Check cashing

Provides caps on the fees that may be charged by check cashing
businesses.  Requires posted and a separate written notice of
fees to consumers.  Makes violation of the check cashing law an
unfair or deceptive act or practice in the conduct of any trade
or commerce under section 480-2(a), Hawaii Revised Statutes.
(HB460 HD2)

HOUSE OF REPRESENTATIVES                H.B. NO.           H.D. 2
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            

                     A BILL FOR AN ACT



 1      SECTION 1.  The Hawaii Revised Statutes is amended by adding
 2 a new chapter to be appropriately designated and to read as
 3 follows:
 4                             "CHAPTER
 5                           CHECK CASHING
 6          -1 Definitions.  As used in this chapter, unless the
 7 context requires otherwise:
 8      "Check" means any check, draft, money order, or other
 9 instrument for the transmission or payment of money.  "Check"
10 does not include a traveler's check or foreign denomination or
11 foreign drawn payment instrument.
12      "Fee" includes any payment of cash or other consideration
13 including an exchange of value in excess of regular retail value,
14 or the purchase of catalog items or coupons indicating the
15 ability to receive goods, services, or catalog items.
16         -2  Posting and notice of fees charged.  Any person who
17 cashes one or more checks for a fee shall:
18      (1)  Post in a conspicuous place in every location at which
19           the person does business a notice that sets forth the
20           fees charged for cashing a check, states that consumer

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                                     H.B. NO.           H.D. 2

 1           complaints about the check cashing business may be
 2           filed with the state department of commerce and
 3           consumer affairs, and includes and identifies the
 4           telephone number of the consumer information service of
 5           the department of commerce and consumer affairs;
 6      (2)  Provide written notice to each customer of the fees
 7           charged for cashing checks that is separate from and in
 8           addition to any posted notice;
 9      (3)  Obtain a written acknowledgement from the customer that
10           written notice of the fees charged for cashing checks
11           was provided; and
12      (4)  Provide each customer a receipt documenting any and all
13           fees charged.
14         -3  Authorized fees.  No person who cashes checks for a
15 fee shall charge fees in excess of the following amounts:
16      (1)  Except as otherwise provided by this chapter, five per
17           cent of the face amount of the check or $5, whichever
18           is greater;
19      (2)  Three per cent of the face amount of the check or $5,
20           whichever is greater, if the check is the payment of
21           any kind of state public assistance or federal social
22           security benefit payable to the bearer of the check;
23           and

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                                     H.B. NO.           H.D. 2

 1      (3)  Ten per cent of the face amount of a personal check or
 2           money order, or $5, whichever is greater.
 3         -4  Prohibited practices.  No person who cashes checks
 4 for a fee shall:
 5      (1)  Cash a check without requiring that the bearer of the
 6           check provide identification prior to obtaining
 7           payment, or publish or otherwise advertise that checks
 8           may be cashed without identification;
 9      (2)  Cash or advance any money on a postdated check;
10      (3)  Agree to hold a check for later deposit;
11      (4)  Issue any check without concurrently receiving the full
12           principal amount in cash or its equivalent; or
13      (5)  Engage in any unfair, deceptive, false, or misleading
14           advertising.
15         -5  Exemptions.  This chapter shall not apply to:
16      (1)  Any person who is principally engaged in the bona fide
17           retail sale of goods or services, and who, either as
18           incident to or independent of the retail sale or
19           service, from time to time cashes items for a fee or
20           other consideration, where not more than $2, or two per
21           cent of the amount of the check, whichever is greater,
22           is charged for the service; or
23      (2)  Any person authorized to engage in business as a bank,

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                                     H.B. NO.           H.D. 2

 1           trust company, savings bank, savings and loan
 2           association, financial services loan company, or credit
 3           union under the laws of the United States, any state or
 4           territory of the United States, or the District of
 5           Columbia.
 6         -6  Penalties.  Any person who violates this chapter
 7 shall be deemed to have engaged in an unfair or deceptive act or
 8 practice in the conduct of any trade or commerce within the
 9 meaning of section 480-2(a), Hawaii Revised Statutes.
10         -7  Other relief available.  The penalties provided in
11 this chapter are in addition to penalties and remedies otherwise
12 available against the same conduct under the common law or other
13 state or federal statutes or rules."
14      SECTION 2.  This Act shall take effect upon its approval.