Rhode Island 2025 Regular Session

Rhode Island House Bill H6055 Compare Versions

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

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5	5	2025 -- H 6055
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7	7	LC002347
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9	9	S T A T E O F R H O D E I S L A N D
10	10	IN GENERAL ASSEMBLY
11	11	JANUARY SESSION, A.D. 2025
12	12	____________
13	13
14	14	A N A C T
15	15	RELATING TO COMMERCI AL LAW -- GENERAL REGULATORY PROVISION S --
16	16	INTEREST AND USURY
17	17	Introduced By: Representatives Potter, Cruz, Sanchez, Alzate, J. Lombardi, Slater, and
18	18	Giraldo
19	19	Date Introduced: March 12, 2025
20	20	Referred To: House Corporations
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23	23	It is enacted by the General Assembly as follows:
24	24	SECTION 1. Chapter 6-26 of the General Laws entitled "Interest and Usury" is hereby 1
25	25	amended by adding thereto the following section: 2
26	26	6-26-11. The Federal Depository Institutions Deregulation and Monetary Control Act 3
27	27	of 1980. 4
28	28	In accordance with section 525 of the Depository Institutions Deregulation and Monetary 5
29	29	Control Act of 1980 (Pub. L. 96-221; 94 Stat. 161) (“DIDMCA”), it is hereby expressly provided 6
30	30	that the State of Rhode Island rejects the application of the amendments made by sections 521 7
31	31	through 523 of DIDMCA with respect to loans made in the State of Rhode Island. 8
32	32	SECTION 2. Title 19 of the General Laws entitled "FINANCIAL INSTITUTIONS" is 9
33	33	hereby amended by adding thereto the following chapter: 10
34	34	CHAPTER 14.12 11
35	35	ANTI-EVASION OF LENDING RULES ACT OF 2025 12
36	36	19-14.12-1. Short title. 13
37	37	This chapter shall be known and may be cited as “The Anti-Evasion of Lending Rules Act 14
38	38	of 2025.” 15
39	39	19-14.12-2. Application. 16
40	40	This chapter shall apply to any loan made according to chapters 14.1 and 14.2 of title 19 17
41	41	and shall apply to any loan made in the State of Rhode Island through any medium whatsoever 18
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45	45	including, but not limited to, paper, mail, facsimile, Internet, telephone or any electronic means, 1
46	46	regardless of whether the lender has a physical presence in the state. 2
47	47	19-14.12-3. Prohibition of subterfuge to evade lending rules and interest rate limits. 3
48	48	No person shall engage in any device, subterfuge, or pretense to evade the requirements of 4
49	49	this chapter or chapters 14.1 and 14.2 of title 19 including, without limitation to: 5
50	50	(1) Making a loan disguised as a personal or real property sale and leaseback transaction; 6
51	51	(2) Disguising loan proceeds as a cash rebate for the pretextual sale of goods or services; 7
52	52	(3) Disguising a loan as the sale or assignment of goods, services or things in action; 8
53	53	(4) Disguising loan charges, interest or the annual percentage rate, including without 9
54	54	limitation in the price of goods, services or things in action; 10
55	55	(5) Offering, charging, contracting for, receiving, arranging or facilitating interest, fees, 11
56	56	charges, or other payments or consideration in excess of those permitted by chapters 14.1 and 14.2 12
57	57	of title 19; 13
58	58	(6) Otherwise obscuring the fact that the transaction is a loan or that it is subject to this 14
59	59	chapter or chapters 14.1 and 14.2 of title 19. 15
60	60	19-14.12-4. Application to persons purporting not to be lenders. 16
61	61	If a loan exceeds the rate permitted by chapters 14.1 and 14.2 of title 19, a person shall be 17
62	62	a lender subject to the requirements of this chapter notwithstanding the fact that the person purports 18
63	63	to act as an agent or service provider or in another capacity for another entity that is exempt from 19
64	64	chapters 14.1 and 14.2 of title 19, if, among other things: 20
65	65	(1) The person holds, acquires, or maintains, directly or indirectly, the predominant 21
66	66	economic interest, risk or reward, in the loan; 22
67	67	(2) The person: 23
68	68	(i) Markets, solicits, brokers, arranges, facilitates or services loans and directly or 24
69	69	indirectly; 25
70	70	(ii) Holds or has the right to, requirement to, first right of refusal to, or expectation that it 26
71	71	will acquire the loans, a share of receivables or another direct or indirect interest in the loans or 27
72	72	loan program; or 28
73	73	(3) The totality of the circumstances indicate that the person is the lender and that the 29
74	74	transaction is structured to evade the requirements of chapters 14.1 and 14.2 of title 19. 30
75	75	Circumstances that weigh in favor of a person being a lender include, without limitation, when the 31
76	76	person: 32
77	77	(i) Indemnifies, insures or protects an exempt entity from costs or risks related to the loan; 33
78	78	(ii) Predominantly designs, controls or operates the loan program; 34
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82	82	(iii) Holds the trademark or intellectual property rights in the brand, underwriting system, 1
83	83	or other core aspects of the loan program; or 2
84	84	(iv) Purports to act as an agent or service provider or in another capacity for an exempt 3
85	85	entity while acting directly as a lender in other states. 4
86	86	19-14.12-5. Facilitating loans. 5
87	87	No person shall solicit, broker, or engage in any other activity intended to facilitate or result 6
88	88	in, or that in fact facilitates or results in, the origination of a loan that violates chapters 14.1 and 7
89	89	14.2 of title 19. 8
90	90	19-14.12-6. Violations. 9
91	91	(a) A loan made in violation of this chapter shall be void and uncollectible as to any 10
92	92	principal, fee, interest, charge or payment, and the borrower shall be entitled to restitution of any 11
93	93	amounts paid. 12
94	94	(b) An action for violation of this chapter may be brought in any court of competent 13
95	95	jurisdiction. 14
96	96	(c) Any person who violates this chapter is liable to the borrower for: 15
97	97	(1) Actual and consequential damages, including treble the amount of any excess fee, 16
98	98	interest, charge, or payment; 17
99	99	(2) Statutory damages of one thousand dollars ($1,000) per violation; 18
100	100	(3) Reasonable attorneys' fees and costs; and 19
101	101	(4) Any other legal or equitable relief that the court deems appropriate in addition to any 20
102	102	other remedies provided at law. 21
103	103	SECTION 3. This act shall take effect on October 1, 2025. 22
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110	110	EXPLANATION
111	111	BY THE LEGISLATIVE COUNCIL
112	112	OF
113	113	A N A C T
114	114	RELATING TO COMMERCI AL LAW -- GENERAL REGULATORY PROVISIONS --
115	115	INTEREST AND USURY
116	116	***
117	117	This act would allow Rhode Island to opt out of the provisions of the “Depository 1
118	118	Institutions Deregulation and Monetary Control Act of 1980” (DIDMCA), for loans made within 2
119	119	the State of Rhode Island, which allow financial institutions chartered in other states to be exempt 3
120	120	from interest rate limits which apply to financial institutions chartered in Rhode Island. This act 4
121	121	would also prevent evasion of Rhode Island’s interest rate limits and lending rules by making clear 5
122	122	that lenders, whether they identify themselves as such or not, remain bound by Rhode Island’s 6
123	123	lending laws for both small loans and loans in general. 7
124	124	This act would take effect on October 1, 2025. 8
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