SB2888

Report Title:

Negotiable Instruments; Charges for Dishonored Checks

 

Description:

Prohibits charging a fee to any person who receives a payment that is dishonored for lack of funds or other reasons.

THE SENATE	S.B. NO.	2888
TWENTY-FIRST LEGISLATURE, 2002
STATE OF HAWAII

A BILL FOR AN ACT

 

relating to negotiable instruments.

 

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

SECTION 1. The legislature finds that financial institutions currently may charge a fee to both the writer and the recipient of a "bad check". The legislature believes that while the person who pays with a check that is dishonored due to lack of funds or for other reasons should be assessed a fee, the recipient of the payment should not be so penalized. The receiver of the payment has little means of knowing that the payment will not be honored, and suffers a financial loss in the transaction. Further penalizing the recipient causes undue hardship.

The purpose of this Act is to ensure that the person who receives a payment that is dishonored shall not be charged a fee.

SECTION 2. Section 490:3-506.5, Hawaii Revised Statutes, is amended to read as follows:

"[[]§490:3-506.5[]] Charges for dishonored checks. The payee or a holder in due course of any check, draft, or order for the payment of money that has been dishonored for lack of funds or credit to pay the check, draft, or order or because the maker has no account with the drawee shall be allowed to assess the maker a reasonable service charge of not more than $20[.]; provided that no charge shall be assessed against the payee or holder of any dishonored check, draft, or order for the payment of money."

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 Statutory material to be repealed is bracketed and stricken.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:	_____________________________