CT SB00235

Repeals the minimum 1.5% interest rate floor on tenant security deposits and replaces it with a rate tied to the deposit index published by the Federal Reserve Board Bulletin, effective October 1, 2010.

Requires landlords to pay interest on security deposits at a rate no less than the average rate paid on savings deposits by insured commercial banks as published in the Federal Reserve Board Bulletin for the prior year, rounded to the nearest one-tenth of one percentage point.

Exempts residential units in buildings owned by educational institutions used for student housing from the interest rate requirements.

Requires the Commissioner of Banking to publish the applicable deposit index rate in the Department of Banking news bulletin by December 15 of each prior year and disseminate rates through press releases, public service announcements, and notices at financial institutions.

Maintains existing provisions for annual interest payments or credits to tenants on anniversary dates and within thirty days if tenancy terminates early, with forfeiture of interest if rent is delinquent more than ten days.