Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Regular Session of 2001

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred S.B. No. 1220 entitled:

begs leave to report as follows:

The purpose of this measure is to remove the restriction that the Secondary Market Services Corp.--Hawaii ("SMSC") acquire student loan notes held only by local financial institutions.

Your Committee finds that with the advent of the internet and the globalization of the banking industry, more and more Hawaii students are obtaining their student loans from out-of-state lenders. This trend shrinks the pool of student loans that the SMSC is authorized to purchase.

Your Committee therefore finds that this measure is necessary to ensure the financial vitality of the SMSC. This measure will allow the SMSC to offer its cost-saving borrower benefits to all of Hawaii's students regardless of the lending institution that the students choose.

As affirmed by the record of votes of the members of your Committee on Ways and Means that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1220 and recommends that it pass Third Reading.