2024 -- S 2141 | |
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LC003861 | |
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STATE OF RHODE ISLAND | |
IN GENERAL ASSEMBLY | |
JANUARY SESSION, A.D. 2024 | |
____________ | |
A N A C T | |
RELATING TO FINANCIAL INSTITUTIONS -- LICENSED ACTIVITIES -- LENDERS AND | |
LOAN BROKERS -- CHECK CASHING | |
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Introduced By: Senators Quezada, Cano, DiMario, Euer, Miller, Britto, Valverde, | |
Date Introduced: January 24, 2024 | |
Referred To: Senate Commerce | |
It is enacted by the General Assembly as follows: | |
1 | SECTION 1. Section 19-14-1 of the General Laws in Chapter 19-14 entitled "Licensed |
2 | Activities" is hereby amended to read as follows: |
3 | 19-14-1. Definitions. |
4 | Unless otherwise specified, the following terms shall have the following meanings |
5 | throughout chapters 14, 14.1, 14.2, 14.3, 14.4, 14.6, 14.8, 14.10, and 14.11 of this title: |
6 | (1) “Bona fide employee” shall mean an employee of a licensee who works under the |
7 | oversight and supervision of the licensee. |
8 | (2) “Check” means any check, draft, money order, personal money order, or other |
9 | instrument for the transmission or payment of money. For the purposes of check cashing, travelers |
10 | checks or foreign denomination instruments shall not be considered checks. “Check cashing” |
11 | means providing currency for checks. |
12 | (3) “Check casher” means a person or entity who or that, for compensation, engages, in |
13 | whole or in part, in the business of cashing checks. |
14 | (4) “Currency transmission” means engaging in the business of any of the following: |
15 | (i) Sale or issuance of payment instruments or stored value primarily for personal, family, |
16 | or household purposes; or |
17 | (ii) Receiving money or monetary value for transmission or holding funds incidental to |
18 | transmission within the United States or to locations abroad by any and all means, including |
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1 | payment instrument, stored value, wire, facsimile, or electronic transfer, primarily for personal, |
2 | family, or household purposes. This includes maintaining control of virtual currency or transactions |
3 | in virtual currency on behalf of others. |
4 | (5) “Deferred-deposit transaction” means any transaction, such as those commonly known |
5 | as “payday loans,” “payday advances,” or “deferred-presentment loans,” in which a cash advance |
6 | is made to a customer in exchange for the customer’s personal check or in exchange for the |
7 | customer’s authorization to debit the customer’s deposit account and where the parties agree either |
8 | that the check will not be cashed or deposited, or that the customer’s deposit account will not be |
9 | debited until a designated future date. |
10 | (6) [Deleted by P.L. 2019, ch. 226, § 1 and P.L. 2019, ch. 246, § 1.] |
11 | (7) “Deliver” means to deliver a check to the first person who, in payment for the check, |
12 | makes, or purports to make, a remittance of, or against, the face amount of the check, whether or |
13 | not the deliverer also charges a fee in addition to the face amount and whether or not the deliverer |
14 | signs the check. |
15 | (8) “Insurance premium finance agreement” means an agreement by which an insured, or |
16 | prospective insured, promises to pay to an insurance premium finance company the amount |
17 | advanced, or to be advanced, under the agreement to an insurer or to an insurance producer, in |
18 | payment of a premium, or premiums, on an insurance contract, or contracts, together with interest |
19 | and a service charge, as authorized and limited by this title. |
20 | (9) “Insurance premium finance company” means a person or entity engaged in the |
21 | business of making insurance premium finance agreements or acquiring insurance premium finance |
22 | agreements from other insurance premium finance companies. |
23 | (10)(i) “Lender” means any person who makes or funds a loan within this state with the |
24 | person’s own funds, regardless of whether the person is the nominal mortgagee or creditor on the |
25 | instrument evidencing the loan; |
26 | (ii) A loan is made or funded within this state if any of the following conditions exist: |
27 | (A) The loan is secured by real property located in this state; |
28 | (B) An application for a loan is taken by an employee, agent, or representative of the lender |
29 | within this state; |
30 | (C) The loan closes within this state; |
31 | (D) A retail installment contract as defined herein is created; |
32 | (E) The loan solicitation is done by an individual with a physical presence in this state; or |
