Bill Details - HB450 (2019)

HB 450 - VERSION ADOPTED BY BOTH BODIES

 

19Mar2019... 0681h

2019 SESSION

19-0780

11/05

 

HOUSE BILL 450

 

AN ACT relative to examinations conducted by the banking department.

 

SPONSORS: Rep. Luneau, Merr. 10

 

COMMITTEE: Commerce and Consumer Affairs

 

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ANALYSIS

 

This bill clarifies the authority of the bank commissioner to conduct investigations and examinations on certain regulated entities and the cost of such examinations born by the entity being examined.

 

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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

19Mar2019... 0681h 19-0780

11/05

 

STATE OF NEW HAMPSHIRE

 

In the Year of Our Lord Two Thousand Nineteen

 

AN ACT relative to examinations conducted by the banking department.

 

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

 

1 Retail Installment Sales; Retail Installment Sales of Motor Vehicles; Examinations.  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 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].

2  Banks and Banking; Bank Commissioner; Duties.  Amend RSA 383:9, V to read as follows:

V.  The commissioner may conduct an examination or investigation during business hours, at the commissioner's office by consent or by subpoena, or at any location of the entity's operations, including any place where assets are located or where records are made, posted, or kept.  The commissioner shall have the power to conduct [such] an examination or investigation outside the state of New Hampshire and outside the United States and its territories.  Notice of any examination may be provided to the entity's main or principal office or, for a trust company or family trust company, to any executive officer of the trust company or family trust company.

3  Banks and Banking; Bank Commissioner; Examination of Banks, Credit Unions, Trust Companies, and Family Trust Companies.  Amend RSA 383:9-d, IV to read as follows:

IV.  The commissioner shall examine the condition and management of all consumer credit licensees as required by law, every [18] 24 months, or more often when necessary in his or her judgment.  In lieu of his or her own report, the commissioner may accept a report of a federal or state regulator or group of regulators with authority to conduct a similar type of examination of the entity.

4  Banks and Banking; Bank Commissioner; Examination of Banks, Credit Unions, Trust Companies, and Family Trust Companies.  Amend RSA 383:9-d, VI to read as follows:

VI.  In no event shall a licensee be examined less than every [36] 48 months.

5  Banks and Banking; Bank Commissioner; Confidential Information.  Amend RSA 383:10-b to read as follows:

383:10-b  Confidential Information.  All records of the department's investigations, examinations, visitations, and reports produced by those investigations, examinations, and visitations including any duly authenticated copy of those records in the possession of any entity under the supervision of the commissioner, shall be confidential, shall not be subject to RSA 91-A, 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 served by the publication of those records.  The commissioner may [furnish] disclose to [the] federal and state supervisory authorities and to independent insuring funds which he or she deems qualified such information and reports relating to the entities under his or her supervision as he or she deems best.  The commissioner may also furnish to any government sponsored bank created under the Federal Home Loan Bank Act, or any authorized agent thereof, copies of reports of examination concerning any bank or credit union that is a member of such government sponsored bank, as required for the evaluation of the financial condition of the member bank or credit union.  The commissioner may share information with state and federal regulators, and may share information with law enforcement agencies for the purpose of criminal investigations.  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 those records for use in that 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 of those records.

6  Banks and Banking; Bank Commissioner; Consumer Complaints and Restitution.  Amend RSA 383:10-d to read as follows:

383:10-d  Consumer Complaints and Restitution.  The commissioner shall have exclusive authority and jurisdiction to investigate conduct that may violate any of the provisions of RSA 361-A and Titles XXXV and XXXVI and administrative rules adopted thereunder.  The commissioner may hold hearings relative to such conduct and may order restitution for a person or persons adversely affected by such conduct.  The commissioner may request the assistance and services of the department of justice and shall delegate to the department of justice the authority to investigate criminal conduct under this section.  The commissioner shall provide the department of justice information relevant to the criminal investigation of such matters, if applicable, and shall cooperate with such investigation and prosecution.  The commissioner may also share information with state and federal regulators, and may share information with law enforcement agencies for the purpose of criminal investigations.

