Rhode Island 2025 Regular Session

Rhode Island Senate Bill S0229 Compare Versions

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

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7	7	LC000645
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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 FINANCIAL INSTITUTIONS -- LICENSED ACTIVITIES -- LENDERS AND
16	16	LOAN BROKERS -- CHECK CASHING
17	17	Introduced By: Senators Quezada, Thompson, Bissaillon, and Bell
18	18	Date Introduced: February 13, 2025
19	19	Referred To: Senate Commerce
20	20
21	21
22	22	It is enacted by the General Assembly as follows:
23	23	SECTION 1. Section 19-14-1 of the General Laws in Chapter 19-14 entitled "Licensed 1
24	24	Activities" is hereby amended to read as follows: 2
25	25	19-14-1. Definitions. 3
26	26	Unless otherwise specified, the following terms shall have the following meanings 4
27	27	throughout chapters 14, 14.1, 14.2, 14.3, 14.4, 14.6, 14.8, 14.10, and 14.11 of this title: 5
28	28	(1) “Bona fide employee” shall mean an employee of a licensee who works under the 6
29	29	oversight and supervision of the licensee. 7
30	30	(2) “Check” means any check, draft, money order, personal money order, or other 8
31	31	instrument for the transmission or payment of money. For the purposes of check cashing, travelers 9
32	32	checks or foreign denomination instruments shall not be considered checks. “Check cashing” 10
33	33	means providing currency for checks. 11
34	34	(3) “Check casher” means a person or entity who or that, for compensation, engages, in 12
35	35	whole or in part, in the business of cashing checks. 13
36	36	(4) “Currency transmission” means engaging in the business of any of the following: 14
37	37	(i) Sale or issuance of payment instruments or stored value primarily for personal, family, 15
38	38	or household purposes; or 16
39	39	(ii) Receiving money or monetary value for transmission or holding funds incidental to 17
40	40	transmission within the United States or to locations abroad by any and all means, including 18
41	41
42	42
43	43	LC000645 - Page 2 of 13
44	44	payment instrument, stored value, wire, facsimile, or electronic transfer, primarily for personal, 1
45	45	family, or household purposes. This includes maintaining control of virtual currency or transactions 2
46	46	in virtual currency on behalf of others. 3
47	47	(5) “Deferred-deposit transaction” means any transaction, such as those commonly known 4
48	48	as “payday loans,” “payday advances,” or “deferred-presentment loans,” in which a cash advance 5
49	49	is made to a customer in exchange for the customer’s personal check or in exchange for the 6
50	50	customer’s authorization to debit the customer’s deposit account and where the parties agree either 7
51	51	that the check will not be cashed or deposited, or that the customer’s deposit account will not be 8
52	52	debited until a designated future date. 9
53	53	(6) [Deleted by P.L. 2019, ch. 226, § 1 and P.L. 2019, ch. 246, § 1.] 10
54	54	(7) “Deliver” means to deliver a check to the first person who, in payment for the check, 11
55	55	makes, or purports to make, a remittance of, or against, the face amount of the check, whether or 12
56	56	not the deliverer also charges a fee in addition to the face amount and whether or not the deliverer 13
57	57	signs the check. 14
58	58	(8) “Insurance premium finance agreement” means an agreement by which an insured, or 15
59	59	prospective insured, promises to pay to an insurance premium finance company the amount 16
60	60	advanced, or to be advanced, under the agreement to an insurer or to an insurance producer, in 17
61	61	payment of a premium, or premiums, on an insurance contract, or contracts, together with interest 18
62	62	and a service charge, as authorized and limited by this title. 19
63	63	(9) “Insurance premium finance company” means a person or entity engaged in the 20
64	64	business of making insurance premium finance agreements or acquiring insurance premium finance 21
65	65	agreements from other insurance premium finance companies. 22
66	66	(10)(i) “Lender” means any person who makes or funds a loan within this state with the 23
67	67	person’s own funds, regardless of whether the person is the nominal mortgagee or creditor on the 24
68	68	instrument evidencing the loan; 25
69	69	(ii) A loan is made or funded within this state if any of the following conditions exist: 26
