SB223 (2005) Detail

Relative to licensing nondepository mortgage bankers and brokers.


CHAPTER 255

SB 223-FN – FINAL VERSION

03/24/05 0636s

01Jun2005… 1564h

06/29/05 2110eba

2005 SESSION

05-1045

06/03

SENATE BILL 223-FN

AN ACT relative to licensing nondepository mortgage bankers and brokers.

SPONSORS: Sen. Flanders, Dist 7

COMMITTEE: Banks and Insurance

AMENDED ANALYSIS

This bill:

I. Makes RSA 397-A applicable to all mortgages.

II. Requires background checks for principals of certain financial businesses regulated by the commissioner.

III. Increases the fee for mortgage banker and broker licenses.

IV. Adds agents and originators to the persons covered by mortgage licenses.

V. Clarifies the limits of certain time periods.

VI. Allows the commissioner to accept examinations of financial condition conducted by regulators in other states and the federal government.

VII. Allows the commissioner to share information with regulators in other states and the federal government.

VIII. Repeals the chapter relative to second mortgage home loans.

IX. Allows the commissioner to use certain national organizations to facilitate licensing.

This bill is a request of the banking department.

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Explanation: Matter added to current law appears in bold italics.

Matter removed from current law appears [in brackets and struckthrough.]

Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

03/24/05 0636s

01Jun2005… 1564h

06/29/05 2110eba

05-1045

06/03

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Five

AN ACT relative to licensing nondepository mortgage bankers and brokers.

Be it Enacted by the Senate and House of Representatives in General Court convened:

255:1 Definitions. RSA 397-A:1 is repealed and reenacted to read as follows:

397-A:1 Definitions. In this chapter:

I. “Agent” means any individual, other than a mortgage banker or mortgage broker, who is employed or retained by a mortgage banker or mortgage broker required to be licensed under RSA 397-A, and who represents a mortgage banker or mortgage broker in soliciting, finding, negotiating, arranging, or processing mortgage loans.

II. “At closing” means the time at which the mortgage and the note are executed by the borrower.

III. “Borrower” means a homeowner or purchaser of a home who obtains funds from another by the signing of a note and mortgage deed on a dwelling. The term shall include any legal successor to the borrower’s rights or obligations.

IV. “Branch office” means a business location within this state of a person required to be licensed under this chapter that is identified by any means to the public as a location at which a mortgage banker or mortgage broker conducts mortgage business. Branch office does not include:

(a) A person’s principal office location.

(b) A location identified solely in a telephone directory line listing or on a business card or letterhead if:

(1) The listing, card, or letterhead also sets forth the address and telephone number of a New Hampshire office of the mortgage banker or mortgage broker from which all individuals conducting mortgage business from such identified location are directly supervised.

(2) No more than one agent, employee, originator, or other representative transacts business on behalf of the mortgage banker or broker from such identified location.

(c) Any other location not within the intent of this paragraph as the commissioner may determine.

V. “Commissioner” means the bank commissioner.

VI. “Department” means the banking department.

VII. “First mortgage loan” means a loan secured in whole or in part by a mortgage upon any interest in real property used or intended to be used as a dwelling with accommodations for not more than 4 families, which property is not subject to the lien of any prior mortgage, and shall include retail installment contracts secured by manufactured housing as defined in RSA 384:16-d, II and the renewal or refinancing of an existing first mortgage loan.

VIII. “HOEPA” means the Home Ownership and Equity Protection Act of 1994, 15 U.S.C. section 1639 et seq., as amended.

IX. “Lender” means any person that provides the initial funding for a mortgage and includes any legal successor to the rights of the lender. For the purpose of a table-funded transaction, the lender is the person who actually provides the funds for the transaction.

X. “Licensee” means a person, whether mortgage banker or mortgage broker, duly licensed by the commissioner pursuant to the provisions of this chapter.

XI. “Loan” means any loan of money or goods or forbearance of money and goods or choses in action.

XII. “Mortgage banker” means a person not exempt under RSA 397-A:4 who for compensation or gain, or in the expectation of compensation or gain, either directly or indirectly:

(a) Makes or originates mortgage loans as payee on the note evidencing the loan.

(b) Advances, or offers to advance, or makes a commitment to advance the banker’s own funds for mortgage loans, or closes mortgage loans with the banker’s own funds.

(c) Otherwise engages in the business of funding mortgage loans.

XIII. “Mortgage broker” means a person not exempt under RSA 397-A:4 who for compensation or gain, or in the expectation of compensation or gain, either directly or indirectly:

(a) Acts as an intermediary, finder, or agent of a lender or borrower for the purpose of negotiating, arranging, finding, or procuring mortgage loans, or commitments for mortgage loans.

(b) Offers to serve as agent for any person in an attempt to obtain a mortgage loan.

(c) Offers to serve as agent for any person who has money to lend for a mortgage loan.

XIV. “Mortgage loan” means a first or second mortgage loan which is secured in whole or in part by a mortgage upon any interest in real property used as a dwelling with accommodations for not more than 4 families.

XV. “Note” means the instrument, other than the mortgage, evidencing or containing the debt secured by the mortgage, or any renewal or refinancing of such instrument.

XVI. “Open end credit” means a plan prescribing the terms of credit transactions which may be made thereunder from time to time and under the terms of which a finance charge may be charged from time to time on an outstanding unpaid balance.

XVII. “Originator” means an individual who is employed or retained and supervised by a mortgage banker or mortgage broker required to be licensed under RSA 397-A and who, for compensation or gain or in the expectation of compensation or gain, negotiates, solicits, arranges, or finds a mortgage loan. No individual may act as an originator for more than one licensee.

XVIII. “Person” means an individual, corporation, business trust, estate, trust, partnership, association, 2 or more persons having a joint or common interest, or any other legal or commercial entity however organized.

XIX. “Principal” of the applicant or licensee means an owner with 10 percent or more ownership interest, corporate officer, director, member, general or limited liability partner, limited partner with 10 percent or more ownership interest, trustee, beneficiary of 10 percent or more of the trust that owns the applicant or licensee, senior manager, New Hampshire branch manager, and any person occupying similar status or performing similar functions.

XX. “Principal office” means the main office location of a person required to be licensed under this chapter.

XXI. “Real property” means land and the improvements which are affixed thereon, including, but not limited to, single-family homes, multifamily dwellings not exceeding 4 units, manufactured housing as defined in RSA 384:16-d, II, and any single-family condominium unit, wholly or partly used or occupied, or intended to be used or occupied, as the home or residence of one or more persons.

XXII. “Second mortgage loan” means a loan secured in whole or in part by a mortgage upon any interest in real property used or intended to be used as a dwelling with accommodations for not more than 4 families, which property is subject to the lien of one or more prior mortgages, and shall include home equity loans and the renewal or refinancing of an existing second mortgage loan.

XXIII. “Secondary market” means the market where lenders and investors buy and sell existing mortgages or mortgage-backed securities.

XXIV. “Table funding” means a settlement at which a loan is funded by a contemporaneous advance of loan funds and an assignment of a loan to the person advancing the funds. A table-funded transaction is not a secondary market transaction.

255:2 Application of Chapter; “First Mortgage” Changed to “Mortgage;” Order Added. Amend RSA 397-A:2, I-III to read as follows:

I. This chapter shall provide for the [banking] department’s regulation of persons that engage in the business of making or brokering [first] mortgage loans secured by real property located in the state of New Hampshire, which is or shall be occupied in whole or in part as a [primary domicile or] place of residence by the borrower and which consists of not more than 4 living units.

II. Any [first] mortgage loan made or brokered under the provisions of this chapter shall be further governed by any other applicable laws of the state of New Hampshire and by the Consumer Credit Protection Act, as amended (15 U.S.C. section 1601 et seq.).

III. Persons subject to or licensed under this chapter shall abide by applicable federal laws and regulations, the laws and rules of this state, and the orders of the commissioner. Any violation of such law, regulation, order, or rule is a violation of this chapter.

255:3 License Required; “First” Deleted. Amend RSA 397-A:3 to read as follows:

397-A:3 License Required. Any person not exempt under RSA 397-A:4 that, in its own name or on behalf of other persons, engages in the business of making or brokering [first] mortgage loans secured by real property located in this state shall be required to obtain a license from the [banking] department. Persons licensed as mortgage bankers may engage in the mortgage broker business without obtaining a separate license.

255:4 Exemptions; Second Mortgages Added. Amend RSA 397-A:4, III to read as follows:

III. Any natural person who, as seller, receives one or more first or second mortgages or deeds of trust on real estate as security for a purchase money obligation.

255:5 New Paragraph; Exemptions; Other Persons Commissioner May Exempt. Amend RSA 397-A:4 by inserting after paragraph VIII the following new paragraph:

IX. Other persons not within the intent of this chapter as the commissioner may designate by rule or order.

255:6 License Application; Requirements; Investigation. RSA 397-A:5, I-IV is repealed and reenacted to read as follows:

I. To be considered for licensing, each person shall complete and file with the department one verified application prescribed by the commissioner. At a minimum, the application shall state the primary business address of the applicant, the address of its principal office and all branch offices located or to be located within the state, and a list of the principals of the applicant. Each principal shall authorize the commissioner to conduct a background check. The applicant shall submit any other information that the commissioner may require including, but not limited to, the applicant’s form and place of organization, the applicant’s proposed method of doing business, the qualifications and business history of the applicant and its principals, and the applicant’s financial condition and history. The applicant shall disclose whether the applicant or any of its principals has ever been issued or been the subject of an injunction or administrative order, has ever been convicted of a misdemeanor involving the lending industry or any aspect of the lending business or has ever been convicted of any felony.

II.(a) Unless the applicant is a publicly traded corporation, the department shall complete a background investigation and criminal history records check on the applicant’s principals and any person in a similar position or performing similar functions. If the applicant is a subsidiary, the department shall complete a background investigation and criminal history records check on the principals of each equity owner of 10 percent or more of the applicant unless such equity owner is a publicly traded corporation.

(b) The persons described in subparagraph II(a) shall submit to the department a notarized criminal history records release form, as provided by the New Hampshire division of state police, which authorizes the release of the person’s criminal records, if any. The person shall submit with the release form a complete set of fingerprints taken by a qualified law enforcement agency or an authorized employee of the banking department. In the event that the first set of fingerprints is invalid due to insufficient pattern, a second set of fingerprints is necessary in order to complete the criminal history records check. If, after 2 attempts, a set of fingerprints is invalid due to insufficient pattern, the department may, in lieu of the criminal history records check, accept police clearances from every city, town, or county where the person has lived during the past 5 years.

