CHAPTER 218
FORMERLY
HOUSE BILL NO. 163
AS AMENDED BY HOUSE AMENDMENT NO. 1 AS AMENDED BY HOUSE AMENDMENT NO. 1 TO HOUSE AMENDMENT NO. 1
AN ACT TO AMEND TITLE 5 AND TITLE 30 OF THE DELAWARE CODE RELATING TO THE RETAIL INSTALLMENT SALE OF MOTOR VEHICLES AND SURETY FOR MOTOR VEHICLE DEALERS.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE :
Section 1. Amend §2901(4) of Title 5 of the Delaware Code by striking the phrase ", if any," as it appears therein between the phrases "finance charge" and "shall together" in the last sentence, and by adding the following sentence at the end of §2901(4):
"A transaction is not a retail installment transaction if no interest is charged by the retail seller.".
Section 2. Amend §3005, Title 30 of the Delaware Code by redesignating subsection (b) as subsection (c), and by adding to §3005 a new subsection (b) to read:
"(b) A motor vehicle dealer who is not required to provide a surety bond to the Banking Commissioner pursuant to Chapter 29 of Title 5 of this Code, and who, as a retail seller, self-finances any sale of a motor vehicle to a retail buyer without charging interest to the buyer shall, as a prerequisite to obtaining an annual license, file with the Department of Finance an original surety bond in the principal sum of $25,000, payable to the State, with surety provided by a corporation authorized to transact business in this State.
(1) The term of the bond shall be continuous or commensurate with the license period, with the expiration date of the bond not earlier than midnight of the date on which the license expires.
(2) The bond is for the benefit of consumers injured by any wrongful act, omission, default, fraud, or misrepresentation by the licensed retail seller in the course of activity as a licensed retail seller. Compensation under the bond shall be for amounts which represent actual losses, including reasonable attorney fees accrued by the consumer in pursuing a claim against the licensee. Compensation shall not be payable for claims made by business creditors, third-party service providers, agents, or persons otherwise in the employ of the licensed retail seller. A consumer claim may be submitted to the Department of Finance in the form of a final judgment from a court of competent jurisdiction, a written settlement agreement, an admission, a binding arbitration decision, or a binding order entered pursuant to any other method of voluntary alternative dispute resolution. Surety claims shall be paid to the Department of Finance by the insurer not later than 90 days after receipt of a claim. Claims paid after 90 days shall be subject to daily interest at the legal rate. The aggregate liability of the surety on the bond, exclusive of any interest which accrues for payments made after 90 days, shall in no event exceed the amount of the bond.
(3) If the licensed retail seller changes the surety company or the bond is otherwise amended, the licensed retail seller shall immediately provide the Secretary of the Department of Finance with an original copy of the new or amended surety bond. No cancellation of an existing bond by a surety shall be effective unless written notice of its intention to cancel is filed with the Secretary at least 30 days before the date upon which the cancellation is to take effect.
(4) The Secretary of the Department of Finance may require potential claimants to provide documentation and affirmations as the Secretary determines necessary and appropriate. In the event the Secretary determines that multiple consumers have been injured by a licensed retail seller, the Secretary shall cause a notice to be published for the purpose of identifying all relevant claims.
(5) When a surety company receives a claim against the bond of a licensed retail seller, it shall immediately notify the Secretary and shall not pay any claim unless and until it receives notice to do so from the Secretary.
(6) The Secretary shall have a period of 2 calendar years after the effective date of cancellation or termination of a surety bond by the insurer to submit a claim to the insurer.".