33 | (F) The lender maintains an office in this state; |
34 | (iii) The term “lender” shall also include any person engaged in a transaction whereby the |
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1 | person makes or funds a loan within this state using the proceeds of an advance under a line of |
2 | credit over which proceeds the person has dominion and control and for the repayment of which |
3 | the person is unconditionally liable. This transaction is not a table-funding transaction. A person is |
4 | deemed to have dominion and control over the proceeds of an advance under a line of credit used |
5 | to fund a loan regardless of whether: |
6 | (A) The person may, contemporaneously with, or shortly following, the funding of the |
7 | loan, assign or deliver to the line of credit lender one or more loans funded by the proceeds of an |
8 | advance to the person under the line of credit; |
9 | (B) The proceeds of an advance are delivered directly to the settlement agent by the line- |
10 | of-credit lender, unless the settlement agent is the agent of the line-of-credit lender; |
11 | (C) One or more loans funded by the proceeds of an advance under the line of credit is |
12 | purchased by the line-of-credit lender; or |
13 | (D) Under the circumstances, as set forth in regulations adopted by the director, or the |
14 | director’s designee, pursuant to this chapter. |
15 | (11) “Licensee” means any person licensed under this chapter. |
16 | (12) “Loan” means any advance of money or credit including, but not limited to: |
17 | (i) Loans secured by mortgages; |
18 | (ii) Insurance premium finance agreements; |
19 | (iii) The purchase or acquisition of retail installment contracts or advances to the holders |
20 | of those contracts; |
21 | (iv) Educational loans; or |
22 | (v) Any other advance of money; or. |
23 | (vi) Any transaction, such as those commonly known as “payday loans,” “payday |
24 | advances,” or “deferred-presentment loans,” in which a cash advance is made to a customer in |
25 | exchange for the customer’s personal check, or in exchange for the customer’s authorization to |
26 | debit the customer’s deposit account, and where the parties agree either, that the check will not be |
27 | cashed or deposited, or that customer’s deposit account will not be debited, until a designated future |
28 | date. |
29 | (13) “Loan broker” means any person or entity who or that, for compensation or gain, or |
30 | in the expectation of compensation or gain, either directly or indirectly, solicits, processes, |
31 | negotiates, places, or sells a loan within this state for others in the primary market, or offers to do |
32 | so. A loan broker shall also mean any person who is the nominal mortgagee or creditor in a table- |
33 | funding transaction. A loan is brokered within this state if any of the following conditions exist: |
34 | (i) The loan is secured by real property located in this state; |
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1 | (ii) An application for a loan is taken or received by an employee, agent, or representative |
2 | of the loan broker within this state; |
3 | (iii) The loan closes within this state; |
4 | (iv) The loan solicitation is done by an individual with a physical presence in this state; or |
5 | (v) The loan broker maintains an office in this state. |
6 | (14) “Loan-closing services” means providing title services, including title searches, title |
7 | examinations, abstract preparation, insurability determinations, and the issuance of title |
8 | commitments and title insurance policies, conducting loan closings, and preparation of loan-closing |
9 | documents when performed by, or under the supervision of, a licensed attorney, licensed title |
10 | agency, or licensed title insurance company. |
11 | (15) “Loan solicitation” shall mean an effectuation, procurement, delivery and offer, or |
12 | advertisement of a loan. Loan solicitation also includes providing or accepting loan applications |
13 | and assisting persons in completing loan applications and/or advising, conferring, or informing |
14 | anyone regarding the benefits, terms and/or conditions of a loan product or service. Loan |
15 | solicitation does not include loan processing or loan underwriting as defined in this section. Loan |
16 | solicitation does not include telemarketing that is defined, for purposes of this section, to mean |
17 | contacting a person by telephone with the intention of collecting such person’s name, address, and |
18 | telephone number for the sole purpose of allowing a mortgage loan originator to fulfill a loan |
19 | inquiry. |
20 | (16) “Loan underwriting” shall mean a loan process that involves the analysis of risk with |
