RI Coalition for Predatory Lending Reform Hearings Update

# 03-03-2026 04:53 PM
nancy.wolanski@unitedwayri.org	From Predatory Lending Coalition: There will be a hearing on two bills this Tuesday, March 3rd, 2026, at the House Committee on Corporations: One of these bills is the Coalition’s priority bill H-7850 to protect Rhode Islanders from online predatory lenders charging triple-digit interest rates. The second bill is a new and dangerous proposal to replace Rhode Island’s 24%-36% APR small dollar loan rate limits with new, predatory limits that would run as high as 236% APR. We need folks to turn out, whether with written testimony or verbal testimony or both. The hearing will take place on Tuesday in the House Lounge at the Rise of the House. This means that we do not have an exact start time, because the committee session will begin only after the full House session has concluded and the representatives rise from their seats to leave main chamber. The hearing could begin before 5 p.m. but could also start later. The committee will be hearing these two bills and a dozen others. Here is key info on the two bills: Representative Art Handy’s H-7850 addresses a pretty straightforward problem with two complementary approaches. The problem H-7850 addresses: That fintech lenders are harming Rhode Islanders by getting around Rhode Island’s interest rate caps (of between 21% and 36% APR depending upon the size of the loan) and charging rates between 100% and 200% APR. The solutions H-7850 proposes: Establishing the Anti-Evasion of Lending Rules Act of 2026; core to these rules is the idea that whoever has the “predominant economic interest, risk or reward” in the loan is the true lender and should be recognized and regulated as the true lender; a number of fintech companies claim that banks Utah or elsewhere, because they sign the loan documents, are the lenders, despite the fact that the fintech companies do all the work of designing the loan product, approving/rejecting applicants, and servicing the loan; the bank gets its fee regardless, taking no risk, whereas the fintech company gets the reward and takes risk, which they lower by crafting a predatory product. Opting Rhode Island out of a federal statute that permits banks chartered in one state to export their (much higher) interest rate caps to Rhode Islanders; if Rhode Island opts out, banks chartered in other states would have to obey Rhode Island’s reasonable and affordable interest rate caps, and the fintech companies would not be able to “rent” out these banks to get around Rhode Island rate caps. Representative Patricia Serpa’s H-7868 will also be heard by the committee. Less than a year after the long-awaited enactment of payday lending reform legislation in Rhode Island (and before it even takes effect next year), this bill would gut this historic and beneficial achievement. This bill would replace the rate caps Rhode Island policymakers long ago set to protect Rhode Islanders from predatory lenders. In place of rate caps of between 24% and 36% APR (depending on loan size) for loans up to $5,000, Representative Serpa’s rewriting of the law would introduce not only higher rates, but also origination fees and additional monthly charges, resulting in overall APRs between 60% and 236%. This would not only resurrect storefront payday lending but also overturn the entire small loan market for Rhode Islanders, increasing borrowing costs for individuals and small business owners. Please join me in opposing this disastrous proposal. I hope a number of you can make it to the state house on Tuesday to provide verbal testimony in support of H-7850 and in opposition to H-7868, though of course written testimony alone is welcome as well. It is important that we provide written and verbal testimony, to make it clear to policymakers that this is an important issue and that we do not want to fight for this reform for a decade and a half the way we fought for that long for storefront payday lending reform. Feel welcome to share with others this call to action. One is permitted to provide both written and verbal testimony. When providing verbal testimony, it is fine to read from notes, but generally not best to read exactly the same document one has submitted for written testimony. Rather, it is best to emphasize key points and especially stories, and possibly add something different. We recommend submitting written legislation to Louis Mansolillo, Committee Clerk, at HouseCorporations@rilegislature.gov by 1 p.m. on Tuesday. All written testimony is considered public and will be posted at the General Assembly website. All verbal testimony will be recorded on video and streamed live and then archived by CapitolTV. Link to hearing agenda: https://status.rilegislature.gov/documents/agenda-21325.pdf Links to bills: https://webserver.rilegislature.gov/BillText26/HouseText26/H7850.pdf, https://webserver.rilegislature.gov/BillText/BillText26/HouseText26/H7868.pdf Please find attached a document with two fact sheets on the coalition’s priority legislation. Here is a link to EPI’s 2024 policy brief on predatory lending, including the rent-a-bank scheme: https://nmd.nyc3.cdn.digitaloceanspaces.com/epi/documents/reports/Predatory-Lending-Briefing.pdf. Please feel free to reach out to me at 401-523-7635 or at akrinsky@economicprogressri.org, if you have any questions. Thank you for your efforts! Alan You are encouraged to include something unique in your testimony, but here are a few general talking points: Rhode Island policymakers long ago set interest rate caps of between 21% and 36% APR for loans, to protect Rhode Islanders from predatory lenders. While Rhode Island banks, credit unions, and other lenders are bound by these caps, some lenders try to get around them by claiming they are not the true lenders and by going to out-of-state banks not held to the same limits. The rent-a-bank scheme is the way some fintech companies get around Rhode Island’s interest rate caps and charge Rhode Islanders rates of between 100% and 200% APR. This means, for example, whereas according to Rhode Island law, a 12-month $3,000 loan has an interest rate cap of 24% APR, resulting in just over $400 in interest, one rent-a-bank schemer offers 12-month $3,000 loans at 160% APR, resulting in $3,175 in interest (on top of paying back the $3,000 principal). Because the interest rates are so high and repayment schedule is so heavily weighted to interest payments on the front end, borrowers frequently wind up paying off the value of these loans within a few months while still owing most of the principal. And this means lenders no longer care if the borrower defaults, because they’ve already covered the cost of the loan. It’s better not to get any loan than to get a predatory one with such a high rate of interest that paying it back becomes unmanageable, sinking someone into a debt trap and lowering one’s credit score. Policymakers should enact this legislation this year, to protect Rhode Islanders from the predatory practices of the rent-a-bank schemers and other lenders seeking to take advantage of Rhode Islanders.

