Allows RI to opt out of the provisions of DIDMCA exempting out of state lenders from interest rate limits which apply to RI lenders. Prevents evasion of statutory interest rate limits and lending rules for loans made in RI.
Summary
H6055 would amend Rhode Island’s interest and usury laws to expressly reject the application of certain provisions of the federal Depository Institutions Deregulation and Monetary Control Act of 1980 (DIDMCA) for loans made in Rhode Island. In practical terms, the bill is designed to preserve Rhode Island’s ability to apply its own interest-rate limits and lending rules to loans made in the state, including loans made through mail, phone, internet, or other electronic means, even when the lender is located outside Rhode Island.
The bill also creates a new chapter titled the “Anti-Evasion of Lending Rules Act of 2025,” which targets transactions structured to disguise loans or evade state lending laws. It prohibits subterfuges such as sale-leaseback arrangements, disguised rebates, inflated prices used to hide finance charges, and other methods intended to conceal interest or fees above legal limits. It further provides that persons who function as lenders in substance, even if they claim to be agents, service providers, or affiliated entities, may still be treated as lenders under Rhode Island law if the totality of the circumstances shows they are effectively originating or controlling the loan program.
Impact
The bill would strengthen and clarify Rhode Island’s consumer lending enforcement by making state interest-rate caps and lending restrictions apply more broadly to loans made in the state, including certain online and cross-border lending arrangements. It would also create explicit civil remedies for violations, including voiding unlawful loans, restitution, actual and consequential damages, treble damages for excess charges, statutory damages of $1,000 per violation, and attorneys’ fees and costs. The measure would take effect October 1, 2025, and would affect lenders, loan facilitators, and entities that structure transactions to avoid Rhode Island’s usury laws.
Sentiment
Based on the bill text and caption, the measure appears to be framed as a consumer-protection and anti-evasion bill, with an emphasis on preserving Rhode Island’s regulatory authority over lending. No committee transcripts or votes were provided, so there is no recorded debate or roll-call history to indicate broader legislative sentiment. The available context suggests the bill was introduced to address perceived loopholes in interest-rate regulation and to protect borrowers from high-cost lending structures.
Contention
The main point of contention is likely to be the bill’s restriction on out-of-state and internet-based lenders that rely on federal preemption or affiliate structures to avoid Rhode Island rate caps. Financial institutions and lending platforms that use bank-partnership or similar models may object to being treated as lenders under the bill’s anti-evasion provisions, especially where they claim to be service providers or agents rather than the lender of record. Supporters would likely argue that these provisions are necessary to stop predatory lending and ensure that Rhode Island’s usury laws cannot be circumvented through transaction design.