STAND. COM. REP. NO. 298

Honolulu, Hawaii

RE:    S.B. No. 1399

       S.D. 1

Honorable Colleen Hanabusa

President of the Senate

Twenty-Fourth State Legislature

Regular Session of 2007

State of Hawaii

Madam:

     Your Committee on Commerce, Consumer Protection, and Affordable Housing, to which was referred S.B. No. 1399 entitled:

"A BILL FOR AN ACT RELATING TO THE CODE OF FINANCIAL INSTITUTIONS,"

begs leave to report as follows:

     The purpose of this measure is to amend the Code of Financial Institutions (Code), chapter 412, Hawaii Revised Statutes (HRS), to reduce regulatory burden when consumers' interests are not adversely affected. 

     This measure also updates the Code to recognize changes in the industry and make clarifications to the existing law. 

     Your Committee received testimony in support of this measure from the Department of Commerce and Consumer Affairs (DCCA).  Testimony in opposition to this measure was received from the Hawaii Financial Services Association and the Hawaii Bankers Association.

     Your Committee finds that the intent of this measure is to reduce regulatory burdens by eliminating obsolete requirements and improving procedures of licensing and regulation of financial institutions within the State.

     Your Committee has amended this measure, based upon an agreement reached between the DCCA and financial institutions representatives, to:

     (1)  Delete the addition of new definitions to section 412:3‑112(a), Hawaii Revised Statutes, relating to various loan products, found in section 2 of this measure;

     (2)  Delete the addition of new definitions of section 412:9‑100, Hawaii Revised Statutes, relating to security breaches, found in section 6 of this measure; and

     (3)  To make technical, nonsubstantive changes for the purposes of clarity and style.

     As affirmed by the record of votes of the members of your Committee on Commerce, Consumer Protection, and Affordable Housing that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1399, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 1399, S.D. 1, and be referred to the Committee on Judiciary and Labor.

Respectfully submitted on behalf of the members of the Committee on Commerce, Consumer Protection, and Affordable Housing,

____________________________

BRIAN T. TANIGUCHI, Chair