STAND. COM. REP. NO. 671

Honolulu, Hawaii

, 2005

RE: S.B. No. 108

S.D. 1

 

 

Honorable Robert Bunda

President of the Senate

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committee on Commerce, Consumer Protection, and Housing, to which was referred S.B. No. 108 entitled:

"A BILL FOR AN ACT RELATING TO MORTGAGE BROKERS AND SOLICITORS,"

begs leave to report as follows:

The purpose of this measure is to exempt time share sales agents from the licensure requirement for mortgage brokers and solicitors.

Pahio Resorts, Inc., Starwood Vacation Ownership, Marriott International, Inc., American Resort Development Association-Hawaii, Cendant Timeshare Resort Group, and Fairfield Resorts, Inc. testified in support of this measure. The Department of Commerce and Consumer Affairs opposed the measure.

This measure establishes an exemption from the mortgage broker and solicitor licensure requirement for a licensed real estate salesperson or broker who sells time share interests on behalf of a time share plan developer that is licensed as a mortgage broker.

Your Committee finds that the conduct of entities involved in time share sales is subject to regulation under the time share law and, additionally, under professional and vocational licensing laws; a time share plan developer is required to be licensed as a mortgage broker and a sales agent who sells time share interests on behalf of the developer is required to be licensed as a real estate salesperson or broker. This measure would avoid redundancy in licensing by exempting time share sales agents from the licensing requirement for mortgage brokers and solicitors.

Your Committee further finds that, notwithstanding the above, there continue to be concerns that time share sales consumers will not be adequately protected if sales agents are exempted from licensure as mortgage brokers or solicitors. Testimony was received that time share sales often involve the provision of financing through the developer, and as a mortgage broker, the developer is subject to compliance with certain federal consumer protection laws and other requirements in transacting the financing agreement. Under this measure, a consumer would not have recourse under the mortgage broker and solicitor law against a sales agent who failed to comply with the law's requirements.

To address these concerns, your Committee has amended this measure to provide that:

(1) The acts or conduct of a time share plan developer's authorized representative shall be deemed to be the acts or conduct of the developer for purposes of the mortgage brokers and solicitors license suspension and revocation law; and

(2) A real estate licensee who engages in conduct that is grounds for suspension of a mortgage broker or solicitor license is subject to disciplinary action under the real estate licensing law.

As affirmed by the record of votes of the members of your Committee on Commerce, Consumer Protection, and Housing that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 108, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 108, 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 Housing,

____________________________

RON MENOR, Chair