§478-4 Rate by written contract. (a)
It shall in no case be deemed unlawful, with respect to any consumer credit
transaction (except a credit card agreement) and any home business loan to
stipulate by written contract, for any rate of simple interest not exceeding
one per cent per month or twelve per cent a year or, in the event the creditor
is a financial institution regulated under chapter 412 (other than a trust
company or a credit union), for any rate of simple interest not exceeding two
per cent per month or twenty-four per cent a year.
(b) As an alternative to the rate of interest
specified in subsection (a), it shall be lawful with respect to any consumer
credit transaction (except a credit card agreement) and any home business loan
to stipulate by written contract for the payment and receipt of a finance
charge in any form or forms at an annual percentage rate not to exceed twelve
per cent, or twenty-four per cent in the event the creditor is a financial
institution regulated under chapter 412 (other than a trust company or a credit
union), together in either case with any other charges that are excluded or
excludable from the determination of finance charge under the Truth in Lending
Act. The rates in this subsection shall be available as alternative
permissible rates for any of the credit transactions referred to, whether in
fact or in law the Truth in Lending Act applies to the transaction,
notwithstanding the advance, fixed, or variable manner in which interest or
finance charge may be computed under the contract, and whether the contract
uses the terms interest, annual percentage rate, finance charge, or any
combination of such terms. For rate computation purposes, with respect to any
contract to which this subsection may apply, the creditor conclusively shall be
presumed to have given all disclosures in the manner, form, and at the time
contemplated by the Truth in Lending Act, including those necessary to exclude
any charges from the finance charge.
(c) With respect to any transaction other than
a consumer credit transaction, a home business loan, or a credit card
agreement, it shall be lawful to stipulate by written contract for any rate of
interest not otherwise prohibited by law.
(d) The rate limitations contained in
subsections (a) and (b) of this section and section 478-11.5 shall not apply to
any credit transaction authorized by, and entered into in accordance with the
provisions of, articles 9 and 10 of chapter 412 or chapter 476.
(e) With respect to a credit card agreement,
it shall be lawful to stipulate by written contract any amount of interest
authorized by section 478-11.5. [CC 1859, §1482; am L 1898, c 4, §3; RL 1925,
§3587; RL 1935, §7052; RL 1945, §8733; RL 1955, §191-3; HRS §478-3; ren and am
L 1986, c 137, pt of §1; am L 1993, c 350, §§24, 25; am L 2006, c 307, §1]
Law Journals and Reviews
Administering Justice or Just Administration: The Hawaii Supreme Court and the Intermediate Court of Appeals. 14 UH L. Rev. 271.
Case Notes
Cited: 11 H. 747, 748; 36 H. 107, 108; 49 H. 160, 171, 413
P.2d 221.