HOUSE OF REPRESENTATIVES

H.C.R. NO.

211

TWENTY-FIRST LEGISLATURE, 2002

 

STATE OF HAWAII

 
   


HOUSE CONCURRENT

RESOLUTION

 

Requesting the convening of a task force on abusive mortgage lending practices.

 

 

WHEREAS, abusive mortgage lending practices involve fraud, deception, and unfairness; and

WHEREAS, in response to anecdotal evidence about abusive mortgage lending practices involving home-secured loans, Congress enacted the Home Ownership and Equity Protection Act (HOEPA) in 1994; and

WHEREAS, HOEPA identifies a class of high-cost mortgage loans through rate and fee-based triggers and provides consumers entering into these transactions with special protections including disclosures; and

WHEREAS, HOEPA is implemented by Regulation Z of the Federal Reserve Board; and

WHEREAS, HOEPA authorizes the Federal Reserve Board (FRB) to expand HOEPA's coverage and to prohibit certain acts and practices in connection with mortgage lending; and

WHEREAS, in December, 2001, FRB approved amendments to Regulation Z to:

(1) Extend the scope of mortgage loans subject to HOEPA's protections;

(2) Restrict certain acts or practices;

(3) Strengthen HOEPA's prohibition on loans based on homeowners' equity without regard to repayment ability; and

(4) Enhance HOEPA disclosures received by consumers before closing loans;

and

WHEREAS, compliance with these amendments becomes mandatory on October 1, 2002; and

WHEREAS, there has been some anecdotal allegations of some unspecified past instances of abusive mortgage lending practices in Hawaii; and

WHEREAS, the trade groups for Hawaii's mortgage lenders have condemned and are opposed to abusive mortgage lending practices and are currently working on the issue of abusive mortgage lending practices in Hawaii; and

WHEREAS, in Hawaii, there are numerous laws governing mortgage lending; now, therefore,

BE IT RESOLVED by the House of Representatives of the Twenty-first Legislature of the State of Hawaii, Regular Session of 2002, the Senate concurring, that the Director of Commerce and Consumer Affairs is requested to convene a task force on abusive mortgage lending practices, to be known as the Abusive Mortgage Lending Practices Task Force (Task Force), with the Director serving as both member and chair of the Task Force; and

BE IT FURTHER RESOLVED that the Task Force members include a representative from the Department of Business, Economic Development, and Tourism; Hawaii Bankers Association; Hawaii Credit Union League; Hawaii Financial Services Association; Hawaii Mortgage Brokers Association; Mortgage Bankers Association of Hawaii; Federal National Mortgage Association; Federal Home Loan Mortgage Corporation; Hawaii Association of Realtors; AARP Hawaii; Legal Aid Society of Hawaii; and ILWU Local 142; and

BE IT FURTHER RESOLVED that the Task Force seek input to:

(1) Define abusive mortgage lending practices consistent with this Concurrent Resolution and HOEPA;

(2) Determine the extent and impact of any current abusive mortgage lending practices in Hawaii;

(3) Identify, evaluate, and assess:

(a) Statutory and regulatory remedies which currently exist in Hawaii and at the federal level;

(b) Statutory and regulatory remedies enacted in other states and jurisdictions;

(c) The effect those enactments have had on the availability of credit and the mortgage lending industry, as compared to those jurisdictions without those enactments;

(d) The enforcement of current Hawaii and federal law; and

(e) Public education efforts regarding abusive mortgage lending practices;

and

(4) Make recommendations to deter any abusive mortgage lending practices in Hawaii without negatively affecting the availability of credit or the mortgage lending industry;

and

BE IT FURTHER RESOLVED that the Task Force is requested to submit a report of its findings and recommendations, including any proposed legislation, to the Legislature no later than November 1, 2002; and

BE IT FURTHER RESOLVED that certified copies of this Concurrent Resolution be transmitted to the Director of Commerce and Consumer Affairs; the Director of Business, Economic Development, and Tourism; the Hawaii Bankers Association; the Hawaii Credit Union League; the Hawaii Financial Services Association; the Hawaii Mortgage Brokers Association; the Mortgage Bankers Association of Hawaii; the Federal National Mortgage Association; the Federal Home Loan Mortgage Corporation; the Hawaii Association of Realtors; AARP Hawaii; the Legal Aid Society of Hawaii; and the ILWU Local 142.

 

 

OFFERED BY:

_____________________________

Report Title:

Requesting the convening of a task force on abusive mortgage lending practices.