TITLE XXXVI
PAWNBROKERS AND MONEYLENDERS
CHAPTER 399-A
REGULATION OF SMALL LOANS, TITLE LOANS, AND PAYDAY LOANS
Section 399-A:1
399-A:1 Definitions. - In this chapter:
I. "Check' means a draft drawn on the account of an individual or individuals at a depository institution.
II. "Closed-end loan' means a loan other than an open-end loan.
III. "Commissioner' means the bank commissioner.
IV. "Engaged in the business of making title loans' means that at least 10 percent of all loans made by the lender are title loans.
V. "Financial institution' means a bank, savings institution, credit union, or trust company.
VI. "License' means the authority to do business issued by the commissioner under the provisions of this chapter.
VII. "Licensee' means a person to whom one or more licenses have been issued under this chapter.
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.
IX. "Open-end loan' means an open-end credit arrangement pursuant to which a creditor may permit a borrower from time to time to obtain loans from the creditor as described in RSA 358-K:1, XI.
X. "Payday loan' means a small, short-maturity loan on the security of:
(a) A check;
(b) Any form of assignment of an interest in the account of an individual or individuals at a depository institution; or
(c) Any form of assignment of income payable to an individual or individuals.
XI. "Payday loan lender' means a person engaged in the business of making payday loans.
XII. "Person' means any individual, firm, voluntary association, joint-stock company, incorporated society, partnership, association, trust, corporation, limited liability company, or legal or commercial entity or group of individuals however organized.
XIII. "Principal' means any person who, directly or indirectly, owns or controls:
(a) Ten percent or more of the outstanding stock of a stock corporation; or
(b) Ten percent or greater interest in a nonstock corporation or a limited liability company.
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, in connection with any such loan any charges, whether for interest, compensation, brokerage, endorsement fees, consideration, expense or otherwise, which in the aggregate are greater than 10 percent per annum.
XV. "Small loan lender' means any person engaged in the business of making small loans, including title loans and payday loans.
XVI. "Title loan' means a loan, other than a purchase money loan:
(a) (1) Secured by the title to a motor vehicle;
(2) Made for a period of 60 days or less;
(3) With a single payment payback; and
(4) Made by a lender in the business of making title loans; or
(b) That is secured, substantially equivalent to a title loan, and designated as a title loan by rule or order of the commissioner.
XVII. "Title loan lender' means a person engaged in the business of making title loans.
Source. 2003, 308:1, eff. July 21, 2003.
Section 399-A:2
399-A:2 License Required. -
I. No person shall engage in the business of making small loans, title loans, or payday loans in this state or with consumers located in this state, without first obtaining a license from the commissioner as provided in this chapter.
II. Each such license shall terminate on December 31st. Each license shall remain in full force and effect until surrendered, revoked, suspended, or terminated.
III. This chapter shall not apply to any person lawfully engaged in business as permitted by the laws of this state or of the United States relative to banks, trust companies, insurance companies, savings or building and loan associations, or credit unions, or to loans made by them, nor shall this chapter apply to any person engaged solely in the business of making loans for educational purposes or to the loans made by such persons, nor shall it apply to any person engaged in the business of second mortgage loans in accordance with the provisions of RSA 398-A, as amended, or to loans made by such persons.
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 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.
Source. 2003, 308:1, eff. July 21, 2003.
Section 399-A:3
399-A:3 Application and Fees. -
I. Every applicant for licensing under this chapter shall file with the commissioner a written application, under oath and penalty of perjury, and in the form prescribed by the commissioner. The application shall contain the name of the applicant; the address where the business is or is to be conducted and similar information as to any branch office of the applicant; the name and resident address of the owner or partners or, if a corporation or association, of the directors, trustees, and principal officers; names of any branch managers; the trade name, if any, under which the applicant proposes to conduct such business; the articles of incorporation or organization or partnership agreement; the name and address of the New Hampshire resident agent if the applicant is a foreign entity; and such other pertinent information as the commissioner may require. Each initial and renewal license application shall be accompanied by a nonrefundable application fee of $450 for the principal place of business of the licensee within this state and the sum of $450 for each branch of such licensee maintained in this state.
II. Every applicant for licensing shall be required to submit to the banking department detailed financial information sufficient for the commissioner to determine the applicant's ability to conduct the business of a small loan lender, payday lender, or title loan lender with financial integrity. The application shall include a balance sheet or a statement of net worth prepared in accordance with generally accepted accounting principles. 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 this chapter. Each applicant shall demonstrate that it has available for use in such business at each location specified in the application, at least $25,000, or in the case of a licensee, has such amount available or actually invested in loans made under this chapter at each location.
III. Every applicant for licensing under this chapter shall file with the commissioner, in such form as the commissioner prescribes by rule, irrevocable consent appointing the commissioner to receive service of any lawful process in any non-criminal suit, action, or proceeding against the applicant or the applicant's successor, executor, or administrator which arises under this chapter or any rule or order under this chapter after the consent has been filed, with the same force and validity as if served personally on the person filing the consent. A person who has filed such a consent in connection with a previous application need not file another. When any person, including any nonresident of this state, engages in conduct prohibited or made actionable by this chapter or any rule or order under this chapter, and such person has not filed a consent to service of process under this section and personal jurisdiction over such person cannot otherwise be obtained in this state, that conduct shall be considered equivalent to such person's appointment of the commissioner to receive service of any lawful process. Service may be made by leaving a copy of the process in the office of the commissioner along with $5, but is not effective unless:
(a) The plaintiff, who may be the attorney general in a suit, action, or proceeding instituted by him or her, forthwith sends a notice of the service and a copy of the process by registered mail to the defendant or respondent at such person's last address on file with the commissioner, and
(b) The plaintiff's affidavit of compliance with this paragraph is filed in the case on or before the return day of the process, if any, or within such further time as the court allows.
