February 8, 2008
No. 6A
STATE OF
WEB SITE ADDRESS:
www.gencourt.state.nh.us
Legislative
SENATE
CALENDAR
ADDENDUM
REPORTS AND
AMENDMENTS
REPORTS
COMMERCE, LABOR
AND CONSUMER PROTECTION
SB 439, relative to money transmitters and mortgage servicing companies.
Ought to pass with amendment, Vote 6-0
Senator DeVries for the committee.
SB 472, relative to consumer protection from certain practices of payday loan, small loan, and title loan lenders.
Ought to pass with amendment, Vote 6-0
Senator Gottesman for the committee.
AMENDMENTS
Commerce, Labor and Consumer Protection
February 12, 2008
2008-0561s
08/10
Amendment to SB 439
Amend the bill by replacing sections 2-3 with the following:
2 New Paragraph; Definition. Amend RSA 399-G:1 by inserting after paragraph VIII the following new paragraph:
VIII-a. “Net worth” means assets minus liabilities calculated in accordance with generally accepted accounting principles.
3 License Application; Requirements; Investigation. Amend RSA 399-G:5, II(b)-(c) to read as follows:
(b) Each
license application shall be accompanied by a nonrefundable application fee of
$500 for each principal office and $25 for each authorized delegate
registration, up to a maximum annual fee of [$4,000] $5,000. 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 submit detailed financial information sufficient for the commissioner to determine the applicant’s ability to conduct the business of a money transmitter with financial integrity. The application shall include a statement of net worth in all cases and an applicant shall demonstrate and maintain a positive net worth computed in accordance with generally accepted accounting principles. A licensee shall at all times maintain a net worth of the lesser of its average daily outstanding money transmissions for the prior calendar year or $1,000,000. 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 399-G:13. Each money transmitter applicant shall post a continuous surety bond in the amount of $100,000. The surety bond shall be payable to the state of New Hampshire and the bank commissioner of the state of New Hampshire for the benefit of any person who is damaged by any violation of this chapter and shall be conditioned upon the licensee’s compliance with each provision of this chapter. 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 principal within 6 years after the act upon which the recovery or suit is based. The obligations of the surety shall survive the bankruptcy, insolvency, liquidation, or reorganization of the licensee, including, without limitation, any bankruptcy, insolvency, liquidation, or reorganization commenced by or against the licensee under any applicable state or federal law, including the United States Bankruptcy Code.
Amend RSA 399-G:13, II-a as inserted by section 5 of the bill by replacing it with the following:
II-a. Licensees shall implement a system of education,
training, monitoring, and periodic inspection designed to reasonably supervise
their authorized delegates’ filings with the Department of the Treasury,
Financial Crimes Enforcement Network (FINCEN).
Commerce, Labor and Consumer Protection
February 12, 2008
2008-0555s
08/04
Amendment to SB 472
Amend the title of the bill by replacing it with the following:
AN ACT relative to consumer protection from certain practices of payday
loan, small loan, and title loan lenders and establishing a commission to study
access to consumer credit for people in
Amend the bill by replacing all after the enacting clause with the following:
1 Findings. The general court recognizes that:
I. Access to consumer credit can provide people with a means by which to navigate gaps in income, establish long-term financial stability, and build household wealth.
II. Certain irresponsible or abusive lending practices and loan products can increase consumers’ financial distress, rather than decrease it.
III. Some people may lack access to responsible consumer credit.
IV. Access to responsible consumer credit for people benefits not only individual households, but also local and state economic health.
2 Payday Loan; Definition. Amend RSA 399-A:1, X to read as follows:
X. “Payday loan”
means a [small-dollar,] short-maturity, secured or unsecured loan, other
than a title loan[, where the lender contracts for, exacts or receives,
directly or indirectly, or where the borrower pays for, directly or indirectly,
in connection with any such loan, any charges which in the aggregate are
greater than 50 percent per annum].
3 Small Loan; Definition. Amend RSA 399-A:1, XIV to read as follows:
XIV. “Small loan” means a closed-end loan in the amount of $10,000 or less or an open-end loan with a line of credit of $10,000 or less, and where the lender contracts for, exacts or receives, directly or indirectly, or where the borrower pays for, directly or indirectly in connection with any such loan any charges, whether for interest, examination, commission, compensation, service, brokerage, endorsement fees, other fees, consideration, expense or otherwise, which in the aggregate are greater than 10 percent per annum except for the lawful fees, if any, actually and necessarily paid out by the lender to any public officer, for filing or recording in any public office any instrument securing such loan and except for the reasonable costs, charges, and expenses, including court costs actually incurred in connection with a repossession of the security or an actual sale of the security.
4 Lender; Definition. Amend RSA 399-A:1, VIII to read as follows:
VIII. “Lender”
means individuals, corporations, associations, firms, partnerships, limited
liability companies, and joint stock companies or other forms of organizations
that lend money or give credit temporarily on condition that the amount
borrowed be returned, usually with an interest fee. “Lender” shall not include a financial
institution. “Lender” shall include a person
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
loans, or commitments for loans.
