§ 36a-684 — (Formerly Sec. 36-414). Enforcement. Disclosure errors and adjustments.

Connecticut § 36a-684

• Jurisdiction: Connecticut
• Title 36a: The Banking Law of Connecticut
• Ch. 669: Regulated Activities

Text

(a) The commissioner shall enforce the requirements of sections 36a-567, 36a-568, the Connecticut Truth-in-Lending Act, subdivision (13) of subsection (c) of section 36a-770, and sections 36a-771, 36a-774 and 36a-777. The commissioner shall, in addition to other powers granted by said sections or by other provisions of law, receive and act on complaints, take action designed to obtain voluntary compliance with said sections or commence proceedings on the commissioner's own initiative pursuant to sections 36a-50 to 36a-53, inclusive. (b) In order to accomplish the purposes of the Connecticut Truth-in-Lending Act and the provisions of the general statutes referred to in subsection (a) of this section, the commissioner may (1) counsel persons and groups on their rights and duties under said act and provisions, (2) establish programs for the education of consumers with respect to credit and leasing practices and problems, and (3) make studies appropriate to effectuate the purposes and policies of said act and provisions and make the results available to the public. (c) The commissioner may by regulation require the maintenance of records related to consumer credit sales, loans and leases sufficient to evidence the adoption of policies calculated to produce compliance with the Connecticut Truth-in-Lending Act and the provisions of the general statutes referred to in subsection (a) of this section which shall be in addition to the record retention requirements imposed under the Consumer Credit Protection Act. (d) (1) In carrying out enforcement activities under this section, the commissioner, in cases where an annual percentage rate or finance charge was inaccurately disclosed, shall notify the creditor of such disclosure error and may require the creditor to make an adjustment to the account of the person to whom credit was extended, to assure that such person will not be required to pay a finance charge in excess of the finance charge actually disclosed or the dollar equivalent of the annual percentage rate actually disclosed, whichever is lower. For the purposes of this subsection, except where such disclosure error resulted from a wilful violation which was intended to mislead the person to whom credit was extended, in determining whether a disclosure error has occurred and in calculating any adjustment, the commissioner shall apply the tolerances set forth in 15 USC 1607(e)(1), as amended from time to time. (2) The commissioner shall require such an adjustment when the commissioner determines that such disclosure error resulted from a clear and consistent pattern or practice of violations, from gross negligence, or from a wilful violation which was intended to mislead the person to whom the credit was extended. Notwithstanding the preceding sentence, except where such disclosure error resulted from a wilful violation which was intended to mislead the person to whom credit was extended, the commissioner need not require such an adjustment if the commissioner determines that such disclosure error: (A) Resulted from an error involving the disclosure of a fee or charge that would otherwise be excludable in computing the finance charge, including but not limited to, violations involving the disclosures described in 15 USC 1605(b), (c) and (d), as amended from time to time, in which event the commissioner may require such remedial action as the commissioner determines to be equitable, except that for transactions consummated after March 31, 1982, such an adjustment shall be ordered for violations of 15 USC 1605(b), as amended from time to time; (B) involved a disclosed amount which was ten per cent or less of the amount that should have been disclosed and (i) in cases where the error involved a disclosed finance charge, the annual percentage rate was disclosed correctly, and (ii) in cases where the error involved a disclosed annual percentage rate, the finance charge was disclosed correctly; in which event the commissioner may require such adjustment as the commissioner determines to be equitable; (C) involved a total failure to disclose either the annual percentage rate or the finance charge, in which event the commissioner may require such adjustment as the commissioner determines to be equitable; or (D) resulted from any other unique circumstance involving clearly technical and nonsubstantive disclosure violations that do not adversely affect information provided to the consumer and that have not misled or otherwise deceived the consumer. In the case of other such disclosure errors, the commissioner may require such an adjustment. (3) Notwithstanding subdivision (2) of this subsection, no adjustment shall be ordered: (A) If it would have a significantly adverse impact upon the safety or soundness of the creditor, but in any such case, the commissioner may require a partial adjustment in an amount which does not have such an impact except that with respect to any transaction consummated after May 18, 1981, the commissioner shall require the full adjustment, but permit the creditor to make the required adjustment in partial payments over an extended period of time which the commissioner considers to be reasonable, if the commissioner determines that a partial adjustment or making partial adjustments over an extended period is necessary to avoid causing the creditor to become undercapitalized pursuant to 12 USC 1831o, as amended from time to time, (B) if the amount of the adjustment would be less than one dollar, except that if more than one year has elapsed since the date of the violation, the commissioner may require that such amount be paid to the commissioner, or (C) except where such disclosure error resulted from a wilful violation which was intended to mislead the person to whom credit was extended, in the case of an open-end credit plan, more than two years after the violation, or in the case of any other extension of credit, as follows: (i) With respect to creditors that have been examined by the commissioner, except in connection with violations arising from practices identified in the current examination and only in connection with transactions that are consummated after the date of the immediately preceding examination, except that where practices giving rise to violations identified in earlier examinations have not been corrected, adjustments for those violations shall be required in connection with transactions consummated after the date of the examination in which such practices were first identified; (ii) with respect to creditors that have not been examined by the commissioner, except in connection with transactions that are consummated after May 10, 1978; and (iii) in no event after the later of (I) the expiration of the life of the credit extension, or (II) two years after the agreement to extend credit was consummated. (4) In addition to the enforcement powers authorized by the provisions of this section, the commissioner may order any creditor to make an adjustment as provided in this subsection. After such an order is issued, the persons named therein may, within fourteen days after receipt of the order, file a written request for a hearing. The hearing shall be held in accordance with the provisions of chapter 54. (5) Except as otherwise specifically provided in this subsection and notwithstanding any other provision of law, the commissioner may not require a creditor to make dollar adjustments for errors in any requirements under the Consumer Credit Protection Act, except with regard to the requirements of 15 USC 1666d, as amended from time to time. (6) A creditor shall not be subject to an order to make an adjustment, if within sixty days after discovering a disclosure error, whether pursuant to a final written examination report or through the creditor's own procedures, the creditor notifies the person concerned of the error and adjusts the account so as to assure that such person will not be required to pay a finance charge in excess of the finance charge actually disclosed or the dollar equivalent of the annual percentage rate actually disclosed, whichever is lower.

