STAND. COM. REP. NO. 2947

Honolulu, Hawaii

RE: S.B. No. 2879

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirtieth State Legislature

Regular Session of 2020

State of Hawaii

Sir:

Your Committee on Commerce, Consumer Protection, and Health, to which was referred S.B. No. 2879 entitled:

"A BILL FOR AN ACT RELATING TO THE MORTGAGE LOAN RECOVERY FUND,"

begs leave to report as follows:

The purpose and intent of this measure is to expand the pool of persons eligible to receive restitution from the Mortgage Loan Recovery Fund.

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

Your Committee finds that existing law requires aggrieved persons to obtain a judgment against a licensee and then obtain an order from the court for payment from the Mortgage Loan Recovery Fund. This measure simplifies this process and gives the Commissioner of Financial Institutions authorization to provide payments based upon the entry of judgment, without a separate post-judgment order.

Your Committee further finds that existing law allows the Commissioner of Financial Institutions to order a licensee to make restitution payments directly to consumers when the Division of Financial Institutions finds a regulatory calculation error during an examination or investigation of the licensee. In these instances, because the check comes directly from the licensee, consumers often do not cash these checks because the consumer has not heard from the licensee in a number of years and the check is therefore unexpected, or the consumer believes the check is fraudulent or part of a scam. This measure authorizes the Division of Financial Institutions to pay restitution of up to $25,000 to the affected consumer from the fund, rather than require the consumer to receive payment from the licensee, as consumers are more likely to deposit restitution checks that originate from the State with an explanation letter.

Your Committee has amended this measure by making technical, nonsubstantive amendments for 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. 2879, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 2879, S.D. 1, and be placed on the calendar for Third Reading.

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

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ROSALYN H. BAKER, Chair