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Senator Patricia Billie Miller, D-Stamford, helped Wednesday to pass revisions to Connecticut’s banking statutes, which are expected to benefit Stamford, a city with a thriving and growing financial sector. The changes, passed during a special legislative session, include the creation of a new classification of bank called “innovation banks.”
Innovation banks are Connecticut-chartered or organized banks and trust companies, savings banks, or savings and loan associations that do not accept retail deposits. The new law authorizes these banks to receive non-retail deposits eligible for Federal Deposit Insurance Corporation (FDIC) insurance, providing them with greater operational flexibility and the ability to secure deposit insurance for these deposits.
“The creation of innovation banks will enhance Connecticut’s financial landscape by providing more flexibility and opportunities for growth within the banking sector,” Senator Miller, co-chair of the legislature’s Banking Committee, said. “This legislative update is a crucial step in ensuring that our state remains competitive and continues to attract top-tier financial institutions. By modernizing our banking sector we are supporting economic growth in Stamford and across the state.”
This new classification of bank will encompass financial institutions previously referred to as “uninsured banks.” The bill also defines “retail deposits” as deposits by anyone other than accredited investors, as specified in federal securities regulations.
Accredited investors include certain banks, securities brokers or dealers, insurance companies, investment companies, business development companies, qualifying retirement and employee benefit plans, trusts with assets over $5 million, and individuals with an income over $200,000 in each of the past two years or $300,000 jointly with a spouse.
Other provisions of the bill passed during Wednesday’s session included changes that will:
- Allow the South Central Connecticut Regional Water Authority to amend its charter to possibly acquire the Aquarion Water Company, thereby creating a state-chartered regional water authority.
- Forgive any interest due on any business tax underpayment that was made as a result of businesses taking the employee retention tax credit, which was offered for 21 months by the Biden administration during the COVID-19 crisis.
- Require local tax assessors to tax commercial motor vehicles with certain permanent attachments as motor vehicles (with a maximum tax rate of 32.46 mills) and not as personal property (which some towns tax at 40 mills or more).
- Require cities and towns to set different mill rates for motor vehicles and property, with motor vehicles tax rates as low as zero if a town chooses.
- In an effort to avoid criminal acts or the perception of impropriety, reinstate the state prohibition on construction managers on school construction projects from bidding on subcontracts.
- Create a timeline by which the State Historic Preservation Office determines the preservation and redevelopment needs of historic properties.
- Change the formula and timeframe by which state insurance companies pay assessments to operate the state Insurance Department, Office of Healthcare Advocate, and Office of Health Strategy.
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