5 Del. Admin. Code § 2210-3.0

Current through Register Vol. 28, No. 5, November 1, 2024

Section 2210-3.0 - Short-Term Consumer Loans

3.1 All licensees shall comply with 5 Del.C. Ch. 22, all regulations issued thereunder, and all other applicable State and federal statutes and regulations. In addition, all short-term consumer loans shall be subject to the following:

3.1.1 Notwithstanding any other provision of law, no licensee shall make, and no borrower shall receive, a short-term consumer loan that would cause the borrower to have more than five short-term consumer loans from all licensees in any twelve-month period. Any loan made or collected in violation of this paragraph is void, and the licensee does not have the right to collect, receive, or retain any principal, interest, fees or other charges. A violation of 5 Del.C. § 2235A is a violation of Chapter 25 of Title 6 of the Delaware Code.

3.1.2 No licensee shall make more than four rollovers of an existing short-term consumer loan. A licensee 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.

3.1.3 No licensee shall make a short-term consumer loan unless such loan is subject to a right of rescission on the part of the individual borrower.

3.1.4 No licensee 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 clearing house transaction.

3.1.5 No licensee shall make a short-term consumer loan unless the application for the loan shall be written in both English and Spanish.

3.2 Nothing in this regulation prohibits a licensee from refinancing the principal amount of a short-term consumer loan, subject to the limitations and requirements imposed by 5 Del.C. § 2235A and this regulation.

3.3 In addition to such other disclosure requirements as are imposed pursuant to other provisions of 5 Del.C. Ch. 22, Subch. III and the regulations in 5 DE Admin. Code Ch. 22, no licensee shall make a short-term consumer loan unless the application for the loan contains a written disclosure, conspicuously displayed, that:

3.3.1 The loan is designed as a short-term cash flow solution and not designed as a solution for longer term financial problems;

3.3.2 Additional fees may accrue if the loan is rolled over; and

3.3.3 Credit counseling services are available to consumers who are experiencing financial problems.

3.4 Every short-term consumer loan provider must post in plain view, in an area easily accessible to their customers at the entrance to the office and on any website, a schedule of fees and rates applicable to their loans, and a prominent statement that: "A payday loan is not intended to meet long-term financial needs."

3.5 A licensee or licensee's agent shall not engage in any device or subterfuge intended to evade the requirements of 5 Del.C. Ch. 22 and the regulations thereunder through any method including, but not limited to, mail, telephone, internet or any electronic means, including:

3.5.1 Offering, making, or assisting a borrower to obtain a loan in violation of 5 Del.C. § 2235A and this regulation, or brokering or acting as an agent for a third party in such a transaction, regardless of whether approval, acceptance or ratification is necessary to create a legal obligation for the third party.

3.5.2 Disguising a short-term consumer loan as a revolving line of credit, or making or assisting a borrower to obtain a revolving line of credit for the purpose of avoiding the requirements of 5 Del.C. § 2235A and this regulation.

5 Del. Admin. Code § 2210-3.0