Delaware Code Title 5 Sec. 978 – Short-term consumer loans
(a) In addition to such other limitations and requirements as are imposed pursuant to other provisions of this subchapter, short-term consumer loans shall be subject to the following:
(1) No bank, trust company or savings bank shall make more than 4 rollovers of an existing short-term consumer loan. A bank, trust company or savings bank may, following not more than the maximum allowable number of rollovers, enter into a workout agreement with the borrower or take such other actions as are lawful to collect any outstanding and unpaid indebtedness.
(2) No bank, trust company or savings bank shall make a short-term consumer loan unless such loan is subject to a right of recission on the part of the individual borrower.
(3) No bank, trust company or savings bank shall pursue or threaten to pursue criminal action against an individual borrower in connection with the nonpayment of any amount due, including the unpaid return of any check or automated clearinghouse transaction.
Terms Used In Delaware Code Title 5 Sec. 978
- Conspicuously displayed: means highlighted through the use of capitalization, bold print, underlining or some combination thereof. See Delaware Code Title 5 Sec. 961
- Loan: means any single extension of closed end credit. See Delaware Code Title 5 Sec. 961
- Right of recission: means , with respect to any short-term consumer loan, the right to return any amount borrowed, in full, on or before the close of business of the business day following the day on which such sum has been disbursed or advanced, without the incursion of any fee or other charges. See Delaware Code Title 5 Sec. 961
- Short-term consumer loan: means a loan of $500 or less made to an individual borrower that charges interest and/or fees for which the stated repayment period is less than 60 days and is not secured by title to a motor vehicle. See Delaware Code Title 5 Sec. 961
- Workout agreement: means an agreement between an individual borrower and a bank, trust company or savings bank for the repayment of an outstanding and unpaid indebtedness which requires a net reduction of not less than 10% of such indebtedness per payment period. See Delaware Code Title 5 Sec. 961
(b) In addition to such other disclosure requirements as are imposed pursuant to other provisions of this subchapter, short-term consumer loans shall be subject to the following: No bank, trust company or savings bank shall make a short-term consumer loan unless the application for such loan, which application shall be written in both English and Spanish, contains a written disclosure, conspicuously displayed, that:
(1) The loan is designed as a short-term cash flow solution and not designed as a solution for longer term financial problems;
(2) Additional fees may accrue if the loan is rolled over; and
(3) Credit counseling services are available to consumers experiencing financial problems.
(c) Nothing in this section prohibits a lender from refinancing the principal amount of a short-term consumer loan, subject to the limitations and requirements imposed herein.
(d) The Commissioner is authorized to promulgate rules and regulations to exempt certain loans or classes of loans from the requirements of this section.