Rhode Island House Bill H7724

Rhode Island 2026 Regular Session

• Introduced: 2/12/26
• Refer: 2/12/26

Caption

RELATING TO FINANCIAL INSTITUTIONS -- SMALL LOAN LENDERS

Summary

H7724 amends Rhode Island’s small loan lender law to change the pricing rules for loans made by licensed small loan lenders. For loans up to $5,000, the bill sets a maximum annual interest rate of 99% when origination and closing fees are included in the cost of the loan, and it keeps the existing tiered structure for smaller loan amounts. It also caps origination fees at 10% of the original loan amount and closing fees at 4% of the original loan amount. The bill further provides that late payment fees and returned payment fees may be charged only if they are agreed to in writing by both the borrower and lender. It preserves the general prohibition on other charges, except for items already allowed under current law such as credit insurance, lawful filing fees, insurance charges, and certain other authorized fees. The act would take effect immediately upon passage.

Impact

This bill would amend two sections of Rhode Island General Laws chapter 19-14.2 governing small loan lenders: the maximum loan and interest rate provision and the prohibition on other charges. Its practical effect is to formalize a 99% annualized cost cap for the largest small loans covered by the statute, while also tightening fee limits and documentation requirements for late and returned payment charges. Borrowers, licensed small loan lenders, and regulators enforcing consumer lending rules would be directly affected.

Sentiment

Based on the bill text and the absence of recorded committee testimony or votes, the available record suggests a neutral-to-regulatory posture rather than clear support or opposition. The measure appears aimed at clarifying and limiting permissible charges in the small-loan market, which may appeal to consumer protection interests while still allowing lenders to operate at high interest rates. No formal sentiment can be inferred from hearings or roll calls because none are provided.

Contention

The likely points of contention are the high effective cost of small loans and whether the bill sufficiently protects borrowers from excessive fees. Consumer advocates would likely focus on the 99% annual rate and the potential burden on low-income borrowers, while small loan lenders may view the bill as preserving needed flexibility by explicitly allowing substantial interest and certain fees. The requirement that late and returned payment fees be agreed to in writing may also be debated as a borrower-protection measure versus an added compliance burden for lenders.