# 03-03-2026 04:53 PM

From Predatory Lending Coalition:

There will be a hearing on two bills this Tuesday, March 3rd, 2026, at the House Committee on Corporations:

One of these bills is the Coalition’s priority bill H-7850 to protect Rhode Islanders from online predatory lenders charging triple-digit interest rates.

The second bill is a new and dangerous proposal to replace Rhode Island’s 24%-36% APR small dollar loan rate limits with new, predatory limits that would run as high as 236% APR.

We need folks to turn out, whether with written testimony or verbal testimony or both. The hearing will take place on Tuesday in the House Lounge at the Rise of the House. This means that we do not have an exact start time, because the committee session will begin only after the full House session has concluded and the representatives rise from their seats to leave main chamber. The hearing could begin before 5 p.m. but could also start later. The committee will be hearing these two bills and a dozen others.

Here is key info on the two bills:

Representative Art Handy’s H-7850 addresses a pretty straightforward problem with two complementary approaches.

The problem H-7850 addresses: That fintech lenders are harming Rhode Islanders by getting around Rhode Island’s interest rate caps (of between 21% and 36% APR depending upon the size of the loan) and charging rates between 100% and 200% APR.

The solutions H-7850 proposes:

Establishing the Anti-Evasion of Lending Rules Act of 2026; core to these rules is the idea that whoever has the “predominant economic interest, risk or reward” in the loan is the true lender and should be recognized and regulated as the true lender; a number of fintech companies claim that banks Utah or elsewhere, because they sign the loan documents, are the lenders, despite the fact that the fintech companies do all the work of designing the loan product, approving/rejecting applicants, and servicing the loan; the bank gets its fee regardless, taking no risk, whereas the fintech company gets the reward and takes risk, which they lower by crafting a predatory product. Opting Rhode Island out of a federal statute that permits banks chartered in one state to export their (much higher) interest rate caps to Rhode Islanders; if Rhode Island opts out, banks chartered in other states would have to obey Rhode Island’s reasonable and affordable interest rate caps, and the fintech companies would not be able to “rent” out these banks to get around Rhode Island rate caps.

