Delaware Financial Literacy Program

By: Javi Calderon
Payday Loan Fee Funds Delaware Financial Literacy Program

The State of Delaware officially launched their Financial Literacy Education Fund on October 25th, 2010. The fund is open to grade schools and non-profit organizations with the intention of educating students and adults about money management and financial understanding.

The fund holds more than $200,000, accessible to those institutions who apply if they meet certain criteria agreed upon by the Office of the State Bank Commissioner and the Department of Education.

Last July, Delaware Governor Jack Markell signed Senate Bill 108 which placed a fee on payday loan lenders and other, similar businesses that offer short-term consumer loans. The bill requires these businesses to pay an annual loan license fee of $1,500 dollars.

Governor Markell identified the goal of the FLEF: “to help people make the most out of every dollar – how to reduce costs, maximize returns, fix errors and identify new opportunities…”

The accumulation of said fees goes directly and specifically into the FLE Fund. Since the fee is collected every year the FLEF will have a steady and consistent influx of funding.

Grants will be decided by a grant committee who will then defer to the Secretary of State for final approval. Grant applications will be judged on the basis of how the grant will help improve the financial well-being and financial understanding of the institution’s target audience.

The State is specifically interested in reaching out to members of the military, minority communities and senior citizens. They aim to improve the money managing skills of the low-income population. Proactive and preventive proposals are especially encouraged.

Cash advance lenders have been a hot topic for legislation recently with many states passing laws to restrict their rates. There is a $500 loan limit according Delaware State laws. The state allows for a maximum 60-day payday loan term length, and only four subsequent rollovers. As of now there is no cap on interest rates for payday advance loans in the State of Delaware.