State House Report: Payday Loans, Litigation Lenders & the Strangulation Bill
Saturday, April 07, 2012
As was true with last week's legislative roundup, the General Assembly had another slow week in terms of introducing new ideas. In fact, the House and Senate proposed just 30 pieces of legislation, mainly consisting of resolutions. Taxpayers might be interested to learn that the majority of resolutions actually consisted of marriage congratulations and even one recognizing former University of Rhode Island basketball coach Jim Baron. That said, the GA did conduct a number of important hearings including an examination into payday loans, an investigation into litigation lending rates and a reevaluation of domestic violence penalties. As for new bills, there was a proposal to repeal the state’s seat belt penalty law and legislation designed to increase firefighter cancer awareness.
Senate Hearing on Payday Loans
On Tuesday, the Senate Committee on Corporations held a hearing discussing the merits of three different bills relating to check cashing and payday loans. The first piece of legislation examined was Sen. Juan M. Pichardo’s bill designed to repeal selected sections of the general laws, which allow for deferred deposit providers, also known as payday lenders. Next up was Sen. William A. Walaska’s proposal to increase security measures to safeguard customers and employees at licensed check cashing establishments. Last on the docket was Sen. Joshua Miller’s request to provide separate licensing requirements for check cashers and payday lenders. Sen. Miller’s bill would set up a payday lending law that would require payday lenders to abide by multiple consumer protection provisions.
Payday lending services have been a controversial topic in recent years in terms of their legitimacy and consumer fairness practices. Though not always labeled “Payday Loans,” such services may also be disguised as “Check Cashing” or “Gold Buying” businesses. A payday loan is a short-term loan, which usually requires speedy repayment. These loans are quick and easy to obtain, thus making them convenient for many people. Despite the convenience factor, payday lenders often charge customers a sizable standard upfront fee, as well as interest on the loan.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTHouse Hearing on Litigation Lending Interest Rates
Aside from taking up payday lending legislation, the GA also heard testimony about litigation lending interest rates. Specifically, the House Committee on Corporations investigated a proposal introduced by Rep. Michael J. Marcello (D), which would cap the amount of interest litigation lenders can impose upon plaintiffs. Rep. Marcello’s bill would limit interest rates by making litigation lenders subject to state usury laws. Additionally, the legislation “closes the loopholes that have resulted in Rhode Island litigants being charged enormous interest rates for loans needed when they are most vulnerable,” according to Rep. Marcello.
Litigation lending is broadly defined as a device in which litigants can finance their legal fees through a third party funding company. Although litigation lending is a useful service, many borrowers are often charged massive amounts of interest under questionable circumstances, which Rep. Marcello’s legislation attempts to rectify. In particular, Rep. Marcello’s proposal would subject all interest payments to a maximum rate of 21 percent or nine percent domestic prime rate.
House Hearing on Domestic Assault Strangulation Bill
Following the trend of GA hearings, the House Judiciary Committee heard a bill on Wednesday that increases the penalty for domestic assault by strangulation. Introduced by Rep. Roberto DaSilva (D), the legislation would make strangulation in domestic assault cases a felony, punishable by up to 20 years in prison.
“Strangulation is a serious form of domestic assault and perpetrators who commit heinous crimes like these should be punished appropriately,” said Rep. DaSilva. “More than half of the states in the nation, including neighboring Connecticut, have passed similar laws and recognize the seriousness of this crime.”
Rep. DaSilva, who is also a police officer, has observed domestic assault strangulation first hand, which helped influence his decision to draft the bill. “As a police officer, I have observed how strangulation leads to more violence,” commented Rep. DaSilva. “It might start off with verbal abuse before escalating to something like choking or strangling, but in the most tragic cases those acts of abuse end in death. That’s why strangulation needs to be a felony in this state. If there are harsher consequences, someone might think twice before entering into that pattern.”
Recent statistics indicate that more than 10 percent of all homicide deaths amongst U.S. women are due to strangulation. Roughly 3.5 percent of all violence-related homicides (involving men and women) in 2007 were caused by strangulation, according to the Centers for Disease Control and Prevention. Furthermore, a 2011 Annual Report from the Rhode Island Coalition Against Domestic Violence found that 2010-2011 marked the state’s highest number of domestic violence death since the agency began keeping record in the 1980s.
House Bill No. 8044 - Amendment to Motor and Other Vehicles Safety Belt Use
Introduced by Rep. Jared R. Nunes, this act would amend the sunset provision of the statute passed in 2011, which declared seat belt law violations be a primary offense. If enacted, Rep. Nunes’ legislation would repeal the 2011 law on June 30, 2012, rather than June 30, 2013. If repealed, seat belt violations would become a secondary offense.
Rhode Island is currently one of 32 states to have a primary seat belt law on the books. Rhode Island currently institutes a $75 maximum fine for first time offenders. The amount is one of highest in the nation. A total of 17 states consider seat belt violations a secondary offense, which is typically punishable by a minimal citation. New Hampshire is the only state to have neither a primary or secondary seat belt law. While most people do not argue that seat belts save lives, most seat belt law opponents believe that such mandatory laws infringe upon civil liberties.
House Bill No. 8048 - Firefighter Cancer Wellness Act
Also introduced this week was a bill that would require the director of department of health to report firefighter and emergency medical technician cancer incidence to the office of the state fire marshal. Proposed by Rep. Cale P. Keable, the bill aims to increase survival rates amongst emergency respondents by utilizing early detection and screenings to decrease the incidence of cancer. Additionally, the office of the fire marshal will annually inform fire chiefs of all departments in the state of cancer risks associated with firefighting.
The Center for Disease Control and Prevention estimates that 4 to 10 percent of all cancer occurrences each year are caused by occupational occurrences. Firefighters routinely face a number of toxic hazards on the scene of a fire including carbon monoxide, hydrogen cyanide and nitrogen dioxide. A 2011 study found that firefighters exposed to toxic dust and fumes after the World Trade Center collapsed were more 19 percent likely to develop cancer. On a local note, the death of 53-year-old Providence firefighter Frank Reddington was believed to have been due to smoke and chemical exposure. The 23-year veteran passed away in December 2011.
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