Source. 2003, 308:1, eff. July 21, 2003.
Section 399-A:4
399-A:4 Investigation of Application; License Requirements. -
I. Upon the filing of the complete application for a small loan lender license, a payday loan lender license, or a title loan lender license and payment of the required application fee, if the commissioner determines that the applicant's financial resources and responsibility, experience, character and general fitness, personnel, and record of past or proposed conduct warrant the public's confidence and that the business will be operated lawfully, honestly, and fairly within the purposes of this chapter, the commissioner shall enter an order approving such application and shall issue a license to the applicant and shall issue licenses to the applicant's branches to engage in the business of a small loan lender, payday loan lender, or title loan lender under and in accordance with the provisions of this chapter.
II. If a person holds a valid license under this section and is in compliance with this chapter and the rules adopted pursuant to this chapter, such licensee may renew the license by paying the required annual fee of $450 for the principal license and $450 for each branch office to the banking department on or before December 1st for the ensuing year that begins on January 1st. Failure to renew the license shall result in the license terminating on December 31st.
III. Each license shall specify the name and address of the licensee and the location of the office or branch, and shall be conspicuously displayed there in a public area of the location. In case such location is changed, the commissioner shall endorse the change of location on the license without charge.
IV. No licensee shall transact any business provided for by this chapter under a trade name or any other name different from the name stated in its license or branch office license without immediately notifying the commissioner, who shall then amend the license accordingly. Before the corporate, organization, or trade name under which the licensed business is conducted is changed, the lender shall give notice to the commissioner who shall amend the license accordingly without cost. The name or trade name of the licensee shall not be confusing to the public or conflict with any existing licensed lender's name.
V. No license shall be issued to any person whose principal place of business is located outside of this state unless that person designates an agent residing within this state for service of process.
VI. Persons subject to or licensed under this chapter shall abide by applicable federal laws, and regulations promulgated thereunder, including the Federal Truth in Lending Act, and the laws, orders, and rules of this state. Any violation of such law, rule, or order shall be a violation of this chapter.
VII. Persons licensed under this chapter are under a continuing obligation to update information on file with the commissioner. If any information filed with the commissioner becomes materially inaccurate, the licensee shall promptly submit to the commissioner an amendment to its application records that will correct the information on file with the commissioner. An amendment shall be considered to be filed promptly if the amendment is filed within 30 days of the event that requires the filing of the amendment.
VIII. A licensee who ceases to engage in the business of a small loan lender, payday loan lender, or title loan lender at any time during a license year for any cause, including but not limited to bankruptcy, license revocation, or voluntary dissolution, shall surrender such license in person or by registered or certified mail to the commissioner within 15 calendar days of such cessation.
IX. Any licensee may surrender any license by delivering it to the commissioner with written notice of a surrender, but such surrender shall not affect administrative, civil, or criminal liability for acts committed prior thereto.
Source. 2003, 308:1, eff. July 21, 2003.
Section 399-A:5
399-A:5 Consumer Credit Administration License Fund. - The bank commissioner shall keep a separate account, in the state treasurer's office, to be known as the consumer credit administration license fund. Moneys received from payment of fees under this chapter shall be credited to the consumer credit administration license fund. This fund may be expended by the commissioner with the approval of the governor and council for the purpose of supervising persons subject to supervision and licensing by the consumer credit administration division of the banking department.
Source. 2003, 308:1, eff. July 21, 2003.
Section 399-A:6
399-A:6 Reporting and Recordkeeping Requirements. -
I. (a) Each licensee shall file, under oath, an annual report with the commissioner on or before February 1st each year concerning its business and operations for the preceding calendar year or license period ending December 31st in the form prescribed by the commissioner. A separate annual report shall be filed for each type of license held by the licensee.
(b) Each licensee shall also file, under oath, its financial statement with the commissioner within 60 days from the date of its fiscal year end. The financial statement shall be prepared in accordance with generally accepted accounting principles and shall include a balance sheet, income statement, statement of changes in owners' equity, a cash flow statement, and note disclosures. If the financial statement is not audited, a certification statement shall be attached and signed by a duly authorized officer of the licensee. The certification statement shall state that the financial statement is true and accurate to the best of the officer's belief and knowledge.
II. The commissioner shall publish an analysis of the information required in the licensee's annual report as part of the commissioner's annual report.
III. Any licensee failing to file either the annual report or the financial statement required by this section within the time prescribed shall pay to the commissioner a penalty of $25 for each calendar day the annual report or financial statement is overdue.
IV. In addition to the annual report and financial statement required by this section, the commissioner may require such regular or special reports as the commissioner deems necessary to the proper supervision of licensees under this chapter.
V. A licensee who files an annual report under this section which fails to disclose or materially misstates loan contracts made during the reporting year may, in addition to any other penalty provided by law and after notice and opportunity for hearing pursuant to RSA 541-A, be subject to a fine of not more than $1,000 and to license revocation or suspension.
