(a) Each installment loan transaction and renewal shall be documented by a written agreement signed by the installment lender and consumer. The written agreement shall contain the following information:

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Terms Used In Hawaii Revised Statutes 480J-3

  • Annual percentage rate: The cost of credit at a yearly rate. It is calculated in a standard way, taking the average compound interest rate over the term of the loan so borrowers can compare loans. Lenders are required by law to disclose a card account's APR. Source: FDIC
  • Annual percentage rate: means an annual percentage rate as determined pursuant to section 107 of the Truth in Lending Act, title 15 United States Code § 1606. See Hawaii Revised Statutes 480J-1
  • Arranger: means a provider of funds in the syndication of a debt. See Hawaii Revised Statutes 480J-1
  • Commissioner: means the commissioner of financial institutions. See Hawaii Revised Statutes 480J-1
  • 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
  • Finance charges: means the cost of credit or cost of borrowing, including the interest and other fees authorized by this chapter. See Hawaii Revised Statutes 480J-1
  • Installment loan: means a loan made pursuant to this chapter. See Hawaii Revised Statutes 480J-1
  • Instrument: means a method of payment that may include a debit card payment, Automated Clearing House transfer, electronic check or other forms of electronic transfers, money order, cash, personal check signed by the consumer, or any other method of loan payment authorized by this part or by rule adopted by the commissioner pursuant to chapter 91 and made payable to a person subject 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
  • Interest rate: The amount paid by a borrower to a lender in exchange for the use of the lender's money for a certain period of time. Interest is paid on loans or on debt instruments, such as notes or bonds, either at regular intervals or as part of a lump sum payment when the issue matures. Source: OCC
  • 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
  • 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
  • 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
  • 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) The name and address of the consumer and the lender;
(2) The transaction date;
(3) The loan amount;
(4) The authorized interest rate;
(5) A statement of the total amount of finance charges charged, expressed as a dollar amount and an annual percentage rate;
(6) The installment payment schedule setting out the amount due on specific due dates;
(7) A statement that an installment lender shall not require a consumer to purchase add-on products;
(8) The name, address, electronic mail address, and telephone number of any agent or arranger involved in the installment loan transaction;
(9) A notice to the consumer that the consumer has the right to rescind the installment loan before 5:00 p.m., Hawaii-Aleutian Standard Time, by the third business day after the date the loan was originated and at the location where the loan was originated;
(10) A statement that it shall not be considered a violation of law if the consumer obtains an installment loan voluntarily and separately from the consumer’s spouse if the consumer documents the action in writing, either in the written agreement or in a subsequent agreement;
(11) A notice to the consumer that a returned instrument may result in a dishonored instrument charge, not to exceed $25; and
(12) A description of the methods by which installment loan payments may be made, which may include a debit card payment, Automated Clearing House transfer, electronic check, other forms of electronic transfers, money order, cash, check, or any additional method of loan payment authorized by this chapter or by rule adopted by the commissioner pursuant to chapter 91.
(b) The written agreement shall also comply with the disclosure requirements of the Truth in Lending Act and any regulation adopted thereunder.
(c) The installment lender shall provide to the consumer a printed written disclosure prior to signing the written agreement that accurately discloses the types of information in the chart below, in at least twelve-point type:

“MULTIPLE

INSTALLMENT

LOAN PAYMENT

Amount Financed

Term (months)

Authorized Interest Rate

Monthly Maintenance Fee

Total of All Permitted Charges

Total You Will Pay for This Loan If Paid on Time

(Amount Financed, Interest, and Monthly Maintenance Fee)

ANNUAL PERCENTAGE RATE

Payment Schedule”

Included in the chart above, an installment lender may include any other information the lender believes will benefit the consumer, such as an explanation of annual percentage rate and how it is calculated.

(d) The consumer shall sign and date each of two copies of the written disclosure required pursuant to subsection (c), one of which shall be given to the consumer and the other of which shall be retained by the lender as part of its records of the installment loan. This requirement may also be accomplished by electronically signing an electronic copy of the disclosure and making the disclosure electronically available to the consumer if the consumer is applying for the loan over the Internet. For purposes of preparing the written disclosure, the installment loan shall be structured on a precomputed basis (total of payments) with the assumption that all payments will be made as scheduled.
(e) The written agreement may include a demand feature that permits the lender or any other person, if the consumer fails to make any payment when due, to terminate the installment loan in advance of the original maturity date, but no earlier than ten days after the missed payment, and demand repayment of the entire outstanding balance. If the written agreement includes a demand feature and the demand feature is exercised, the lender shall be entitled to collect only the outstanding balance and a prorated portion of the unpaid interest and fees earned up to the date of termination. For purposes of this subsection, the outstanding balance and prorated portion of the unpaid interest and fees shall be calculated as if the consumer had voluntarily prepaid the loan in full on the date of termination.

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