(c) The department shall submit the criminal history records release form to the New Hampshire division of state police which shall conduct a criminal history records check through its records and through the Federal Bureau of Investigation. Upon completion of the background investigation, the division of state police shall release copies of the criminal conviction records to the department. The department shall maintain the confidentiality of all criminal history records information received pursuant to this paragraph.

(d) The department may require the applicant or licensee to pay the actual costs of each background investigation and criminal history records check.

III.(a) The license issued for the licensee’s principal place of business shall be referred to as a “principal office license.” Each additional license issued for mortgage lending or brokering activity occurring in a location in this state that is separate from the licensee’s principal place of business shall be referred to as a “branch office license.” If the applicant or licensee desires to make or broker mortgage loans in more than one location, the commissioner, upon favorable action on the applicant’s principal office license, shall issue a branch office license for each location where the business of making or brokering mortgage loans is to be conducted.

(b) Each license application shall be accompanied by a nonrefundable application fee of $500 for each separate office location to be licensed. Sums collected under this chapter shall be payable to the state treasurer as restricted revenue and credited to the appropriation for the commissioner, consumer credit administration division.

(c) Each applicant shall be required to submit to the department detailed financial information sufficient for the commissioner to determine the applicant’s ability to conduct the business of a mortgage banker or a mortgage broker with financial integrity. The application shall include a statement of net worth. An applicant or licensee shall demonstrate and maintain a positive net worth. Net worth statements provided in connection with a license application under this section shall be subject to review and verification during the course of any examination or investigation conducted under the authority of RSA 397-A:12. Each mortgage banker applicant shall demonstrate a net worth at all times of at least $100,000 or increase their posted continuous surety bond to a total amount of $100,000. Each mortgage broker shall post a continuous surety bond in the amount of $20,000 to the commissioner. Surety bonds shall include a provision requiring the surety to give written notice to the commissioner 20 days in advance of the cancellation or termination of the bond. Every bond shall provide that no recovery may be made against the bond unless the state makes a claim for recovery or the person brings suit naming the licensee within 6 years after the act upon which the recovery or suit is based.

(d) Each applicant shall provide a list of all individuals, and the address of the work location of each such individual, who will act as originators for the licensee.

(e) No person shall be issued or continue to hold a mortgage license unless at least one person employed full-time in a supervisory capacity at the company’s principal office shall have been actively engaged in the mortgage business in a similar supervisory capacity for a minimum of 3 of the preceding 5 years.

IV. Every applicant for licensing under this chapter shall file with the commissioner, in such form as the commissioner prescribes by rule, irrevocable consent appointing the commissioner to receive service of any lawful process in any non-criminal suit, action, or proceeding against the applicant or the applicant’s successor, executor, or administrator which arises under this chapter or any rule or order under this chapter after the consent has been filed, with the same force and validity as if served personally on the person filing the consent. A person who has filed such a consent in connection with a previous registration need not file another. When any person, including any nonresident of this state, engages in conduct prohibited or made actionable by this chapter or any rule or order under this chapter, and such person has not filed a consent to service of process under this section and personal jurisdiction over such person cannot otherwise be obtained in this state, that conduct shall be considered equivalent to such person’s appointment of the commissioner to receive service of any lawful process. Service may be made by leaving a copy of the process in the office of the commissioner along with $5, but is not effective unless:

(a) The plaintiff, who may be the attorney general in a suit, action, or proceeding instituted by him or her, forthwith sends a notice of the service and a copy of the process by registered mail to the defendant or respondent at such person’s last address on file with the commissioner; and

(b) The plaintiff’s affidavit of compliance with this paragraph is filed in the case on or before the return day of the process, if any, or within such further time as the court allows.

V.(a) Upon the applicant’s filing of the complete application and payment of the required fee, the commissioner shall have, in accordance with RSA 541-A:29, up to 120 days to investigate and determine whether the applicant’s financial resources, experience, personnel, and record of past or proposed conduct warrant the public’s confidence and the issuance of a license.

(b) The commissioner shall determine whether the applicant’s proposed interest rates and fees are in accordance with the interest rates and fees charged by other first or second mortgage lenders, and whether said rates and fees will promote a free and competitive market.

VI. The commissioner may license or register individuals or firms by means of or through the facilities of a national organization which facilitates registration and licensing on a nationwide basis.

255:7 License Grant; “First” Deleted from Mortgage Loans; Agents and Originators Added to Covered Persons. Amend RSA 397-A:6, I-V to read as follows:

I. If the commissioner determines that the applicant meets the requirements of this chapter, then the commissioner shall forthwith issue a license or licenses permitting the applicant to engage in the business of making or brokering [first] mortgage loans in accordance with the laws of this state. Licensees shall be responsible for the supervision of their employees, agents, loan originators, and branch offices.

II. No license shall be issued to any person whose principal place of business is located outside of this state unless that person designates an agent residing within this state for service of process.

III. Each license issued under the provisions of this chapter shall state the name and address of the principal office of the licensee and, if the license is a branch office license, the name and address of the branch office location for which that license is issued.

IV. If a licensee is a person other than a natural person, the license issued to it shall entitle all officers, directors, members, partners, trustees, agents, originators, and employees of the licensed corporation, partnership, entity, or trust to engage in the business of making or brokering [first] mortgage loans; provided that one officer, director, member, partner, employee, or trustee of such person shall be designated in the license as the individual to be contacted under the provisions of this chapter.

V. If the licensee is a natural person, the license shall entitle all employees, agents, and originators of the licensee to engage in the business of making or brokering [first] mortgage loans. [For the purposes of this paragraph, an employee does not include an independent contractor.]

255:8 License Term; Renewal; Fee Increased. Amend RSA 397-A:8, III to read as follows:

III. A renewal fee of [$250] $500 for the principal office license and each branch office license shall be submitted with the application for license renewal.

255:9 License Posting; “First” Deleted. Amend RSA 397-A:9 to read as follows:

397-A:9 License Posting. It shall be unlawful to engage in the business of making or brokering [first] mortgage loans without a conspicuously posted license in the licensee’s principal place of business within this state and in each of the licensee’s branch offices within this state.

255:10 Change in Name; Ownership; Location; New Principal. Amend RSA 397-A:10, II to read as follows:

II. A licensee shall submit written notification to the [banking] department of the addition or deletion of a principal and shall provide the name and address of each new [stockholder or other person owning 10 percent or more of the licensee] principal no later than 30 days after such change. Each new principal shall authorize the commissioner to conduct a background check. The commissioner shall investigate management and ownership changes including, but not limited to, each principal’s qualifications and business history. The licensee shall disclose any injunction or administrative order that has been issued against the principal and whether the principal has been convicted of a misdemeanor involving the lending industry or any aspect of the lending business or convicted of any felony, prior to the commissioner’s approval of such change.

255:11 License Surrender; “First” Deleted. Amend RSA 397-A:10-a, I(a) to read as follows:

I.(a) A licensee who ceases to engage in the business of a [first] mortgage banker or [first] mortgage broker at any time during a license year for any cause, including, but not limited to, bankruptcy, license revocation, or voluntary dissolution, shall surrender such license in person or by registered or certified mail to the commissioner within 15 calendar days of such cessation, and shall cause to be published in a newspaper of general circulation in the licensee’s market area a notice to such effect. The commissioner shall adopt rules, in accordance with RSA 541-A, relative to such notice and final reports to the commissioner.

255:12 Record Keeping; Location; Time Period Clarified. Amend RSA 397-A:11, I-III to read as follows:

I. The licensee shall maintain such records as will enable the [banking] department to determine whether the licensee’s business is in compliance with the provisions of this chapter and the rules adopted pursuant to it. Such records shall be maintained in a readily accessible location and made available for examination at the licensee’s New Hampshire principal office or its New Hampshire branch office location or the office of its New Hampshire agent for a period of at least 3 years after the loan is closed, if the loan is not retained in the licensee’s loan portfolio, or 3 years after the loan is paid in full, if the loan is retained in the licensee’s loan portfolio. Licensees may maintain photocopies, microfilm, or microfiche copies of original documents.

II. Those licensees that maintain their files and business records in another state are required to return such files to their principal or branch New Hampshire office or the office of their New Hampshire agent for examination no later than 21 calendar days after being requested to do so by the [banking] department. When the commissioner requests a loan list or other similar summary document from a licensee from which to select particular files for review, the licensee shall ensure that the list is received by the commissioner within 7 calendar days, and return the files selected by the commissioner to the commissioner within 14 calendar days to ensure compliance with the 21-day requirement. Failure to provide files and documents within the time established by this paragraph shall subject a licensee or person to a fine of $50 per day for each day after 21 days the files and documents are not produced. Failure to provide files and documents within 60 days after being requested to do so by the [banking] department shall be sufficient cause for license revocation, suspension, or denial.

III. If the licensee retains a [first] mortgage loan in its loan portfolio or services a loan it originated, an adequate loan payment history for such loan [must] shall be made available to the [banking] department upon request.

255:13 New Paragraph; Examinations; Other States and Federal Agencies Acceptable. Amend RSA 397-A:12 by inserting after paragraph V the following new paragraph:

V-a. The commissioner may, in his or her discretion, accept all or a part of a report of examination of a mortgage banker or mortgage broker, certified to by the regulatory supervisory official of another state. To avoid unnecessary duplication of examinations, the commissioner, insofar as he or she deems it practicable in administering this section, may cooperate with the regulators of other states, the Federal Trade Commission, the Department of Housing and Urban Development, other federal regulators, or their successors in conducting examinations and investigations.

255:14 Annual Report; “First” Deleted. Amend RSA 397-A:13, II-IV to read as follows:

II. Each licensee shall also file, under oath, its financial statement with the commissioner within 90 days from the date of its fiscal year end. The financial statement shall be prepared in accordance with generally accepted accounting principles with appropriate note disclosures. A [first] mortgage banker’s financial statement shall include a balance sheet, income statement, statement of changes in owners’ equity, and a cash flow statement. A [first] mortgage broker’s financial statement shall include a balance sheet or a statement of net worth. If the financial statement filed under this section is not audited, a certification statement shall be attached and signed by a duly authorized officer of the licensee. The certification statement shall state that the financial statement is true and accurate to the best of the officer’s belief and knowledge.

III. The [banking] department shall publish its analysis of the information required in the licensee’s annual report as a part of the commissioner’s annual report.

