(a)  No creditor shall impose a finance charge in excess of an amount equal to eighteen percent (18%) simple interest per annum. This subsection shall not apply to any transaction in connection with which the finance charge does not exceed ten dollars ($10.00). Notwithstanding the provision of any retail installment contract to the contrary, a buyer may prepay in full the unpaid balance of any retail installment contract at any time before its final due date and, if the buyer does so, shall receive a refund credit on the retail installment contract for the prepayment. The amount of the refund credit of finance charges on precomputed loans, made for an original term of sixty (60) months or less, may be calculated on the method commonly referred to as the rule of 78s or sum of the digits. Refund credits of finance charges on precomputed loans, made for an original term greater than sixty (60) months, must be at least the amount as that produced by the rule of anticipation.

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Terms Used In Rhode Island General Laws 6-27-4

  • Agreement: means a written contractual agreement between the merchant and the third-party delivery service. See Rhode Island General Laws 6-58-1
  • Contract: A legal written agreement that becomes binding when signed.
  • Credit: means any loan, mortgage, deed of trust, advance, or discount; any conditional sales contract; any contract to sell, or sale or contract of sale of property or services either for present or future delivery, under which part or all of the price is payable subsequent to the making of the sale or contract and the creditor imposes a finance charge; any contract or arrangement for the hire, bailment, or leasing of property in connection with which the creditor imposes a finance charge; any option, demand, lien, pledge, or other claim against or for the delivery of property or money; any purchase, or other acquisition of, or any credit upon the security of, any obligation or claim arising out of any of the foregoing; and any transaction or series of transactions having a similar purpose or effect. See Rhode Island General Laws 6-27-3
  • Creditor: means any person engaged in the business of extending credit, including any person who as a regular business practice makes loans or sells or rents property or services on a time, credit, or installment basis, either as principal or as agent, who requires, as an incident to the extension of credit, the payment of a finance charge. See Rhode Island General Laws 6-27-3
  • Finance charge: The total cost of credit a customer must pay on a consumer loan, including interest. The Truth in Lending Act requires disclosure of the finance charge. Source: OCC
  • Open-end credit: A credit agreement (typically a credit card) that allows a customer to borrow against a preapproved credit line when purchasing goods and services. The borrower is only billed for the amount that is actually borrowed plus any interest due. (Also called a charge account or revolving credit.) Source: OCC
  • Person: means any individual, corporation, partnership, association, or other organized group of persons, or the legal successor or representative of the foregoing. See Rhode Island General Laws 6-27-3
  • Revolving or open-end credit plan: means a credit plan prescribing the terms of credit transactions exclusive of cash advances under the plans. See Rhode Island General Laws 6-27-3
  • United States: include the several states and the territories of the United States. See Rhode Island General Laws 43-3-8

(b)  Where the amount of refund credit is less than one dollar ($1.00), no refund credit need be made.

(c)  Notwithstanding any contrary provision of law, the maximum finance charge that may be applied under a revolving or open-end credit plan in connection with a transaction arising out of a retail sale of consumer goods, including the retail sale of gasoline or services, shall not exceed the rate or rates agreed to by the creditor and a retail buyer compared on the average daily balance of the open-end or revolving account or the unpaid balance of the open-end or revolving account outstanding as of the end of the current billing cycle. Regardless of any agreement to the contrary, a transaction under a revolving or open-end credit plan is subject to this section whenever a solicitation for the extension of credit is made by a creditor whose primary activity in Rhode Island is soliciting Rhode Island customers through the mails and the solicitation originates outside Rhode Island but is directed to, and received by, a retail buyer who resides and responds to the solicitation in Rhode Island.

(d)  This section shall not apply to any person doing business under and as permitted by any general or special law of this state or of the United States relating to: (1) financial institutions, (2) credit unions, or (3) licensees pursuant to title 19, chapter 44 of Title 6, and § 6-26-2.

(e)  Under each revolving or open-end credit plan a late fee not to exceed twelve dollars ($12.00) may be assessed on each minimum payment not paid in full within forty (40) days following the billing date of the statement on which the minimum payment first appears.

History of Section.
P.L. 1968, ch. 147, § 1; P.L. 1968, ch. 184, § 1; P.L. 1970, ch. 223, § 1; P.L. 1981, ch. 303, § 1; P.L. 1982, ch. 436, § 1; P.L. 1986, ch. 359, § 2; P.L. 1989, ch. 481, § 2; P.L. 1994, ch. 228, § 1; P.L. 1995, ch. 82, § 59; P.L. 1995, ch. 194, § 1; P.L. 1997, ch. 98, § 11; P.L. 2014, ch. 528, § 17.