Removes the licensing exemption for a lender that originates less than six (6) loans in twelve (12) consecutive months.
Summary
H5331 amends Rhode Island’s lender and loan broker licensing law by eliminating a current exemption for persons who make fewer than six loans in the state during any consecutive 12-month period. Under existing law, that small-volume lender exemption applies to lenders, but the bill expressly notes that there is no similar exemption for loan brokers. By removing the lender exemption, the bill would require even low-volume lenders to comply with the chapter’s licensing requirements unless another exemption applies.
The bill leaves the rest of the statutory exemption structure largely intact. It continues to exempt a range of entities and transactions, including nonprofit organizations, banks and credit unions, certain employees and attorneys acting on behalf of licensees, business-purpose loans, loans secured by business assets, government lending programs, and certain retail installment and motor vehicle financing arrangements. The bill would take effect immediately upon passage.
Impact
The bill would narrow an existing carve-out in Rhode Island General Laws § 19-14.1-10 by subjecting small-volume lenders to the state’s lender licensing regime. As a result, individuals or entities making fewer than six loans in a 12-month period would no longer be automatically exempt from licensing and would need to meet applicable regulatory, compliance, and oversight requirements unless another statutory exemption applies. The change affects the regulation of consumer lending and small-scale lending activity in the state.
Sentiment
Based on the bill text and available context, the measure appears to be a targeted regulatory tightening rather than a broadly controversial overhaul. The stated purpose is straightforward: to remove a licensing exemption for low-volume lenders. There are no recorded committee transcripts or votes in the provided materials, so there is no documented public debate or formal sentiment from legislative proceedings beyond the bill’s clear consumer-finance regulatory intent.
Contention
The main point of contention is likely the burden on occasional or small-scale lenders, who would lose an exemption and face licensing requirements even if they make only a handful of loans. Supporters would likely view the change as closing a loophole and improving oversight of lending activity, while opponents may argue that it imposes unnecessary compliance costs on limited or infrequent lending. No specific stakeholder positions, committee objections, or recorded votes are available in the provided materials.