Rhode Island Payday Loan Status
Rhode Island allows payday lending with regulation. $500 max; 10% of amount advanced Rollover practice: 1 rollover allowed
| Rule | Rhode Island Status |
|---|---|
| Legal status | LEGAL |
| Loan / fee cap | $500 max; 10% of amount advanced |
| Rollover rule | 1 rollover allowed |
| APR disclosure | APR disclosure required per TILA |
| Primary citation | R.I. Gen. Laws 19-14.4-4 |
Usury Cap and Enforceability in Rhode Island
In Rhode Island, the state usury law controls what fees a lender can legally charge. Loans that exceed the cap may be:
- Void in whole or in part -- some states void usurious loans entirely; others require repayment of principal only, with no interest or fees.
- Subject to statutory penalty -- many states allow recovery of 2x or 3x the usurious interest paid.
- Unenforceable via collection -- a lawsuit on a usurious loan can itself be an FDCPA violation.
If you suspect a Rhode Island payday loan violates the cap, demand a full billing history and compare the effective APR (including all fees) against R.I. Gen. Laws 19-14.4-4.
Rollover Prohibitions in Rhode Island
1 rollover allowed
Rollovers are the mechanism by which payday lenders convert a 2-week loan into a multi-year debt trap. Each rollover typically requires a new fee equal to the original charge, so a $500 loan at 15% fee rolled 6 times costs $450 in fees alone -- 90% of the original principal.
Most regulated states now limit rollovers or require cooling-off periods:
- Database check. States like Florida, Kentucky, and Michigan require lenders to check a state database before issuing a new loan.
- Cooling-off periods. Waiting periods (24 hours to 30 days) between loans.
- Loan caps. Maximum number of loans per borrower per year.
If a Rhode Island lender rolled a loan without authority under R.I. Gen. Laws 19-14.4-4, the rollover may be void.
APR Disclosure Rules in Rhode Island
APR disclosure required per TILA
The federal Truth in Lending Act (TILA, 15 U.S.C. 1601) requires all lenders -- including payday lenders in every state -- to disclose the annual percentage rate before the loan is funded. Failure to disclose APR is itself a federal statutory violation with:
- Actual damages
- Statutory damages up to $5,000 (for closed-end credit)
- Attorney-fee shifting
A typical 14-day payday loan with a 15% fee has an APR of roughly 391%. Lenders must disclose that number, not the "15%" fee alone.
ACH Revocation Rights -- Applies in Rhode Island
Under Regulation E (12 CFR 1005) of the federal Electronic Fund Transfer Act, you can revoke ACH authorization at any time in writing -- no state can override this federal right. The process:
- Send written revocation to the lender and to your bank.
- Bank must honor the revocation within 3 business days.
- Any withdrawal after revocation is an unauthorized transfer.
See our ACH revocation guide for a template letter that works in all 50 states.
Military Lending Act Overlay (applies in Rhode Island)
If you are active-duty military or a covered dependent, the Military Lending Act (10 U.S.C. 987) caps consumer credit at 36% Military APR in every state, including Rhode Island. Violations carry criminal penalties.
Critical MLA protections:
- 36% all-in APR cap
- No mandatory arbitration
- No roll-over / refinancing
- No prepayment penalty
- Written disclosure required
See full MLA rights.
Bankruptcy Discharge of Payday Loans in Rhode Island
Payday loans are ordinarily dischargeable in bankruptcy. Exceptions:
- Luxury goods within 90 days (11 U.S.C. 523(a)(2)(C)(i)(I)) -- generally not an issue for payday advances, which are cash.
- Cash advances over $1,000 within 70 days before filing (11 U.S.C. 523(a)(2)(C)(i)(II)) -- presumptively non-dischargeable; courts can rebut with no-intent-to-deceive showing.
- Fraudulent intent at origination -- lender must sue within 60 days of 341 meeting under 11 U.S.C. 523(c).
For most Rhode Island debtors with ordinary payday debt, Chapter 7 discharges the loan within 90 days. See 1328(f) refiling screener and the Rhode Island means test.