Honolulu, Hawaii
                                                     , 1999

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

Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 1999
State of Hawaii


     Your Committee on Ways and Means, to which was referred S.B.
No. 1124, S.D. 1, entitled: 


begs leave to report as follows:

     The purpose of this bill is to allow an out-of-state bank to
establish a de novo interstate branch or acquire an interstate
branch in Hawaii if certain conditions are met.

     In addition, this bill deletes the requirement that
prohibits an interstate merger transaction resulting in the
acquisition by an out-of-state bank of a Hawaii state bank, or of
all or substantially all of the branches of a Hawaii state bank,
unless the Hawaii state bank has been in continuous operation, on
the date of the acquisition, for a period of at least five years.

     Your Committee agrees with the intent of this bill, and
finds that banks operating through the internet, direct mail, and
the telephone, already have access to Hawaii consumers, but are
not subject to the regulatory measures governing financial
institutions domiciled in Hawaii.  Your Committee finds that
permitting out-of-state banks to establish or acquire interstate
branches in this State subject to their compliance with the
requirements of the laws of this State will allow out-of-state

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banks to compete on a direct level with local financial
institutions while under the regulatory scrutiny of the State.

     Your Committee has further amended the bill to make
technical nonsubstantive changes for the purposes of clarity and

     As affirmed by the record of votes of the members of your
Committee on Ways and Means that is attached to this report, your
Committee is in accord with the intent and purpose of S.B. No.
1124, S.D. 1, as amended herein, and recommends that it pass
Third Reading in the form attached hereto as S.B. No. 1124,
S.D. 2.

                                 Respectfully submitted on behalf
                                 of the members of the Committee
                                 on Ways and Means,

                                 CAROL FUKUNAGA, Co-Chair

                                 ANDREW LEVIN, Co-Chair

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