VI. Each licensee shall keep and use such books and accounting records as are in accord with sound and accepted accounting practices and enable the commissioner to determine whether the licensee is complying with this chapter.
Source. 2003, 308:1, eff. July 21, 2003.
Section 399-A:7
399-A:7 Denial, Suspension, or Revocation of Licenses. -
I. The commissioner may by order deny, suspend, or revoke any license or application if the commissioner finds that the order is in the public interest and the applicant or licensee, any partner, officer or director, any person occupying a similar status or performing similar functions, or any person directly or indirectly controlling the applicant or licensee:
(a) Has filed an application for licensing which as of its effective date, or as of any date after filing in the case of an order denying effectiveness, was incomplete in any material respect or contained any statement which was, in light of the circumstances under which it was made, false or misleading with respect to any material fact;
(b) Has made a false or misleading statement to the commissioner or in any reports to the commissioner;
(c) Has made fraudulent misrepresentations, or has circumvented or concealed, through whatever subterfuge or device, any of the material particulars or the nature thereof required to be stated or furnished to a borrower under the provisions of this chapter;
(d) Has failed to supervise its agents, managers, or employees;
(e) Is the subject of an order entered within the past 5 years by this state, any other state, or federal regulator denying, suspending, or revoking licenses or registration;
(f) Is permanently, preliminarily, or temporarily enjoined by any court of competent jurisdiction from engaging in or continuing any conduct or practice involving any aspect of lending or collection activities;
(g) Is not qualified on the basis of such factors as experience, knowledge, and financial integrity;
(h) Has engaged in dishonest or unethical practices in the conduct of the business of making or collecting small loans, payday loans, or title loans;
(i) Has violated this chapter or any rule or order thereunder or has violated applicable federal laws or rules thereunder; or
(j) Should not be licensed for other good cause shown.
II. The commissioner may issue an order requiring the person to whom any license has been granted to show cause why the license should not be suspended or revoked. The order shall be calculated to give reasonable notice of the opportunity for hearing, and shall state the reasons for the issuance of the order.
III. If a licensee is a partnership, association, corporation, or entity however organized, it shall be sufficient cause for the suspension or revocation of a license that any officer, director, or trustee of a licensed association or corporation or any member of a licensed partnership has so acted or failed to act on behalf of said licensee as would be cause for suspending or revoking a license to such party as an individual. Each licensee shall be responsible for supervision of its branch offices and for the acts of any or all of his or her employees while acting as his or her agent if such licensee, after actual knowledge of such acts, retained the benefits, proceeds, profits or advantages accruing from such acts or otherwise ratified such acts.
IV. Any license revocation, suspension, or unfavorable action by the department on a license shall comply with the provisions of RSA 541-A. An aggrieved licensee may, pursuant to RSA 541-A and RSA 541, appeal an unfavorable action by the department. The department may take action for immediate suspension of a license, pursuant to RSA 541-A.
V. If the commissioner finds that any licensee or applicant for license is no longer in existence or has ceased to do business as a small loan lender, payday loan lender, or title loan lender, or cannot be located after reasonable search, the commissioner may by order revoke the license or deny the application. The commissioner may deem abandoned and withdraw any application for licensure made pursuant to this chapter, if any applicant fails to respond in writing within 180 days to a written request from the commissioner requesting a response. Such request shall be sent via certified mail to the last known address of the applicant that is on file with the commissioner.
VI. No revocation, suspension, or surrender of any license shall impair or affect the obligation of any pre-existing lawful contract between the licensee and any obligors, and such contracts and all lawful charges thereon may be collected by the licensee, its successors, and assigns.
Source. 2003, 308:1, eff. July 21, 2003.
Section 399-A:8
399-A:8 Cease and Desist Orders. - The banking department may issue a cease and desist order against any licensee or person who it has reasonable cause to believe has violated or is about to violate the provisions of this chapter or any rule or order under this chapter. Delivery of such order shall be by hand or registered mail at the principal office of the licensee or other person. The order shall be calculated to give reasonable notice of the rights of the person to request a hearing on the order and shall state the reasons for the entry of the order. A hearing shall be held not later than 10 days after the request for such hearing is received by the commissioner after which and within 20 days of the date of the hearing the commissioner shall issue a further order vacating the cease and desist order or making it permanent as the facts require. All hearings shall comply with 541-A. If the person to whom a cease and desist order is issued fails to appear at the hearing after being duly notified, such person shall be deemed in default, and the proceeding may be determined against him or her upon consideration of the cease and desist order, the allegations of which may be deemed to be true. If the person to whom a cease and desist order is issued fails to request a hearing within 30 calendar days of receipt of such order, then such person shall likewise 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.
Source. 2003, 308:1, eff. July 21, 2003.
Section 399-A:9
399-A:9 Consumer Inquiries. -
I. Consumer complaints naming licensees under this chapter, which are filed in writing with the office of the bank commissioner, shall be forwarded via certified or registered mail to the licensee for response within 10 days of receipt by the department. Licensees shall, within 30 days after receipt of such complaint, send a written acknowledgement thereof to the consumer and the banking department. Not later than 60 days following receipt of such complaint, the licensee shall conduct an investigation of the complaint and either:
(a) Make appropriate corrections in the account of the consumer and transmit to the consumer and the banking department written notification of such corrections, including documentary evidence thereof; or
(b) Transmit a written explanation or clarification to the consumer and the banking department which sets forth, to the extent applicable, the reasons why the licensee believes its actions are correct, including copies of documentary evidence thereof.
