Report Title:

Check Cashing; Deferred Deposit



Prohibits check cashers or assignees who enter into deferred deposit agreements from recovering damages under chapter 490. Allows a check casher to charge a late fee and a return fee for checks dishonored by a financial institution. Allows a check casher to enter into a payment plan if a check is dishonored.



S.B. NO.













relating to check cashers.





SECTION 1. Section 480F-4, Hawaii Revised Statutes, is amended to read as follows:

"480F-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-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. 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] while an earlier agreement for a deferred deposit [for] with 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 or its assignee 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.] a "late fee" of $20 for any check that is in default of the signed agreement and a "return fee" of $20 for a check that is dishonored by the financial institution for any reason.

(f) A check casher may enter into a payment plan with the check writer only after receipt of a written advise from the financial institution that the check has been dishonored and is hereby returned for the reasons noted on the advise note. The payment plan shall be a minimum of six equal payments on the balance of the account and the length of the payment plan shall not exceed six months.

[(f)] (g) 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 2. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 3. This Act shall take effect on July 1, 2009.