STAND. COM. REP. NO. 1333

Honolulu, Hawaii

, 2005

RE: H.C.R. No. 172

H.D. 1

 

 

 

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committee on Consumer Protection & Commerce, to which was referred H.C.R. No. 172 entitled:

"HOUSE CONCURRENT RESOLUTION REQUESTING THE AUDITOR TO PERFORM A SUNRISE REVIEW OF THE REGISTRATION OF PAYDAY LENDERS AND DEFERRED DEPOSIT CHECK CASHERS,"

begs leave to report as follows:

The purpose of this concurrent resolution is to determine whether payday lenders and deferred deposit check cashers should be subject to increased regulation by the State, by requesting the Auditor to conduct a sunrise review of the registration of these two groups.

Your Committee received testimony in support of this measure from the Legal Aid Society of Hawaii, Hawaii Alliance for Community-Based Economic Development, Hawaii Asset Building Coalition, Asset Building Initiative of Hawaii, and the Service Learning Program of Chaminade University. The Department of Commerce and Consumer Affairs supported the intent of the measure.

Your Committee finds that payday lenders and deferred deposit check cashers provide consumers with short-term loans of relatively small amounts based on a personal check held for future deposit. Concerns have been voiced that this industry takes advantage of its consumers, in part through its high interest rates and coercive collection methods. Your Committee finds that S.B. No. 1413 was introduced this year to provide for more extensive regulation of the industry under chapter 480F, Hawaii Revised Statutes.

It was suggested at the hearing on this measure that the Auditor review the possibility of regulating, rather than registering the industry. Industry regulation would allow the State to provide additional protections to consumers not possible under a registration program.

In light of this suggestion, your Committee has amended the title of this concurrent resolution so that it requests the Auditor to perform a sunrise review of the regulation of payday lenders and deferred deposit check cashers. Technical, nonsubstantive amendments were also made for style, consistency, and clarity.

As affirmed by the record of votes of the members of your Committee on Consumer Protection & Commerce that is attached to this report, your Committee concurs with the intent and purpose of H.C.R. No. 172, as amended herein, and recommends that it be referred to the Committee on Finance in the form attached hereto as H.C.R. No. 172, H.D. 1.

 

Respectfully submitted on behalf of the members of the Committee on Consumer Protection & Commerce,

 

____________________________

KENNETH HIRAKI, Chair