CHAPTER 228

FORMERLY

HOUSE BILL NO. 845

AS AMENDED BY HOUSE AMENDMENTS NOS. 1 AND 2

AN ACT TO AMEND TITLE 5 AND TITLE 6, DELAWARE CODE, RELATING TO LOANS, INTEREST AND OTHER CHARGES AND TERMS, DEFERMENTS, PREPAYMENTS AND REFINANCING, FINANCE CHARGE LIMITATIONS, CREDIT UPON ANTICIPATION OF PAYMENTS, FORMULA TO DETERMINE MAXIMUM LOAN, LEGAL RATE, SERVICE CHARGE AUTHORIZED AND SERVICE CHARGE RATES.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE:

Section I. Amend subsection (a), §2108, Chapter 21, The 5, Delaware Code, by adding the following thereto:

"To the extent that the discount rate charged by the Federal Reserve Bank in the Federal Reserve District encompassing the State of Delaware exceeds 12%, the base rate of 9% expressed above shall be increased by the same amount as such excess."

Section 2. Amend subsection (c), §2106, Chapter 21, Title 5, Delaware Code, by striking said subsection in its entirety and substituting in lieu thereof the following:

"(e) 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 of 1 1/2% of the loan balance. Upon payment of such charge the lender shall note the new expiration date of such contract and advise the borrower."

Section 3. Amend §2907, Chapter 29, Title 5, Delaware Code, by adding the following class:

"Class 5. Mobile Homes - $10 per hundred per year."

Section 4. Further amend subsection (a), §2907, Chapter 29, Title 5, Delaware Code, by adding the following thereto:

To the extent the discount rate charged by the Federal Reserve Bank in the Federal Reserve District encompassing the State of Delaware exceeds 10%, the $7 per hundred for Class 1 vehicles and the $10 per hundred for Class 5 shall each be adjusted upward 25 cents for each 1/4 of 1% of such excess. To the extent the discount rate charged by the Federal Reserve Bank in the Federal Reserve District encompassing the State of Delaware exceeds 11%, the $10 per $100 for Class 2, $13 per hundred for Class 3 and $10 per hundred for Class 4 shall each be adjusted upward 25 cents for each 1/4 of 1% of such excess."

Section 5. Amend §3121, Chapter 31, Title 5, Delaware Code, by striking said Section in its entirety and substituting in lieu thereof the following:

"§3121. Formula to Determine Maximum Loan

A licensee may make a secondary mortgage loan and shall state the charge thereof in terms of simple interest not to exceed eighteen percent per annum. To the extent the discount rate charged by the Federal Reserve Bank in the Federal Reserve District encompassing the State of Delaware exceeds 13% the base rate of 18% as expressed above shall be increased by the same amount as such excess."

Section 6. Amend 53125, Chapter 31, Title 5, Delaware Code, by striking the Section in its entirety and substituting in lieu thereof the following:

"§3125. Satisfaction of Debt

The borrower may satisfy in full at any time before maturity the amount of any balance to become due on any secondary mortgage obligation."

Section 7. Amend subsection (a), §2301, Chapter 23, Title 6, Delaware Code, by striking such subsection in its entirety and substituting in lieu thereof the following:

"(a) The legal rate of interest on a judgement shall be at any rate expressed in the contract sued upon, or where there is no expressed contract rate, a 5% over the Federal Reserve discount rate including any surcharge, on the date of judgement, charged by the Federal Reserve Bank in the district encompassing the State of Delaware. Any lender may charge and collect from a borrower interest at any rate agreed upon in writing not in excess of 5% over the Federal Reserve discount rate including any surcharge thereon."

Section 8. Amend Section 4315, Subchapter IV, Chapter 43, Title 6, Delaware Code, by striking the phrase "as does not exceed 51,000.00" as it appears in Paragraph (1) therein.

Section 9. Amend §4315, Subchapter IV, Chapter 43, Title 6, Delaware Code, by striking paragraph (2) as it appears in its entirety and substituting in lieu thereof the following:

"(2) Notwithstanding the rate established in paragraph (1), to the extent the discount rate charged by the Federal Reserve Bank in the Federal Reserve District encompassing the State of Delaware exceeds 11% the base rate as stated in paragraph (1) shall be increased by one-twelfth of 1% for each full percentage point of such excess."

Section 10. Amend §4337, Subchapter IX, Chapter 43, Title 6, Delaware Code, by striking paragraphs (1) and (2) in their entirety and substituting in lieu thereof the following:

"(1) On so much of the outstanding balance - 1 1/2% per month•.

Section 11. Further amend §4337, Subchapter IX, Chapter 43, Title 6, Delaware Code, by renumbering paragraphs (3) and (4) as paragraphs (2) and (3) respectively.

Section 12. Amend Subsection (d), Section 2108, Chapter 21, Title 5, Delaware Code by striking the last sentence of said subsection.

Section 13. Amend Section 2908, Chapter 29, Title 5, Delaware Code, by striking such subsection in its entirety.

Section 14. Sections 1 through I1 of this Act shall become effective with the signature of the Governor. Sections 12 and 13 shall become effective on June 1, 1981.

Approved April 18, 1980.