IV. Any [first] mortgage banker[, first] or mortgage broker[, or first mortgage banker and broker] failing to file either the annual report or the financial statement required by this section within the time prescribed may be required to pay to the [banking] department a penalty of $25 for each calendar day the annual report or financial statement is overdue up to a maximum penalty of $2,500 per report or statement. [The penalties for failure to file an annual report that are prescribed by this paragraph shall not apply to mortgage brokers licensed under this chapter who earned no money from purchasing, placing, or selling first mortgage loans during the preceding year and who indicate such in writing to the banking department on or before February 1 to a maximum penalty of $2,500 per report or statement and shall be subject to suspension or revocation of its license.]

255:15 New Paragraph; Annual Report; Reply Required. Amend RSA 397-A:13 by inserting after paragraph V the following new paragraph:

VI. Any officer, owner, manager, or agent of any licensee and any person controlling or having a contract under which he or she has a right to control such a licensee, whether exclusively or otherwise, and any person with executive authority over or in charge of any segment of such a licensee’s affairs, shall reply promptly in writing, or in other designated form, to any written inquiry from the commissioner requesting a reply. The commissioner may require that any communication made to him or her under this section be verified.

255:16 Lending Practices; “Home” Deleted. Amend RSA 397-A:14, I to read as follows:

I. Any first mortgage [home] loan made under the provisions of this chapter shall provide for the computation of interest on a simple interest basis.

255:17 Compliance With Requirements for Funding of Loans at Real Estate Closings; Documents Added. Amend RSA 397-A:14-b to read as follows:

397-A:14-b Compliance With Requirements for Funding of Loans at Real Estate Closings. A licensee shall comply with the provisions of RSA 477:52 relative to requirements for the funding of loans at real estate closings. At a minimum, a closing requires the delivery of a deed if the transaction is a conveyance, the signing of a note, and the disbursement of the mortgage loan funds.

255:18 Borrower’s Rights; “First” and “Home” Deleted. Amend RSA 397-A:15, V to read as follows:

V. Persons subject to or licensed under this chapter that service [first] mortgage [home] loans on real property located in the state of New Hampshire shall, within 5 days of receipt of a written request, provide a net payoff amount as of a specific date with a daily interest rate charge.

255:19 Borrower’s Rights; “First” Deleted. Amend RSA 397-A:15, VII to read as follows:

VII. Upon payment in full of the outstanding principal, interest, and other charges due on a [first] mortgage loan, the holder shall mark plainly the note or a copy thereof with the words “PAID IN FULL” or “CANCELLED” and release or provide the borrower evidence to release any mortgage or security instrument no longer securing any indebtedness to the holder. If the original is retained by the lender, the original shall be returned within a reasonable period of time upon the written request of the borrower.

255:20 Lender’s Rights and Broker’s Rights. Amend RSA 397-A:16, I-IV to read as follows:

I. [Lenders] Mortgage bankers and mortgage brokers may charge fees and points for services rendered in conjunction with the origination, closing, and servicing of loans; provided, however, that the [lender] mortgage banker or mortgage broker issues a written disclosure to the borrower stating the estimated amount and purpose of all fees and expenses within 3 business days of the receipt of a loan application. If any fee is collected in advance of the closing of the loan, the [lender] mortgage banker or mortgage broker shall provide the borrower with a written explanation of the purpose and disposition of the fee. A [lender] mortgage banker or mortgage broker may charge an application fee which may include the direct costs incurred by the [lender] mortgage banker or mortgage broker for processing an application, and for a real estate appraisal, a credit bureau report, or [for] income verification or other third party services. Notwithstanding RSA 479:30, a borrower who pays a [lender] mortgage banker or mortgage broker a fee for a real estate appraisal report, or who pays an application fee to a [lender] mortgage banker or mortgage broker which includes costs for a real estate appraisal, whether designated as a separate fee therefor or not, shall, upon written request, be entitled to obtain from the [lender] mortgage banker or mortgage broker who authorized and ordered the appraisal and whose name appears on the appraisal report a copy of the real estate appraisal report. The [lender] mortgage banker or mortgage broker shall certify on such copy that it is a true copy of the original report. Such certified copy shall be provided to the borrower within 10 business days of the date the [lender] mortgage banker or mortgage broker receives a borrower’s request, receives the report from the appraiser, or receives such application or appraisal fee from the borrower, whichever is last to occur.

II. [Licensees] Persons subject to the provisions of this chapter shall comply with the provisions of RSA 384:16-c, relative to escrow accounts.

III. [Licensees] Persons subject to provisions of this chapter shall comply with the provisions of RSA 479, relative to foreclosure.

IV. Pursuant to RSA 397-A:3, only mortgage brokers and mortgage bankers licensed under the provisions of this chapter shall be entitled to retain commissions for services rendered.

255:21 License Revocation; Suspension; Originators Added. Amend RSA 397-A:17, I(g) to read as follows:

(g) Has failed to supervise its agents, originators, managers, or employees;

255:22 License Revocation; Suspension; Agents Added; “First” Deleted. Amend RSA 397-A:17, VI and VII to read as follows:

VI. If a licensee is a partnership, association, corporation, or entity however organized, it shall be sufficient cause for the suspension or revocation of a license that any officer, director, or trustee of a licensed association or corporation or any member of a licensed partnership has so acted or failed to act in behalf of said licensee as would be cause for suspending or revoking a license to such party as an individual. Each licensee shall be responsible for supervision of its branch offices and for the acts of any or all of its employees, agents, and originators while acting as its agent if such licensee, after actual knowledge of said acts, retained the benefits, proceeds, profits, or advantages accruing from said acts or otherwise ratified said acts.

VII. If the commissioner finds that any licensee or applicant for license is no longer in existence or has ceased to do business as a [first] mortgage broker or [first] mortgage banker, or cannot be located after reasonable search, the commissioner may by order revoke the license, impose penalties, or deny the application. The commissioner may deem abandoned and withdraw any application for licensure made pursuant to this chapter, if any applicant fails to respond in writing within 180 calendar days to a written request from the commissioner requesting a response. Such request shall be sent via certified mail to the last known address of the applicant that is on file with the commissioner.

255:23 Administration by Commissioner; Rulemaking; Reference Changed. Amend RSA 397-A:20, II(d) to read as follows:

(d) Personal disclosure statements to meet the requirements of RSA 397-A:5[, III].

255:24 New Subparagraph; Administration by Commissioner, Rulemaking; Copying Costs. Amend RSA 397-A:20, II by inserting after subparagraph (d) the following new subparagraph:

(e) Fees to be charged to cover the reasonable costs of copying documents and producing reports.

255:25 New Paragraph; Administration by Commissioner; Rulemaking; Information Sharing. Amend RSA 397-A:20 by inserting after paragraph VI the following new paragraph:

VII. In adopting rules, preparing forms, setting standards, and in performing examinations, investigations, and other regulatory functions authorized by the provisions of this chapter, the commissioner may cooperate, and share information pursuant to confidentiality agreements, with regulators in this state and with regulators in other states and with federal regulators in order to implement the policy of this chapter in an efficient and effective manner and to achieve maximum uniformity in the form and content of applications, reports, and requirements for mortgage bankers and brokers, where practicable.

255:26 License Required; Exemption for Second Mortgages Removed. Amend RSA 399-A:2, III to read as follows:

III. This chapter shall not apply to any person lawfully engaged in business as permitted by the laws of this state or of the United States relative to banks, trust companies, insurance companies, savings or building and loan associations, or credit unions, or to loans made by them, nor shall this chapter apply to any person engaged solely in the business of making loans for educational purposes or to the loans made by such persons[, nor shall it apply to any person engaged in the business of second mortgage loans in accordance with the provisions of RSA 398-A, as amended, or to loans made by such persons].

255:27 Application and Fees; Additional Information Required. RSA 399-A:3, I is repealed and reenacted to read as follows:

I.(a) Every applicant for licensing under this chapter shall file with the commissioner a written verified application, on a form prescribed by the commissioner. The application shall contain the name of the applicant; the address where the business is or is to be conducted and similar information for any branch office of the applicant; the trade name, if any, under which the applicant proposes to conduct such business; the articles of incorporation or organization or partnership agreement; the name and address of the New Hampshire resident agent if the applicant is a foreign entity; and such other pertinent information as the commissioner may require. The application shall include the names of the applicant’s principals and the name of any person occupying a similar status or performing similar functions. Each such principal shall authorize the commissioner to conduct a background check. The applicant shall submit any other information that the commissioner may require including, but not limited to, the applicant’s form and place of organization, the applicant’s proposed method of doing business, the qualifications and business history of the applicant and its principals, and the applicant’s financial condition and history. The applicant shall disclose if any injunction or administrative order has been issued against the applicant or any of its principals and whether the applicant or any of its principals have been convicted of a misdemeanor involving the lending industry or any aspect of the lending business or of any felony. Each applicant and licensee who conducts payday or title loan lending shall maintain an office in this state that is accessible to consumers. Persons subject to this chapter shall be responsible for the supervision of their employees, agents, and branch offices. Each initial and renewal license application shall be accompanied by a nonrefundable application fee of $450 for the principal place of business of the licensee and the sum of $450 for each branch of such licensee maintained in this state.

(b) Unless the applicant is a publicly traded corporation, the department shall complete a background investigation and criminal history records check on the applicant’s principals and any person in a similar position or performing similar functions. If the applicant is a subsidiary, the department shall complete a background investigation and criminal history records check on the principals of each equity owner of 10 percent or more of the applicant unless such equity owner is a publicly traded corporation.

(c) The persons described in subparagraph I(b) shall submit to the department a notarized criminal history records release form, as provided by the New Hampshire division of state police, which authorizes the release of the person’s criminal records, if any. The person shall submit with the release form a complete set of fingerprints taken by a qualified law enforcement agency or an authorized employee of the banking department. In the event that the first set of fingerprints is invalid due to insufficient pattern, a second set of fingerprints is necessary in order to complete the criminal history records check. If, after 2 attempts, a set of fingerprints is invalid due to insufficient pattern, the department may, in lieu of the criminal history records check, accept police clearances from every city, town, or county where the person has lived during the past 5 years.

(d) The department shall submit the criminal history records release form to the New Hampshire division of state police which shall conduct a criminal history records check through its records and through the Federal Bureau of Investigation. Upon completion of the background investigation, the division of state police shall release copies of the criminal conviction records to the department. The department shall maintain the confidentiality of all criminal history records information received pursuant to this paragraph.

