Allows a lender to charge an origination fee, increase interest rates and collect a monthly service fee, on loans up to three hundred dollars ($300) but not exceeding five thousand dollars ($5,000).

Rhode Island Small Loan Fee Bill – Plain English Summary

This bill would change the rules for small personal loans in Rhode Island, specifically for loans between $300 and $5,000. Under this proposal, lenders who offer these smaller loans would be allowed to charge borrowers an origination fee (a one-time fee just for taking out the loan), a higher interest rate than currently permitted, and a monthly service fee on top of the regular loan payments. Essentially, it expands the types and amounts of fees that lenders can legally collect on this category of small loans.

This bill would directly affect Rhode Island residents who borrow small amounts of money from licensed small loan lenders — often people who need quick access to cash and may not qualify for traditional bank loans. It would also affect the lenders themselves, potentially making it more profitable for them to offer loans in this range. Supporters of similar measures typically argue that higher allowable fees encourage more lenders to offer small loans, increasing access to credit. Critics often argue that stacking multiple fees can make borrowing significantly more expensive for people who are already in tight financial situations.

Currently, the bill has been referred to the House Corporations Committee and has been recommended to be held for further study, meaning lawmakers want more time to review it before taking a vote. It has not yet been passed into law.