SB2587 Summary

• Establishes comprehensive regulatory framework for small dollar lenders in Hawaii requiring licensure beginning January 1, 2022, under oversight of the Division of Financial Institutions.

• Caps small dollar loans at $1,500 maximum principal, limits interest to 36% annually, imposes monthly maintenance fees ($10-$60 tiered by loan amount), and caps total fees at 60% of principal loan amount.

• Requires lenders to fully amortize loans over the loan term, prohibits secured loans, restricts lenders to one outstanding loan per borrower, and allows only one renewal before consumer must pay debt in full.

• Mandates check casher registration with the Department of Commerce and Consumer Affairs; requires offering voluntary payment plans to customers entering third consecutive deferred deposit transaction; limits deferred deposits to $600 with 15% fee cap.

• Appropriates funds for two full-time examiner positions to administer the small dollar loan program; directs State Auditor to analyze payday lending regulation and its consumer protection impact, reporting findings to legislature by 2021.