2018 Connecticut General Statutes
Title 36a - The Banking Law of Connecticut
Chapter 668 - Nondepository Financial Institutions
Section 36a-557 - (Formerly Sec. 36-227). Exemptions.

(a) The following persons are exempt from the requirement for licensure set forth in section 36a-556:

(1) A licensed pawnbroker;

(2) A person licensed as a consumer collection agency in accordance with section 36a-801 when engaged in the activities of a consumer collection agency in the normal course of business;

(3) A person who services small loans for an exempt person described in subsection (b) of this section, when such exempt person owns the small loans, provided the servicing arrangements include, in addition to receiving payments of principal and interest in connection with the small loans, the provision of accounting, recordkeeping and data processing services;

(4) A person who is a passive buyer of a small loan. For purposes of this subdivision, “passive buyer” means a person who: (A) Has acquired a small loan for investment purposes from a person who is either licensed or exempt from licensure under subdivisions (1) to (3), inclusive, of this subsection; (B) will receive the principal and interest and any other moneys due under the small loan through a person who is either licensed or exempt from licensure under subdivisions (1) to (3), inclusive, of this subsection; and (C) has had and will have no communications of any kind with the Connecticut borrower regarding the small loan it has acquired;

(5) A consumer reporting agency, as defined in Section 603(f) of the Fair Credit Reporting Act, 15 USC 1681a, as amended from time to time, when generating leads; and

(6) A retail seller who offers, extends or facilitates credit through an open-end or closed-end credit plan for the purchase of goods or services from such retail seller.

(b) The following persons are exempt from the provisions of sections 36a-555 to 36a-573, inclusive:

(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 such bank or credit union; and

(3) Any operating subsidiary where each owner of such operating subsidiary is wholly owned by the same bank or credit union.

(c) Loans made by an exempt person described in subsection (b) of this section shall be exempt from the provisions of sections 36a-555 to 36a-573, inclusive, including, without limitation, the provisions applicable to licensed persons, even if: (1) The exempt person utilizes the services of a person exempt from licensing or required to be licensed pursuant to section 36a-556 in connection with the small loans that are made by the exempt person described in subsection (b) of this section; and (2) a person exempt from licensing or required to be licensed pursuant to section 36a-556 engages in activities intended to assist a prospective Connecticut borrower or a Connecticut borrower in obtaining a small loan that is made or to be made by an exempt person described in subsection (b) of this section. Nothing in this subsection shall be construed as exempting persons required to be licensed pursuant to section 36a-556 from the requirements to obtain and maintain a license or from the provisions of sections 36a-562 to 36a-573, inclusive. Notwithstanding the foregoing, no person licensed or required to be licensed under section 36a-556 shall engage in any of the activities described in subsection (a) of section 36a-556 for any small loan that has a disclosed APR in excess of thirty-six per cent if that small loan contains any condition or provision inconsistent with the requirements of subsections (d) to (g), inclusive, of section 36a-558.

(1949 Rev., S. 5938; 1949, S. 2754d; P.A. 94-122 S. 260, 340; P.A. 02-111, S. 36; P.A. 09-208, S. 9; P.A. 11-216, S. 32; P.A. 16-65, S. 21.)

History: P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-227 transferred to Sec. 36a-557 in 1995; P.A. 02-111 deleted provisions re content of application; P.A. 09-208 designated existing provisions as Subsec. (a), added Subdivs. (1) and (2) therein re criminal conviction information to be included in application and added Subsec. (b) specifying when withdrawal of application becomes effective and providing that commissioner may deny license up to 1 year after date the withdrawal became effective, effective July 7, 2009; P.A. 11-216 amended Subsec. (a) to delete provision re ten-year period re history of criminal convictions, add provisions authorizing commissioner to conduct state and national criminal history records check of applicant and each member, officer and director of applicant and add provisions re abandonment of application; P.A. 16-65 replaced former provisions with new Subsecs. (a) to (c) re exemptions, effective July 1, 2016.