2012 -- H 7689

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LC01615

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2012

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A N A C T

RELATING TO FINANCIAL INSTITUTIONS-LICENSED ACTIVITIES

     Introduced By: Representative Arthur J. Corvese

     Date Introduced: February 16, 2012

     Referred To: House Corporations

It is enacted by the General Assembly as follows:

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     SECTION 1. Section 19-14-5 of the General Laws in Chapter 19-14 entitled "Licensed

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Activities" is hereby amended to read as follows:

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     19-14-5. Minimum capital. – (a) Each licensee, licensed pursuant to an application for

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license filed after June 30, 1995, shall maintain the following minimum net worth to be evidenced

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in accordance with regulations promulgated by the director or the director's designee.

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      (1) Small loan lenders, the sum of twenty-five thousand dollars ($25,000);

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      (2) Loan brokers, the sum of ten thousand dollars ($10,000);

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      (3) Lenders, the sum of one hundred thousand dollars ($100,000); and

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      (4) Sale of checks, the sum of fifty thousand dollars ($50,000).

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     (b) No lender shall make a loan to a borrower if the loan would cause the borrower to

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have more than five hundred dollars ($500) outstanding among all licensees in the state or is

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greater than twenty-five percent (25%) of their monthly gross income (MGI), or the lesser of the

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two.

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     (c) The department of business regulation shall develop and administer a real-time

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statewide compliance system for deferred deposit lenders licensed under section 19-14-1 to

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record each deferred deposit loan transaction. The department may contract with a single third-

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party provider to operate the database. If the department contracts with the third-party provider

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for the operation of the database, the department shall do all of the following:

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     (1) Ensure the third-party provider operates the database according to the provisions of

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this section;

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     (2) In selecting a third-party provider, consider the cost of providing the service and the

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third-party provider’s ability to meet all the requirements of this section;

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     (3) In selecting the third-party provider, give strong consideration to all of the following:

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     (i) The third-party provider’s ability to prevent fraud, abuse, and other unlawful activity

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associated with payday loan transactions and to provide additional tools for the administration

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and enforcement of this section;

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     (ii) Whether the provider is currently providing service for another state.

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     (d) The department shall be charged with the following:

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     (1) Adopting rules governing the creation, structure, and use of the compliance system,

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which shall include a real-time customer eligibility verification charge as necessary to maintain

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the system;

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     (2) Establishing requirements for the retention, archiving, and purging of information

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entered into and stored by the system; and

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     (3) Fully implementing the system by July 1, 2012.

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     SECTION 2. This act shall take effect upon passage.

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LC01615

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO FINANCIAL INSTITUTIONS-LICENSED ACTIVITIES

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     This act would require the department of business regulation to develop and administer a

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statewide compliance system for deferred deposit lenders.

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     This act would take effect upon passage.

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LC01615

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