2019 -- H 5105

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LC000081

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2019

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A N   A C T

RELATING TO FINANCIAL INSTITUTIONS -- PAYDAY LOANS

     Introduced By: Representatives Lombardi, Hull, and Walsh

     Date Introduced: January 10, 2019

     Referred To: House Finance

     It is enacted by the General Assembly as follows:

     SECTION 1. Section 19-14.4-5.1 of the General Laws in Chapter 19-14.4 entitled

"Check Cashing" is hereby amended to read as follows:

     19-14.4-5.1. Customer checks -- Deferred deposits.

     (a) A check casher may defer the deposit of a personal check written by a customer for a

term of no less than thirteen (13) days, pursuant to the provisions of this section. The face amount

of the check shall not exceed five hundred dollars ($500).

     (b) Each deferred deposit shall be made pursuant to a written agreement that has been

signed by the customer and by the check casher or an authorized representative of the check

casher. The written agreement shall contain a statement of the total amount of any fees charged

for the deferred deposit, expressed both in United States currency and as an annual percentage

rate (APR), as required by federal regulations. The written agreement shall authorize the check

casher to defer deposit of the personal check until a specific date no less than thirteen (13) days

from the date the written agreement was signed and executed. The written agreement shall not

permit the check casher to accept collateral.

     (c) Notwithstanding any provision of the general laws to the contrary, all "payday loans",

"payday advances" or "deferred presentment loans", as defined in § 19-14-1:

     (1) Shall have an annual percentage rate (APR) of no more than twenty-eight percent

(28%) per annum;

     (2) Shall have a maturity date of more than ninety (90) days from the date on which the

loan closed;

     (3) Shall not have fees and interest that exceeds sixty percent (60%) of the loan's original

principal; and

     (4) Shall be repayable in monthly increments with each monthly payment being no more

than twenty-five percent (25%) of the loan's original principal.

     (c)(d) A rollover is an extension or deferral of the payment due date of a deferred deposit

transaction for the payment of only an additional fee.

     (d)(e) The maximum amount of a single customer's check is five hundred dollars ($500).

     (e)(f) The maximum aggregate amount of concurrently outstanding checks held by the

licensee or its affiliate from the same customer is five hundred dollars ($500).

     (f)(g) The maximum number of concurrently outstanding checks held by the licensee or

its affiliates from the same customer is three (3).

     (g)(h) The maximum number of rollovers permitted is one.

     (h)(i) The check casher shall give a duplicate original of the agreement to the customer at

the time of the transaction.

     SECTION 2. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO FINANCIAL INSTITUTIONS -- PAYDAY LOANS

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     This act would cap the annual percentage rate (APR) for payday loans to twenty-eight

percent (28%); requires a maturity date of more than ninety days (90) from closing; prohibits fees

and interest payments of more than sixty percent (60%) of the principal amount; and requires that

payments be made monthly with each payment being no more than twenty-five percent (25%) of

the loan's original principal.

     This act would take effect upon passage.

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