(e) The department may require the applicant or licensee to pay the actual costs of each background investigation and criminal history records check.

255:28 Investigation of Application; License Requirements; Management and Ownership Changes. RSA 399-A:4, VII is repealed and reenacted to read as follows:

VII. Persons licensed under this chapter are under a continuing obligation to update information on file with the commissioner. If any information filed with the commissioner becomes materially inaccurate, the licensee shall promptly submit an amendment to its application records that will correct the information on file with the commissioner. An amendment shall be considered to be filed promptly if the amendment is filed within 30 days of the event that requires the filing of the amendment. A licensee shall submit written notification to the department of the addition or deletion of a principal, and shall provide the name and address of each new principal no later than 30 days after such change. Each new principal shall authorize the commissioner to conduct a background check. The commissioner shall investigate management and ownership changes including, but not limited to, each principal’s qualifications and business history. The licensee shall investigate and disclose any injunction or administrative order that has been issued against the principal and whether the principal has been convicted of a misdemeanor involving the lending industry or any aspect of the lending business or convicted of any felony, prior to the commissioner’s approval of such change.

255:29 Examinations and Investigations; Other States and Federal Agencies. Amend RSA 399-A:10, I and II to read as follows:

I. The commissioner or the commissioner’s duly authorized representative may at any time, and shall periodically, with or without notice to the licensee or person, examine the business affairs of any licensee or any other person subject to this chapter, whether licensed or not, as the commissioner deems necessary to determine compliance with this chapter and the rules adopted pursuant to it. In determining compliance, the commissioner or the duly authorized representative may examine the books, accounts, records, files, and other documents, whether electronically stored or otherwise, and any other matters of any licensee or person. The commissioner or the duly authorized representative shall have and be given free access to the office and places of business, files, safes, and vaults of all such persons, and shall have authority to require the attendance of any person and to examine him or her under oath relative to such loans or such business or to the subject matter of any examination or investigation and shall have authority to require the production of books, accounts, papers, and records of such persons. The commissioner may, in his or her discretion, accept all or part of a report of examination of a small loan lender, certified to by the regulatory supervisory official of another state. To avoid unnecessary duplication of examinations, the commissioner, insofar as he or she deems it practicable in administering this section, may cooperate with the regulators of other states, the Federal Trade Commission, other federal regulators, or their successors in conducting examinations and investigations.

II. Every person being examined, and all of the officers, directors, employees, agents, and representatives of such person shall make freely available to the commissioner or the commissioner’s examiners the accounts, records, documents, files, information, assets, and matters in their possession or control relating to the subject of the examination and shall facilitate the examination. The expense of such examination shall be chargeable to and paid by the licensee or person being examined. The procedure for such payment shall be the same as for payments by institutions for cost of examinations under RSA 383:11, except when the principal office of the licensee or person is located outside of this state and the department has determined that the examination must be conducted at that out-of-state location, the actual cost of travel, lodging, meals, and other expenses of examination personnel making the examination, shall be chargeable to and paid by such licensee or person in addition to the per diem charge for examination personnel set forth in RSA 383:11.

255:30 Examinations and Investigations; Documents and Deadlines. RSA 399-A:10, III is repealed and reenacted to read as follows:

III. Those licensees or persons that maintain their files and business documents in another state shall appoint a New Hampshire agent and shall return such files and documents to their principal New Hampshire office or the office of their New Hampshire agent for examination no later than 21 calendar days after being requested to do so by the department. When the commissioner requests a list of New Hampshire consumers who have contracted with the licensee or other similar summary document from a licensee from which to select particular files for review, the licensee shall ensure that the list is received by the commissioner within 7 calendar days and return the files selected by the commissioner to the commissioner within 14 calendar days to ensure compliance with the 21-day requirement. Failure to provide files and documents within the time established by this paragraph shall subject a licensee or person to a fine of $50 per day for each day after 21 days the files and documents are not produced. Failure to provide files and documents within 60 days after being requested to do so by the department shall be sufficient cause for license revocation, suspension, or denial, or other penalties under this chapter.

255:31 Powers of the Commissioner; Personal Disclosure Statements and Authorizations. Amend RSA 399-A:16, III to read as follows:

III. The commissioner may prepare, alter, or withdraw such forms as are necessary to comply with the provisions of this [title] chapter, including personal disclosure statements and authorizations to meet the requirements of RSA 399-A:3 and RSA 399-A:4.

255:32 New Paragraphs; Powers of the Commissioner; Sharing Information and Setting Fees. Amend RSA 399-A:16 by inserting after paragraph VI the following new paragraphs:

VII. In adopting rules, preparing forms, setting standards, and performing examinations, investigations, and other regulatory functions authorized by the provisions of this chapter, the commissioner may cooperate, and share information pursuant to confidentiality agreements, with regulators in this state and with regulators in other states and with federal regulators in order to implement the policy of this chapter in an efficient and effective manner and to achieve maximum uniformity in the form and content of applications, reports, and requirements for small loan lenders, where practicable.

VIII. The commissioner shall have the authority to set fees to be charged to cover the reasonable costs of copying documents and producing reports.

255:33 New Paragraph; Exceptions; Persons Designated by the Commissioner. Amend RSA 399-D:4 by inserting after paragraph V the following new paragraph:

VI. Other persons not within the intent of this chapter as the commissioner may designate by rule or order.

255:34 License Application; Requirements; Investigation; Additional Information Required. The introductory paragraph of RSA 399-D:5, II is repealed and reenacted to read as follows:

II. To be considered for licensing, each person, firm, or corporation shall file with the department one verified application on a form prescribed by the commissioner. At a minimum, the application shall be in writing, setting forth the primary business address of the applicant, the address of its principal office and all branch offices located or to be located within the state, and a list of the principals and the name of any person occupying a similar status or performing similar functions. Each principal shall authorize the commissioner to conduct a background check. The applicant shall submit any other information that the commissioner may require including, but not limited to, the applicant’s form and place of organization, the applicant’s proposed method of doing business, qualifications, and business history of the applicant and those persons listed in the application, and the applicant’s financial condition and history. The applicant shall disclose if any injunction or administrative order has been issued against the applicant or any of its principals and whether the applicant or any of its principals have been convicted of a misdemeanor involving the lending industry or any aspect of the lending business or convicted of any felony. Each application shall designate the name and address of the manager or person in charge at each licensed location and shall contain other information required by rules adopted under this chapter. The applicant shall submit any other information that the commissioner may require. In addition:

255:35 Examinations and Investigations; Other States and Federal Agencies. Amend RSA 399-D:22, I to read as follows:

I. The commissioner shall examine the condition and affairs of each licensee at least every 18 months. The commissioner may, in his or her discretion, accept all or a part of a report of examination of a debt adjuster, certified to by the regulatory supervisory official of another state. To avoid unnecessary duplication of examinations, the commissioner, insofar as he or she deems it practicable in administering this section, may cooperate with the regulators of other states, the Federal Trade Commission, other federal regulators, or their successors in conducting examinations and investigations.

255:36 Examinations and Investigations; Time Periods. Amend RSA 399-D:22, V to read as follows:

V. Licensees that maintain their files in another state are required to return such files to their New Hampshire office or if there is no office in New Hampshire, to the office of their New Hampshire agent as named in the license application as amended. Such licensees are required to return all files and records no later than 21 calendar days after being requested to do so by the banking department. When the commissioner requests a list of New Hampshire consumers who have contracted with the licensee or other similar summary document from a licensee from which to select particular files for review, the licensee shall ensure that the list is received by the commissioner within 7 calendar days and return the files selected by the commissioner to the commissioner within 14 calendar days to ensure compliance with the 21-day requirement. Failure to provide files and documents within the time established by this paragraph shall subject a licensee or person to a fine of $50 per day for each day after 21 days the files and documents are not produced. Failure to provide files and documents within 60 days after being requested to do so by the banking department shall be sufficient cause for license revocation, suspension, or denial.

255:37 Administration and Rulemaking. RSA 399-D:25 is repealed and reenacted to read as follows:

399-D:25 Administration and Rulemaking.

I. The commissioner shall administer and enforce the provisions of this chapter.

II. Pursuant to RSA 541-A, the commissioner may adopt such rules as he or she deems necessary to the administration and enforcement of this chapter. Such rules shall be consistent with the provisions of this chapter, and may include, but shall not be limited to, the following:

(a) The application form for licensees required under RSA 399-D:5.

(b) The form of license issued to licensees under RSA 399-D:7.

(c) Annual reports required by RSA 399-D:28.

(d) Personal disclosure statements and authorizations to meet the requirements of RSA 399-D:5.

(e) Fees to be charged to cover the reasonable costs of copying documents and producing reports.

III. The commissioner may prepare, alter, or withdraw such forms as are necessary to comply with the provisions of this chapter.

IV. The commissioner may issue, amend, or rescind such orders as are reasonably necessary to carry out the provisions of this chapter.

V. The commissioner may, for good cause shown, abate all or a portion of delinquency penalties assessed under this chapter.

VI. All actions taken by the commissioner pursuant to this chapter shall be taken only when the commissioner finds such action necessary or appropriate to the public interest or for the protection of consumers and consistent with the purposes fairly intended by the policy and provisions of this chapter.

VII. In adopting rules, preparing forms, setting standards, and in performing examinations, investigations, and other regulatory functions authorized by the provisions of this chapter, the commissioner may cooperate, and share information pursuant to confidentiality agreements, with regulators in this state and with regulators in other states and with federal regulators in order to implement the policy of this chapter in an efficient and effective manner and to achieve maximum uniformity in the form and content of applications, reports, and requirements for debt adjusters, where practicable.

255:38 Licensing of Sales Finance Companies and Retail Sellers Required; Additional Information Required. RSA 361-A:2, II(a) is repealed and reenacted to read as follows:

II.(a) The application for such license shall be in writing and verified on a form prescribed by the commissioner. The application shall contain the name of the applicant; date of incorporation, if incorporated; the address where the business is or is to be conducted and similar information as to any branch office of the applicant; the trade name, if any, under which the applicant proposes to conduct such business; and such other pertinent information as the commissioner may require. The application shall include a list of the names and resident addresses of principals and the name of any person occupying a similar status or performing similar functions. Each principal shall authorize the commissioner to conduct a background check. The applicant shall submit any other information that the commissioner may require including, but not limited to, the applicant’s form and place of organization, the applicant’s proposed method of doing business, the qualifications and business history of the applicant and those persons listed in the application, and in the case of sales finance companies, the applicant’s financial condition and history. The applicant shall disclose if any injunction or administrative order has been issued against the applicant or any of its principals listed in the application and whether the applicant or any of its principals have been convicted of a misdemeanor involving the lending industry or any aspect of the lending business or convicted of any felony.

