Connecticut General Statutes 36a-487 – Exemptions from licensure
(a) The following are exempt from licensing as a mortgage lender, mortgage correspondent lender or mortgage broker under sections 36a-485 to 36a-498e, inclusive, 36a-534a and 36a-534b: (1) Any bank, out-of-state bank, Connecticut credit union, federal credit union or out-of-state credit union, provided such bank or credit union is federally insured; (2) any wholly-owned subsidiary of any such bank or credit union; (3) any operating subsidiary where each owner of such operating subsidiary is wholly owned by the same such bank or credit union; (4) any person licensed under sections 36a-671 to 36a-671d, inclusive, or exempt from licensure under § 36a-671c, who is negotiating or offering to negotiate terms of a residential mortgage loan as authorized by said sections 36a-671 to 36a-671d, inclusive; and (5) any person engaged solely in providing loan processing or underwriting services to persons (A) licensed as a mortgage lender, mortgage correspondent lender or mortgage broker, or (B) exempt from such licensure under subdivision (1) of this subsection. Each wholly-owned subsidiary of a Connecticut bank or Connecticut credit union that engages in the business of making residential mortgage loans or acts as a mortgage broker in this state shall provide written notification to the commissioner prior to engaging in such activity.
Terms Used In Connecticut General Statutes 36a-487
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Bank: means a Connecticut bank or a federal bank. See Connecticut General Statutes 36a-2
- Commissioner: means the Banking Commissioner and, with respect to any function of the commissioner, includes any person authorized or designated by the commissioner to carry out that function. See Connecticut General Statutes 36a-2
- Connecticut bank: means a bank and trust company, savings bank or savings and loan association chartered or organized under the laws of this state. See Connecticut General Statutes 36a-2
- Connecticut credit union: means a cooperative, nonprofit financial institution that (A) is organized under chapter 667 and the membership of which is limited as provided in §. See Connecticut General Statutes 36a-2
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
- Federal credit union: means any institution chartered or organized as a federal credit union pursuant to the laws of the United States having its principal office in this state. See Connecticut General Statutes 36a-2
- Loan: includes any line of credit or other extension of credit. See Connecticut General Statutes 36a-2
- Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
- Mortgage loan: A loan made by a lender to a borrower for the financing of real property. Source: OCC
- Out-of-state: includes any state other than Connecticut and any foreign country. See Connecticut General Statutes 36a-2
- Out-of-state credit union: means any credit union other than a Connecticut credit union or a federal credit union. See Connecticut General Statutes 36a-2
- Person: means an individual, company, including a company described in subparagraphs (A) and (B) of subdivision (11) of this section, or any other legal entity, including a federal, state or municipal government or agency or any political subdivision thereof. See Connecticut General Statutes 36a-2
- Real property: Land, and all immovable fixtures erected on, growing on, or affixed to the land.
- State: means any state of the United States, the District of Columbia, any territory of the United States, Puerto Rico, Guam, American Samoa, the trust territory of the Pacific Islands, the Virgin Islands and the Northern Mariana Islands. See Connecticut General Statutes 36a-2
- Subsidiary: has the meaning given to that term in 12 USC Section 1841(d), as amended from time to time. See Connecticut General Statutes 36a-2
- System: means the Nationwide Mortgage Licensing System and Registry, NMLS, NMLSR or such other name or acronym as may be assigned to the multistate system developed by the Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators and owned and operated by the State Regulatory Registry, LLC, or any successor or affiliated entity, for the licensing and registration of persons in the mortgage and other financial services industries. See Connecticut General Statutes 36a-2
(b) The following are exempt from licensing as a mortgage lender or mortgage correspondent lender under sections 36a-485 to 36a-498e, inclusive, 36a-534a and 36a-534b:
(1) Persons making five or fewer residential mortgage loans within any period of twelve consecutive months, provided nothing herein shall relieve such persons from complying with all applicable laws;
(2) Bona fide nonprofit organizations making residential mortgage loans that promote home ownership for the economically disadvantaged;
(3) Agencies of the federal government, or any state or municipal government, or any housing finance agency making residential mortgage loans under the specific authority of the laws of any state or the United States. For purposes of this subdivision, a “housing finance agency” means any authority:
(A) Chartered by a state to help meet the affordable housing needs of the residents of the state; (B) supervised directly or indirectly by the state government; (C) subject to audit and review by the state in which it operates; and (D) whose activities make it eligible to be a member of the National Council of State Housing Agencies;
(4) Persons owning real property who take back from the buyer of such property a secondary mortgage loan in lieu of any portion of the purchase price of the property;
(5) Any corporation or its affiliate that makes residential mortgage loans exclusively for the benefit of its employees or agents;
(6) Any corporation, licensed in accordance with § 38a-41, or its affiliate or subsidiary, that makes residential mortgage loans to promote home ownership in urban areas;
(7) Persons acting as fiduciaries with respect to any employee pension benefit plan qualified under the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended, who make residential mortgage loans solely to plan participants from plan assets; and
(8) Persons making secondary mortgage loans to immediate family members.
(c) A bona fide nonprofit organization shall be exempt from licensing as a mortgage broker under sections 36a-485 to 36a-498e, inclusive, 36a-534a and 36a-534b to the extent that such bona fide nonprofit organization acts as a mortgage broker in connection with residential mortgage loans to be exclusively made by persons covered by the exemption set forth in either subdivision (5) or (6) of subsection (b) of this section.
(d) Any person claiming exemption from licensure under this section may register on the system as an exempt registrant for purposes of sponsoring a mortgage loan originator or a loan processor or underwriter pursuant to subdivision (1) of subsection (b) of § 36a-486. Such registration shall not affect the exempt status of such person. Any approval of such registration, or any approval of any renewal of such registration, shall not constitute a determination by the commissioner that such entity is exempt, but rather shall evidence the commissioner’s approval to use the system for purposes of sponsoring and bonding.
(e) (1) For purposes of this section, a “bona fide nonprofit organization” means an organization that has filed a written certified submission to the commissioner in a form prescribed by the commissioner and with such documentation as may be required by the commissioner and that demonstrates to the satisfaction of the commissioner that the organization: (A) Has the status of a tax-exempt organization under Section 501(c)(3) of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended; (B) promotes affordable housing or provides home ownership education or similar services; (C) conducts its activities in a manner that serves public or charitable purposes rather than commercial purposes; (D) receives funding and revenue and charges fees in a manner that does not incentivize it or its employees to act other than in the best interests of its clients; (E) compensates its employees in a manner that does not incentivize employees to act other than in the best interests of its clients; (F) provides or identifies for the borrower residential mortgage loans (i) with terms favorable to the borrower, which means such terms must be consistent with loan origination in a public or charitable context, not a commercial context, and (ii) comparable to mortgage loans and housing assistance provided under government housing assistance programs; and (G) meets such other standards as the commissioner may by regulation require. Any organization that demonstrates to the satisfaction of the commissioner its status as a bona fide nonprofit organization shall timely report any change in any information previously submitted to the commissioner and, not later than December thirty-first of each year, submit to the commissioner a renewed certification and documentation to update all information last filed in support of such bona fide nonprofit organization status or such status shall expire, except that any organization that obtained initial bona fide nonprofit status from the commissioner after November first of a given year shall submit a renewal certification and documentation by December thirty-first of the following year.
(2) The commissioner shall have the authority to periodically examine the books and activities of a certified bona fide nonprofit organization and to revoke the bona fide nonprofit organization status of an entity that does not continue to meet the criteria in subdivision (1) of this subsection.