Consumer Protection Law in NH

State officials have long talked about how to amend the state's Consumer Protection Law to prevent another FRM from happening again in the Granite State.

In 2010, the state Legislature took a stab at some reform with the last-minute passage of an amended HB 1490. The bill -- to create a task force to look at, among other things, the regulation of financial institutions -- included an FRM-prompted amendment that would have expanded the authority of the banking commissioner to "enjoin" bad behavior by financial firms. Then-Gov. John Lynch vetoed the legislation on July 13 of that year, saying it "would make changes to the Banking Department’s jurisdiction over consumer complaints against financial institutions that are inconsistent with the Attorney General’s Report concerning Financial Resources Mortgage, Inc. and recommendations for strengthening consumer protections and enforcement."

The state had sought more authority to regulate unfair or deceptive practices in the banking industry, particularly in banking, insurance and securities, which are exempt in the current law from Justice Department oversight. But some in the banking community were concerned about the proposed changes that put more regulatory control in the hands of the attorney general's office.

Gerald Little, president of the New Hampshire Bankers Association, said the changes might curtail business in a fragile moment of economic recovery. He added in a Union Leader article that the current system that allows the commissioners to order restitution is a better way. "The consumer is whole but they got whole without using an attorney," he said. "It's faster, it's quicker, it's neat and the consumer is better served under the legislation we have."

2013 Legislation

SB 180, a 2013 bill sponsored by Sen. Lou D'Allesandro (D-Manchester), would create a fund for the state to pay restitution to victims of the Financial Resources Mortgage (FRM) fraud.  The House tabled SB 180 in January 2014.

HB 565, sponsored by Rep. Donna Schlachman (D-Exeter), would require that anyone filing a consumer fraud claim must first file a complaint with the relevant regulatory body (e.g. banking, Public Utlities Commission) and give that body first chance to take enforcement action.  The Governor signed HB 565 into law in 2014.

2014 Legislation

In 2014 the state legislature passed two bills related to consumer protection.  First, Sen. Andrew Hosmer (D-Laconia) sponsored SB 306, a bill to create a commission to study New Hampshire mortgage foreclosure law, new federal regulations, and fair foreclosure practices.  Gov. Hassan also signed HB 1282, which protects consumers who purchase pre-buy fuel oil contracts.

2015 Legislation

Several legislators sponsored 2015 bills related to consumer protection; see the Legislation History section below for details on all of these bills.  Notably, Sen. Kevin Avard is the primary sponsor of SB 155, a 2015 bill that establishes a process for restitution assistance for victims of the Financial Resources Mortgage (FRM) fraud, using some funds from the Secretary of State. Supporters argue that the state could have done more to prevent the fraud, and therefore the state should contribute to restitution. Opponents point out that no state employee was charged with a crime, so there is no justification for restitution.  SB 155 is still being studied in committee, and may be considered in the 2016 legislative session.