Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Regular Session of 2001

State of Hawaii

Sir:

Your Committee on Commerce, Consumer Protection and Housing, to which was referred H.B. No. 240, H.D. 1, entitled:

begs leave to report as follows:

The purpose of this measure is to repeal the sunset of the check cashing law.

Testimony in support of this measure was received from Check 'N Go, Inc. Cash In Advance, Inc. and Advance Til Payday testified in support of the measure with amendments. The Department of Commerce and Consumer Affairs submitted comments on the measure.

Act 146, Session Laws of Hawaii (SLH) 1999, established the Check Cashing Act, which imposes requirements on check cashing businesses relating to posting and notice, fees, and deferred deposits. The Act also provided for the law's sunset on July 1, 2001.

Your Committee finds that regulation of the check cashing industry protects persons in need of short-term loans. Consumers are able to make informed decisions about check cashing transactions because fees and rates are required to be posted on the check cashing premises and provided in a separate notice to the customer. Abuses by check cashing entities are kept in check by deferred deposit restrictions that limit the amounts that may be cashed and prohibit the rolling over of fees.

Your Committee further finds that an increase in the demand for check cashing services and a growth in the check cashing industry warrants continued regulation of the industry. Therefore, this measure makes Hawaii's check cashing law permanent by repealing the law's sunset as effected by Act 146, SLH 1999.

As affirmed by the record of votes of the members of your Committee on Commerce, Consumer Protection and Housing that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 240, H.D. 1, and recommends that it pass Second Reading and be placed on the calendar for Third Reading.