The Hawaii law is effective January 1, 2016.
Hawaii Gov. David Ige has signed a bill into law that creates a limited purpose driver’s license for people who don’t have documents to prove they are legally allowed to live in the U.S.
The governor signed the measure, House Bill 1007, on Tuesday, according to a press release.
The measure was backed by the Hawaii Coalition for Immigration Reform and Filipino community advocacy groups such as the Filipino American Citizens League. But in addition to immigrants, the law applies to a range of drivers including homeless people and domestic violence victims who may not have the proper documentation.
The law becomes effective January 1, 2016.
Discrimination against foreign-born residents was alleged when translation of some exams was discontinued.
The Hawaii Department of Transportation and the nonprofit Faith Action for Community Equity (FACE) said Friday that a lawsuit was settled regarding the translation of driver’s examinations for vehicle licenses.
United States District Court Judge Susan Oki Mollway approved the settlement.
In 2013, FACE said it was concerned that speakers of Marshallese, Chuukese and Ilocano were being disenfranchised because exams were not available in those languages.
Translations of the driver’s test began in 2001, but they were later suspended after new state laws led to changes in the test. The DOT did, however, provide translations into eight other languages including Japanese and Tagalog.
FACE filed a lawsuit in federal court alleging that the DOT discriminated against foreign-born residents of Hawaii “by not offering a translated exam for a period of more than five years after previously existing translations were removed from service when additional questions needed to be added to the exam,” according to a joint press release.
For its part, the DOT says it consistently disputed that there was “any discriminatory motive” involved in decision-making about the translated exams. In a statement, DOT Director Ford Fuchigami said his department is committed “to serving all of Hawaii’s residents regardless of who they are or where they are from.”
The DOT currently offers the examination in 13 languages, said to make Hawaii the only state under 2 million people to offer the exam in more than 10 languages, including Hawaiian.
FACE said it is pleased with the outcome of the case.
Thursday, April 30
6:00 to 9:00 p.m. in Davies Hall at St. Andrews Cathedral
Talk story with Ai-Jen Poo
Help us build Hawaii’s movement for care and caregiving! This event is a conversation about the challenge of caregiving in our state. National leader Ai-Jen Poo will read from her recent book The Age of Dignity, as well as lead a discussion about how our families are planning for aging and long term care.
Join the event on Facebook: https://www.facebook.com/events/1041074595920387/
Learn more about Caring Across Generations: https://www.youtube.com/watch?v=-3F8isOxNGM
As Faith and Community leaders in Hawaii, it is vital that we speak out against predatory lending practices hurting the
families in our congregations and communities. Payday loans, short term loans where our families are being charged more
than 450% APR, are spreading on our islands, trapping families in a cycle of debt.
As many of our faith traditions have taught us, this is usury and all major religious traditions share a deep opposition to usury.
In our ministries and communities, we see many households struggling financially. As we work together to empower families
and strengthen our economy, the last thing we need to do is saddle households with bottomless debt.
We believe that a limit of 36% APR on Payday Loans in Hawaii would be more fair, would parallel the national protections
already on the books for military families and would make it more likely for our local families to be able to pay these debts
without falling further and further behind.
View full letter with signatures below:
Published in the Star Advertiser April 8, 2015
By Kim Harman
Hawaii law allows payday lenders to charge families 459 percent APR (annual percentage rate) on 14- to 32-day loans.
This high interest rate is the result of a loophole that was created in Hawaii law in 1999; prior to 1999, payday loans were not legal here.
Payday loans are small, short-term loans, often secured with a post-dated check that come due on your next “payday.”
According to the Center for Responsible Lending, payday lending is a $46 billion industry nationwide and is growing here, in large part due to Hawaii allowing such high interest rates.
Early this session, Senate Bill 737 was introduced to reduce the interest rate on payday loans from the current 459 percent to 36 percent. Seventeen states and the District of Columbia already cap their payday in terest rates at 36 percent or have made them illegal altogether. The federal government has capped interest rates on payday loans at 36 percent since 2006 for all military and their families. The Department of Defense has found the cap to be so successful in protecting military families from the payday debt cycle that they are requesting authority from Congress to expand the cap to cover other types of high-interest loans, such as car title loans.
