Revision: Jan. 5, 2012, midnight
SB 188-FN – AS INTRODUCED
2011 SESSION
09/01
SENATE BILL 188-FN
AN ACT relative to the authority and roles of the banking department, the attorney general, and the bureau of securities regulation in state regulation of securities.
SPONSORS: Sen. Bragdon, Dist 11; Sen. White, Dist 9
COMMITTEE: Executive Departments and Administration
This bill clarifies the authority and roles of the banking department, the attorney general, and
the bureau of securities regulation in state regulation of securities.
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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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
11-1041
09/01
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Eleven
AN ACT relative to the authority and roles of the banking department, the attorney general, and the bureau of securities regulation in state regulation of securities.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 Attorney General; Supervision of Securities Regulation. Amend RSA 7:8 to read as follows:
7:8 Advice to Departments; Supervision. [He] The attorney general shall, when requested, advise any state board, commission, agent, or officer as to questions of law relating to the performance of their official duties, and he or she shall, under the direction of the governor and council, exercise a general supervision over the state departments, commissions, boards, bureaus, and officers, to the end that they perform their duties according to law. The attorney general shall exercise overall authority and general supervision over state regulation of securities by the banking department and the bureau of securities regulation.
2 Consumer Protection Act; Exemptions. Amend RSA 358-A:3 to read as follows:
I. Except as provided in RSA 358-A:3-a, trade or commerce that is subject to the jurisdiction of the bank commissioner, the director of securities regulation, the insurance commissioner, the public utilities commission, the financial institutions and insurance regulators of other states, or federal banking or securities regulators who possess the authority to regulate unfair or deceptive trade practices. This paragraph includes trade or commerce under the jurisdiction of, and regulated by, the bank commissioner pursuant to RSA 361-A, relative to retail installment sales of motor vehicles.
3 New Sections; Coextensive Jurisdiction for Securities Transactions; Central Database. Amend RSA 358-A by inserting after section 3 the following new sections:
358-A:3-a Coextensive Jurisdiction for Securities Transactions. The department of justice, the banking department, and the bureau of securities regulation shall have coextensive jurisdiction over unfair or deceptive trade practices involving securities transactions.
358-A:3-b Central Database for Consumer Complaints. The consumer protection and antitrust bureau shall maintain a central database for consumer complaints alleging unfair or deceptive trade practices. Any department receiving such a consumer complaint shall report its findings and the disposition of the consumer complaint to the bureau for inclusion in the central database.
4 Bank Commissioner; Examinations. Amend RSA 383:9, I to read as follows:
I. The commissioner shall have general supervision of all banks (except national banks), trust companies, building and loan associations, credit unions, Morris plan banks, small loan companies, and other similar institutions in the state. He or she shall examine into the condition and management of all such institutions at least every 18 months with the exception of highly rated institutions provided for in RSA 383:9-d, and more often when necessary in his or her judgment or when so directed by the governor. In examining each institution, the commissioner shall examine both the institution’s activities which are subject to the commissioner’s regulatory authority and the financial condition of the institution’s entire operations. He or she may regulate the buying or selling of securities by savings banks for officers, employees, or customers. He or she shall assign to the deputy commissioner and the assistants appointed under RSA 383:7 such of his or her duties as he or she sees fit.
5 Bank Commissioner; Confidential Information. Amend RSA 383:10-b to read as follows:
383:10-b Confidential Information. All records of investigations and reports of examinations by the banking department, including any duly authenticated copy or copies thereof in the possession of any institution under the supervision of the bank commissioner, shall be confidential communications, shall not be subject to subpoena and shall not be made public unless, in the judgment of the commissioner, the ends of justice and the public advantage will be subserved by the publication thereof. The commissioner shall share records of investigations and reports of examinations with the department of justice and the bureau of securities regulation for institutions over which the departments and the bureau have concurrent regulatory authority. The commissioner may furnish to the federal supervisory authorities and to independent insuring funds which he deems qualified such information and reports relating to the institutions under his supervision as he deems best. On motion for discovery filed in any court of competent jurisdiction, in aid of any pending action, the court, after hearing the parties, may order the production of such records, investigations and reports for use in such action whenever it is found that justice so requires, subject to such reasonable safeguards imposed by the court as may be necessary to prevent use by unauthorized persons or publicity of irrelevant portions thereof.
