STAND. COM. REP. NO. 2737

Honolulu, Hawaii

RE:    S.B. No. 2760

       S.D. 1

Honorable Shan S. Tsutsui

President of the Senate

Twenty-Sixth State Legislature

Regular Session of 2012

State of Hawaii

Sir:

     Your Committee on Ways and Means, to which was referred S.B. No. 2760 entitled:

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

begs leave to report as follows:

     The purpose and intent of this measure is to provide the resources and tools necessary to protect consumers of escrow services in an evolving regulatory environment.

Specifically, this measure:

     (1)  Amends the bond requirements for escrow depositories;

     (2)  Adjusts the fee schedule for services provided to escrow depositories by the Division of Financial Institutions of Department of Commerce and Consumer Affairs; and

     (3)  Increases administrative fines for violations of escrow depository regulations.

     Your Committee finds that escrow depository fees have not been reviewed in some time and that the fees collected by the Division of Financial Institutions for services provided to escrow depositories no longer reflect the cost of services provided by the Division.  Increasing fees will bring them in line with the amount of work that must be performed by the Division.  Additionally, your Committee finds that adjusting the bonding requirements will more accurately reflect the increased volume and amount of escrow transactions that now take place.  Finally, your Committee finds that adjustments to penalty provisions will provide the Division of Financial Institutions with additional tools to ensure compliance with escrow depository regulations.

     Your Committee has amended this measure by:

     (1)  Adding a savings clause to ensure that the increased penalties provided by the measure are not applied to violations that occurred prior to its effective date;

     (2)  Changing the effective date to July 1, 2050, to encourage further discussion on the measure; and

     (3)  Making technical nonsubstantive amendments for the purposes of clarity, consistency, and style.

     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. 2760, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 2760, S.D. 1.

Respectfully submitted on behalf of the members of the Committee on Ways and Means,

____________________________

DAVID Y. IGE, Chair