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Substitute Senate Bill No. 315

PUBLIC ACT NO. 96-109

AN ACT CONCERNING TECHNICAL REVISIONS TO THE BANKING LAWS OF CONNECTICUT.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. Subsection (j) of section 36a-136 of the general statutes is repealed and the following is substituted in lieu thereof:

(j) The commissioner shall approve a conversion under this section if the commissioner determines that: (1) The converting institution has complied with all applicable provisions of law; (2) the conversion would not result in any reduction of the converting institution's amount of equity capital, less any subordinated debt reorganized as bona fide capital; (3) the conversion would not result in a taxable reorganization of the converting institution under the Internal Revenue Code of [1954] 1986, OR ANY SUBSEQUENT CORRESPONDING INTERNAL REVENUE CODE OF THE UNITED STATES, as from time to time amended; (4) approvals needed for deposit insurance by the Federal Deposit Insurance Corporation or its successor agency have been obtained; and (5) the plan of conversion is fair to depositors.

Sec. 2. Subsection (a) of section 36a-210 of the general statutes, as amended by section 17 of public act 95-155, is repealed and the following is substituted in lieu thereof:

(a) With the approval of the commissioner, (1) a Connecticut bank or a Connecticut credit union may sell all or a significant part of its assets and business to a bank, and (2) a Connecticut credit union may sell all or a significant part of its assets and business to a Connecticut credit union or a federal credit union. The selling Connecticut bank must have been in existence and continuously operating for at least five years unless the commissioner waives this requirement. The commissioner shall not approve such sale if the purchasing institution, including all insured depository institutions which are affiliates of such institution, upon consummation of the sale, would control thirty per cent or more of the total amount of deposits of insured depository institutions in this state, unless the commissioner permits a greater percentage of such deposits. The selling and purchasing institutions shall file with the commissioner a written agreement approved and executed by a majority of the governing board of each institution prescribing the terms and conditions of the transaction. In the case of a sale of all of the assets and business of the selling institution, the terms of the agreement shall at least provide for full payment of the amounts due depositors, share account holders and creditors of the selling institution. Payment for all or part of the assets of the selling institution may be made in cash or by making available on demand to depositors, share account holders and other creditors thereof funds on deposit with the purchasing institution. Prior to the sale of all or substantially all of the assets and business of an institution pursuant to this section, the selling institution shall obtain authorization for the sale by the affirmative vote of at least: [(1)] (A) Two-thirds of the voting power of the outstanding shares of each class of stock, whether or not otherwise entitled to vote, in the case of a capital stock Connecticut bank; [(2)] (B) two-thirds of the voting power of the members or depositors, in the case of a mutual savings and loan association or a Connecticut credit union; and [(3)] (C) two-thirds of the governing board and two-thirds of the voting power of the corporators, in the case of A mutual savings bank, which voting power shall, in any event, be no less than twenty-five corporators.

Sec. 3. Subsection (a) of section 36a-265 of the general statutes is repealed and the following is substituted in lieu thereof:

(a) (1) "Mortgage loan" means a loan secured by a first mortgage on one, two, three or four family, owner-occupied residential real property; (2) "Standard mortgage loan" means a mortgage loan authorized by section 36a-261, AS AMENDED, OR SECTION 36a-442 for the Connecticut bank or Connecticut credit union making such loan; (3) "Alternative mortgage loan" means a mortgage loan which is a reverse annuity mortgage loan or graduated payment mortgage loan, other than a standard mortgage loan; (4) "Reverse annuity mortgage loan" means a mortgage loan in which loan proceeds are advanced to the mortgagors, in installments, either directly or indirectly, and which together with unpaid interest, if any, is to be repaid in accordance with subdivision (2) of subsection (e) of this section; and (5) "Graduated payment mortgage loan" means a mortgage loan, other than a standard mortgage loan, in which principal and interest payments, if any, and the making of additional advances, if any, are designed to reflect the prospective increasing or decreasing income of the mortgagor.

