Sec. 36a-684. (Formerly Sec. 36-414). Enforcement. Disclosure errors and adjustments.
Sec. 36a-684. (Formerly Sec. 36-414). Enforcement. Disclosure errors and adjustments. (a) Compliance with the requirements of sections 36a-567, 36a-568 and 36a-675 to 36a-685, inclusive, subdivision (13) of subsection (c) of section 36a-770, and
sections 36a-771, 36a-774 and 36a-777 shall be enforced by the commissioner and 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.
(b) In order to accomplish the purposes of sections 36a-675 to 36a-685, inclusive,
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 sections 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 sections 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 sections 36a-675 to 36a-685, inclusive, 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 (15 USC 1601 et seq.).
(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, (A) the commissioner shall apply (i) with
respect to the annual percentage rate, a tolerance of one-quarter of one per cent more
or less than the actual rate, determined without regard to Section 107(c) of the Consumer
Credit Protection Act (15 USC 1606(c)), and (ii) with respect to the finance charge, a
corresponding numerical tolerance as generated by the tolerance provided under this
subsection for the annual percentage rate; except that (B) with respect to transactions
consummated after March 31, 1982, the commissioner shall apply (i) for transactions
that have a scheduled amortization of ten years or less, with respect to the annual percentage rate, a tolerance not to exceed one-quarter of one per cent more or less than the actual
rate, determined without regard to Section 107(c) of the Consumer Credit Protection Act
(15 USC 1606(c)), but in no event a tolerance of less than the tolerances allowed under
Section 107(c) (15 USC 1606(c)), (ii) for transactions that have a scheduled amortization
of more than ten years, with respect to the annual percentage rate, only such tolerances
as are allowed under Section 107(c) of the Consumer Credit Protection Act (15 USC
1606(c)), and (iii) for all transactions, with respect to the finance charge, a corresponding
numerical tolerance as generated by the tolerances provided under this subsection for
the annual percentage rate.
(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 Sections 106(b), (c) and (d)
of the Consumer Credit Protection Act (15 USC 1605(b), (c) and (d)), 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 Section 106(b) (15 USC 1605(b)); (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, (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, (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 and section 36a-50, the commissioner may order any creditor to make an adjustment
as provided in subdivision (1) of 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
(15 USC 1601 et seq.), except with regard to the requirements of Section 165 of the
Consumer Credit Protection Act (15 USC 1666d).
(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.
(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.)
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.