70	70	(A) The loan is secured by real property located in this state; 27
71	71	(B) An application for a loan is taken by an employee, agent, or representative of the lender 28
72	72	within this state; 29
73	73	(C) The loan closes within this state; 30
74	74	(D) A retail installment contract as defined herein is created; 31
75	75	(E) The loan solicitation is done by an individual with a physical presence in this state; or 32
76	76	(F) The lender maintains an office in this state; 33
77	77	(iii) The term “lender” shall also include any person engaged in a transaction whereby the 34
78	78
79	79
80	80	LC000645 - Page 3 of 13
81	81	person makes or funds a loan within this state using the proceeds of an advance under a line of 1
82	82	credit over which proceeds the person has dominion and control and for the repayment of which 2
83	83	the person is unconditionally liable. This transaction is not a table-funding transaction. A person is 3
84	84	deemed to have dominion and control over the proceeds of an advance under a line of credit used 4
85	85	to fund a loan regardless of whether: 5
86	86	(A) The person may, contemporaneously with, or shortly following, the funding of the 6
87	87	loan, assign or deliver to the line of credit lender one or more loans funded by the proceeds of an 7
88	88	advance to the person under the line of credit; 8
89	89	(B) The proceeds of an advance are delivered directly to the settlement agent by the line-9
90	90	of-credit lender, unless the settlement agent is the agent of the line-of-credit lender; 10
91	91	(C) One or more loans funded by the proceeds of an advance under the line of credit is 11
92	92	purchased by the line-of-credit lender; or 12
93	93	(D) Under the circumstances, as set forth in regulations adopted by the director, or the 13
94	94	director’s designee, pursuant to this chapter. 14
95	95	(11) “Licensee” means any person licensed under this chapter. 15
96	96	(12) “Loan” means any advance of money or credit including, but not limited to: 16
97	97	(i) Loans secured by mortgages; 17
98	98	(ii) Insurance premium finance agreements; 18
99	99	(iii) The purchase or acquisition of retail installment contracts or advances to the holders 19
100	100	of those contracts; 20
101	101	(iv) Educational loans; or 21
102	102	(v) Any other advance of money; or 22
103	103	(vi) Any transaction, such as those commonly known as “payday loans,” “payday 23
104	104	advances,” or “deferred-presentment loans,” in which a cash advance is made to a customer in 24
105	105	exchange for the customer’s personal check, or in exchange for the customer’s authorization to 25
106	106	debit the customer’s deposit account, and where the parties agree either, that the check will not be 26
107	107	cashed or deposited, or that the customer’s deposit account will not be debited, until a designated 27
108	108	future date. 28
109	109	(13) “Loan broker” means any person or entity who or that, for compensation or gain, or 29
110	110	in the expectation of compensation or gain, either directly or indirectly, solicits, processes, 30
111	111	negotiates, places, or sells a loan within this state for others in the primary market, or offers to do 31
112	112	so. A loan broker shall also mean any person who is the nominal mortgagee or creditor in a table-32
113	113	funding transaction. A loan is brokered within this state if any of the following conditions exist: 33
114	114	(i) The loan is secured by real property located in this state; 34
115	115
116	116
117	117	LC000645 - Page 4 of 13
118	118	(ii) An application for a loan is taken or received by an employee, agent, or representative 1
119	119	of the loan broker within this state; 2
120	120	(iii) The loan closes within this state; 3
121	121	(iv) The loan solicitation is done by an individual with a physical presence in this state; or 4
122	122	(v) The loan broker maintains an office in this state. 5
123	123	(14) “Loan-closing services” means providing title services, including title searches, title 6
124	124	examinations, abstract preparation, insurability determinations, and the issuance of title 7
125	125	commitments and title insurance policies, conducting loan closings, and preparation of loan-closing 8
126	126	documents when performed by, or under the supervision of, a licensed attorney, licensed title 9