Sec. 4. Section 36a-306 of the general statutes is repealed and the following is substituted in lieu thereof:

A [financial institution] CONNECTICUT BANK OR CONNECTICUT CREDIT UNION shall accept any identity card issued by the Department of Motor Vehicles in accordance with section 1-1h AS AMENDED as identification for establishing an account with the [financial institution] CONNECTICUT BANK OR CONNECTICUT CREDIT UNION or for any other purpose for which the [financial institution] CONNECTICUT BANK OR CONNECTICUT CREDIT UNION accepts as identification a motor vehicle operator's license. [As used in this section, "financial institution" means any state bank and trust company, savings bank, savings and loan association or credit union, organized under the laws of this state.]

Sec. 5. Section 36a-428 of the general statutes is repealed and the following is substituted in lieu thereof:

A foreign bank that has elected this state as its home state under the International Banking Act of 1978, 12 USC Section 3101 et seq., as from time to time amended, may establish and maintain in this state one or more state branches upon receipt of a license for each such branch from the commissioner at the location specified in such license. A foreign bank may establish and maintain in this state one or more state agencies upon receipt of a license for each such agency from the commissioner at the location specified in such license. Such licensed foreign bank shall be deemed to transact business or conduct affairs in this state for the purposes of section 33-396 or 33-505 and shall comply with the requirements of said sections. In establishing and maintaining a state branch or state agency, a foreign bank shall be subject to such regulations and orders as the commissioner considers appropriate to carry out the purposes of sections [36a-2, 36a-145, 36a-425 and] 36a-428 to 36a-428l, inclusive AS AMENDED BY THIS ACT.

Sec. 6. Subsection (a) of section 36a-428b of the general statutes is repealed and the following is substituted in lieu thereof:

(a) Except as otherwise specifically provided in sections [36a-2, 36a-145, 36a-425 and] 36a-428 to 36a-428l, inclusive, AS AMENDED BY THIS ACT or in regulations or orders adopted by the commissioner under said sections, operations of a foreign bank at a state branch or state agency in this state shall be conducted with the same rights and privileges as a Connecticut bank at the same location and shall be subject to all the same duties, restrictions, penalties, liabilities, conditions and limitations that would apply under the laws of this state to the operations of a Connecticut bank doing business at the same location.

Sec. 7. Subsection (c) of section 36a-428g of the general statutes is repealed and the following is substituted in lieu thereof:

(c) In establishing and maintaining a representative office, a foreign bank shall be subject to such regulations and orders as the commissioner considers appropriate to carry out the purposes of sections [36a-2, 36a-145, 36a-425 and] 36a-428 to 36a-428l, inclusive AS AMENDED BY THIS ACT. Such foreign bank shall be deemed to transact business or conduct affairs in this state for the purposes of section 33-396 or 33-505 and shall comply with the requirements of said sections.

Sec. 8. Section 36a-428j of the general statutes is repealed and the following is substituted in lieu thereof:

A license issued to a foreign bank to maintain a state branch, state agency or representative office in this state shall be revoked when voluntarily surrendered by such licensee or when such foreign bank is dissolved or its authority or existence is otherwise terminated or canceled in the country of its organization. The commissioner may suspend, revoke or refuse to renew any license issued to a foreign bank in accordance with the provisions of section 36a-51 for any reason which would be sufficient grounds for the commissioner to deny an application for such license under sections [36a-2, 36a-145, 36a-425 and] 36a-428 to 36a-428l, inclusive, AS AMENDED BY THIS ACT or if the commissioner finds that the licensee or any director, officer, partner, controlling shareholder, trustee, employee, agent or representative of such foreign bank has: (1) Made any material misstatement in the application or (2) violated or failed to comply with any of the provisions of this title applicable to such licensee or any of the regulations or orders of the commissioner made pursuant to said sections.

Sec. 9. Subsection (b) of section 36a-428l of the general statutes is repealed and the following is substituted in lieu thereof:

(b) For the purpose of any investigation, examination or proceeding under sections [36a-2, 36a-145, 36a-425 and] 36a-428 to 36a-428l, inclusive, AS AMENDED BY THIS ACT the commissioner may administer oaths and affirmations, subpoena witnesses, compel attendance of witnesses, take evidence, require written statements and require the production of any records relating to the activities of such branch, agency or representative office as the commissioner deems relevant or material. The commissioner may require that certified copies of any such records be provided to the commissioner at the commissioner's office.

