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Senate Bill No. 218
Public Act No. 26-79
AN ACT CONCERNING THE COMMUNITY BANK AND CREDIT
UNION INVESTMENT PROGRAM, MORTGAGE PAYMENTS,
PENALTIES FOR VIOLATIONS OF RENTAL SECURITY DEPOSIT
REQUIREMENTS, CERTAIN APPROVALS BY THE BANKING
COMMISSIONER, CONNECTICUT BRANCH APPLICATIONS AND
SECURED CREDIT CARDS.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:
Section 1. Section 3 -24k of the general statutes is repealed and the
following is substituted in lieu thereof (Effective October 1, 2026):
(a) The State Treasurer may establish a program under which the
State Treasurer may, based on cash availability, make available a pool
of funds not exceeding three hundred million dollars for investment
with eligible community banks and community credit unions. Such
funds shall be obtained from the state's operating cash managed by the
State Treasurer.
(b) (1) The State Treasurer shall establish eligibility criteria for any
program established under subsection (a) of this section. Such eligibility
criteria shall include, at a minimum, an asset limit for community banks
and community credit unions to participate in such program. Such asset
limit shall provide that: (A) During the period beginning July 1, 2023,
and ending September 29, 2024, no community bank or community
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credit union with assets exceeding two billion dollars may participate in
such program; and (B) beginning September 30, 2024, no community
bank or community credit union may participate in such program if
such community bank's or community credit union's a ssets exceed the
sum of (i) the preceding asset limit established by the State Treasurer,
and (ii) the median percentage loan growth of community banks and
community credit unions eligible for the program at the time when the
State Treasurer establishes su ch asset limit. As used in this subsection,
"median percentage loan growth" means the middle value representing
the percentage increase or decrease, as the case may be, in loan assets
over a period of time reflected on the balance sheet of a specified group
of lenders.
(2) Not later than July 1, 2024, and annually thereafter, the State
Treasurer shall provide to the Department of Banking a list of the
community banks and community credit unions that are eligible to
participate in such program at the time when the State Treas urer
provides each such list to the department. Not later than August 31,
2024, and annually thereafter, the Department of Banking shall provide
to the State Treasurer the median percentage loan growth of each such
community bank and community credit union.
(c) The State Treasurer shall establish a schedule for making such
investments with such banks and credit unions.
(d) The State Treasurer shall establish a [competitive bidding ]
procedure under which such banks and credit unions may [compete]
apply for investment-related services under said program. Under such
procedure, the State Treasurer may accept rates for such investment-
related services that are not greater than one hundred basis points below
the previous day's yield for an appropriately comparative United States
Treasury security with the same maturity date as the maturity date
applicable to such investment -related services, as determined by the
State Treasurer.
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(e) The State Treasurer may establish capital standards for such banks
and credit unions wishing to participate in said program.
Sec. 2. Subsection (i) of section 49-8a of the general statutes is repealed
and the following is substituted in lieu thereof (Effective October 1, 2026):
(i) (1) A mortgagee shall accept, as payment tendered for satisfaction
or partial satisfaction of a mortgage loan, a bank check, certified check,
attorney's clients' funds account check, title insurance company check,
wire transfer or any other form of payment aut horized under federal
law.
(2) As used in this subdivision, (A) "mortgage loan" means a loan
secured by a mortgage on residential real property, which loan is
granted by a mortgagee to a mortgagor, (B) "mortgagee" means the
owner or servicer of the debt secured by a mortgage, (C) "mortg agor"
means any person obligated to repay a mortgage loan, (D) "residential
real property" means a one -to-four family dwelling, occupied as a
residence by a mortgagor , and (E) "prepayment" means a payment
toward the outstanding principal amount of a mo rtgage loan beyond
the monthly payment due on such mortgage loan. For a mortgage loan
made on or after January 1, 2027, a mortgagee shall accept a full or
partial prepayment from a mortgagor, which prepayment shall reduce,
in whole or in part, the amount of principal that a mortgagor owes on
the mortgage loan, provided the mortgagee may apply the prepayment
to an amount that is owed under the mortgage loan other than the
principal amount, as permitted by the terms of the mortgage loan. The
mortgagee shall apply such prepayment in accordance with applicable
state and federal laws and regulations. A payment on a mortgage loan
that a mortgagor intends as a prepayment shall not be considered a
prepayment under this subdivision unless all monthly payments due on
the mortgage loan have been paid at the time the mortgagor delivers
such payment. A prepayment shall not result in any change to the due
date or the amount of the mortgagor's monthly payment due on the
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mortgage loan unless the mortgagee agrees in writing to such change.