II. A licensee who fails to respond to consumer complaints as required by this section within the time prescribed shall pay to the commissioner the sum of $50 for each day such response is overdue. For purposes of this section, the date of transmission shall be the date such response is received by the commissioner.
III. (a) Licensees who because of extenuating circumstances beyond the control of the licensee, are unable to comply with the time frames prescribed in this section, may make written request to the commissioner for a waiver of such time frames. Waivers shall not be granted or considered unless the request for the waiver:
(1) Is received by the banking department within 50 days following the licensee's receipt of the complaint;
(2) Specifies the reason for the request; and
(3) Specifies a date certain by which the licensee shall comply with the provisions of this section.
(b) Requests for waivers shall be either granted or denied within 5 days of receipt by the banking department.
Source. 2003, 308:1, eff. July 21, 2003.
Section 399-A:10
399-A:10 Examinations and Investigations. -
I. The commissioner or the commissioner's duly authorized representative may at any time, and shall periodically, with or without notice to the licensee or person, examine the business affairs of any licensee or any other person subject to this chapter, whether licensed or not, as the commissioner deems necessary to determine compliance with this chapter and the rules adopted pursuant to it. In determining compliance, the commissioner or the duly authorized representative may examine the books, accounts, records, files, and other documents, whether electronically stored or otherwise, and any other matters of any licensee or person. The commissioner or the duly authorized representative shall have and be given free access to the office and places of business, files, safes, and vaults of all such persons, and shall have authority to require the attendance of any person and to examine him or her under oath relative to such loans or such business or to the subject matter of any examination or investigation and shall have authority to require the production of books, accounts, papers, and records of such persons.
II. 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 the commissioner's 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. The expense of such examination shall be chargeable to and paid by the licensee or person being examined. The procedure for such payment shall be the same as for payments by institutions for cost of examinations under RSA 383:11.
III. Those licensees or persons that maintain their files and business documents in another state shall appoint a New Hampshire agent and shall return such files and documents to their principal New Hampshire office or the office of their New Hampshire agent for examination no later than 21 calendar days after being requested to do so by the banking department. Failure to provide files and documents within the time established by this paragraph shall subject a licensee or person to a fine of $50 per day for each day after 21 days the files and documents are not produced. Failure to provide files and documents within 60 days after being requested to do so by the banking department shall be sufficient cause for license revocation, suspension, or denial or other penalties under this chapter.
IV. The commissioner or the commissioner's duly authorized representative may investigate at any time any person that the commissioner reasonably believes is engaged in the business of making small loans, payday loans, or title loans, or participating in such business as principal, agent, broker, or otherwise; or any person who the commissioner has reasonable cause to believe is violating or is about to violate any provision of this chapter, or any rule or order under this chapter, whether such person shall claim to be within the authority or beyond the scope of this chapter. Any person not exempt hereunder who shall advertise for, solicit, or hold himself or herself out as willing to make or procure small loans, payday loans, or title loans shall be presumed to be engaged in the business of making such loans.
V. In any investigation to determine whether any person has violated or is about to violate this chapter or any rule or order under this chapter, upon the commissioner's finding that the person violated this chapter or a rule or order under this chapter, or the person charged with the violation being found in default, the commissioner shall be entitled to recover the cost of the investigation, in addition to any other penalty provided for under this chapter.
VI. If the commissioner or examiner finds any accounts or records to be inadequate, or kept or posted in a manner not in accordance with generally accepted accounting principles, the commissioner may employ experts to reconstruct, rewrite, post, or balance them at the expense of the person being examined if such person has failed to maintain, complete, or correct such records or accounting after the commissioner or examiner has given him or her written notice and a reasonable opportunity to do so.
VII. Any individual who refuses without just cause to be examined under oath or who willfully obstructs or interferes with the examiners in the exercise of their authority pursuant to this section shall be guilty of a misdemeanor.
VIII. (a) Upon receipt of a written report of examination, the licensee shall have 30 days or such additional reasonable period as the commissioner for good cause may allow, within which to review the report, recommend any changes, and set forth in writing the remedial course of action the licensee will pursue to correct any reported deficiencies outlined in the report.
(b) If so requested by the person examined, within the period allowed in subparagraph (a), 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 such closed hearing has been requested or held, the examination report, with such modifications, if any, thereto as the commissioner deems proper, shall be accepted by the commissioner and filed upon expiration of the review period provided for in subparagraph (a). The report shall in any event be so accepted and filed within 6 months after final hearing thereon.
(c) All reports pursuant to this section shall be absolutely privileged and although filed in the department as provided in subparagraph (b) 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.
Source. 2003, 308:1, eff. July 21, 2003.
Section 399-A:11
399-A:11 Provisions Applicable to all Persons Under This Chapter. -
I. Any loan made outside this state, as permitted by the laws of the state in which the loan was made, may be collected in this state in accordance with its terms.
