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Kokua Line
Question: I just got a snail-mail spam from someone from a local financial institution offering me a $3,000 loan to be paid off with 48 monthly payments of only (!) $99.45. The fine print states that the APR is 24.99 percent! I checked the Web site http://www.lectlaw.com/files/ban02.htm, which states: "Hawaii, the legal rate of interest is 10 percent. The usury limit for consumer transactions is 12 percent." This doesn't seem correct because credit card interest is higher than 12 percent in Hawaii, but I've never seen a consumer loan interest rate anywhere near 24.99 percent. Doesn't Hawaii have usury laws that would make such an outrageous interest rate illegal? Usury statute offers
no easy answersAnswer: As you found out, it's not that simple of a matter.
The state does have a usury law (Chapter 478 of the Hawaii Revised Statutes), which says rates as high as 24 percent are not "unlawful," but the answer is more complicated than just pointing to that law, says Lynne Y. Wakatsuki, state commissioner of financial institutions.
She advised you to call her office at 586-2820. One of her bank examiners can then either answer your question or refer you to a federal agency that can do so.
No one state agency has jurisdiction over the usury statute, although the Office of Consumer Protection generally will investigate complaints about someone charging an interest rate above the usury law, Wakatsuki said. (Call 587-3222 in that case.)
Wakatsuki's office oversees HRS Chapter 412, a lengthy chapter on the Code of Financial Institutions.
She said it was difficult to answer your question because "it all depends on who the lender is."
She noted there are federally chartered financial institutions, state-chartered financial institutions as well as the Interstate Commerce clause of the U.S. Constitution that are pertinent in this case.
"To show you how complicated it is, if a national bank that offers credit cards, located on the mainland, solicits (you) through the mail, it may fall within the Interstate Commerce clause," she said. In that case, the Hawaii usury law is preempted and the bank "can charge whatever rate they are allowed to under their (own state) laws."
That's because it depends on what state the institution is in -- some states have no usury laws while others have usury laws for particular types of transactions.
"That's why it's difficult to give a blanket answer," Wakatsuki said.
On top of that, if an institution is licensed by the state of Hawaii, it would fall under Article 9 (Financial Services Loan Companies) of the Code of Financial Institutions, but the interest rate it can charge is regulated in the usury law.
So it also depends on what kind of loan is involved, Wakatsuki said.
"People can call us if they have questions about a loan," Wakatsuki said. "We might not be able to help them if it is a loan from a company we don't regulate," but her office could point you in the right direction.
Auwe
At the Feb. 4 Pro Bowl, parking attendants at Aloha Stadium directed cars to park in specific stalls, resulting in a huge humbug locating family and friends for tailgating. We went to the stadium early to park in a predetermined spot for tailgating, but that spot was taken by cars that arrived much later. Once again the Stadium Authority implemented a policy which reflects a lack of common sense and a total disregard for fans. -- C.Y.H.
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