7  Banks and Banking; Bank Commissioner; Examination Costs.  Amend RSA 383:11, I to read as follows:

I.  The commissioner shall charge and collect from each entity, the condition and management of which he or she [is required to examine] examines under the provisions of RSA 383:9, the actual cost of travel, lodging, meals, and other expenses of examination personnel employed in making examinations under this section plus an examination fee, which shall be calculated as a sum equal to the product of the average daily rate of overall salary costs, including the benefits portion thereof, and expenses of all personnel employed in making examinations under the provisions of RSA 383:9, multiplied by the number of personnel days devoted to the examination of the particular entity, provided, however, that no such entity shall be charged or pay for less than one full day.  Sums collected under this section shall be payable to the state treasurer as restricted revenue and credited, in accordance with the department's accounting unit designation, to the appropriation for the commissioner or the consumer credit administration division.

8  Banks and Banking; Bank Commissioner; Irregularities.  Amend RSA 383:16 to read as follows:

383:16  Irregularities.  If the commissioner, deputy commissioner, or any examiner shall make a false statement of the condition of any institution with the intent to deceive, or shall intentionally fail when examining any institution to make a [full] prudent and careful examination of appropriate scope based on the size, complexity, and the risk profile of the institution, he or she shall be guilty of a class B felony.

9  Banks and Banking; Organization of State Banks; Investigative Powers.  Amend RSA 383-A:3-306 to read as follows:

383-A:3-306  Investigative Powers.  For the purpose of any investigation or examination under RSA 383-A, RSA 383-B, RSA 383-C, RSA 383-D, and RSA 383-E, the commissioner shall have the power to subpoena witnesses and administer oaths in any adjudicative proceedings and the power to compel, by subpoena duces tecum, the production of all books, records, files, and other documents and materials relevant to his or her investigation or examination.

10  Banks and Banking; Bank and Credit Union Regulation and Enforcement; Annual Audits; Reports.  Amend RSA 383-A:5-509(c) to read as follows:

(c)  Each state bank or credit union shall direct its auditor to provide, and the auditor shall provide, the commissioner with a copy of its audit report, within 60 days after each is made available to the state bank or credit union.  All reports, memoranda, and correspondence [remain the property of the individual state bank or credit union] shall be confidential in accordance with RSA 383:10-b.

11  Depository Bank Act; Interstate Banking; Examination of Foreign Banks and Foreign Bank Holding Companies.  Amend RSA 383-B:10-1005(b) to read as follows:

(b)  The cost of any examination conducted under subsection (a) shall be the same as that provided by RSA 383:11[, I, except that the actual cost of travel, lodging, meals, and other expenses of examination personnel employed in making examinations under the provisions of subsection (a) shall be chargeable to the foreign bank or foreign bank holding company examined and shall be paid by such entity in addition to the per diem charge for examination personnel set forth in RSA 383:11, I].

12  Banks and Banking; Trust Company Act; Offices; Examination of Out-of-State Offices.  Amend RSA 383-C:7-704 to read as follows:

383-C:7-704  Examination of Out-of-State Trust Offices.  The commissioner may enter into agreements with any regulatory authority having jurisdiction to examine out-of-state trust offices of trust companies.  For those examinations, [a trust company shall pay (i) an examination fee calculated in accordance with RSA 383:11, I, and (ii) the actual cost of travel, lodging, meals, and other expenses of examination personnel employed in making examinations under this section] the cost shall be the same as that provided in RSA 383:11.

13  Banks and Banking; Trust Company Act; Examination; Regular Examination.  Amend RSA 383-C:14-1401 to read as follows:

383-C:14-1401  Regular Examination.

I.  Subject to RSA 383-C:14-1402, the commissioner shall examine the condition and management of a trust company every 18 months, or more often when necessary in his or her judgment.

II.  For trust companies that qualify under paragraph III, the commissioner may alternate every 18 months between conducting an examination of the entity and either waiving one examination, or accepting the examination report of a federal or state regulator or group of regulators with authority to conduct a similar type of examination of the entity.

III.  A trust company qualifies for examination treatment under paragraph II if:

(a)  It has consistently been given high ratings in past exams.

(b)  It is not currently subject to an enforcement proceeding or order.

