House Bill 5142 (sHB5142 File No. 637) proposes comprehensive amendments to Connecticut's banking, securities, and mortgage laws, with various effective dates primarily in October 2024 and July 2024. The bill revises procedures for surety bond cancellations, requiring all cancellations to be done electronically and mandating updates to surety bonds when banking licensees change their legal names. It expands the definition of activities requiring licensure for sales finance companies, small loan lenders, mortgage servicers, and education loan servicers. The bill also requires licensed mortgage lenders to register as "exempt mortgage servicer registrants" on the Nationwide Multistate Licensing System (NMLS) before acting as mortgage servicers and authorizes the banking commissioner to enforce actions against these registrations.

The bill extends the requirements for private student education loan servicers to include private education lenders and creditors, mandating disclosures about cosigner rights and responsibilities and providing options for cosigner release under certain conditions. It broadens the commissioner’s enforcement authority to include censure and bar over registered securities broker-dealers, broker-dealer agents, investment advisors, and investment advisor agents. The bill establishes disclosure requirements for mortgage lenders offering shared appreciation agreements and replaces the term "uninsured banks" with "innovation banks," allowing them to accept nonretail deposits eligible for FDIC insurance. Additionally, it adds federal banks and out-of-state banks, reinstating federal credit unions to the treasurer’s Community Banking Program’s list of eligible participants and makes technical changes to several banking laws, a securities provision, and a mortgage statute. The Banking Committee has given a Joint Favorable Substitute with a vote of Yea 8 Nay 4 on March 12, 2024.

Statutes affected:
BA Joint Favorable Substitute:
File No. 200:
File No. 637: