Connecticut General Statutes
Chapter 668 - Nondepository Financial Institutions
Section 36a-489. (Formerly Sec. 36-440d). - Licenses: Issuance; denial; renewal; suspension; financial responsibility; withdrawal or abandonment of application.

(a)(1) The commissioner shall not issue an initial license for a mortgage lender, mortgage correspondent lender or mortgage broker unless the commissioner, at a minimum, finds that: (A) The applicant meets the requirements of subsection (a) of section 36a-488; (B) notwithstanding the provisions of section 46a-80, the applicant, the control persons of the applicant and the qualified individual or branch manager have not been convicted of, or pled guilty or nolo contendere to, a felony in a domestic, foreign or military court during the seven-year period preceding the date of the application for licensing or at any time preceding the date of application if such felony involved an act of fraud, dishonesty, a breach of trust or money laundering, provided any pardon or expungement of a conviction shall not be a conviction for purposes of this subdivision; (C) the applicant demonstrates that the financial responsibility, character and general fitness of the applicant, the control persons of the applicant and the qualified individual or branch manager are such as to command the confidence of the community and to warrant a determination that the applicant will operate honestly, fairly and efficiently within the purposes of sections 36a-485 to 36a-498e, inclusive, 36a-498h, 36a-534a and 36a-534b; (D) the applicant has met the surety bond requirement under section 36a-492; and (E) the applicant, the control persons of the applicant and the qualified individual or branch manager have not made a material misstatement in the application. If the commissioner fails to make such findings, the commissioner shall not issue a license, and shall notify the applicant of the denial and the reasons for such denial. For purposes of this subsection, the level of offense of the crime and the status of any conviction, pardon or expungement shall be determined by reference to the law of the jurisdiction where the case was prosecuted. In the event that such jurisdiction does not use the term “felony”, “pardon” or “expungement”, such terms shall include legally equivalent events.

(2) (A) The minimum standards for license renewal for a mortgage lender, mortgage correspondent lender or mortgage broker shall include the following: (i) The applicant continues to meet the minimum standards under subdivision (1) of this subsection; and (ii) the mortgage lender, mortgage correspondent lender or mortgage broker has paid all required fees for renewal of the license and has paid any outstanding examination fees or other moneys due to the commissioner.
(B) The license of a mortgage lender, mortgage correspondent lender or mortgage broker failing to satisfy the minimum standards for license renewal shall expire. The commissioner may adopt procedures for the reinstatement of expired licenses consistent with the standards established by the system. The commissioner may automatically suspend a mortgage lender, mortgage correspondent lender or mortgage broker license if the licensee receives a deficiency on the system indicating that the payment required by subparagraph (A) of this subdivision was Returned-ACH or returned pursuant to such other term as may be utilized by the system to indicate that the payment was not accepted. After a license has been automatically suspended pursuant to this section, the commissioner shall (i) give the licensee notice of the automatic suspension, pending proceedings for revocation or refusal to renew pursuant to section 36a-494 and an opportunity for a hearing on such action in accordance with section 36a-51, and (ii) require such licensee to take or refrain from taking such action as the commissioner deems necessary to effectuate the purposes of this section.
(b) (1) The commissioner shall not issue an initial license for a mortgage loan originator or a loan processor or underwriter unless the commissioner, at a minimum, finds that the applicant has: (A) Never had a mortgage loan originator or equivalent loan processor or underwriter license revoked in any governmental jurisdiction, except that a subsequent formal vacating of such revocation shall not be deemed a revocation; (B) notwithstanding the provisions of section 46a-80, not been convicted of, or pled guilty or nolo contendere to, a felony in a domestic, foreign or military court during the seven-year period preceding the date of the application for licensing or at any time preceding such date of application if such felony involved an act of fraud, dishonesty, a breach of trust, or money laundering, provided any pardon or expungement of a conviction shall not be a conviction for purposes of this subdivision; (C) demonstrated financial responsibility, character and general fitness so as to command the confidence of the community and to warrant a determination that the mortgage loan originator or loan processor or underwriter will operate honestly, fairly and efficiently within the purposes of sections 36a-485 to 36a-498e, inclusive, 36a-498h, 36a-534a and 36a-534b; (D) completed the prelicensing education requirement described in section 36a-489a and passed a written test that meets the test requirement described in section 36a-489a; (E) met the surety bond requirement under section 36a-492 and, in the case of a mortgage loan originator required to be licensed under section 36a-671e, met the surety bond requirements under sections 36a-492 and 36a-671d; and (F) not made a material misstatement in the application. If the commissioner denies an application for a mortgage loan originator or a loan processor or underwriter license, the commissioner shall notify the applicant and may notify the sponsor or any other person the commissioner deems appropriate of the denial and the reasons for such denial. For purposes of this subsection, the level of offense of the crime and the status of any conviction, pardon or expungement shall be determined by reference to the law of the jurisdiction where the case was prosecuted. In the event that such jurisdiction does not use the term “felony”, “pardon” or “expungement”, those terms shall include legally equivalent events.