Sec. 10. Subsection (a) of section 36a-486 of the general statutes is repealed and the following is substituted in lieu thereof:

(a) No person shall engage in the business of making first mortgage loans unless such person has first obtained a license in accordance with the provisions of sections 36a-485 to 36a-495, inclusive. No person shall engage in the first [loan] mortgage loan business in this state as a mortgage broker unless such person has first obtained a license in accordance with the provisions of said sections.

Sec. 11. Subsection (a) of section 36a-679 of the general statutes is repealed and the following is substituted in lieu thereof:

(a) The commissioner may adopt substantive regulations when authorized by sections 36a-675 to 36a-685, inclusive, AS AMENDED BY THIS ACTand may adopt procedural regulations to carry out the provisions of said sections. Such regulations shall be consistent with the policy of this state as provided in section 36a-677. The commissioner may adopt regulations to carry out the provisions of [subsection (c) of section 36a-535,] sections 36a-567 and 36a-568, subdivision [(12)] (13) of subsection (c) of section 36a-770, and sections 36a-771, 36a-774 and 36a-777. Such regulations shall be adopted in accordance with chapter 54 and shall not be inconsistent with the Consumer Credit Protection Act (15 USC 1601 et seq.). Sec. 12. Section 36a-681 of the general

statutes is repealed and the following is substituted in lieu thereof:

Any person who willfully and knowingly (1) gives false or inaccurate information or fails to provide information which such person is required to disclose under the provisions of [subsection (c) of section 36a-535,] sections 36a-567, 36a-568 and 36a-675 to 36a-685, inclusive, AS AMENDED BY THIS ACT subdivision [(12)] (13) of subsection (c) of section 36a-770, and sections 36a-771, 36a-774, 36a-777 and 36a-786, or any regulation adopted thereunder, (2) uses any chart or table authorized by the Federal Reserve Board under Section 107 of the Consumer Credit Protection Act (15 USC 1606) in such manner as to consistently understate the annual percentage rate determined under said sections or (3) otherwise fails to comply with any requirement imposed under said sections shall be fined not more than five thousand dollars or imprisoned not more than one year or both.

Sec. 13. Section 36a-682 of the general statutes is repealed and the following is substituted in lieu thereof:

(a) Any department or agency of the state or any political subdivision thereof which administers a credit program in which it extends, insures or guarantees consumer credit and in which it provides instruments to a creditor which contain any disclosures required by sections [36a-665 to] 36a-675 TO 36a-685, inclusive, AS AMENDED BY THIS ACT shall, prior to the issuance or continued use of such instruments, consult with the commissioner to assure that such instruments comply with said sections.

(b) No civil or criminal penalty provided under sections [36a-665 to] 36a-675 TO 36a-685, inclusive, AS AMENDED BY THIS ACT for any violation thereof may be imposed upon this state or any other state, or any political subdivision thereof, or any department or agency of any such state or political subdivision.

(c) A creditor shall not be held liable for a civil or criminal penalty under sections [36a-665 to] 36a-675 TO 36a-685, inclusive, AS AMENDED BY THIS ACT in any case in which the violation results from the use of an instrument required by any department or agency of: (1) The United States, with regard to any transaction which is part of a credit program administered, insured or guaranteed by such department or agency; or (2) this state or of any political subdivision of this state, with regard to any transaction which is part of a credit program administered, insured or guaranteed by such department or agency, provided that such department or agency has consulted with the commissioner to assure that such instrument complies with said sections as provided in subsection (a) of this section.

(d) A creditor shall not be held liable for a civil or criminal penalty under the laws of this state for any technical or procedural failure, such as a failure to use a specific form, to make information available at a specific place on an instrument, or to use a specific typeface, as required by the laws of this state, which is caused by the use of an instrument required to be used by any department or agency of: (1) The United States with regard to any transaction which is part of a credit program administered, insured or guaranteed by such department or agency; or (2) this state or any political subdivision of this state, with regard to any transaction which is part of a credit program administered, insured or guaranteed by such department or agency, provided that such department or agency has consulted with the commissioner to assure that such instrument complies with sections [36a-665 to] 36a-675 TO 36a-685, inclusive, AS AMENDED BY THIS ACT provided in subsection (a) of this section.

