HOUSE OF REPRESENTATIVES	H.B. NO.	1585
TWENTY-SIXTH LEGISLATURE, 2011
STATE OF HAWAII

A BILL FOR AN ACT

relating to credit sales.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

     SECTION 1.  Chapter 476, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

     "§476-  Surcharge on credit transactions; prohibited. (a)  No seller in any credit sale or any company issuing credit, charge, or debit cards may impose a surcharge on a holder who elects to use a credit, charge, or debit card in lieu of payment by cash, check, or similar means.

(b)  No financial institution or card issuer may impose a surcharge for the use of a debit card for an automatic cash withdrawal; provided that a transaction processing fee may be allowed by the owner of the automatic cash machine at the time of the transaction.

(c)  A discount offered by a seller for the purpose of inducing payment by cash, check, or other means not involving the use of a seller credit card, charge card, or debit card shall not constitute a finance charge if the discount is offered to all prospective buyers in a clear and conspicuous manner.

(d)  For the purposes of this section, a "surcharge" means any additional amount imposed at the time of the sales transaction by the seller that increases the charge to the buyer for the privilege of using a credit, charge, or debit card and is not a finance charge allowed under section 476-28(1) or (2)."

     SECTION 2.  Section 476-1, Hawaii Revised Statutes, is amended as follows:

     1.  By adding a new definition to be appropriately inserted and to read:

     ""Debit card" means a card issued by a financial institution that is linked to an account at the financial institution and may be used by the holder to make electronic cash withdrawals and to pay for goods and services.  "Debit card" includes a prepaid card or other means of access to prepaid funds that may be used to initiate electronic transfers of funds and may be used without unique identifying information, including but not limited to a personal identification number, to initiate access to prepaid funds."

     2.  By amending the definition of "finance charge" to read:

     ""Finance charge" means the amount, however denominated or expressed, which the credit buyer contracts to pay or pays for the privilege of purchasing goods, services, or both, to be paid for over a period of time under the terms of the credit sale contract.  It includes any charge payable, directly or indirectly, by the buyer and imposed, directly or indirectly, by the seller as an incident to or a condition of the buyer's privilege of paying over a period of time[.], but shall not include a surcharge on the buyer when the buyer elects to use a credit, charge, or debit card in lieu of payment by cash, check, or similar means or a surcharge imposed by a financial institution for the use of a debit card for an automated cash withdrawal.  It does not include any charge of a type payable in a comparable cash transaction[.] or a transaction processing fee charged by the owner of the automated cash withdrawal machine at the time of the transaction.  The types of charges included in and excluded from the finance charge shall be the same as provided by the federal Truth in Lending Act."

     SECTION 3.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 4.  This Act shall take effect upon its approval.

INTRODUCED BY:

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Report Title:

Debit Cards; Surcharge

Description:

Prohibits the imposition of a surcharge for a credit card, charge card, or debit card transaction.

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.