21 | respect to the decision whether to make a loan to a loan applicant based on credit, employment, |
22 | assets, and other factors, including evaluating a loan applicant against a lender’s various lending |
23 | criteria for creditworthiness, making a determination for the lender as to whether the applicant |
24 | meets the lender’s pre-established credit standards, and/or making a recommendation regarding |
25 | loan approval. |
26 | (17) “Monetary value” means a medium of exchange, whether or not redeemable in fiat |
27 | currency. |
28 | (18) “Mortgage loan” means a loan secured in whole, or in part, by real property located |
29 | in this state. |
30 | (19) “Mortgage loan originator” has the same meaning set forth in § 19-14.10-3(6). |
31 | (20) “Nationwide Multistate Licensing System” means a system involving more than one |
32 | state, the District of Columbia, or the Commonwealth of Puerto Rico and that is established to |
33 | facilitate the sharing of regulatory information and the licensing, application, reporting, and |
34 | payment processes, by electronic or other means, for mortgage lenders and loan brokers and other |
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1 | licensees required to be licensed under this chapter. |
2 | (21) “Natural person employee” shall mean any natural person performing services as a |
3 | bona fide employee for a person or entity licensed under § 19-14-1 et seq., in return for a salary, |
4 | wage, or other consideration, where such salary, wage, or consideration is reported by the licensee |
5 | on a federal form W-2 payroll record. The term does not include any natural person or business |
6 | entity performing services for a person licensed under the provisions of Rhode Island general laws |
7 | in return for a salary, wage, or other consideration, where such salary, wage, or consideration is |
8 | reported by the licensee on a federal form 1099. |
9 | (22) “Negative equity” means the difference between the value of an asset and the |
10 | outstanding portion of the loan taken out to pay for the asset, when the latter exceeds the former |
11 | amount. |
12 | (23) “Negotiates” shall mean, with respect to a loan, to confer directly with, or offer advice |
13 | directly to, a loan applicant or prospective loan applicant for a loan product or service concerning |
14 | any of the substantive benefits, terms, or conditions of the loan product or service. |
15 | (24) “Nonprofit organization” means a corporation qualifying as a 26 U.S.C. § 501(c)(3) |
16 | nonprofit organization, in the operation of which no member, director, officer, partner, employee, |
17 | agent, or other affiliated person profits financially other than receiving reasonable salaries if |
18 | applicable. |
19 | (25) “Operating subsidiary” shall mean a majority-owned subsidiary of a financial |
20 | institution or banking institution that engages only in activities permitted by the parent financial |
21 | institution or banking institution. |
22 | (26) “Oversight and supervision of the licensee” shall mean that the licensee provides |
23 | training to the employee, sets the employee’s hours of work, provides the employee with the |
24 | equipment required to perform the employee’s duties, and supervises the services provided by the |
25 | employee to the licensee. |
26 | (27) “Personal money order” means any instrument for the transmission or payment of |
27 | money in relation to which the purchaser or remitter appoints, or purports to appoint, the seller as |
28 | his or her agent for the receipt, transmission, or handling of money, whether the instrument is signed |
29 | by the seller, or by the purchaser, or remitter, or some other person. |
30 | (28) “Primary market” means the market in which loans are made to borrowers by lenders, |
31 | whether or not through a loan broker or other conduit. |
32 | (29) “Principal owner” means any person or entity who or that owns, controls, votes, or |
33 | has a beneficial interest in, directly or indirectly, ten percent (10%) or more of the outstanding |
34 | capital stock and/or equity interest of a licensee. |
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1 | (30) “Processes” shall mean, with respect to a loan, any of a series of acts or functions, |
2 | including the preparation of a loan application and supporting documents, performed by a person |
3 | that leads to, or results in, the acceptance, approval, denial, and/or withdrawal of a loan application, |
4 | including, without limitation, the rendering of services, including loan underwriting, obtaining |
5 | verifications, credit reports or appraisals, communicating with the applicant and/or the lender or |
