Rhode Island General Laws Title 6. Commercial Law--General Regulatory Provisions § 6-27-5. Consumer notes

(a) If any contract between a retail seller and a retail buyer for the sale of consumer goods and services requires or involves the execution of a promissory note by a retail buyer in connection with an extension of credit by the retail seller, or by a creditor to whom the retail buyer was referred by the retail seller and to whom the retail seller regularly, as part of the ordinary conduct of its business and with the actual knowledge of the creditor, refers retail buyers for credit, the words “nonnegotiable consumer note” shall be placed prominently on the note and an assignee of a note with the words “nonnegotiable consumer note” appearing prominently on the note shall take the note subject to the claims and defenses permitted under § 6A-3-306, irrespective of whether or not the assignee qualifies as a “holder in due course” as defined in § 6A-3-302.  For the purposes of this section “consumer goods” means tangible personal property used or bought for use primarily for personal, family, or household purposes.

(b) A creditor who obtains a note from the maker in violation of this section shall be punished by a fine of not less than one hundred dollars ($100) nor more than five hundred dollars ($500).

(c) If a note is obtained by a creditor from a maker in violation of this section, no finance, delinquency, collection, repossession, or refinancing charges may be recovered in any action or proceeding based on the contract for sale by the creditor and if the charges are recovered from a maker by a holder in due course, the maker may recover the charges from the creditor who violated the provisions of this section.

(d) The provisions of this section shall not apply to any notes executed in connection with any financing that is insured under federal housing administration regulations.