(1) Unless the applicant is a publicly traded corporation, the department shall complete a background investigation and criminal history records check on the applicant’s principals and any person in a similar position or performing similar functions. If the applicant is a subsidiary, the department shall complete a background investigation and criminal history records check on the principals of each equity owner of 10 percent or more of the applicant unless such equity owner is a publicly traded corporation.

(2) The persons described in subparagraph II(a) shall submit to the department a notarized criminal history records release form, as provided by the New Hampshire division of state police, which authorizes the release of the person’s criminal records, if any. The person shall submit with the release form a complete set of fingerprints taken by a qualified law enforcement agency or an authorized employee of the banking department. In the event that the first set of fingerprints is invalid due to insufficient pattern, a second set of fingerprints is necessary in order to complete the criminal history records check. If, after 2 attempts, a set of fingerprints is invalid due to insufficient pattern, the department may, in lieu of the criminal history records check, accept police clearances from every city, town, or county where the person has lived during the past 5 years.

(3) The department shall submit the criminal history records release form to the New Hampshire division of state police which shall conduct a criminal history records check through its records and through the Federal Bureau of Investigation. Upon completion of the background investigation, the division of state police shall release copies of the criminal conviction records to the department. The department shall maintain the confidentiality of all criminal history records information received pursuant to this paragraph.

(4) The department may require the applicant or licensee to pay the actual costs of each background investigation and criminal history records check.

255:39 Licensing of Sales Finance Companies and Retail Sellers Required; Change of Management or Ownership. Amend RSA 361-A:2, XII to read as follows:

XII. Retail sellers and sales finance companies licensed under this chapter are under a continuing obligation to update information on file with the commissioner. If any information filed with the commissioner becomes materially inaccurate, the retail seller and sales finance company licensee [must] shall promptly submit [to the commissioner] an amendment to its application records [that will] to correct the information on file with the commissioner. An amendment shall be considered to be filed promptly if the amendment is filed within 30 days of the event that requires the filing of the amendment. A licensee shall submit written notification to the department of the addition or deletion of a person required to be listed in the application, and shall provide the name and address of each new person required to be listed no later than 30 days after such change. Each new person required to be listed shall authorize the commissioner to conduct a background check. The commissioner shall investigate management and ownership changes including, but not limited to, the qualifications and business history of each person required to be listed. The licensee shall investigate and disclose any injunction or administrative order that has been issued against the person required to be listed and whether the person required to be listed has been convicted of a misdemeanor involving the lending industry or any aspect of the lending business or convicted of any felony, prior to the commissioner’s approval of such change.

255:40 Powers of Commissioner; Personal Disclosure Statements and Authorizations. Amend RSA 361-A:5, III to read as follows:

III. The commissioner may prepare, alter, or withdraw such forms as are necessary to comply with the provisions of this [title] chapter including personal disclosure statements and authorizations to meet the requirements of RSA 361-A:2.

255:41 New Paragraphs; Powers of Commissioner; Cooperation With Other States and Federal Regulators; Copying Fees. Amend RSA 361-A:5 by inserting after paragraph VII the following new paragraphs:

VIII. In adopting rules, preparing forms, setting standards, and performing examinations, investigations, and other regulatory functions authorized by the provisions of this chapter, the commissioner may cooperate, and share information pursuant to confidentiality agreements, with regulators in this state and with regulators in other states and with federal regulators in order to implement the policy of this chapter in an efficient and effective manner and to achieve maximum uniformity in the form and content of applications, reports, and requirements for sales finance companies and retail sellers, where practicable.

IX. The commissioner shall have the authority to set fees to be charged to cover the reasonable costs of copying documents and producing reports.

255:42 Examinations; Time Periods. Amend RSA 361-A:6-a, II to read as follows:

II. The affairs and records of every sales finance company licensee or person shall be subject at any time to periodic, special, regular, or other examination by the banking department with or without notice to the licensee or person. Those licensees or persons that maintain their files and business documents in another state shall appoint a New Hampshire agent and shall return such files and documents to their principal New Hampshire office or the office of their New Hampshire agent for examination no later than 21 calendar days after being requested to do so by the banking department. When the commissioner requests a list of New Hampshire consumers who have contracted with the licensee or other similar summary document from a licensee from which to select particular files for review, the licensee shall ensure that the list is received by the commissioner within 7 calendar days and return the files selected by the commissioner to the commissioner within 14 calendar days to ensure compliance with the 21 day requirement. Failure to provide files and documents within the time established by this paragraph shall subject a licensee or person to a fine of $50 per day for each day after 21 days the files and documents are not produced. Failure to provide files and documents within 60 days after being requested to do so by the banking department shall be sufficient cause for license revocation, suspension, or denial.

255:43 Examinations; Other States and Federal Regulators. Amend RSA 361-A:6-a, IV to read as follows:

IV. The expense of such examination shall be chargeable to and paid by the sales finance company licensee or person. The procedure for such payment shall be the same as for payments by [other licensees of the department] institutions for cost of examinations under RSA 383:11, except when the principal office of the licensee or person is located outside of this state and the department has determined that the examination must be conducted at that out-of-state location, the actual cost of travel, lodging, meals, and other expenses of examination personnel making the examination, shall be chargeable to and paid by such licensee or person in addition to the per diem charge for examination personnel set forth in RSA 383:11.

IV-a. The commissioner may, in his or her discretion, accept all or a part of a report of examination of a sales finance company, certified to by the regulatory supervisory official of another state. To avoid unnecessary duplication of examinations, the commissioner, insofar as he or she deems it practicable in administering this section, may cooperate with the regulators of other states, the Federal Trade Commission, other federal regulators, or their successors in conducting examinations and investigations.

255:44 Payment of Cost of Examination; Reference Removed. Amend the introductory paragraph of RSA 383:11 to read as follows:

383:11 Payment of Cost of Examination. The bank commissioner shall, each fiscal year, charge and collect from the institutions, the condition and management of which he or she is required to examine under the provisions of RSA 383:9, and which he or she supervises under the provisions of RSA 361-A, RSA 397-A, [RSA 398-A] and RSA 399-A, the total amount appropriated for the bank commissioner’s department. Said sum shall be collected as follows:

255:45 Residential Mortgage Loan Application Fee; Reference Changed. Amend RSA 384:16-f, II to read as follows:

II. Any bank or any company which is in the business of or customarily makes loans for the purpose of financing the acquisition of real property as defined in RSA 397-A:1, [XI], XXI and which

accepts a fee with a residential mortgage loan application for the purpose of processing and approving such application, shall determine if the applicant possesses sufficient income, credit, and employment to meet underwriting guidelines existing at the time such application is made, to qualify for the loan amount requested in the application.

255:46 Regulation of Mortgage Loan Services; Definitions; Reference Changed. Amend RSA 397-B:1, II to read as follows:

II. “First mortgage loan” shall have the same meaning as provided in RSA 397-A:1, [III] VII.

255:47 New Section; Lender’s and Borrower’s Rights; Second Mortgage Debt. Amend RSA 397-A by inserting after section 16 the following new section:

397-A:16-a Lender’s and Borrower’s Rights; Second Mortgage Debt.

I. The allowable rate of interest computed on the unpaid balance that any person may directly or indirectly charge, take, or receive for a second mortgage loan secured by property which is occupied in whole or in part at the time said loan is made as a home by any obligor on the mortgage debt or by any person granting or releasing any interest under said mortgage shall be the rate agreed upon in the note between borrower and lender, and following the sixth month of any period in which a loan has been in continuous default, not more than 1-1/2 percent per month on any unpaid balances.

II. Notwithstanding any other provisions of this chapter, the charges which may be collected on any second mortgage loan made under this chapter for the period beginning 6 months after the originally scheduled final installment date of a loan other than an open-end loan, or for the period beginning 6 months after the final due date of an open-end loan as established by the term applicable to the loan from time to time in accordance with the open-end note or loan agreement and ending with date of payment of the loan in full shall not exceed 18 percent per annum simple interest on the balances outstanding from time to time during said period. If the loan is an open-end loan the borrower’s privilege for further loans shall not be reinstated by the licensee where the rate has been reduced under the preceding sentence unless the borrower executes a new open-end loan agreement.

III. The borrower shall have the right to anticipate his or her second mortgage debt in whole or in part upon payment of any prepayment penalty agreed upon between borrower and licensee, provided, however, that any penalty shall be clearly set forth in the loan documents; except that there shall be no penalty charged for prepayment of a second mortgage home loan after the loan has been in existence for 5 years. When an open-end loan agreement providing for advances from time to time by the licensee exists between the borrower and the licensee, monthly loan payments shall be selected by the borrower as stated in the note or open-end agreement.

IV. Unless otherwise provided in the note, second mortgage loan payments shall be applied on the scheduled payment dates. Except where the borrower agrees in writing to a different application of his payments, in cases where partial payments are made, the interest shall be calculated to the time of payments, and such payment shall first be applied to interest, and the balance thereafter remaining, if any, shall be applied to principal. In addition to the interest permitted under this section, the lender may contract for and receive any additional other charge, as defined by RSA 358-K:1, XIII, as may be agreed upon by the lender and the borrower.

V. A licensee may retain any security interest in real property on an open-end loan until the open-end account is terminated, provided that if there is no outstanding balance in the account and there is no commitment by the licensee to make advances, the licensee shall within 10 days following written demand by the borrower deliver to the borrower a release of the mortgage or a request for reconveyance of the deed of trust on the real property taken as security.

VI. The repayment provisions of any second mortgage loan shall be clearly set forth in the loan documentation and finance charges shall be clearly disclosed in accordance with RSA 399-B. Nothing in this chapter shall be deemed to limit any type of mortgage or repayment plan.

VII. For second mortgage loans where the payment is applied on the date received, the licensee shall provide to the borrower, at the time of application for the loan, a separate written disclosure which explains how the payments will be applied.

VIII. Upon payment in full of the outstanding principal, interest, and other charges due on a second mortgage loan, the holder shall plainly mark the note or a copy thereof with the words ‘PAID IN FULL’ or ‘CANCELLED’ and release or provide the borrower evidence to release any mortgage or security instrument no longer securing any indebtedness to the holder. If the original is retained by the lender, the original shall be returned within a reasonable period of time upon the written request of the borrower.

