STAND. COM. REP. NO.  799-10

Honolulu, Hawaii

                , 2010

RE:   S.B. No. 2921

      S.D. 1

      H.D. 1

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Fifth State Legislature

Regular Session of 2010

State of Hawaii

Sir:

     Your Committee on Consumer Protection & Commerce, to which was referred S.B. No. 2921, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO ESCROW DEPOSITORIES,"

begs leave to report as follows:

     The purpose of this bill is to increase consumer protections and help ensure consistency for all entities performing escrow services relating to Hawaii real property by requiring the entity operating as an escrow depository for property located in the state to be licensed by the Commissioner of Financial Institutions. 

     Title Guaranty Escrow Services, Inc., supported this bill with amendments.  The Department of Commerce and Consumer Affairs opposed this measure.

     Escrow transactions involve large sums of money and the handling of documents affecting title to real property.  Since escrow companies have fiduciary responsibilities toward the parties involved in these transactions, there are certain laws and regulations in place meant to protect these parties.  Escrow transactions concerning Hawaii real property, therefore, should be handled by escrow depositories licensed in the state and subject to state regulations.  Current statutes, however, do not apply to those escrow depositories that are located out-of-state.  Your Committee finds that this bill will help remedy this situation by providing consistent regulation for all real property within the state regardless of the location of escrow depositories.

     Upon further consideration, your Committee has amended this measure by:

     (1)  Restoring language that prohibits the transaction of business under any name, title, or descriptive term containing the words "escrow", "escrow depository", or any word or phrase having the same or similar meaning by any person not licensed or exempt under state escrow depository regulations; and

     (2)  Making technical, nonsubstantive amendments for clarity, consistency, and style.

     As affirmed by the record of votes of the members of your Committee on Consumer Protection & Commerce that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2921, S.D. 1, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 2921, S.D. 1, H.D. 1, and be referred to the Committee on Judiciary.

Respectfully submitted on behalf of the members of the Committee on Consumer Protection & Commerce,

____________________________

ROBERT N. HERKES, Chair