Today I voluntarily appeared before a legislative panel in Concord that is reviewing the state’s oversight of Financial Resources Mortgage. I did so to help prevent future white collar crime from ever happening again in New Hampshire.
My heart goes out to the victims of this horrible criminal fraud. Let’s be clear: what happened to the victims of this criminal Ponzi scheme should never have happened – and must be stopped in the future.
As I have said previously, I had no personal knowledge of FRM. Had I known this type of financial crime was being committed in the state, I would have moved quickly to stop it – just like I did with other criminal cases.
In my view, jurisdiction – who was responsible to act – was a significant factor in this matter. I strongly believe that in 2002 the Legislature should not have taken jurisdiction for unfair business and trade practices for matters involving banking and securities from the Consumer Protection Bureau of the Attorney General’s Office.
As a result of the changes in 2002, and further changes in 2004, which were opposed by the Attorney General’s office, the Legislature removed the authority of the Attorney General to pursue actions under the Consumer Protection Act for matters regulated by Banking and Securities. The Legislature also removed a consumer’s private right of action under the Consumer Protection Act for any matters regulated by Banking or Securities.
That means the Attorney General’s Office lost jurisdiction – the ability and responsibility to act on consumer complaints – and that others gained that jurisdiction. That should not have been done. You can’t tie the hands of the Department of Justice behind its back and then expect it to roll up its sleeves and get to work. That’s exactly what happened by taking away jurisdiction from the Consumer Protection Bureau.
Because jurisdiction was removed from the Attorney General’s Office, the Department of Justice referred the consumer complaints it received regarding FRM to the Banking Commissioner in accordance with the law.
To improve financial regulatory oversight in the state, I suggested that legislators take the following actions:
· Reinstate jurisdiction to the Consumer Protection Bureau of the Attorney General’s Office for matters related to banking and securities;
· Allow consumers the right to seek relief under the Consumer Protection Act;
· Establish clear central reporting requirements to ensure communication and coordination across state agencies, so bad actors can’t use jurisdictional exemptions to avoid detection and accountability.
It is my sincere hope that my appearance today will help lawmakers and regulators better protect consumers in New Hampshire. Please know that I remain grateful for your support and look forward to seeing you on the campaign trail soon.