Commerce and Trade


Other Laws Relating to Commerce and Trade

CHAPTER 23. Interest

§ 2301. Legal rate; loans insured by Federal Housing Administration.

(a) 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. Where there is no expressed contract rate, the legal rate of interest shall be 5% over the Federal Reserve discount rate including any surcharge as of the time from which interest is due; provided, that where the time from which interest is due predates April 18, 1980, the legal rate shall remain as it was at such time. Except as otherwise provided in this Code, any judgment entered on agreements governed by this subsection, whether the contract rate is expressed or not, shall, from the date of the judgment, bear post-judgment interest of 5% over the Federal Reserve discount rate including any surcharge thereon or the contract rate, whichever is less.

(b) If the rate of interest specifically set forth in any bond, note or other evidence of indebtedness, exclusive of other charges, fees or discounts authorized or permitted under federal law or under any rule or regulation promulgated pursuant thereto, does not exceed the lawful rate prescribed in subsection (a) of this section, no person shall, by way of defense or otherwise, avail himself or herself of any of the provisions of this chapter, to avoid or defeat the payment of any interest or any such charges, fees or discounts, which any such person shall have contracted to pay in respect of any loan insured by the Federal Housing Administration, or the Commissioner thereof, under or pursuant to the provisions of the National Housing Act [12 U.S.C. § 1701 et seq.], approved June 27, 1934, and amendments thereto, or guaranteed by the Veterans Administration, or the administrator thereof, under and pursuant to Title 38 of the United States Code [38 U.S.C. § 3701 et seq.], and amendments thereto; nor shall anything contained in this chapter be construed to prevent recovery of any such interest or any such charges, fees or discounts from any person who shall have contracted to pay the same.

(c) Notwithstanding any other provision in this chapter to the contrary, there shall be no limitation on the rate of interest which may be legally charged for the loan or use of money, where the amount of money loaned or used exceeds $100,000, and where repayment thereof is not secured by a mortgage against the principal residence of any borrower.

(d) In any tort action for compensatory damages in the Superior Court or the Court of Common Pleas seeking monetary relief for bodily injuries, death or property damage, interest shall be added to any final judgment entered for damages awarded, calculated at the rate established in subsection (a) of this section, commencing from the date of injury, provided that prior to trial the plaintiff had extended to defendant a written settlement demand valid for a minimum of 30 days in an amount less than the amount of damages upon which the judgment was entered.

Code 1852, §  1160;  16 Del. Laws, c. 310, §  1;  Code 1915, §  2621;  28 Del. Laws, c. 213;  Code 1935, §  3101;  6 Del. C. 1953, §  2301;  52 Del. Laws, c. 27756 Del. Laws, c. 288, §§  1-457 Del. Laws, c. 78, §  157 Del. Laws, c. 31159 Del. Laws, c. 439, §  159 Del. Laws, c. 589, §  162 Del. Laws, c. 228, §  762 Del. Laws, c. 239, §  170 Del. Laws, c. 186, §  172 Del. Laws, c. 443, §  178 Del. Laws, c. 222, §§  1, 2

§ 2302. Secured demand loans for not less than $5,000 by banks and others.

Every contract for the loan or advance of money by banking corporations, within this State, shall be subject to § 2301 of this title. In any case where loans or advances of money, made by banking corporations or otherwise, repayable on demand to an amount not less than $5,000, are made upon warehouse receipts, bills of lading, certificates of stock, certificates of deposit, bills of exchange, bonds, or other negotiable instruments, pledged as collateral security for such repayment, any sum agreed upon, in writing, by the parties to the transaction may be received, or contracted to be received, and collected as compensation for making the advances.

11 Del. Laws, c. 227;  Code 1915, §  2622;  28 Del. Laws, c. 213;  Code 1935, §  3102;  6 Del. C. 1953, §  2302;  70 Del. Laws, c. 186, §  1

§ 2303. Loans of less than $500.

Repealed by 71 Del. Laws, c. 254, § 34, eff. Mar. 30, 1998.

§ 2304. Usury defined; borrower’s rights and remedies where interest exceeds the lawful rate.

(a) Usury is the charge to a borrower by a lender, directly or indirectly, of a higher rate of interest than that permitted by law.

(b) When a rate of interest for the loan or use of money exceeding that established by law has been reserved or contracted for, the borrower or debtor shall not be required to pay the creditor the excess over the lawful rate and the borrower or debtor may, at the borrower’s or debtor’s option, retain and deduct the excess from the amount of any debt. In all cases where any borrower or debtor has paid the whole debt or sum loaned, together with interest exceeding the lawful rate, the borrower or debtor, or a personal representative, may recover in an action against the person who has taken or received the debt and interest, or the personal representative, the sum of 3 times the amount of interest collected on any loan in excess of that permitted by law or the sum of $500, whichever is greater, if such action is brought within 1 year after the time of such payment.

Code 1852, §  1160;  16 Del. Laws, c. 310, §  1;  Code 1915, §  2621;  28 Del. Laws, c. 213;  Code 1935, §  3101;  6 Del. C. 1953, §  2304;  56 Del. Laws, c. 44370 Del. Laws, c. 186, §  1

§ 2305. Negotiable paper; rights of holders.

Nothing in this chapter shall affect the holders of negotiable paper taken bona fide in the usual course of business.

Code 1852, §  1160;  16 Del. Laws, c. 310, §  1;  Code 1915, §  2621;  28 Del. Laws, c. 213;  Code 1935, §  3101;  6 Del. C. 1953, §  2305; 

§ 2306. Defense of usury as available to certain entities and associations.

No corporation, limited partnership, statutory trust, business trust or limited liability company, and no association or joint stock company having any of the powers and privileges of corporations not possessed by individuals or partnerships, shall interpose the defense of usury in any action.

Code 1852, §  1160;  16 Del. Laws, c. 310, §  1;  Code 1915, §  2621;  28 Del. Laws, c. 213;  Code 1935, §  3101;  6 Del. C. 1953, §  2306;  69 Del. Laws, c. 258, §  5573 Del. Laws, c. 329, §  34

§ 2307. International banking transactions.

This chapter and any other law of this State limiting the rate or amount of interest, discount, points, finance charges, service charges or other charges which may be charged, taken, collected, received or reserved shall not apply to any international banking facility extension of credit, as such terms are contained in § 101 of Title 5.

64 Del. Laws, c. 43, §  7