§ 19-14-1 - Definitions.
SECTION 19-14-1
§ 19-14-1 Definitions. – Unless otherwise specified, the following terms shall have the followingmeanings throughout chapters 14.1, 14.2, 14.3, 14.4, 14.6, 14.8 and 14.10 ofthis title:
(1) "Check" means any check, draft, money order, personalmoney order, or other instrument for the transmission or payment of money. Forthe purposes of check cashing, travelers checks or foreign denominationinstruments shall not be considered checks. "Check cashing" means providingcurrency for checks;
(2) "Deliver" means to deliver a check to the first personwho in payment for the check makes or purports to make a remittance of oragainst the face amount of the check, whether or not the deliverer also chargesa fee in addition to the face amount, and whether or not the deliverer signsthe check;
(3) "Electronic money transfer" means receiving money fortransmission within the United States or to locations abroad by any meansincluding, but not limited to, wire, facsimile or other electronic transfersystem;
(4) "Lender" means any person who makes or funds a loanwithin this state with the person's own funds, regardless of whether the personis the nominal mortgagee or creditor on the instrument evidencing the loan;
(ii) A loan is made or funded within this state if any of thefollowing conditions exist:
(A) The loan is secured by real property located in thisstate;
(B) An application for a loan is taken by an employee, agent,or representative of the lender within this state;
(C) The loan closes within this state;
(D) The loan solicitation is done by an individual with aphysical presence in this state; or
(E) The lender maintains an office in this state.
(iii) The term "lender" shall also include any person engagedin a transaction whereby the person makes or funds a loan within this stateusing the proceeds of an advance under a line of credit over which proceeds theperson has dominion and control and for the repayment of which the person isunconditionally liable. This transaction is not a table funding transaction. Aperson is deemed to have dominion and control over the proceeds of an advanceunder a line of credit used to fund a loan regardless of whether:
(A) The person may, contemporaneously with or shortlyfollowing the funding of the loan, assign or deliver to the line of creditlender one or more loans funded by the proceeds of an advance to the personunder the line of credit;
(B) The proceeds of an advance are delivered directly to thesettlement agent by the line of credit lender, unless the settlement agent isthe agent of the line of credit lender;
(C) One or more loans funded by the proceeds of an advanceunder the line of credit is purchased by the line of credit lender; or
(D) Under the circumstances as set forth in regulationsadopted by the director or the director's designee pursuant to this chapter;
(5) "Licensee" means any person licensed under this chapter;
(6) "Loan" means any advance of money or credit including,but not limited to:
(i) Loans secured by mortgages;
(ii) Insurance premium finance agreements;
(iii) The purchase or acquisition of retail installmentcontracts or advances to the holders of those contracts;
(iv) Educational loans;
(v) Any other advance of money; or
(vi) Any transaction such as those commonly known as "pay dayloans," "pay day advances," or "deferred presentment loans," in which a cashadvance is made to a customer in exchange for the customer's personal check, orin exchange for the customer's authorization to debit the customer's depositaccount, and where the parties agree either that the check will not be cashedor deposited, or that customer's deposit account will not be debited, until adesignated future date.
(7) "Loan broker" means any person who, for compensation orgain, or in the expectation of compensation or gain, either directly orindirectly, solicits, processes, negotiates, places or sells a loan within thisstate for others in the primary market, or offers to do so. A loan broker shallalso mean any person who is the nominal mortgagee or creditor in a tablefunding transaction. A loan is brokered within this state if any of thefollowing conditions exist:
(i) The loan is secured by real property located in thisstate;
(ii) An application for a loan is taken or received by anemployee, agent or representative of the loan broker within this state;
(iii) The loan closes within this state;
(iv) The loan solicitation is done by an individual with aphysical presence in this state; or
(v) The loan broker maintains an office in this state.
(8) "Personal money order" means any instrument for thetransmission or payment of money in relation to which the purchaser or remitterappoints or purports to appoint the seller as his or her agent for the receipt,transmission, or handling of money, whether the instrument is signed by theseller or by the purchaser or remitter or some other person;
(9) "Primary market" means the market in which loans are madeto borrowers by lenders, whether or not through a loan broker or other conduit;
(10) "Principal owner" means any person who owns, controls,votes or has a beneficial interest in, directly or indirectly, ten percent(10%) or more of the outstanding capital stock and/or equity interest of alicensee;
(11) "Sell" means to sell, to issue, or to deliver a check;
(12) "Small loan" means a loan of less than five thousanddollars ($5,000), not secured by real estate, made pursuant to the provisionsof chapter 14.2 of this title;
(13) "Small loan lender" means a lender engaged in thebusiness of making small loans within this state;
(14) "Table funding transaction" means a transaction in whichthere is a contemporaneous advance of funds by a lender and an assignment bythe mortgagee or creditor of the loan to the lender;
(15) "Check casher" means a person or entity that, forcompensation, engages, in whole or in part, in the business of cashing checks;
(16) "Deferred deposit transaction" means any transactionsuch as those commonly known as "pay-day loans," "pay-day advances," or"deferred presentment loans" in which a cash advance is made to a customer inexchange for the customer's personal check or in exchange for the customer'sauthorization to debit the customer's deposit account and where the partiesagree either that the check will not be cashed or deposited, or that thecustomer's deposit account will not be debited until a designated future date;
(17) "Insurance premium finance agreement" means an agreementby which an insured, or prospective insured, promises to pay to an insurancepremium finance company the amount advanced or to be advanced, under theagreement to an insurer or to an insurance producer, in payment of a premium orpremiums on an insurance contract or contracts, together with interest and aservice charge, as authorized and limited by this title;
