An act relating to banking, insurance, and securities
Sponsored By: Michael J Marcotte (Republican)
Signed by Governor
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Bill Overview
Analyzed Economic Effects
38 provisions identified: 21 benefits, 10 costs, 7 mixed.
Victim payouts capped and fund-dependent
Beginning July 1, 2026, eligible securities victims can receive the lesser of $25,000 or 25% of unpaid restitution. For victims who were vulnerable adults when the violation occurred, the cap is the lesser of $50,000 or 50%. Vulnerable adults include anyone age 60 or older and people meeting the law’s other vulnerability criteria. The Commissioner can pause applications or set award amounts based on the fund’s finances and money assigned to other purposes. The State is not liable for these decisions.
Fairer credit decisions and written reasons
Beginning July 1, 2026, covered banks, credit unions, and licensed or license-exempt lenders must follow expanded credit nondiscrimination rules. Protections cover applicants legally able to contract for credit cards and personal, mortgage, or commercial loans. Prohibited grounds include sex, marital status, race, age, sexual orientation, gender identity, and disability. Lenders must send decisions within 30 days after deciding on completed applications and give written reasons for adverse action. Commercial-credit reasons must identify specific grounds and supporting records or business judgment; records must be kept 24 months, and civil remedies include actual and punitive damages and costs.
Household-use financing gets consumer loan protections
Beginning July 1, 2026, commercial financing used mainly for personal, family, or household needs counts as a loan. It must follow the applicable Vermont lending and consumer-credit laws named in the act. The financing’s label does not remove these protections.
Insurance customers gain stronger discrimination protections
Beginning July 1, 2026, insurance rules expressly prohibit unfair discrimination based on race, religion, or national origin. These protections apply to underwriting standards and practices, eligibility requirements, and rates for applicants and insured people.
More access to securities victim assistance
Beginning July 1, 2026, securities victims can seek assistance for unpaid restitution awarded in a final order without exhausting appeals. The victim must have been a Vermont resident when the violation occurred. If the victim died, a surviving spouse or dependent child can apply; the child must meet federal tax-dependent rules as of the final order. Only one claimant can apply per victim, within two years after the order’s payment deadline. Victims are excluded if their loss came from helping, attempting, or committing the violation, or if they profited or stood to profit.
Workers get revised family life-insurance rules
Beginning July 1, 2026, covered group life policies can start spouse and child coverage when at least 75% of eligible workers or members agree to contribute. This applies when workers or members pay some or all of the premium. The participation count no longer excludes people based on dependent status or family members failing the insurer’s insurability requirements.
Borrowers owe less under illegal contracts
Beginning July 1, 2026, commercial financing contracts knowingly and willfully violating 8 V.S.A. § 2247(b)(1) or (2) are void. Providers cannot collect payments, receivables, charges, or other amounts under those contracts. Without a Commissioner finding of a knowing and willful violation, collection for those violations is limited to the net amount paid out after upfront fees, with no additional charges. Loan and commercial financing contracts made after a cease order are also void if the provider continues without an authorizing resolution or a decision vacating the order. Providers cannot collect principal, interest, payments, receivables, charges, or other amounts under those contracts.
Businesses gain financing contract and dispute protections
Beginning July 1, 2026, financing providers cannot set up automatic account withdrawals without a legally perfected security interest that outranks every other claim. A commercial financing contract containing a confession-of-judgment clause, or a similar clause, is void and unenforceable. Covered contracts must use Vermont law, and related court cases must be brought in Vermont. Only recipients can enforce conflicting out-of-state law or venue terms. Contracts cannot require face-to-face arbitration outside Vermont, and providers must pay arbitrators' fees, expenses, and other arbitration costs and administrative fees.
Broader financial privacy with sharing exceptions
Beginning July 1, 2026, Vermont’s financial privacy rules cover more regulated firms, including credit unions and covered subsidiaries. Covered firms and staff must protect customer information and adopt reasonable compliance procedures. The law also extends sharing exceptions for routine business, credit information, debt collection, transactions, subpoenas, and specified state agencies. Credit exchanges must follow state and federal credit-reporting laws; collection disclosures must help recover money owed. Most subpoena disclosures require 14 days’ advance customer notice, except regulatory or law-enforcement subpoenas; account verification services may mail information to customer-provided addresses.
Vermont bans virtual-currency kiosks, requires refunds
Beginning July 1, 2026, Vermont bans placing, operating, hosting, or conducting virtual-currency business through kiosks. Existing Vermont kiosk registrations end that day. For illegal transactions after July 1, 2026, operators must refund the transaction amount and fees when customers or the Commissioner request it. Operators must keep previously required records until at least July 1, 2031, or longer if the Commissioner requires. They must provide those records to the Commissioner on request.
