STAND. COM. REP. NO. 684

Honolulu, Hawaii

RE:    S.B. No. 1070

       S.D. 2

Honorable Donna Mercado Kim

President of the Senate

Twenty-Seventh State Legislature

Regular Session of 2013

State of Hawaii

Madam:

     Your Committee on Ways and Means, to which was referred S.B. No. 1070, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO MORTGAGE SERVICERS,"

begs leave to report as follows:

     The purpose of this measure is to enhance the regulation of mortgage servicers.

     Specifically, the measure:

     (1)  Expands the authority of the Commissioner of Financial Institutions to examine and investigate licensees and other persons subject to the mortgage servicer law, including:

          (A)  Access to accounts, records, documents, information, and evidence relevant to an inquiry or investigation;

          (B)  The ability to hire staff, contract for services, and share resources with other government or regulatory entities; and

          (C)  The authority to charge an hourly examination or investigation fee and reasonable expenses; and

     (2)  Increases the application and renewal fees for mortgage servicer licenses.

     Your Committee received written comments in support of this measure from the Department of Commerce and Consumer Affairs.

     Your Committee finds that the Commissioner of Financial Institutions regulates mortgage servicers who relay residential mortgage loan payments from a borrower to the owner of the loan or to other third parties, pursuant to the terms of service.  This measure provides the Commissioner with expanded examination and investigation tools and increases the fees for mortgage servicer license applications and renewals to a level commensurate with the actual costs of regulating the industry.  Your Committee finds that this measure will ensure the availability of adequate resources for the effective and expeditious licensing and examination of mortgage servicers, which will promote the interests of consumers and businesses alike.

     Your Committee has amended this measure by:

     (1)  Adding a savings clause;

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

     (3)  Making technical nonsubstantive amendments for clarity 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. 1070, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 1070, S.D. 2.

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

____________________________

DAVID Y. IGE, Chair