STAND. COM. REP. 503

Honolulu, Hawaii

, 2003

RE: H.B. No. 1438

H.D. 1

 

 

 

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Second State Legislature

Regular Session of 2003

State of Hawaii

Sir:

Your Committee on Human Services and Housing, to which was referred H.B. No. 1438 entitled:

"A BILL FOR AN ACT RELATING TO HOME LOAN PROTECTION,"

begs leave to report as follows:

The purpose of this bill is to protect consumers from predatory lenders by:

(1) Establishing the Hawaii Home Loan Protection Act (Act) to discourage predatory lending by prohibiting mortgage brokers, in connection with a home loan, from certain deceptive practices; and

(2) Establishing penalties for violation.

The Legal Aid Society of Hawaii, Kokua Council, ILWU Local 142, and Hawaii Coalition for Responsible Lending testified in support of this measure. The Hawaii Bankers Association, Mortgage Bankers Association of Hawaii, and Hawaii Association of Realtors opposed this measure. The Department of Commerce and Consumer Affairs provided comments.

Your Committee finds that many individuals, particularly on the Big Island, have been taken advantage of by predatory mortgage lenders. While there are some federal regulations in place, predatory lenders manage to skirt the regulations, and still be within the bounds of the law. Something must be done on the state level to supplement federal laws to protect our citizens.

Your Committee has amended this bill by:

(1) Incorporating many of the prohibited practices of this bill into chapter 454, Hawaii Revised Statutes, instead of creating a new chapter;

(2) Clarifying that prohibited practices would apply when a mortgage broker and solicitor is brokering a high cost home loan; and

(3) Specifying that a mortgage broker or solicitor may not solicit any mortgage loan, including a high cost home loan, door-to-door, and may not engage in acts of dishonesty on any mortgage loan.

Numerous technical, nonsubstantive amendments were also made for clarity, consistency, and style.

As affirmed by the record of votes of the members of your Committee on Human Services and Housing that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1438, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 1438, H.D. 1, and be referred to the Committees on Consumer Protection and Commerce and Judiciary.

Respectfully submitted on behalf of the members of the Committee on Human Services and Housing,

 

____________________________

MICHAEL PUAMAMO KAHIKINA, Chair