6 | loan broker, and/or other loan processing and origination services, for consideration by a lender or |
7 | loan broker. Loan processing does not include the following: |
8 | (i) Providing loan closing services; |
9 | (ii) Rendering of credit reports by an authorized credit reporting agency; and |
10 | (iii) Rendering of appraisal services. |
11 | (31) “Provisional employee” means a natural person who, pursuant to a written agreement |
12 | between the natural person and a wholly owned subsidiary of a financial holding company, as |
13 | defined in the Bank Holding Company Act of 1956 (12 U.S.C. § 1841 et seq.), as amended, a bank- |
14 | holding company, savings-bank-holding company, or thrift-holding company, is an exclusive agent |
15 | for the subsidiary with respect to mortgage loan originations and the subsidiary: (a) Holds a valid |
16 | loan broker’s license; and (b) Enters into a written agreement with the director, or the director’s |
17 | designee, to include: |
18 | (i) An “undertaking of accountability,” in a form prescribed by the director, or the director’s |
19 | designee, for all of the subsidiary’s exclusive agents to include full-and-direct financial and |
20 | regulatory responsibility for the mortgage loan originator activities of each exclusive agent as if |
21 | said exclusive agent were an employee of the subsidiary; |
22 | (ii) A business plan, to be approved by the director, or the director’s designee, for the |
23 | education of the exclusive agents, the handling of consumer complaints related to the exclusive |
24 | agents, and the supervision of the mortgage loan origination activities of the exclusive agents; and |
25 | (iii) A restriction of the exclusive agents’ mortgage loan originators’ activities to loans to |
26 | be made only by the subsidiary’s affiliated bank. |
27 | (32) “Remote location” means a location meeting the requirements of § 19-14-25(b) at |
28 | which an employee of a licensee may provide services for the licensee notwithstanding that the |
29 | location differs from the place of business named in the license or a branch certificate issued to the |
30 | licensee. |
31 | (33) “Retail installment contract” means any security agreement negotiated or executed in |
32 | this state, or under the laws of this state, including, but not limited to, any agreement in the nature |
33 | of a mortgage, conditional sale contract, or any other agreement whether or not evidenced by any |
34 | written instrument to pay the retail purchase price of goods, or any part thereof, in installments over |
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1 | any period of time and pursuant to which any security interest is retained or taken by the retail seller |
2 | for the payment of the purchase price, or any part thereof, of the retail installment contract. |
3 | (34) “Sell” means to sell, to issue, or to deliver a check. |
4 | (35) “Servicing” means receiving a scheduled, periodic payment from a borrower, pursuant |
5 | to the terms of a loan, including amounts for escrow accounts, and making the payments to the |
6 | owner of the loan or other third party of principal and interest and other payments with respect to |
7 | the amounts received from the borrower as may be required pursuant to the terms of the servicing |
8 | loan documents or servicing contract. In the case of a home equity conversion mortgage or a reverse |
9 | mortgage, servicing includes making payment to the borrower. |
10 | (36) “Simple interest” means interest computed on the principal balance outstanding |
11 | immediately prior to a payment for one plus the actual number of days between payments made on |
12 | a loan over the life of a loan. |
13 | (37) “Small loan” means a loan of less than five thousand dollars ($5,000), not secured by |
14 | real estate, made pursuant to the provisions of chapter 14.2 of this title. |
15 | (38) “Small-loan lender” means a lender engaged in the business of making small loans |
16 | within this state. |
17 | (39) “Stored value” means monetary value representing a claim against the issuer that is |
18 | stored on an electronic or digital medium and is evidenced by an electronic or digital record, and |
19 | that is intended and accepted for use as a means of redemption for money or monetary value or |
20 | payment for goods or services. The term does not include stored value that is redeemable by the |
21 | issuer exclusively in goods or services; stored value that is redeemable exclusively in goods or |
22 | services limited to transactions involving a defined merchant or location or set of locations, such |
23 | as a specific retailer or retail chain, college campus, or program points, miles, or other units issued |
