HB1048 revises Hawaii’s installment loan law to standardize terminology and update several consumer loan rules. The bill replaces references to “consumer loan” with “installment loan” throughout the chapter and clarifies the definition of “installment lender” to cover persons offering, making, arranging, or acting as agents for installment loans through mail, phone, internet, or other electronic means. It also keeps the chapter’s core structure in place, including the $1,500 maximum loan amount, limits on total loan charges, and restrictions on secured repayment obligations and add-on products.
The bill makes several operational changes to how installment loans may be priced and administered. It requires monthly maintenance fees to be prorated daily, allows a lender to charge up to a $5 convenience fee for debit card payments if the borrower chooses that method, and narrows paper receipt requirements to cash or in-person payments while removing the borrower’s name from the receipt. It also repeals the existing three-day waiting period before a lender may issue a new installment loan after full repayment, and it preserves the rule that borrowers may prepay without penalty, subject to paying past-due amounts first.
Impact
HB1048 would amend sections 480J-1, 480J-2, and 480J-5 of the Hawaii Revised Statutes governing installment lending. It would affect licensed installment lenders and borrowers by changing fee calculation methods, payment options, receipt requirements, and the definition of who is covered by the chapter. The bill also removes the statutory cooling-off period between paid-off loans and adds a sunset provision, with the act set to be repealed on June 30, 2028, and the prior law restored unless further legislative action is taken.
Sentiment
The available legislative history suggests generally favorable treatment of the bill. It passed second reading as amended in HD 1 and was referred onward with no votes in opposition and no reservations recorded, indicating broad committee support at that stage. The bill’s stated purpose and amendments appear aimed at clarifying and modernizing the installment loan chapter rather than overhauling it.
Contention
The main policy tensions appear to involve consumer protection versus lender flexibility. Consumer-oriented provisions include limits on loan size, total charges, maintenance fees, and prohibitions on mandatory add-on products, while lender-friendly changes include allowing a debit-card convenience fee, reducing receipt requirements, and eliminating the three-day waiting period between loans. Another point of possible concern is the clarification of who is subject to licensure and regulation under the chapter, which could affect third-party arrangers and agents operating through electronic channels. No specific objections or divided votes are reflected in the provided record.