STAND. COM. REP. NO. 279-04

Honolulu, Hawaii

, 2004

RE: H.B. No. 2429

 

 

 

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Second State Legislature

Regular Session of 2004

State of Hawaii

Sir:

Your Committees on Consumer Protection and Commerce and Judiciary, to which was referred H.B. No. 2429 entitled:

"A BILL FOR AN ACT RELATING TO ESCROW DEPOSITORIES,"

beg leave to report as follows:

The purpose of this bill is to amend and update the law that governs the licensing and regulation of escrow depositories to:

(1) Recognize changes in the escrow depository industry in recent years;

(2) Reduce the regulatory burden on depositories; and

(3) Provide greater flexibility for the Division of Financial Institutions (Division) in supervising the industry, while continuing to ensure adequate protection for consumers who utilize the services of escrow depositories.

The major amendments to the escrow depositories law proposed by this bill include:

(1) Permitting limited liability companies to be licensed as escrow depositories;

(2) Strengthening the confidentiality provisions of the statute;

(3) Enabling the Division to scrutinize more closely the financial responsibility of proposed directors and officers of an applicant for a license as an escrow depository;

(4) Increasing the current escrow depository bond requirements;

(5) Requiring escrow depositories to disclose accounts that are not federally insured;

(6) Including provisions to establish procedures for the appointment of a receiver for an escrow depository, and to describe the powers of a receiver when such appointment is necessary; and

(7) Replacing the current application process for voluntary termination of escrow depository operations with a simplified notification procedure.

Testimony in support of this measure was received from the Department of Commerce and Consumer Affairs.

Your Committees find that a comprehensive update of the escrow depositories law in chapter 449, Hawaii Revised Statutes, has not been undertaken since the law was enacted in 1967.

As affirmed by the records of votes of the members of your Committees on Consumer Protection and Commerce and Judiciary that are attached to this report, your Committees are in accord with the intent and purpose of H.B. No. 2429 and recommend that it pass Second Reading and be referred to the Committee on Finance.

 

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

 

____________________________

ERIC G. HAMAKAWA, Chair

____________________________

KENNETH T. HIRAKI, Chair