2019 -- H 5105

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LC000081

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2019

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A N   A C T

RELATING TO FINANCIAL INSTITUTIONS -- PAYDAY LOANS

     

     Introduced By: Representatives Lombardi, Hull, and Walsh

     Date Introduced: January 10, 2019

     Referred To: House Finance

     It is enacted by the General Assembly as follows:

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     SECTION 1. Section 19-14.4-5.1 of the General Laws in Chapter 19-14.4 entitled

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"Check Cashing" is hereby amended to read as follows:

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     19-14.4-5.1. Customer checks -- Deferred deposits.

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     (a) A check casher may defer the deposit of a personal check written by a customer for a

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term of no less than thirteen (13) days, pursuant to the provisions of this section. The face amount

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of the check shall not exceed five hundred dollars ($500).

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     (b) Each deferred deposit shall be made pursuant to a written agreement that has been

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signed by the customer and by the check casher or an authorized representative of the check

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casher. The written agreement shall contain a statement of the total amount of any fees charged

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for the deferred deposit, expressed both in United States currency and as an annual percentage

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rate (APR), as required by federal regulations. The written agreement shall authorize the check

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casher to defer deposit of the personal check until a specific date no less than thirteen (13) days

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from the date the written agreement was signed and executed. The written agreement shall not

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permit the check casher to accept collateral.

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     (c) Notwithstanding any provision of the general laws to the contrary, all "payday loans",

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"payday advances" or "deferred presentment loans", as defined in ยง 19-14-1:

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     (1) Shall have an annual percentage rate (APR) of no more than twenty-eight percent

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(28%) per annum;

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     (2) Shall have a maturity date of more than ninety (90) days from the date on which the

 

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loan closed;

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     (3) Shall not have fees and interest that exceeds sixty percent (60%) of the loan's original

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principal; and

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     (4) Shall be repayable in monthly increments with each monthly payment being no more

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than twenty-five percent (25%) of the loan's original principal.

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     (c)(d) A rollover is an extension or deferral of the payment due date of a deferred deposit

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transaction for the payment of only an additional fee.

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     (d)(e) The maximum amount of a single customer's check is five hundred dollars ($500).

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     (e)(f) The maximum aggregate amount of concurrently outstanding checks held by the

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licensee or its affiliate from the same customer is five hundred dollars ($500).

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     (f)(g) The maximum number of concurrently outstanding checks held by the licensee or

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its affiliates from the same customer is three (3).

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     (g)(h) The maximum number of rollovers permitted is one.

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     (h)(i) The check casher shall give a duplicate original of the agreement to the customer at

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the time of the transaction.

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     SECTION 2. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO FINANCIAL INSTITUTIONS -- PAYDAY LOANS

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     This act would cap the annual percentage rate (APR) for payday loans to twenty-eight

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percent (28%); requires a maturity date of more than ninety days (90) from closing; prohibits fees

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and interest payments of more than sixty percent (60%) of the principal amount; and requires that

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payments be made monthly with each payment being no more than twenty-five percent (25%) of

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the loan's original principal.

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     This act would take effect upon passage.

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