All Roll Calls
Yes: 235 • No: 0
ConnecticutSB 012572025 Regular SessionSenateWALLET
AN ACT CONCERNING CONSUMER CREDIT AND COMMERCIAL FINANCING.
Sponsored By: Banking Committee
Signed by Governor
Summary
To: (1) Require cancellations of certain surety bonds to be submitted electronically; (2) modify procedures regarding changes to the legal names of certain licensees; (3) redefine "sales finance company"; (4) establish procedures for registering as an exempt mortgage servicer registrant; (5) establish requirements regarding private student education loan cosigner releases; (6) establish enforcement authority regarding registrants; (7) prohibit receiving fees in connection with small loans without a license; (8) redefine "mortgage servicer" and "servicing"; (9) define "private education lender" and "private education loan creditor"; (10) establish requirements regarding timelines and fees for certain registrants that are exempt from licensing; (11) modify various statutes relating to commercial financing; (12) modify registration and enforcement procedures regarding private education lenders and private education loan creditors; (13) require certain disclosures in connection with shared appreciation agreements; (14) make technical changes to various statutes regarding consumer credit; and (15) redefine "system".
banking
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Bill Overview
Analyzed Economic Effects
9 provisions identified: 4 benefits, 1 costs, 4 mixed.
New release rights for student loan cosigners
Covered private student loans made or extended on or after October 1, 2025 must offer cosigner release. The payment requirement cannot exceed 12 consecutive on-time payments. Paying 12 months of principal and interest within any 12-month period also satisfies that requirement, even without monthly payments. Release is also required for a cosigner’s total and permanent disability, confirmed by a government agency or Connecticut-authorized physician. Lenders cannot require a replacement cosigner after disability-based release. They cannot permanently bar release eligibility or impose the law’s prohibited negative consequences during an application. Listed banks, credit unions, specified subsidiaries, and the Connecticut Higher Education Supplemental Loan Authority are excluded from these release requirements. Beginning October 1, 2025, private student loan servicers must explain rights, send annual release notices, and report when payment requirements are met. They must give written application notices, provide appeal and review rights, maintain application records, and allow cosigners access to loan records. Electronic notices are allowed when the borrower has chosen electronic communications.
Homeowners get shared appreciation cost details
Beginning October 1, 2025, licensed mortgage lenders offering shared appreciation agreements must disclose terms within three business days after application. A conspicuous warning in 12-point type must explain that borrowers need not proceed and risk losing their home. It must explain the lender’s mortgage and shared interest, and advise consulting an attorney. Disclosures include lender contacts, cash amounts, starting home value, agreement length, valuation methods, interest, and limits on the lender’s share. They also advise consulting a tax adviser. Repayment examples must cover 5, 10, 15, and 30 years, or the maximum term, under specified home-value scenarios. Calculations must show annual-percentage-rate-equivalent costs, appreciation charges, interest, principal, the lender’s share, and total repayment.
More installment payment firms face oversight
Beginning October 1, 2025, Connecticut’s sales finance company definition includes more businesses receiving payments from retail buyers. It covers payments tied to retail installment contracts or installment loan contracts, including fees, principal, and interest. These payment recipients fall within the applicable sales-finance rules.
Mortgage managers must enforce compliance policies
Beginning October 1, 2025, covered mortgage businesses, qualified individuals, and branch managers must establish, enforce, and maintain compliance policies. Mortgage servicers’ qualified individuals and branch managers must enforce their servicing policies. A servicing-policy failure violates this rule only when it leads to conduct breaking applicable state or federal law.
Mortgage lenders servicing loans must register
Beginning October 1, 2025, licensed Connecticut mortgage lenders must register before servicing loans from a licensed main or branch office. They must register as exempt mortgage servicer registrants through the electronic licensing system and renew annually. Registration and renewal require supplemental bonds, fidelity and errors-and-omissions coverage, and nonrefundable fees. The Banking Commissioner can suspend, revoke, or refuse renewal on the law’s specified disciplinary grounds.
Credit firms face updated filing rules
Beginning October 1, 2025, sureties must send covered bond-cancellation notices through the electronic licensing system. They must notify the licensee or bond principal and Banking Commissioner at least 30 days before cancellation. Covered licensees must file legal-name or office-address changes through the system at least 30 calendar days before the change. The commissioner can disapprove the change or request more information during that period. Legal-name changes still require a bond rider showing the new name, but address changes no longer require one.
Mortgage servicers must maintain financial safeguards
Beginning October 1, 2025, mortgage servicers and exempt servicer registrants must maintain surety bonds of at least $100,000 per office. Required fidelity and errors-and-omissions coverage starts at $300,000 for residential servicing volume up to $100 million. Above $100 million through $500 million, coverage adds 0.015% of volume over $100 million. Above $500 million through $1 billion, it adds another 0.125% of volume over $500 million. Above $1 billion, it adds another 0.10% of volume over $1 billion. Deductibles cannot exceed the greater of $100,000 or 5% of coverage; servicers pay the coverage costs. Bond proceeds are held for claimants and can cover consumer restitution, civil penalties, and recovered examination costs. Coverage cancellation or expiration automatically suspends authorization and ends a registrant’s licensing exemption unless coverage is reinstated or replaced beforehand. Suspension is also avoided when the servicer stops Connecticut business and surrenders the applicable licenses and registrations.