127	127	agency, or licensed title insurance company. 10
128	128	(15) “Loan solicitation” shall mean an effectuation, procurement, delivery and offer, or 11
129	129	advertisement of a loan. Loan solicitation also includes providing or accepting loan applications 12
130	130	and assisting persons in completing loan applications and/or advising, conferring, or informing 13
131	131	anyone regarding the benefits, terms and/or conditions of a loan product or service. Loan 14
132	132	solicitation does not include loan processing or loan underwriting as defined in this section. Loan 15
133	133	solicitation does not include telemarketing that is defined, for purposes of this section, to mean 16
134	134	contacting a person by telephone with the intention of collecting such person’s name, address, and 17
135	135	telephone number for the sole purpose of allowing a mortgage loan originator to fulfill a loan 18
136	136	inquiry. 19
137	137	(16) “Loan underwriting” shall mean a loan process that involves the analysis of risk with 20
138	138	respect to the decision whether to make a loan to a loan applicant based on credit, employment, 21
139	139	assets, and other factors, including evaluating a loan applicant against a lender’s various lending 22
140	140	criteria for creditworthiness, making a determination for the lender as to whether the applicant 23
141	141	meets the lender’s pre-established credit standards, and/or making a recommendation regarding 24
142	142	loan approval. 25
143	143	(17) “Monetary value” means a medium of exchange, whether or not redeemable in fiat 26
144	144	currency. 27
145	145	(18) “Mortgage loan” means a loan secured in whole, or in part, by real property located 28
146	146	in this state. 29
147	147	(19) “Mortgage loan originator” has the same meaning set forth in § 19-14.10-3. 30
148	148	(20) “Nationwide Multistate Licensing System” means a system involving more than one 31
149	149	state, the District of Columbia, or the Commonwealth of Puerto Rico and that is established to 32
150	150	facilitate the sharing of regulatory information and the licensing, application, reporting, and 33
151	151	payment processes, by electronic or other means, for mortgage lenders and loan brokers and other 34
152	152
153	153
154	154	LC000645 - Page 5 of 13
155	155	licensees required to be licensed under this chapter. 1
156	156	(21) “Natural person employee” shall mean any natural person performing services as a 2
157	157	bona fide employee for a person or entity licensed under § 19-14-1 et seq., in return for a salary, 3
158	158	wage, or other consideration, where such salary, wage, or consideration is reported by the licensee 4
159	159	on a federal form W-2 payroll record. The term does not include any natural person or business 5
160	160	entity performing services for a person licensed under the provisions of Rhode Island general laws 6
161	161	in return for a salary, wage, or other consideration, where such salary, wage, or consideration is 7
162	162	reported by the licensee on a federal form 1099. 8
163	163	(22) “Negative equity” means the difference between the value of an asset and the 9
164	164	outstanding portion of the loan taken out to pay for the asset, when the latter exceeds the former 10
165	165	amount. 11
166	166	(23) “Negotiates” shall mean, with respect to a loan, to confer directly with, or offer advice 12
167	167	directly to, a loan applicant or prospective loan applicant for a loan product or service concerning 13
168	168	any of the substantive benefits, terms, or conditions of the loan product or service. 14
169	169	(24) “Nonprofit organization” means a corporation qualifying as a 26 U.S.C. § 501(c)(3) 15
170	170	nonprofit organization, in the operation of which no member, director, officer, partner, employee, 16
171	171	agent, or other affiliated person profits financially other than receiving reasonable salaries if 17
172	172	applicable. 18
173	173	(25) “Operating subsidiary” shall mean a majority-owned subsidiary of a financial 19
174	174	institution or banking institution that engages only in activities permitted by the parent financial 20
175	175	institution or banking institution. 21
176	176	(26) “Oversight and supervision of the licensee” shall mean that the licensee provides 22
177	177	training to the employee, sets the employee’s hours of work, provides the employee with the 23
