2015 New Hampshire Revised Statutes
Title XXXVI - PAWNBROKERS AND MONEYLENDERS
Chapter 399-A - REGULATION OF SMALL LOANS, TITLE LOANS, AND PAYDAY LOANS
Section 399-A:4 - Investigation of Application; License Requirements.

NH Rev Stat § 399-A:4 (2015) What's This?


[RSA 399-A:4 effective until January 1, 2016; see also RSA 399-A:4 set out below.]
    399-A:4 Investigation of Application; License Requirements. –
    I. Upon the filing of the complete application for a small loan lender license for lending activities including payday loans or title loans 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 including 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 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. A licensee shall submit written notification to the department of the addition or deletion of a principal, and shall provide the name and address of each new principal no later than 30 days after such change. Each new principal shall authorize the commissioner to conduct a background check. The commissioner shall investigate management and ownership changes including, but not limited to, each principal's qualifications and business history. The licensee shall investigate and disclose any injunction or administrative order that has been issued against the principal and whether the principal has been convicted of a misdemeanor involving the lending industry or any aspect of the lending business or convicted of any felony, prior to the commissioner's approval of such change. Certain significant events as defined by rule shall be reported to the department in writing within 10 calendar days.
    VIII. (a) 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.
       (b) Withdrawal of the surrendered license becomes effective 30 days after receipt of the license by the commissioner or within such shorter period of time as the commissioner may determine, unless a revocation or suspension proceeding is pending when the withdrawal is filed or a proceeding to revoke, suspend, or to impose conditions upon the withdrawal is instituted within 30 days after the license is surrendered. If a proceeding is pending or instituted, withdrawal becomes effective at such time and upon such conditions as the commissioner by order determines. If no proceeding is pending or instituted and withdrawal automatically becomes effective, the commissioner may nevertheless institute a revocation or suspension proceeding under RSA 399-A:7 within one year after withdrawal became effective and may enter a revocation or suspension order as of the last date on which the license was effective.
       (c) Failure to comply with the provisions of this section and rules adopted under this section shall be cause for denial of future license applications and the imposition of penalties under RSA 399-A:18.
    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.
    X. The fact that a person is licensed or registered in the state of New Hampshire under this chapter does not constitute a finding that the commissioner has passed in any way upon the merits or qualifications of such person or that the commissioner has recommended or given approval to any person. It is unlawful to make, or cause to be made, to any prospective purchaser, customer, or client any representation inconsistent with the provisions of this paragraph.
    XI. Any license fee required by this chapter shall be paid before a license may become effective.
    XII. Any officer, owner, manager or agent of any licensee and any person controlling or having a contract under which he or she has a right to control such a licensee, whether exclusively or otherwise, and any person with executive authority over or in charge of any segment of such a licensee's affairs, shall reply promptly in writing, or in other designated form, to any written inquiry from the commissioner requesting a reply. The commissioner may require that any communication made to him or her under this section be verified.
    399-A:4 Application and Fees. --
    I. Every applicant for licensing under this chapter shall file with the commissioner a written verified application, on a form prescribed by the commissioner. The application shall contain:
       (a) The name of the applicant;
       (b) The applicant's tax identification number;
       (c) The address where the business is or is to be conducted and similar information for any branch office of the applicant;
       (d) The trade name, if any, under which the applicant proposes to conduct such business and evidence of authority to use the trade name in New Hampshire;
       (e) The articles of incorporation or organization or partnership agreement;
       (f) The name and address of the New Hampshire resident agent if the applicant is a foreign entity;
       (g) A financial statement as described in paragraph IV;
       (h) The names and social security number of the applicant's principal;
       (i) Authorization for the department to conduct a background check of the applicant's principals;
       (j) Any injunction or administrative order that has been issued against the applicant or any of its principals and whether the applicant or any of its principals have been convicted of a misdemeanor involving the lending industry or any aspect of the lending business or of any felony; and
       (k) Any other information that the commissioner may require including, but not limited to, the applicant's form and place of organization, the applicant's proposed method of doing business, the qualifications and business history of the applicant and its principals, and the applicant's financial condition and history.
    II. 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 and the sum of $450 for each branch of such licensee maintained in this state.
    III. (a) Unless the applicant is a publicly traded corporation, the department shall complete a background investigation and criminal history records check on the applicant's principals. If the applicant is a subsidiary, the department shall complete a background investigation and criminal history records check on individuals who are indirect owners.
       (b) The persons described in subparagraph (a) shall submit to the department a notarized criminal history records release form, as provided by the New Hampshire division of state police, which authorizes the release of the person's criminal records, if any. The person shall submit with the release form a complete set of fingerprints taken by a qualified law enforcement agency or an authorized employee of the banking department. In the event that the first set of fingerprints is invalid due to insufficient pattern, a second set of fingerprints is necessary in order to complete the criminal history records check. If, after 2 attempts, a set of fingerprints is invalid due to insufficient pattern, the department may, in lieu of the criminal history records check, accept police clearances from every city, town, or county where the person has lived during the past 5 years.
       (c) The department shall submit the criminal history records release form to the New Hampshire division of state police which shall conduct a criminal history records check through its records and through the Federal Bureau of Investigation. Upon completion of the background investigation, the division of state police shall release copies of the criminal conviction records to the department. The department shall maintain the confidentiality of all criminal history records information received pursuant to this paragraph.
       (d) The department may require the applicant or licensee to pay the actual costs of each background investigation and criminal history records check.
       (e) The department may conduct a pre-licensing examination of the applicant.
       (f) The department may rely on criminal records checks reported through a national licensing system in lieu of subparagraphs (b) and (c).
    IV. (a) 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.
       (b) The application shall include a financial statement that shall be prepared in accordance with generally accepted accounting principles and shall include a balance sheet, income statement, statement of changes in owner's 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. If the financial statement is more than 6 months old, the applicant shall also submit an interim balance sheet and income statement not more than 3 months old. Financial 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.
       (c) Each applicant and licensee shall maintain a positive net worth at all times.
    V. (a) Each applicant shall post a continuous surety bond in amount of $25,000. 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.
       (b) Surety bonds shall include a provision requiring the surety to give written notice to the commissioner 30 days in advance of the cancellation or termination of the bond.
       (c) Every bond shall provide that no recovery shall be made against the bond unless the state makes a claim for recovery or the person brings suit naming the licensee 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 State Bankruptcy Code.
       (d) When an action is commenced on a licensee's bond, the licensee shall immediately file a new bond. Immediately upon recovery upon any action on the bond the licensee shall file a new bond.
    VI. 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 shall not be effective unless:
       (a) The plaintiff, who may be the attorney general in a suit, action, or proceeding instituted by him or her, 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.
    VII. The commissioner may license or register individuals or firms by means of or through the facilities of a national organization which facilitates registration and licensing on a nationwide basis.

Source. 2015, 73:1, eff. Jan. 1, 2016.


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