2012 -- H 7689

=======

LC01615

=======

STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2012

____________

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:

1-1

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

1-2

Activities" is hereby amended to read as follows:

1-3

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

1-4

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

1-5

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

1-6

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

1-7

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

1-8

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

1-9

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

1-10

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

1-11

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

1-12

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

1-13

two.

1-14

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

1-15

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

1-16

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

1-17

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

1-18

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

1-19

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

1-20

this section;

2-1

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

2-2

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

2-3

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

2-4

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

2-5

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

2-6

and enforcement of this section;

2-7

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

2-8

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

2-9

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

2-10

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

2-11

the system;

2-12

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

2-13

entered into and stored by the system; and

2-14

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

2-15

     SECTION 2. This act shall take effect upon passage.

     

=======

LC01615

=======

EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO FINANCIAL INSTITUTIONS-LICENSED ACTIVITIES

***

3-1

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

3-2

statewide compliance system for deferred deposit lenders.

3-3

     This act would take effect upon passage.

     

=======

LC01615

=======

H7689