Report Title:

Check Cashing

 

Description:

Removes 7/1/01 sunset from the check cashing law, authorizes check cashing for more than 1 check in a deferral period, increases the fee for returned checks, and makes clarifying amendments.

 

HOUSE OF REPRESENTATIVES

H.B. NO.

56

TWENTY-FIRST LEGISLATURE, 2001

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

RELATING TO CHECK CASHING.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. Act 146, Session Laws of Hawaii 1999, is amended as follows:

1. By amending sections    –3 and    –4 of section 1 of the Act to read:

"§ -3 Authorized fees. Except as provided in section    -4, with regard to checks as defined under section    -1, no check casher shall charge fees in excess of the following amounts:

(1) Five per cent of the face amount of the check or $5, whichever is greater;

(2) Three per cent of the face amount of the check or $5, whichever is greater, if the check is the payment of any kind of state public assistance or federal social security benefit payable to the bearer of the check;

(3) Ten per cent of the face amount of a personal check or money order, or $5, whichever is greater; or

(4) No more than $10 to set up an initial account and issue an optional membership or identification card, and no more than $5 for a replacement optional identification card.

The fees allowed in this section shall not be assessed in any transaction or agreement in which the check casher defers deposit of the check.

§ -4 Deferred deposits, when allowed. (a) No check casher may defer the deposit of a check except as provided in this section.

(b) Each deferred deposit shall be made pursuant to a written agreement that has been signed by the customer and the check casher or an authorized representative of the check casher. The written agreement shall contain a statement of the total amount of any fees charged for the deferred deposit, expressed both in United States currency and as an annual percentage rate. The written agreement shall authorize the check casher to defer deposit of the personal check until a specific date not later than thirty-one days from the date the written agreement was signed. The written agreement shall not permit the check casher to accept collateral.

(c) The face amount of [the] any one check shall not exceed $300 and the deposit of a personal check written by a customer pursuant to a deferred deposit transaction may be deferred for no more than thirty-one days. A check casher may charge a fee for deferred deposit of a personal check in an amount not to exceed fifteen per cent of the face amount of the check. Any fees charged for deferred deposit of a personal check in compliance with this section shall be exempt from chapter 478.

(d) A check casher [shall not] may enter into an agreement for deferred deposit with a customer during the period of time that an earlier agreement for a deferred deposit for the same customer is in effect[. A deferred deposit transaction shall not be repaid, refinanced, or consolidated by or with the proceeds of another deferred deposit transaction.]; provided that the aggregate total dollar value at any one time of all deferred deposit checks of the customer shall not exceed $600.

(e) A check casher who enters into a deferred deposit agreement and accepts a check passed on insufficient funds, or any assignee of that check casher, shall not be entitled to recover damages in any action brought pursuant to or governed by chapter 490. Instead, the check casher may charge and recover a fee for the return of a dishonored check in an amount not greater than [$20.] $40 fifteen days after providing notice to the customer that the check was dishonored.

(f) No amount in excess of the amounts authorized by this section and no collateral products such as insurance shall be directly or indirectly charged by a check casher pursuant or incident to a deferred deposit agreement."

2. By amending section    –7 of section 1 of the Act to read:

"§ -7 Other relief available. The penalties provided in this chapter are in addition to any other penalties and remedies otherwise available [against the same conduct] under [the common law or other state or federal statutes or rules.] federal and state statutory, administrative, and common law."

3. By amending section 2 of the Act to read:

"SECTION 2. This Act shall take effect on July 1, 1999[, and shall be repealed on July 1, 2001]."

SECTION 2. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 3. This Act shall take effect on June 30, 2001.

INTRODUCED BY:

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