(18) "Insurance premium finance company" means a personengaged in the business of making insurance premium finance agreements oracquiring insurance premium finance agreements from other insurance premiumfinance companies;
(19) "Simple interest" means interest computed on theprincipal balance outstanding immediately prior to a payment for the actualnumber of days between payments made on a loan over the life of a loan;
(20) "Nonprofit organization" means a corporation qualifyingas a 26 U.S.C. § 501(c)(3) nonprofit organization, in the operation ofwhich no member, director, officer, partner, employee, agent, or otheraffiliated person profits financially other than receiving reasonable salariesif applicable;
(21) "Mortgage loan originator" has the same meaning setforth in subdivision 19-14.10-3(6);
(22) "Mortgage loan" means a loan secured in whole or in partby real property located in this state;
(23) "Loan solicitation" shall mean an effectuation,procurement, delivery and offer, and advertisement of a loan. Loan solicitationalso includes providing or accepting loan applications and assisting persons incompleting loan applications and/or advising, conferring, or informing anyoneregarding the benefits, terms and/or conditions of a loan product or service.Loan solicitation does not include loan processing or loan underwriting asdefined in this section. Loan solicitation does not include telemarketing whichis defined for purposes of this section to mean contacting a person bytelephone with the intention of collecting such person's name, address andtelephone number for the sole purpose of allowing a mortgage loan originator tofulfill a loan inquiry;
(24) "Processes" shall mean, with respect to a loan, any of aseries of acts or functions including the preparation of a loan application andsupporting documents performed by a person which leads to or results in theacceptance, approval, denial, and/or withdrawal of a loan application,including, without limitation, the rendering of services including loanunderwriting, obtaining verifications, credit reports or appraisals,communicating with the applicant and/or the lender or loan broker, and/or otherloan processing and origination services for consideration by a lender or loanbroker. Loan processing does not include the following:
(A) Providing loan closing services;
(B) Rendering of credit reports by an authorized creditreporting agency; and
(C) Rendering of appraisal services.
(25) "Loan underwriting" shall mean a loan process thatinvolves the analysis of risk with respect to the decision whether to make aloan to a loan applicant based on credit, employment, assets, and other factorsincluding evaluating a loan applicant against a lender's various lendingcriteria for creditworthiness, making a determination for the lender as towhether the applicant meets the lender's pre-established credit standardsand/or making a recommendation regarding loan approval;
(26) "Negotiates" shall mean, with respect to a loan, toconfer directly with or offer advice directly to a loan applicant orprospective loan applicant for a loan product or service concerning any of thesubstantive benefits, terms, or conditions of the loan product or service;
(27) "Natural person employee" shall mean any natural personperforming services as a bona-fide employee for a person licensed under theprovisions of Rhode Island general laws § 19-14-1, et. seq., in returnfor a salary, wage, or other consideration, where such salary, wage, orconsideration is reported by the licensee on a federal form W-2 payroll record.The term does not include any natural person or business entity performingservices for a person licensed under the provisions of Rhode Island generallaws in return for a salary, wage, or other consideration, where such salary,wage, or consideration is reported by the licensee on a federal form 1099;
(28) "Bona-fide employee" shall mean an employee of alicensee who works under the oversight and supervision of the licensee;
(29) "Oversight and supervision of the licensee" shall meanthat the licensee provides training to the employee, sets the employee's hoursof work, and provides the employee with the equipment and physical premisesrequired to perform the employee's duties;
(30) "Operating subsidiary" shall mean a majority-ownedsubsidiary of a financial institution or banking institution that engages onlyin activities permitted by the parent financial institution or bankinginstitution;
(31) "Provisional employee" means a natural person who,pursuant to a written agreement between the natural person and a wholly ownedsubsidiary of a financial holding company, as defined in The Bank HoldingCompany Act of 1956, as amended, a bank holding company, savings bank holdingcompany, or thrift holding company, is an exclusive agent for the subsidiarywith respect to mortgage loan originations, and the subsidiary: (a) holds avalid loan broker's license and (b) enters into a written agreement with thedirector or the director's designee to include:
(i) An "undertaking of accountability" in a form prescribedby the director or the director's designee, for all of the subsidiary'sexclusive agents to include full and direct financial and regulatoryresponsibility for the mortgage loan originator activities of each exclusiveagent as if said exclusive agent was an employee of the subsidiary;
(ii) A business plan to be approved by the director or thedirector's designee, for the education of the exclusive agents, the handling ofconsumer complaints related to the exclusive agents, and the supervision of themortgage loan origination activities of the exclusive agents;
(iii) A restriction of the exclusive agents' mortgage loanoriginators' activities to loans to be made only by the subsidiary's affiliatedbank; and
(32) "Multi-state licensing system" means a system involvingone or more states, the District of Columbia, or the Commonwealth of PuertoRico established to facilitate the sharing of regulatory information and thelicensing, application, reporting and payment processes, by electronic or othermeans, for mortgage lenders and loan brokers, and other licensees required tobe licensed under this chapter.
(33) "Negative equity" means the difference between the valueof an asset and the outstanding portion of the loan taken out to pay for theasset, when the latter exceeds the former amount.
(34) "Loan closing services" means providing title services,including title searches, title examinations, abstract preparation,insurability determinations, and the issuance of title commitments and titleinsurance policies, conducting loan closings, and preparation of loan closingdocuments when performed by or under the supervision of a licensed attorney,licensed title agency, of licensed title insurance company.