2022 -- H 7434 SUBSTITUTE A

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2022

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A N   A C T

RELATING TO COMMERCIAL LAW -- GENERAL REGULATORY PROVISIONS --

CREDIT CARD LENDING

     

     Introduced By: Representatives Barros, Solomon, Kennedy, and Alzate

     Date Introduced: February 11, 2022

     Referred To: House Corporations

     It is enacted by the General Assembly as follows:

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     SECTION 1. Section 6-26.1-1 of the General Laws in Chapter 6-26.1 entitled "Credit Card

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Lending" is hereby amended to read as follows:

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     6-26.1-1. Definitions.

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     For purposes of this chapter, the following definitions shall apply:

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     (1) "ACH", also known as the Automated Clearing House Network, means the electronic

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funds-transfer system comprised of a network of associated institutions that process computer-

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based electronic financial transactions between originating and receiving depository financial

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institutions. ACH in the United States is governed by NACHA, the former National Automated

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Clearing House Association.

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     (1)(2) "Credit card device" includes any means of making a credit card transaction

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available to a borrower pursuant to a credit card plan, including, but not limited to, a card, draft or

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check, identification code, other means of identification, or other credit device or code, whether

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made directly or indirectly by means of telephone, point of sale terminal, automated teller machine,

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computer or other electronic or other communication or device, or through the mail.

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     (2)(3) "Credit card lender" or "lender" means any entity that is a lending institution as

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defined by § 19-9-1, or licensee as defined by § 19-14-1, that offers or extends credit in the form

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of a credit card transaction.

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     (3)(4) "Credit card transaction" means any loan or extension of credit made pursuant to a

 

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credit card plan. Without limitation of the foregoing, a credit card transaction may be extended

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under a credit card plan by a credit card lender's acquisition of obligations arising out of the

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honoring by a merchant or other third-party; a credit card lender or other financial institution

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(whether chartered or organized under the laws of this or any other state, the District of Columbia,

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the United States or any district, territory or possession of the United States, or any foreign country);

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or a government or governmental subdivision or agency of a credit card device.

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     (4)(5) "Credit card plan" or "plan" means any arrangement or plan between a borrower and

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a credit card lender or issuer, including, without limitation, lines of credit directly between a

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borrower and a credit card lender or issuer, for open-end, revolving extensions of credit made

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available through a credit card device or other means of settlement between the credit card lender

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or issuer and the merchant, such as ACH or electronic-only credit card devices, provided, however,

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said "credit card plan" or "plan" does not include an extension of credit the repayment of which is

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secured by real property.

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     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 COMMERCIAL LAW -- GENERAL REGULATORY PROVISIONS --

CREDIT CARD LENDING

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     This act would add a definition for the automated clearing house network and would

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modernize the Rhode Island credit card lending statute by amending the definition of "credit card

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plan" to keep up with new technology and online purchasing and expressly allow merchants to

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continue to assist consumers with digital payment options.

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     This act would take effect upon passage.

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