Honorable Robert Bunda

President of the Senate

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committee on Judiciary and Hawaiian Affairs, to which was referred S.B. No. 1135 entitled:

begs leave to report as follows:

The purpose of this measure is to clarify permissible credit card interest rates as well as define the term "interest" to include credit card related fees or charges.

Testimony in support of the measure was submitted by the Hawaii Bankers Association, the Hawaii Credit Union League, and the Hawaii Financial Services Association.

This measure provides that the eighteen per cent annual interest rate limit on credit cards applies only to the numeric periodic rate and not to finance charges. Further, this measure also clarifies the type of fees that constitute "interest" under Hawaii's usury law. Your Committee finds that this bill will prevent Hawaii financial institutions from being placed at a disadvantage relative to out-of-state financial institutions.

As affirmed by the record of votes of the members of your Committee on Judiciary and Hawaiian Affairs that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1135 and recommends that it pass Third Reading.