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
This bill amends Rhode Island’s deceptive trade practices law to regulate how motor vehicle financing and leasing terms are disclosed. For vehicle purchase financing, it requires the contract to prominently display the loan term and interest rate, and it requires the borrower’s initials or signature to appear immediately adjacent to those terms as an acknowledgment that the borrower was informed of them. The borrower must also separately sign the agreement to be bound by the contract.
For motor vehicle leases, the bill prohibits the use of the terms “down payment,” “money down,” or similar language to describe lump-sum payments made at signing that are intended to reduce monthly lease payments. Instead, the lessee must receive and acknowledge a plain-language disclosure, in at least 11-point font, explaining that any lump-sum money paid at the time of financing is non-refundable if the vehicle is later declared a total loss, regardless of the circumstances. The act takes effect upon passage.
Impact
The bill would amend Section 6-13.1-28 of the Rhode Island General Laws within the state’s deceptive trade practices framework. It would impose new disclosure and acknowledgment requirements on motor vehicle finance and lease agreements, affecting auto dealers, lessors, lenders, and consumers entering into vehicle financing or leasing contracts. Noncompliant motor vehicle financing agreements would remain voidable by the borrower within 30 days, while the borrower would still be responsible for any damage to the vehicle.
Sentiment
The available record shows no committee transcript, recorded votes, or formal opposition, so there is no documented debate to gauge broad sentiment. Based on the bill’s text and caption, the measure appears to be consumer-protection oriented, aiming to improve transparency and prevent misleading lease terminology. The overall framing suggests a generally favorable policy intent toward clearer disclosures for borrowers and lessees.
Contention
The main policy issue is the restriction on lease marketing language and the requirement to disclose that lump-sum payments are non-refundable in a total-loss situation. Supporters would likely view this as preventing confusion and deceptive sales practices, while potential opponents in the auto finance and leasing industry may argue that the bill could limit common industry terminology or add compliance burdens. Another point of concern is the voidability remedy, which gives borrowers a 30-day option to cancel noncompliant financing agreements, creating legal and financial risk for dealers and lenders.