The bill, HB 5042, repeals the provisions of the general laws that allow deferred deposit providers, commonly known as "payday lenders." It introduces a new section titled "Definitions" in Section 19-14-1, which removes the definition of "deferred-deposit transaction" that previously included payday loans and similar financial transactions.

Additionally, the bill establishes new language in Section 19-14.1-10 regarding special exemptions from licensing requirements for certain entities, including nonprofit organizations and individuals making fewer than six loans annually. It also introduces a new section, 19-14.2-1, which addresses maximum interest rates for small loans not authorized by the chapter and prohibits deceptive practices to evade regulatory requirements.

The bill sets forth provisions regarding fees for cashing checks and mandates clear posting of charges. It specifically prohibits the charging of deferred deposit transaction fees in excess of ten percent (10%) of the amount of funds advanced.

Overall, the act effectively bans payday lending in the state by repealing the relevant provisions, and it is set to take effect on January 1, 2027.

Statutes affected:
5042: 19-14-1, 19-14.1-10, 19-14.2-1, 19-14.4-5.1
5042  SUB A: 19-14-1, 19-14.1-10, 19-14.2-1, 19-14.4-5.1