DOVER, Del.- New laws to monitor payday loans have hit pay dirt in Delaware. The legislation, passed by both the House and the Senate, puts the clamps on how many payday loans people can take out in a year. It also creates a data base to track the number of loans in the state.
The laws aim to protect those stuck in the payday loan trap. Payday loans are meant to help people tight on cash get a short term loan until their next pay check. But, officials in Delaware are finding more people are using payday loans, and getting caught in an endless borrowing cycle, leading to debt.
There are 350 payday loan offices statewide.
"We are not saying that you can not have a payday loan," said bill sponsor Helene Keeley, D-Wilmington South. "We are not telling people you can't operate a business that offers payday loans. What we're saying is that if you truly are what you say and you advertise what you say to be, then why does someone need more than five in one year?"
Keeley said the most important part is creating the database for lenders to monitor those high-interest loans.
"As a business owner someone could now say, 'Well, geeze you just took out a loan down the road, I am not giving you this loan.'"
The bi-partisan bill was passed 20-1 in Dover Thursday. So far in 2012, the Justice of the Peace Courts have had companies filing grievances against 1,000 Delawareans who have not paid back their payday loans.
