2012 Connecticut General Statutes
Title 36a - The Banking Law of Connecticut
Chapter 668 - Nondepository Financial Institutions
Section 36a-568 - (Formerly Sec. 36-236). Form of security restricted. Loan contract.

No licensee shall take any confession of judgment or any power of attorney, nor shall he take any note or promise to pay that does not state the actual amount of the loan, the time for which it is made and the charges, or any instrument in which blanks are left to be filled after the loan is made. No licensee shall take a mortgage, lien, security interest in or assignment or pledge of household goods or an assignment of wages as security for any loan made under sections 36a-555 to 36a-573, inclusive. A licensee may take a security interest in chattels or personal property other than household goods, except a security interest in an automobile may not be taken as security for any loan where the cash advance is one thousand eight hundred dollars or less. A licensee may take a security interest in real estate on loans made under said sections where the cash advance is in excess of one thousand eight hundred dollars, but may not take such a security interest in real estate where the cash advance is one thousand eight hundred dollars or less. A contract for a loan under said sections shall not originally schedule any repayment of the cash advance over a period in excess of twenty-four months and fifteen days if the amount of the original cash advance was one thousand dollars or less or thirty-six months and fifteen days if the amount of the original cash advance was more than one thousand dollars but not in excess of one thousand eight hundred dollars or seventy-two months and fifteen days if the amount of the original cash advance was in excess of one thousand eight hundred dollars, and shall be repayable in installments of cash advance and charges combined which are substantially equal in amount or so arranged that no installment is substantially greater in amount than any preceding installment and which are payable at approximately equal intervals not exceeding one month, except that the first installment may be payable not more than one month and fifteen days after the date of such contract. The requirements of section 36a-785 shall apply to any repossession under sections 36a-555 to 36a-573, inclusive, of property other than real estate.

(1949 Rev., S. 5951; 1949, S. 2764d; 1963, P.A. 175, S. 5; 1969, P.A. 242, S. 5; 454, S. 36; P.A. 75-99, S. 5, 6; P.A. 77-129, S. 6.)

History: 1963 act rephrased provisions and increased maximum repayment period from 20 months to 24 months and 15 days and time for payment of first installment from 45 days to 1 month and 15 days; 1969 acts prohibited taking mortgage or lien except as authorized in Sec. 36-234, made previous repayment period applicable to loans not exceeding $1,000 and allowed 36 months and 15 days for larger loans and deleted provision prohibiting licensee from taking any note or promise to pay which “does not state the actual amount of the loan, the time for which it is made and the charges” and from taking “any instrument in which blanks are left to be filled after the loan is made”; P.A. 75-99 specified conditions for taking security interest in real estate and stated that time for repayment of loan secured by real estate may not be restricted; P.A. 77-129 clarified use of chattels and personal property as loan security and deleted reference to security authorized in Sec. 36-234, allowed repayment period of 72 months and 15 days in cases where cash advance exceeded $1,800, deleted statement that time for loan repayment where loan secured by real estate is not to be limited and added provision re applicability of Sec. 42-98 to repossession of property other than real estate; Sec. 36-236 transferred to Sec. 36a-568 in 1995.

See Sec. 36a-564 re definition of “cash advance”.

See Sec. 36a-565(j) re inapplicability of section to certain open-end loans.

Cited. 115 C. 105.