Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-First State Legislature

Regular Session of 2001

State of Hawaii

Sir:

Your Committee on Consumer Protection and Commerce, to which was referred H.B. No. 1411 entitled:

begs leave to report as follows:

The purpose of this bill is to allow the Secondary Market Services Corp.--Hawaii (SMS-Hawaii) to acquire student loan notes held by brokers outside of the State, as well as from local financial institutions.

The University of Hawaii, SMS-Hawaii, Pacific Financial Aid Association, HawaiiUSA Federal Credit Union, Hawaii Credit Union League, and American Savings Bank supported this bill.

Your Committee finds that SMS-Hawaii is a nonprofit corporation authorized by the Legislature to purchase student loans in 1992. Since then, the internet has changed the pattern of student borrowing so that Hawaii students are increasingly obtaining loans from lenders located outside the State. Only 45 percent of loans to students in Hawaii are from local financial institutions. This measure will allow SMS-Hawaii to offer cost saving borrower benefits to all of Hawaii's students, regardless of the location of the student's lending institution.

As affirmed by the record of votes of the members of your Committee on Consumer Protection and Commerce that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1411 and recommends that it be referred to the Committee on Finance.