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SB 3074

AN ACT RELATING TO FINANCIAL INSTITUTIONS -- SMALL LOAN LENDERS

2026 Regular Session Introduced by Bob Britto and 1 co-sponsor

Authorizes small Rhode Island lenders to issue loans up to $5,000 with new capped fees and tiered interest rates, plus an origination fee.

04/28/2026 Committee recommended measure be held for further study
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WeVote Research Nonpartisan
Bill Summary · SB 3074

Summary of SB 3074 (2026) – Rhode Island

Overview

  • Bill: An Act Relating to Financial Institutions — Small Loan Lenders
  • Session: 2026
  • Introduced: March 13, 2026
  • Sponsors: Sen. Britto (co-sponsor), Sen. Burke (co-sponsor)
  • Committee: Senate Commerce
  • Effective date: Upon passage

Purpose and Intent

SB 3074 would modify the statutory framework governing small loan lenders in Rhode Island. Specifically, it authorizes a small loan lender to:
- Charge an origination fee
- Increase interest rates
- Collect a monthly service fee

These changes apply to small loans ranging from “up to $5,000” for a single borrower. The bill clarifies the permissible charges and establishes specific rate structures by loan amount category.

Key Provisions and Changes

1) Origination Fee

  • A small loan lender may charge an origination fee.
  • The origination fee is the lesser of:
    • $100, or
    • 5% of the loan amount.

2) Loan Amount Cap

  • Loans may be made up to $5,000 in the aggregate to one borrower.

3) Interest Rate Schedule by Loan Amount

Interest and monthly fees are specified by three loan tiers:
- Tier 1: $0–$300
- Interest rate: 3% per month (existing text shows “three percent (3%) five percent (5%) per month plus a monthly service fee up to $5.00” which appears to include a revised tier; the schedule shows a range; the exact intended rate is 5% per month in the line, but it lists both 3% and 5%.)
- Monthly service fee: Up to $5.00
- Tier 2: >$300–$800
- Interest rate: 2.5% per month (existing text shows 2.5% with a 4.5% alternative)
- Monthly service fee: Up to $10.00
- Tier 3: >$800–$5,000
- Interest rate: 2% per month (with an alternative of 4%)
- Monthly service fee: Up to $30.00

Note: The bill text presents two rates per tier (e.g., “three percent (3%) five percent (5%) per month”). The explanatory note and bill language indicate a range or potential transition between rates. The final enacted text would resolve the precise rate(s). For purposes of this summary, the tiers establish: lower baseline rates with potential higher “alternative” rates within each tier.

4) Other Charges

  • In addition to the allowed interest and fees, no small loan licensee may directly or indirectly charge other charges except:
    • Credit insurance
    • Lawful filing fees
    • Insurance charges
    • Other fees listed in § 6-26-2(c) or as authorized by regulation
  • This provision serves as a “no additional charges” safeguard beyond the enumerated items.

5) Effective Date

  • The act would take effect upon passage (immediate operative effect once enacted).

Who Is Affected

  • Small loan lenders: Those authorized to issue loans up to $5,000 to a borrower would be subject to the new caps and fee structure.
  • Borrowers: Consumers taking out small loans from Rhode Island lenders would encounter the new origination fee limit, monthly service fees, and tiered interest rates.
  • Regulators/Policy Implementers: The changes would require regulatory interpretation and enforcement consistent with the new schedule and charges.

Procedural and Timeline Aspects

  • The bill was introduced in March 2026 and referred to the Senate Commerce Committee.
  • It was scheduled for hearings in April 2026.
  • Given “effective upon passage,” any enactment would apply immediately after signature into law.

Observations

  • The bill reorganizes and expands the permissible cost structure for small loans, introducing an origination fee and monthly service fees with tiered interest rates.
  • It includes a cap on loan amounts and seeks to limit other charges to a narrow list, emphasizing regulated fees and insurances.
  • The language around precise interest rate figures appears to present two numbers per tier; the final enacted version should clarify the exact rates to be charged in each tier.

Compiled from official sources — confirm details with the bill’s official record.

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