Governor Jeanne Shaheen today signed into law a measure she says will make NH more attractive to credit card companies.??Supporters of the bill say it balances the needs of lender and borrower. Detractors call it a sellout to Providian, the financially troubled NH based national bank.
At a morning press conference, Governor Shaheen touted what has become known as ?the Providian Bill? as a boon to local economic development.
"This law directly mirrors the law in Delaware?..And Delaware as you all know has become a magnet for financial institutions?.In enacting this legislation we believe it will give New Hampshire the opportunity to be a magnet for similar institutions."
The measure puts the provisions of many credit card contracts into law. It also allows New Hampshire?s uncapped interest rates to be exported to out of state consumers, and enjoys the full support of the state financial services industry?. John Funk is counsel to the NH bankers association. He says adoption of the so-called Delaware model puts NH is a good position to compete with other states for credit card companies ?..while also protecting the needs of the consumer.
"There are probably about ten states that are known to have statutory provisions that comprehensively deal with open ended credit?.Delaware is a state that has been recognized as having balanced legislation and is one of the leaders?"
But according to Jean Ann Fox of the consumer federation of America, states like Delaware are more object lessons than role models.
"Both Delaware and South Dakota have no usury limit and no limit on fees that can be charged from credit cards?..A bank can charge any interest rate they can get a consumer to agree to. And the fact that you can solicit with a teaser rate that?s very low and then with only fifteen days warning raise rates, consumers have a very hard time."
And Consumers hard time was shared by any citizen who may have wanted to weigh in on the matter before it passed the legislature in April?Lawmakers adopted the Delaware amendment at Providian?s request without the benefit of a public hearing.?..According to Jerry Little of the NH bankers association that turn of events was entirely appropriate. And Little insists the bill?s passage demonstrates the legislature is doing its job.
"I think that it is a strong sign of the effectiveness our legislative process and the ability of the general court to respond quickly to problems and issues and opportunities that arise."
And chief among those issues and opportunities was the possibility that Providian would move it?s headquarters out of state?..That much was indicated in a May 16th letter to the Governor from Providian CEO Joseph Saunders??where Saunders said ?competitive considerations? could compel Providian?s relocation if level playing field wasn?t created??..For John Funk, who in addition to representing the bankers association is also law partner of Providian lobbyist Chris Gallagher, a level playing field means a salutatory framework of sufficient clarity to ward off unnecessary litigation.
"Providian has certainly had some lawsuits brought against it and if the law is uncertain than lawsuits can certainly be brought to exploit that uncertainty."
Executive Councilor Peter Spalding, whose day job is with Providian, concurs?..And Spalding says the bottom line is that the new law will help insure Providian?s 470 local employees keep their jobs.
"It certainly creates the type of framework that helps a company like Providian keep in operation??It?s not immunity?.But its better than we had yesterday?."