But in Hawaii, families are targeted by aggressive payday marketing, charged $86 every paycheck for interest on a $500 loan and trapped in a debt cycle that is very hard to escape. Even successful financial literacy programs run by veteran community organizations such as Catholic Charities and Hawaiian Community Assets struggle to find ways to get these families out of the cycle.
Borrowers have been at the state Capitol, telling their stories to legislators. Veronica, a young mother, was trapped in her payday loan for 11 months. Napua, whose son just joined the Army, told the House Consumer Protection Committee of being ashamed that she fell for the “easy money” promised by a payday storefront.
The Hawaii Office of Consumer Protection has testified in favor of the 36 percent cap at hearings this year. A broad coalition of clergy, advocates, environmentalists and more has called for an end to these usurious interest rates that take advantage of our most vulnerable families.
One legislator on the Finance Committee asked me a few weeks ago: “If we tell the stores and the gas stations that they cannot inflate the price of water and gasoline when a tsunami warning is declared, why is it OK for payday lenders to inflate the cost of credit when a family is in financial crisis?”
Many in Hawaii are in agreement that 400-plus percent interest rates are usury and should not be allowed. Catholic, Methodist and Episcopal bishops here and across the country have been particularly outspoken in support of a 36 percent cap on payday loan annual interest rates.
Supporters of the current interest rate argue that it is unfair to call their fees and charges “interest.” The Truth in Lending Act as well as the Federal Trade Commission require that payday lenders combine all these costs into an APR or annual percentage rate so that borrowers can compare the cost of credit from one storefront to another. In the U.S., we all must use APR for loans, no matter what an individual lender would prefer to call it.
Two weeks ago, President Barack Obama spoke out against predatory payday loan practices. The national Consumer Financial Protection Bureau (CFPB) is holding hearings and doing what it can to curb abusive payday practices, but the CFPB, like the U.S. military, was never authorized by Congress to cap interest rates for the general public.
Capping interest rates is the No. 1 reform that would help local families trapped in the payday debt cycle and must be governed by each state legislature.
Payday Lenders: It’s Time to Rein In Hawaii’s Loan Sharks
New legislation would eliminate the industry’s current 459 percent APR ceiling, but an amendment passed Wednesday makes it unclear what the new cap would be.
If you were broke and desperate, perhaps the least you might expect of the government is that it wouldn’t help to make your situation worse. Yet that is exactly what the state has done for nearly 16 years now through its laissez faire treatment of Hawaii’s burgeoning payday loan industry.
As Civil Beat’s Anita Hofschneider reported earlier this week, Hawaii has one of the nation’s most permissive payday lending laws, allowing companies to charge an annual percentage rate of up to 459 percent, according to an analysis performed a decade ago by the State Auditor.
Sadly, not much has changed since that analysis, except the number of lenders offering their payday products to typically poor borrowers with few options.
Nationally, that has resulted in a troubling trend: According to the Consumer Financial Protection Bureau, four out of five payday loans are followed by another payday loan within two weeks. The effect of that trend is only magnified in Hawaii with its stratospheric APR limit and lax oversight of the industry.
Cory Lum/Civil Beat
Here’s how the payday loan process works. Borrowers can take out loans of up to $600. The lender gets a 15 percent fee, but the loan must be repaid within 32 days.
Cash-strapped individuals, who often need the money to cover basic expenses such as food and rent, are frequently unable to repay on time. A federal report notes that rather than being repaid, 80 percent of such loans are rolled over or renewed. As a result, payday loan borrowers are typically indebted for roughly 200 days.
Despite the fact that they’re not supposed to be able to take out a second loan while the first note remains due, many do so to repay the first, ensnaring themselves in a cycle of loan repayment from which it is difficult to escape.
