STAND. COM. REP. NO. 1100

Honolulu, Hawaii

RE:    S.C.R. No. 13

Honorable Colleen Hanabusa

President of the Senate

Twenty-Fifth State Legislature

Regular Session of 2009

State of Hawaii

Madam:

     Your Committees on Human Services and Transportation, International and Intergovernmental Affairs, to which was referred S.C.R. No. 13 entitled:

"SENATE CONCURRENT RESOLUTION ENCOURAGING STATE AND COUNTY ACTION TO STIMULATE INDIVIDUAL SAVINGS AND DEVELOPMENT OF CREDIT AND TO FORMULATE AN INVENTORY OF BANKING SERVICES AVAILABLE TO LOW-INCOME PERSONS AND THOSE WITH NO CREDIT HISTORY IN THE STATE,"

beg leave to report as follows:

     The purpose of this measure is to encourage:

     (1)  The State and the counties take action to stimulate individual savings and development of credit and to formulate an inventory of banking services available to low-income persons and those with no credit history in the State;

     (2)  The State and the counties to take steps to accurately identify the unbanked and the underbanked populations in Hawaii; and

     (3)  The State and the counties to collaborate with local financial institutions to integrate the unbanked and underbanked populations into the financial mainstream and to encourage local financial institutions to redouble their efforts to recognize and pursue the potentially huge and previously untapped unbanked and underbanked markets.

     Testimony in support of this measure was provided by the Department of Commerce and Consumer Affairs, the Hawaii Bankers Association, the Hawaii Credit Union League, VISA, the Hawaii Alliance for Community Based Economic Development (HACBED), and two individuals.  Written testimony presented to the Committees may be reviewed on the Legislature's website.

     Your Committees find that in the United States, forty million households are financially underserved, comprising about twenty‑eight million unbanked individuals and almost forty-five million underbanked individuals.  The unbanked consist of diverse groups of people who do not have checking or savings accounts and who remain outside the banking mainstream for many reasons.  The underbanked consist of people or businesses that have poor access to mainstream financial services such as banks and so rely upon alternative financial services targeted for the less advantaged, such as check cashers, loan sharks, and pawnbrokers.

     Your Committees also find that handling payments through a bank account provides a gateway for households to enter the financial mainstream and become owners of financial assets.  Those who own bank accounts are more likely to own other assets, including accounts related to savings, credit, and insurance, while those without financial accounts are less likely to own a home and a car.  Consumers without a relationship with a mainstream financial institution also pay high transaction fees for services, such as check cashing, and pay interest rates to purchase items through rent-to-own companies.

     As affirmed by the records of votes of the members of your Committees on Human Services and Transportation, International and Intergovernmental Affairs that are attached to this report, your Committees concur with the intent and purpose of S.C.R. No. 13 and recommend that it be referred to the Committee on Commerce and Consumer Protection.

Respectfully submitted on behalf of the members of the Committees on Human Services and Transportation, International and Intergovernmental Affairs,

____________________________ J. KALANI ENGLISH, Chair

____________________________ SUZANNE CHUN OAKLAND, Chair