Raised Bill No. 187 proposes amendments to the consumer credit statutes, focusing on the cancellation of surety bonds by surety companies and the regulation of various financial service licensees. The bill mandates that surety companies provide a thirty-day written notice of bond cancellation to both the principal and the commissioner, exclusively through an electronic system, removing the option for certified mail. It also details the repercussions of bond cancellation, which include the automatic suspension of licenses for mortgage lenders, brokers, and debt negotiation licensees, and the inactivation of licenses for mortgage loan originators sponsored by these entities. To avoid suspension, the bill allows for the submission of a letter of reinstatement, a new bond, or evidence of business cessation and license surrender. The commissioner is required to notify the licensee of the suspension and offer a hearing in accordance with amended section 36a-51.

The bill also revises the definition of "sales finance company" and introduces new registration requirements for mortgage servicers, including exempt mortgage servicer registrants. It specifies that consumer collection agencies must operate under the name and location specified in their license and outlines the process for changing legal names or addresses. The bill sets forth new calculations for the principal amount of loans serviced and revises the cancellation process for surety bonds and related coverage. Additionally, it includes provisions for private student education loan servicers, requiring them to inform borrowers and cosigners about cosigner release eligibility and process. The bill removes certain restrictions that could prevent cosigner release and simplifies the numbering of subsequent sections. It also amends Section 36a-51 to include procedures related to the suspension, revocation, or refusal to renew licenses or registrations, and clarifies the commissioner's authority to impose penalties and institute proceedings against surrendered or expired licenses or registrations. The bill is effective October 1, 2024, and includes various insertions and deletions to update the general statutes accordingly.

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