Reverse mortgages gain safeguards and federal limits
Beginning July 1, 2026, reverse-mortgage lenders must refer every borrower to a HUD-approved counselor and obtain a signed certificate before accepting an application. Counseling is in person unless the borrower cannot or chooses not to travel and cannot receive a home visit; then authorized telephone counseling is required. Loan holders must keep the certificate throughout the loan. No one can require an annuity purchase, or offer one or refer borrowers to sellers before closing or the applicable cancellation period ends. Issuers need HUD approval, and loans must meet federal reverse-mortgage program standards with federal insurance or government-sponsored-enterprise backing.
Financial firms must follow interest protections
Beginning July 1, 2026, firms covered by Parts 2, 4, or 5 of Vermont's financial-services laws must follow state interest law. This includes firms required to be licensed, chartered, or otherwise authorized, even if they lack that authorization. The law also repeals the consumer-protection chapter's former coverage provision. The supplied text does not identify who gains or loses coverage from that repeal.
Money-transfer kiosks need approval and disclosures
Beginning July 1, 2026, licensed money-transfer firms must register Vermont kiosks and get the Commissioner's approval before activation. Before users are committed to a transaction, kiosks must prominently show the operator's name, address, phone number, and Vermont license number. They must also show when and how customers can get help.
No bank fee for received bounced checks
Beginning July 1, 2026, banks and credit unions cannot charge depositors for processing a received check returned for insufficient funds. This protects the person who received the check, not the person who wrote it. The ban also covers similar processing charges.
Stronger access rules for bank accounts
Beginning July 1, 2026, the Commissioner can require Vermont financial institutions to offer basic checking and savings accounts. This requires findings in two consecutive surveys that account availability and costs have materially worsened. Any rules must protect bank safety and must not harm other banking customers; the law itself does not require these accounts. Credit unions must treat joint deposits equally whether the other named people are members or nonmembers. At least one person named on the deposit must be a member.
Virtual currency buyers get pricing details
Beginning July 1, 2026, licensees must disclose transaction details immediately before they or affiliates directly buy virtual currency from customers or sell it to them. Customers must acknowledge the details, including type, value, amount, date, exact time, charges, and differences from market prices. This advance requirement applies when the firm trades for itself, rather than every kiosk transaction. Receipts for completed virtual-currency transactions must show currency type and quantity, date, exact time, U.S. dollar amount, charges, and price differences.
Credit union members gain joint-borrowing options
Beginning July 1, 2026, a credit union can make a member loan with a nonmember as a joint borrower. The loan must serve a purpose approved by the credit union’s governing body. This does not give nonmembers a general right to borrow.
Updated safeguards and rules for mortgages
Beginning July 1, 2026, lenders must keep home-loan escrow funds at qualifying federally insured banks or credit unions. Checks and other drafts from qualifying financial institutions or credit unions count as loan funds paid to settlement agents. The law also repeals a special mortgage rule for married borrowers that described people age 18 or older as 'minors.' The supplied text does not explain how that repeal changes loan approval or costs.
Businesses get clearer financing cost disclosures
Beginning July 1, 2027, disclosure rules cover financing contracts entered into, modified, amended, or restructured on or after that date. Sales-based financing offers must show total financing, money paid out after fees, finance charges, and an estimated yearly rate including fees. Disclosures also cover total repayment, estimated term, payment amounts and frequency, draw fees, late fees, and returned-payment fees. Factoring disclosures show purchase price, net payout, finance charge, estimated yearly rate, and collateral. Rates follow federal Regulation Z methods; sales-based estimates use a single historical period or an opt-in projected method. Recipients must sign disclosures before applications are finalized and receive them before financing is extended. When new financing requires paying off the same provider's older financing, disclosures must show prepayment charges, unpaid interest, and reductions in the payout.
Financial examinations keep gathered information confidential
Beginning July 1, 2026, information obtained during or for covered examinations and investigations is confidential and legally privileged. This includes reports required by the financial-services reporting provision identified in the law.
Insurance fees fund oversight and fire safety
Beginning July 1, 2026, the Insurance Regulatory and Supervision Fund supports state insurance oversight. Insurance administration fees and assessments go into this fund; fines and administrative penalties go directly to the General Fund. The new fund transfers $30,000 each year to the Division of Fire Safety Special Fund. Its remaining balance at the end of each state budget year goes to the General Fund.
Insurers get naming and reporting flexibility
Beginning July 1, 2026, mutual insurance holding companies can use 'mutual' in their names. Their stock insurer subsidiaries can retain that word, but must include 'SI,' meaning stock insurer. Insurers based outside Vermont meet the annual-statement rule if their home state's law is substantially similar to Vermont's.
