Rhode Island House Bill H5331

Rhode Island 2023 Regular Session

• Introduced: 2/3/23
• Refer: 2/3/23

Caption

Check Cashing

Impact

If enacted, H5331 would significantly alter the landscape of payday lending in Rhode Island. The bill aims to limit the costs that borrowers incur, which could reduce instances of predatory lending practices that often accompany high-interest loans. By enforcing these limits, the bill hopes to facilitate a fairer environment for borrowers, allowing them to repay loans without incurring exorbitant fees and high-interest debts.

Summary

House Bill 5331 seeks to amend the financial institutions statutes in the state of Rhode Island regarding check cashing and payday loans. The bill proposes a stringent set of guidelines for payday loans, setting an annual percentage rate (APR) cap at 28%, while also establishing a minimum maturity date of over 90 days from loan closure. This aims to provide consumer protection and regulate the activities of check cashers, ensuring that the borrowing terms are manageable for individuals utilizing these services.

Contention

Discussions around H5331 are likely to arise concerning its impact on local financial institutions and check cashing businesses. Supporters argue that capping interests will protect vulnerable consumers from debt traps, while opponents may suggest that such regulations could lead to reduced access to credit for low-income individuals who rely on these financial services. This push and pull reflects broader tensions in financial regulatory policy and consumer rights advocacy.