Inspired by FaceCash's plight (http://www.quora.com/Aaron-Greenspan/In-Fifty-Days-Payments-Innovation-Will-Stop-In-Silicon-Valley), a New Hampshire resident told her state representative about what was happening in California. Now, the New Hampshire House of Representatives is voting tomorrow (February 23, 2012) on H.B. 1700, which would repeal money transmission laws in New Hampshire. If you or someone you know works for a payments-related startup, this is something you should definitely support.

From our friends in New Hampshire:

"The Republicans (except for Sullivan, who is owned by large banking interests) are more likely to be favorable to this. Our best allies are Hunt (the committee chairman) and McGuinness. They could use some encouragement. Other people who should be contacted are Flanders, Headd, Nevins and Sullivan, who needs to hear from our side more.

Some talking points:

1. Merchants are getting killed by high credit card processing rates, and piecemeal state regulation and licensing prohibits real competition in the payments market.

2. Consumers pay more for goods and services because of the lack of competition in the payments market.

3. Licensing in New Hampshire is keeping computer firms out that would otherwise consider locating here. The "New Hampshire advantage" is meaningless to the up-and-coming internet payments companies can start up and grow in nearby Massachusetts, which does not license money transmitters.

4. Consumer protection is almost non-existent because the licensing fees are collected by the State Banking Commission, an agency which is required to be self-financing. The $52,475 collected in fees each year cover little more than the cost of licensing and records keeping. There have been almost no enforcement actions against money transmitters in recent years, except to collect the licensing fee.

5. Money laundering by money transmitters is already covered -- and prosecuted -- under Federal Law, specifically 31 USC 5321 (the Bank Secrecy Act) and its associated regulations 31 CFR 103.57, as well as 18 USC 1956 (Laundering of Monetary Instruments).

Here's the list of representatives on the committee:

Ronald Belanger <[email protected]> (R-Salem)

Jerry Bergevin <[email protected]> (R-Manchester)

Jennifer Coffey <[email protected]> (R-Andover)

Donald Flanders <[email protected]> (R-Laconia)

James Headd <[email protected]> (R-Auburn)

John Hunt <[email protected]> (R-Rindge)

Donna Mauro <[email protected]> (R-Windham)

Sean McGuinness <[email protected]> (R-Nashua)

Chris Nevins <[email protected]> (R-Hampton)

David Palfrey <[email protected]> (R-Franklin)

Frederick Rice <[email protected]> (R-Hampton)

James Sullivan <[email protected]> (R-Deerfield)"