Governor Rell Signs Bill Extending

Commercial Loan Protections

            Governor M. Jodi Rell today announced she has signed into law a bill that extends the protections granted to commercial revolving loans secured by a mortgage to all commercial future advance loans secured by mortgages.

            “Revolving loans” are accounts that allow a borrower to withdraw money from the account, repay the loan and then withdraw from the account again. Under current law, so long as certain standards are met, revolving loans that are secured by a mortgage have priority over other claims – known as a “safe harbor” provision. The legislation extends those provisions to mortgage-backed loan accounts that do not “revolve.”

            “This bill is an important step for lenders and borrowers alike, giving them a clear ‘safe harbor’ at a time when access to credit is especially vital for the future of our economy,” Governor Rell said. “I am pleased to sign this bill into law.”

            The legislation – House Bill 6233, An Act Concerning Safe Harbor Provisions for Revolving Loans – takes effect October 1.