STAND. COM. REP. NO. 3264

                                   Honolulu, Hawaii
                                                     , 2000

                                   RE:  H.B. No. 2017
                                        H.D. 1
                                        S.D. 1




Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committee on Commerce and Consumer Protection, to which
was referred H.B. No. 2017, H.D. 1, entitled: 

     "A BILL FOR AN ACT RELATING TO COLLECTION AGENCIES,"

begs leave to report as follows:

     The purpose of this measure is to establish an "open border"
policy regarding out-of-state collection agencies collecting
debts in Hawaii.

     Testimony on the measure was received from the Department of
Commerce and Consumer Affairs (DCCA), Legal Aid Society, Hawaiian
Collectors Association, Inc., numerous collection agencies, and
three law firms.

     This measure allows out-of-state collection agencies to
operate in Hawaii without a license under the status of an exempt
out-of-state collection agency.  The requirements for an exempt
out-of-state collection agency include registration, verification
of licensure in another state that requires a bond and does not
require licensure of Hawaii collection agencies operating within
the other state's borders, an agreement to comply with State laws
prohibiting certain collection practices, and payment of fees.
An exempt out-of-state collection agency may only collect debts
on behalf of an out-of-state creditor and effect collection
through interstate communications, such as telephone, facsimile,
or mail.


 
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     Your Committee finds that other states permit an out-of-
state collection agency to conduct interstate collections within
their borders provided that the agency's domicile extends the
same privilege to collection agencies outside the state.
Therefore, this measure facilitates the operations of Hawaii
collection agencies in other states by granting reciprocal
privileges to collection agencies domiciled in those states.

     Your Committee further finds that exempt out-of-state
collection agencies will be under the jurisdiction of DCCA and
the Regulated Industries Complaints Office.  Therefore, injured
consumers will have recourse against out-of-state agencies for
misconduct under the unfair and deceptive practices provisions of
sections 443B-15 to 443B-19, Hawaii Revised Statutes (HRS), and
chapter 480, (HRS), in addition to being able to enforce their
rights under the federal Fair Debt Collection Practices Act.

     Your Committee has amended this measure by:

     (1)  Requiring an exempt out-of-state collection agency to
          maintain an office in the State and to designate a
          principal collector, pursuant to section 443B-6, HRS;
          and

     (2)  Inserting a defective effective date of July 1, 2050,
          for the purpose of continuing discussions on this
          measure in conference committee.

     Your Committee also made technical, nonsubstantive changes
to reflect existing statutory language and for clarity and style.

     As affirmed by the record of votes of the members of your
Committee on Commerce and Consumer Protection that is attached to
this report, your Committee is in accord with the intent and
purpose of H.B. No. 2017, H.D. 1, as amended herein, and
recommends that it pass Second Reading in the form attached
hereto as H.B. No. 2017, H.D. 1, S.D. 1, and be placed on the
calendar for Third Reading.


 
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                                   STAND. COM. REP. NO. 3264
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                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Commerce and
                                   Consumer Protection,



                                   ______________________________
                                   BRIAN KANNO, Co-Chair



                                   ______________________________
                                   BRIAN T. TANIGUCHI, Co-Chair

 
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