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F I S C A L I M P A C T R E P O R T

SPONSOR Grubesic

ORIGINAL DATE

LAST UPDATED

2/19/07

HB

SHORT TITLE Lender use of Similar Names & Trademarks

SB 930

ANALYST Ortiz

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY07

FY08

NFI

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

SUMMARY

Synopsis of Bill

Senate Bill 930 prohibits use of a similar trademark or name of a lender in a solicitation offering

services or products without consent of the lender and shall not reference loan number, loan

amount or other specific loan information that is publicly available in a solicitation offering

services or products, unless the solicitation conspicuously states next to the trademark or name

the following:

1.

name, address and phone number of person making the solicitation;

2.

the person soliciting is not affiliated with the lender;

3.

the solicitation is unauthorized by the lender; and

4.

the loan information referenced was not provided by the lender.

The above list would not apply to lender or affiliate of a lender with a current customer of the

lender or with a person was a customer during the eighteen months immediately preceding the

communication.

The bill further prohibits use of the name of a lender or name similar directed to consumers if

that use could cause a reasonable person to deceived as to:

1.

the lender’s sponsorship, affiliation, connection or association with the person using the

name;

Senate Bill 930 – Page

2

2.

the lender’s approval or endorsement of the person using the name or the person’s

services or products.

Finally, it prohibits any reference to an outstanding loan on the outside of an envelope, that is

visible through the envelope window or that appears on a postcard unless consent of the

lender is obtained.

A lender or owner of a trade name or mark may seek an injunction in a state district court

against a person who violates the items noted above.

SIGNIFICANT ISSUES

The law of unfair competition is primarily comprised of torts that cause an economic injury to a

business, through a deceptive or wrongful business practice. Unfair competition can be broken

down into two broad categories. First, the term "unfair competition" is sometimes used to refer

only to those torts that are meant to confuse consumers as to the source of the product. The other

category, "unfair trade practices", comprises all other forms of unfair competition. The law of

unfair competition is mainly governed by state common law. In the areas of trademarks,

copyrights, and false advertising Federal law may apply.

http://www.law.cornell.edu/wex/index.php/Unfair_competition

Chapter 57, Article 12 NMSA 1978 Whenever the attorney general has reasonable belief that any

person is using, has used or is about to use any method, act or practice which is declared by the

Unfair Practices Act [Chapter 57, Article 12 NMSA 1978] to be unlawful, and that proceedings

would be in the public interest, he may bring an action in the name of the state alleging

violations of the Unfair Practices Act. The action may be brought in the district court of the

county in which the person resides or has his principal place of business or in the district court in

any county in which the person is using, has used or is about to use the practice which has been

alleged to be unlawful under the Unfair Practices Act. The attorney general acting on behalf of

the state of New Mexico shall not be required to post bond when seeking a temporary or

permanent injunction in such action.

In any action filed pursuant to the Unfair Practices Act, including an action with respect to

unimproved real property, the attorney general may petition the district court for temporary or

permanent injunctive relief and restitution.

ADMINISTRATIVE IMPLICATIONS

LFC staff indicates that it may increase court caseload.

POSSIBLE QUESTIONS

How will consumers be educated of the difference between the authentic trademark/name vs. the

deceptive trademark/name.

EO/mt