Bill Text - HB334 (2009)

Relative to consumer credit.

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Revision: April 7, 2009, midnight

26Mar2009… 0308h

2009 SESSION

09-0740

08/04

HOUSE BILL 334-FN

COMMITTEE: Commerce and Consumer Affairs

ANALYSIS

This bill:

I. Allows the bank commissioner to bar certain persons from registering as being licensed as certain retail sellers, mortgage loan servicers, debt adjustment services personnel, and money transmitters.

II. Allows the bank commissioner to expand criminal record checks for certain retail sellers, mortgage loan servicers, debt adjustment services personnel, and money transmitters.

III. Allows for the collection of certain examination expenses, fines, and other penalties.

IV. Allows the bank department to examine business records in certain situations.

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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

26Mar2009… 0308h

09-0740

08/04

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Nine

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

1 Automotive Retail Sellers; Licenses. 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 and bar any person from licensure 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:

2 Mortgage Loan Servicers; Registration. 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] and deny, suspend, or revoke any registration or application, and bar any person from registration 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:

3 Debt Adjustment Services; Licenses. Amend the introductory paragraph of RSA 399-D:13, I 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] and revoke a license or application, and bar any person from licensure 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:

4 Licensing of Money Transmitters. Amend the introductory paragraph of RSA 399-G:18, I 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, 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 certified mail at the last known principal office of the licensee, or respondent, 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. The commissioner may by order, upon due notice and opportunity for hearing, assess penalties [or] and deny, suspend, or revoke a license, registration, or application, and bar any person from licensure if it is in the public interest and the applicant, respondent, authorized delegate, 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, authorized delegate, or licensee:

5 New Subparagraph; Automotive Retail Sellers. Amend RSA 361-A:2, II(a) by inserting after subparagraph (4) the following new subparagraph:

(5) The department may rely on criminal records checks reported through a national licensing facility in lieu of (2) and (3) above.

6 New Subparagraph; Mortgage Loan Services. Amend RSA 397-B:4, I by inserting after subparagraph (f) the following new subparagraph:

(g) The department may rely on criminal records checks reported through a national licensing facility in lieu of (d) and (e) above.

7 New Subparagraph; Debt Adjustment Services. Amend RSA 399-D:5, II by inserting after subparagraph (i) the following new subparagraph:

(j) The department may rely on criminal records checks reported through a national licensing facility in lieu of (g) and (h) above.

8 New Subparagraph; Money Transmitters. Amend RSA 399-G:5, II by inserting after subparagraph (g) the following new subparagraph:

(h) The department may rely on criminal records checks reported through a national licensing facility in lieu of (e) and (f) above.

9 New Paragraph; Automotive Retail Sellers. Amend RSA 361-A:6 by inserting after paragraph II the following new paragraph:

III. The commissioner may share information with state and federal regulators, and may share information with law enforcement agencies for the purposes of criminal investigations.

10 New Paragraph; Mortgage Loan Services. Amend RSA 397-B:9 by inserting after paragraph V the following new paragraph:

VI. The commissioner may share information with state and federal regulators, and may share information with law enforcement agencies for the purposes of criminal investigations.

11 New Paragraph; Debt Adjustment Services. Amend RSA 399-D:22 by inserting after paragraph XI the following new paragraph:

XII. The commissioner may share information with state and federal regulators, and may share information with law enforcement agencies for the purposes of criminal investigations.

12 New Paragraph; Money Transmitters. Amend RSA 399-G:13 by inserting after paragraph X the following new paragraph:

XI. The commissioner may share information with state and federal regulators, and may share information with law enforcement agencies for the purposes of criminal investigations.

13 Examinations; Automotive Retail Sellers. 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 calculated by the same method 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.

14 Records and Filings; Payment; Automotive Retail Sellers. Amend RSA 361-A:13, I to read as follows:

I. A document is filed when it is received by the commissioner. Examination expenses, fines, penalties, and other moneys obliged to be paid to the department shall be paid within 14 days of receipt of notice by the licensee or other person or at such later time determined by the commissioner. If any filing deadline date falls on a weekend or on a New Hampshire state or federal legal holiday, the due date shall be automatically extended to the next business day following such weekend or holiday.

15 Records and Filings; Payment; Mortgage Loan Services. Amend RSA 397-B:11, I to read as follows:

I. A document is filed when it is received by the commissioner. Examination expenses, fines, penalties, and other moneys obliged to be paid to the department shall be paid within 14 days of receipt of notice by the licensee or other person or at such later time determined by the commissioner. If any filing deadline date falls on a weekend or on a New Hampshire state or federal legal holiday, the due date shall be automatically extended to the next business day following such weekend or holiday.

16 Examinations and Investigations; Debt Adjustment Services. Amend RSA 399-D:22, VII 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 calculated by the same method 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.

17 Debt Adjustment Services; Records and Filings. Amend RSA 399-D:27, I to read as follows:

I. A document is filed when it is received by the commissioner. Examination expenses, fines, penalties, and other moneys obliged to be paid to the department shall be paid within 14 days of receipt of notice by the licensee or other person or at such later time determined by the commissioner. If any filing deadline date falls on a weekend or on a New Hampshire state or federal legal holiday, the due date shall be automatically extended to the next business day following such weekend or holiday.

