§412:9-304  Consumer loan charges. Unless specifically authorized in this article or by rule adopted by thecommissioner, a financial services loan company shall only have the right tocharge, contract for, and receive in advance or otherwise, the followingcharges in addition to the interest permitted in section 412:9-302 for aconsumer loan made under this article, including but not limited to afirst-lien mortgage loan:

(1)  Late charges under the consumer loan on anydelinquent installment, or portion of the delinquent installment where therehas been no extension or deferment.  Delinquency occurs when the installment orpayment is not paid on the due date.  Late charges shall not be collected morethan once for the same delinquent installment.  Late charges on any consumerloan shall not exceed five per cent of the delinquent installment, and latecharges shall not be assessed on any consumer loan after acceleration of thematurity of the consumer loan;

(2)  A prepayment penalty as provided in the note orother form of contract signed by the borrower on any amount that is voluntarilyprepaid; provided that:

(A)  The prepayment penalty on any consumerloan with a term of five years or more that is primarily secured by an interestin real property and in which the interest rate is computed under section412:9-301(2) and which is prepaid within five years of the date of the loanshall be computed on the amount prepaid in excess of twenty per cent of theoriginal principal amount of the loan in any twelve-month period measured fromthe date of the loan or from any anniversary of the loan date.  The prepaymentpenalty may be charged only on amounts in excess of the twenty per cent amountin each twelve-month period in such five-year period and shall not exceed sixmonths of interest at the then-applicable loan interest rate on the amountprepaid; provided that the interest rate is permissible under applicable usurylaw;

(B)  The prepayment penalty shall not becharged on a consumer loan that is a variable rate or open-end loan, on aprecomputed loan on which interest is computed under section 412:9-301(1), oron loans that are not secured by real estate; and

(C)  The prepayment penalty shall not becharged on any amount that is paid because of the exercise of any accelerationprovision by the financial services loan company;

(3)  Extension or deferment charges on any payment onaccount of the principal balance of a loan, or a portion thereof, that is dueon a particular date, but is extended or deferred to a later date by mutualagreement.  The charges shall be based upon the amount so extended or deferredat interest not exceeding that permitted upon the original loan under section412:9-302, for the actual period of the extension or deferment.  The extension ordeferment charges may be collected either in advance at the commencement of theperiod of extension or deferment or otherwise as agreed.  The term andconditions of the extension or deferment, including the amount of the consumerloan so extended or deferred, and the period of, and the charge for theextension or deferment shall be set forth in writing and signed by the borrowerwith one copy given to the borrower;

(4)  Nonrefundable discount, points, loan fees, andloan origination charges; provided that:

(A)  Discount, points, loan fees, and loanorigination charges shall not be charged on precomputed loans on which interestis computed under section 412:9-301(1); and

(B)  The nonrefundable discount, points, loanfees, and loan origination charges shall be permitted on consumer loans onwhich interest is computed under section 412:9-301(2) if the consumer loan issecured by an interest in real property or if the consumer loan is made to alessee of land subject to the Hawaiian Homes Commission Act and the loan, butfor the provisions of the Act, would be secured by a mortgage on the leaseholdinterest.  Provided further that, except for open-end loans, the nonrefundablediscount, points, loan fees, and origination charges shall be included asinterest to determine compliance of the loan with the interest rate limitsunder section 412:9-302(b)(2) when the consumer loan is made.

The nonrefundable discount, points, loan fees,and loan origination charges shall be fully earned on the date the loancommitment agreement or other form of contract is executed and the commitmentfee paid, or on the date the consumer loan is made, and shall not be subject torefund on prepayment of the consumer loan;

(5)  Fees, charges, and expenses reasonably related tothe consumer loan that are retained by the financial services loan company;provided that the fees, charges, and expenses are charged only on consumerloans that are secured by an interest in real property; and provided furtherthat the total dollar amount of the fees, charges, and expenses, whether or notitemized, shall not exceed one per cent of the principal amount of the loan. The fees, charges, and expenses may include but are not limited to notary fees,appraisal fees, appraisal review fees, and fees for the development,processing, and preparation of loan documents, including deeds, promissorynotes, mortgages, and reconveyance, settlement, and similar documents;

(6)  Fees, charges, and expenses reasonably related tothe consumer loan that are actually paid to third parties, affiliates, orsubsidiaries for services actually rendered, no portion of which is rebated,refunded, or paid directly or indirectly to the financial services loan companyby the third parties, affiliates, or subsidiaries.  The fees, charges, andexpenses may include but are not limited to charges for credit reports, actualtaxes, and fees charged by a governmental agency for recording, filing, orentering of record any security agreements or instruments, including thepartial or complete release of such security agreements or instruments,insurance premiums of the kind and to the extent described in paragraph (2) ofsubsection (e) of Section 226.4 of Regulation Z of the Board of Governors ofthe Federal Reserve System and to the extent that the insurance premium doesnot exceed $20, appraisal fees, appraisal review fees, title report or titleinsurance fees, mortgage reserve funds to be used for payment of taxes,insurance, lease rent and condominium assessments, real property tax servicesfees, wire transfer fees, and attorney's fees and expenses for documentation ofthe consumer loan or for the collection of any consumer loan in default. [L1993, c 350, pt of §1; am L 1995, c 26, §2, c 39, §1, and c 44, §1; am L 1997,c 158, §2; am L 2005, c 38, §2; am L 2008, c 196, §7]