CONCORD, N.H. (Legal Newsline) - New Hampshire Gov. John Lynch on Tuesday vetoed a bill that would've given the state's Banking Department more power to investigate unfair conduct by financial institutions.
The governor said it goes against recommendations made by state Attorney General Michael Delaney's recent report on a failed mortgage firm.
Lynch wrote on his Web site Tuesday, "The state of New Hampshire has a responsibility to do the very best it can to provide oversight of state regulated financial institutions and protect consumers from fraud. Because this bill moves New Hampshire in the wrong direction, and does not serve the best interests of New Hampshire consumers, I am vetoing it."
According to an article on Bloomberg's BusinessWeek website, the bill would have given more authority to the department to deal with "unfair and deceptive trade practices" by financial institutions under the state's consumer protection act.
Lynch said the legislation "extends existing law that provides the Banking Department with exclusive authority and jurisdiction to investigate unfair conduct by regulated financial institutions, but it also purports to expand that exclusive authority to include enjoining violations of the consumer protection laws."
Moreover, Lynch said, the bill suggests the Banking Commissioner "now have authority to appear in Superior Court to enjoin violations while, in fact, it is the responsibility of the Attorney General to enjoin unfair and deceptive trade practices in the courts."
Delaney, the state's attorney general, has recommended that the Department of Justice's authority, which was removed from his office, be restored in the wake of the collapse of Financial Resources Mortgage. The Meredith firm, according to BusinessWeek, is accused of swindling investors out of millions of dollars.
Lynch said he supports "the restoration of that authority" and plans to "make other necessary changes to strengthen oversight of financial transactions and financial services."