AGO 1990-006.

• Case Date: February 05, 1990
• Court: Connecticut

Connecticut Attorney General Opinions 1990. AGO 1990-006. February 5, 1990Opinion No. 1990-006Hon. John B. Larson President Pro Tempore and Hon. Richard J. Balducci Speaker of the HouseConnecticut General Assembly Legislative Office BuildingHartford, CT 06106 Dear Messrs. Larson and Balducci: This is in response to your request for an opinion from this office regarding the constitutionality of provisions of the proposed interstate banking bill which would set interest rate caps on credit cards as a condition of entry by out-of-state bank holding companies, out-of-state savings and loan holding companies, out-of-state banks, out-of-state savings banks, and out-of-state savings and loan associations. Under the pertinent provisions of the bill, an out-of-state holding company, bank, savings bank, or savings and loan association ("S&L"') may not acquire or establish a Connecticut financial institution unless the Connecticut Commissioner of Banking finds inter alia that such out-of-state holding company, bank, savings bank or S&L

agrees, as an express condition of approval of such acquisition or establishment, that all banking and related services originating outside of this state which are offered or provided through the mails by such [holding company, bank, savings bank or S&L], or by any subsidiary of such [holding company, bank, savings bank or S&L], to customers residing in this state, including, but not limited to, the extension of credit, shall comply with the law of this state.

See §§ 2(a)(D), 2(b)(D), 3(5), 4(a)(D) and 5(a)(5) of proposed bill. Under this provision, out-of-state holding companies, banks, savings banks, S&L's, and their subsidiaries would be required to comply with Conn. Gen. Stat. § 42-133c which sets the maximum interest rate which may be charged on open-end credit plans (credit cards). In this regard Conn. Gen. Stat. § 42-133c(a) as amended by 1989 Conn. Pub. Act 89-37 provides

(a) Notwithstanding any contrary provision of law, the maximum finance charge which may be applied under an open-end credit plan, as defined in subdivision (h) of section 36-393, in connection with a transaction arising out of a retail sale of consumer goods or services shall not exceed one and one-quarter per cent per month on the average daily balance of the account or the unpaid balance outstanding as of the end of the

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