Hawaii’s House Consumer Protection and Commerce Committee on Wednesday took up Senate Bill 737, a measure that would bring long overdue reform to this industry, including establishing a five-day waiting period between paying off one loan and taking out another and increasing the fine for lenders who willfully violate the law to $5,000. But when it came to interest rates — the heart of the bill — the committee lost its nerve.
In its original form, SB737 would have eliminated the 459 percent APR, forbidding payday lenders from charging any more than 36 percent. However, bowing to committee Vice Chair Justin Woodson, the committee elected to leave the percentage rate blank before passing the measure unanimously. It now will be up to Rep. Sylvia Luke’s Finance Committee to determine not only what the ceiling should be, but whether the APR rate limit is even “the appropriate measurement solution.”
In all of these considerations, payday lenders are well represented: Bruce Coppa, former chief of staff for then-Gov. Neil Abercrombie and current lobbyist for Capitol Consultants, was dutifully watching on Wednesday. He has said lack of enforcement of state law preventing lenders from rolling over loans is the real culprit, not the APR ceiling.
The federal Consumer Financial Protection Bureau on Thursday released a proposed framework of reform regulations that would bring new discipline to the $46-billion payday loan industry, which it says collects about $8.7 billion annually in interest and fees. While the proposals focus on eliminating “debt traps” around issues like borrower qualification and the number of loans and loan rollovers possible in a given period, they stopped short of capping interest rates for these short-term debts, in part because until now, payday lending regulation has been done at the state level.
Critics already say the proposed federal regulations don’t go far enough, and that the payday loan industry will be able to exploit loopholes and largely continue current practices. Given that the industry’s products have already been banned outright in 14 states and the District of Columbia, that’s particularly disappointing.
For Hawaii, the interest rate issue thus comes down to what course the House chooses next. Will it follow the Senate’s lead and come through on behalf of impoverished borrowers? Or will it allow SB737 to die, as it did similar reform measures in 2013 and 2014, and continue to leave individuals at the mercy of loan sharks who circle our islands in ever greater numbers?
We’re watching, too.
The Hawaii Coalition for Immigration Reform thanked Obama for his Executive Action which has extended legal status to thousands of Filipino, Chinese, Korean, Tongan, and Latino Immigrants in our state. HCIR and FACE was featured in the Washington Post with its Mahalo sign waving right before Christmas. See article at:
FACE also assisted in the spin-off of a new group – the Aloha Dream Team which is made up of “Dreamers” young immigrants who have been working with us for about a year. They will be coming soon to your church to help people understand the DACA/DAPA opportunities! We will be their fiscal agent as they seek to raise funds for their work.
FACE Maui co-hosted the President of the Federated States of Micronesia (FSM) on Tuesday, December 9 at Kahului Union Church. The discussion ranged from the economic status of FSM, to funding education, the importance of translation of vital documents and FACE’s lawsuit against the Department of Transportation. A notary was available to help families with their I-94 and passport renewals. Mahalo to Maui County Immigration Services for assisting with this event.
On the 1st day of Christmas, my true love gave to me:
A worker-owned homecare coop
On the 2nd day of Christmas my true love gave to me:
2 islands organizing for justice
On the 3rd day of Christmas my true love gave to me:
3 leaders at national training
On the 4th day of Christmas, my true love gave to me:
4 thousand people eligible for DAPA in Hawaii
On the 5th day of Christmas, my true love gave to me:
5 sign-wavings for minimum wage
On the 6th day of Christmas, my true love gave to me:
6 funders funding
On the 7th day of Christmas, my true love sent to me:
7 FACE staff a’singing
On the 8th day of Christmas, my true love gave to me:
8 FACE leaders meeting in DC
On the 9th day of Christmas, my true love gave to me:
9 Fabulous Board members
On the 10th day of Christmas, my true love gave to me:
10.10 an hour
On the 11th day of Christmas, my true love gave to me:
11 drivers tests translated
On the 12th day of Christmas, my true love gave to me:
￼￼￼￼￼12 months of faith-based organizing!