RESOLUTION

WHEREAS, payday lenders, or deferred deposit check cashers, provide consumers with short-term loans of relatively small amounts based on a personal check held for future deposit; and

WHEREAS, because consumers are charged interest rates in terms of dollar amounts on payday loans, consumer advocates raise concerns that consumers are unaware of the corresponding high annual percentage rate they are paying; and

WHEREAS, check cashers who provide payday lending or deferred check cashing services may threaten to use the criminal system to collect on checks, which scares consumers into repaying these debts more readily than others, or file criminal charges when a check is returned for insufficient funds; and

WHEREAS, payday lenders and deferred deposit check cashers currently are not subject to registration requirements; and

WHEREAS, section 26H-6, Hawaii Revised Statutes, requires that new regulatory measures that would subject unregulated professions and vocations to licensing or other regulatory controls must be referred to the Auditor for analysis; and

WHEREAS, the referral must be by Concurrent Resolution that identifies the specific legislative bill to be analyzed; now, therefore,

BE IT RESOLVED by the House of Representatives of the Twenty-third Legislature of the State of Hawaii, Regular Session of 2005, the Senate concurring, that the Auditor is requested to perform a sunrise review regarding the regulation of payday lenders and deferred deposit check cashers; and

BE IT FURTHER RESOLVED that the Auditor is requested to submit findings and recommendations not later than twenty days prior to the convening of the Regular Session of 2006; and

BE IT FURTHER RESOLVED that certified copies of this Concurrent Resolution be transmitted to the Auditor.

Report Title:

Sunrise Review; Check Cashers