Sec. 14. Section 36a-683 of the general statutes is repealed and the following is substituted in lieu thereof:

(a) Except as otherwise provided in this section, any creditor who fails to comply with any requirement of sections [36a-665 to] 36a-675 TO 36a-685, inclusive, AS AMENDED BY THIS ACT including Section 125 of the Consumer Credit Protection Act (15 USC 1635), or of section 36a-771 or 36a-774, with respect to any person is liable to that person in an amount equal to the sum of (1) any actual damage sustained by such person as a result of the failure; (2) (A) (i) in the case of an individual action twice the amount of any finance charge in connection with the transaction, (ii) in the case of an individual action relating to a consumer lease under Chapter 5 of the Consumer Credit Protection Act (15 USC Sections 1667 to 1667E, inclusive) twenty-five per cent of the total amount of monthly payments under the lease, except that the liability under this subparagraph shall not be less than one hundred dollars nor greater than one thousand dollars; (B) in the case of a class action, such amount as the court may allow, except that as to each member of the class no minimum recovery shall be applicable, and the total recovery under this subparagraph in any class action or series of class actions arising out of the same failure to comply by the same creditor shall not be more than the lesser of five hundred thousand dollars or one per cent of the net worth of the creditor; and (3) in the case of any successful action to enforce the foregoing liability, or in any action in which a person is determined to have a right of rescission under Section 125 of the Consumer Credit Protection Act (15 USC 1635), the costs of the action, together with a reasonable attorney's fee as determined by the court. In determining the amount of award in any class action, the court shall consider, among other relevant factors, the amount of any actual damages awarded, the frequency and persistence of failures of compliance by the creditor, the resources of the creditor, the number of persons adversely affected, and the extent to which the creditor's failure of compliance was intentional. In connection with the disclosures referred to in Section 127 of the Consumer Credit Protection Act (15 USC 1637) a creditor shall have a liability determined under subdivision (2) of this subsection only for failing to comply with the requirements of Section 125 or 127(a) of said act (15 USC 1635) or (15 USC 1637(a)) or of paragraph (4), (5), (6), (7), (8), (9) or (10) of Section 127(b) of said act (15 USC 1637(b)). In connection with the disclosures referred to in Section 128 of said act (15 USC 1638) a creditor shall have a liability determined under subdivision (2) of this subsection only for failing to comply with the requirements of Section 125 of said act (15 USC 1635) or of paragraph (2), insofar as it requires a disclosure of the "amount financed", or paragraph (3), (4), (5), (6) or (9) of Section 128 (a) of said act (15 USC 1638(a)). With respect to any failure to make disclosures required under Chapter 2, 4 or 5 of said act, liability shall be imposed only upon the creditor required to make disclosure, except as provided in Section 131 of said act (15 USC 1641).

(b) A creditor or assignee has no liability under this section or section 36a-681 AS AMENDED BY SECTION 12 OF THIS ACT or 36a-684 AS AMENDED BY SECTION 15 OF THIS ACT for any failure to comply with any requirement imposed under sections [36a-665 to] 36a-675 TO 36a-685, inclusive, AS AMENDED BY THIS ACT if within sixty days after discovering an error, whether pursuant to a final written examination report or notice issued under subsection [(g)] (d) of section 36a-684, or through the creditor's or assignee's own procedures, and prior to the institution of an action under this section or the receipt of written notice of the error from the obligor, the creditor or assignee notifies the person concerned of the error and makes whatever adjustments in the appropriate account are necessary to insure that the person will not be required to pay an amount in excess of the charge actually disclosed, or the dollar equivalent of the annual percentage rate actually disclosed, whichever is lower.

(c) A creditor or assignee may not be held liable in any action brought under this section for a violation of sections [36a-665 to] 36a-675 TO 36a-685, inclusive, AS AMENDED BY THIS ACT if the creditor or assignee shows by a preponderance of evidence that the violation was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid any such error. Examples of a bona fide error include, but are not limited to, clerical, calculation, computer malfunction and programming, and printing errors, except that an error of legal judgment with respect to a person's obligations under said sections is not a bona fide error.

(d) When there are multiple obligors in a consumer credit transaction or consumer lease, there shall be no more than one recovery of damages under subdivision (2) of subsection (a) of this section for a violation of sections [36a-665 to] 36a-675 TO 36a-685, inclusive AS AMENDED BY THIS ACT.

