Bill Text: HI SB646 | 2011 | Regular Session | Amended
Bill Title: Escrow Depositories; Nationwide Mortgage Licensing System Unique Identifier
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Engrossed - Dead) 2011-03-14 - (H) The committee(s) recommends that the measure be deferred. [SB646 Detail]
Download: Hawaii-2011-SB646-Amended.html
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THE SENATE |
S.B. NO. |
646 |
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TWENTY-SIXTH LEGISLATURE, 2011 |
S.D. 1 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
RELATING TO ESCROW DEPOSITORIES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. Chapter 449, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:
"§449- Nationwide Mortgage Licensing System unique identifier required; reporting requirement. (a) In every real estate transaction involving an escrow depository and a person required by chapter 454F to maintain a unique identifier through the Nationwide Mortgage Licensing System, an escrow depository shall require that the person include the person's unique identifier on all residential mortgage loan applications submitted to the escrow depository. An escrow depository shall not accept any documents subject to this section that do not include the required unique identifier.
(b) A person acting as an escrow depository shall verify the validity of the unique identifier included on residential mortgage loan applications subject to this section. If a document includes a unique identifier that is not current and valid, the person acting as an escrow depository shall report the name of the person who submitted the residential mortgage loan application and the purported unique identifier to the commissioner within five days of verification."
SECTION 2. Section 449-1, Hawaii Revised Statutes, is amended by adding a new definition to be appropriately inserted and to read as follows:
""Unique identifier" means the unique identifier issued by the Nationwide Mortgage Licensing System and required for all persons subject to section 454F-1.5."
SECTION 3. Section 449-15, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:
"(b) The audited financial statements shall be prepared in accordance with generally accepted accounting principles and the examination by the independent certified public accountant shall be performed in accordance with generally accepted auditing standards. The financial statements and the independent certified public accountant's report required by this section shall include but not be limited to the following:
(1) An unqualified opinion on the fair presentation
of the financial statements taken as a whole[. To]; provided that to
the extent that this is not possible, then a detailed footnote explaining the
reason why an unqualified opinion could not be given shall suffice;
(2) A direct verification of escrow funds and escrow
liabilities[. If]; provided that if less than a one hundred per
cent verification is performed, there shall be a separate letter from the
independent certified public accountant indicating: the number of accounts
verified; the percentage of the verification; the basis for determining the
sample size; the method used in selecting the sample items to verify; a
description of the sampling technique used; the discrepancies noted; and how
the discrepancies were resolved;
(3) Footnotes to the audited financial statement
showing the escrow funds and escrow liabilities and, to the extent that these
amounts differ, a reconciliation of the amounts; [and]
(4) A listing of all information regarding unique identifiers reported to the commissioner pursuant to section 449- and the date that the information was reported; and
[(4)] (5) A statement as to whether the
escrow depository is in compliance with this chapter[. If]; provided
that if the independent certified public accountant reports any incident involving
noncompliance, the statement shall address whether the noncompliance may have a
material adverse impact on the ongoing operations of the company."
SECTION 4. Section 449-17, Hawaii Revised Statutes, is amended to read as follows:
"§449-17 Revocation and suspension of licenses. The commissioner may revoke any license issued hereunder, or suspend the right of the licensee to use the license, for any of the following causes:
(1) Making any misrepresentation concerning any escrow transaction;
(2) Making any false promises concerning any escrow transaction of a character likely to mislead another;
(3) Pursuing a continued and flagrant course of misrepresentation, or making of false promises, through advertising or otherwise;
(4) Without first having obtained the written consent so to do of both parties involved in any escrow transaction, acting for both parties in connection with such transaction, or collecting or attempting to collect commissions or other compensation for its services from both of the parties;
(5) Failing, within a reasonable time, to account for any moneys belonging to others which may be in the possession or under the control of the licensee;
(6) Any other conduct constituting fraudulent or dishonest dealings;
(7) Violating any of the provisions of this chapter or the rules promulgated pursuant thereto;
(8) Splitting fees with or otherwise compensating others not licensed hereunder for referring business;
(9) Commingling the moneys or other property of others with its own;
(10) Engaging in an unsafe or unsound practice that is likely to cause insolvency or substantial dissipation of assets or earnings of the licensee;
(11) Failing to maintain books and records that are
sufficiently complete and accurate so as to permit the commissioner to
determine the financial condition of the licensee; [and]
(12) Ceasing, for a period of six consecutive months
or more, to engage in the business for which its license was granted[.];
(13) Knowingly failing to report a unique identifier that does not correspond to a person licensed pursuant to chapter 454F that is included on a residential mortgage loan application as required by section 449‑ ; and
(14) Knowingly failing to verify a unique identifier that is included on a residential mortgage loan application as required by section 449- .
No license shall be suspended for longer than five years and no corporation whose license has been revoked shall be eligible to apply for a new license until the expiration of five years."
SECTION 5. Section 449-24, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:
"(b) [Nothing in this section shall
preclude the commissioner at any time from seeking any relief or sanction from
the courts that may otherwise be permitted by law.] To ensure the
effective supervision of licensees and enforcement of this chapter, the
commissioner may, pursuant to chapter 91, issue orders or directives to:
(1) Order or direct any person subject to this chapter to cease and desist the conduct of business, including through an immediate temporary order to cease and desist;
(2) Order or direct any person subject to this chapter to cease any harmful activities or violations of this chapter, including through an immediate temporary order to cease and desist harmful activities or violations;
(3) Enter an immediate temporary order to cease doing business under a license granted pursuant to this chapter if the commissioner determines that the license was granted erroneously or that the licensee is currently in violation of this chapter; and
(4) Order or direct any other affirmative action that the commissioner deems necessary."
SECTION 6. Section 454F-19, Hawaii Revised Statutes, is amended to read as follows:
"§454F-19 Unique identifier shown. (a) The unique identifier of any person originating a residential mortgage loan, except a person who is exempt from this chapter, shall be clearly shown on all residential mortgage loan application forms, solicitations, or advertisements, including business cards or websites, and any other documents as established by rule or order of the commissioner.
(b) Every person subject to section 454F-1.5 shall include the person's unique identifier on each residential mortgage loan application submitted to an escrow depository in every real estate transaction involving an escrow depository."
SECTION 7. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 8. This Act shall take effect on July 1, 2050.
Report Title:
Escrow Depositories; Nationwide Mortgage Licensing System Unique Identifier
Description:
Requires every person subject to section 454F-1.5 to include the person's unique identifier on every residential mortgage loan application submitted to an escrow depository in a real estate transaction; requires escrow depositories to report invalid unique identifiers to the commissioner of financial institutions. Effective 7/1/2050. (SD1)
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