(c)  The commissioner has deemed it prudent to apply this paragraph and paragraph II.

14  Banks and Banking; Credit Union Act; Investigative Powers.  Amend RSA 383-E:3-305 to read as follows:

383-E:3-305  Investigative Powers.  For the purpose of any investigation or examination under this chapter, the commissioner 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 his or her investigation or examination.

15  Banks and Banking; Licensing of Nondepository Mortgage Bankers, Brokers, and Servicers; Examinations.  Amend RSA 397-A:12, VI to read as follows:

VI.  The expense of such examination shall be chargeable to and paid by the licensee.  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 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].

16  Pawnbrokers and Moneylenders; Regulation of Small Loans, Title Loans, and Payday Loans; Examinations and Investigations.  Amend RSA 399-A:13, V to read as follows:

V.  The expense of such examination shall be chargeable to and paid by the licensee or person being examined.  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 licensee or person is located outside of this state and the department has determined that the examination shall 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  New Paragraph; Pawnbrokers and Moneylenders; Regulation of Small Loans, Title Loans, and Payday Loans; Powers of the Commissioner.  Amend RSA 399-A:20 by inserting after paragraph VIII the following new paragraph:

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

18  Pawnbrokers and Moneylenders; Debt Adjustment Services; Examinations and Investigations.  Amend RSA 399-D:12, V to read as follows:

V.  The expense of such examination shall be chargeable to and paid by the licensee or person being examined.  The 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 shall 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].

19  Pawnbrokers and Moneylenders; Licensing of Money Transmitters; Examinations and Investigations.  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 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].

20  Examination of Banks, Credit Unions, Trust Companies, and Family Trust Companies.  Amend RSA 383:9-d, V(a) to read as follows:

(a)  The licensee has consistently had examinations with few or no cited violations of law or has not conducted significant business in the state during the exam period;

21   Effective Date.  

I.  Sections 1, 7, 11, 12, 15, 16, 18, and 19 of this act shall take effect 60 days after its passage.

II.  The remainder of this act shall take effect upon its passage.

Docket

Date Status
Jan. 3, 2019 Introduced 01/03/2019 and referred to Commerce and Consumer Affairs HJ 3 P. 14
Feb. 12, 2019 Public Hearing: 02/12/2019 10:00 am LOB 302
Feb. 21, 2019 Subcommittee Work Session: 02/21/2019 10:30 am LOB 304
Feb. 21, 2019 ==RECESSED== Executive Session: 02/21/2019 02:00 pm LOB 302
Feb. 26, 2019 Subcommittee Work Session: 02/26/2019 02:30 pm LOB 302
March 8, 2019 Executive Session: 03/08/2019 01:30 pm LOB 302-304
Committee Report: Ought to Pass with Amendment # 2019-0681h (Vote 20-0; CC)
March 19, 2019 Committee Report: Ought to Pass with Amendment # 2019-0681h for 03/19/2019 (Vote 20-0; CC) HC 16 P. 4
March 19, 2019 Amendment # 2019-0681h: AA VV 03/19/2019 HJ 10 P. 6
March 19, 2019 Ought to Pass with Amendment 2019-0681h: MA VV 03/19/2019 HJ 10 P. 6
March 28, 2019 Introduced 03/28/2019 and Referred to Commerce; SJ 12
April 23, 2019 Hearing: 04/23/2019, Room 100, SH, 01:30 pm; SC 19
May 2, 2019 Committee Report: Ought to Pass, 05/02/2019; Vote 5-0; CC SC 20
May 2, 2019 Ought to Pass: MA, VV; OT3rdg; 05/02/2019; SJ 15

Action Dates

Date Body Type
Feb. 12, 2019 House Hearing
Feb. 21, 2019 House Exec Session
March 8, 2019 House Exec Session
House Floor Vote
March 19, 2019 House Floor Vote
April 23, 2019 Senate Hearing
May 2, 2019 Senate Floor Vote

Bill Text Revisions

HB450 Revision: 4656 Date: Jan. 8, 2019, 9:35 a.m.
HB450 Revision: 5586 Date: March 19, 2019, 1:38 p.m.
HB450 Revision: 5811 Date: May 2, 2019, 12:49 p.m.