An Act Defining "mortgage Loan" For Purposes Of Certain Notice Provisions Relating To Flood Damage And Insurance.
Summary
HB 5317 amends Connecticut General Statutes section 49-7b to define “mortgage loan” for purposes of the statute’s flood-damage notice requirements. Under the bill, the term would apply only to loans secured by a first mortgage on one-to-four-family residential real property in Connecticut and made to finance the purchase of that property. The bill does not change the substance of the required notice itself; creditors would still have to inform applicants, in writing, that standard homeowners insurance does not cover flood damage, that flooding can occur outside designated flood zones, and that flood insurance may be worth discussing with an insurance professional.
The bill also preserves the existing procedural requirements that the notice be written in plain language, signed and dated by the applicant, and retained in the mortgage records. Its practical effect is to narrow and clarify which transactions fall within the notice mandate, which may reduce ambiguity for lenders and borrowers about when the flood-insurance disclosure must be provided. The effective date is July 1, 2026.
The available legislative history shows a strongly favorable committee result, with a 12-0 Joint Favorable vote and no recorded opposition in the materials provided. There are no committee transcripts or floor debate excerpts included, so the public record here suggests the bill moved forward without visible controversy.
Because the bill is mainly definitional and procedural, the likely policy impact is limited to mortgage lending and disclosure compliance rather than broader housing or insurance regulation. It affects creditors, mortgage loan applicants, and mortgage recordkeeping practices by clarifying the scope of the flood notice requirement tied to home purchase financing.
Impact
HB 5317 would amend section 49-7b of the Connecticut General Statutes to add a specific definition of “mortgage loan” for the flood-damage notice provisions. The definition would limit coverage to first-mortgage loans on one-to-four-family residential property in Connecticut that are made to finance the purchase of the property. This narrows and clarifies the set of transactions subject to the statutory flood-insurance disclosure requirements, while leaving the notice content and recordkeeping obligations unchanged.
Sentiment
The bill appears to have been received positively and without recorded opposition in the available materials. It was reported Joint Favorably by the Banking Committee on a 12-0 vote, and there are no committee transcripts or other discussion snippets indicating disagreement. The available record suggests broad agreement that the bill is a technical clarification rather than a substantive policy change.
Contention
No specific points of contention are documented in the provided materials. If any concerns existed, they are not reflected in the available transcripts or vote history. Based on the text, any debate would likely center on whether the new definition appropriately limits the notice requirement to purchase-money, first-lien residential mortgages and whether that scope is too narrow or too broad for flood-risk disclosure purposes.
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