Hawaii-2014-SB598-Amended

SECTION 1. 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 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~~], and the fees and annual percentage rate for deferred deposit transactions;

(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~~] resource center of the department of commerce and consumer affairs;

(D) That only one deferred deposit transaction can be opened from all sources; and

(E) Information on where to obtain financial education and credit counseling from a Hawaii-based budget and credit counseling agency that has received approval from a United States trustee or bankruptcy administrator to provide instructional courses concerning personal financial management pursuant to title 11 United States Code section 111;

(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 transaction;

(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 resource center of the department of commerce and consumer affairs;

(D) That only one deferred deposit transaction can be opened from all sources;

(E) That, pursuant to section 480F-4(h), an extended repayment plan option is available after any customer has entered into four or more consecutive transactions with the same check casher; provided that the customer requests the option within twenty-four hours of the customer's last payment due date;

(F) The right to rescind a deferred deposit transaction within twenty-four hours of the transaction; and

(G) Where to obtain financial education and credit counseling from a Hawaii-based budget and credit counseling agency that has received approval from a United States trustee or bankruptcy administrator to provide instructional courses concerning personal financial management pursuant to title 11 United States Code section 111;

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

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

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

"§480F-4 Deferred deposits, when allowed[.]; payment plans. (a) No check casher may defer the deposit of a check except as provided in this section.

(b) Each deferred deposit shall be made pursuant to a written agreement that has been signed by the customer and the check casher or an authorized representative of the check casher. The written agreement shall contain a statement of the total amount of any fees charged for the deferred deposit, expressed both in United States currency and as an annual percentage rate. The written agreement shall authorize the check casher to defer deposit of the personal check until a specific date not later than thirty-two days from the date the written agreement was signed. The written agreement shall not permit the check casher to accept collateral.

(c) The face amount of the check shall not exceed $600 and the deposit of a personal check written by a customer pursuant to a deferred deposit transaction may be deferred for no more than thirty-two days. A check casher may charge a fee for deferred deposit of a personal check in an amount not to exceed fifteen per cent of the face amount of the check[.]; provided that all cumulative fees charged for a deferred deposit transaction shall be expressed as an annual percentage rate not to exceed thirty-six per cent. Any fees charged for deferred deposit of a personal check in compliance with this section shall be exempt from chapter 478.

(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.~~]

(f) A check casher may enter into a payment plan with a non-default customer for a period of up to ninety days. Under the payment 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. There shall be a thirty day period after the completion of any payment plan under this subsection during which no new payment plan under this subsection with that customer shall commence.

(g) 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 that a check casher sends to a customer in default shall inform the customer of the option of interest-free payment.

(h) A check casher shall offer an extended repayment plan option after any customer has entered into four or more consecutive transactions with the same check casher; provided that the customer requests the option within twenty-four hours of the customer's last payment due date. For purposes of this subsection, "consecutive transactions" means entering into back to back agreements within twenty-four hours of the payment of a previous transaction.

[~~(f)~~] (i) No amount in excess of the amounts authorized by this section and no collateral products such as insurance shall be directly or indirectly charged by a check casher pursuant or incident to a deferred deposit agreement."

SECTION 3. 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 4. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 5. This Act shall take effect on July 1, 2050.

THE SENATE	S.B. NO.	598
TWENTY-SEVENTH LEGISLATURE, 2013		S.D. 2
STATE OF HAWAII