178	178	equipment required to perform the employee’s duties, and supervises the services provided by the 24
179	179	employee to the licensee. 25
180	180	(27) “Personal money order” means any instrument for the transmission or payment of 26
181	181	money in relation to which the purchaser or remitter appoints, or purports to appoint, the seller as 27
182	182	his or her agent for the receipt, transmission, or handling of money, whether the instrument is signed 28
183	183	by the seller, or by the purchaser, or remitter, or some other person. 29
184	184	(28) “Primary market” means the market in which loans are made to borrowers by lenders, 30
185	185	whether or not through a loan broker or other conduit. 31
186	186	(29) “Principal owner” means any person or entity who or that owns, controls, votes, or 32
187	187	has a beneficial interest in, directly or indirectly, ten percent (10%) or more of the outstanding 33
188	188	capital stock and/or equity interest of a licensee. 34
189	189
190	190
191	191	LC000645 - Page 6 of 13
192	192	(30) “Processes” shall mean, with respect to a loan, any of a series of acts or functions, 1
193	193	including the preparation of a loan application and supporting documents, performed by a person 2
194	194	that leads to, or results in, the acceptance, approval, denial, and/or withdrawal of a loan application, 3
195	195	including, without limitation, the rendering of services, including loan underwriting, obtaining 4
196	196	verifications, credit reports or appraisals, communicating with the applicant and/or the lender or 5
197	197	loan broker, and/or other loan processing and origination services, for consideration by a lender or 6
198	198	loan broker. Loan processing does not include the following: 7
199	199	(i) Providing loan closing services; 8
200	200	(ii) Rendering of credit reports by an authorized credit reporting agency; and 9
201	201	(iii) Rendering of appraisal services. 10
202	202	(31) “Provisional employee” means a natural person who, pursuant to a written agreement 11
203	203	between the natural person and a wholly owned subsidiary of a financial holding company, as 12
204	204	defined in the Bank Holding Company Act of 1956 (12 U.S.C. § 1841 et seq.), as amended, a bank-13
205	205	holding company, savings-bank-holding company, or thrift-holding company, is an exclusive agent 14
206	206	for the subsidiary with respect to mortgage loan originations and the subsidiary: (a) Holds a valid 15
207	207	loan broker’s license; and (b) Enters into a written agreement with the director, or the director’s 16
208	208	designee, to include: 17
209	209	(i) An “undertaking of accountability,” in a form prescribed by the director, or the director’s 18
210	210	designee, for all of the subsidiary’s exclusive agents to include full-and-direct financial and 19
211	211	regulatory responsibility for the mortgage loan originator activities of each exclusive agent as if 20
212	212	said exclusive agent were an employee of the subsidiary; 21
213	213	(ii) A business plan, to be approved by the director, or the director’s designee, for the 22
214	214	education of the exclusive agents, the handling of consumer complaints related to the exclusive 23
215	215	agents, and the supervision of the mortgage loan origination activities of the exclusive agents; and 24
216	216	(iii) A restriction of the exclusive agents’ mortgage loan originators’ activities to loans to 25
217	217	be made only by the subsidiary’s affiliated bank. 26
218	218	(32) “Remote location” means a location meeting the requirements of § 19-14-25(b) at 27
219	219	which an employee of a licensee may provide services for the licensee notwithstanding that the 28
220	220	location differs from the place of business named in the license or a branch certificate issued to the 29
221	221	licensee. 30
222	222	(33) “Retail installment contract” means any security agreement negotiated or executed in 31
223	223	this state, or under the laws of this state, including, but not limited to, any agreement in the nature 32
224	224	of a mortgage, conditional sale contract, or any other agreement whether or not evidenced by any 33
225	225	written instrument to pay the retail purchase price of goods, or any part thereof, in installments over 34
226	226
227	227
228	228	LC000645 - Page 7 of 13
229	229	any period of time and pursuant to which any security interest is retained or taken by the retail seller 1
