STAND. COM. REP. NO. 548
Honolulu, Hawaii
S.D. 1
President of the Senate
Twenty-Third State Legislature
State of Hawaii
Sir:
Your Committee on Commerce, Consumer Protection, and Housing, to which was referred S.B. No. 748 entitled:
begs leave to report as follows:
The purpose of this measure is to update the laws regulating escrow depositories.
The Department of Commerce and Consumer Affairs testified ins support of this measure. The Hawaii Association of Realtors submitted comments.
This measure comprehensively updates chapter 449, Hawaii Revised Statutes, the law regulating the practices of escrow depositories. The proposed changes reflect changes in industry practices, and are intended to reduce the regulatory burden on licensees and provide more flexibility in regulating the industry while continuing to ensure consumer protection. Some of the major changes in the law include:
(1) Permitting limited liability companies to be licensed as escrow depositories;
(2) Enabling the Division of Financial Institutions to more closely scrutinize the financial responsibility of proposed directors and officers of an applicant for a license, including through the use of fingerprinting and criminal background checks;
(3) Increasing the escrow depository bond requirement of $100,000 by an additional $5,000 per branch; and
(4) Requiring escrow depositories that are eligible to deposit escrow funds in sweep accounts to disclose that these accounts are not federally insured and may involve risks, including the possible loss of value.
Your Committee has amended this measure:
(1) To conform the definitions of "director", "officer" and "shareholder" to definitions established in federal regulations;
(2) To expand the definition of "person" to include a limited liability company;
(3) To clarify that a designated principal escrow officer may also serve as an officer and director of the escrow depository licensee; and
(4) By making technical, nonsubstantive changes to reflect preferred drafting style.
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 S.B. No. 748, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 748, S.D. 1, and be referred to the Committee on Judiciary and Hawaiian Affairs.
Respectfully submitted on behalf of the members of the Committee on Commerce, Consumer Protection, and Housing,
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RON MENOR, Chair |
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