IX. If any note secured by a second mortgage, in the case of loans other than open-end loans, does not among its provisions clearly indicate the principal sums, the rate of interest, the period of the loan and the periodic due dates, if any, of principal and interest or, in the case of open-end loans, if the note does not among its provisions clearly indicate the maximum amount of credit available, the rate of interest, the selected payment, or its manner of determination, and the related period or periods of repayment and the monthly or periodic due dates, then the lender shall have no right to collect interest.

X. If any note secured by a second mortgage, in the case of loans other than open-end loans, does not among its provisions clearly indicate the principal sums, the rate of interest, the period of the loan, and the periodic due dates, if any, of principal and interest or, in the case of open-end loans, if the note does not among its provisions clearly indicate the maximum amount of credit available, the rate of interest, the selected payment, or its manner of determination, and the related period or periods of repayment and the monthly or periodic due dates, then the lender shall have no right to collect interest.

XI. If the borrower on a second mortgage loan or his or her authorized representative requests, by registered mail, the lender to furnish him or her with a copy of the note, the lender shall, within 15 days after receipt of said request, send by registered mail a true copy of said note to the person requesting the same at the address specified in such request. At least 15 days prior to the commencement of any foreclosure proceedings the lender shall send to the borrower by registered mail a statement of his or her intention to foreclose which shall specify the amount of principal, interest and other indebtedness, if any, owing and accruing under the note and mortgage. Failure of the lender to comply with the provisions of this section shall suspend his or her rights until such time as he or she complies with the provisions of this section.

XII. Upon payment of any money by the borrower on a second mortgage loan, the lender shall at the request of the borrower give him or her a receipt stating the date of payment, the amount paid, the amount applicable to interest on the loan and the amount applicable to the principal. Such receipt shall be signed by the lender or the lender’s duly authorized representative. If a lender refuses, on written demand sent by registered mail, to give such receipt, the lender shall forfeit all interest on the principal sum.

XIII. Any second mortgage loan made in violation of paragraphs I-VIII by any person shall be discharged upon payment or tender by the debtor or any person succeeding to his or her interest in such real estate of the principal sum actually borrowed. Any agreement whereby the borrower waives the benefits of paragraphs I-VIII or releases any rights he or she may have acquired by virtue thereof shall be deemed against public policy and void. The superior court shall have jurisdiction of all suits arising under paragraphs I-VIII and, if a finding is made that such loan secured by any such mortgage violates paragraphs I-VIII, the borrower shall be entitled as a part of his or her costs to a reasonable fee for the services of an attorney in such suit.

255:48 License Revocation; Suspension; Unsworn Falsification Added. Amend RSA 397-A:17, I(l)-(m) to read as follows:

(l) Has violated applicable federal laws or rules thereunder; [or]

(m) Has made an unsworn falsification under RSA 641:3 to the commissioner; or

(n) For other good cause shown.

255:49 New Paragraph; Investigation of Application; License Requirements. Amend RSA 399-A:4 by inserting after paragraph XI the following new paragraph:

XII. Any officer, owner, manager or agent of any licensee and any person controlling or having a contract under which he or she has a right to control such a licensee, whether exclusively or otherwise, and any person with executive authority over or in charge of any segment of such a licensee’s affairs, shall reply promptly in writing, or in other designated form, to any written inquiry from the commissioner requesting a reply. The commissioner may require that any communication made to him or her under this section be verified.

255:50 Denial, Suspension, or Revocation of Licenses; Unsworn Falsification Added. Amend RSA 399-A:7, I(i)-(j) to read as follows:

(i) Has violated this chapter or any rule or order thereunder or has violated applicable federal laws or rules thereunder; [or]

(j) Has made an unsworn falsification under RSA 641:3 to the commissioner; or

(k) Should not be licensed for other good cause shown.

255:51 Debt Adjustment Services; License Denial, Revocation, or Suspension. Amend RSA 399-D:13, I(n)-(o) to read as follows:

(n) Is insolvent, or has filed in bankruptcy or receivership, or made assignments for the benefit of creditors; [or]

(o) Has violated this chapter or any rule or order thereunder;

(p) Has made an unsworn falsification under RSA 641:3 to the commissioner; or

(q) For other good cause shown.

255:52 Debt Adjustment Services; Reporting and Recordkeeping Requirements. Amend RSA 399-D:28, I(c) to read as follows:

(c) Each licensee shall also file, under oath, its financial statement with the commissioner within [60] 90 days from the date of its fiscal year end. The financial statement shall be prepared in accordance with generally accepted accounting principles and shall include a balance sheet, income statement, statement of changes in owners’ equity, a cash flow statement, and note disclosures. If the financial statement is not audited, a certification statement shall be attached and signed by a duly authorized officer of the licensee. The certification statement shall state that the financial statement is true and accurate to the best of the officer’s belief and knowledge.

255:53 New Paragraph; Debt Adjustment Services; Duty to Reply. Amend RSA 399-D:28 by inserting after paragraph VI the following new paragraph:

VII. Any officer, owner, manager or agent of any licensee and any person controlling or having a contract under which he or she has a right to control such a licensee, whether exclusively or otherwise, and any person with executive authority over or in charge of any segment of such a licensee’s affairs, shall reply promptly in writing, or in other designated form, to any written inquiry from the commissioner requesting a reply. The commissioner may require that any communication made to him or her under this section be verified.

255:54 New Paragraph; Retail Installment Sales of Motor Vehicles; Duty to Reply. Amend RSA 361-A:2-b by inserting after paragraph V the following new paragraph:

VI. Any officer, owner, manager or agent of any licensee and any person controlling or having a contract under which he or she has a right to control such a licensee, whether exclusively or otherwise, and any person with executive authority over or in charge of any segment of such a licensee’s affairs, shall reply promptly in writing, or in other designated form, to any written inquiry from the commissioner requesting a reply. The commissioner may require that any communication made to him or her under this section be verified.

255:55 Retail Installment Sales of Motor Vehicles; Suspension or Revocation of License; Unsworn Falsification Added. Amend RSA 361-A:3, I-a(i)-(j) to read as follows:

(i) Has violated this chapter or any rule or order thereunder or has violated applicable federal laws or rules thereunder; [or]

(j) Has made an unsworn falsification under RSA 641:3 to the commissioner; or

(k) For other good cause shown.

255:56 Administration by Commissioner; Rulemaking; Unsworn Falsification Added. Amend RSA 397-B:3, IX(g)-(h) to read as follows:

(g) Has violated this chapter or any rule or order thereunder or has violated applicable federal laws or rules thereunder; [or]

(h) Has made an unsworn falsification under RSA 641:3 to the commissioner; or

(i) For other good cause shown.

255:57 Mortgage Bankers and Brokers; Registration. RSA 397-B:4, I is repealed and reenacted to read as follows:

I.(a) Any mortgage servicing company which services first mortgage loans secured by real property located in the state of New Hampshire shall be required to register with the banking department by filing a registration statement on a form prescribed by the commissioner and paying an original registration fee of $100. Each such registration shall expire on December 31 of each calendar year. A registration may be renewed by filing a renewal statement on a form prescribed by the commissioner and paying a renewal registration fee of $50, on or before, December 1 for registration for the ensuing year. Sums collected under this chapter shall be payable to the state treasurer as restricted revenue and credited to the appropriation of the commissioner, consumer credit administration division.

(b) The applicant shall submit any other information that the commissioner may require including, but not limited to, the applicant’s form and place of organization and the applicant’s proposed method of doing business. The applicant shall disclose whether the applicant or any of its principals has ever been issued or been the subject of an injunction or administrative order, has ever been convicted of a misdemeanor involving the lending industry or any aspect of the lending business, or has ever been convicted of any felony. Each principal shall authorize the commissioner to conduct a background check.

(c) Unless the applicant is a publicly traded corporation, the department shall complete a background investigation and criminal history records check on the applicant’s principals and any person in a similar position or performing similar functions. If the applicant is a subsidiary, the department shall complete a background investigation and criminal history records check on the principals of each equity owner of 10 percent or more of the applicant unless such equity owner is a publicly traded corporation.

(d) The persons described in subparagraph I(c) shall submit to the department a notarized criminal history records release form, as provided by the New Hampshire division of state police, which authorizes the release of the person’s criminal records, if any. The person shall submit with the release form a complete set of fingerprints taken by a qualified law enforcement agency or an authorized employee of the banking department. In the event that the first set of fingerprints is invalid due to insufficient pattern, a second set of fingerprints is necessary in order to complete the criminal history records check. If, after 2 attempts, a set of fingerprints is invalid due to insufficient pattern, the department may, in lieu of the criminal history records check, accept police clearances from every city, town, or county where the person has lived during the past 5 years.

(e) The department shall submit the criminal history records release form to the New Hampshire division of state police which shall conduct a criminal history records check through its records and through the Federal Bureau of Investigation. Upon completion of the background investigation, the division of state police shall release copies of the criminal conviction records to the department. The department shall maintain the confidentiality of all criminal history records information received pursuant to this paragraph.

(f) The department may require the applicant or licensee to pay the actual costs of the background investigation and a criminal history records check.

255:58 New Section; Mortgage Bankers and Mortgage Brokers; Duty to Reply. Amend RSA 397-B by inserting after section 4-a the following new section:

397-B:4-b Duty to Reply. Any officer, owner, manager or agent of any registrant and any person controlling or having a contract under which he or she has a right to control such a registrant, whether exclusively or otherwise, and any person with executive authority over or in charge of any segment of such a registrant’s affairs, shall reply promptly in writing, or in other designated form, to any written inquiry from the commissioner requesting a reply. The commissioner may require that any communication made to him or her under this section be verified.

255:59 Examinations; Expenses. RSA 397-A:12, V is repealed and reenacted to read as follows:

V. The expense of such examination shall be chargeable to and paid by the licensee. The procedure for such payment shall be the same as for payments by institutions for cost of examinations under RSA 383:11, except when the principal office of the licensee or person is located outside of this state and the department has determined that the examination must be conducted at that out-of-state location, the actual cost of travel, lodging, meals and other expenses of examination personnel making the examination, shall be chargeable to and paid by such licensee or person in addition to the per diem charge for examination personnel set forth in RSA 383:11.

