STAND. COM. REP. NO. 661

Honolulu, Hawaii

RE: S.B. No. 973

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-First State Legislature

Regular Session of 2021

State of Hawaii

Sir:

Your Committee on Judiciary, to which was referred S.B. No. 973, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO HAWAII MONEY TRANSMITTER ACT,"

begs leave to report as follows:

The purpose and intent of this measure is to amend the Hawaii Money Transmitters Act by:

(1) Incorporating definitions of key terms provided in the Model Money Services Business Law published by the Conference of State Bank Supervisors;

(2) Adding supporting documentation to be submitted by a license applicant;

(3) Extending the period of a license applicant's litigation and criminal conviction history review from five to ten years from the date of the application;

(4) Requiring a license applicant to submit information concerning any bankruptcy or receivership proceedings; and

(5) Clarifying the authority of the Commissioner of Financial Institutions relating to examinations and investigations of licensees and to participate in nationwide protocols for licensing cooperation.

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

Your Committee finds that existing law does not provide sufficient flexibility for Hawai‘i to share supervisory information with other states to swiftly protect consumers who use money transmission companies. Furthermore, instantaneous global money transmission activity necessitates additional oversight of money transmitters to provide appropriate consumer protection, establish barriers to the entry of bad actors, and facilitate coordination among state agencies. The Division of Financial Institutions needs more flexibility to share supervisory information with other states to swiftly protect consumers who use money transmission companies. Therefore, this measure adopts certain model act provisions to allow Hawai‘i to retain its state sovereignty while working alongside a network of states to license, supervise, and examine transglobal money transmission companies as a multi-state system to provide financial stability and economic growth while better protecting consumers.

As affirmed by the record of votes of the members of your Committee on Judiciary that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 973, S.D. 1, and recommends that it pass Third Reading.

Respectfully submitted on behalf of the members of the Committee on Judiciary,

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KARL RHOADS, Chair