(e) Any action under this section shall be brought in any court of competent jurisdiction within one year from the date of the occurrence of the violation. This subsection does not bar a person from asserting a violation of sections [36a-665 to] 36a-675 TO 36a-685, inclusive, AS AMENDED BY THIS ACT, in an action to collect the debt which was brought more than one year from the date of the occurrence of the violation as a matter of defense by recoupment or set-off in such action.

(f) No provision of this section, subsection [(g)] (d) of section 36a-684 or section 36a-681, AS AMENDED BY SECTION 12 OF THIS ACT imposing any liability shall apply to any act done or omitted in good faith in conformity with any provision of sections [36a-665 to] 36a-675 TO 36a-685, inclusive, AS AMENDED BY THIS ACT or with any rule, regulation, approval, or formal interpretation thereof by the commissioner, or in conformity with the Consumer Credit Protection Act (15 USC 1601 et seq.), including any rule or regulation adopted by the Federal Reserve Board pursuant to said act, or in conformity with any interpretation of said act by the Federal Reserve Board or in conformity with any interpretation or approval by an official or employee of the Federal Reserve System duly authorized by the Federal Reserve Board to issue such interpretations or approvals under such procedures as said board may prescribe therefor, notwithstanding that after such act or omission has occurred, such statute, rule, regulation, approval or interpretation is amended, rescinded, or determined by judicial or other authority to be invalid for any reason.

(g) The multiple failure to disclose to any person any information required under sections [36a-665 to] 36a-675 TO 36a-685, inclusive, AS AMENDED BY THIS ACT to be disclosed in connection with a single account under an open-end consumer credit plan, other single consumer credit sale, consumer loan, other extension of consumer credit or consumer lease, shall entitle the person to a single recovery under this section but continued failure to disclose after a recovery has been granted shall give rise to rights to additional recoveries. This subsection does not bar any remedy permitted by subsection (j) of this section.

(h) A person may not take any action to offset any amount for which a creditor or assignee is potentially liable to such person under subdivision (2) of subsection (a) of this section against any amount owed by such person, unless the amount of the creditor's or assignee's liability under sections [36a-665 to] 36a-675 TO 36a-685, inclusive, AS AMENDED BY THIS ACT has been determined by judgment of a court of competent jurisdiction in an action to which such person was a party. This subsection does not bar a consumer then in default on the obligation from asserting a violation of said sections as an original action, or as a defense or counterclaim to an action to collect amounts owed by the consumer brought by a person liable under said sections.

(i) Notwithstanding any other provision of sections [36a-665 to] 36a-675 TO 36a-685, inclusive, AS AMENDED BY THIS ACT (1) no person shall be entitled in any action to a recovery under this section for the failure to disclose any information required under said sections if a recovery is awarded in the same action under Section 130 of the Consumer Credit Protection Act (15 USC 1640) for the failure to disclose any information required under said sections; and (2) no person shall be entitled in any action brought under this section to a recovery if, prior to an award in any such action, a recovery has been awarded to such person in any action brought under Section 130 of the Consumer Credit Protection Act (15 USC 1640) in which the same act or omission was the basis of that action.

