(a) Each installment loan transaction and renewal shall meet the following requirements:

Terms Used In Hawaii Revised Statutes 480J-2

  • Consumer: means a natural person who is the buyer, lessee, or debtor to whom credit is granted in a transaction that is primarily for that natural person's personal, family, or household purposes. See Hawaii Revised Statutes 480J-1
  • Contract: A legal written agreement that becomes binding when signed.
  • Dependent: A person dependent for support upon another.
  • Installment loan: means a loan made pursuant to this chapter. See Hawaii Revised Statutes 480J-1
  • Interest: means all charges payable directly or indirectly by a borrower to a licensee as a condition to a loan or an application for a loan, however denominated. See Hawaii Revised Statutes 480J-1
  • lender: means any person who is in the business of offering or making a consumer loan, who arranges a consumer loan for a third party, or who acts as an agent for a third party, regardless of whether the third party is exempt from licensure under this chapter or whether approval, acceptance, or ratification by the third party is necessary to create a legal obligation for the third party, through any method including mail, telephone, the Internet, or any electronic means. See Hawaii Revised Statutes 480J-1
  • Lien: A claim against real or personal property in satisfaction of a debt.
  • Loan amount: means the amount financed, as that term is defined in Truth in Lending (Regulation Z), title 12 Code of Federal Regulations, chapter X, part 1026, as amended, or supplemented by this chapter. See Hawaii Revised Statutes 480J-1
  • Loan charges: means the total of all charges made in connection with a loan except for insufficient funds charges authorized by § 480J-11 and default charges authorized by section 480J-4(i). See Hawaii Revised Statutes 480J-1
  • Maintenance fee: means a monthly fee paid to a licensee to maintain an installment loan. See Hawaii Revised Statutes 480J-1
  • month: means a calendar month; and the word "year" a calendar year. See Hawaii Revised Statutes 1-20
  • Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
  • Person: means an individual, sole proprietorship, partnership, corporation, limited liability company, limited liability partnership, or other association of individuals, however organized. See Hawaii Revised Statutes 480J-1
  • Personal property: All property that is not real property.
  • Place of business: means a location where installment loans are offered or made and includes each website through which a consumer may apply for an installment loan from an installment lender. See Hawaii Revised Statutes 480J-1
  • Renewal: means the refinancing of an installment loan that occurs during the period between the original maturity date and the immediately preceding installment payment due date. See Hawaii Revised Statutes 480J-1
(1) Any transaction and renewal shall be documented in a written agreement pursuant to section 480J-3;
(2) The total amount of the installment loan shall not be greater than $1,500 pursuant to section loan amount; prohibition against multiple loans” class=”unlinked-ref” datatype=”S” sessionyear=”2022″ statecd=”HI”>480J-5(a);
(3) The total amount of loan charges an installment lender may charge, collect, or receive in connection with an installment loan shall not exceed fifty per cent of the principal loan amount;
(4) Subject to paragraph (3), a monthly maintenance fee may be charged by the lender, not to exceed the following:

(A) $25 on a loan of an original principal loan amount up to $299.99;
(B) $30 on a loan of an original principal loan amount of at least $300 and up to $699.99; and
(C) $35 on a loan of an original principal loan amount of at least $700 and greater;

provided that the monthly maintenance fee shall not be added to the loan balance upon which the interest is charged; provided further that an installment lender shall not charge, collect, or receive a monthly maintenance fee if the borrower is a person on active duty in the armed forces of the United States or a dependent of that person;

(5) The minimum contracted repayment term of the installment loan shall be two months if the contracted loan amount is $500 or less, or four months if the contracted loan amount is $500.01 or more; provided that, for purposes of meeting the required minimum contracted repayment term, an installment lender may calculate one month as twenty-eight days or longer;
(6) All repayment schedule due dates shall be dates upon which an installment lender is open for business to the public at the place of business where the installment loan was made;
(7) An installment lender shall accept prepayment in full or in part from a consumer prior to the loan due date and shall not charge the consumer a fee or penalty if the consumer opts to prepay the loan; provided that to make a prepayment, all past due interest and fees shall be paid first;
(8) The loan amount shall be fully amortized over the term of the loan, and maintenance fees shall be applied in arrears on a monthly basis;
(9) A consumer’s repayment obligations shall not be secured by a lien on any real or personal property;
(10) An installment lender shall not charge a consumer any loan charges for an installment loan, other than the fees permitted by this chapter;
(11) The written agreement required under section 480J-3 shall not require a consumer to purchase add-on products, such as credit insurance; and
(12) The maximum contracted repayment term of the installment loan shall be twelve months.
(b) In an installment loan, a lender may contract for a once-every-two-weeks, twice-monthly, or monthly payment of the loan balance due, including the applicable portion of the interest, and earned monthly maintenance fee.
(c) For each payment made by a consumer, a lender shall give the consumer a written receipt with the lender’s name and address, payment date, amount paid, consumer’s name, and sufficient information to identify the account to which the payment is applied.
(d) Upon prepayment in full by the consumer, the lender shall refund:

(1) Any unearned and unaccrued portion of the interest charged; and
(2) Any unearned monthly maintenance fees.
(e) Upon request from a consumer or a consumer’s agent, an installment lender shall provide confirmation of the amount required to discharge the installment loan obligation in full. When responding to a request under this subsection, the installment lender, at a minimum, shall include a statement of the amount required to discharge the consumer’s obligation fully as of the date the notice is provided and for each of the next three business days following that date. The installment lender shall make the information required under this subsection available verbally and in writing and shall provide it in an expeditious manner but no later than five business days after receiving the request.

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