Rhode Island’s payday exception ends January 1, 2027
As of October 3, 2026, Rhode Island still has payday lending under its deferred-deposit laws. This exception will no longer be in place as of January 1, 2027. This law, Public Law 2025, Chapter 373, removes the exemption from lending for check cashers, repeals the section for deferred deposits, and removes the special payday fee provision.
Prior to January 1, 2027, a deferred deposit allows you to get cash in exchange for your personal check, which the business holds to be cashed or deposited on an agreed later date. The rules below explain how this is done. This should not be used as a means to provide high cost payday loans as of 2027.
As of January 1, 2027 there will no longer be this check-casher lending exemption. Other small dollar loans will have to meet the regulations for the lender and loan product. An installment loan will still need to be checked for compliance with licensing, cost and payment requirements.
The current limits apply to the check, not just the cash
For a check written under the 2026 rules, the amount on the check is the cash advanced plus the transaction fee. In a quote by a business selling a “$500 payday loan,” ask how much you will keep and how much will be taken from your account.
| What is limited | Rhode Island rule |
|---|---|
| One personal check | No more than $500, including the transaction fee. |
| Checks held at the same time | A business and its affiliates may keep up to three of your checks with a combined value of no more than $500. |
| Time before deposit | At least 13 days after the agreement is signed. |
| Fee-only extension | One rollover is allowed. |
| Collateral | The agreement cannot allow the check casher to take collateral. |
These rules are in section 19-14.4-5.1. The three check allowance does not mean three separate $500 advances. The combined limit above applies to the same business and its affiliates rather than a statewide limit. Dividing one shortfall among several businesses can still result in payments due together.
Calculate the fee from the money advanced
Until January 1, 2027, section 19-14.4-4 limits the deferred-deposit fee to 10% of the cash advanced. This is a transaction fee, not a 10% annual interest rate.
Take the example of a $450 cash advance for 14 days at the maximum fee:
- Cash advanced: $450.
- Fee: $450 × 10% = $45.
- Scheduled repayment: $450 + $45 = $495.
This check would be for less than $500 and would therefore meet the check-amount limit. A $500 cash advance with the same 10% fee would require a $550 check and would exceed that limit.
The approximate annual percentage rate (APR) for this example is 261%: ([$45 ÷ $450] × [365 ÷ 14] × 100). This example expresses the transaction fee on an annual basis; however, for this 14-day period the cost of the loan is $45. The calculation assumes one payment and no other charges. It is expressed this way for comparison purposes. The actual APR and fee in dollars must be disclosed in the loan agreement.
What paying for a rollover actually changes
A rollover means that you’ve extended the due date, for another fee. This does not reduce your cash advance. In Rhode Island, rules allow only one rollover, and a business is not required to offer it. These rules end on January 1, 2027.
In the $450 example, paying another $45 fee to extend the due date leaves the $450 advance due. If the original $45 fee has also been paid, $90 in fees has been paid, and nothing has been done to reduce that advance. Request, in writing, what the current balance is, and what the new due date is.
If the payment due on that new date is still not workable, contact the lender before the check is deposited to ask about a payment plan. You can also contact the company billing you for the original expense about splitting the bill or changing its due date. Any arrangement with the lender needs to state the amounts due, the new due date and what will happen to the original check.
Match the agreement to the business and deposit date
Both you and the check-cashing business must sign the agreement. It has to show the fee as a dollar amount, the annual percentage rate (APR) and the agreed deposit date for your check. The business must supply your copy during that same transaction. A licensed location must post its schedule of fees and provide you a receipt.
Prior to handing over a check, check the business’s legal name in NMLS Consumer Access to see if there is an active Rhode Island check-cashing license, and confirm that the business and the location match your agreement. If there are concerns, contact the Department of Business Regulation (DBR) to confirm its authorization.
Consider the timing of the withdrawal and determine whether you will have funds available on that day. If you will pay by another means, find out how the held check will be returned or otherwise prevented from collecting the same balance again. Retain your agreements, receipts and any payment instructions.
If a payment or renewal falls around the January change
Don’t assume the balance will be automatically canceled with the repeal of the law, and don’t assume an old check-cashing license will allow a new payday advance after January 1, 2027. Old agreements may have a payment due or a proposed renewal around that time. Contact the DBR to determine the effects of the law on those agreements. You can’t rely on a lender’s assurance that the old regulations will continue to apply.
For an unexplained fee, early deposit, licensing issue or disputed payment, ask the business for an explanation in writing. If the issue is not resolved, the Rhode Island Division of Banking complaint process provides a form that you can use to file a complaint. Include your contact details, the business name, the disputed amount or date, the agreements, receipts, and account records. The division requires a written complaint and is unable to take the place of a court or provide individual legal advice.
Reviewed October 3, 2026. The current deferred-deposit rules summarized here end January 1, 2027. Confirm transition questions with Rhode Island DBR.