With all the bad news about the global economy, it's hard not to think about the future. Predatory mortgage lenders, 100 percent financing defaults, interest-only loans gone bad, the government takeover of Freddie Mac and Fannie Mae, signs that AIG might sell its Hawai'i unit to help pay off an emergency $85 billion federal loan, are among the forces impacting our national and global economy.

Since many citizens are wondering how these factors, all of which are outside of our control, will affect us here at home, we want to share how the state Department of Commerce and Consumer Affairs is dealing with our financial institutions, the securities industry and insurance companies. While it's hard to predict what's next for our economy, state regulators are continuously monitoring how Hawai'i is being affected, and looking at how to best protect Hawai'i's consumers.

First, a closer look at the state's banking industry shows that Hawai'i's exposure to subprime and other nontraditional mortgage products is much less than that of Mainland states. In general, Hawai'i borrowers were cautious and wisely avoided risky lending options. While we have experienced foreclosures, they have not occurred at the rate seen in places such as California and Nevada. Local outreach efforts by government agencies and not-for-profits are providing assistance to Hawai'i consumers who have been affected.

Hawai'i banks are well-capitalized and, unlike Mainland institutions, are actively seeking new loan business from qualified borrowers in both commercial and consumer sectors. Terms are good and interest rates are at competitive levels. The Federal Deposit Insurance Corporation increased the amount of deposit insurance coverage available for banks from $100,000 to $250,000 per depositor. The National Credit Union Share Insurance Fund increased its share insurance coverage for credit unions to $250,000 as well. The state Division of Financial Institutions continues to work closely with Hawai'i's financial institutions, the FDIC, the Federal Reserve, and local outreach and assistance groups to support Hawai'i residents and business enterprises.

Second, on the state securities side, the Office of the Securities Commissioner regulates broker-dealers, their salespeople, and investment advisers and their representatives who are either in Hawai'i or advise or sell to consumers in Hawai'i. If there is a securities violation of sales practices, advising practices or failure to register, we have investigators and attorneys who investigate, review and prosecute cases. We continue to work closely with the Securities and Exchange Commission and with Financial Industry Regulatory Authority regarding securities violations that affect Hawai'i.

A good example of our collaborative efforts is the recent global settlements against banks with respect to auction rate securities. As part of the current financial crisis, the auction rate securities markets began freezing up early this year, locking up investors' money to the tune of $400 billion nationally, including millions from Hawai'i investors. The Hawai'i Office of the Securities Commissioner worked with the North American Securities Administrators Association, the leading association for state securities regulators, to investigate the banks, broker-dealers, investment advisers and their representatives regarding these securities. As a result, Citibank, JP Morgan, UBS and others have agreed to return investors' money within the next several months — a welcome resolution for Hawai'i investors.

DCCA also created an investor education program to inform the public about fraud and careful investing and to give them the tools to make investment decisions cautiously in light of their long-term financial goals and to fully understand any product in which they invest.

Third, as it relates to the state's insurance industry, many people are concerned about AIG Hawai'i since the U.S. Treasury intervened with an $85 billion bridge loan. AIG Hawai'i and its sister, American Pacific Insurance Co., are both in solid financial shape, as are the other insurance subsidiaries of AIG. The problem that Treasury addressed had to do with the AIG financial services entities, which are separate from the insurance companies and are regulated by the federal Office of Thrift Supervision. Nevertheless, the state's Insurance Division is closely monitoring the situation and working with insurance regulators across the nation to ensure Hawai'i's people are protected.

The Insurance Division has been working hard to reduce burdens on Hawai'i's citizens and businesses by reducing assessments on insurance companies and the fees charged against agents and others insurance professionals. Working with the Department of Labor and Industrial Relations and employers, we have helped make Hawai'i workplaces safer while reducing the costs of doing business, resulting in a 61 percent reduction in workers compensation insurance premiums over the past four years. This savings is a significant benefit to Hawai'i's businesses and their customers.

It used to take a year or more for an insurance company to get licensed and there was a backlog of more than 150 companies waiting to sell insurance in Hawai'i. It now takes 60 to 90 days and there is no backlog.

As a result, this year alone we've welcomed 27 new companies eager to do business in Hawai'i. Over the last five years, we have welcomed new companies in areas where it was difficult to find coverage, such as health insurance and commercial liability insurance. We have admitted six new hurricane insurers in the last two years. These companies provide a more competitive market resulting in more choices, lower premiums and better service for consumers. We have been able to bring real reductions in the insurance expenses that every person and every business in Hawai'i faces.

By keeping our eyes on the economy as a whole, making government more efficient and providing a good business environment, we will continue to reduce the cost of living and doing business, ease the impacts of the national economy on Hawai'i's economy, and lay a solid foundation for Hawai'i's future.

Nick Griffin is Hawai'i financial institutions commissioner, Tung Chan is Hawai'i state securities commissioner and J.P. Schmidt is Hawai'i insurance commissioner. They wrote this commentary for The Advertiser.