Rhode Island Payday Loan Law and Legislation

Rhode Island enacted its payday loan regulations in 2001 when it allowed the lenders to operate under the Check Cashers Act. There have been attempts in recent years to introduce more restrictive measures, however, none of the proposed bills was passed. Currently, payday loans in Rhode Island are officially legal and are still offered at high-interest rates.

Rhode Island Payday Lending Statutes

Payday lending in Rhode Island is regulated by R.I. Stat. Ann. 19-14.4-1 et seq. (CHAPTER 19-14.4, Check Cashing), thus, the law allows check cashers to be payday lenders.

The official name for payday loans in the state is “deferred deposit transactions”.

All lenders willing to give loans to the residents of Rhode Island must hold a relevant license with the Rhode Island Department of Business Regulation to operate in the state.

Payday lenders operating in Rhode Island are to have a fee schedule and the interest rates posted at the office to make it available for the customers. All the lenders should keep a list of identification forms they accept to issue the loans.

Actually, all payday loans in Rhode Island should have a written contract signed by both the lender and the borrower. The contract is to state the fees and the APR (annual percentage rate) in dollars (US). The contract should contain the information on the loan term.

Loan Amount in Rhode Island

• Borrowers can apply for loans that do not exceed $500.
• The limit to loans provided to a person per year in Rhode Island: 3, not exceeding $500 each.

Rates, Fees and Other Charges in Rhode Island

“No licensee shall: (4) Charge deferred deposit transaction fees in excess of ten percent (10%) of the amount of funds advanced.”  (R.I. Stat. Ann. 19-14.4-4 et seq.)

Real APR for payday loans in Rhode Island can reach 261% (*According to the Center for Responsible Lending 2019: “Typical APR based on average rate for a $300 loan advertised by largest payday chains or as determined by state regulator, where applicable.”).

The Maximum Term for a Payday Loan in Rhode Island

• The minimum loan term in Rhode Island is 13 days but there isn’t the maximum term.
• One roll-over is allowed for a loan.

Consumer Information

Attention
From July 2020, lenders are not required to check a borrower’s ability to repay a loan.
Be careful, evaluate your financial situation, don’t get into a debt trap.
The rule was changed by the CFPB.

• Lenders are forbidden to take any criminal actions against borrowers.

To find the information about payday lenders of the state you may visit the Rhode Island Department of Business Regulation.

Regulator: Complaints & Information

Rhode Island Department of Business Regulation

Address: 1511 Pontiac Ave, Cranston, RI 02920
Phone: 401-462-9500
Fax: 401-462-9532
Url: https://dbr.ri.gov/
File a Complaint: https://dbr.ri.gov/questioncomplaints/

Submit a Complaint to the CFPB

Number of Rhode Island Consumers Complaints by Topics

According to CFPB Consumer Complaint Database

• Charges from account ( 35 )
• Fraud and threat ( 18 )
• Credit rating ( 11 )
• Not exiting debt ( 8 )
• Lender is not available ( 7 )
• Not requested loan ( 7 )
• Loan not received ( 2 )
• Loan to return ( 2 )

The Quantity of Top Rhode Island Stores by Cities

The History of Payday Loans in Rhode Island

• 2001 – Rhode Island included payday lending into its check cashing statute. Payday loan stores opened in the state.
• 2006 – The Military Lending Act effectively capped payday loans offered to the military at 36% APR. This federal law has no exceptions, thus, no lender in Rhode Island is now allowed to offer loans to the military in excess of 36% APR.
• June 2, 2016 – The Consumer Financial Protection Bureau (CFPB) proposed a Payday Loan Rule that hasn’t yet fully come into effect (expected in November 2020).
• 2018 – S 2173 was introduced by the Legislature. It would eliminate the exemption from usury laws for payday loans and introduce a 36% cap small loan cap. However, the bill didn’t pass: “Committee recommended measure be held for further study.”
• 2018 – The same happened with S 2333, the bill that would “allow small loan lenders to charge borrowers fees pursuant to applicable federal and state laws as long as they are disclosed and agreed to in writing.” Thus, as of today, payday loan regulations stay the same in Rhode Island.

[Updated As of February 2020]