6 Bank Commissioner; Examinations of Mortgage Licensees; Confidentiality and Information Sharing. Amend RSA 397-A:12, V-a to read as follows:
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 and investigations, the commissioner, insofar as he or she deems it practicable in administering this section, may cooperate and share information with the regulators of this state and other states, the Federal Trade Commission, the Department of Housing and Urban Development, other federal regulators, or their successors in conducting examinations and investigations. The commissioner shall share records of investigations and reports of examinations with the department of justice and the bureau of securities regulation for institutions over which the departments and the bureau have concurrent regulatory authority.
7 Bank Commissioner; Examination of Mortgage Licensees; Confidentiality and Information Sharing. Amend RSA 397-A:12, X to read as follows:
X. All reports pursuant to this section shall be absolutely privileged and although filed in the department as provided in paragraph IX shall nevertheless not be for public inspection. The comments and recommendations of the examiner shall also be deemed confidential information and shall not be available for public inspection. The provisions of this paragraph shall not apply to the sharing of records of investigations and reports of examinations with the department of justice and the bureau of securities regulation for institutions over which the departments and the bureau have concurrent regulatory authority.
8 Definitions; Bureau. Amend RSA 421-B:2, IV-b to read as follows:
IV-b. “Bureau” means the bureau of securities regulation within the department of state.
IV-c. “Complaint” means a written statement submitted within a reasonable time following the incident complained of by a person, association, partnership, corporation, state agency (including the staff of the department) or by any other legal entity that sets forth specific allegations and requests administrative action by the department.
9 New Section; Bureau of Securities Regulation; Authority to Investigate. Amend RSA 421-B by inserting after section 22 the following new section:
421-B:22-a Bureau; Authority to Investigate. The bureau may investigate any transactions by any entity upon a reasonable articulable suspicion that the entity is subject to the bureau’s jurisdiction.
10 Effective Date. This act shall take effect 60 days after its passage.
LBAO
11-1041
Revised 03/02/11
SB 188 FISCAL NOTE
AN ACT relative to the authority and roles of the banking department, the attorney general, and the bureau of securities regulation in state regulation of securities.
FISCAL IMPACT:
The Department of Justice states this bill will increase state general fund expenditures by an indeterminable amount in FY 2011 and each year thereafter. The New Hampshire Banking Department states this bill will increase state restricted revenue and expenditures by $1,055,060 in FY 2012 and each year thereafter. There will be no fiscal impact on state general fund revenues, or county and local revenues or expenditures.
METHODOLOGY:
The Department of Justice states this bill gives coextensive jurisdiction over unfair or deceptive trade practices involving securities transactions to the Department of Justice, New Hampshire Banking Department, and Bureau of Securities Regulations and provides the Department overall authority and general supervision over state regulations of securities by the Banking Department and the Bureau of Securities Regulations. The Department states this bill will increase the Department’s enforcement responsibilities. Because the Department cannot estimate whether the necessary institutional communication and cooperation between the three departments and future investigations can be conducted utilizing existing resources, the fiscal impact of these responsibilities cannot be determined at this time. Additionally, the Department states this bill requires the Consumer Protection Bureau to create and maintain a central database for consumer complaints alleging unfair and deceptive trade practices increasing state general fund expenditures by an indeterminable amount in FY 2011 and each year thereafter.
The New Hampshire Banking Department states this bill requires the Banking Commissioner to examine the financial condition of an institution’s entire operations at the time of the entities scheduled banking examination. The Department assumes there will be no new licensees in FY 2012 through FY 2015. The Department estimates this bill will require an additional 2,229 exam days per 18 month examination cycle, thereby increasing state restricted expenditures by $1,055,060 in FY 2012 and each year thereafter (2,229 days * $710 cost per exam day = $1,582,590 per 18 months * 2/3 = $1,055,060 per 12 months). The Department states because it is self-funded through fees, fines, and assessments, increased expenditures will result in increased state restricted revenues of $1,055,060 in FY 2012 and each year thereafter. Finally, the Department states because it already shares information with other state agencies and works with the Department of Justice and Bureau of Securities Regulation on matters of securities regulations there will be no fiscal impact resulting from these sections of the proposed bill.
The Bureau of Securities Regulation states this bill requires the Bureau to report to the Department of Justice and explains the basis upon which the Bureau may initiate an investigation. The Bureau states this bill will have no fiscal impact on the Bureau in FY 2011 and each year thereafter.