STAND. COM. REP. NO. 1313

Honolulu, Hawaii

RE: H.B. No. 989

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. 989, H.D. 1, entitled:

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

begs leave to report as follows:

The purpose and intent of this measure is to authorize the Commissioner of Financial Institutions to:

(1) Modify requirements and make new requirements to implement changes and improvements to the Nationwide Multistate Licensing System and Registry (NMLS);

(2) Issue cease and desist orders against licensees and unlicensed persons; and

(3) Enter into consent orders.

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

Your Committee finds that NMLS is a web-based nationwide licensing system that streamlines workflows and communications for applicants, licensees, and the Division of Financial Institutions. Currently, the Division of Financial Institutions cannot accept electronic bonds uploaded by an insurance carrier through NMLS due to the requirements in existing law that bond riders or endorsements must be provided directly to the Commissioner of Financial Institutions (Commissioner) and surety bonds must be filed with the Commissioner. This measure gives the Commissioner authority to expand the Division's uses of NMLS in accordance with the current practice of other states and better manage the licensure of mortgage servicers.

Your Committee further finds that, currently, the Commissioner may only issue proposed cease and desist orders, which have no immediate effect in the event that a licensee's violation is likely to cause immediate and irreparable harm to a consumer. Moreover, because the Commissioner also has no authority to enter into consent orders, administrative proceedings can last a number of years, wasting time and resources. This measure authorizes the Commissioner to enter into consent orders and issue cease and desist orders for violations for licensees and unlicensed persons, which will enable the Commissioner to quickly minimize consumer harm, expedite decisions, and save resources.

Your Committee has amended this measure by changing its effective date to upon approval.

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. 989, H.D. 1, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 989, 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