STAND. COM. REP. NO. 2104

Honolulu, Hawaii

RE:    S.B. No. 2292

Honorable Colleen Hanabusa

President of the Senate

Twenty-Fourth State Legislature

Regular Session of 2008

State of Hawaii

Madam:

     Your Committee on Commerce, Consumer Protection, and Affordable Housing, to which was referred S.B. No. 2292 entitled:

"A BILL FOR AN ACT RELATING TO AUTOMATED TELLER MACHINES,"

begs leave to report as follows:

     The purpose of this measure is to create parity between United States and non-United States cardholders and new source of revenue for automated teller machine (ATM) operators in Hawaii by allowing ATM operators in Hawaii to assess a customer transaction fee at the point of sale for ATM cash withdrawals made by international cardholders.

     Testimony in support of this measure was received from the Financial Institutions Division, Department of Commerce and Consumer Affairs; Central Pacific Bank; the Hawaii Credit Union League; and the Hawaii Bankers Association.

     Your Committee finds that an ATM domestic cardholder from a financial institution located in the mainland or Hawaii can be assessed a transaction fee, but that international cardholders are not assessed a fee due to international surcharge rules in VISA International and Mastercard International agreements.  Transaction fees are the primary source of revenue for ATM units and are typically waived for the customers of the financial institutions operating the ATM.  Exempting international cardholders from transaction fees will result in higher pricing for ATM transactions in heavy visitor traffic areas in order to offset the reduced revenue sources at a cost to Hawaii residents and domestic cardholders.  Your Committee believes that overriding restrictions on assessing international cardholders ATM transaction fees will fulfill the intent of this measure, which is to create parity between domestic and international cardholders and a new source of revenue for ATM operators in Hawaii.

     As affirmed by the record of votes of the members of your Committee on Commerce, Consumer Protection, and Affordable Housing that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2292 and recommends that it pass Second Reading and be placed on the calendar for Third Reading.

Respectfully submitted on behalf of the members of the Committee on Commerce, Consumer Protection, and Affordable Housing,

____________________________

RUSSELL S. KOKUBUN, Chair