255:60 License Revocation; Suspension. Amend the introductory paragraph of RSA 397-A:17, I to read as follows:

I. The commissioner may issue an order requiring [the] a person to whom any license has been granted or any person under the commissioner’s jurisdiction to show cause why the license should not be revoked, suspended, or penalties imposed, or both, for violations of this chapter. The order shall give reasonable notice of the opportunity for a hearing and shall state the reasons for the issuance of the order. The commissioner may by order summarily postpone or suspend any license or application pending final determination of any order to show cause, or other order, or of any other proceeding under this section, provided the commissioner finds that the public interest would be irreparably harmed by delay in issuing such order. Upon the entry of the order, the commissioner shall promptly notify the respondent, applicant, or licensee that the order has been entered and of the reasons for the order and that within 10 calendar days after receipt of a written request the matter will be scheduled for hearing. Valid delivery of such order shall be by hand or [registered] certified mail at the last known principal office of the licensee[. Delivery of such order], or respondent, to an officer, director, 5 percent or more owner, member, partner, or legal representative of the licensee [shall be deemed a valid delivery of the order] or respondent. If the person to whom an order to show cause or other order is issued fails to request a hearing within 30 calendar days of receipt or valid delivery of the order [or within 10 days of valid delivery of the order,] and no hearing is ordered by the commissioner, then such person shall be deemed in default, and the order shall, on the thirty-first day, become permanent, and shall remain in full force and effect until and unless later modified or vacated by the commissioner, for good cause shown. A hearing, if requested shall be [held] scheduled not later than 10 calendar days after the written request for such hearing is received by the commissioner, after which and within 20 calendar days [of] from the date of the hearing the commissioner shall enter an order making such disposition of the matter as the facts require. If the [person to whom the license was granted] licensee or respondent fails to request a hearing within 30 calendar days of receipt or valid delivery of such order or fails to appear at a hearing after being duly notified, or cannot be located after a reasonable search, such person shall be deemed in default and the proceeding may be decided against [him or her] the person upon consideration of the order to show cause or other order, the allegations of which may be deemed to be true. The commissioner may by order, upon due notice and opportunity for hearing, assess penalties or deny, suspend, or revoke a license or application if it is in the public interest and the applicant, respondent, or licensee, any partner, officer, member, or director, any person occupying a similar status or performing similar functions, or any person directly or indirectly controlling the applicant, respondent, or licensee:

255:61 New Paragraph; Definitions; Department. Amend RSA 399-A:1 by inserting after paragraph III the following new paragraph:

III-a. “Department” means the banking department.

255:62 Definitions; Principal. RSA 399-A:1, XIII is repealed and reenacted to read as follows:

XIII. “Principal” of the applicant or licensee means an owner with 10 percent or more ownership interest, corporate officer, director, member, general or limited liability partner, limited partner with 10 percent or more ownership interest, trustee, beneficiary of 10 percent or more of the trust that owns the applicant or licensee, senior manager, New Hampshire branch manager, and any person occupying similar status or performing similar functions.

255:63 New Paragraph; Application and Fees; Use of National Organization. Amend RSA 399-A:3 by inserting after paragraph III the following new paragraph:

IV. The commissioner may license or register individuals or firms by means of or through the facilities of a national organization which facilitates registration and licensing on a nationwide basis.

255:64 Denial, Suspension, or Revocation of Licenses; Hearing Added. Amend the introductory paragraph of RSA 399-A:7, I to read as follows:

I. The commissioner may by order, upon due notice and opportunity for a hearing, assess penalties or deny, suspend, or revoke any license or application if [the commissioner finds that the order] it is in the public interest and the applicant, respondent, or licensee, any partner, member, officer or director, any person occupying a similar status or performing similar functions, or any person directly or indirectly controlling the applicant, respondent, or licensee:

255:65 Denial, Suspension, or Revocation of Licenses; Person Under the Jurisdiction of the Commissioner Added. RSA 399-A:7, II is repealed and reenacted to read as follows:

II. The commissioner may issue an order requiring a person to whom any license has been granted or any person under the commissioner’s jurisdiction to show cause why the license should not be suspended or revoked or penalties should not be imposed, or both, for violations of this chapter. The order shall give reasonable notice of the opportunity for a hearing, and shall state the reasons for the issuance of the order. The commissioner may by order summarily postpone or suspend any license or application pending final determination of any order to show cause, or other order, or of any other proceeding under this section, provided the commissioner finds that the public interest would be irreparably harmed by delay in issuing such order. Upon the entry of the order, the commissioner shall promptly notify the respondent, applicant, or licensee that the order has been entered and of the reasons for the order and that within 10 calendar days after receipt of a written request the matter will be scheduled for hearing. Valid delivery of such order shall be by hand or certified mail at the last known principal office of the licensee or respondent or to an officer, director, 5 percent or more owner, member, partner, or legal representative of the licensee or respondent. If the person to whom an order to show cause or other order is issued fails to request a hearing within 30 calendar days of receipt or valid delivery of the order and no hearing is ordered by the commissioner, then such person shall be deemed in default, and the order shall, on the thirty-first day, become permanent, and shall remain in full force and effect until and unless later modified or vacated by the commissioner, for good cause shown. A hearing, if requested, shall be scheduled not later than 10 calendar days after the written request for such hearing is received by the commissioner, after which and within 20 calendar days from the date of the hearing the commissioner shall enter an order making such disposition of the matter as the facts require. If the licensee or respondent fails to request a hearing within 30 calendar days of receipt or valid delivery of such order or fails to appear at a hearing after being duly notified, or cannot be located after a reasonable search, such person shall be deemed in default and the proceeding may be decided against the person upon consideration of the order to show cause or other order, the allegations of which may be deemed to be true.

255:66 Denial, Suspension, or Revocation of Licenses; Imposition of Penalties Added. Amend RSA 399-A:7, V to read as follows:

V. If the commissioner finds that any licensee or applicant for license is no longer in existence or has ceased to do business as a small loan lender, payday loan lender, or title loan lender, or cannot be located after reasonable search, the commissioner may by order revoke the license, impose penalties, or deny the application. The commissioner may deem abandoned and withdraw any application for licensure made pursuant to this chapter, if any applicant fails to respond in writing within 180 calendar days to a written request from the commissioner requesting a response. Such request shall be sent via certified mail to the last known address of the applicant that is on file with the commissioner.

255:67 New Paragraph; Definitions; Department. Amend RSA 399-D:2 by inserting after paragraph V the following new paragraph:

V-a. “Department” means the banking department.

255:68 New Paragraph; Definitions; Principal Added. Amend RSA 399-D:2 by inserting after paragraph VII the following new paragraph:

VII-a. “Principal” of the applicant or licensee means an owner with 10 percent or more ownership interest, corporate officer, director, member, general or limited liability partner, limited partner with 10 percent or more ownership interest, trustee, beneficiary of 10 percent or more of the trust that owns the applicant or licensee, senior manager, New Hampshire branch manager, and any person occupying similar status or performing similar functions.

255:69 New Subparagraphs; License Application; Background Investigation. Amend RSA 399-D:5, II by inserting after subparagraph (e) the following new subparagraphs:

(f) Unless the applicant is a publicly traded corporation, the department shall complete a background investigation and criminal history records check on the applicant’s principals and any person in a similar position or performing similar functions. If the applicant is a subsidiary, the department shall complete a background investigation and criminal history records check on the principals of each equity owner of 10 percent or more of the applicant unless such equity owner is a publicly traded corporation.

(g) The persons described in subparagraph II(f) shall submit to the department a notarized criminal history records release form, as provided by the New Hampshire division of state police, which authorizes the release of the person’s criminal records, if any. The person shall submit with the release form a complete set of fingerprints taken by a qualified law enforcement agency or an authorized employee of the banking department. In the event that the first set of fingerprints is invalid due to insufficient pattern, a second set of fingerprints is necessary in order to complete the criminal history records check. If, after 2 attempts, a set of fingerprints is invalid due to insufficient pattern, the department may, in lieu of the criminal history records check, accept police clearances from every city, town, or county where the person has lived during the past 5 years.

(h) The department shall submit the criminal history records release form to the New Hampshire division of state police, which shall conduct a criminal history records check through its records and through the Federal Bureau of Investigation. Upon completion of the background investigation, the division of state police shall release copies of the criminal conviction records to the department. The department shall maintain the confidentiality of all criminal history records information received pursuant to this paragraph.

(i) The department may require the applicant or licensee to pay the actual costs of each background investigation and criminal history records check.

255:70 New Paragraph; License Application; Use of National Organization. Amend RSA 399-D:5 by inserting after paragraph IV the following new paragraph:

V. The commissioner may license or register individuals or firms by means of or through the facilities of a national organization which facilitates registration and licensing on a nationwide basis.

255:71 License Denial, Revocation, or Suspension. The introductory paragraph of RSA 399-D:13, I is repealed and reenacted to read as follows:

I. The commissioner may issue an order requiring a person to whom any license has been granted or any person under the commissioner’s jurisdiction to show cause why the license should not be revoked or penalties should not be imposed, or both, for violations of this chapter. The order shall give reasonable notice of the opportunity for a hearing and shall state the reasons for the issuance of the order. The commissioner may by order summarily postpone or suspend any license or application pending final determination of any order to show cause, or other order, or of any other proceeding under this section, provided the commissioner finds that the public interest would be irreparably harmed by delay in issuing such order. Upon the entry of the order, the commissioner shall promptly notify the respondent, applicant, or licensee that it has been entered and of the reasons for the order and that within 10 calendar days after receipt of a written request the matter will be scheduled for hearing. Valid delivery of such order shall be by hand or certified mail at the last known principal office of the licensee or respondent or to an officer, director, 5 percent or more owner, member, partner, or legal representative of the licensee or respondent. If the person to whom an order to show cause or other order fails to request a hearing within 30 calendar days of receipt or valid delivery of the order and no hearing is ordered by the commissioner, then such person shall be deemed in default, and the order shall, on the thirty-first day, become permanent, and shall remain in full force and effect until and unless later modified or vacated by the commissioner, for good cause shown. A hearing, if requested, shall be scheduled not later than 10 calendar days after the written request for such hearing is received by the commissioner, after which and within 20 calendar days from the date of the hearing the commissioner shall enter an order making such disposition of the matter as the facts require. If the licensee or respondent fails to request a hearing within 30 calendar days of receipt or valid delivery of such order or fails to appear at a hearing after being duly notified, or cannot be located after a reasonable search, such person shall be deemed in default and the proceeding may be decided against the person upon consideration of the order to show cause or other order, the allegations of which may be deemed to be true. The commissioner may by order, upon due notice and opportunity for a hearing, assess penalties, deny, suspend, or revoke a license or application if it is in the public interest, or any combination of the foregoing and the applicant, licensee or respondent, any partner, officer, member, or director, any person occupying a similar status or performing similar functions, or any person directly or indirectly controlling the applicant, licensee or respondent:

255:72 License Denial, Revocation, or Suspension; Imposition of Penalties Added. Amend RSA 399-D:13, VII to read as follows:

VII. If the commissioner finds that any licensee or applicant for license is no longer in existence or has ceased to do business as a debt adjuster, or cannot be located after reasonable search, the commissioner may by order revoke the license, impose penalties, or deny the application. The commissioner may deem abandoned and withdraw any application for licensure made pursuant to this chapter, if the applicant fails to respond in writing within 180 calendar days to a written request from the commissioner requesting a response. Such request shall be sent via certified mail to the last known address of the applicant that is on file with the commissioner.