18 Money Transmitters; Examinations. Amend RSA 399-G:13, V to read as follows:

V. The expense of examination shall be chargeable to and paid by the licensee. The [procedure for such] payment shall be calculated by the same method 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 employed in making examinations 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.

19 Money Transmitters; Records and Filings. Amend RSA 399-G:22, I to read as follows:

I. A document is filed when it is received by the commissioner. Examination expenses, fines, penalties, and other moneys obliged to be paid to the department shall be paid within 14 days of receipt of notice by the licensee or other person or at such later time determined by the commissioner. If any filing deadline date falls on a weekend or on a New Hampshire state or federal legal holiday, the due date shall be automatically extended to the next business day following such weekend or holiday.

20 New Section; Examinations. Amend RSA 397-B by inserting after section 9 the following new section:

397-B:9-a Examinations.

I. The department may examine the business affairs and records of any registrant or any other person, whether registered or not, as it deems necessary to determine compliance with this chapter and the rules adopted pursuant to it. In determining compliance, the department may examine the books, accounts, records, files, and other documents or matters of any registrant or person. The department shall have the power to subpoena witnesses and administer oaths in any adjudicative proceedings, and to compel, by subpoena duces tecum, the production of all books, records, files, and other documents and materials relevant to its investigation.

II. For the purpose of discovering violations of this chapter, the banking department may examine, during business hours, the records of any registrant and of any person acting as a mortgage servicer on New Hampshire loans, whether such person shall be registered to act, or claim to act, as principal, agent, or other representative, or under, or without the authority of this chapter; and for that purpose, the banking department shall have access to the books, papers, records, files, and vaults of all such persons. The banking department shall also have authority to examine, under oath, all persons whose testimony it may require relative to such loans or business.

III. The affairs and records of every registrant shall be subject at any time to such periodic, special, regular, or other examination by the banking department with or without notice to the registrant. All books, papers, files, related material, and records of assets of the registrant shall be subject to the banking department’s examination.

IV. Any agent of the department may make a thorough examination into the business affairs of each registrant and shall report any violations of law, rule, or standard business practice to the department.

V. The expense of examination shall be chargeable to and paid by the registrant. The payment shall be calculated by the same method as for payments by institutions for cost of examinations under RSA 383:11, except when the principal office of the registrant 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 employed in making examinations shall be chargeable to and paid by such registrant or person in addition to the per diem charge for examination personnel set forth in RSA 383:11.

VI. The commissioner may, in his or her discretion, accept all or a part of a report of examination of a mortgage servicer, 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 share information and cooperate with the regulators of other states, the Federal Trade Commission, other federal regulators, or their successors in conducting examinations and investigations.

VII. 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 his or her 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.

VIII. Upon receipt of a written report of examination, the registrant shall have 30 days or such additional period the commissioner for good cause may allow, to review the report, recommend any changes, and set forth in writing the remedial course of action the registrant will pursue to correct any reported deficiencies outlined in the report.

IX. If requested by the person examined, within the period allowed in paragraph VIII, or if deemed advisable by the commissioner without such request, the commissioner shall hold a closed hearing relative to the report and shall not file the report in the department until after such closed hearing and issuance of his or her order thereon. If no closed hearing has been requested or held, the examination report, with such modifications as the commissioner deems proper, shall be accepted by the commissioner and filed upon expiration of the review period provided for in paragraph VIII.

X. All reports pursuant to this section shall be privileged and exempt from the requirements of RSA 91-A. The comments and recommendations of the examiner shall also be exempt.

21 New Subparagraph; Definitions. Amend RSA 399-D:2, IV by inserting after subparagraph (d) the following new subparagraph:

(e) A person otherwise engaging in the debt adjustment business including but not limited to acting upon outstanding debt adjustment contracts is providing debt adjustment within the intent of this chapter.

22 New Paragraph; License Required. Amend RSA 399-D:3 by inserting after paragraph II the following new paragraph:

III. If a person, or a person’s members, officers, directors, agents and employees, violates paragraph I of this section, the debt adjustment contract shall be void and the person shall have no right to collect, receive, or retain any interest or charges whatsoever whether paid or received directly or indirectly. Any such direct or indirect compensation received by the person shall be refunded to the consumer.

23 License Application; Requirements; Investigation. Amend RSA 399-D:5, II(a) to read as follows:

(a) Each application shall be accompanied by a current financial statement, certified by a certified public accountant or a public accountant, a nonrefundable license fee of [$100 for each office, and an investigation fee of $50] $500.

24 License Term; Renewal. Amend RSA 399-D:9, III to read as follows:

III. A renewal fee of [$100] $500 for the principal office license and for each branch office license shall be submitted with the application for license renewal.

25 New Paragraph; Fees of Licensee. Amend RSA 399-D:14 by inserting after paragraph IV the following new paragraph:

V. The dollar amount of any direct or indirect remuneration that is or will be received for debt adjustment services from parties other than the consumer shall be disclosed and agreed to in writing by the consumer prior to execution of a debt adjustment contract or agreement by the consumer.

26 Effective Date. This act shall take effect 60 days after its passage.

LBAO

09-0740

Amended 04/07/09

HB 334 FISCAL NOTE

FISCAL IMPACT:

METHODOLOGY: