Delaware Governor Jack Markell signed legislation regulating payday lenders. The signing took place at a July news conference at West End Neighborhood House (WENH), a Wilmington nonprofit that announced statewide expansion of its small loan alternative to payday loans. The nonprofit's small loan product, Loans Plus, provides sameday cash loans averaging from $300 to $500 for up to three months with interest rates that do not exceed 15 percent. WENH provides related services such as financial literacy education and the opportunity to establish or re-establish positive credit.
Governor Markell said at the signing, "Predatory lenders have devastating effects on our communities, and I'm proud that West End took the initiative to offer a safe alternative to high-interest payday loans. While Loans Plus helps people with the cash they need now, more importantly it helps them plan for the future and decrease their dependence on short-term loans."
The new law adds an annual surcharge of $1,500 per office for payday and title lenders in Delaware. The standard annual fee for all licensed lenders in Delaware, including payday and title lenders, is $250 per office. The surcharge on payday lenders will fund financial literacy education and promotion of low-interest community-based loan programs. The law limits a consumer's debt exposure on a title loan to the value of the vehicle.
In the past 18 months, West End has made $160,000 in loans to nearly 400 people, of whom 93 percent have successfully repaid their loans, WENH said.
WENH is making Loans Plus available statewide in a partnership with the United Way of Delaware, Wilmington Trust Company, Catholic Charities, and the YWCA. Other supporters include Barclays Bank, the Federal Home Loan Bank of Pittsburgh, ING Bank, and TD Bank.
For information, contact Barbara Reed, director of WENH's housing and financial management program, at (302) 658- 4171, ext. 176 or firstname.lastname@example.org.