24 | in connection with a customer affinity or rewards program, even if there is a secondary market for |
25 | the stored value. |
26 | (40) “Table-funding transaction” means a transaction in which there is a contemporaneous |
27 | advance of funds by a lender and an assignment by the mortgagee or creditor of the loan to the |
28 | lender. |
29 | (41) “Third-party loan servicer” means a person or entity who or that, directly or indirectly, |
30 | engages in the business of servicing a loan secured by residential real estate located in Rhode Island, |
31 | for a personal, family, or household purpose, owed or due, or asserted to be owed or due, another, |
32 | or a person or entity that owns the servicing rights to a loan secured by residential real estate located |
33 | in Rhode Island whether or not that owner services the loan themselves or contracts with another |
34 | person or entity for the servicing. |
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1 | (42) “Virtual currency”: |
2 | (i) Means a digital representation of value that: |
3 | (A) Is used as a medium of exchange, unit of account, or store of value; and |
4 | (B) Is not legal tender, whether or not denominated in legal tender; and |
5 | (ii) Does not include: |
6 | (A) A transaction in which a merchant grants, as part of an affinity or rewards program, |
7 | value that cannot be taken from or exchanged with the merchant for legal tender, bank credit, or |
8 | virtual currency; |
9 | (B) A digital representation of value issued by or on behalf of a publisher and used solely |
10 | within an online game, game platform, or family of games sold by the same publisher or offered |
11 | on the same game platform; |
12 | (C) Native digital token used in a proprietary blockchain service platform; or |
13 | (D) A gift certificate; store gift card; general-use prepaid card; or loyalty, award, or |
14 | promotional gift card, as these terms are defined in federal Regulation E, 12 C.F.R. § 1005.20(a), |
15 | without giving effect to any exception as specified in 31 C.F.R. § 1010.100(kkk) or any card, code |
16 | or device, or other device that can add funds to those products. |
17 | (43) “Writing” means hard-copy writing or electronic writing that meets the requirements |
18 | of § 42-127.1-2(7). |
19 | SECTION 2. Section 19-14.1-10 of the General Laws in Chapter 19-14.1 entitled "Lenders |
20 | and Loan Brokers" is hereby amended to read as follows: |
21 | 19-14.1-10. Special exemptions. |
22 | (a) The licensing provisions of chapter 14 of this title shall not apply to: |
23 | (1) Nonprofit charitable, educational, or religious corporations or associations; |
24 | (2) Any person who makes less than six (6) loans in this state in any consecutive twelve- |
25 | month (12) period; there is no similar exemption from licensing for loan brokers for brokering loans |
26 | or acting as a loan broker; |
27 | (3) Any person acting as an agent for a licensee for the purpose of conducting closings at |
28 | a location other than that stipulated in the license; |
29 | (4) Regulated institutions and banks or credit unions organized under the laws of the United |
30 | States, or subject to written notice with a designated Rhode Island agent for service of process in |
31 | the form prescribed by the director, or the director’s designee, of any other state within the United |
32 | States if the laws of the other state in which such bank or credit union is organized authorizes under |
33 | conditions not substantially more restrictive than those imposed by the laws of this state, as |
34 | determined by the director, or the director’s designee, a financial institution or credit union to |
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1 | engage in the business of originating or brokering loans in the other state; no bank or credit union |
2 | duly organized under the laws of any other state within the United States may receive deposits, pay |
3 | checks, or lend money from any location within this state unless such bank or credit union has |
4 | received approval from the director, or the director’s designee, for the establishment of an interstate |
5 | branch office pursuant to chapter 7 of title 19; |
6 | (5) Any natural person employee who is employed by a licensee when acting on the |
7 | licensee’s behalf; provided that this exemption shall not apply to a mortgage loan originator |
8 | required to be licensed under § 19-14-2 or § 19-14.10-4; or |
9 | (6) A licensed attorney when performing loan closing services for a licensee or for an entity |
10 | identified in subdivision (4) above. |
11 | (b) The provisions of this chapter and chapter 14 of this title shall not apply to: |
12 | (1) Loans to corporations, joint ventures, partnerships, limited liability companies or other |