(j) (1) When an obligor exercises his right to rescind under Section 125 of the Consumer Credit Protection Act (15 USC 1635), he is not liable for any finance or other charge, and any security interest given by the obligor, including any such interest arising by operation of law, becomes void upon such a rescission. Within twenty days after receipt of a notice of rescission, the creditor shall return to the obligor any money or property given as earnest money, down payment or otherwise, and shall take any action necessary or appropriate to reflect the termination of any security interest created under the transaction. If the creditor has delivered any property to the obligor, the obligor may retain possession of it. Upon the performance of the creditor's obligations under this subsection and Section 125 of the Consumer Credit Protection Act (15 USC 1635), the obligor shall tender the property to the creditor, except that if return of the property in kind would be impracticable or inequitable, the obligor shall tender its reasonable value. Tender shall be made at the location of the property or at the residence of the obligor, at the option of the obligor. If the creditor does not take possession of the property within twenty days after tender by the obligor, ownership of the property vests in the obligor without obligation on his part to pay for it. The procedures described by this subdivision shall apply except when otherwise ordered by a court. (2) Notwithstanding any rule of evidence, written acknowledgment of receipt of any disclosures required under sections [36a-665 to] 36a-675 TO 36a-685, inclusive, AS AMENDED BY THIS ACT by a person to whom information, forms and a statement is required to be given pursuant to this subsection and Section 125 of the Consumer Credit Protection Act (15 USC 1635), does no more than create a rebuttable presumption of delivery thereof. (3) An obligor's right of rescission shall expire three years after the date of consummation of the transaction or upon the sale of the property, whichever occurs earlier, notwithstanding the fact that the information and forms required under this section and Section 125 of the Consumer Credit Protection Act (15 USC 1635), or any other disclosures required under sections [36a-665 to] 36a-675 TO 36a-685, inclusive, AS AMENDED BY THIS ACT have not been delivered to the obligor, except that if (A) the commissioner institutes a proceeding to enforce the provisions of this section, or Section 125 of the Consumer Credit Protection Act (15 USC 1635), made a part of said sections as provided in section 36a-678, within three years after the date of consummation of the transaction, (B) the commissioner finds a violation of this subsection or Section 125 of the Consumer Credit Protection Act (15 USC 1635), and (C) the obligor's right to rescind is based in whole or in part on any matter involved in such proceeding, then the obligor's right of rescission shall expire three years after the date of consummation of the transaction or upon the earlier sale of the property, or upon the expiration of one year following the conclusion of the proceeding, or any judicial review or period for judicial review thereof, whichever is later. (4) (A) In any credit transaction in which an obligor has the right to rescind under Section 125 of the Consumer Credit Protection Act (15 USC 1635), and the obligor does not exercise that right, a finance charge may not begin to accrue in connection with such transaction, until after midnight of the third business day following the consummation of the transaction. (B) Any obligor required to pay a finance charge, in violation of the provisions of this subdivision, may recover from the creditor twice the amount of such finance charge, costs and reasonable attorney's fees. (5) In any action in which it is determined that a creditor has violated subdivision (1), (2) or (3) of this subsection, in addition to rescission the court may award relief under other subsections of this section for violations of sections [36a-665 to] 36a-675 TO 36a-685, inclusive, AS AMENDED BY THIS ACT not relating to the right to rescind.

(k) (1) Except as otherwise specifically provided in sections [36a-665 to] 36a-675 TO 36a-685, inclusive, AS AMENDED BY THIS ACT any civil action for a violation of said sections or proceeding by the commissioner which may be brought against a creditor may be maintained against any assignee of that creditor only if the violation for which such action or proceeding is brought is apparent on the face of the disclosure statement, except where the assignment was involuntary. For the purpose of this section, a violation apparent on the face of the disclosure statement includes, but is not limited to, (A) a disclosure which can be determined to be incomplete or inaccurate from the face of the disclosure statement or other documents assigned, or (B) a disclosure not made in the terms required to be used by said sections. (2) Except as provided in subdivision (2) of subsection (j) of this section, in any action or proceeding by or against any subsequent assignee of the original creditor without knowledge to the contrary by the assignee when he acquires the obligation, written acknowledgment of receipt by a person to whom a statement is required to be given pursuant to sections [36a-665 to] 36a-675 TO 36a-685, inclusive, AS AMENDED BY THIS ACT shall be conclusive proof of the delivery thereof and, except as provided in subdivision (1) of this subsection, of compliance with Chapter 2 of the Consumer Credit Protection Act. This subsection does not affect the rights of the obligor in any action against the original creditor. (3) Any consumer who has the right to rescind a transaction under subsection (j) of this section or Section 125 of the Consumer Credit Protection Act (15 USC 1635) may rescind the transaction as against any assignee of the obligation.