230	230	for the payment of the purchase price, or any part thereof, of the retail installment contract. 2
231	231	(34) “Sell” means to sell, to issue, or to deliver a check. 3
232	232	(35) “Servicing” means receiving a scheduled, periodic payment from a borrower, pursuant 4
233	233	to the terms of a loan, including amounts for escrow accounts, and making the payments to the 5
234	234	owner of the loan or other third party of principal and interest and other payments with respect to 6
235	235	the amounts received from the borrower as may be required pursuant to the terms of the servicing 7
236	236	loan documents or servicing contract. In the case of a home equity conversion mortgage or a reverse 8
237	237	mortgage, servicing includes making payment to the borrower. 9
238	238	(36) “Simple interest” means interest computed on the principal balance outstanding 10
239	239	immediately prior to a payment for one plus the actual number of days between payments made on 11
240	240	a loan over the life of a loan. 12
241	241	(37) “Small loan” means a loan of less than five thousand dollars ($5,000), not secured by 13
242	242	real estate, made pursuant to the provisions of chapter 14.2 of this title. 14
243	243	(38) “Small-loan lender” means a lender engaged in the business of making small loans 15
244	244	within this state. 16
245	245	(39) “Stored value” means monetary value representing a claim against the issuer that is 17
246	246	stored on an electronic or digital medium and is evidenced by an electronic or digital record, and 18
247	247	that is intended and accepted for use as a means of redemption for money or monetary value or 19
248	248	payment for goods or services. The term does not include stored value that is redeemable by the 20
249	249	issuer exclusively in goods or services; stored value that is redeemable exclusively in goods or 21
250	250	services limited to transactions involving a defined merchant or location or set of locations, such 22
251	251	as a specific retailer or retail chain, college campus, or program points, miles, or other units issued 23
252	252	in connection with a customer affinity or rewards program, even if there is a secondary market for 24
253	253	the stored value. 25
254	254	(40) “Table-funding transaction” means a transaction in which there is a contemporaneous 26
255	255	advance of funds by a lender and an assignment by the mortgagee or creditor of the loan to the 27
256	256	lender. 28
257	257	(41) “Tangible net worth” means the aggregate assets of a licensee excluding all intangible 29
258	258	assets, less liabilities, as determined in accordance with United States generally accepted 30
259	259	accounting principles. 31
260	260	(42) “Third-party loan servicer” means a person or entity who or that, directly or indirectly, 32
261	261	engages in the business of servicing a loan secured by residential real estate located in Rhode Island, 33
262	262	for a personal, family, or household purpose, owed or due, or asserted to be owed or due, another, 34
263	263
264	264
265	265	LC000645 - Page 8 of 13
266	266	or a person or entity that owns the servicing rights to a loan secured by residential real estate located 1
267	267	in Rhode Island whether or not that owner services the loan themselves or contracts with another 2
268	268	person or entity for the servicing. 3
269	269	(43) “Virtual currency”: 4
270	270	(i) Means a digital representation of value that: 5
271	271	(A) Is used as a medium of exchange, unit of account, or store of value; and 6
272	272	(B) Is not legal tender, whether or not denominated in legal tender; and 7
273	273	(ii) Does not include: 8
274	274	(A) A transaction in which a merchant grants, as part of an affinity or rewards program, 9
275	275	value that cannot be taken from or exchanged with the merchant for legal tender, bank credit, or 10
276	276	virtual currency; 11
277	277	(B) A digital representation of value issued by or on behalf of a publisher and used solely 12
278	278	within an online game, game platform, or family of games sold by the same publisher or offered 13
279	279	on the same game platform; 14
280	280	(C) Native digital token used in a proprietary blockchain service platform; or 15
281	281	(D) A gift certificate; store gift card; general-use prepaid card; or loyalty, award, or 16
