States, on account of religion, national origin, alienage, color, race, sex, gender identity or expression, sexual orientation, blindness, mental disability, or physical disability. This law has been amended to add “status as a veteran” to the list of protected classes.
Under the Connecticut Human Rights and Opportunities laws, it is prohibited as a discriminatory act, in connection with various actions and activities, for a person or group to act or refuse to act with a person due to that person’s specific status. The protected class has been extended to include “status as a veteran.” It is a discriminatory act to act or refuse to act with a person due to his/her status as a veteran for various activities, including:
- Employment practices – hiring or discharging;
- Sale or rental of a dwelling or failure to do so;
- Engaging in residential real-estate-related transactions; and
- Engaging in a credit transaction.
Connecticut House Bill 7015
Any previous mortgagor of real property against whom a final judgment of foreclosure has been entered, who continues to collect rental payments on such property after passage of such mortgagor’s law day (the last date the mortgagor can redeem the property), and who has no legal right to do so, is subject to the penalties for larceny under Connecticut law.
Connecticut House Bill 7019
The Commissioner of the Department of Banking (“Commissioner”) may suspend, revoke or refuse to renew any mortgage lender, mortgage correspondent lender or mortgage broker license if the Commissioner finds that the licensee, any control person of the licensee, the qualified individual or branch manager with supervisory authority, trustee, employee or agent of such licensee has violated any regulation or order adopted or issued pursuant to the banking laws of Connecticut and pertaining to any such person or any other law or regulation applicable to the conduct of its business. This is in addition to those practices currently prohibited.
Connecticut House Bill 7141
In order to meet the pre-licensing education and testing requirements for a mortgage lender license, a mortgage correspondent lender license or a mortgage broker license, an individual must complete:
- At least 20 hours (previously 21) of approved education which includes at least:
- Three hours of instruction on relevant federal law and regulations;
- Three hours of ethics training, including instruction on fraud, consumer protection and fair lending issues; and
- Two hours of training related to lending standards for the nontraditional mortgage product marketplace.
- At least one hour of approved education on relevant Connecticut law.
If an individual has not obtained a mortgage loan originator license in any state or an active federal registration by the date that is three years from the date he/she completed 20 hours of pre-licensing education, he/she is required to retake 20 hours of pre-licensing education prior to being licensed as either a mortgage loan originator or a loan processor or underwriter.
If an individual previously held but no longer holds an approved mortgage loan originator license in any state or an active federal registration, he/she must obtain a mortgage loan license in any state or an active federal registration not later than three years from the date he/she last held such license or registration, or he/she must retake 20 hours of pre-licensing education prior to being licensed as a mortgage loan originator or loan processor or underwriter.
If an individual has not obtained a mortgage loan originator license or a loan processor or underwriter license in Connecticut by the date that is three years from the date such individual completed one hour of Connecticut specific pre-licensing education, he/she must retake one hour of Connecticut specific pre-licensing education prior to being licensed as a mortgage loan originator or loan processor or underwriter.
If an individual previously held but no longer holds an approved mortgage loan originator license or loan processor or underwriter license in Connecticut, he/she must obtain a mortgage loan originator license or loan processor or underwriter license in Connecticut not later than three years from the date he/she last held such license, or he/she is required to retake one hour of Connecticut specific pre-licensing education prior to being licensed as a mortgage loan originator or loan processor or underwriter.
Those licensed or required to be licensed must establish, enforce and maintain policies and procedures reasonably designed to achieve compliance with the requirements for such individuals. An individual who is required to be licensed as a mortgage loan originator and supervises loan processors or loan underwriters must enforce such policies and procedures.
As part of its application and upon a change to such information, a mortgage servicer must file with the Commissioner a current schedule of the range of costs and fees it charges borrowers for its servicing-related activities. At least annually, a licensee must file with the Commissioner a report in a form and format acceptable to the Commissioner detailing the mortgage servicer’s activities in Connecticut. They are no longer required to include details on workout arrangements in this annual report but must maintain such information and make it available to the Commissioner upon request.
The current law specifies activities which are prohibited by mortgage servicers. A mortgage servicer must establish, enforce and maintain policies and procedures reasonably designed to ensure the prohibited activities are not engaged in and all qualifying individuals or branch managers for such mortgage servicer must enforce such policies and procedures.