(l) (1) Subject to the limitation contained in subdivision (2) of this subsection, a card issuer who has issued a credit card to a cardholder pursuant to an open-end consumer credit plan shall be subject to all claims, other than tort claims, and defenses arising out of any transaction in which the credit card is used as a method of payment or extension of credit if (A) the obligor has made a good faith attempt to obtain satisfactory resolution of a disagreement or problem relative to the transaction from the person honoring the credit card; (B) the amount of the transaction exceeds fifty dollars; and (C) the transaction took place wholly within this state, provided the mailing address previously provided by the cardholder was within this state and provided the state of billing of the transaction shall not be considered in determining where the transaction took place, or the transaction took place within one hundred miles from the mailing address within this state previously provided by the cardholder, except that the limitations set forth in SUBPARAGRAPHS (B) and (C) OF THIS SUBDIVISION with respect to an obligor's right to assert claims and defenses against a card issuer shall not be applicable to any transaction in which the person honoring the credit card (i) is the same person as the card issuer, (ii) is controlled by the card issuer, (iii) is under direct or indirect common control with the card issuer, (iv) is a franchised dealer in the card issuer's products or services, or (v) has obtained the order for such transaction through a mail solicitation made by or participated in by the card issuer in which the cardholder is solicited to enter into such transaction by using the credit card issued by the card issuer.

(2) The amount of claims or defenses asserted by the cardholder may not exceed the amount of credit outstanding with respect to such transaction at the time the cardholder first notifies the card issuer or the person honoring the credit card of such claim or defense. For the purpose of determining the amount of credit outstanding in this subdivision, payments and credits to the cardholder's account are deemed to have been applied, in the order indicated, to the payment of: (A) Late charges in the order of their entry to the account; (B) finance charges in order of their entry to the account; and (C) debits to the account other than those set forth [above] IN SUBPARAGRAPHS (A) AND (B) OF THIS SUBDIVISION, in the order in which each debit entry to the account was made.

(m) (1) For the purpose of this subsection, the term "creditor" in this section shall include a lessor. (2) Any lessor who fails to comply with any requirement imposed under Section 182 or 183 of the Consumer Credit Protection Act (15 USC 1667a or 1667b) with respect to any person is liable to such person as provided in this section. (3) Any lessor who fails to comply with any requirement imposed under Section 184 of the Consumer Credit Protection Act (15 USC 1667c) with respect to any person who suffers actual damage from the violation is liable to such person as provided in this section.

Sec. 15. Subsection (a) of section 36a-684 of the general statutes is repealed and the following is substituted in lieu thereof:

(a) Compliance with the requirements of [subsection (c) of section 36a-535,] sections 36a-567, 36a-568 and 36a-675 to 36a-685, inclusive, AS AMENDED BY THIS ACT subdivision [(12)] (13) of subsection (c) of section 36a-770, and sections 36a-771, 36a-774 and 36a-777 shall be enforced by the commissioner and the commissioner shall, in addition to other powers granted by said sections or by other provisions of law, receive and act on complaints, take action designed to obtain voluntary compliance with said sections or commence proceedings on the commissioner's own initiative.

Sec. 16. Section 36a-736 of the general statutes is repealed and the following is substituted in lieu thereof:

As used in sections 36a-735 to 36a-744, inclusive, AS AMENDED unless the context otherwise requires: (1) "Applicant" means any person who applies for a home purchase loan, home improvement loan or other mortgage loan as defined in sections 36a-735 to 36a-744, inclusive, AS AMENDED whether or not the loan is granted; (2) "Federal Home Mortgage Disclosure Act" means the Home Mortgage Disclosure Act of 1975 (12 USC section 2801 et seq.), as from time to time amended, and any regulations promulgated by the Federal Reserve Board pursuant to that act, except, for purposes of sections 36a-735 to 36a-744, inclusive, AS AMENDED the supervisory agency shall be the commissioner; (3) "Financial institution" means any Connecticut bank or Connecticut credit union which makes home purchase loans or home improvement loans or any for profit mortgage lending institution other than a Connecticut bank or Connecticut credit union, whose home purchase loan originations equaled or exceeded ten per cent of its loan origination volume, measured in dollars, in the preceding calendar year, if such mortgage lending institution is licensed under sections 36a-485 to 36a-498, inclusive, AS AMENDED BY THIS ACT [and] OR SECTIONS 36a-510 to 36a-524, inclusive; (4) "Home improvement loan" has the same meaning as provided in the federal Home Mortgage Disclosure Act; (5) "Home purchase loan" has the same meaning as provided in the federal Home Mortgage Disclosure Act; and (6) "Mortgage loan" means a loan which is secured by residential real property.

Approved May 24, 1996. Effective October 1, 1996.

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