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| § 19-14.1-1 Confessions of judgment –
Incomplete instruments prohibited. – No lender or loan broker
shall take any confession of judgment, or any power of attorney,
except a power of attorney or power of sale authorizing the lender
or loan broker in case of default in payment of interest or
principal, to enforce the provisions of any chattel mortgage or
pledge. No lender or loan broker shall take any note, promise to
pay, or security that does not accurately disclose the actual amount
of the loan, the time for which it is made, and the agreed rate of
interest nor any instrument in which blanks are left to be filled in
after execution. The provisions of this section related to
confessions of judgment and power of attorney shall not apply to
real estate secured loans.
§ 19-14.1-2 Maximum rate of interest. – (a) Every lender may lend or loan broker may negotiate the lending of any sum of money and may charge, contract for and receive points, fees, charges and interest on the unpaid balance of the loan at a rate not to exceed that provided in § 6-26-2, or as otherwise permitted under applicable federal law or regulation. (b) Rebates 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 78 or sum of the digits. Rebates of finance charges on precomputed loans, made for an original term greater than sixty (60) months, must be calculated on the simple interest method. § 19-14.1-3 Unemployment insurance defined. – For the purposes of this chapter, involuntary unemployment insurance coverage shall not be a factor in the approval by the lender or loan broker of any loan. The lender or loan broker shall give and maintain specific written indication that the cost of this coverage is disclosed to the debtor, that the coverage is not a condition for the extension of credit and that the debtor voluntarily desires the coverage. The debtor shall be given written notice of his or her right to cancel within thirty (30) days of the receipt of the insurance policy and that the cancellation will result in a full refund of any premiums paid. Unemployment resulting from a labor dispute shall be deemed involuntary unemployment § 19-14.1-4 Documents delivered to borrower – Advance payments – Release of security. – Every lender or loan broker, as applicable, who is the holder of any note shall: (1) Give to any borrower or the borrower's agent making a loan payment a plain and complete receipt for all payments on the loan at the time the payment is made in person at the lender's or loan broker's office; (2) Except for an open-end loan, upon written request from the borrower, the holder of a subordinate mortgage loan instrument shall deliver to the borrower within ten (10) days from receipt of a written request a statement of the borrower's account showing the date and amount of all payments made or credited to the account and the total unpaid balance. Not more than two (2) such statements shall be required in any twelve (12) month period; (3) Permit payment to be made in advance in any amount on any contract of loan at any time, but the lender or loan broker may apply the payment first to all interest in full at the agreed rate and other permitted charges, up to the date of the payment. Any broker fees, points or origination fees shall not be subject to any required refund; (4) Upon repayment of the loan in full, mark indelibly every obligation and security signed by the borrower with the word "paid" or "canceled" and release any mortgage, restore any pledge, cancel and return any note or a copy of the note, and cancel and return any assignment or a copy of the assignment given to the lender or loan broker by the borrower; § 19-14.1-5 Instrument evidencing loan, contents. – No loan document shall contain: (1) Any acceleration clause under which any part or all of the unpaid balance of the obligation not yet matured may be declared due and payable because the holder deems himself or herself to be insecure; (2) Any power of attorney to confess judgment or any other power of attorney except a statutory power of sale; (3) Any provision whereby the debtor waives any rights accruing to him or her under the provisions of this title or any other law expressly prohibiting such waiver; § 19-14.1-6 Assignment of earnings. – The payment in money, credit, goods, or things in action, as consideration for any sale or assignment of, or order for, the payment of wages, salary, commissions, or other compensation for services, whether earned or to be earned, shall for the purposes of regulation under this chapter be deemed a loan secured by the assignment, and the amount which the assigned compensation exceeds the amount of consideration actually paid shall for the purposes of regulation under this chapter be deemed interest upon the loan from the date of the payment to the date the compensation is payable. The transaction shall be governed by and subject to the provisions of this chapter. (4) Except for a change in the payment schedule as a result of the borrower's default or delinquency, or pursuant to an agreement involving a court proceeding, any requirement that more than one installment be payable in any one installment period; or (5) Any assignment of or order for the payment of any salary, wages, commission or other compensation for services, or any part thereof, earned or to be earned. § 19-14.1-7 Assignment of wages simultaneous with loan – Liens on furniture. – No assignment of or order for payment of any salary, wages, commissions, or other compensation for services, earned or to be earned, given to secure any loan made by any licensee under this chapter, shall be valid unless the amount of the loan is paid to the borrower simultaneously with its execution; nor shall the assignment or order, or any chattel mortgage or other lien on household furniture then in the possession and use of the borrower be valid unless it is in writing, signed in person by the borrower, nor if the borrower is married unless it is signed in person by both husband and wife, provided that written assent of a spouse shall not be required when husband and wife have been living separate and apart for a period of at least five (5) months prior to the making of the assignment, order, mortgage, or lien. § 19-14.1-8 Escrow accounts. – (a) All fees paid by clients or residential mortgage loan applicants to a lender or loan broker prior to the closing of the loan in connection with which those fees are paid, shall be deposited in one or more escrow accounts maintained at a federally-insured-deposit-taking institution. The account(s) shall contain only those funds collected from clients or residential mortgage loan applicants. Fees shall include, but are not limited to: application fees, appraisal fees, title attorney fees, title insurance fees, credit report fees, rate lock fees or other similar fees. (b) A lender or loan broker may offset related funds in the escrow account(s) against commissions to which it is entitled in accordance with the contract for services actually performed or for reimbursement for the fees described in the immediately preceding paragraph paid directly by the lender or loan broker to third parties. All offsets shall be accounted for through written documentation evidencing the amount of offset. (c) The lender or loan broker shall maintain complete and accurate records of all escrow accounts and shall produce upon request all documents pertaining to escrow account activity including, but not limited to: bank statements, check stubs, canceled, voided, or unused checks, deposit tickets, and reconciliations or other comparable account records. (d) No licensee governed by this chapter shall commingle money collected for fees from clients or residential mortgage loan applicants with its own funds or use any part of a client's or residential mortgage loan applicant's money in the conduct of the lender's or loan broker's business until those fees or moneys have been offset as provided for in this section.
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