New Hampshire House Moves Forward on Public Banking Bill

The Commerce and Consumer Affairs Committee of the New Hampshire State House has voted 12-4 to continue consideration of the public banking bill filed there two weeks ago.

new-hampshire.jpgAccording to Gwen Hallsmith in a PBI update released late last night:

On Tuesday this week, the Commerce and Consumer Affairs Committee of the New Hampshire House voted 12-4 to retain a bill filed a couple weeks ago to establish a public bank. Supporters of the bill include bi-partisan representatives - Republican Valerie Fraser of New Hampton, and Democratic co-sponsors John Cloutier of Claremont, and Tim Horrigan of Durham. The bill, HB 672-FN, calls for a Development Bank of New Hampshire to be established, with a board of directors consisting of 5 voting members appointed by the governor, subject to approval by the general court. The state treasurer and the banking commissioner shall serve as ex officio nonvoting members of the board. The primary mission of the bank is to be a depository for public funds, and to make loans to public bodies or to other entities in partnership with the private banks of the state.

New Hampshire has made this effort before. In 2012, HB 430 failed to pass the house. It would have established a committee to study the feasibility of establishing a state development bank in New Hampshire. That same year, HB 1691, to establish a state bank, also failed in the house. The feasibility study bill failed before the straight up establishment bill failed.  The 2015 legislation, 672, is called a "state bank" in its title, but in its body it again specifies a development bank.

What's the difference? A development bank typically has a mandate to create and develop businesses, which a public bank does, but not exclusively. The Business Development Bank of Canada, for example, does this through  financing, growth and transition capital, venture capital and consulting services, with a focus on small and medium-sized enterprises. It possesses that limited mandate. But it also possesses all the advantages of a public bank, including counter-cyclicality (able to offer loans in bad economic times), massive boosting of municipalities and small businesses, and a boost to community banking.

Gwen Hallsmith's message also included information on a whole array of economy and finance-related bills advanced in the New Hampshire legislature. The Commerce Committee is also considering bills related to "cryptocurrency," or financial exchange that utilizes cryptography to secure transactions and create new value. Bitcoin is the most topical example of this. The New Hampshire legislation would, among other things, either exempt virtual currency users from licensing requirements, or strengthens such requirements, depending on which of two competing bills gets passed.

And last, but not least on the list, is a payday lending bill that would strengthen licensing requirements, seek to curb false advertising, bans prepaid interest, sets limits on maximum loans and interest rates, and utilizes other measures to protect borrowers.

Clearly, New Hampshire has financial reform on its mind.


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