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To Her Excellency M. Jodi Rell, Governor - page 9 / 25

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CONSUMER CREDIT DIVISION

The Consumer Credit Division is responsible for regulating the activities of mortgage lenders, brokers, and originators; small loan companies; sales finance companies; debt adjusters; consumer collection agencies; money transmitters; issuers of money orders or traveler’s checks; and check cashing services. The Division is responsible for the licensing and examination of these entities and the enforcement of related Connecticut laws. The Division also administers Truth-in-Lending laws; retail installment sales financing laws; and a major portion of the law relating to rental security deposits.

Licensing

On July 1, Mortgage Licensing and renew existing

2008, the Department System. This allows all licenses on a national

of Banking began participation in the National

Connecticut mortgage lenders

database.

During

this

time

to apply for licenses period, Connecticut

changed from having separate licenses for first mortgage activity and secondary activity to a combined license for both first and secondary mortgage activity.

mortgage

Examination and Enforcement

During 2008 the Consumer Credit Division continued to increase focus on enforcement. Department actions against licensees and related entities increased, with 266 actions taken against licensees or registrants totaling $1,996,250 in civil penalties.

The Division conducted 393 examinations of licensees under their jurisdiction. The examinations included review of state statutes, with $451,375.44 being refunded to consumers.

Disclosure of the Cost of Credit (Truth in Lending)

During 2008, the Consumer Credit Division conducted 304 inspections of creditors subject to the requirements of the Truth in Lending Act and Regulations. These examinations were conducted at entities licensed by the Consumer Credit Division, including mortgage companies, sales finance companies and small loan companies. With few exceptions the level of compliance is high, with technical violations constituting the bulk of non-compliance observed.

Connecticut is one of five states that the Federal Reserve Board exempts from the federal Truth in Lending Act. This permits local enforcement of the Truth in Lending Law.

Creditors found to be violating the Truth in Lending regulations may be required to rebate overcharges, to issue corrected disclosure statements, or to issue additional rights of rescission where such rights were improperly administered initially. In addition, such creditors are required to advise the department of their plan to prevent similar violations from occurring in the future.

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