282	282	promotional gift card, as these terms are defined in federal Regulation E, 12 C.F.R. § 1005.20(a), 17
283	283	without giving effect to any exception as specified in 31 C.F.R. § 1010.100(kkk) or any card, code 18
284	284	or device, or other device that can add funds to those products. 19
285	285	(44) “Writing” means hard-copy writing or electronic writing that meets the requirements 20
286	286	of § 42-127.1-2(7). 21
287	287	SECTION 2. Section 19-14.1-10 of the General Laws in Chapter 19-14.1 entitled "Lenders 22
288	288	and Loan Brokers" is hereby amended to read as follows: 23
289	289	19-14.1-10. Special exemptions. 24
290	290	(a) The licensing provisions of chapter 14 of this title shall not apply to: 25
291	291	(1) Nonprofit charitable, educational, or religious corporations or associations; 26
292	292	(2) Any person who makes less than six (6) loans in this state in any consecutive twelve-27
293	293	month (12) period; there is no similar exemption from licensing for loan brokers for brokering loans 28
294	294	or acting as a loan broker; 29
295	295	(3) Any person acting as an agent for a licensee for the purpose of conducting closings at 30
296	296	a location other than that stipulated in the license; 31
297	297	(4) Regulated institutions and banks or credit unions organized under the laws of the United 32
298	298	States, or subject to written notice with a designated Rhode Island agent for service of process in 33
299	299	the form prescribed by the director, or the director’s designee, of any other state within the United 34
300	300
301	301
302	302	LC000645 - Page 9 of 13
303	303	States if the laws of the other state in which such bank or credit union is organized authorizes under 1
304	304	conditions not substantially more restrictive than those imposed by the laws of this state, as 2
305	305	determined by the director, or the director’s designee, a financial institution or credit union to 3
306	306	engage in the business of originating or brokering loans in the other state; no bank or credit union 4
307	307	duly organized under the laws of any other state within the United States may receive deposits, pay 5
308	308	checks, or lend money from any location within this state unless such bank or credit union has 6
309	309	received approval from the director, or the director’s designee, for the establishment of an interstate 7
310	310	branch office pursuant to chapter 7 of title 19; 8
311	311	(5) Any natural person employee who is employed by a licensee when acting on the 9
312	312	licensee’s behalf; provided that this exemption shall not apply to a mortgage loan originator 10
313	313	required to be licensed under § 19-14-2 or § 19-14.10-4; or 11
314	314	(6) A licensed attorney when performing loan closing services for a licensee or for an entity 12
315	315	identified in subdivision (4) above. 13
316	316	(b) The provisions of this chapter and chapter 14 of this title shall not apply to: 14
317	317	(1) Loans to corporations, joint ventures, partnerships, limited liability companies or other 15
318	318	business entities; 16
319	319	(2) Loans over twenty-five thousand dollars ($25,000) in amount to individuals for 17
320	320	business or commercial, as opposed to personal, family or household purposes; 18
321	321	(3) Loans principally secured by accounts receivable and/or business inventory; 19
322	322	(4) Loans made by a life insurance company wholly secured by the cash surrender value 20
323	323	of a life insurance policy; 21
324	324	(5) Education-purpose loans made by the Rhode Island health and educational building 22
325	325	corporation as vested in chapter 38.1 of title 45 of the Rhode Island student loan authority as vested 23
326	326	in chapter 62 of title 16; 24
327	327	(6) The acquisition of retail or loan installment contracts by an entity whose sole business 25
328	328	in this state is acquiring them from federal banks receivers or liquidators; 26
329	329	(7) Notes evidencing the indebtedness of a retail buyer to a retail seller of goods, services 27
330	330	or insurance for a part or all of the purchase price; 28
331	331	(8) Any municipal, state or federal agency that makes, brokers, or funds loans or acts as a 29
332	332	lender or a loan broker. This exemption includes exclusive agents or exclusive contractors of the 30
333	333	agency specifically designated by the agency to perform those functions on behalf of the agency 31
