STAND. COM. REP. NO.254

Honolulu, Hawaii

, 2001

RE: H.B. No. 587

H.D. 1

 

 

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-First State Legislature

Regular Session of 2001

State of Hawaii

Sir:

Your Committee on Consumer Protection and Commerce, to which was referred H.B. No. 587, entitled:

"A BILL FOR AN ACT RELATING TO MORTGAGE BROKER LICENSING,"

begs leave to report as follows:

The purpose of this bill is to make housekeeping amendments to the current mortgage broker and solicitor licensing law.

Testimony in support of this measure was submitted by the Department of Commerce and Consumer Affairs (DCCA).

Among other things, this bill reduces the bond requirement for mortgage brokers from $50,000 to $15,000. Existing law requires mortgage brokers to post a $50,000 bond to do business in the State as a surety. The requirement may be reduced to $15,000 if the broker does not engage in mortgage servicing or collecting. DCCA stated that the $50,000 bond requirement mirrored the $50,000 bond requirement for real estate collection servicing agents (agents). However, there no longer is a need for conformity because the $50,000 bond requirement for agents was repealed by Act 254, Session Laws of Hawaii 1999.

This bill repeals obsolete licensing fees for mortgage brokers and solicitors, and instead provides for fees to be established by the Director of Commerce and Consumer Affairs by rule. In addition, this bill changes the licensing renewal cycle from an annual to a biennial cycle to streamline the administrative process.

Your Committee finds that licensed areas with a financial impact on consumers typically mandate financial integrity as a licensing requirement. To better protect consumers, this bill provides for a two-year experience requirement for the designated principal mortgage solicitor.

Existing law allows a license to be suspended for a period not exceeding two years, which conflicts with section 92-17, HRS. This bill aligns mortgage broker and solicitor licensing requirements with other professions by providing for a five-year license suspension and revocation period.

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

As affirmed by the record of votes of the members of your Committee on Consumer Protection and Commerce that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 587, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 587, H.D. 1, and be placed on the calendar for Third Reading.

 

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

____________________________

KENNETH T. HIRAKI, Chair