THE SENATE

S.C.R. NO.

114

TWENTY-FIRST LEGISLATURE, 2002

 

STATE OF HAWAII

 
   


SENATE CONCURRENT

RESOLUTION

 

Requesting the director of commerce and consumer affairs to convene 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 in 1994 the Home Ownership and Equity Protection Act; and

WHEREAS, the Home Ownership and Equity Protection Act 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, the Home Ownership and Equity Protection Act is implemented by Regulation Z of the Federal Reserve Board; and

WHEREAS, the Home Ownership and Equity Protection Act authorizes the Federal Reserve Board to expand the Home Ownership and Equity Protection Act's coverage and to prohibit certain acts and practices in connection with mortgage lending; and

WHEREAS, in December, 2001, the Federal Reserve Board approved amendments to Regulation Z to:

(1) Extend the scope of mortgage loans subject to the Home Ownership and Equity Protection Act's protections;

(2) Restrict certain acts or practices;

(3) Strengthen the Home Ownership and Equity Protection Act's prohibition on loans based on a homeowner's equity without regard to repayment ability; and

(4) Enhance Home Ownership and Equity Protection Act disclosures received by consumers before closing loans;

and

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

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

WHEREAS, trade groups for Hawaii's mortgage lenders have condemned and are opposed to abusive mortgage lending practices; and

WHEREAS, the trade groups for Hawaii's mortgage lenders are 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 Senate of the Twenty-first Legislature of the State of Hawaii, Regular Session of 2002, the House of Representatives concurring, that the Director of Commerce and Consumer Affairs is requested to convene a task force on abusive mortgage lending practices; and

BE IT FURTHER RESOLVED that the Director is requested to serve as both a member and the Chair of the Task Force; and

BE IT FURTHER RESOLVED that the Director is requested to include in the Task Force representatives from the following organizations: 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, American Association of Retired Persons Hawaii, Legal Aid Society of Hawaii, and the International Longshoremen's and Warehousemen's Union Local 142; and

BE IT FURTHER RESOLVED that the Task Force is requested to:

(1) Define abusive mortgage lending practices consistent with this Concurrent Resolution and the Home Ownership and Equity Protection Act;

(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 jurisdictions without those enactments;

(d) The enforcement of current Hawaii and federal laws; 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 Abusive Mortgage Lending Practice 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, the American Association of Retired Persons Hawaii, the Legal Aid Society of Hawaii, and the International Longshoremen's and Warehousemen's Union Local 142.

 

 

 

OFFERED BY:

_____________________________

Report Title:

Abusive Mortgage Lending Practices Task Force