Several members of a New Hampshire legislative committee discussing changes to the law in the wake of a failed mortgage firm questioned Tuesday whether a final report could be issued, since they still don't know or fully understand everything that led to its collapse.
"I wonder if we're not building something on quicksand," said Rep. Rip Holden, R-Goffstown, a member of the House and Senate Commerce Committee, which was assigned to review the state's regulatory oversight over Financial Resources Mortgage of Meredith.
The firm closed nearly a year ago and left more than 150 investors with millions of dollars in losses. The former head of the firm and an assistant have pleaded guilty to federal fraud charges and await sentencing.
Sen. Maggie Hassan, D-Exeter, committee chairwoman, said she didn't think it was possible to know precisely what happened in such a short time frame, noting that federal criminal and Securities and Exchange Commission investigations were happening the same time the committee was charged with its task. The committee took testimony in May and June before preparing its report.
Hassan said the committee has made some recommendations that would be necessary "first steps" for the Legislature to proceed. She said such members' concerns about not knowing specific information about the investigations should be part of the report, but shouldn't necessarily stall it.
"We see a lot of layers here, and the issue is do we go after all of them first before we recommend anything _ understanding that there are some limits in terms of our power, our resources and the conflicts with other investigations _ or do we go after some of the obvious 'low-hanging fruit' to try to make things better for future generations of New Hampshire consumers, while still attending over time to the other issues that this very serious and very devastating series of events created?" Hassan said.
The legislative panel faces a Dec. 1 deadline to submit a final report to the next legislative session in January. It decided to take more comments through Nov. 8 before starting to make its revisions.
The draft report was critical of the state Banking Department, Bureau of Securities Regulation and Attorney General's Office for not following through on complaints about the firm. The draft followed an investigation by Attorney General Michael Delaney of what led to the firm's collapse.
Among the comments submitted to the committee was an 18-page response prepared Friday by the Bureau of Securities Regulation. It had a number of objections, among them that the committee's report strongly relies on an analysis of the bureau's role provided by the attorney general's office, which offered "a view quite different from that of the BSR."
The bureau is about to launch its own investigation of what led to the firm's failure and the fallout. An organizational meeting is scheduled for Wednesday.
The committee report recommends changing state laws to clear up ambiguity about who is in charge of addressing consumer complaints. It recommends that one regulatory agency have a lead role on specific complaints if more than one agency is involved in a case, and that a database be created where consumers can find information about documented complaints or violations against companies.