With tax season recently passed, state legislators are prioritizing new legislation aimed at improving the economic well being of their constituents during the critical tax refund process. Representative Helene M. Keeley of Delaware is fast at work doing just that. Her sponsorship of House Bill (H.B.) 303 focuses on curtailing the potentially predatory lending practices associated with anticipated tax refunds. Anticipation lending involves a loan in which a taxpayer borrows money based on the estimated value of his or her annual tax return. Representative Keeley attributes the lack of legislative consumer protection safeguards as a principle reason why these loans have threatened the economic stability and well being of Delaware’s residents. In fact, some of the percentage rates for refund anticipation loans range from 40 percent to 700 percent.
The regularity conditions required by H.B. 303 are aimed at tackling these predatory lending practices with several new initiatives. Representative Keeley’s first priority is the bill’s requirements for loan companies. Each lender must be filed and registered with the State Department of Justice and have a valid certification on file. Secondly, the loan agreement must be provided in different languages, such as Spanish. This safeguards the full understanding of participants whose first language may not be English, before they enter into a loan contract. Thirdly, a non-negotiable for Representative Keeley is ensuring that the exact loan amount charge is in plain language, bold point font at least four times larger than the regular font of the contract. Lastly, people must confirm that they understand they are being charged a percentage rate in order to receive their tax refund moneys early.
H.B. 303 has been proposed twice before, but whereas in previous legislative cycles it has not passed, this year, Representative Keeley is more optimistic than ever that it will succeed. Unlike the past proposed bills, Representative Keeley and fellow legislators are working to revise outdated language and policies proposed in the previous drafts and aligning H.B. 303’s policies in accordance with new federal legislation which has been enacted over the past few years. As a dedicated member of the State Poverty Task Force, Representative Keeley thinks the proposed legislation would signal a real accomplishment for amending anticipation loans and ensuring economic success for Delaware families. During this fiscal recession, Representative Keeley recognizes, as do her fellow representatives, this legislation as a high priority for the state. Representative Keeley notes that in her conversations with constituents the topic of anticipation loans had been their number one talking point people wanted to discuss. As a representative of an entirely urban area, Representative Keeley recognizes the needs of her constituents and is enthusiastically working towards the passage of H.B. 303, which seeks to ameliorate the economic effects of predatory lending.
If passed, the bill will become effective in June 2010, in plenty of time to be instituted and helpful to residents of Delaware filing a 2010 tax refund in January of next year. Representative Keeley is confident the bill will help her Delaware constituents manage their monetary tax refunds better and ultimately ensure economic stabilization.
To learn the current status of this bill or to view the complete bill please visit the Delaware Legislature's website at http://legis.delaware.gov/.
