Prohibits disclosure terms "down payment", "money down", or any similar language to describe lump sum payments in order to reduce monthly lease payments. Provides that lump sum payments are non-refundable in the event of a total loss of the vehicle.
Summary
H5567 amends Rhode Island’s deceptive trade practices law to regulate how motor vehicle financing and leasing terms are disclosed. For financed vehicle sales, the bill requires the contract to prominently display the loan term and interest rate, and it requires the borrower’s initials or signature to appear next to those terms as an acknowledgment, in addition to a separate signature binding the borrower to the contract.
For motor vehicle leases, the bill prohibits the use of terms such as “down payment,” “money down,” or similar language to describe lump-sum payments made at signing that reduce monthly lease payments. Instead, the lessee must receive and acknowledge a plain-language disclosure, in at least 11-point font, stating that any lump-sum payment made at the time of financing is non-refundable if the vehicle is later declared a total loss, regardless of the circumstances. Noncompliant financing agreements would be voidable by the borrower within 30 days, though the borrower would remain responsible for damage to the vehicle.
Impact
The bill would amend Section 6-13.1-28 of the General Laws, expanding Rhode Island’s deceptive trade practices rules for auto finance and lease disclosures. It would impose specific formatting, acknowledgment, and disclosure requirements on motor vehicle lenders and lessors, and it would create a borrower right to void noncompliant financing agreements within 30 days. The measure primarily affects auto dealers, finance companies, lessors, and consumers entering vehicle purchase or lease contracts.
Sentiment
Based on the bill text and the absence of recorded committee testimony or votes, the measure appears to be framed as a consumer-protection bill aimed at clearer disclosure and preventing misleading lease terminology. The overall tone of the proposal is regulatory and protective rather than punitive, with an emphasis on transparency in auto finance transactions. No formal vote history or hearing record is available here to indicate broader legislative support or opposition.
Contention
The main point of contention is likely to be the bill’s restriction on common lease marketing language such as “down payment” and “money down,” which dealers or lessors may view as limiting standard industry terminology. Another possible issue is the mandated nonrefundable disclosure for lump-sum lease payments, which could be seen by consumers as clarifying risk but by industry as potentially discouraging upfront payments or complicating lease offers. The borrower’s ability to void a noncompliant contract within 30 days may also raise concerns for lenders about contract certainty and administrative compliance.