Representative Patricia Serpa’s H-7868 will also be heard by the committee. Less than a year after the long-awaited enactment of payday lending reform legislation in Rhode Island (and before it even takes effect next year), this bill would gut this historic and beneficial achievement.

This bill would replace the rate caps Rhode Island policymakers long ago set to protect Rhode Islanders from predatory lenders. In place of rate caps of between 24% and 36% APR (depending on loan size) for loans up to $5,000, Representative Serpa’s rewriting of the law would introduce not only higher rates, but also origination fees and additional monthly charges, resulting in overall APRs between 60% and 236%. This would not only resurrect storefront payday lending but also overturn the entire small loan market for Rhode Islanders, increasing borrowing costs for individuals and small business owners. Please join me in opposing this disastrous proposal.

I hope a number of you can make it to the state house on Tuesday to provide verbal testimony in support of H-7850 and in opposition to H-7868, though of course written testimony alone is welcome as well. It is important that we provide written and verbal testimony, to make it clear to policymakers that this is an important issue and that we do not want to fight for this reform for a decade and a half the way we fought for that long for storefront payday lending reform. Feel welcome to share with others this call to action.

One is permitted to provide both written and verbal testimony. When providing verbal testimony, it is fine to read from notes, but generally not best to read exactly the same document one has submitted for written testimony. Rather, it is best to emphasize key points and especially stories, and possibly add something different.

We recommend submitting written legislation to Louis Mansolillo, Committee Clerk, at HouseCorporations@rilegislature.gov by 1 p.m. on Tuesday. All written testimony is considered public and will be posted at the General Assembly website. All verbal testimony will be recorded on video and streamed live and then archived by CapitolTV.

Link to hearing agenda: https://status.rilegislature.gov/documents/agenda-21325.pdf

Links to bills: https://webserver.rilegislature.gov/BillText26/HouseText26/H7850.pdf, https://webserver.rilegislature.gov/BillText/BillText26/HouseText26/H7868.pdf

Please find attached a document with two fact sheets on the coalition’s priority legislation. Here is a link to EPI’s 2024 policy brief on predatory lending, including the rent-a-bank scheme: https://nmd.nyc3.cdn.digitaloceanspaces.com/epi/documents/reports/Predatory-Lending-Briefing.pdf.

Please feel free to reach out to me at 401-523-7635 or at akrinsky@economicprogressri.org, if you have any questions.

Thank you for your efforts!

Alan

You are encouraged to include something unique in your testimony, but here are a few general talking points:

Rhode Island policymakers long ago set interest rate caps of between 21% and 36% APR for loans, to protect Rhode Islanders from predatory lenders. While Rhode Island banks, credit unions, and other lenders are bound by these caps, some lenders try to get around them by claiming they are not the true lenders and by going to out-of-state banks not held to the same limits. The rent-a-bank scheme is the way some fintech companies get around Rhode Island’s interest rate caps and charge Rhode Islanders rates of between 100% and 200% APR. This means, for example, whereas according to Rhode Island law, a 12-month $3,000 loan has an interest rate cap of 24% APR, resulting in just over $400 in interest, one rent-a-bank schemer offers 12-month $3,000 loans at 160% APR, resulting in $3,175 in interest (on top of paying back the $3,000 principal). Because the interest rates are so high and repayment schedule is so heavily weighted to interest payments on the front end, borrowers frequently wind up paying off the value of these loans within a few months while still owing most of the principal. And this means lenders no longer care if the borrower defaults, because they’ve already covered the cost of the loan. It’s better not to get any loan than to get a predatory one with such a high rate of interest that paying it back becomes unmanageable, sinking someone into a debt trap and lowering one’s credit score.
Policymakers should enact this legislation this year, to protect Rhode Islanders from the predatory practices of the rent-a-bank schemers and other lenders seeking to take advantage of Rhode Islanders.