13 | business entities; |
14 | (2) Loans over twenty-five thousand dollars ($25,000) in amount to individuals for |
15 | business or commercial, as opposed to personal, family or household purposes; |
16 | (3) Loans principally secured by accounts receivable and/or business inventory; |
17 | (4) Loans made by a life insurance company wholly secured by the cash surrender value |
18 | of a life insurance policy; |
19 | (5) Education-purpose loans made by the Rhode Island health and educational building |
20 | corporation as vested in chapter 38.1 of title 45 of the Rhode Island student loan authority as vested |
21 | in chapter 62 of title 16; |
22 | (6) The acquisition of retail or loan installment contracts by an entity whose sole business |
23 | in this state is acquiring them from federal banks receivers or liquidators; |
24 | (7) Notes evidencing the indebtedness of a retail buyer to a retail seller of goods, services |
25 | or insurance for a part or all of the purchase price; |
26 | (8) Any municipal, state or federal agency that makes, brokers, or funds loans or acts as a |
27 | lender or a loan broker. This exemption includes exclusive agents or exclusive contractors of the |
28 | agency specifically designated by the agency to perform those functions on behalf of the agency |
29 | and which has notified the director, in writing, of the exclusive agency or contract; or |
30 | (9) Notes evidencing the indebtedness of a retail buyer to a retail motor vehicle dealer that |
31 | include as part of the amount financed, disclosed in accordance with 12 C.F.R. § 226.18 as |
32 | amended, an amount representing negative equity related to the motor vehicle being traded in as |
33 | part of the purchase price of the motor vehicle being purchased. |
34 | (c) No license to make or fund loans, or to act as a lender or small loan lender shall be |
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1 | required of any person who engages in deferred deposit transactions (commonly known as “pay- |
2 | day advance”) while holding a valid license to cash checks pursuant to chapter 14 of this title. |
3 | SECTION 3. Section 19-14.2-1 of the General Laws in Chapter 19-14.2 entitled "Small |
4 | Loan Lenders" is hereby amended to read as follows: |
5 | 19-14.2-1. Maximum rate on small loans not authorized by chapter. |
6 | (a) No person, except as authorized by this chapter, shall directly or indirectly charge, |
7 | contract for, or receive any interest, discount, or consideration greater than provided by this chapter |
8 | upon the loan, use, or sale of credit of the amount or value of five thousand dollars ($5,000) or less. |
9 | (b) The prohibition in subsection (a) shall apply to any person who, by any device, |
10 | subterfuge, or pretense shall charge, contract for, or receive greater interest, consideration, or |
11 | charges than is authorized by this chapter for the loan, use, or forbearance of money, goods, or |
12 | things in action, or for the loan, use, or sale of credit. |
13 | (c) No loan of the amount or value of five thousand dollars ($5,000) or less for which a |
14 | greater rate of interest, consideration, or charges than is permitted by this chapter has been charged, |
15 | contracted for, or received, wherever made, shall be enforced in this state, and every person in any |
16 | way participating therein in this state shall be subject to the provisions of this chapter, provided |
17 | that this section shall not apply to loans legally made in any other state, commonwealth, or district |
18 | which then has in effect a regulatory small loan law similar in principal to this chapter. |
19 | (d) No person may engage in any device, subterfuge, or pretense to evade the requirements |
20 | of this chapter, including making loans disguised as personal property sales and leaseback |
21 | transactions, or disguising loan proceeds as cash rebates for the pretextual installment sale of goods |
22 | or services, or assisting a debtor to obtain a loan with a greater rate of interest, consideration, or |
23 | charges than is permitted by this chapter through any method including mail, telephone, Internet, |
24 | or any electronic means regardless of whether the person has a physical location in the state. |
25 | SECTION 4. Section 19-14.4-4 and 19-14.4-5 of the General Laws in Chapter 19-14.4 |
26 | entitled "Check Cashing" are hereby amended to read as follows: |
27 | 19-14.4-4. Fees for services. |
28 | No licensee shall: |
29 | (1) Charge check-cashing fees in excess of three percent (3%) of the face amount of the |
30 | check, or five dollars ($5.00), whichever is greater, if the check is the payment of any kind of state |