(2) (A) The minimum standards for license renewal for a mortgage loan originator or a loan processor or underwriter shall include the following: (i) The licensee continues to meet the minimum standards for license issuance under subdivision (1) of this subsection; (ii) the licensee has satisfied the annual continuing education requirements described in subsection (c) of section 36a-489a; and (iii) the licensee has paid all required fees for renewal of the license and any outstanding examination fees or other moneys due to the commissioner.
(B) The license of a mortgage loan originator or a loan processor or underwriter that fails to satisfy the minimum standards for license renewal shall expire. The commissioner may adopt procedures for the reinstatement of expired licenses consistent with the standards established by the system. The commissioner may automatically suspend a mortgage loan originator or a loan processor or underwriter license if the licensee receives a deficiency on the system indicating that the payment of renewal fees required by subparagraph (A) of subdivision (2) of this subsection was Returned-ACH or returned pursuant to such other term as may be utilized by the system to indicate that the payment was not accepted. After a license has been automatically suspended pursuant to this section, the commissioner shall (i) give the licensee notice of the automatic suspension, pending proceedings for revocation or refusal to renew pursuant to section 36a-494 and an opportunity for a hearing on such action in accordance with section 36a-51 and (ii) require such licensee to take or refrain from taking such action as the commissioner deems necessary to effectuate the purposes of this section.
(c) For purposes of this section, a person has shown that such person is not financially responsible when such person has shown a disregard in the management of such person's own financial condition. A determination that a person has not shown financial responsibility may include, but is not limited to: (1) Current outstanding judgments, except judgments solely as a result of medical expenses; (2) current outstanding tax liens or other government liens and filings; (3) foreclosures during the three years preceding the date of application for an initial license or renewal of a license; or (4) a pattern of seriously delinquent accounts within the past three years.
(d) (1) The commissioner shall not issue a lead generator license to an applicant for such license unless the commissioner, at a minimum, finds that: (A) The applicant demonstrates that the character, reputation, integrity and general fitness of the applicant, any control person of the applicant and the qualified individual are such as to command the confidence of the community and warrant a determination that the applicant will operate honestly, fairly and efficiently within the purposes of sections 36a-485 to 36a-498e, inclusive, 36a-498h, 36a-534a and 36a-534b; (B) the applicant has not made a material misstatement in the application; and (C) the applicant has met any other requirements determined by the commissioner. If the commissioner fails to make such findings, the commissioner shall not issue a license and shall notify the applicant of the denial and the reasons for such denial. Without limiting the foregoing requirements of this subdivision, and subject to the provisions of section 46a-80, the commissioner may deny an application based on the history of criminal convictions of the applicant, any control person of the applicant or the qualified individual.
(2) (A) The minimum standards for license renewal for a lead generator shall include the following: (i) The applicant continues to meet the minimum standards under subdivision (1) of this subsection; and (ii) the lead generator has paid all required fees for renewal of a license and any outstanding examination fees or other moneys due to the commissioner.
