STAND. COM. REP. NO. 1311

Honolulu, Hawaii

RE: H.B. No. 988

H.D. 1

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirtieth State Legislature

Regular Session of 2019

State of Hawaii

Sir:

Your Committee on Commerce, Consumer Protection, and Health, to which was referred H.B. No. 988, H.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO TRANSITIONAL AUTHORITY IN THE MORTGAGE INDUSTRY,"

begs leave to report as follows:

The purpose and intent of this measure is to implement Section 106 of the federal Economic Growth, Regulatory Relief, and Consumer Protection Act (Section 106), which provides a one hundred twenty-day temporary transitional authority to originate loans in this State for loan originators moving from a depository institution to a non-depository institution and state-licensed loan originators moving interstate.

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

Your Committee finds that when loan originators change jobs within the profession, they encounter employment barriers due to state licensing requirements. Nationally, approximately seventy-five percent of the mortgage loan originators who apply for a license would qualify for transitional authority because they are either employed by a depository institution or are licensed in another state. This measure integrates Section 106 into existing law relating to mortgage loan originators by temporarily authorizing qualified mortgage loan originators to originate mortgage loans in the State for one hundred twenty days. During this time, a mortgage loan originator will have the opportunity to complete state requirements for licensure, including pre-education or continuing education, financial responsibility review, and criminal background review, which will ease the employment process for employers without the impact of delays associated with the state licensing process. A mortgage loan originator company also remains responsible for any origination errors caused by a mortgage loan originator with transitional authority, which ensures consumer protection during this transitional period.

Your Committee has amended this measure by:

(1) Inserting an effective date of November 24, 2019, to conform with the date on which Section 106 will take effect; 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 H.B. No. 988, H.D. 1, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 988, H.D. 1, S.D. 1, and be referred to your Committee on Judiciary.

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

________________________________

ROSALYN H. BAKER, Chair