31 | public assistance or federal social security benefit; |
32 | (2) Charge check-cashing fees for personal checks in excess of ten percent (10%) of the |
33 | face amount of the personal check or five dollars ($5.00), whichever is greater; or |
34 | (3) Charge check-cashing fees in excess of five percent (5%) of the face amount of the |
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1 | check or five dollars ($5.00), whichever is greater, for all other checks; or. |
2 | (4) Charge deferred deposit transaction fees in excess of ten percent (10%) of the amount |
3 | of funds advanced. |
4 | 19-14.4-5. Posting of charges — Endorsement — Receipt. |
5 | (a) In every location licensed pursuant to this chapter, there shall be at all times posted, in |
6 | a conspicuous place within the licensed premises, a complete and unambiguous schedule of all fees |
7 | for cashing checks, deferred deposit transactions expressed as both a dollar amount and an annual |
8 | percentage rate, and the initial issuance of any identification card. |
9 | (b) Before a licensee shall deposit, with any regulated institution or other insured-deposit- |
10 | taking institution organized under the laws of the United States, a check cashed by the licensee, the |
11 | check must be endorsed with the name under which the licensee is doing business and must include |
12 | the words “licensed check cashing services”. |
13 | (c) The licensee shall provide a receipt for each transaction for the benefit of a customer. |
14 | (d) Each check casher shall also post a list of valid identification that is acceptable in lieu |
15 | of identification provided by the check casher. The information required by this section shall be |
16 | clear, legible, and in letters not less than one-half (½) inch in height. The information shall be |
17 | posted in a conspicuous location in the unobstructed view of the public within the check casher’s |
18 | premises. Failure to post information as required by this section, or the imposition of fees or |
19 | identification requirements contrary to the information posted, shall constitute a deceptive trade |
20 | practice under chapter 13.1 of title 6. |
21 | SECTION 5. Section 19-14.4-5.1 of the General Laws in Chapter 19-14.4 entitled "Check |
22 | Cashing" is hereby repealed. |
23 | 19-14.4-5.1. Customer checks — Deferred deposits. |
24 | (a) A check casher may defer the deposit of a personal check written by a customer for a |
25 | term of no less than thirteen (13) days, pursuant to the provisions of this section. The face amount |
26 | of the check shall not exceed five hundred dollars ($500). |
27 | (b) Each deferred deposit shall be made pursuant to a written agreement that has been |
28 | signed by the customer and by the check casher or an authorized representative of the check casher. |
29 | The written agreement shall contain a statement of the total amount of any fees charged for the |
30 | deferred deposit, expressed both in United States currency and as an annual percentage rate (APR), |
31 | as required by federal regulations. The written agreement shall authorize the check casher to defer |
32 | deposit of the personal check until a specific date no less than thirteen (13) days from the date the |
33 | written agreement was signed and executed. The written agreement shall not permit the check |
34 | casher to accept collateral. |
| LC003861 - Page 11 of 13 |
1 | (c) A rollover is an extension or deferral of the payment due date of a deferred deposit |
2 | transaction for the payment of only an additional fee. |
3 | (d) The maximum amount of a single customer’s check is five hundred dollars ($500). |
4 | (e) The maximum aggregate amount of concurrently outstanding checks held by the |
5 | licensee or its affiliate from the same customer is five hundred dollars ($500). |
6 | (f) The maximum number of concurrently outstanding checks held by the licensee or its |
7 | affiliates from the same customer is three (3). |
8 | (g) The maximum number of rollovers permitted is one. |
9 | (h) The check casher shall give a duplicate original of the agreement to the customer at the |
10 | time of the transaction. |
11 | SECTION 6. This act shall take effect upon passage. |
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| LC003861 - Page 12 of 13 |
EXPLANATION | |
BY THE LEGISLATIVE COUNCIL | |
OF | |
A N A C T | |
RELATING TO FINANCIAL INSTITUTIONS -- LICENSED ACTIVITIES -- LENDERS AND | |
LOAN BROKERS -- CHECK CASHING | |
*** | |
1 | This act would repeal the provisions of the general laws allowing deferred deposit |
2 | providers, also known as "payday lenders." |
3 | This act would take effect upon passage. |
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| LC003861 - Page 13 of 13 |