255:73 Examinations and Investigations; Expenses. RSA 399-D:22, VII is repealed and reenacted to read as follows:

VII. The expense of such examination shall be chargeable to and paid by the licensee. The procedure for such payment shall be the same as for payments by institutions for the cost of examinations under RSA 383:11, except when the principal office of the licensee or person is located outside of this state and the department has determined that the examination must be conducted at that out-of-state location, the actual cost of travel, lodging, meals, and other expenses of examination personnel making the examination, shall be chargeable to and paid by such licensee or person in addition to the per diem charge for examination personnel set forth in RSA 383:11.

255:74 New Paragraph; Definitions; Department Added. Amend RSA 361-A:1 by inserting after paragraph III-a the following new paragraph:

III-b. “Department” means the banking department.

255:75 Definitions; Principal Added. Amend RSA 361-A:1, VIII-a to read as follows:

VIII-a. “Principal” of the applicant or licensee means an owner with 10 percent or more ownership interest, corporate officer, director, member, general or limited liability partner, limited partner with 10 percent or more ownership interest, trustee, beneficiary of 10 percent or more of the trust that owns the applicant or licensee, senior manager, New Hampshire branch manager, and any person occupying similar status or performing similar functions.

VIII-b. “Principal office” means the main office location of a person required to be licensed under this chapter.

255:76 New Paragraph; Licensing of Sales Finance Companies and Retail Sellers Required; Use of National Organization. Amend RSA 361-A:2 by inserting after paragraph XIV the following new paragraph:

XV. The commissioner may license or register individuals or firms by means of or through the facilities of a national organization which facilitates registration and licensing on a nationwide basis.

255:77 Suspension or Revocation of Licenses; Any Person Under the Commissioner’s Jurisdiction Added. RSA 361-A:3, I is repealed and reenacted to read as follows:

I. The commissioner may issue an order requiring a person to whom any license has been granted or any person under the commissioner’s jurisdiction to show cause why the license should not be revoked or penalties should not be imposed, or both, for violations of this chapter. The order shall give reasonable notice of the opportunity for a hearing and shall state the reasons for the issuance of the order. The commissioner may by order summarily postpone or suspend any license or application pending final determination of any order to show cause, or other order, or of any other proceeding under this section, provided the commissioner finds that the public interest would be irreparably harmed by delay in issuing such order. Upon the entry of the order, the commissioner shall promptly notify the respondent, applicant, or licensee that the order has been entered and of the reasons for the order and that within 10 calendar days after receipt of a written request the matter will be scheduled for a hearing. Valid delivery of such order shall be by hand or certified mail at the last known principal office of the licensee or respondent or to an officer, director, 5 percent or more owner, member, partner, or legal representative of the licensee or respondent. If the person to whom an order to show cause or other order is issued fails to request a hearing within 30 calendar days of receipt or valid delivery of the order and no hearing is ordered by the commissioner, then such person shall be deemed in default, and the order shall, on the thirty-first day, become permanent, and shall remain in full force and effect until and unless later modified or vacated by the commissioner, for good cause shown. A hearing, if requested, shall be scheduled not later than 10 calendar days after the written request for such hearing is received by the commissioner, after which and within 20 calendar days from the date of the hearing the commissioner shall enter an order making such disposition of the matter as the facts require. If the licensee or respondent fails to request a hearing within 30 calendar days of receipt or valid delivery of such order or fails to appear at a hearing after being duly notified, or cannot be located after a reasonable search, such person shall be deemed in default and the proceeding may be decided against the person upon consideration of the order to show cause, or other order, the allegations of which may be deemed to be true.

255:78 Suspension or Revocation of Licenses; Parties Added. Amend the introductory paragraph of RSA 361-A:3, I-a to read as follows:

I-a. The commissioner may, by order, deny, suspend, or revoke any license or application if the commissioner finds that the order is in the public interest and the applicant, respondent, or licensee, any partner, officer, member, or director, any person occupying a similar status or performing similar functions, or any person directly or indirectly controlling the applicant, respondent, or licensee:

255:79 Suspension or Revocation of Licenses; Imposition of Penalties Added. Amend RSA 361-A:3, IV to read as follows:.

IV. If the commissioner finds that any licensee or applicant for license is no longer in existence or has ceased to do business as a retail seller or sales finance company, or cannot be located after reasonable search, the commissioner may by order revoke the license, impose penalties, or deny the application. The commissioner may deem abandoned and withdraw any application for licensure made pursuant to this chapter, if any applicant fails to respond in writing within 180 calendar days to a written request from the commissioner requesting a response. Such request shall be sent via certified mail to the last known address of the applicant that is on file with the commissioner.

255:80 New Paragraph; Definitions; Department Added. Amend RSA 397-B:1 by inserting after paragraph I the following new paragraph:

I-a. “Department” means the banking department.

255:81 New Paragraph; Definitions; Principal Added. Amend RSA 397-B:1 by inserting after paragraph IV the following new paragraph:

V. “Principal” of the applicant or licensee means an owner with 10 percent or more ownership interest, corporate officer, director, member, general or limited liability partner, limited partner with 10 percent or more ownership interest, trustee, beneficiary of 10 percent or more of the trust that owns the applicant or licensee, senior manager, New Hampshire branch manager, and any person occupying similar status or performing similar functions.

255:82 Administration by Commissioner; Rulemaking; Imposition of Penalties Added. Amend RSA 397-B:3, VII to read as follows:

VII. If the commissioner finds that any registrant or applicant for registration is no longer in existence or has ceased to do business as a mortgage servicing company, or cannot be located after reasonable search, the commissioner may by order revoke the registration, impose penalties, or deny the application. The commissioner may deem abandoned and withdraw any application for registration made pursuant to this chapter, if any applicant fails to respond in writing within 180 calendar days to a written request from the commissioner requesting a response. Such request shall be sent via certified mail to the last known address of the applicant that is on file with the commissioner.

255:83 Administration by Commissioner; Rulemaking; Procedures. RSA 397-B:3, VIII is repealed and reenacted to read as follows:

VIII. The commissioner may issue an order requiring a person to whom any registration has been granted or any person under the commissioner’s jurisdiction to show cause why the registration should not be revoked or penalties should not be imposed, or both, for violations of this chapter. The order shall give reasonable notice of the opportunity for a hearing and shall state the reasons for the issuance of the order. The commissioner may by order summarily postpone or suspend any application or registration pending final determination of any order to show cause, cease and desist, or other order, or of any other proceeding under this section, provided the commissioner finds that the public interest would be irreparably harmed by delay in issuing such order. A registration may be revoked for violations of this chapter or any rule or order thereunder. The commissioner may issue a cease and desist order against any registrant or person whom he or she has reasonable cause to believe is in violation of the provisions of this chapter or any rule or order under this chapter. Upon entry of an order, the commissioner shall promptly notify the respondent, applicant, or registrant that the order has been entered and of the reasons for the order and that within 10 calendar days after receipt of a written request the matter will be scheduled for hearing. Valid delivery of such orders shall be by hand or certified mail at the last known principal office of the applicant, registrant, or respondent or to an officer, director, 5 percent or more owner, member, partner, or legal representative of the registrant, applicant, or respondent. If the person to whom an order to show cause, cease and desist, or other order is issued fails to request a hearing within 30 calendar days of receipt or valid delivery of the order and no hearing is ordered by the commissioner, then such person shall be deemed in default and the order shall, on the thirty-first day, become permanent, and shall remain in full force and effect until and unless later modified or vacated by the commissioner, for good cause shown. A hearing, if requested, shall be scheduled not later than 10 calendar days after the written request for such hearing is received by the commissioner after which and within 20 calendar days from the date of the hearing the commissioner shall enter an order making such disposition of the matter as the facts require. If the licensee or respondent fails to request a hearing within 30 calendar days of receipt or valid delivery of such order or fails to appear at a hearing after being duly notified, or cannot be located after a reasonable search, such person shall be deemed in default and the proceeding may be decided against the person upon consideration of the order to show cause, cease and desist, or other order, the allegations of which may be deemed to be true.

255:84 Administration by Commissioner; Rulemaking; Hearing Added. Amend the introductory paragraph of RSA 397-B:3, IX to read as follows:

IX. The commissioner may by order, after notice and opportunity for hearing, assess penalties or deny, suspend, or revoke any registration or application if the commissioner finds that the order is in the public interest and the applicant or registrant, any partner, officer, member, or director, any person occupying a similar status or performing similar functions, or any person directly or indirectly controlling the applicant, respondent, or registrant:

255:85 New Paragraph; Registration; Use of National Organization. Amend RSA 397-B:4 by inserting after paragraph II the following new paragraph:

III. The commissioner may license or register individuals or firms by means of or through the facilities of a national organization which facilitates registration and licensing on a nationwide basis.

255:86 Prohibited Pledges; Statutory Reference Changed. Amend RSA 398:2, II to read as follows:

II. In excess of 4 motor vehicles or titles to motor vehicles, as defined in RSA 361-A:1, [V]VII;

255:87 Repeal. The following are repealed:

I. RSA 398-A, relative to second mortgage home loans.

II. RSA 397-A:15, V-a, relative to a requirement that a mortgage payoff amount be provided within 5 days of receipt of a written request.

255:88 Effective Date. This act shall take effect 60 days after its passage.

(Approved: July 14, 2005)

(Effective Date: September 12, 2005)

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SB223 at GenCourtMobile

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Bill Text Revisions

SB223 Revision: 9273 Date: Jan. 21, 2010, midnight

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