(b) Offers to serve as agent for any person in an
attempt to obtain a loan.
(c) Offers to serve as agent for any person who
has money to lend for a loan.
(d)
Performs services or any of the business
functions auxiliary or supplemental to the production, distribution or
maintenance of loans for a lender.
5 License Required. Amend RSA 399-A:2, IV to read as follows:
IV.
Any person not exempt under paragraph III, and the several members,
officers, directors, agents and employees thereof, who shall willfully violate
or participate in the violation of any provisions of paragraph I shall be
guilty of a misdemeanor if a natural person, or guilty of a felony if any other
person. If in the making or collection
of a loan the [licensee] person violates paragraph I of this
section, the loan contract shall be void and the lender shall have no right to
collect, receive, or retain any principal, interest, or charges whatsoever.
6 New Paragraph; License Required. Amend RSA 399-A:2 by inserting after paragraph IV the following new paragraph:
V. The provisions of this chapter shall apply to any person who seeks to evade its application by any device, subterfuge, or pretense, including, without limitation:
(a) Calling a loan by any other name;
(b) Using any agents, affiliates, or subsidiaries in an attempt to avoid the application of the provisions of this chapter; or
(c) Having any affiliation or other business arrangement with an entity that is exempt from the provisions of this chapter, the effect of which is to evade the provisions of this chapter, including, without limitation, making a loan, while purporting to be the agent of such an exempt entity where the purported agent holds, acquires, or maintains a preponderant economic interest in the revenues generated by the loan.
7 No Refinancing of Payday Loans. Amend RSA 399-A:11, X to read as follows:
X. If a borrower
desires to renew an existing closed-end loan[, payday loan,] or title
loan for the purpose of obtaining additional cash a new contract shall be drawn
up in its entirety and such prior loan shall be paid in full from such proceeds
of the new loan. Payday loans shall not be rolled
over, renewed, or refinanced. All
legal papers in connection with such prior loan shall be stamped “PAID IN FULL”
and returned to such borrower.
8 Debit Authorization. Amend RSA 399-A:13, II(d)-(e) to read as follows:
(d) Evidence
of receipt from the borrower of a check[,] or other account debit authorization,
dated the same date, as security for the loan, stating the amount of the check, if
a check or other account debit authorization was given by the borrower.
(e) An agreement by the lender not to present the check or other account debit authorization for payment or deposit until a specified maturity date, which date shall be at least 7 days and not more than 30 days after the date the loan is made and after which date interest shall not accrue at a greater rate than 6 percent per year, if a check or other account debit authorization was given by the borrower.
9 Commission
Established. There is established a
commission to study access to consumer credit for people in
10 Membership and Compensation.
I. The members of the commission shall be as follows:
(a) Two members of the senate, appointed by the president of the senate.
(b) Two members of the house of representatives, appointed by the speaker of the house of representatives.
(c) The governor, or designee.
(d) The bank commissioner, or designee.
(e) The attorney general, or designee.
(f) A
representative of Consumer Credit Counseling of New Hampshire and
(g) Two representatives of the New Hampshire Bankers Association, appointed by that organization.
(h) A representative of the New Hampshire Community Loan Fund, appointed by that organization.
(i) Two representatives of the New Hampshire Credit Union League, appointed by that organization.
(j) A representative of the New England Financial Services Association, appointed by that organization.
(k) A representative of New Hampshire Legal Assistance, appointed by that organization.
(l) A representative of the New Hampshire Local Welfare Administrators Association, appointed by that organization.
II. Legislative members of the commission shall receive mileage at the legislative rate when attending to the duties of the commission.
11 Duties. The commission shall examine the following:
I. The varieties
of consumer credit currently available to people in
II. The varieties
of non-credit emergency assistance currently available to people in
III. The impact of
irresponsible or abusive lending practices and loan products on people in
IV. The potential
for market-based development of new varieties of responsible consumer credit
for people in
V. Possible
legislation to improve access to responsible consumer credit for people in
12 Chairperson; Quorum. The members of the study commission shall elect a chairperson from among the members. The first meeting of the commission shall be called by the first-named senate member. The first meeting of the commission shall be held within 45 days of the effective date of this section. Five members of the commission shall constitute a quorum.
13 Report. The commission shall report its findings and any recommendations for proposed legislation to the president of the senate, the speaker of the house of representatives, the senate clerk, the house clerk, the governor, and the state library on or before November 14, 2008.
14 Effective Date.
I. Sections 1, and 9-14 of this act shall take effect upon its passage.
II. The remainder of this act shall take effect January 1, 2009.
2008-0555s
AMENDED ANALYSIS
This bill redefines payday loan, small loan, and title loan.
This bill establishes a commission to study access to consumer
credit for people in