Beginning January 1, 2015, Connecticut will require any person acting as a mortgage servicer to hold a license from the Connecticut Department of Banking. Connecticut House Bill 5353, which was signed by the governor on June 3, 2014, requires a license for any servicer’s main office location as well as any branch office where servicing activity is conducted.

The bill defines “mortgage servicer” to mean the following: (1) any person who receives payments of principal and interest in connection with a residential mortgage loan, records such payments and performs related administrative functions as necessary to carry out the mortgage holder’s obligations; and (2) any person who makes payments to borrowers pursuant to the terms of a home equity conversion mortgage or reverse mortgage.

Certain exemptions to this licensing requirement exist, specifically: (1) any person licensed as a mortgage lender in Connecticut, provided that such person meets the supplemental mortgage servicer surety bond, fidelity bond, and errors and omissions insurance requirements under the act; (2) any bank, out-of-state bank or credit union, provided they are federally insured; (3) any wholly-owned subsidiary of such bank or credit union; and (4) any operating subsidiary where each owner is wholly owned by such bank or credit union.