Student lenders face fees and stronger oversight
Beginning October 1, 2025, private education lenders and creditors generally must register before making, purchasing, or assuming Connecticut residents’ loans. Initial and renewal registrations cost a nonrefundable $900, plus other required charges. Registrations expire December 31 of the approval year; approvals on or after November 1 last through the following December 31. Renewals must be filed November 1 through December 31; public and private nonprofit colleges may follow alternative registration and fee rules. The Banking Commissioner can suspend, revoke, or deny renewal for material application misstatements, fraud, misappropriation, or specified legal violations. This includes misconduct by covered control persons, trustees, employees, or agents; enforcement can also address apparent past, ongoing, or imminent violations. A private education loan law violation causing consumer financial harm can trigger a bar of up to 10 years. That bar can cover any activity requiring a license or registration under the banking title, including ownership or employment.
Business financing fees rise alongside oversight
Beginning July 1, 2025, commercial financing providers and brokers pay $1,000 for each initial or renewal registration. This nonrefundable fee replaces the prior $500 annual fee. Registrations expire December 31 of the approval year; approvals on or after November 1 last through the following December 31. Renewal applications must be filed November 1 through December 31. The Banking Commissioner can suspend, revoke, or deny renewal for material misstatements, fraud, misappropriation, or specified legal violations. This covers misconduct by registrants and covered control persons, trustees, employees, or agents. The commissioner can also act against apparent past, ongoing, or imminent violations, strengthening protections for financing recipients.
Sponsors & Cosponsors
Sponsor
Banking Committee
Affiliation unavailable
Cosponsors
There are no cosponsors for this bill.
Roll Call Votes
Senate vote • 5/12/2025
JUD Vote Tally Sheet (Joint Favorable)
Yes: 40 • No: 0
Senate vote • 3/6/2025
Senate Roll Call Vote 203
Yes: 35 • No: 0
Senate vote • 3/6/2025
BA Vote Tally Sheet (Joint Favorable)
Yes: 12 • No: 0
House vote • 3/6/2025
House Roll Call Vote 333 AS AMENDED
Yes: 148 • No: 0
Actions Timeline
Signed by the Governor
7/1/2025legislatureTransmitted by Secretary of the State to Governor
6/25/2025legislatureTransmitted to the Secretary of State
6/25/2025legislaturePublic Act 25-115
6/16/2025legislatureIn Concurrence
6/3/2025legislatureHouse Passed as Amended by Senate Amendment Schedule A
6/3/2025HouseHouse Adopted Senate Amendment Schedule A
6/3/2025HouseHouse Calendar Number 623
5/22/2025HouseFavorable Report, Tabled for the Calendar, House
5/22/2025HouseSenate Passed as Amended by Senate Amendment Schedule A
5/20/2025SenateSenate Adopted Senate Amendment Schedule A 8655
5/20/2025SenateFavorable Report, Tabled for the Calendar, Senate
5/13/2025SenateNo New File by Committee on Judiciary
5/13/2025legislatureReported Out of Legislative Commissioners' Office
5/13/2025legislatureFiled with Legislative Commissioners' Office
5/13/2025legislatureJoint Favorable
5/12/2025legislatureImmediate Transmittal
5/8/2025legislatureReferred by Senate to Committee on Judiciary
5/8/2025SenateFile Number 181
3/24/2025legislatureSenate Calendar Number 146
3/24/2025SenateFavorable Report, Tabled for the Calendar, Senate
3/24/2025SenateReported Out of Legislative Commissioners' Office
3/24/2025legislatureReferred to Office of Legislative Research and Office of Fiscal Analysis 03/24/25 12:00 PM
3/17/2025legislatureFiled with Legislative Commissioners' Office
3/6/2025legislatureJoint Favorable
3/6/2025legislature
Bill Text
Public Act No. 25-115
6/16/2025
File No. 181
3/24/2025
BA Joint Favorable
3/6/2025
JUD Joint Favorable
3/6/2025
Raised Bill
2/6/2025
BA Joint Fav. Rpt
BA Vote Tally Sheet (Joint Favorable)
Bill Analysis For File Copy 181
Bill Analysis for SB-1257, as amended by Senate "A"
Fiscal Note For File Copy 181
Fiscal Note for Amendment LCO 8308 (See Fiscal Note Details)
Fiscal Note for Amendment LCO 8655 (No Fiscal Impact)
Fiscal Note for SB-1257, As Amended by Senate "A" (LCO 8655)
House Roll Call Vote 333 AS AMENDED
JUD Joint Fav. Rpt
JUD Vote Tally Sheet (Joint Favorable)
Senate LCO Amendment #8308 (J)
Senate Roll Call Vote 203
Senate Schedule A LCO# 8655 (J)
Summary for Public Act No. 25-115
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