Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Regular Session of 2001

State of Hawaii

Sir:

Your Committee on Commerce, Consumer Protection and Housing, to which was referred H.B. No. 1127 entitled:

begs leave to report as follows:

The purpose of this measure is to eliminate the requirement that state-chartered depository financial institutions publish semiannual financial statements filed with the Commissioner of Financial Institutions (Commissioner).

The Hawaii Bankers Association and Hawaii Financial Services Association testified in support of this measure. The Commissioner testified that the Department of Commerce and Consumer Affairs was not opposed to the measure and presented additional comments.

Currently, the law requires that state-chartered depository financial institutions publish their June 30 and December 31 statements of assets and liabilities within ten days of filing the statements with the Commissioner. This measure eliminates the publication requirement, but requires that the statements be made available to the public.

Your Committee finds that national banks, federally-chartered thrift institutions, and out-of-state banks are not required to publish their financial statements. Further, since the public already has access to information comparable to information contained in a financial institution's financial statement through sources such as government web sites, publication is no longer necessary in order to make this information publicly available.

Your Committee has amended this measure by replacing its contents with the language of a similar measure, S.B. No. 840, S.D. 1, and by making technical amendments to the Senate version for purposes of clarification. As amended, this measure, additionally, reduces revenues received by the Division of Financial Institutions from taxes imposed on banks and financial corporations, from $2,500,000, to $2,000,000. This funding reduction was requested by the Division because the current level of funding provides more moneys than are necessary to support the Division's budget.

As affirmed by the record of votes of the members of your Committee on Commerce, Consumer Protection and Housing that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1127, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 1127, S.D. 1, and be referred to the Committee on Ways and Means.