334	334	and which has notified the director, in writing, of the exclusive agency or contract; or 32
335	335	(9) Notes evidencing the indebtedness of a retail buyer to a retail motor vehicle dealer that 33
336	336	include as part of the amount financed, disclosed in accordance with 12 C.F.R. § 226.18 as 34
337	337
338	338
339	339	LC000645 - Page 10 of 13
340	340	amended, an amount representing negative equity related to the motor vehicle being traded in as 1
341	341	part of the purchase price of the motor vehicle being purchased. 2
342	342	(c) No license to make or fund loans, or to act as a lender or small loan lender shall be 3
343	343	required of any person who engages in deferred deposit transactions (commonly known as “pay-4
344	344	day advance”) while holding a valid license to cash checks pursuant to chapter 14 of this title. 5
345	345	SECTION 3. Section 19-14.2-1 of the General Laws in Chapter 19-14.2 entitled "Small 6
346	346	Loan Lenders" is hereby amended to read as follows: 7
347	347	19-14.2-1. Maximum rate on small loans not authorized by chapter. 8
348	348	(a) No person, except as authorized by this chapter, shall directly or indirectly charge, 9
349	349	contract for, or receive any interest, discount, or consideration greater than provided by this chapter 10
350	350	upon the loan, use, or sale of credit of the amount or value of five thousand dollars ($5,000) or less. 11
351	351	(b) The prohibition in subsection (a) shall apply to any person who, by any device, 12
352	352	subterfuge, or pretense shall charge, contract for, or receive greater interest, consideration, or 13
353	353	charges than is authorized by this chapter for the loan, use, or forbearance of money, goods, or 14
354	354	things in action, or for the loan, use, or sale of credit. 15
355	355	(c) No loan of the amount or value of five thousand dollars ($5,000) or less for which a 16
356	356	greater rate of interest, consideration, or charges than is permitted by this chapter has been charged, 17
357	357	contracted for, or received, wherever made, shall be enforced in this state, and every person in any 18
358	358	way participating therein in this state shall be subject to the provisions of this chapter, provided 19
359	359	that this section shall not apply to loans legally made in any other state, commonwealth, or district 20
360	360	which then has in effect a regulatory small loan law similar in principal to this chapter. 21
361	361	(d) No person may engage in any device, subterfuge, or pretense to evade the requirements 22
362	362	of this chapter, including making loans disguised as personal property sales and leaseback 23
363	363	transactions, or disguising loan proceeds as cash rebates for the pretextual installment sale of goods 24
364	364	or services, or assisting a debtor to obtain a loan with a greater rate of interest, consideration, or 25
365	365	charges than is permitted by this chapter through any method including mail, telephone, Internet, 26
366	366	or any electronic means regardless of whether the person has a physical location in the state. 27
367	367	SECTION 4. Sections 19-14.4-4 and 19-14.4-5 of the General Laws in Chapter 19-14.4 28
368	368	entitled "Check Cashing" are hereby amended to read as follows: 29
369	369	19-14.4-4. Fees for services. 30
370	370	No licensee shall: 31
371	371	(1) Charge check-cashing fees in excess of three percent (3%) of the face amount of the 32
372	372	check, or five dollars ($5.00), whichever is greater, if the check is the payment of any kind of state 33
373	373	public assistance or federal social security benefit; 34
374	374
375	375
376	376	LC000645 - Page 11 of 13
377	377	(2) Charge check-cashing fees for personal checks in excess of ten percent (10%) of the 1
378	378	face amount of the personal check or five dollars ($5.00), whichever is greater; or 2
379	379	(3) Charge check-cashing fees in excess of five percent (5%) of the face amount of the 3
380	380	check or five dollars ($5.00), whichever is greater, for all other checks; or 4
381	381	(4) Charge deferred deposit transaction fees in excess of ten percent (10%) of the amount 5
382	382	of funds advanced. 6
383	383	19-14.4-5. Posting of charges — Endorsement — Receipt. 7
384	384	(a) In every location licensed pursuant to this chapter, there shall be at all times posted, in 8
