SENATE BILL REPORT

SB 5737

BYSenator Rasmussen

Requiring banks and trust companies to cash checks presented by pensioners and retirees.

Senate Committee on Financial Institutions & Insurance

Senate Hearing Date(s):February 19, 1987; February 4, 1988; February 5, 1988

Majority Report:  That Substitute Senate Bill No. 5737 be substituted therefor, and the substitute bill do pass.

      Signed by Senators von Reichbauer, Chairman; Johnson, Kreidler, McCaslin, Moore, Sellar, Smitherman.

Senate Staff:Benson Porter (786-7470)

                  February 5, 1988

AS REPORTED BY COMMITTEE ON FINANCIAL INSTITUTIONS & INSURANCE, FEBRUARY 5, 1988

BACKGROUND:

State-chartered financial institutions are not required to provide a no-cost check cashing service.  Most no-cost check cashing policies require that the presenter of the check maintain an account with the institution.

SUMMARY:

State-chartered banks, trust companies, credit unions, mutual savings banks and savings and loan are required to cash certain federal and state government benefit checks presented by qualified retirees or pensioners.  To qualify, the presenter must be a resident of this state, be registered with the particular branch or office of the financial institution, and offer adequate identification information.  Maintaining an account with the institution is not necessary.

The Supervisor of Banking is to establish a procedure enabling the pensioner or retiree to register with the institution.  Any information required may be verified by the institution, and, upon verification, an identification card will be issued entitling the registrant to check cashing privileges.

The institution may assess a fair charge for generation of the card, but no additional fee for check cashing is permitted.  An institution violating this act will be subject to a maximum $500 fine for each violation.

EFFECT OF PROPOSED SUBSTITUTE:

A striking amendment is entered to strike everything after the enacting clause.  The Senate Standing Committee on financial institutions is required to conduct a study to determine the fee that should be charged, if any, to cash state and federal benefit checks presented by retirees and pensioners.

The committee is to report any recommendations for legislation to the Chairman of the Senate Financial Institutions Committee and the Chairman of the House Financial Institutions Committee.

Appropriation:    none

Revenue:    none

Fiscal Note:      none requested

Senate Committee - Testified: Arnold Livingston, Senior Citizens Lobby (for); Gayle McElroy, Washington BAnkers Association (against)