STAND. COM. REP. NO.  448

Honolulu, Hawaii

                , 2015

RE:   H.B. No. 228

      H.D. 1

Honorable Joseph M. Souki

Speaker, House of Representatives

Twenty-Eighth State Legislature

Regular Session of 2015

State of Hawaii

Sir:

     Your Committee on Consumer Protection & Commerce, to which was referred H.B. No. 228 entitled:

"A BILL FOR AN ACT RELATING TO DEFERRED DEPOSITS,"

begs leave to report as follows:

The purpose of this measure is to reduce the allowable maximum fee of a payday loan from 15 per cent to 7 per cent of the face amount of the deferred check.

The Office of Hawaiian Affairs, CHOW project, and Catholic Charities Hawaii testified in support of this measure.  The Office of Consumer Protection and Hawaii Appleseed Center for Law and Economic Justice testified in support of the intent of this measure.  Phocused testified in support with amendments to this measure.  Money Mart; Dollar Financial Group; Maui Loan Inc.; Money Service Centers of Hawaii, Inc.; Cash in Advance, Inc.; Hawaii Check Cashing; and an individual testified in opposition to this measure.  The Office of the Auditor provided comments on this measure.

     Your Committee has amended this measure by:

     (1)  Changing the maximum fee for a deferred deposit agreement to an unspecified percentage; and

     (2)  Changing its effective date to July 1, 2050, to encourage further discussion.

     Your Committee notes that the use of an annual percentage rate (APR) as a measurement of interest in deferred deposits of checks is misleading.  Therefore, your Committee respectfully requests that your Committee on Finance further examine this issue.

     As affirmed by the record of votes of the members of your Committee on Consumer Protection & Commerce that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 228, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 228, H.D. 1, and be referred to the Committee on Finance.

Respectfully submitted on behalf of the members of the Committee on Consumer Protection & Commerce,

____________________________

ANGUS L.K. McKELVEY, Chair