II. No person making small loans, payday loans, or title loans, shall advertise, print, display, publish, distribute, or broadcast or cause or permit to be advertised, printed, displayed, published, distributed, or broadcast, in any manner whatsoever, any statement or representation with regard to the rates, terms, or conditions which is false, misleading, or deceptive.
III. This chapter, or any part thereof may be modified, amended, or repealed so as to effect a cancellation or alteration of any license, or right of a licensee hereunder, provided that such modification, amendment, or repeal shall not impair or affect the obligation of any pre-existing lawful contracts between any licensee and any borrowers.
IV. No interest shall be paid, deducted, or received in advance. Interest shall not be compounded and interest shall be computed only on unpaid principal balances. For the purpose of computing interest, whether at the maximum rate or less, a month shall be considered a calendar month and, where a fraction of a month is involved, a day shall be considered 1/30 of a month. However, if all or any part of the consideration for a loan contract is the unpaid principal balance of the prior loan with the same lender then the loan contract may include unpaid interest of such prior loan which has accrued within 60 days of the making of the loan contract.
V. If charges in excess of those permitted by this chapter shall be charged, contracted for, or received except as a result of an accidental or bona fide error the contract of loan shall be void and the lender shall have no right to collect or receive any principal, charges, or recompense whatsoever.
VI. No person shall take any confession of judgment or any power of attorney running to himself, herself, or any third person to confess judgment or to appear for the borrower in a judicial proceeding; nor take any note, agreement, or promise to pay which does not disclose the date and amount or maximum credit line of the note or agreement, a schedule or description of the payments to be made thereon, and the agreed charges or rates of charge; nor take any instrument in which blanks are left to be filled in after the loan is made.
VII. No person shall include any of the following provisions in a small loan, payday loan, or title loan contract:
(a) A hold-harmless clause;
(b) A confession of judgment or other waiver of the right to notice and the opportunity to be heard in an action;
(c) An agreement by the consumer not to assert any claim or defense arising out of the contract against the lender or any holder in due course;
(d) An executory waiver or a limitation of exemption from attachment, execution, or other process on real or personal property held by, owned by, or due to the consumer, unless the waiver or limitation applies only to property subject to a security interest executed in connection with the loan; or
(e) A clause permitting the continuation of interest after repossession of the consumer's motor vehicle.
VIII. No person shall be permitted to accept as collateral on a loan under this chapter:
(a) Real estate; or
(b) Household furniture presently in use on loans of $2,000 or less.
IX. Any agreement purporting to convey to a lender a security interest in the property listed in paragraph VIII shall be null and void.
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. All legal papers in connection with such prior loan shall be stamped "PAID IN FULL' and returned to such borrower.
XI. No charge for any examination, service, brokerage, commission, or other fee shall be directly or indirectly made or contracted for on closed-end loans, payday loans, or title loans except 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, which fees may be collected when such loan is made, or at any time thereafter and except 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 in foreclosure proceedings or upon entry of judgment.
XII. Credit life insurance, credit accident and health insurance, and credit involuntary unemployment insurance may be issued in connection with a loan or other credit transaction authorized by this chapter in compliance with the provisions of RSA 408:15, II and the cost of such insurance and any commission, benefit, or return to the lender therefrom shall not be deemed a violation of any provision of this chapter; provided, however, that if there is more than one borrower or obligor on any such loan or credit transaction, credit life insurance providing a single benefit may cover both borrowers or obligors.
XIII. The lender may require a borrower to insure tangible personal property given to secure the loan against any substantial risk of loss, damage, or destruction for an amount not to exceed the reasonable value of the property insured or the amount of the loan, whichever is less, and for the customary insurance term approximating the term of the loan. The borrower shall not be required to insure against unusual or exceptional risks not ordinarily insured against in policies issued to nonborrowers. The premium for such insurance may be included in the principal amount of the loan. Such insurance shall be written by or through a duly licensed insurance agent or broker with a company qualified to do business in New Hampshire. Such insurance shall name the borrower as insured but may include the lender as co-insured or protect the interest of the lender under a loss-payable clause. No lender shall require a borrower to duplicate or cancel existing insurance or to purchase insurance from a lender or any employee, affiliate, or associate of the lender or from any agent, broker, or insurance company designated by the lender, as a condition precedent to the making of the loan.
XIV. A lender in the business of making small loans, payday loans, or title loans shall include in every loan contract a notice, printed in type size equal to at least 12-point type, stating that the consumer or the consumer's attorney may file a complaint with the commissioner.
Source. 2003, 308:1, eff. July 21, 2003.
Section 399-A:12
399-A:12 Provisions Applicable to Loans. -
I. For any closed-end loan of $10,000 or less, excluding charges, a lender may lend in money, goods, or things of value upon such security not forbidden by RSA 399-A:11, VIII as may be agreed upon and may charge, contract, for, and receive charges on the entire principal of the loan, at rates agreed to in writing by the borrower and lender.
II. For any open-end loan with a line of credit of $10,000 or less, excluding charges, a lender may charge, contract for, and receive charges on the unpaid balances of the account at rates agreed to in writing by the borrower and the lender.
III. No small loan lender shall permit any person to be obligated to him or her on one or more contracts of loan the total principal balance of which is more than $10,000.
IV. For the purpose of applying paragraphs II and III of this section only, small loan lender shall mean any single small loan lender, except that in the event any person or affiliated group of persons holds more than one small loan lender license, such person or affiliated group of persons shall be considered a single small loan lender.
