STAND. COM. REP. NO. 956-22

Honolulu, Hawaii

, 2022

RE: H.B. No. 2113

H.D. 2

Honorable Scott K. Saiki

Speaker, House of Representatives

Thirty-First State Legislature

Regular Session of 2022

State of Hawaii

Sir:

Your Committee on Judiciary & Hawaiian Affairs, to which was referred H.B. No. 2113, H.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO MONEY TRANSMITTERS,"

begs leave to report as follows:

The purpose of this measure is to minimize the regulatory burden and eliminate redundancy by permitting money transmitter applicants to submit to either a state or federal criminal history record check, rather than both.

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

Your Committee finds that the majority of states only require a federal criminal history background review since states are reporters to the national criminal background database. Hawaii has been a reporter to the national criminal history background database for the past seven years. Since learning that the State was a reporter to the national database, the Department of Commerce and Consumer Affairs' Division of Financial Institutions reviewed parallel state and federal criminal history background reviews and found no discrepancies on disqualifying crimes.

Your Committee further finds that NMLS is the sole nationwide platform that provides information-sharing among state regulators to increase efficiencies for supervision and enhance consumer protection. The cloud-based system provides state agencies with access to up-to-date criminal history records from the national database and helps ensure that persons in a position of trust meet established standards to protect consumers and businesses.

This measure streamlines the process for money transmitter applicants by requiring a criminal history record check through either NMLS or the state review.

Your Committee has amended this measure by making a technical, nonsubstantive amendment for the purposes of clarity, consistency, and style.

As affirmed by the record of votes of the members of your Committee on Judiciary & Hawaiian Affairs that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 2113, H.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as H.B. No. 2113, H.D. 2.

Respectfully submitted on behalf of the members of the Committee on Judiciary & Hawaiian Affairs,

____________________________

MARK M. NAKASHIMA, Chair