Which of the following is NOT a Hawaii usury exemption?

Which of the following is NOT a Hawaii usury exemption?

• A. Indebtedness secured by a vehicle
• B. Indebtedness secured by a first mortgage lien on real property
• C. Indebtedness secured by a purchase-money junior mortgage lien on real property
• D. Transaction for the sale of goods or services by a seller

Answer: (A)

The correct answer identifies indebtedness secured by a vehicle as not being a usury exemption under Hawaii law. In Hawaii, the usury laws, which set the maximum allowable interest rates for loans, have certain exemptions that apply to specific forms of indebtedness. These exemptions commonly include mortgages and similar financial agreements that pertain to real property, as well as transactions related to the sale of goods or services, particularly when they are properly secured. Indebtedness that is secured by a first mortgage lien on real property and junior mortgage liens reflect the traditional understanding of real estate financing where these loans can benefit from exemptions to usury limits. Furthermore, transactions for the sale of goods or services are typically exempt, as this fosters commercial activity and consumer rights. In contrast, loans secured by personal property like vehicles generally do not receive similar treatment under the usury laws. They tend to have different scrutiny than those secured by real estate, meaning they are not classified under exemptions. This distinction is crucial for understanding which types of loans and financial arrangements benefit from usury exemptions in Hawaii.

The correct answer identifies indebtedness secured by a vehicle as not being a usury exemption under Hawaii law. In Hawaii, the usury laws, which set the maximum allowable interest rates for loans, have certain exemptions that apply to specific forms of indebtedness. These exemptions commonly include mortgages and similar financial agreements that pertain to real property, as well as transactions related to the sale of goods or services, particularly when they are properly secured.

Indebtedness that is secured by a first mortgage lien on real property and junior mortgage liens reflect the traditional understanding of real estate financing where these loans can benefit from exemptions to usury limits. Furthermore, transactions for the sale of goods or services are typically exempt, as this fosters commercial activity and consumer rights.

In contrast, loans secured by personal property like vehicles generally do not receive similar treatment under the usury laws. They tend to have different scrutiny than those secured by real estate, meaning they are not classified under exemptions. This distinction is crucial for understanding which types of loans and financial arrangements benefit from usury exemptions in Hawaii.