Under House Bill 289, Delaware borrowers would be limited to five payday loans of $1,000 or less in any 12-month period, including loan rollovers or refinancing. HB 289 would also create a database to track the number of payday loans a person has obtained.

Excerpt from State of Delaware’s website:

This bill limits to five the number of short-term consumer loans (sometimes called payday loans) that any one borrower may obtain in a twelve month period. It changes the definition of short-term consumer loan to include loans up to $1000 rather than $500. The bill also provides for establishment of a database to track the number of short-term consumer loans an individual has obtained in a twelve month period. Finally, the Banking Commissioner is directed to provide a report on the prevalence and nature of these payday loans to the General Assembly.

HB 289 has been assigned to the House Economic Development, Banking, Insurance and Commerce Committee.

Funded by payday advance fees.   From the story: 

A new state fund will help launch more programs that teach children how to handle money.

Gov. Markell says $200,000 from the Financial Literacy Education Fund is available to schools, community and non-profit organizations to improve the financial well-being of Delawareans.

The funding comes from a fee charged to payday loan and other businesses that make short-term consumer loans.

This is a pretty angry letter.  Sounds like this writer has a personal issue with the state’s director of economic development.

We missed this from yesterday:

West End Neighborhood House, Inc., Wilmington, announced the statewide expansion of its low-interest loan program – now called Loans Plus. This program helps Delawareans break free from the cycle of predatory lending known as payday lending, according to a release from the organization.

This bank is part of the FDIC’s small loan program.   The FDIC, in its own reports, say that the banks are not making money and are making very few loans.

Begin in Delaware. From the story:

Prior to Thursday, if a borrower defaulted on a title loan, the person risked losing the vehicle and was still responsible for paying what was due. The practice came to an end Thursday, when Gov. Jack Markell signed a new law that provides protection for consumers of title loans — short-term loans in which a borrower provides a motor vehicle as collateral.

CFSA’s Tommy Moore in Delawareonline:

State regulator reports show that more than 90 percent of payday advances are repaid when due.

These are businesses, not charities. It would not make good business sense to loan money to people who can’t pay you back.

Can’t get more straightfoward than that.

How many times have we ever posted about Delaware? Today, two posts.  Same issue, though.  PDLindustryblog has some thoughts on the new “surcharge.”

Our friends at RTOonline have the scoop:

Delaware governor Jack Markell unveiled legislation Wednesday that would force payday lenders in the state to pay a $1,500 surcharge per location in addition to the existing license fee.

The fee would be used for financial literacy.

The Payday Pundit isn’t sure if the Governor is genuine or is merely trying to raise money from the industry for state coffers.  From the story:

The proposals, which Markell will discuss next week in his address to a joint session of the Delaware General Assembly, focus on a particular type of predatory lenders: those who issue payday loans and title loans.

Specifically, the legislation would require that any payday lender who wants to set up shop in Delaware be licensed by the state and would need to pay a $1,500 fee that will go to making low-interest lending programs available. The Governor also proposal also demands a similar license and fee from title lenders and goes one step further by requiring the lenders to cease all liabilities on the loan once the family surrenders the title.