385	385	a conspicuous place within the licensed premises, a complete and unambiguous schedule of all fees 9
386	386	for cashing checks, deferred deposit transactions expressed as both a dollar amount and an annual 10
387	387	percentage rate, and the initial issuance of any identification card. 11
388	388	(b) Before a licensee shall deposit, with any regulated institution or other insured-deposit-12
389	389	taking institution organized under the laws of the United States, a check cashed by the licensee, the 13
390	390	check must be endorsed with the name under which the licensee is doing business and must include 14
391	391	the words “licensed check cashing services”. 15
392	392	(c) The licensee shall provide a receipt for each transaction for the benefit of a customer. 16
393	393	(d) Each check casher shall also post a list of valid identification that is acceptable in lieu 17
394	394	of identification provided by the check casher. The information required by this section shall be 18
395	395	clear, legible, and in letters not less than one-half (½) inch in height. The information shall be 19
396	396	posted in a conspicuous location in the unobstructed view of the public within the check casher’s 20
397	397	premises. Failure to post information as required by this section, or the imposition of fees or 21
398	398	identification requirements contrary to the information posted, shall constitute a deceptive trade 22
399	399	practice under chapter 13.1 of title 6. 23
400	400	SECTION 5. Section 19-14.4-5.1 of the General Laws in Chapter 19-14.4 entitled "Check 24
401	401	Cashing" is hereby repealed. 25
402	402	19-14.4-5.1. Customer checks — Deferred deposits. 26
403	403	(a) A check casher may defer the deposit of a personal check written by a customer for a 27
404	404	term of no less than thirteen (13) days, pursuant to the provisions of this section. The face amount 28
405	405	of the check shall not exceed five hundred dollars ($500). 29
406	406	(b) Each deferred deposit shall be made pursuant to a written agreement that has been 30
407	407	signed by the customer and by the check casher or an authorized representative of the check casher. 31
408	408	The written agreement shall contain a statement of the total amount of any fees charged for the 32
409	409	deferred deposit, expressed both in United States currency and as an annual percentage rate (APR), 33
410	410	as required by federal regulations. The written agreement shall authorize the check casher to defer 34
411	411
412	412
413	413	LC000645 - Page 12 of 13
414	414	deposit of the personal check until a specific date no less than thirteen (13) days from the date the 1
415	415	written agreement was signed and executed. The written agreement shall not permit the check 2
416	416	casher to accept collateral. 3
417	417	(c) A rollover is an extension or deferral of the payment due date of a deferred deposit 4
418	418	transaction for the payment of only an additional fee. 5
419	419	(d) The maximum amount of a single customer’s check is five hundred dollars ($500). 6
420	420	(e) The maximum aggregate amount of concurrently outstanding checks held by the 7
421	421	licensee or its affiliate from the same customer is five hundred dollars ($500). 8
422	422	(f) The maximum number of concurrently outstanding checks held by the licensee or its 9
423	423	affiliates from the same customer is three (3). 10
424	424	(g) The maximum number of rollovers permitted is one. 11
425	425	(h) The check casher shall give a duplicate original of the agreement to the customer at the 12
426	426	time of the transaction. 13
427	427	SECTION 6. This act shall take effect upon passage. 14
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429	429	LC000645
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431	431
432	432
433	433	LC000645 - Page 13 of 13
434	434	EXPLANATION
435	435	BY THE LEGISLATIVE COUNCIL
436	436	OF
437	437	A N A C T
438	438	RELATING TO FINANCIAL INSTITUTIONS -- LICENSED ACTIVITIES -- LENDERS AND
439	439	LOAN BROKERS -- CHECK CASHING
440	440	***
441	441	This act would repeal the provisions of the general laws allowing deferred deposit 1
442	442	providers, also known as "payday lenders." 2
443	443	This act would take effect upon passage. 3
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445	445	LC000645
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447	447