Five Questions With: Patricia Antonelli

"The changes are positive because they simplify the licensing and renewal processes, and they consolidate regulatory guidance into one set of regulations."

Patricia Antonelli is a partner at the well-known law firm Partridge Snow & Hahn LLP.
Her expertise is in the fields of collection actions, foreclosures, bankruptcies and receiverships and she advises creditors, lending institutions, banks and mortgage companies about creditors’ rights in insolvency proceedings, according to her bio on the firm’s website.
Antonelli tracks legislation and shifting regulations in Rhode Island and she discussed some of this year’s changes to the state’s banking regulations with Providence Business News.

PBN: What are the biggest changes this year to the state’s banking regulations?
ANTONELLI:
No big drama here. New Regulations 6 and 8 are replacements for regulations that originated in 1998 and were identified with an outdated numerical scheme. The new regulations contain identical provisions to those that were in the repealed regulations with additional guidance on the electronic licensing process through the National Mortgage Licensing System (NMLS) for non-bank lenders, small loan lenders, loan brokers and check cashers. There is additional guidance on bond requirements for licensees, qualifications required for licensees’ managerial personnel and on the criminal background checks that are required for principals, owners and managerial personnel of licensees. The Dept. of Business Regulation’s (“DBR’s”) policy on net branching (prohibited in Rhode Island) which was previously found in a banking bulletin is incorporated into the new regulations, and there is now an exemption from the requirement that licensees designate an agent that has authority to sign insurance checks for licensees who certify that they will not be listed as loss payee on any insurance policy.

PBN: Practically speaking, do these changes positively or negatively affect the banking community?
ANTONELLI:
The changes are positive because they simplify the licensing and renewal processes, and they consolidate regulatory guidance into one set of regulations. The changes meet the criteria for being “business friendly” because they promote efficiencies for lending businesses. These kinds of changes are positive for Rhode Island’s banking community and for the Rhode Island economy.
PBN: The changes were made in an attempt to bring uniformity to state regulations, do you think that’s achieved? Why or why not?
ANTONELLI:
Yes, uniformity has been achieved. Reorganizing the numerical scheme of Rhode Island’s banking and lending regulations allows licensee applicants to more easily research and locate all of the regulatory guidance that is available to applicants. In a world where so many business processes are becoming automated to promote efficiencies, these new regulations help accomplish efficiencies.

PBN: Do these changes affect payday lending in Rhode Island?
ANTONELLI:
Requirements for payday lending (also known as “deferred deposit lending”) are found in Rhode Island statutory law. Chapter 19-14.4 of Rhode Island law entitled “Check Cashing” includes provisions specifying certain limitations on deferred deposit lending. New Regulation 8 is designed to implement Rhode Island’s “Check Cashing” law, but the regulation does not include any provisions that specifically address payday or deferred deposit lending. The only changes from the repealed regulation which was replaced by new Regulation 8 are the addition of qualification criteria for branch managers, owners and officers and the instructions for criminal background checks and fingerprinting that is found in new Regulation 8 – those changes do not focus solely on payday lenders.

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PBN: In your opinion, what more should be done in the coming years to strengthen or bring further uniformity to banking regulations in Rhode Island?
ANTONELLI:
The introduction and role of the NMLS as an electronic recordkeeping and licensing system for consumer lenders and brokers, mortgage loan originators and other financial licensees has brought uniformity and efficiencies to the lending industry nationally. Rhode Island has not lagged behind in moving its application and renewal process for all of its consumer finance licenses to the NMLS. Utilizing this system, licensees that hold licenses in multiple participating states can easily renew their varying states’ licenses all at the same time with one process – a tremendous savings of time and costs. The DBR and the licensees that utilize the NMLS for application and renewal of licenses should continue to seek out situations where regulatory guidance will enhance and simplify the process.

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