STAND. COM. REP. NO. 2020

Honolulu, Hawaii

RE:    S.B. No. 2850

       S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Twenty-Eighth State Legislature

Regular Session of 2016

State of Hawaii

Sir:

     Your Committee on Commerce, Consumer Protection, and Health, to which was referred S.B. No. 2850 entitled:

"A BILL FOR AN ACT RELATING TO MORTGAGE INDUSTRY REGULATION,"

begs leave to report as follows:

     The purpose and intent of this measure is to make various amendments to the mortgage loan originators law, chapter 454F, Hawaii Revised Statutes, and the mortgage servicers law, chapter 454M, Hawaii Revised Statutes, including:

     (1)  Increasing the clarity and consistency of the two chapters, which regulate related industries;

     (2)  Moving mortgage servicer provisions that currently appear in chapter 454F, Hawaii Revised Statutes, to chapter 454M, Hawaii Revised Statutes; and

     (3)  Deleting the mortgage loan servicer loan modification license under chapter 454F, Hawaii Revised Statutes.

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

     Your Committee finds that there is a certain amount of overlap between the mortgage loan origination industry governed by chapter 454F, Hawaii Revised Statutes, and the mortgage servicer industry governed by chapter 454M, Hawaii Revised Statutes.  This measure makes various amendments to these chapters for clarity and consistency and migrates mortgage servicer provisions under chapter 454F, Hawaii Revised Statutes, into the mortgage servicer law, which will help eliminate confusion for mortgage servicers.  This measure also deletes a special mortgage loan servicer loan modification license under chapter 454F, Hawaii Revised Statutes, as the need for this license has been eliminated by amendments to the mortgage servicer law.  Your Committee further finds that the amendments proposed by this measure will ensure clearer requirements within the mortgage loan origination and mortgage servicer industries, which will support licensee compliance.

     Your Committee has amended this measure by:

     (1)  Clarifying that if an aggregate administrative fine imposed for a violation of the mortgage servicers law exceeds $7,000, $1,000 of the fine shall be deposited into the mortgage foreclosure dispute resolution fund; and

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

     As affirmed by the record of votes of the members of your Committee on Commerce, Consumer Protection, and Health that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2850, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 2850, S.D. 1, and be referred to your Committee on Ways and Means.

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

________________________________

ROSALYN H. BAKER, Chair