HB1048 • 2026

RELATING TO INSTALLMENT LOANS.

Active

The official status still shows this bill as active or still awaiting another formal step.

Sponsor: NAKAMURA (Introduced by request of another party)
Last action: 2025-12-08
Official status: Carried over to 2026 Regular Session.
Effective date: Not listed

Plain English Breakdown

The bill text does not specify that paper receipts are required only for in-person or cash payments, although this is mentioned in the summary description.

Rules for Installment Loans

This bill changes rules about installment loans, including how fees are charged and when new loans can be issued.

What This Bill Does

Changes the term 'consumer loan' to 'installment loan' in laws related to these types of loans.
Requires that maintenance fees for installment loans be calculated daily if a loan is partially paid off.
Allows lenders to charge up to $5 as a convenience fee when consumers pay with debit cards.
Removes consumer names from receipts given by lenders, keeping payments more private.
Gets rid of the rule that requires lenders to wait three days before giving out another installment loan after one is fully paid.

Who It Names or Affects

Installment lenders and their customers in Hawaii.

Terms To Know

installment loan: A type of loan that requires the borrower to make regular payments over time until the full amount is paid back.
maintenance fee: A charge by a lender for keeping an installment loan active, which can be daily or monthly depending on how much of the loan remains unpaid.

Limits and Unknowns

The bill does not specify what happens if the law is not renewed before it sunsets in June 2028.
It's unclear how many installment lenders will charge the new convenience fee for debit card payments.

Amendments

These notes stay tied to the official amendment files and metadata from the legislature.

HD1

Hawaii published version HD1

Plain English: The amendment changes the definition of 'installment lender' to include agents acting for licensed third parties and sets new limits on loan amounts and fees.

Expands the definition of an installment lender to include anyone who acts as an agent for a licensed third party, regardless of whether that third party is exempt from licensure or requires approval.
Limits the total amount of an installment loan to $1,500.
Caps the monthly maintenance fee based on the original principal loan amount and prohibits charging this fee if the borrower is in active military service.
Requires lenders to accept prepayment without penalty and forbids requiring consumers to use a debit card for payments.

The amendment text is complex, and some parts are truncated or unclear, making it difficult to provide a complete summary of all changes.

Bill History

2025-12-08 D
Carried over to 2026 Regular Session.
2025-02-11 H
Passed Second Reading as amended in HD 1 and referred to the committee(s) on FIN with none voting aye with reservations; none voting no (0) and Representative(s) Cochran, Ward excused (2).
2025-02-11 H
Reported from CPC (Stand. Com. Rep. No. 426) as amended in HD 1, recommending passage on Second Reading and referral to FIN.
2025-02-04 H
The committee on CPC recommend that the measure be PASSED, WITH AMENDMENTS. The votes were as follows: 8 Ayes: Representative(s) Matayoshi, Chun, Ilagan, Ichiyama, Iwamoto, Marten, Tam, Pierick; Ayes with reservations: none; Noes: none; and 2 Excused: Representative(s) Kong, Lowen.
2025-01-31 H
Bill scheduled to be heard by CPC on Tuesday, 02-04-25 2:00PM in House conference room 329 VIA VIDEOCONFERENCE.
2025-01-23 H
Referred to CPC, FIN, referral sheet 3
2025-01-23 H
Introduced and Pass First Reading.
2025-01-21 H
Pending introduction.

Official Summary Text

RELATING TO INSTALLMENT LOANS.
Department of Commerce and Consumer Affairs; Division of Financial Institutions; Installment Lender; Lender
Replaces the term "consumer loan" with the defined term "installment loan" for consistency throughout the installment loan chapter. Clarifies who is subject to the installment loan chapter. Requires loan maintenance fees to be prorated daily. Allows lenders to charge a convenience fee of up to $5 for debit card payments. Requires paper receipts only for in-person or cash payments and removes consumer names from receipts. Repeals the requirement for lenders to wait three days after a consumer fully repays a loan before issuing a new installment loan. Sunsets 6/30/2028. Effective 7/1/3000. (HD1)

Current Bill Text

Read the full stored bill text

HB1048

HOUSE OF REPRESENTATIVES

H.B. NO.

1048

THIRTY-THIRD LEGISLATURE, 2025

STATE OF HAWAII

A BILL FOR AN ACT

RELATING TO INSTALLMENT LOANS.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

����
SECTION 1.
�
Section
480J-1,

Hawaii Revised Statutes, is amended by amending the definition of
"installment lender or lender" to read as follows:

����
""
Installment lender
" or
"lender" means any person
not exempt under section 480J-32
who
is in the business of offering or making [
a consumer
]
an installment

loan, who arranges [
a

consumer
]
an installment
loan for a
third party[
,
]
required by this chapter to be licensed,
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,
]
required by this chapter to be licensed with respect
to the third party's offering, making, or arranging of installment loans,
through
any method including mail, telephone, the Internet, or any electronic means."