A mortgagee shall not assess a prepayment charge with respect to any
prepayment if such charge is prohibited by any state or federal law or
regulation, provided, with respect to a mortgage loan insured by the
Federal Housing Administration, the mortgagor may be required to
reimburse the mortgagee up to the full amount of any charge, premium
or fee required by any state or federal law or regulation of th e Federal
Housing Administration to be paid by the mortgagee upon payment of
the mortgage loan prior to the date fixed for such payment.
Sec. 3. Subdivision (1) of subsection (j) of section 47a -21 of the 2026
supplement to the general statutes is repealed and the following is
substituted in lieu thereof (Effective October 1, 2026):
(j) (1) Except as provided in subdivision (2) of this subsection, the
commissioner may receive and investigate complaints regarding any
alleged violation of [subsections] subsection (b), (d), (h) or (i) of this
section. For the purposes of such investigation, any person who is or
was a landlord shall be subject to the provisions of section 36a-17. If the
commissioner determines that any landlord has violated any provision
of this sec tion over which the commissioner has jurisdiction, the
commissioner may, in accordance with [section] sections 36a -50 and
36a-52, order such [person to] landlord to pay a civil penalty, cease and
desist from such practices and [to] comply with the provisio ns of this
section.
Sec. 4. Subsection (b) of section 36a -34 of the general statutes is
repealed and the following is substituted in lieu thereof (Effective October
1, 2026):
(b) The commissioner shall not grant any approval under section 36a-
125, subsections (b), (c) and (d) of section 36a -145, as amended by this
act, section 36a -181, section 36a -411 or subdivisions (1) and (2) of
subsection (a) of section 36a -412 unless the commissioner finds, in
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accordance with regulations adopted pursuant to chapter 54, that (1)
based on the most recent applicable performance evaluation and any
related information required by the commissioner, the entity has a
record of compliance with the requirements of federal CRA, sections
36a-30 to 36a -33, inclusive, to the extent applicable, and applicable
consumer protection laws; and (2) except as otherwise provided in this
subsection, if the entity, and in the case of an approval pursuant to
section 36a -411, the bank or a ny subsidiary bank of the Connecticut
holding company, received any overall rating other than an assigned
rating of "outstanding" on its most recent applicable community
reinvestment performance evaluation, or, in the case of an approval
under subsection (b), (c) or (d) of section 36a -145, as amended by this
act, if the entity received an overall rating of "needs to improve" or
"substantial noncompliance" on its most recent applicable community
reinvestment performance evaluation, the resulting entity will provide
adequate services to meet the banking needs of all community residents,
including low-income residents and moderate -income residents to the
extent permitted by its charter, in accordance with a plan submitted by
the applicant to the commissioner, i n such form and containing such
information as the commissioner may require, or, if acceptable to the
commissioner, in accordance with an approved strategic plan prepared
under federal CRA, or the relevant portion thereof, that is submitted by
the applicant to the commissioner. Upon receiving any such plan, the
commissioner shall make the plan available for public inspection and
comment at the Department of Banking and cause notice of its
submission and availability for inspection and comment to be published
in the department's weekly bulletin. With the concurrence of the
commissioner, the applicant or applicants shall publish, in the form of a
legal advertisement in a newspaper having a substantial circulation in
the area, notice of such plan's submission a nd availability for public
inspection and comment. The notice shall state that the inspection and
comment period will last for a period of thirty days from the date of
publication. The commissioner shall not make such finding until the
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expiration of such thirty -day period. In making such finding, the
commissioner shall, unless clearly inapplicable, consider, among other
factors, whether the plan identifies specific unmet credit and consumer
banking needs in the local community and specifies how such needs will
be satisfied, provides for sufficient distribution of banking services
among branches or satellite devices, or both, located in low -income
neighborhoods, contains adequate assurances that banking services will
be offered on a nondis criminatory basis and demonstrates a
commitment to extend credit for housing, small business and consumer
purposes in low -income neighborhoods. The submission of such plan
shall not be required in the case of an approval under subsection (d) of
section 36a-145, provided, the commissioner may require the filing of
such information in lieu of a plan as the commissioner deems
appropriate. If the commissioner determines that an applicant is an
eligible entity, the commissioner may (A) exempt such applicant from
the requirement that such applicant file a plan, or (B) require such
information in lieu of a plan as the commissioner deems appropriate.
