Bill Text: IA HF260 | 2019-2020 | 88th General Assembly | Introduced
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: A bill for an act relating to permissible interest rates and charges for certain loans. (Formerly HSB 31.) Effective 7-1-19.
Spectrum: Committee Bill
Status: (Passed) 2019-04-15 - Signed by Governor. H.J. 858. [HF260 Detail]
Download: Iowa-2019-HF260-Introduced.html
Bill Title: A bill for an act relating to permissible interest rates and charges for certain loans. (Formerly HSB 31.) Effective 7-1-19.
Spectrum: Committee Bill
Status: (Passed) 2019-04-15 - Signed by Governor. H.J. 858. [HF260 Detail]
Download: Iowa-2019-HF260-Introduced.html
House
File
260
-
Introduced
HOUSE
FILE
260
BY
COMMITTEE
ON
COMMERCE
(SUCCESSOR
TO
HSB
31)
A
BILL
FOR
An
Act
relating
to
permissible
interest
rates
and
charges
for
1
certain
loans.
2
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
3
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Section
1.
Section
536.13,
subsection
7,
paragraph
a,
Code
1
2019,
is
amended
to
read
as
follows:
2
a.
The
superintendent
may
establish
the
maximum
rate
of
3
interest
or
charges
as
permitted
under
this
chapter
for
those
4
loans
with
an
unpaid
principal
balance
of
ten
thirty
thousand
5
dollars
or
less.
For
those
loans
with
an
unpaid
principal
6
balance
of
over
ten
thirty
thousand
dollars,
the
maximum
rate
7
of
interest
or
charges
which
a
licensee
may
charge
shall
be
8
the
greater
of
the
rate
permitted
by
chapter
535
or
the
rate
9
authorized
for
supervised
financial
organizations
by
chapter
10
537
.
11
Sec.
2.
Section
537.2501,
subsection
1,
Code
2019,
is
12
amended
by
adding
the
following
new
paragraph:
13
NEW
PARAGRAPH
.
l.
For
an
interest-bearing
consumer
credit
14
transaction,
a
service
charge
in
an
amount
not
to
exceed
the
15
lesser
of
ten
percent
of
the
amount
financed
or
thirty
dollars.
16
Sec.
3.
Section
537.2510,
subsection
3,
paragraph
a,
Code
17
2019,
is
amended
to
read
as
follows:
18
a.
If
the
prepayment
is
in
full,
the
creditor
may
collect
19
or
retain
a
minimum
charge
not
exceeding
five
dollars
in
a
20
transaction
which
had
an
amount
financed
of
seventy-five
21
dollars
or
less,
or
not
exceeding
seven
dollars
and
fifty
cents
22
in
a
transaction
which
had
an
amount
financed
of
more
than
23
seventy-five
dollars,
if
the
minimum
charge
was
contracted
24
for,
and
the
finance
charge
earned
at
the
time
of
prepayment
25
is
less
than
the
minimum
charge
contracted
for.
If,
however,
26
a
creditor
has
collected
a
service
charge
in
association
with
27
an
interest-bearing
consumer
credit
transaction
pursuant
to
28
section
537.2501,
subsection
1,
paragraph
“l”
,
the
creditor
29
shall
not
collect
or
retain
a
minimum
charge
upon
prepayment
30
pursuant
to
this
subsection.
31
Sec.
4.
Section
537.2510,
Code
2019,
is
amended
by
adding
32
the
following
new
subsection:
33
NEW
SUBSECTION
.
9.
This
section
does
not
apply
to
a
service
34
charge
collected
pursuant
to
section
537.2501,
subsection
1,
35
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paragraph
“l”
.
1
EXPLANATION
2
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
3
the
explanation’s
substance
by
the
members
of
the
general
assembly.
4
This
bill
relates
to
permissible
interest
rates
and
charges
5
for
certain
loans.
6
Current
law
allows
the
superintendent
of
banking
to
7
establish
the
maximum
rate
of
interest
or
charges
for
regulated
8
loans
subject
to
Code
chapter
536
with
unpaid
principal
9
balances
of
$10,000
or
less.
The
bill
increases
this
amount
to
10
$30,000.
For
loans
with
unpaid
principal
balances
in
excess
11
of
$30,000
(formerly
$10,000),
the
maximum
interest
rate
or
12
charges
a
lender
may
charge
remains
the
greater
of
the
rate
13
permitted
in
Code
chapter
535
or
the
rate
authorized
for
14
supervised
financial
organizations
in
Code
chapter
537.
15
The
bill
authorizes
a
creditor
to
contract
for
and
receive,
16
for
an
interest-bearing
consumer
credit
transaction,
a
service
17
charge
in
an
amount
not
to
exceed
the
lesser
of
10
percent
18
of
the
amount
financed
or
$30.
The
bill
provides
that
if
a
19
creditor
has
received
such
a
service
charge,
the
creditor
20
shall
not
collect
or
retain
a
minimum
charge
upon
prepayment
21
as
authorized
under
Code
section
537.2510.
The
bill
specifies
22
that
Code
section
537.2510,
relating
to
rebate
upon
prepayment,
23
does
not
apply
to
service
charges
collected
pursuant
to
the
24
bill.
25
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