STAND. COM. REP. NO. 3468
RE: H.B. No. 2323
Honorable Ronald D. Kouchi
President of the Senate
Thirtieth State Legislature
Regular Session of 2020
State of Hawaii
Your Committee on Commerce, Consumer Protection, and Health, to which was referred H.B. No. 2323, H.D. 2, entitled:
"A BILL FOR AN ACT RELATING TO THE MORTGAGE LOAN RECOVERY FUND,"
begs leave to report as follows:
The purpose and intent of this measure is to:
(1) Expand the pool of persons eligible to receive restitution from the Mortgage Loan Recovery Fund; and
(2) Authorize the Director of Commerce and Consumer Affairs to issue orders of restitution.
Your Committee received testimony in support of this measure from the Department of Commerce and Consumer Affairs.
Your Committee finds that under existing law, a person aggrieved by a licensee's fraud, misrepresentation, or deceit must obtain a judgment against the licensee in circuit or district court and then obtain an order from the court for payment from the Mortgage Loan Recovery Fund (Fund). This measure simplifies the process by allowing payments based on the entry of the order, without a separate post-judgment order.
Your Committee notes the concerns raised in the testimony of the Department of Commerce and Consumer Affairs that this measure, as written, creates confusion for consumers seeking recovery from the Fund because it appears to provide that aggrieved consumers can either go to court and get a judgment or make a claim with the Director of the Department of Commerce and Consumer Affairs. Further, this measure does not expand the pool of individuals eligible for payment from the Fund, as intended, because it does not include consumers who are entitled to restitution based on a finding of a regulatory calculation error made by the licensee, which does not require a finding a fraud, misrepresentation, or deceit. Your Committee further notes that the companion to this measure, S.B. No. 2879, S.D. 1, addresses the concerns raised in testimony and that its language is preferable.
Accordingly, your Committee has amended this measure by clarifying that any person aggrieved by a licensee's act, representation, transaction, or conduct in violation of chapter 454F, Hawaii Revised Statutes, and not involving an act of fraud, misrepresentation, or deceit, may receive restitution by order of the Commissioner of Financial Institutions.
As affirmed by the record of votes of the members of your Committee on Commerce, Consumer Protection, and Health that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 2323, H.D. 2, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 2323, H.D. 2, S.D. 1, and be referred to your Committees on Judiciary and Ways and Means.
Respectfully submitted on behalf of the members of the Committee on Commerce, Consumer Protection, and Health,
ROSALYN H. BAKER, Chair