STAND. COM. REP. NO.  1693

Honolulu, Hawaii

                , 2007

RE:   H.C.R. No. 77

      H.D. 1

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Fourth State Legislature

Regular Session of 2007

State of Hawaii

Sir:

     Your Committees on Consumer Protection & Commerce and Legislative Management, to which was referred H.C.R. No. 77 entitled:

"HOUSE CONCURRENT RESOLUTION REQUESTING THE AUDITOR TO CONDUCT A STUDY ON PREDATORY MORTGAGE LENDING IN HAWAII,"

beg leave to report as follows:

     The purpose of this concurrent resolution is to request the Auditor to conduct a study on predatory mortgage lending in Hawaii.

     The Department of Commerce and Consumer Affairs, Legal Aid Society of Hawaii, Hawaii Alliance for Community-Based Economic Development, Hawaii Association of REALTORS, and a concerned individual testified in support of this measure.  The Hawaii Association of Mortgage Brokers, Hawaii Bankers Association, and Hawaii Financial Services Association opposed this measure.  The Mortgage Bankers Association of Hawaii submitted comments.

     Your Committees note that predatory lending has more to do with bad lending practices rather than bad mortgage loan products.  In many situations, the mortgage products are beneficial to the consumer when applied to the right circumstances.  On the other hand, providing these same products inappropriately would be considered predatory lending.

     Accordingly, your Committees have amended this measure by:

(1)  Adding discussion emphasizing that predatory lending is caused by the inappropriate use of mortgage loan products, rather than the products themselves; and

(2)  Specifying that the Auditor's study should address the acts and practices of mortgage brokers.

     Technical, nonsubstantive amendments were also made for clarity and style.

     As affirmed by the records of votes of the members of your Committees on Consumer Protection & Commerce and Legislative Management that are attached to this report, your Committees concur with the intent and purpose of H.C.R. No. 77, as amended herein, and recommend that it be referred to the Committee on Finance in the form attached hereto as H.C.R. No. 77, H.D. 1.

Respectfully submitted on behalf of the members of the Committees on Consumer Protection & Commerce and Legislative Management,

____________________________ MICHAEL Y. MAGAOAY, Chair

____________________________ ROBERT N. HERKES, Chair