Honolulu, Hawaii
                                                   , 1999

                                 RE: S.B. No. 1124
                                     S.D. 2
                                     H.D. 1

Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 1999
State of Hawaii


     Your Committee on Consumer Protection and Commerce, to which
was referred S.B. No. 1124, S.D. 2, entitled: 


begs leave to report as follows:

     The purpose of this bill is to eliminate the prohibitions on
de novo interstate branching and on partial acquisition of
branches by out-of-state banks, and to eliminate the five-year
age requirement for whole bank acquisitions.

     Testimony in support of this bill was received from the
Department of Commerce and Consumer Affairs (DCCA) and Bank of
Hawaii.  Hawaii National Bank provided comments and proposed an
amendment to insert a sunset date of June 1, 2002 to allow the
community banks to implement strategies to compete with out-of-
state branch banks.

     Your Committee finds that a progressive and open approach to
interstate banking is in the best interest of this State and its
residents, insofar as it creates an open business climate and a
wider array of financial products and services for consumers.  At
the same time, your Committee believes it is important to
consider the effect of such competition on our local banking

                                 STAND. COM. REP. NO. 1222
                                 Page 2

     Your Committee notes that this bill is similar to H.B. No.
1062, H.D. 1, which passed out of your Committee earlier this
session. The substantive difference is that the House bill
provides for the Act to take effect on June 1, 2010, while the
Senate bill takes effect upon approval.  Your Committee had
postponed the effective date to allow the Legislature ample time
to evaluate the full ramifications of this measure.  In order to
facilitate further discussion, your Committee has amended this
Senate bill to replace its contents with that of H.B No. 1062,
H.D. 1.  

     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 S.B. No. 1124, S.D. 2, as amended herein, and
recommends that it pass Second Reading in the form attached
hereto as S.B. No. 1124, S.D. 2, H.D. 1, and be referred to the
Committee on Finance.

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

                                   RON MENOR, Chair