House File 2223
HOUSE FILE
BY HUTTER
(COMPANION TO SF 2083 BY BOLKCOM)
Passed House, Date Passed Senate, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act relating to required notices and disclosures of delayed
2 deposit services, prohibited acts by licensees, and providing
3 for fees.
4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
5 TLSB 5822HH 80
6 kk/cf/24
PAG LIN
1 1 Section 1. Section 533D.9, Code 2003, is amended to read
1 2 as follows:
1 3 533D.9 FEE RESTRICTION == REQUIRED DISCLOSURE.
1 4 1. A licensee shall not charge, contract for, or directly
1 5 or indirectly receive any interest, fees, or charges, except
1 6 those specifically authorized by this section:
1 7 a. TRANSACTION FEE. A licensee shall not charge a fee in
1 8 excess of fifteen five dollars on the first one per hundred
1 9 dollars on the face amount of a check or more than ten dollars
1 10 on subsequent one hundred dollar increments on the face amount
1 11 of the check for services provided by the licensee, or pro
1 12 rata for any portion of one hundred dollars face value the
1 13 amount financed. However, the licensee may receive a minimum
1 14 charge of five dollars when the amount financed exceeds
1 15 seventy=five dollars, or three dollars and fifty cents when
1 16 the amount financed exceeds fifty dollars.
1 17 b. DEFAULT FEE. If the check is not negotiable on the
1 18 date agreed upon, a licensee may charge a default fee, not to
1 19 exceed fifteen dollars. Only one such fee may be collected
1 20 with respect to a check even if it has been redeposited and
1 21 returned more than once, no matter how long the check remains
1 22 unpaid. A fee charged pursuant to this section is a
1 23 licensee's exclusive remedy and charge for late payment or
1 24 nonpayment.
1 25 2. A licensee shall give to the maker of the check, at the
1 26 time any delayed deposit service transaction is made, or if
1 27 there are two or more makers, to one of them, notice written
1 28 in clear, understandable language disclosing all of the
1 29 following:
1 30 a. The transaction fee to be charged for the transaction.
1 31 b. The annual percentage rate on the first hundred dollars
1 32 on the face amount of the check which the fee represents, and
1 33 the annual percentage rate on subsequent one hundred dollar
1 34 increments which the fee represents, if different transaction.
1 35 c. The date on which the check will be deposited or
2 1 presented for negotiation.
2 2 d. Any penalty, not to exceed fifteen dollars, which The
2 3 default fee that the licensee will charge if the check is not
2 4 negotiable on the date agreed upon. A penalty The notice
2 5 shall state that the default fee to be charged pursuant to
2 6 this section shall only be collected by the licensee once on a
2 7 check no matter how long the check remains unpaid. A penalty;
2 8 and that a default fee to be charged pursuant to this section
2 9 is a licensee's exclusive remedy and if a licensee charges a
2 10 penalty default fee pursuant to this section no other
2 11 penalties under this chapter or any other provision apply.
2 12 3. In addition to the notice required by subsection 2,
2 13 every licensee shall conspicuously display a schedule of all
2 14 fees, charges, and penalties for all services provided by the
2 15 licensee authorized by this section. The notice shall be
2 16 posted at the office and every branch office of the licensee.
2 17 The licensee shall provide a written schedule of the fees,
2 18 charges, interest rates, and penalties upon request.
2 19 4. The licensee shall make all notices and disclosures
2 20 required under this section available in the languages spoken
2 21 by consumers who frequent that location.
2 22 Sec. 2. Section 533D.10, Code 2003, is amended to read as
2 23 follows:
2 24 533D.10 PROHIBITED ACTS BY LICENSEE.
2 25 1. A licensee shall not do any of the following:
2 26 a. Hold from any one maker more than two checks one check
2 27 at any one time.
2 28 b. Hold from any one maker a check or checks in an
2 29 aggregate face amount of more than five three hundred dollars
2 30 at any one time.
2 31 c. Hold or agree to hold a check for more less than
2 32 thirty=one thirty days.
2 33 d. Require the maker to receive payment by a method which
2 34 that causes the maker to pay additional or further fees and
2 35 charges to the licensee or another person.
3 1 e. Repay, refinance, or otherwise consolidate a postdated
3 2 check transaction with the proceeds of another postdated check
3 3 transaction made by the same licensee.
3 4 f. Receive any other charges or fees in addition to the
3 5 fees listed in section 533D.9, subsections subsection 1 and 2.
3 6 g. The termination of a delayed deposit transaction either
3 7 through the payment of the consumer's check by the drawee
3 8 bank, through the return of the check to a consumer who
3 9 redeems it for consideration, through expiration of the
3 10 check's maturity date, or through any other method of
3 11 termination. The licensee shall not enter into another
3 12 delayed deposit transaction with the same consumer for at
3 13 least two days after the termination of a delayed deposit
3 14 transaction either through the payment of the consumer's check
3 15 by the drawee bank, through the return of the check to a
3 16 consumer who redeems it for consideration, through expiration
3 17 of the check's maturity date, or through any other method of
3 18 termination. However, the licensee may extend the term of the
3 19 loan without charge.
3 20 2. For purposes of this section, "licensee" includes a
3 21 person related to the licensee by common ownership or control,
3 22 a person in whom the licensee has any financial interest, or
3 23 any employee or agent of the licensee.
3 24 EXPLANATION
3 25 This bill makes amendments to Code chapter 533D, delayed
3 26 deposit services, more commonly known as payday loans.
3 27 The bill specifically amends Code section 533D.9 to require
3 28 licensees to limit the fees that can be charged in connection
3 29 with a delayed deposit transaction, to make available upon
3 30 request written schedules of charges, fees, penalties, and
3 31 interest rates that are posted on location, and to provide
3 32 that notices and disclosures be provided in languages spoken
3 33 by the consumers.
3 34 The bill also amends Code section 533D.10 to prohibit a
3 35 licensee from holding more than one check from a maker at any
4 1 one time, limiting that check to $300 instead of $500, and
4 2 requiring at least a two=day waiting period at the conclusion
4 3 of a delayed deposit transaction before entering into another
4 4 transaction with the same consumer. The bill strikes the 31=
4 5 day maximum loan period and provides for a minimum loan period
4 6 of 30 days.
4 7 LSB 5822HH 80
4 8 kk/cf/24