HOUSE OF REPRESENTATIVES
TWENTY-SEVENTH LEGISLATURE, 2014
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. Section 480F-2, Hawaii Revised Statutes, is amended to read as follows:
§480F-2[ ]] Posting
and notice of fees charged. Any person who cashes one or more checks for a
(1) Post in a conspicuous place in every location at
which the person does business a notice that sets forth[
thirty-eight point type:
(A) The fees charged for cashing a check, for
selling or issuing a money order, and for the initial issuance of any
membership or identification cards[
; and], and the fees and annual
percentage rate for deferred deposit transactions;
(B) That consumer complaints about the check
cashing business may be filed with the department of commerce and consumer
affairs, and includes and identifies the telephone number and address of
the consumer [
information service] resource center of the
department of commerce and consumer affairs;
(C) That deferred deposit transactions are not suitable for long-term borrowing;
(D) That only one deferred deposit transaction can be opened from all sources; and
(E) Information on where to obtain financial education and credit counseling from a Hawaii-based budget and credit counseling agency that has received approval from a United States trustee or bankruptcy administrator to provide instructional courses concerning personal financial management pursuant to title 11 United States Code section 111;
(2) Provide written notice [
to each customer of
the fees charged for cashing checks] in sixteen point type to each
customer, that is separate from and in addition to any posted notice[ ;],
containing the following information:
(A) The fees and annual percentage rate to be charged for a deferred deposit transaction;
(B) That consumer complaints about the check cashing business may be filed with the department of commerce and consumer affairs, and the telephone number and address of the consumer resource center of the department of commerce and consumer affairs;
(C) That deferred deposit transactions are not suitable for long-term borrowing;
(D) That only one deferred deposit transaction can be opened from all sources;
(E) That, pursuant to section 480F-4(h), an extended repayment plan option is available after any customer has entered into four or more consecutive transactions with the same check casher; provided that the customer requests the option within twenty-four hours of the customer's last payment due date;
(F) The right to rescind a deferred deposit transaction within twenty-four hours of the transaction; and
(G) Where to obtain financial education and credit counseling from a Hawaii-based budget and credit counseling agency that has received approval from a United States trustee or bankruptcy administrator to provide instructional courses concerning personal financial management pursuant to title 11 United States Code section 111;
(3) Obtain a written acknowledgment from the customer
that written notice of [
the fees charged for cashing checks] all
information required to be provided by paragraph (2) was provided[ ;]
to the customer; and
(4) Provide each customer a receipt documenting any and all fees charged."
SECTION 2. Section 480F-4, Hawaii Revised Statutes, is amended to read as follows:
"§480F-4 Deferred deposits, when
.]; payment plans. (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-two 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 check shall not
exceed $600 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-two
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[
provided that all cumulative fees charged for a deferred deposit transaction
shall be expressed as an annual percentage rate not to exceed thirty-six per
cent. 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 enter into an agreement for deferred deposit with a customer during the period of time that an earlier agreement for a deferred deposit from any source 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.
(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
excess of principal, interest, and out-of-pocket legal costs in any action
brought pursuant to or governed by chapter 490. No additional interest may
be collected except the ten per cent allowed by law on uncollected judgments.
Instead, the check casher may charge and recover a fee for the return of a
dishonored check in an amount not greater than $20.]
(f) A check casher may enter into a payment plan with a non-default customer for a period of up to ninety days. Under the payment plan, no interest may be charged; provided that an administrative fee of $30 may be added to any fees or sums already owed by the customer. There shall be a thirty day period after the completion of any payment plan under this subsection during which no new payment plan under this subsection with that customer shall commence.
(g) A check casher shall offer an interest-free payment plan with a minimum term of sixty days to any customer who is in default. Any collection letter that a check casher sends to a customer in default shall inform the customer of the option of interest-free payment.
(h) A check casher shall offer an extended repayment plan option after any customer has entered into four or more consecutive transactions with the same check casher; provided that the customer requests the option within twenty-four hours of the customer's last payment due date. For purposes of this subsection, "consecutive transactions" means entering into back to back agreements within twenty-four hours of the payment of a previous transaction.
(f)] (i) 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."
SECTION 3. Section 480F-5, Hawaii Revised Statutes, is amended to read as follows:
Exemptions. This chapter shall not apply to[ : (1) Any person who is principally engaged
in the bona fide retail sale of goods or services, and who, either as incident
to or independent of the retail sale or service, from time to time cashes items
for a fee or other consideration, where not more than $2, or two per cent of
the amount of the check, whichever is greater, is charged for the service; or (2) Any] any person authorized
to engage in business as a bank, trust company, savings bank, savings and loan
association, financial services loan company, or credit union under the laws of
the United States, any state or territory of the United States, or the District
SECTION 4. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 5. This Act shall take effect on July 1, 2014.
Check Cashing; Notice; Fees; Payment Plans
Requires check cashers to provide specific additional information relating to deferred deposit transactions. Limits the cumulative fees charged by check cashers. Requires or authorizes specific types of payment plans with customers. Removes retailers from the exemption to the check cashing law.
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.