CHAPTER 126
FORMERLY HOUSE BILL NO. 287
AN ACT TO AMEND CHAPTER 21, TITLE 5, DELAWARE CODE, RELATING TO REGULATION OF SMALL LOANS.
Be it enacted by the General Assembly of the State of Delaware:
Section 1. Section 2108, Chapter 21, Title 5, Delaware Code, is hereby amended by adding to the title thereof the following:
; deferments, prepayments and refinancing.
Section 2. Section 2108, Chapter 21, Title 5, Delaware Code, is hereby amended by striking paragraph (a) in its entirety and substituting in lieu thereof the following:
(a) The holder of any certificate of registration from the State Bank Commissioner, granted pursuant to this chapter, and any State bank or trust company organized under this Code or any other laws of this State, or any National bank (without obtaining such certificate of registration) may lend money to any person, firm or corporation in any sum not exceeding $500, to be repaid in periodic installments, taking the obligation of the borrower therefor, with any security that may be acceptable to the lender. Any such association, firm, partnership or corporation having a paid-in capital which is not subject to withdrawal and which shall exceed $10,000, may make such loans in amounts to any one borrower in excess of $500, but not exceeding 10% of the paid-in capital stock and surplus of such lender. Any such lender may charge interest at a rate not to exceed the legal rate of 6% charged in advance upon the entire amount of the loan, such loans to be limited to three years if less than $1,500, five years if $1,500 or over but less than $5,000, and seven years if over $5,000, and may make such loan repayable in weekly, monthly or other periodic installments, with the right of the lender to declare the entire unpaid balance due and payable in the event of default in the payment of any installment for a period of thirty days; and the lender may also charge an investigation fee or make a service charge of not exceeding 2% of the amount of any loan made
pursuant to this section. The investigation fee or service charge shall be only on the face amount of the loan and not on a per annum basis. No additional interest or commission shall be charged, nor shall any additional charge of any kind be made except as provided in Section 2109 of this title.
Section 3. Section 2108, Chapter 21, Title 5, Delaware Code, is hereby amended by adding the following new paragraphs (c) and (d):
(c) Notwithstanding the provisions of paragraphs (a) and (b) of this section, any lender, at the request of the borrower, may extend or defer the scheduled due date of all or any part of any installment or installments, and may restate the amount of the installments and the time schedule therefor. The lender may collect for such extension or deferral a charge not to exceed the equivalent of one per cent per month simple interest on the amount of the installment, or installments, or part thereof, extended or deferred, for the period of such extension or deferral, except that a minimum charge of $1.00 may be made. Such period shall not exceed the period from the date when such extended or deferred installment, or part thereof, would have been payable in the absence of such extension or deferral, to the date when such installment or installments, or part thereof, are made payable under the agreement of extension or deferment.
(d) Any borrower may pay in full at any time prior to maturity any loan made pursuant to this section. In the event of such payment or of refinancing of the balance of any such loan prior to maturity, the borrower shall receive a rebate or credit for unearned interest which shall represent at least as great a proportion of the interest charge as the sum of the unpaid installments as of the date of such prepayment or refinancing bears to the sum of all installments under the loan obligation, with the rebate or credit reduced by the amount of any unpaid fines charged under Section 2109 of this chapter plus costs of collection, if any, and charges for previous extensions or deferrals; provided, however, a lender shall not be required to rebate any unearned interest in an amount of $1.00 or less, or for partial payments.
Approved June 12, 1971.