����
SECTION
2.
�
Section
480J-2,
Hawaii
Revised Statutes, is amended
as
follows:

����
1.
�

By amending subsection (a) to read:

����
"(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:
]
;
provided that thirty days shall equal to one month and for any fraction of a
month the fee shall be prorated on a daily basis not to exceed the following
:

���������
(A)
�
$25
monthly fee
on a loan of an
original principal loan amount up to $299.99;
provided that a fraction of a
month shall use a daily factor of .83 cents per day;

���������
(B)
�
$30
monthly fee
on a loan of an
original principal loan amount of at least $300.00 and up to $699.99;
provided
that a fraction of a month shall use a daily factor of $1.00 per day;
and

���������
(C)
�
$35
monthly fee
on a loan of an
original principal loan amount of at least $700.00 and greater;
provided
that a fraction of a month shall use a daily factor of $1.17 per day;

���������
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 may offer to a
consumer the option to make a payment through the consumer's debit card and may
charge up to a five-dollar convenience fee; provided that the installment
lender shall be prohibited from requiring this form of payment.
�
The form of payment decision shall rest with a
consumer. The installment lender shall not charge the consumer a non-sufficient
funds fee for rejected payments through the use of a consumer's debit card.

��
[
(10)
]

(11)

�
An installment lender shall not charge a
consumer any loan charges for an installment loan, other than the fees
permitted by this chapter;

��
[
(11)
]

(12)
�
The written agreement required under section
480J‑3 shall not require a consumer to purchase add-on products, such as
credit insurance; and

��
[
(12)
]

(13)
�
The maximum contracted repayment term of the
installment loan shall be twelve months."

����
2.
�
By amending subsection (c) to read:

����
"(c)
�
For each
cash or in-person
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."

����
SECTION
3.
�
Section 480J-5, Hawaii Revised
Statutes, is amended to read as follows:

����
"[
[
]
�480J-5
[
]
]
�
Maximum loan amount; prohibition against
multiple loans.
�
(a)
�
A lender shall not lend an amount greater
than $1,500 nor shall the amount financed exceed $1,500 by any one lender at
any time to a consumer.

����
(b)
�
Except as otherwise provided in section
480J-8, an installment lender shall take reasonable measures to ensure that no
consumer has more than one installment loan outstanding at a time from any of
the following:

����
(1)
�
The installment lender;

����
(2)
�
A person related to the installment
lender by common ownership or control;

����
(3)
�
A person in whom the installment lender
has any financial interest of ten per cent or more; or

����
(4)
�
Any employee or agent of the
installment lender.

����
(c)
�
An installment lender that receives written
or electronic confirmation from each consumer that the consumer does not have
any outstanding installment loans from the entities listed in subsection (b) as
of the date the consumer enters into an installment loan with the installment
lender shall be deemed to have met the requirements of this section.

����
(d)
�
If a consumer's spouse obtains an installment
loan voluntarily and separately from the consumer, and subsequently the
consumer obtains an installment loan voluntarily and separately from the
consumer's spouse, where neither the consumer nor the consumer's spouse are
coborrowers with each other on either loan, and the consumer's action is
documented in writing, either in the written agreement required under section
480J-3 or in a subsequent agreement, signed by the consumer, and retained by
the lender, the secondary transaction shall not be considered a violation of
this section.

����
[
(e)
�
Upon a consumer's payment in full of any
installment loan, an installment lender shall wait a period of three days
before the lender may make another installment loan to the same consumer
.]"

����
SECTION
4.
�
Statutory material to be repealed is
bracketed and stricken.
�
New statutory
material is underscored.

����
SECTION 5.
�

This Act, upon its approval, shall take effect on July 1, 2025.

INTRODUCED BY:

_____________________________

BY REQUEST

Report Title:

Department of Commerce and Consumer Affairs; Division of
Financial Institutions; Installment Lender; Lender

Description:

Clarifies the intended scope of chapter 480J, HRS, which
is the regulation of installment lenders, and that the law does not intend to
eliminate the ability of lenders to make low-interest rate loans under existing
interest and usury laws.
�
Replaces the term
"consumer loan" with the defined term "installment loan"
for consistency throughout the statutes.
�
Requires loan maintenance fees to be
prorated daily to prevent consumers from incurring fees once the loan is paid
off.
�
Allows lenders to charge a
convenience fee of up to five dollars for debit card payments, providing
consumer more options for repayment.
�

Streamlines the loan repayment process by requiring paper receipts only
for in-person or cash payments and increases consumer privacy by removing
consumer names from receipts.
�
Repeals
the requirement for lenders to wait three days after a consumer fully repays a
loan before issuing a new installment loan.

The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.