Connecticut law sets mortgage payment and community bank review rules

The State Treasurer may invest state cash with eligible community banks and credit unions. The Treasurer sets which community banks and credit unions may take part, including an asset limit that changes over time. The Treasurer may make up to $300 million available based on cash availability. The Treasurer sets eligibility rules, including an asset limit, and sets an application process and investment schedule. The Treasurer may also set capital standards. This section takes effect October 1, 2026.

Mortgage lenders must accept listed forms of payment and accept full or partial extra payments on covered loans. These rules cover loans secured by a one-to-four-family home where the borrower lives. Accepted forms include bank checks, attorney client-fund checks, title insurance company checks, and wire transfers. All monthly payments due must be paid for an extra payment to count as a prepayment. The lender may apply the extra payment to other amounts owed if the loan terms allow. It does not change the monthly payment or due date unless the lender agrees in writing. For a Federal Housing Administration-insured loan, the borrower may have to repay certain charges, premiums, or fees the lender must pay when the loan is paid early. This section takes effect October 1, 2026. The extra-payment rule applies to loans made on or after January 1, 2027.

The Banking Commissioner may investigate complaints and order a landlord to pay a civil penalty, stop a practice, or comply with the law. The rule covers people who are or were landlords and complaints about the listed parts of Connecticut's rental security deposit law. The commissioner may act only on violations of the listed security deposit rules that fall within the commissioner's authority. This section takes effect October 1, 2026.

The Banking Commissioner must use specified standards when reviewing banks and certain applications, and consider banks' community service. The standards apply to approvals listed in the banking law and to reviews of banks' service to their communities. Applicants must show a record of following applicable community reinvestment and consumer protection rules. Some applicants with lower ratings must also show how the resulting organization will meet local banking needs, including for low- and moderate-income residents. When reviewing banks, the commissioner must consider escrow accounts, efforts to work with certain delinquent borrowers, public comments, and products that help residents build credit. These sections take effect October 1, 2026.

The Banking Commissioner must publish notice of certain applications; an eligible application may be approved five business days after the comment period ends. This process applies to the applications listed in the banking law section. The application is not automatically approved if the commissioner gives written notice before the deadline of a listed concern, the need for more information, or additional review. The commissioner may approve an application earlier by giving written notice of an intent not to disapprove it. The five-business-day period starts after the comment period ends. This section takes effect October 1, 2026.