Connecticut Administrative Code
Title 36a - The Banking Law of Connecticut
744 - Home Mortgage Disclosure Act
Transferred from Section 36-455
Section 36a-744-3 - Prohibited practices

(a) No financial institution and no federal bank shall discriminate, on a basis that is arbitrary or unsupported by a reasonable analysis of the lending risks associated with the applicant for a given loan or the condition of the property to secure it, in the granting, withholding, extending, modifying, renewing or in the fixing of the rates, terms, conditions or provisions of any home purchase loan, home improvement loan or other mortgage loan on one to four family owner-occupied residential real property, solely because such property is located in a low-income or moderate-income neighborhood or geographical area. The following factors shall be included in the determination of the disposition of the application:

(b) It shall be a discriminatory practice for a financial institution or a federal bank to make any oral or written statement, in advertising or otherwise, to applicants or prospective applicants that would discourage a reasonable person from making or pursuing an application on one to four family owner-occupied residential real property solely because the secured property is located in a low-income or moderate-income neighborhood or geographical area. Any such statement constitutes a prohibited practice under Section 36a-737 of the act. Written or oral statements of underwriting criteria that are used which do not conflict with the Connecticut General Statutes shall not be construed to be a violation of this subsection.

(c) No financial institution and no federal bank shall utilize arbitrary policies which are discriminatory in effect with regard to any home purchase loan, home improvement loan or other mortgage loan on one to four family owner-occupied residential real property unless the financial institution or federal bank can demonstrate that such policies are necessary to avoid unsafe or unsound lending practices. Such arbitrary policies include, but are not limited to, the refusal to lend on two, three or four family owner-occupied dwellings, and the refusal to lend on dwellings on the basis of age. Such policies represent underwriting criteria that do not conform to the requirements of Section 36a-737 of the act.

(d) No financial institution and no federal bank shall discriminate on the basis of arbitrary or unsupported assertions or assumptions regarding the effect of a trend in the neighborhood or geographic area on the present or future value of secured property consisting of one to four family owner-occupied residential real property so as to avoid contributing to the deterioration of the neighborhood unless the financial institution or federal bank can demonstrate that such considerations in the particular case are necessary to avoid unsafe or unsound lending practices.

(e) No financial institution and no federal bank shall discriminate on the basis of racial or ethnic composition of a neighborhood, or trends in the racial or ethnic composition of a neighborhood. Such considerations do not constitute a reasonable analysis of the lending risks associated with the applicant for a given loan, or the condition of secured property consisting of one to four family owner-occupied residential real property.

(f) As used in this section, "federal bank" shall have the same meaning as set forth in section 36a-2 of the Connecticut General Statutes.