RELATING TO INTEREST.

Plain English Breakdown

The official source material does not specify if there are any additional conditions for obtaining loans under this new law.

Setting Maximum Interest Rates for First-Time Car Buyers

This bill sets a maximum interest rate of two percent per year for first-time car buyers with a credit score below six hundred and zero percent for those with a score of six hundred or higher.

What This Bill Does

• Sets a maximum interest rate of two percent per year for consumers purchasing their first vehicle who have a credit score below six hundred.
• Gives consumers purchasing their first vehicle with a credit score of six hundred or more the option to get a loan at zero percent interest.
• Allows existing laws about unfair lending practices (usury) under chapter 478 to apply to this new law.

Who It Names or Affects

• Consumers who are purchasing their first vehicle and have a credit score below six hundred.
• Consumers who are purchasing their first vehicle and have a credit score of six hundred or more.

Terms To Know

Usury

Charging an unfairly high interest rate on a loan, which is against the law in many places.

Credit Score

A number that shows how likely someone is to pay back money they borrow based on their past borrowing and payment history.

Limits and Unknowns

• The bill does not change any rights or duties that existed before it becomes law.
• It only applies to people buying a car for the first time, not other types of loans.

Official Summary Text

RELATING TO INTEREST.
Interest Rate; Usury; Vehicle; Loan; Consumer Protection
Protects consumers, who are purchasing their first vehicle, from predatory interest rates by setting a maximum interest rate of two per cent for consumers with a credit score below six hundred and zero per cent for consumers with a credit score of six hundred or more. Authorizes existing avenues of redress from usury under chapter 478 to apply to this Act.

Current Bill Text

HB262

HOUSE OF REPRESENTATIVES

H.B. NO.

262

THIRTY-THIRD LEGISLATURE, 2025

STATE OF HAWAII

A BILL FOR AN ACT

relating
to interest
.

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

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SECTION 1.
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Chapter 478, Hawaii Revised Statutes, is
amended by adding a new section to be appropriately designated and to read as
follows:

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�478-
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Loans for vehicles.
�
(a)
�
Notwithstanding any other law to the contrary,
consumers purchasing a vehicle for the first time are protected from usury
according to the limitations imposed under this section.
�

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(b)
�
No
consumer purchasing a vehicle for the first time shall be subject to an
interest rate above two per cent a year, provided that:

����
(1)
�
Consumers
purchasing a vehicle for the first time with a credit score of six hundred or
more shall be eligible for a zero per cent interest rate loan; and

����
(2)
�
Consumers
purchasing a vehicle for the first time with a credit score below six hundred
shall not be subject to an interest rate above two per cent a year.
��

����
(c)
�

Consumers purchasing a vehicle for the first time at a greater rate of
interest than permitted in this section are entitled to the redress available
for usury outlined in this chapter.
"

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SECTION 2.
�
This Act does not affect rights and duties
that matured, penalties that were incurred, and proceedings that were begun
before its effective date.

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SECTION 3.
�
New statutory material is underscored.

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SECTION 4.
�
This Act shall take effect on January 1,
2026.

INTRODUCED BY:

_____________________________

Report Title:

Interest
Rate; Usury; Vehicle; Loan; Consumer Protection

Description:

Protects
consumers, who are purchasing their first vehicle, from predatory interest
rates by setting a maximum interest rate of two per cent for consumers with a
credit score below six hundred and zero per cent for consumers with a credit
score of six hundred or more.
�
Authorizes
existing avenues of redress from usury under chapter 478 to apply to this Act.

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