Rhode Island 2023 Regular Session

Rhode Island Senate Bill S0058 Compare Versions

Only one version of the bill is available at this time.

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5	5	2023 -- S 0058
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7	7	LC000357
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9	9	S TATE OF RHODE IS LAND
10	10	IN GENERAL ASSEMBLY
11	11	JANUARY SESSION, A.D. 2023
12	12	____________
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14	14	A N A C T
15	15	RELATING TO FINANCIAL INSTITUTIONS -- LENDERS AND LOAN BRO KERS
16	16	Introduced By: Senators Raptakis, Burke, F. Lombardi, Felag, Sosnowski, Murray,
17	17	Mack, and Euer
18	18	Date Introduced: February 01, 2023
19	19	Referred To: Senate Commerce
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22	22	It is enacted by the General Assembly as follows:
23	23	SECTION 1. Section 19-14.1-10 of the General Laws in Chapter 19-14.1 entitled "Lenders 1
24	24	and Loan Brokers" is hereby amended to read as follows: 2
25	25	19-14.1-10. Special exemptions. 3
26	26	(a) The licensing provisions of chapter 14 of this title shall not apply to: 4
27	27	(1) Nonprofit charitable, educational, or religious corporations or associations; 5
28	28	(2) Any person who makes less than six (6) loans in this state in any consecutive twelve-6
29	29	month (12) period; there is no similar exemption from licensing for loan brokers for brokering loans 7
30	30	or acting as a loan broker; 8
31	31	(3) Any person acting as an agent for a licensee for the purpose of conducting closings at 9
32	32	a location other than that stipulated in the license; 10
33	33	(4) Regulated institutions and banks or credit unions organized under the laws of the United 11
34	34	States, or subject to written notice with a designated Rhode Island agent for service of process in 12
35	35	the form prescribed by the director, or the director’s designee, of any other state within the United 13
36	36	States if the laws of the other state in which such bank or credit union is organized authorizes under 14
37	37	conditions not substantially more restrictive than those imposed by the laws of this state, as 15
38	38	determined by the director, or the director’s designee, a financial institution or credit union to 16
39	39	engage in the business of originating or brokering loans in the other state; no bank or credit union 17
40	40	duly organized under the laws of any other state within the United States may receive deposits, pay 18
41	41	checks, or lend money from any location within this state unless such bank or credit union has 19
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45	45	received approval from the director, or the director’s designee, for the establishment of an interstate 1
46	46	branch office pursuant to chapter 7 of title 19; 2
47	47	(5) Any natural person employee who is employed by a licensee when acting on the 3
48	48	licensee’s behalf; provided that this exemption shall not apply to a mortgage loan originator 4
49	49	required to be licensed under § 19-14-2 or § 19-14.10-4; or 5
50	50	(6) A licensed attorney when performing loan closing services for a licensee or for an entity 6
51	51	identified in subdivision (4) above. 7
52	52	(b) The provisions of this chapter and chapter 14 of this title shall not apply to: 8
53	53	(1) Loans to corporations, joint ventures, partnerships, limited liability companies or other 9
54	54	business entities; 10
55	55	(2) Loans over twenty-five thousand dollars ($25,000) in amount to individuals for 11
56	56	business or commercial, as opposed to personal, family or household purposes; 12
57	57	(3) Loans principally secured by accounts receivable and/or business inventory; 13
58	58	(4) Loans made by a life insurance company wholly secured by the cash surrender value 14
59	59	of a life insurance policy; 15
60	60	(5) Education-purpose loans made by the Rhode Island health and educational building 16
61	61	corporation as vested in chapter 38.1 of title 45 of the Rhode Island student loan authority as vested 17
62	62	in chapter 62 of title 16; 18
63	63	(6) The acquisition of retail or loan installment contracts by an entity whose sole business 19
64	64	in this state is acquiring them from federal banks receivers or liquidators; 20
65	65	(7) Notes evidencing the indebtedness of a retail buyer to a retail seller of goods, services 21
66	66	or insurance for a part or all of the purchase price; 22
67	67	(8) Any municipal, state or federal agency that makes, brokers, or funds loans or acts as a 23
68	68	lender or a loan broker. This exemption includes exclusive agents or exclusive contractors of the 24
69	69	agency specifically designated by the agency to perform those functions on behalf of the agency 25
70	70	and which has notified the director, in writing, of the exclusive agency or contract; or 26
71	71	(9) Notes evidencing the indebtedness of a retail buyer to a retail motor vehicle dealer that 27
72	72	include as part of the amount financed, disclosed in accordance with 12 C.F.R. § 226.18 as 28
73	73	amended, an amount representing negative equity related to the motor vehicle being traded in as 29
74	74	part of the purchase price of the motor vehicle being purchased. 30
75	75	(c) No license to make or fund loans, or to act as a lender or small loan lender shall be 31
76	76	required of any person who engages in deferred deposit transactions (commonly known as “pay-32
77	77	day advance”) while holding a valid license to cash checks pursuant to chapter 14 of this title. 33
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81	81	SECTION 2. This act shall take effect upon passage. 1
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83	83	LC000357
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88	88	EXPLANATION
89	89	BY THE LEGISLATIVE COUNCIL
90	90	OF
91	91	A N A C T
92	92	RELATING TO FINANCIAL INSTITUTIONS -- LENDERS AND LOAN BRO KERS
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94	94	This act would remove the licensing exemption for a lender that originates six (6) loans or 1
95	95	less in twelve (12) consecutive months. 2
96	96	This act would take effect upon passage. 3
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98	98	LC000357
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