STATE BANKING DEPARTMENT UPHOLDS CITY TOWING PROGRAM
(12/28/2010) The State of Connecticut's Department of Banking has decided that Crown Auto Center, a New Haven-based towing company, does not need a license to accept delinquent parking fees and property taxes on the City of New Haven's behalf for vehicles it tows after hours. The Banking Department recognized that the towing company's activities are permitted under an exception to the state law that generally requires a license for debt collection activities. Since Crown is not "primarily engaged" in debt collection and is only holding these funds in escrow for the City, state law does not require a license.
The license issue gained public attention when other towing companies who do not have a contract with the City for the work Crown performs, claimed that Crown's collection of parking fees and taxes for the City required a license. After the towing companies raised the issue, City officials met with State Banking Department officials to explain the program and agreed to clarify the terms of its contract with Crown in order to make sure it complied with state law. After reviewing all of the facts and the law, the Banking Department agreed that no license is necessary.
City Tax Collector Maurine Villani is pleased with the ruling and issued the following statement. "This decision allows the City to continue with a program that has been convenient for City taxpayers and good for the City. Rather than have taxpayers wait until the next business day to retrieve their vehicles and pay any owed fines or taxes, they can continue to do so at any hour."
The Banking Department's decision, dated December 23rd, was not received by the City until this week.
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