SB 1366 Hawaii Senate · 2025 Regular Session

RELATING TO INTEREST ON INSURANCE PROCEEDS RELATED TO A MORTGAGE LOAN.

Summary

Requires licensed mortgage servicers and financial institutions to pay interest on insurance proceeds held for the benefit of consumers. Provides that a fee shall not be charged to the borrower in connection with the maintenance or disbursement of interest earned from interest-bearing accounts. Effective 7/1/2050. (SD1)

Bill status passed 3 of 5 stages cleared

Introduction

Jan 2025

Committee Review

Mar 2025

Senate Passage

Mar 2025

House Passage

Governor

Introduced Jan 21, 2025 Last action Mar 6, 2025

Maddy AI version diff · 1 comparison

What changed between versions

SB1366 → SB1366_SD1 · 8 edits

MODERATE

The bill was expanded from a standalone interest-on-insurance-proceeds measure into a comprehensive mortgage servicer reform package. The original version focused solely on requiring financial institutions to pay interest on insurance proceeds held for rebuilding, while the new version adds extensive consumer protection requirements for mortgage servicers including improved payment processing, escrow management, fee transparency, complaint resolution, and detailed reporting obligations.

Scope change

The bill's scope expanded from applying only to Hawaii financial institutions handling insurance proceeds to applying broadly to all mortgage servicers with additional duties covering payment handling, escrow accounts, fee disclosures, consumer complaints, and annual reporting requirements.

REQUIREMENT

New requirements for mortgage servicers to handle payments within three business days if they accept non-conforming payments, and to credit late payments before collecting late fees.

Mandatory escrow account analysis and written explanation to borrowers before seeking repayment of escrow shortages, with option to pay over one year without interest.

New fee transparency requirements requiring servicers to maintain and publish schedules of fees with plain English explanations, and restrictions on when fees can be collected.

Enhanced consumer complaint resolution system requirements and obligation to provide borrower contact information for loan owners within ten business days.

New payoff statement requirements providing borrowers with total payoff amounts within five business days of request, with fee restrictions.

Mandatory annual reporting to the commissioner including loan volume, delinquency breakdowns, loss mitigation activities, foreclosure information, and servicer affiliations.

ELIGIBILITY

Expanded applicability from only Hawaii financial institutions to all mortgage servicers licensed or acting under the chapter, with additional requirements for servicers operating in Hawaii.

TIMELINE

Effective date changed from original unspecified date to July 1, 2050.

Floor votes

How they voted

This bill passed the Senate by voice vote (no roll call recorded).

Full legislative history

Actions timeline

Total actions

Key actions

Committee

Mar 6, 2025

Committee

Referred to CPC, FIN, referral sheet 19

lower

Mar 4, 2025

Introduced

Received from Senate (Sen. Com. No. 313) in amended form (SD 1).

lower

Mar 4, 2025

Upper · Passed

Passed Third Reading, as amended (SD 1). Ayes, 25; Aye(s) with reservations: none . Noes, 0 (none). Excused, 0 (none). Transmitted to House.

upper

Feb 14, 2025

Upper · Passed

The committee(s) on CPN recommend(s) that the measure be PASSED, WITH AMENDMENTS. The votes in CPN were as follows: 5 Aye(s): Senator(s) Keohokalole, Fukunaga, McKelvey, Richards, Awa; Aye(s) with reservations: none ; 0 No(es): none; and 0 Excused: none.

upper

Feb 10, 2025

Upper · Passed

The committee(s) on CPN has scheduled a public hearing on 02-14-25 9:30AM; Conference Room 229 & Videoconference.

upper

Jan 27, 2025

Committee

Referred to CPN.

upper

Jan 23, 2025

Introduced

Introduced and passed First Reading.

upper

Jan 21, 2025

Introduced

Pending Introduction.

upper

1 primary · 0 co-sponsors