V. No small loan lender shall induce any potential borrower who is not a loan customer of the lender to enter into a closed-end loan agreement, by delivering in the first instance a negotiable check for such loan to such potential borrower, without including the following information clearly printed on the endorsement side of the check:
(a) A statement which reads, "By endorsing this check, you become legally liable for repaying all moneys, including interest, as specified in the following loan agreement/disclosure statement';
(b) The amount financed;
(c) The annual percentage rate;
(d) The number of installments; and
(e) The amount of each installment payment.
VI. Every small loan lender shall:
(a) Mail or deliver to the borrower, or if more than one, to one of them, at the time of making a loan under this chapter, a payment book in which space shall be provided for the record of all payments showing principal, interest, and balance and which shall contain statements showing the date of such loan; the amount of the principal of such loan; the total interest charged for the period of such loan; the nature of the security, if any, for such loan; the name and address of the borrower and of the lender; and the description of schedule of payments on such loans. The payment book shall also have printed therein an interest calculation such as the following:
"Interpretation of Interest Charges in the Event Payments are Made when Due.

2% per month = 24% per year or $13.47 per year on $100

1 1/2% per month = 18% per year or $10.01 per year on $100'

Provided, however, a lender may provide a borrower with a monthly billing statement in lieu of a payment book and the information required above.
(b) Give to the person making any cash payment on account of any closed-end loan a receipt at the time such payment is made.
(c) Permit payment in advance in an amount equal to one or more full installments at any time during the regular business hours of the lender.
(d) Upon repayment of a closed-end loan in full, mark plainly every note or other evidence of the indebtedness or assignment signed by an obligor or a copy of any of the foregoing documents with the words "PAID IN FULL' or "CANCELLED' and release or provide the borrower evidence to release any mortgage or security instrument no longer securing any indebtedness to the lender. If the original is retained by the lender, the original shall be returned within a reasonable period of time upon the written request of the borrower.
(e) Upon repayment of an open-end loan in full, written notice from the borrower to the lender of termination of such loan, and surrender to the lender of any checks or other device used to obtain credit: mark plainly every note, agreement, or assignment signed by an obligor, with the words "PAID IN FULL' or "CANCELLED' and release or provide the borrower evidence to release any mortgage or security instrument no longer securing any indebtedness to the lender.
VII. No lender shall conduct the business of making loans under this chapter at any office, suite, room, or place of business where liquor or lottery tickets are sold.
Source. 2003, 308:1, eff. July 21, 2003.
Section 399-A:13
399-A:13 Provisions Applicable to Payday Loan Lenders. -
I. Each lender shall conspicuously post in its licensed location a schedule of interest charges, with examples using a $300 loan payable in 14 days and 30 days. Payday loans shall incur interest only. No other charges or fees shall apply to or be collected on payday loans.
II. Each payday loan shall be evidenced by a written loan agreement, which shall be signed by the borrower and a person authorized by the lender to sign such agreements and dated the same day the loan is made and disbursed. The loan agreement shall set forth, at a minimum:
(a) The principal amount of the loan.
(b) The interest charged.
(c) The annual percentage rate, which shall be stated using that term, applicable to the transaction calculated in accordance with Federal Reserve Board Regulation Z.
(d) Evidence of receipt from the borrower of a check, dated the same date, as security for the loan, stating the amount of the check.
(e) An agreement by the lender not to present the check 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.
(f) An agreement by the lender that the borrower shall have the right to cancel the loan transaction at any time before the close of business of the next business day following the date of the transaction by paying to the lender, in the form of cash or other funds instrument, the amount advanced to the borrower.
(g) An agreement that the borrower shall have the right to prepay the loan in full or in part prior to maturity by paying the lender the principal amount advanced and any accrued and unpaid interest.
III. The lender shall give a duplicate original of the loan agreement to the borrower at the time of the transaction.
IV. A lender shall not obtain any agreement from the borrower:
(a) Giving the lender or any third person power of attorney or authority to confess judgment for the borrower;
(b) Authorizing the lender or any third party to bring suit against the borrower in a court outside the state; or
(c) Waiving any right the borrower has under this chapter.
V. A lender shall not require, or accept, more than one check from the borrower as security for any loan at any one time.
VI. A lender shall not cause any person to be obligated to the lender in any capacity at any time in the principal amount of more than $500.
VII. A lender shall not refinance, renew, or extend any loan.
VIII. A lender shall not cause a borrower to be obligated upon more than one loan at any time for the purpose of increasing charges payable by the borrower.
IX. A lender shall not require or accept a post-dated check as security for, or in payment of, a loan.
X. A lender shall not threaten, or cause to be instigated, criminal proceedings against a borrower if a check given as security for a loan is dishonored.
XI. A lender shall not take an interest in any property other than a check payable to the lender as security for a loan.
XII. A lender shall not make a loan to a borrower to enable the borrower to pay for any other product or service sold at the lender's business location.
XIII. Loan proceeds shall be disbursed in cash or by the lender's business check. No fee shall be charged by the lender or an affiliated check cashier for cashing a loan proceeds check.
XIV. A check given as security for a loan shall not be endorsed to a third party.
XV. Upon receipt of a check given as security for a loan, the lender shall stamp the check with an endorsement stating "This check is being negotiated as part of a payday loan pursuant to RSA 399-A, and any holder of this check takes it subject to all claims and defenses of the maker.'
