(a)  Any application form or written solicitation for a revolving or open-end credit plan provided or offered by a creditor to a resident of this state shall contain or be accompanied by either of the following disclosures:

(1)  A disclosure of each of the following, if applicable:

(i)  Any periodic interest or finance charge rate that may be applied to the credit card account, expressed as an annual percentage rate, or in the case of a credit card account with a variable rate, the means for determining that rate;

(ii)  If two (2) or more periodic rates may be used to compute the finance charge, each rate, the range of balances to which each rate is applicable, and the corresponding annual percentage rate with respect to each periodic rate;

(iii)  Any membership, participation, or other similar fee imposed for the issuance of a credit card or, if the creditor does not impose a fee, the disclosure shall so indicate;

(iv)  The period within which any credit extended or principal amount withdrawn from a credit card account shall be repaid to avoid incurring a finance charge, and if no period is offered that fact shall be stated, except that a creditor may, at its option and without disclosure, impose no finance charge when payment is received after the time period’s expiration; and

(v)  Any per-transaction fee or similar fee; or

(2)  A disclosure that satisfies the initial disclosure statement requirements of “Regulation Z”.

Terms Used In Rhode Island General Laws 6-27-10

  • Annual percentage rate: The cost of credit at a yearly rate. It is calculated in a standard way, taking the average compound interest rate over the term of the loan so borrowers can compare loans. Lenders are required by law to disclose a card account's APR. Source: FDIC
  • 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
  • Lien: A claim against real or personal property in satisfaction of a debt.
  • 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
  • Real property: Land, and all immovable fixtures erected on, growing on, or affixed to the land.
  • 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
  • Variable Rate: Having a "variable" rate means that the APR changes from time to time based on fluctuations in an external rate, normally the Prime Rate. This external rate is known as the "index." If the index changes, the variable rate normally changes. Also see Fixed Rate.

(b)  Any information required to be disclosed pursuant to this section shall be disclosed in a clear and conspicuous manner.

(c)  The provisions of this section shall not apply to oral solicitations or solicitations made through or applications contained in a catalogue, magazine, newspaper, or other print media that is mailed or otherwise distributed to people in more than one state.

(d)  A creditor need not present the disclosures required by subsection (a) of this section in chart form or use any specific terminology except as expressly provided in this section. The following chart shall not be construed in any way as a standard by which to determine whether a creditor that elects not to use the chart has provided the required disclosures in a manner that satisfies subsection (a) of this section. However, disclosures shall be conclusively presumed to satisfy the requirements of subsection (a) of this section if a chart with captions substantially as follows is completed with the applicable terms offered by the creditor or if the creditor presents the applicable terms in tabular, list, or narrative format using terminology substantially similar to the captions included in the following chart:

ANNUAL
PER-
CENTAGE
RATE 		VARIABLE
RATE INDEX
AND
SPREAD 		ANNUALIZED
MEMBERSHIP
OR
PARTICI-
PATION
FEE 		MINIMUM
CHARGE
TRANSACTION
FEE 		FREE-RIDE
PERIOD

(e)  For the purposes of this section, “Regulation Z” means the regulation promulgated and as amended by the Federal Reserve Board pursuant to the Federal Truth in Lending Provisions of the “Consumer Credit Protection Act,” 15 U.S.C. § 1601 et seq.

(f)  Nothing in this section shall be deemed or construed to prohibit a creditor from disclosing additional terms, conditions, or information, whether or not relating to the disclosures required under this section, in conjunction with the disclosures required by this section.

(g)  This section does not apply to any application form or written solicitation for a revolving or open-end credit plan where the credit to be extended will be secured by a lien on real property.

(h)  Any person who knowingly and willfully violates any provision of this section shall be subject to a civil penalty of not less than five hundred dollars ($500) nor more than five thousand dollars ($5,000) per violation. Any application or solicitation violating this section shall be treated as a single violation regardless of the number of applications or solicitations distributed.

History of Section.
P.L. 1987, ch. 515, § 1; P.L. 2014, ch. 528, § 17.