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THE SENATE |
S.B. NO. |
1262 |
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TWENTY-EIGHTH LEGISLATURE, 2015 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
relating to the secure and fair enforcement for mortgage licensing act.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds that the existing definition of "sole proprietorship" under chapter 454F, Hawaii Revised Statutes, does not adequately reflect the structure of some businesses regulated by this chapter, as some licensees under chapter 454F, Hawaii Revised Statutes, may be the only licensee for a sole proprietorship but may operate in other allowed business organizations, such as a limited liability corporation.
The legislature further finds that current provisions in chapter 454F, Hawaii Revised Statutes, require offices to be open for the entirety of regular business hours. However, this requirement does not reflect the operations of the industry or meet the needs of customers and the public, who may prefer to meet out of the business location or outside of regular business hours.
The legislature additionally finds that the mortgage loan recovery fund was established in 2010 to bring the State into compliance with the federal Secure and Fair Enforcement for Mortgage Licensing Act of 2008. The fund was designed to protect the State's consumers by making it easier to recover losses caused by individuals or companies that violate the law governing fair mortgage practices. Initially, the goal was to collect and hold in reserve $750,000. However, according to the most recent report to the legislature, there is now more than $1,100,000 in the fund. The legislature finds that the target fund balance should be raised to $1,000,000, but is concerned with the continued collection of fees, which have not been adjusted since the fund was established, to fund the balance beyond the $1,000,000 target.
The purpose of this Act is to:
(1) Amend the definition of "sole proprietorship";
(2) Clarify that mortgage loan originator companies may post language specifying that members of the public may be seen by appointment during posted business hours; and
(3) Raise the target balance of the mortgage loan recovery fund and require the insurance commissioner to adjust the assessed mortgage loan recovery fund fee once the target balance is reached.
SECTION 2. Section 454F-1, Hawaii Revised Statutes, is amended by amending the definition of "sole proprietorship" to read as follows:
""Sole proprietorship"
means a mortgage loan originator business that is solely and personally owned
and operated by an individual mortgage loan originator[, and where there is
no legal distinction between the individual business owner and the business]."
SECTION 3. Section 454F-10.5, Hawaii Revised Statutes, is amended by amending subsection (g) to read as follows:
"(g) The principal place of business and each branch office of the
mortgage loan originator company shall be identified in NMLS to consumers as a
location at which the licensee holds itself out as a mortgage loan originator
company. Each such location shall be open for business to the public during
posted business hours [which]; provided that the mortgage loan
originator company may also post language that specifies that members of the
public are seen by appointment during posted business hours. Posted business
hours shall be during regular business hours. If a location is in a
commercial building, then the business hours shall be posted on or adjacent to
the main office door of the mortgage loan originator company's location, and visible
to the public from outside the location. If a location is not in a commercial
building, or such posting is not permitted by the commercial building, then the
business hours shall be posted on the home page of the mortgage loan originator
company's website, along with the address and phone number of the location.
Business hours, whether posted at a location or on a mortgage loan originator
company website, shall be displayed in a clear, conspicuous, and accurate
manner to inform the consumer when the location will be open."
SECTION 4. Section 454F-41, Hawaii Revised Statutes, is amended by amending subsection (d) to read as follows:
"(d) When the mortgage loan recovery fund attains a funding level
of [$750,000,] $1,000,000, the commissioner [may, by rule
adopted pursuant to chapter 91,] shall cease collection of mortgage loan
recovery fees for renewing licensees until such time as the funding level falls
below $750,000. At that time, the commissioner shall adjust the fees
generated by renewals [or may determine that payments made by renewing
licensees shall cease.] to replenish the fund to attain a funding level
of at least $750,000 but no more than $1,000,000. If the funding level
falls below $250,000 after the first five years of the establishment of the
fund, the commissioner may adjust the fees to a reasonable level for the
purpose of attaining a funding level of $750,000."
SECTION 5. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 6. This Act shall take effect upon its approval.
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INTRODUCED BY: |
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Report Title:
Secure and Fair Enforcement for Mortgage Licensing; Sole Proprietorship; Mortgage Loan Originator Companies; Business Hours; Mortgage Loan Recovery Fund
Description:
Amends the definition of "sole proprietorship". Clarifies that mortgage loan originator companies may post language specifying that members of the public may be seen by appointment during posted business hours. Raises the target balance of the mortgage loan recovery fund and requires the insurance commissioner to adjust the assessed mortgage loan recovery fund fee once the target balance is reached.
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.