HB447.DOC

SECTION 1. Chapter 480F, Hawaii Revised Statutes, is amended by adding four new sections to be appropriately designated and to read as follows:

"§480F- Registration required. (a) No check casher shall conduct business in this state without first registering with the department of commerce and consumer affairs. Check cashers shall renew their registration annually.

(b) The director shall prescribe the form of applications for registration and renewal of registration, which shall include the following:

(1) The names of all owners of the check casher's business;

(2) The address of the principal office of the check casher;

(3) The name and address of the check casher's agent for service of process in the state; and

(4) The names and locations of all check cashing stores in the state.

(c) Applications for registration and renewal of registration shall be accompanied by the appropriate fee as prescribed by the director.

§480F- Payment plans. (a) A check casher may enter into a payment plan for a period of up to ninety days with a customer who is not in default, under which plan no interest may be charged; provided that an administrative fee of $30 may be added to any fees or sums already owed by the customer. No payment plan with a customer shall commence within thirty days after the completion of any other payment plan with the same customer.

(b) A check casher shall offer an interest-free payment plan with a minimum term of sixty days to any customer who is in default. Any collection letter written to a customer in default shall inform the customer of the option of an interest-free payment plan.

(c) A check casher shall offer an extended repayment plan option to any customer who has entered into four or more deferred deposit agreements with the same check casher in which every agreement after the first is consecutive; provided that the extended repayment plan shall become available only if the customer requests the option within twenty-four hours of the customer's last payment due date.

For purposes of this subsection, "consecutive" means the deferred deposit agreement occurs within twenty-four hours of the customer's last payment under a prior deferred deposit agreement with the check casher.

§480F- Records and reports. Every check casher shall keep records and make reports with respect to the operation of business as provided in rules adopted by the director pursuant to chapter 91.

§480F- Rules. The director, pursuant to chapter 91, shall adopt rules necessary to implement this chapter."

SECTION 2. Section 480F-1, Hawaii Revised Statutes, is amended by adding a new definition to be appropriately inserted and to read as follows:

""Director" means the director of commerce and consumer affairs."

SECTION 3. Section 237-24.75, Hawaii Revised Statutes, is amended to read as follows:

"§237-24.75 Additional exemptions. In addition to the amounts exempt under section 237-24, this chapter shall not apply to:

(1) Amounts received as a beverage container deposit collected under chapter 342G, part VIII;

(2) Amounts received by the operator of the Hawaii convention center for reimbursement of costs or advances made pursuant to a contract with the Hawaii tourism authority under section 201B‑7[[]; [~~and]~~]

[[](3) Amounts received[]] by a professional employment organization from a client company equal to amounts that are disbursed by the professional employment organization for employee wages, salaries, payroll taxes, insurance premiums, and benefits, including retirement, vacation, sick leave, health benefits, and similar employment benefits with respect to assigned employees at a client company; provided that this exemption shall not apply to a professional employment organization upon failure of the professional employment organization to collect, account for, and pay over any income tax withholding for assigned employees or any federal or state taxes for which the professional employment organization is responsible. As used in this paragraph, "professional employment organization", "client company", and "assigned employee" shall have the meanings provided in section 373K-1[.]; and

(4) Amounts received by check cashers as fees and interest on deferred deposit transactions under chapter 480F."

SECTION 4. Section 480F-2, Hawaii Revised Statutes, is amended to read as follows:

"[[]§480F-2[]] Posting and notice of fees charged. Any person who cashes one or more checks for a fee shall:

(1) Post in a conspicuous place in every location at which the person does business a copy of the check casher's registration to do business and a notice that sets forth[:] in thirty-eight point type:

(A) The fees charged for cashing a check, for selling or issuing a money order, and for the initial issuance of any membership or identification cards[;], and the fees and annual percentage rate for deferred deposits;

(B) That consumer complaints about the check cashing business may be filed with the department of commerce and consumer affairs, and includes and identifies the telephone number and address of the consumer information service of the department of commerce and consumer affairs;

(D) That the check casher business and a customer may not enter into more than one agreement at a time to defer the deposit of a check; and

(E) Information on where to obtain financial education and credit counseling

(2) Provide written notice [~~to each customer of the fees charged for cashing checks~~] in sixteen point type to each customer, that is separate from and in addition to any posted notice[;], containing the following information:

(A) The fees and annual percentage rate to be charged for a deferred deposit;

(B) That consumer complaints about the check cashing business may be filed with the department of commerce and consumer affairs, and the telephone number and address of the consumer information service of the department of commerce and consumer affairs;

(D) That the check casher business and a customer may not enter into more than one agreement at a time to defer the deposit of a check;

(E) That an extended repayment plan option is available:

(i) After a customer has entered into four or more deferred deposit agreements with a check casher in which every agreement after the first is consecutive. "Consecutive" means the deferred deposit agreement occurs within twenty-four hours of the customer's last payment under a prior deferred deposit agreement with the check casher; and

(ii) If the customer requests the option within twenty-four hours of the customer's last payment due date;

(F) That the customer has the right to rescind a deferred deposit agreement within twenty-four hours of the transaction; and

(G) Where to obtain financial education and credit counseling;

(3) Obtain a written acknowledgment from the customer that written notice of [~~the fees charged for cashing checks~~] all information under paragraph (2) was provided[;] to the customer; and

(4) Provide each customer a receipt documenting any and all fees charged."

SECTION 5. Section 480F-4, Hawaii Revised Statutes, is amended by amending subsections (d) and (e) to read as follows:

"(d) A check casher shall not enter into an agreement for deferred deposit with a customer during the period of time that an earlier agreement for a deferred deposit from any source for the same customer is in effect. A deferred deposit transaction shall not be repaid, refinanced, or consolidated by or with the proceeds of another deferred deposit transaction.

(e) A check casher who enters into a deferred deposit agreement and accepts a check passed on insufficient funds, or any assignee of that check casher, shall not be entitled to recover damages in excess of principal, interest, and out-of-pocket legal costs in any action brought pursuant to or governed by chapter 490. No additional interest may be collected except the ten per cent allowed by law on uncollected judgments. Instead, the check casher may charge and recover a fee for the return of a dishonored check in an amount not greater than [~~$20.~~] $30."

SECTION 6. Section 480F-5, Hawaii Revised Statutes, is amended to read as follows:

"[[]§480F-5[]] Exemptions. This chapter shall not apply to[:

~~(1)~~ Any person who is principally engaged in the bona fide retail sale of goods or services, and who, either as incident to or independent of the retail sale or service, from time to time cashes items for a fee or other consideration, where not more than $2, or two per cent of the amount of the check, whichever is greater, is charged for the service; or

~~(2)~~ ~~Any~~] any person authorized to engage in business as a bank, trust company, savings bank, savings and loan association, financial services loan company, or credit union under the laws of the United States, any state or territory of the United States, or the District of Columbia."

SECTION 7. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 8. This Act shall take effect on July 1, 2010, and shall be repealed on June 30, 2011.

INTRODUCED BY:	_____________________________

HOUSE OF REPRESENTATIVES	H.B. NO.	447
TWENTY-FIFTH LEGISLATURE, 2009
STATE OF HAWAII