Legislative History

(1969, P.A. 454, S. 22; P.A. 74-254, S. 7; P.A. 78-280, S. 6, 127; P.A. 81-158, S. 9, 10, 17; P.A. 82-18, S. 2, 4; 82-174, S. 7, 14; P.A. 88-65, S. 46; 88-230, S. 1, 12; P.A. 90-98, S. 1, 2; P.A. 93-142, S. 4, 7, 8; P.A. 94-122, S. 308, 340; P.A. 96-109, S. 15; P.A. 03-61, S. 7; P.A. 15-235, S. 10; P.A. 16-193, S. 15.) History: P.A. 74-254 substituted reference to chapter 54 for reference to chapter 637 in Subsec. (f); P.A. 78-280 substituted “judicial district of Hartford-New Britain” for “Hartford county” in Subsec. (d); P.A. 81-158 amended Subsec. (b) to include leasing practices and problems in the education programs of the commissioner, amended Subsec. (c) to require the intention of records related to consumer leases, provide that the record retention requirements are in addition to those imposed by federal law and provide that examination of records related to required disclosures may take place on the premises of a lessor or an assignee of a creditor or lessor, amended Subsec. (d) to provide that the commissioner is not required to post a bond, amended Subsec. (e) to delete provisions concerning the specific topics to be covered by the report, amended Subsec. (f) to add “or lessor or assignee thereof”, effective March 31, 1982, and added Subsec. (g) concerning disclosure errors and required adjustments by a creditor to conform to federal law; P.A. 82-18 changed effective date of P.A. 81-158 from March 31, 1982, to “the effective date of Title VI of Public Law 96-221, as contained in Section 625(a) of Public Law 96-221, as amended”, i.e. October 1, 1982; P.A. 82-174 amended Subsec. (f) by deleting provisions authorizing the commissioner, after a hearing, to order a creditor, lessor or assignee to cease and desist from violating the chapter and authorizing an aggrieved person to appeal in the manner provided in chapter 54, and by adding provisions authorizing the commissioner to issue, after notice, cease and desist orders unless a hearing is requested and authorizing him to bring an action to enforce any such order; P.A. 88-65 made technical changes by adding U.S. code citations; P.A. 88-230 replaced “judicial district of Hartford-New Britain” with “judicial district of Hartford”, effective September 1, 1991; P.A. 90-98 changed the effective date of P.A. 88-230 from September 1, 1991, to September 1, 1993; (Revisor's note: In 1991 the incorrect internal reference in Subsec. (a) to section “42-83(2)(d)” was changed editorially by the Revisors to “42-83(3)(d)”); P.A. 93-142 changed the effective date of P.A. 88-230 from September 1, 1993, to September 1, 1996, effective June 14, 1993; P.A. 94-122 deleted a provision authorizing the commissioner or his representative to examine records on a creditor's or lessor's premises in Subsec. (c), deleted Subsecs. (d) re court injunctions, (e) re annual reports to the governor and (f) re cease and desist orders, relettered former Subsec. (g) as Subsec. (d) and made technical changes, effective January 1, 1995; Sec. 36-414 transferred to Sec. 36a-684 in 1995; P.A. 96-109 made technical change in Subsec. (a), deleting reference to Subsec. (c) of Sec. 36a-535 and substituting reference to Subdiv. (13) for reference to Subdiv. (12) of Sec. 36a-770(c); P.A. 03-61 deleted Subsec. (d)(7) re adjustments for annual percentage rate disclosure errors with respect to transactions consummated between January 1, 1977, and May 18, 1981; P.A. 15-235 amended Subsec. (a) to add reference to Secs. 36a-50 to 36a-53, amended Subsec. (d) to add reference to tolerances set forth in 15 USC 1607(e)(1) and to add provisions re creditors at risk of becoming undercapitalized, and made technical changes, effective August 1, 2015; P.A. 16-193 made a technical change in Subsec. (d)(4).