SB 173 Summary

• Establishes licensing requirements for lead generators in residential mortgage lending, effective October 1, 2016, including application procedures, prohibited conduct, and recordkeeping obligations.

• Requires mortgage servicers to deposit escrow funds in segregated accounts at federally insured institutions, maintain detailed records, and pay taxes and insurance premiums timely or from their own funds if insufficient.

• Creates three Martin Luther King, Jr. Corridors to promote secured and unsecured lending in Connecticut, designated by the Banking Commissioner.

• Modifies money transmission licensing definitions and extends tenant protections in foreclosures, requiring 90-day notice to vacate and allowing tenants to remain through lease terms unless successor occupies as primary residence.

• Updates deposit index calculations for security deposits and escrow interest rates, shifting from Federal Reserve Board Bulletin methodology to FDIC rates for determining minimum interest owed to tenants and borrowers.