Honorable Robert Bunda

President of the Senate

Twenty-Third State Legislature

Regular Session of 2006

State of Hawaii

Sir:

Your Committee on Commerce, Consumer Protection, and Housing, to which was referred S.B. No. 3066 entitled:

begs leave to report as follows:

The purpose of this measure is to amend the usury law on credit cards by making it lawful for a credit card issuer and a customer to stipulate by written contract for any amount of interest, providing that an eighteen per cent cap applies to the simple interest numeric percentage rate but not to fees charged for services.

Testimony in support of this measure was submitted by the Commissioner of Financial Institutions, Department of Commerce and Consumer Affairs; the Hawaii Bankers Association, First Hawaiian Bank; the Hawaii Credit Union League; and Hawaii Financial Services Association.

Your Committee finds that current Hawaii law places Hawaii-based credit card issuers at a pricing disadvantage relative to other issuers in states such as South Dakota and Delaware. In these states, usury laws have been eliminated in order to attract credit card issuers who can implement higher interest rates and fees on their credit cards. Your Committee further finds that this measure levels the playing field and achieves parity for Hawaii-based financial institutions.

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. 3066, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 3066, S.D. 1, and be placed on the calendar for Third Reading.