Honorable Robert Bunda

President of the Senate

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committee on Commerce, Consumer Protection, and Housing, to which was referred S.B. No. 1223 entitled:

begs leave to report as follows:

The purpose of this measure is to authorize the holder of a dishonored check to raise the service charge to not more than $30.

Testimony in support of this measure was submitted by the Hawaii Collectors Association, Inc., the Medical Collection Agency of Hawaii, Inc., Select Consulting Service, Maui Collection Service, Inc., and the Honolulu Collection Corporation. Comments on the measure were also submitted by the Department of Commerce and Consumer Affairs.

Your Committee finds that under the current law, a service charge of $20 may be imposed for a dishonored check against the responsible party. This charge is intended to allow a payee or holder of a dishonored check to attempt to recoup moneys, including but not limited to the following, to cover any bank service charge, the time used to redeposit the check, the time used to contact the check writer to transmit a replacement payment, and the loss of goods or services if the check is not replaced. Your Committee determines that although these types of costs may be minimal in nature, the aggregation of these costs multiplied by the number of businesses throughout the State is substantial and can have a serious impact on our State's economy. Therefore, an increase in the amount recoverable is necessary to ensure that businesses and other holders of dishonored checks are able to adequately cover their costs of doing business.

Your Committee has amended this measure by:

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 S.B. No. 1223, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 1223, S.D. 1, and be referred to the Committee on Ways and Means.