Securities sanctions must weigh investor harm
Beginning July 1, 2026, the Commissioner must consider investor harm when setting the covered securities sanctions. Other required factors include harm to capital access, public confidence, and market integrity. Decisions must also weigh knowledge, intent, expected economic gains, violation length, deterrence, resources, compliance history, and aggravating or mitigating facts.
Some money-transmitter control changes need less approval
Beginning July 1, 2026, specified money-transmitter control changes are exempt from advance filing and Commissioner approval. Internal reorganizations qualify only when the ultimate controlling person remains the same. Listed exemptions also cover specified proxy, inheritance, fiduciary, court-appointed, and Commissioner-exempted actions.
Vermont banks gain broader lending powers
Beginning July 1, 2026, Vermont financial institutions can make, buy, sell, arrange, invest in, or participate in loans and credit. Their authority also covers derivative transactions. Activities must serve a lawful purpose and cannot be prohibited by Vermont law.
Kiosk customers lose several required safeguards
Beginning July 1, 2026, the law removes specified kiosk-screen fee disclosures, including who charges fees and how to cancel to avoid them. It also removes special new-customer disclosures about account terms, liability, information sharing, records, risks, and regulator contacts. Operators no longer must give both paper and electronic receipts containing the extra wallet, account, refund, and delivery-liability details. The specified warning and easy pre-completion cancellation requirement are also repealed. A separate requirement for a general virtual-currency risk statement in account-opening disclosures is removed.
Lawsuit funding companies need licenses and security
Beginning July 1, 2026, consumer lawsuit funding companies need a Vermont license; registration alone is not enough. Fees are $200 initially, $300 for the application and investigation, and $200 for renewal. Renewals are due December 1; licenses expire December 31 if renewal and payment standards are not met. Companies must maintain a bond or irrevocable letter of credit equal to the greater of $50,000 or twice their largest Vermont funding amount during the prior three calendar years. The letter of credit must be issued and confirmed by a financial institution authorized to operate in Vermont.
Banks and credit unions tighten oversight
Beginning July 1, 2026, covered financial institutions, including mutual and cooperative institutions, and credit unions must hold at least four board meetings yearly, one each quarter. Boards meeting less than monthly must appoint executive committees: bank committees meet monthly, while credit-union committees meet in months without board meetings. Boards must approve committee minutes at the next meeting. Banks need written loan, credit, and derivative policies, reviewed and approved annually; credit unions’ boards and credit committees need written loan policies. Policies must fit each institution’s size and activities and cover portfolio diversity, underwriting, measurable loan-to-value limits, records, and approvals.
Banks face limits on concentrated lending
Beginning July 1, 2026, Vermont financial institutions’ loans, credit, and derivative exposure cannot exceed 20% of capital for one borrower. The limit is 50% for a corporate group. Related obligations must be combined for direct benefits to others, shared enterprises, and specified corporate relationships; genuine arm’s-length transactions have a stated exception. Specified shared-enterprise tests use at least 25% ownership, control, or voting power, plus at least 50% financial interdependence measured through annual gross receipts or spending. These cap institutional exposure, not a household’s overall borrowing.
Financial firms face stronger licensing reviews
Beginning July 1, 2026, licensing reviews weigh finances, responsibility, experience, competence, character, fitness, honest operation, and the public interest. Reviews cover key people and controlling owners; failures can also support licensing action against existing licensees. Any felony conviction, guilty plea, or no-contest plea after application can support action, including in foreign or military courts. Money-services applicants must name the banks or credit unions they plan to use. A separate coverage rule applies to firms authorized, or required to be authorized, under specified banking, insurance, or credit-union laws; registration alone is no longer listed.
Investment advisers must carry cybersecurity insurance
Beginning July 1, 2026, investment advisers registered or required to register under Vermont's securities chapter must maintain adequate cybersecurity-breach insurance. The Commissioner can set insurance requirements and standards for adequate coverage. The requirement is subject to federal law, 15 U.S.C. § 80b-18a; no specific coverage amount is stated.
Private securities sales face tighter exemptions
Beginning July 1, 2026, this private-sale exemption covers one securities issue with at most 10 Vermont purchasers in 12 consecutive months, down from 25. General advertising and solicitation are prohibited, as are solicitation payments to unregistered people. Issuers must reasonably believe Vermont buyers are purchasing for investment. Federal covered securities otherwise requiring notice filings cannot use this exemption.
Securities exemption requests carry a $200 fee
Beginning July 1, 2026, applicants requesting an exemption from securities registration pay $200 when filing. The fee is nonrefundable and applies to each request.
Virtual currency businesses enter transmission rules
Beginning July 1, 2026, qualifying virtual-currency business activity falls within Vermont’s definition of money transmission. Kiosk rules cover machines that directly or indirectly offer, help conduct, or conduct money transmission, including virtual-currency kiosks. Consumer phones and similar personal devices are excluded. Vermont kiosk operators include owners, managers, operators, and people conducting or helping conduct virtual-currency business through them. A separate virtual-currency subsection is repealed, but coverage remains in the money-transmission definition.