Except with respect to an approval pursuant to section 36a -145, as
amended by this act, and section 36a -181, the commissioner shall not
approve the transaction if the transaction would result in a monopoly,
or would be in furtherance of any combination or conspiracy to
monopolize or attempt to monopolize the business of banking in this
state or if the commissioner determ ines that the effect of the proposed
transaction may be to substantially lessen competition, or would tend to
create a monopoly, or would be in restraint of trade, unless the
commissioner finds that the anticompetitive effects of the proposed
transaction are clearly outweighed in the public interest by the probable
effect of the transaction in meeting the convenience and needs of the
community to be served.
Sec. 5. Subsection (n) of section 36a -145 of the general statutes is
repealed and the following is substituted in lieu thereof (Effective October
1, 2026):
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(n) Upon receipt of an application pursuant to subdivision (1) of
subsection (b) of this section, subdivisions (1) and (4) of subsection (c)
of this section, subdivision (1) of subsection (d) of this section or
subsection (j) of this section, the commissioner shall cause notice of the
application to be published in the department's weekly bulletin. The
commissioner shall determine whether the applicant is an eligible
entity, as defined in section 36a -34, as amended by this act , and shall
promptly notify the applicant of such determination. An application by
an eligible entity shall be deemed approved on the [twelfth] fifth
business day after expiration of the comment period provided in the
department's weekly bulletin, unless the commissioner informs the
applicant, in writing, prior to such [twelfth] fifth business day, that (1)
an adverse comment has been received that warrants additional
investigation or review; (2) the application presents a significant
community reinvestment or compliance concern; (3) the application
presents a significant supervisory concern or raises significant legal or
policy issues; or (4) the application requires additional information. The
application may be deemed approved prior to the expiration of the
[twelfth] fifth business day if the commissioner issues a written notice
of the commissioner's intent not to disapprove the application.
Sec. 6. Subsection (a) of section 36a -32 of the general statutes is
repealed and the following is substituted in lieu thereof (Effective October
1, 2026):
(a) In connection with the examination of a bank under section 36a -
17, the commissioner shall assess the record of the performance of the
bank in helping to meet the credit needs of its entire community,
including low and moderate-income neighborhoods, consistent with the
safe and sound operation of the bank. The commissioner shall assess the
community reinvestment performance of a bank utilizing the applicable
methodology set forth in federal CRA. In addition, the commissioner
shall consider the following in assessing a bank's record of performance:
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(1) The bank's record of offering escrow accounts for purposes of
compliance with subsection (h) of section 47a-21;
(2) Efforts of the bank to work with delinquent residential mortgage
customers who are unemployed or underemployed to facilitate a
resolution of the delinquency; [and]
(3) Written comments received by the commissioner; and
(4) The bank's offering of a loan or deposit product designed to assist
residents of its local communities, including, but not limited to, low and
moderate-income individuals, in establishing or improving such
residents' credit history.