HB 1218 – AS INTRODUCED

2006 SESSION

06-2648

06/10

HOUSE BILL 1218

AN ACT relative to the unauthorized use of the name of a financial institution.

SPONSORS: Rep. Stepanek, Hills 6; Rep. Reardon, Merr 11; Sen. Flanders, Dist 7

COMMITTEE: Commerce

ANALYSIS

This bill:

I. Requires anyone using the name of a financial institution in a written, electronic, or verbal advertisement or solicitation to first obtain permission from the institution.

II. Creates an exception for comparisons of the products of different financial institutions.

III. Permits the bank commissioner to suspend or revoke a license and impose a fine for unauthorized use of a financial institution’s name.

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Explanation: Matter added to current law appears in bold italics.

Matter removed from current law appears [in brackets and struckthrough.]

Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

06-2648

06/10

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Six

AN ACT relative to the unauthorized use of the name of a financial institution.

Be it Enacted by the Senate and House of Representatives in General Court convened:

1 Cease and Desist Order; Penalty Added. Amend RSA 384:12-a, IV to read as follows:

IV. If, in the opinion of the commissioner, an individual or business entity is engaging in or has engaged in the unauthorized [and deceptive] use of the name or trademark of any financial institution, including a bank, as defined in RSA 384-B:1, I, national bank, federally chartered savings bank or association, federally or state chartered credit union, any mortgage lender as defined in RSA 397-A and 397-B, or any affiliate or subsidiary thereof, or any other financial institution as defined in the Gramm-Leach-Bliley Act (PL 106-102) in violation of RSA 384:67, the commissioner may issue and serve an order upon the individual or business entity requiring the individual or business entity to cease and desist from such unauthorized [and deceptive] use.

V. Any person who knowingly violates any order of the commissioner made pursuant to paragraph IV of this section or RSA 384:68 may, upon notice and after opportunity for hearing be subject to suspension or revocation of any registration or license, and imposition of an administrative fine not to exceed $2,500 for each violation. Each act shall constitute a separate violation.

2 Unauthorized Use of a Financial Institution's Name. Amend RSA 384:67 to read as follows:

384:67 Unauthorized [and Deceptive] Use. Except as provided herein, no individual or business entity shall use [in an unauthorized and deceptive manner] the name or trademark of any bank, as defined in RSA 384-B:1, I, national bank, federally chartered savings bank or association, federally or state chartered credit union, any mortgage lender as defined in RSA 397-A and 397-B, or any affiliate or subsidiary thereof, or any other financial institution as defined in the Gramm-Leach-Bliley Act (PL 106-102) in any written, electronic, or oral advertisement or solicitation unless such use is first authorized by such financial institution in writing. Prior written consent of the financial institution shall [constitute authorization and shall] be an affirmative defense to any violation of this paragraph. The individual or business entity shall furnish a copy of such written authorization to the bank commissioner upon request.

3 New Section; Exceptions to Unauthorized Use of a Financial Institution's Name. Amend RSA 384 by inserting after section 67 the following new section:

384:67-a Exceptions to Unauthorized Use of a Financial Institution’s Name. Notwithstanding the provisions of RSA 384:67, the use of a financial institution’s name in a comparative written advertisement or solicitation by another individual or business entity, which is limited solely to comparing the relative attributes of similar products or services offered by such financial institution and the individual or business entity, shall be permitted and shall not require prior written authorization of the financial institution, provided that the name of the financial institution is not visible to the addressee in the case of a letter or other form of written communication, before opening the document containing the comparison or the envelope in which it is sent or delivered or in the case of an electronic transmission, within its subject line.

4 Cease and Desist Order; Deceptive Use Removed. Amend RSA 384:68 to read as follows:

384:68 Cease and Desist Order. The bank commissioner may issue a cease and desist order, as provided in RSA 384:12-a, IV, against any individual or business entity which uses in an unauthorized [and deceptive] manner the name or trademark of any bank, as defined in RSA 384-B:1, I, national bank, federally chartered savings bank or association, federally or state chartered credit union, any mortgage lender as defined in RSA 397-A and 397-B, or any affiliate or subsidiary thereof, in violation of RSA 384:67. The insurance commissioner may issue a cease and desist order, as provided in RSA 400-A:14, against any individual or business entity which uses in an unauthorized [and deceptive] manner the name or trademark of any financial institution subject to the jurisdiction of the insurance commissioner in violation of RSA 384:67.

5 Effective Date. This act shall take effect January 1, 2007.