Substitute Senate Bill No. 1398 seeks to strengthen community reinvestment efforts by banks and credit unions in Connecticut, with a particular focus on supporting minority- and women-owned businesses. The bill introduces new definitions for "minority," "minority-owned business," and "women-owned business," stipulating that at least fifty-one percent of the capital stock or assets must be owned by individuals from these groups who are actively involved in management. It also mandates that banks consider the credit needs of low- and moderate-income neighborhoods, as well as minority and women-owned businesses, when defining their assessment areas for community reinvestment. The bill repeals and replaces existing subsections of sections 36a-30, 36a-32, and 36a-34 of the general statutes, effective October 1, 2025, and requires the commissioner to evaluate banks' performance in meeting these community credit needs, providing a public rating system for transparency.

Additionally, the bill modifies the approval process for banking transactions, ensuring that any acquiring bank or holding company demonstrates compliance with the Community Reinvestment Act (CRA) and adequately serves the banking needs of all community members, particularly low-income, minority-owned, and women-owned businesses. It emphasizes the importance of nondiscriminatory banking practices and allows the commissioner to exempt eligible entities from certain filing requirements. By enhancing the accountability of financial institutions in serving diverse community needs, the bill aims to prevent monopolistic practices in the banking sector and ensure that historically underserved groups receive equitable access to banking services.

Statutes affected:
Raised Bill:
BA Joint Favorable Substitute:
File No. 292: