RELATING TO COMMERCIAL LAW -- GENERAL REGULATORY PROVISIONS --, INTEREST AND USURY
S2206 would amend Rhode Island’s interest and usury laws to expressly opt the state out of certain provisions of the federal Depository Institutions Deregulation and Monetary Control Act of 1980 (DIDMCA) for loans made in Rhode Island. The bill is intended to preserve Rhode Island’s ability to apply its own interest-rate limits to loans made in the state, including loans originated by out-of-state lenders or through remote channels such as the internet, telephone, mail, or other electronic means.
The bill also creates a new chapter titled the “Anti-Evasion of Lending Rules Act of 2026,” which prohibits efforts to disguise loans or otherwise structure transactions to evade Rhode Island lending laws. It targets arrangements such as sale-leasebacks, disguised cash rebates, disguised loan proceeds, and other forms of subterfuge, and it treats certain nontraditional actors as lenders when they effectively control, benefit from, or facilitate the loan. Violations would make the loan void and uncollectible, allow borrowers to recover payments, and authorize damages, including treble damages, statutory damages, attorneys’ fees, and other relief.
If enacted, the bill would change Rhode Island law by limiting the reach of federal preemption under DIDMCA for loans made in the state and by strengthening state enforcement of interest-rate caps and lending rules. It would expand the state’s ability to regulate both in-state and out-of-state lending activity affecting Rhode Island borrowers, and it would create new statutory remedies against lenders, brokers, service providers, and other participants in loan structures that are found to evade state law.
The available voting history suggests support in committee, with the Senate Commerce Committee voting 6-0 to hold the bill for further study rather than rejecting it. The bill’s sponsors and caption indicate a consumer-protection and state-regulatory purpose, and the text is framed as a response to perceived loopholes in lending law. No opposing testimony is provided in the materials, so the overall sentiment appears cautiously favorable but still under review.
The main point of contention is likely the scope of state authority over lending, especially whether Rhode Island should opt out of federal provisions that allow certain out-of-state lenders to avoid state interest-rate limits. Another likely issue is the bill’s broad anti-evasion language, which could sweep in marketplace lenders, fintech platforms, brokers, and service providers that claim not to be the lender of record. The bill’s strong remedies—voiding loans, restitution, treble damages, and statutory damages—also suggest potential concern from the lending industry about compliance risk and litigation exposure.