XVI. Before entering into a payday loan, the lender shall provide each borrower with a pamphlet, in form consistent with regulations promulgated by the commissioner, explaining in plain language the rights and responsibilities of the borrower and providing a toll-free number in the banking department for assistance with complaints.
XVII. Before disbursing funds pursuant to a payday loan, a lender shall provide a clear and conspicuous printed notice to the borrower indicating that a payday loan is not intended to meet long-term financial needs and that the borrower should use a payday loan only to meet short-term cash needs.
XVIII. A borrower shall be permitted to make partial payments, in increments of not less than $50 on the loan at any time prior to maturity without charge. The lender shall give the borrower signed, dated receipts for each payment made, which shall state the balance due on the loan.
Source. 2003, 308:1, eff. July 21, 2003.
Section 399-A:15
399-A:15 Title Loan Renewals. - A title loan shall be for an original term of no more than one month. A title loan lender may allow such loan to be renewed no more than 11 additional periods each equal the original term, provided however, that at each such renewal the borrower must pay at least 5 percent of the loan's original principal balance, in addition to any finance charge owed, to reduce the principal balance outstanding. If the borrower cannot pay this principal reduction at any renewal, the title loan lender may either: (i) declare the borrower in default, or (ii) allow the loan to be renewed, provided that the lender shall reduce the current principal amount of the loan by 5 percent of the original principal amount for the purposes of calculating interest thereafter. This reduction in principal shall continue to be owed by the borrower, but such amount shall not be entitled to accrue interest thereafter. For the purpose of this section, a renewal is any extension of a title loan for an additional period without any change in the terms of the title loan other than a reduction in principal. No accrued interest shall be capitalized or added to the principal of the loan at the time of any renewal.
Source. 2003, 308:1, eff. July 21, 2003.
Section 399-A:16
399-A:16 Powers of the Commissioner. -
I. The commissioner shall have the power to subpoena witnesses and administer oaths in any adjudicative proceeding and to compel, by subpoena duces tecum, the production of documents, papers, books, records, files, and other evidence, whether electronically stored or otherwise, before the commissioner in any matter over which the commissioner has jurisdiction, control, or supervision pertaining to the provisions of this chapter. The commissioner shall have the power to administer oaths and affirmation to any person whose testimony is required. If any person shall refuse to obey any such subpoena or to give testimony or to produce evidence as required thereby, any justice of the superior court may, upon application and proof of such refusal, order the issuance of a subpoena, or subpoena duces tecum, out of the superior court, for the witness to appear before the superior court to give testimony, and to produce evidence as required thereby. Upon filing such order in the office of the clerk of the superior court, the clerk shall issue such subpoena, as directed, requiring the person to whom it is directed to appear at the time and place therein designated. If any person served with any such subpoena shall refuse to obey the same, and to give testimony, and to produce evidence as required thereby, the commissioner may apply to any justice of the superior court who, after proof of such refusal, shall issue such citation, directed to any sheriff, for the arrest of such person, and, upon such person's being brought before such justice, proceed to a hearing of the case. The court shall have power to enforce obedience to such subpoena, and the answering of any question and the production of any evidence that may be proper, by a fine not exceeding $10,000 or by imprisonment, or by both.
II. The commissioner shall adopt rules, pursuant to RSA 541-A, relative to the administration and enforcement of this chapter.
III. The commissioner may prepare, alter, or withdraw such forms as are necessary to comply with the provisions of this title.
IV. The commissioner may issue, amend, or rescind such orders as are reasonably necessary to carry out the provisions of this chapter.
V. The commissioner may, for good cause shown, abate all or a portion of delinquency penalties assessed under this chapter.
VI. All actions taken by the commissioner pursuant to this chapter shall be taken only when the commissioner finds such action necessary or appropriate to the public interest or for the protection of consumers and consistent with the purposes fairly intended by the policy and provisions of this title.
Source. 2003, 308:1, eff. July 21, 2003.
Section 399-A:17
399-A:17 Records and Filings. -
I. A document is filed when it is received 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.
II. Electronic filings, when received by the commissioner, are deemed filed, and are prima facie evidence that a filing has been duly authorized and made by the signatory on the application or document, are admissible in any civil or administrative proceeding under this chapter, and are admissible in evidence in accordance with the rules of superior court in any action brought by the attorney general under this chapter.
III. A licensee may maintain its records in electronic format if, upon request, the licensee provides the commissioner with:
(a) A full explanation of the programming of any data storage or communications systems in use; and
(b) Information from any books, records, electronic data processing systems, computers, or any other information storage system in the form requested by the commissioner.
Source. 2003, 308:1, eff. July 21, 2003.
Section 399-A:18
399-A:18 Penalties. -
I. Any person and the several members, officers, directors, agents, and employees thereof who shall knowingly violate any provision of this chapter, shall be guilty of a misdemeanor if a natural person, or guilty of a felony if any other person.
II. Any person violating the provisions of RSA 399-A:12 through RSA 399-A:15 or engaging in the business of a small loan lender, payday loan lender, or title loan lender without first obtaining a license if a license is required under this chapter shall be barred from recovering any finance charge, delinquency, or collection charge on the contract.