Business financing providers need Vermont licenses
Beginning July 1, 2026, commercial financing providers generally need a lender license to provide, offer, or solicit their financing in Vermont. Making offers for another provider requires a loan solicitation license, and that provider must be licensed or exempt. Exemptions cover specified public entities, banks, credit unions and other financial institutions, and sellers financing their own goods or services. This licensing section does not apply to transactions of $1 million or more that are not mainly for personal, family, or household use.
Restitution applicants gain privacy, face fraud penalties
Beginning July 1, 2026, identifying information in securities restitution-assistance applications is confidential, including names, birth dates, and contact details. This also covers information that identifies someone when combined with other application details. Applicants found by the Commissioner or a court to have used dishonesty, forgery, fraud, or deceit must forfeit their award to the Department and may face other penalties. After paying assistance, the State can pursue the person ordered to pay restitution, but only up to the assistance amount.
Credit union merger votes have emergency exceptions
Beginning July 1, 2026, members of a merging credit union vote on merger plans after the Commissioner approves them. A majority of members present at an annual or special meeting approves the plan, unless the credit union's documents require more. To protect members or the public, the Commissioner can waive merger requirements, including the member vote, and order an immediate merger. Each participating credit union's governing body must first approve by majority vote and submit certified authorizing resolutions.
Investment funds pay revised filing fees
Beginning July 1, 2026, covered investment companies pay a nonrefundable $2,275 initial Vermont notice fee for each share class. Annual renewals cost a nonrefundable $2,025 per share class, rather than per portfolio. Open-end investment companies no longer owe the separate registration and annual renewal fees for each portfolio while registration remains active. These fees apply to companies, not directly to individual investors.
Sponsors & Cosponsors
Sponsor
Michael J Marcotte
Republican • House
Cosponsors
Abbey Duke
Democratic • House
Anthony "Tony" Micklus
Republican • House
David "Dave" Bosch
Republican • House
Edye Graning
Democratic • House
Emily Carris Duncan
Democratic • House
Herb Olson
Democratic • House
Kirk White
Democratic • House
Monique Priestley
Democratic • House
Roll Call Votes
No roll call votes available for this bill.
Actions Timeline
House message: Governor approved bill on June 16, 2026
5/29/2026HouseSigned by Governor on June 16, 2026
5/29/2026HouseDelivered to Governor on June 10, 2026
5/29/2026HouseSenate Message: House proposal of amendment to Senate proposal of amendment concurred in
5/21/2026SenateRules suspended & messaged to House forthwith, on motion of Senator Baruth
5/21/2026SenateHouse proposal of amendment to Senate proposal of amendment concurred in
5/21/2026SenateHouse proposal of amendment to Senate proposal of amendment, text
5/21/2026SenateUnfinished Business/House Proposal of Amendment
5/21/2026SenateHouse proposal of amendment to Senate proposal of amendment
5/20/2026SenateHouse proposal of amendment to Senate proposal of amendment
5/19/2026SenateEntered on Notice Calendar
5/19/2026SenateHouse message: House concurred in Senate proposal of amendment with proposal of amendment
5/19/2026HouseSenate proposal of amendment concurred in with further amendment thereto, as offered by Rep. Olson of Starksboro
5/14/2026HouseAction Calendar: Action postponed until May 14, 2026
5/14/2026HouseRep. Olson of Starksboro moved to postpone action until May 14, 2026, which was agreed to
5/13/2026HouseAction Calendar: Action postponed until May 13, 2026
5/13/2026HouseAction Calendar: Action postponed until May 13, 2026
5/12/2026HouseRep. Olson of Starksboro moved to postpone action until May 13, 2026, which was agreed to
5/8/2026HouseAction Calendar: Senate Proposal of Amendment
5/8/2026HouseNotice Calendar: Senate Proposal of Amendment
5/7/2026HouseSenate Message: Passed in concurrence with proposal of amendment
5/6/2026SenateRead 3rd time & passed in concurrence with proposal of amendment
5/5/2026SenateNew Business/Third Reading
5/5/2026Senate3rd reading ordered
5/1/2026SenateProposal of amendment by Committee on Finance agreed to
5/1/2026Senate
Bill Text
As Enacted (ACT 142)Opens in a new window
6/18/2026
As Passed by Both Chambers
6/4/2026
As Passed by Both Chambers (Unofficial)
6/4/2026
Senate Proposal of Amendment
5/7/2026
Senate Proposal of Amendment (Unofficial)
5/7/2026
As Passed by the House
2/2/2026
As Passed by the House (Unofficial)
2/2/2026
As Introduced
1/12/2026
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