(B) The license of a lead generator who fails to satisfy the minimum standards for license renewal shall expire. The commissioner may adopt procedures for the reinstatement of expired licenses consistent with the standards established by the system. The commissioner may automatically suspend a lead generator license if the licensee receives a deficiency on the system indicating that the payment of renewal fees required by subparagraph (A) of subdivision (2) of this subsection was Returned-ACH or returned pursuant to such other term as may be utilized by the system to indicate that the payment was not accepted. After a license has been automatically suspended pursuant to this section, the commissioner shall (i) give the licensee notice of the automatic suspension, pending proceedings for revocation or refusal to renew pursuant to section 36a-494, and an opportunity for a hearing on such action in accordance with section 36a-51; and (ii) require such licensee to take or refrain from taking such action as the commissioner deems necessary to effectuate the purposes of this section.
(e) The commissioner may deem an application for a license under this section abandoned if the applicant fails to respond to any request for information required under sections 36a-485 to 36a-498e, inclusive, 36a-498h, 36a-534a and 36a-534b, or the regulations adopted pursuant to said sections. The commissioner shall notify the applicant on the system that if such information is not submitted not later than sixty days from the date of such request the application shall be deemed abandoned. An application filing fee paid prior to the date an application is deemed abandoned pursuant to this subsection shall not be refunded. Abandonment of an application pursuant to this subsection shall not preclude the applicant from submitting a new application for a license under sections 36a-485 to 36a-498e, inclusive, 36a-498h, 36a-534a and 36a-534b.
(P.A. 85-399, S. 5; P.A. 89-347, S. 12; P.A. 94-122, S. 233, 340; P.A. 99-36, S. 26; P.A. 02-111, S. 6; P.A. 04-69, S. 4; P.A. 06-45, S. 2; P.A. 07-156, S. 7; P.A. 08-176, S. 31, 43; P.A. 09-207, S. 5; 09-208, S. 3; 09-209, S. 8; P.A. 11-216, S. 14–16; P.A. 12-96, S. 1, 11, 12; P.A. 17-38, S. 4; P.A. 18-173, S. 11.)
History: P.A. 89-347 extended the application of the section to mortgage brokers; P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-440d transferred to Sec. 36a-489 in 1995; P.A. 99-36 made technical changes; P.A. 02-111 designated existing provisions as Subsec. (a) and amended same by requiring commissioner to find that applicant meets requirements of Sec. 36a-488(a), providing that application requirements extend to “partners” in a partnership, and adding provisions re extending application requirements to “members if the applicant is a limited liability company”, re denial of license application based on material misstatement in application, and re denial of application subject to provisions of Sec. 46a-80 and added Subsec. (b) re application for registration of originator; P.A. 04-69 substituted “36a-498a” for “36a-498”; P.A. 06-45 amended Subsec. (a) to require commissioner to deny application for license if commissioner finds that applicant made a material misstatement in application for registration of originator or files application for such registration with knowledge that application contains a material misstatement by originator, and amended Subsec. (b) to require commissioner to register originator named in application unless commissioner finds that originator has made a material misstatement in application and to make technical changes, effective May 8, 2006; P.A. 07-156 replaced language re application for registration of originator and registration with language re application for originator license and license and made conforming changes, effective September 30, 2008; P.A. 08-176 changed effective date of P.A. 07-156, S. 7, from September 30, 2008, to July 1, 2008, amended Subsec. (a) to add mortgage correspondent lender, amended Subsecs. (a) and (b) to add references to Secs. 36a-760a to 36a-760h and to make conforming changes, and amended Subsec. (b) to delete provision re license remaining in force and effect, effective July 1, 2008; P.A. 09-207 added provisions, codified by the Revisors as Subsec. (e), re circumstances under which commissioner may consider license application to be abandoned, effective July 7, 2009; P.A. 09-208 added provisions, codified by the Revisors as Subsec. (d), re withdrawal of license application, effective July 7, 2009; P.A. 09-209 deleted former Subsecs. (a) and (b), added new Subsec. (a) re commissioner's minimum findings for issuance and renewal of mortgage lender, mortgage correspondent lender or mortgage broker license, added new Subsec. (b) re commissioner's minimum findings for