Haw. Rev. Stat. § 480J-2

Current through the 2024 Legislative Session
Section 480J-2 - Installment loans; requirements; payments
(a) Each installment loan transaction and renewal shall meet the following requirements:
(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 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.

HRS § 480J-2

Added by L 2021, c 56,§ 2, eff. 7/1/2021.