HB 2513 - Payday Lending Regulation

• Transitions Hawaii from lump sum deferred deposit loans to installment-based small dollar loans with maximum loan amount of $500 and maximum 6-month loan term.

• Establishes comprehensive consumer protections including maximum 36% annual interest rate, prohibition on prepayment penalties, full loan amortization, and right to rescind loans within one business day.

• Requires licensure of small dollar lenders beginning January 1, 2019, with application fees of $600, annual renewal fees of $450, and surety bond requirements ranging from $30,000 to $250,000.

• Grants commissioner of financial institutions authority to examine licensees, impose penalties up to $1,000 per violation, deny applications, suspend or revoke licenses, and establish licensing rules.

• Prohibits secured loans, add-on products, unlicensed lending, false advertising, and restricts collection practices including limits on communication frequency and prohibition on workplace visits without invitation.