Back in 2018, the National Consumer Law Center criticized Delaware and 11 other states for not have an interest rate cap for loans. Indeed, the lack of such a cap brought banks and credit card companies to Delaware in the 1980s, with financial services remaining a key industry in the state. Efforts to authorize interest rate caps have almost nonexistent in Delaware, due in large part to the presence of the banking industry.
The only check on outrageous interest rates in Delaware is the legal doctrine of unconscionability for short term consumer loans, and such a doctrine is only employed when the consumer sues and then a court reviews the individual facts concerning a loan. This case by case approach is not at all a sufficient protection for consumers in Delaware.
House Bill 181 would cap interest rates at 20% for short-term consumer loans of $1,000 or less that must be repaid in less than 60 days and motor vehicle title loans.
It is a narrow bill, and does not solve all of the problem, but it is a step in the right direction.
|House Bill 181 Sponsors||Yes Votes||No Votes|
|Lynn, K.Williams, Heffernan, Kowalko, Lambert, Morrison, Wilson-Anton|
|Lockman, Pinkney, Ennis, Hansen, Sokola|
|Current Status — House Economic Everything 5/11/21|
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