issuance and renewal of mortgage loan originator license, and added Subsec. (c) re determinations of financial responsibility, effective July 31, 2009 (Revisor's note: In Subsecs. (a)(2)(A)(ii) and (b)(2)(A)(ii), references to Sec. 36a-489a(d) were changed editorially by the Revisors to Sec. 36a-489a(c) for accuracy); P.A. 11-216 amended Subsec. (e) to make technical changes, delete reference to Sec. 36a-498a, add references to Secs. 36a-498f, 36a-534a and 36a-534b and require notification to be made “on the system”, effective July 13, 2011, and amended Subsec. (a)(2)(B) to permit automatic suspension of a mortgage lender, correspondent lender or broker license and amended Subsec. (b) to add provisions re loan processor or underwriter, to require that mortgage loan originator applicant meet the surety bond requirements under Secs. 36a-492 and 26a-671d in Subdiv. (1), to permit automatic suspension of a mortgagor loan originator or loan processor or underwriter license in Subdiv. (2)(B), and to make conforming changes, effective October 1, 2011; P.A. 12-96 amended Subsec. (a) by adding reference to expungement of a conviction and adding provisions re determination of conviction, pardon or expungement in Subdiv. (1) and by replacing “person” with “individual” and requiring each qualified individual and branch manager to be licensed as a mortgagee loan originator and have completed continuing education requirements in Subdiv. (2)(A), amended Subsec. (b)(1) by adding reference to expungement of a conviction in Subpara. (B), requiring qualified individuals or branch managers to have completed continuing education requirements in Subpara. (D) and requiring status of a conviction, pardon or expungement to be determined by reference to law of jurisdiction where case was prosecuted, and amended Subsec. (e) to make technical changes; P.A. 17-38 amended Subsec. (a) by adding reference to Sec. 36a-498h in Subdiv. (1)(C), deleting provisions effective April 1, 2010 and November 1, 2012 in Subdiv. (2)(A)(ii) and redesignating clause (iii) as new clause (ii), amended Subsec. (b) by adding reference to Sec. 36a-498h in Subdiv. (1)(C), deleting provisions effective April 1, 2010 and October 1, 2011 in Subdiv. (1)(D), deleting reference to July 31, 2010 in Subdiv. (1)(E), and deleted Subdiv. (3) re completion of prelicensing education requirement and passing written test, added new Subsec. (d) re issuance of lead generator license to applicant, renewal of license and procedures for reinstatement of expired licenses, redesignated existing Subsec. (d) as Subsec. (e) and amended same by designating existing provisions re withdrawal of application for license as Subdiv. (1), and adding Subdiv. (2) re failure to renew license, and redesignated existing Subsec. (e) re application deemed abandoned as Subsec. (f), and made technical and conforming changes; P.A. 18-173 amended Subsec. (a) by deleting references to having supervisory authority at office and adding reference to control persons of applicant and qualified individual or branch manager re material misstatement in application in Subdiv. (1), amended Subsecs. (a) and (b) by adding provisions re payment of outstanding examination fees or other moneys due commissioner in Subdiv. (2)(A), designating existing provision re commissioner to give licensee notice as clause (i), designating existing provision re commissioner to require licensee to take or refrain from taking action as clause (ii) and amending same by replacing “action that, in the opinion of the commissioner, will effectuate” with “action as the commissioner deems necessary to effectuate”, further amended Subsec. (b) by adding reference to renewal fees in Subdiv. (2)(B), amended Subsec. (d) by adding provision re payment of outstanding examination fees or other moneys due commissioner in Subdiv. (2)(A), adding reference to renewal fees, and replacing “action that, in the opinion of the commissioner, will effectuate” with “action as the commissioner deems necessary to effectuate” in Subdiv. (2)(B), deleted former Subsec. (e) re withdrawal of application and expiration of license for failure to renew, redesignated Subsec. (f) as new Subsec. (e), replaced references to Sec. 36a-498f with references to Sec. 36a-498e, and made technical and conforming changes.
Although Subsec. (a) does not expressly address sole proprietorships, it delineates those individuals to whom commissioner looks in determining the general fitness of various corporate organizations, including principal employees of corporations, and it follows that commissioner reasonably would examine acts of the few employees of sole proprietorship, done in furtherance of its business, in assessing the organization's character or general fitness. 94 CA 547.

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