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 described payday loans and modifies the definition of "loan" to include educational loans while eliminating references to payday loans.

Additionally, the bill establishes a new section, 19-14.1-10, regarding "Special exemptions," which clarifies exemptions from licensing requirements for certain entities, including nonprofit organizations and individuals making fewer than six loans annually. It also specifies exemptions for loans to business entities and loans over $25,000 for business purposes.

The bill repeals the licensing requirement for individuals engaging in deferred deposit transactions while holding a valid check cashing license, prohibits excessive interest rates for small loan lenders, and revises the fee structure for check cashing services. The provisions related to deferred deposits effectively eliminate payday lending practices in the state. The act 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