III. Any person who knowingly violates any rule or order of the commissioner may, upon notice and opportunity for hearing, except where another penalty is expressly provided, be subject to suspension or revocation of any registration or license, or an administrative fine not to exceed $2,500 for each violation in lieu of or in addition to such suspension or revocation as may be applicable under this title for violation of the provision to which such rule or order relates. Each of the acts specified shall constitute a separate violation.
IV. Any person who negligently violates any rule or order of the commissioner may, upon notice and opportunity for hearing, except where another penalty is expressly provided, be subject to suspension, revocation, or denial of any registration or license, including the forfeiture of any application fee, or an administrative fine not to exceed $1,500 for each violation in lieu of or in addition to such suspension or revocation as may be applicable under this title for violation of the provision to which such rule or order relates. Each of the acts specified shall constitute a separate violation.
V. Any person who, either knowingly or negligently, violates any provision of this chapter may, upon notice and opportunity for hearing, and in addition to any such other penalty provided for by law, be subject to suspension, revocation, or denial of any registration or license, including forfeiture of any application fee, or an administrative fine not to exceed $2,500, or both. Each of the acts specified shall constitute a separate violation, and each such administrative action or fine may be imposed in addition to any criminal or civil penalties imposed.
VI. Every person who directly or indirectly controls a person liable under this section, every partner, principal executive officer, or director of such person, every person occupying a similar status or performing a similar function, every employee of such person who materially aids in the act constituting the violation, and every licensee or person acting as a common law agent who materially aids in the acts constituting the violation, either knowingly or negligently, may, upon notice and opportunity for hearing, and in addition to any other penalty provided for by law, be subject to suspension, revocation, or denial of any registration or license, including the forfeiture of any application fee, or an administrative fine not to exceed $2,500, or both. Each of the acts specified shall constitute a separate violation, and such administrative action or fine may be imposed in addition to any criminal or civil penalties imposed. No person shall be liable under this paragraph who shall sustain the burden of proof that such person did not know, and in the exercise of reasonable care could not have known, of the existence of facts by reason of which the liability is alleged to exist.
Source. 2003, 308:1, eff. July 21, 2003.
Section 399-A:19
399-A:19 Review. - In addition to any other available remedy, any person considering himself or herself aggrieved by any act or omission of the commissioner may, within 30 days from the date of such act, or failure to act, bring an action in the superior court to review such act, or failure to act. The hearing before the court shall be based on the record before the commissioner and his or her findings and on such new evidence as may be introduced.
Source. 2003, 308:1, eff. July 21, 2003.
Section 398-A:3
398-A:3 Effect of Failure to Specify Interest Rate. - If any note secured by a second mortgage, in the case of loans other than open-end loans, does not among its provisions clearly indicate the principal sums, the rate of interest, the period of the loan and the periodic due dates, if any, of principal and interest or, in the case of open-end loans, if the note does not among its provisions clearly indicate the maximum amount of credit available, the rate of interest, the selected payment, or its manner of determination, and the related period or periods of repayment and the monthly or periodic due dates, then the lender shall have no right to collect interest.
Source. 1961, 255:1. 1967, 258:5. 1979, 390:3. 1985, 397:8. 1986, 92:8. 1987, 339:9, eff. Jan. 1, 1988.
Section 398-A:9
398-A:9 Advertising. - No licensee or other person shall advertise, print, display, publish, distribute or broadcast or permit to be advertised, printed, displayed, published, distributed, or broadcast in any manner whatsoever any statement or representation with regard to the rates, terms, or conditions for the lending of money under the provisions of this chapter which is false, misleading or deceptive. Any reference to the amount of a loan shall refer to the original principal amount. Any statement so made of the amount of an installment or the rate or amount of interest charges required for any loan shall also indicate the original principal amount of such loan, the number of installments required to pay such loan, and the interval between each installment.
Source. 1967, 258:7, eff. Jan. 1, 1968.
CHAPTER 399-E
LOAN SCAM OPERATORS
Section 399-E:1
399-E:1 Loan Scam Operators. -
I. In this chapter, "loan scam operator' means any person who, through advertising in any media, offers to lend money for a prepaid fee without any source of supply for such money and with no intent to provide such money.
II. Any loan scam operator who operates in this state shall be guilty of a felony and, notwithstanding RSA 651:2, shall be subject to a fine of $10,000 and one year of imprisonment.
Source. 1988, 46:1, eff. May 30, 1988.
Section 399-C:1
399-C:1 Additional Fee or Charge for Substitution of Insurance Policy Prohibited. - It shall be unlawful for any person, partnership, association, corporation, unincorporated organization, savings bank or institution, trust company, national bank, building and loan association, credit union, or any other type of bank, whether federal or state chartered, that makes a loan secured by real or personal property in connection with such a transaction, to make any separate or additional charge to, or to require any fee from, or to require the payment of any money by an insurance company, insurance agency, borrower, mortgagor, or purchaser, other than the insurance premium on insurance written as additional security for the loan, for the substitution by a borrower, a mortgagor, or a purchaser of one insurance policy on the property for an existing policy on the property, when the existing or substituted policy is provided through an insurance company or insurance agent or broker licensed to do business in this state. However, nothing in this section prevents the payment of interest which may be charged on premium loans or premium advancements in accordance with the security agreement.
Source. 1969, 79:1, eff. June 3, 1969.