Text: HSB00697 Text: HSB00699 Text: HSB00600 - HSB00699 Text: HSB Index Bills and Amendments: General Index Bill History: General Index
PAG LIN 1 1 Section 1. Section 537.1301, Code 1995, is amended by 1 2 adding the following new subsection: 1 3 NEW SUBSECTION. 35A. "Principal amount of the loan" means 1 4 the total of the following: 1 5 a. The amount financed as defined in subsection 4. 1 6 b. Any administrative fee or loan origination fee as 1 7 defined in section 537.2401, subsection 6. 1 8 Sec. 2. Section 537.2401, subsections 1 and 2, Code 1995, 1 9 are amended to read as follows: 1 10 1. Except as provided with respect to a finance charge for 1 11 loans pursuant to open end credit under section 537.2402, a 1 12 lender may contract for and receive a finance charge not 1 13 exceeding the maximum charge permitted by the laws of this 1 14 state or of the United States for similar lenders, and, in 1 15 addition, with respect to a consumer loan, a supervised 1 16 financial organization or a mortgage lender may contract for 1 17 and receive a finance charge, calculated according to the 1 18 actuarial method, not exceeding twenty-one percent per year on 1 19 the unpaid balance of theamount financedprincipal amount of 1 20 the loan. This subsection does not prohibit a lender from 1 21 contracting for and receiving a finance charge exceeding 1 22 twenty-one percent per year on the unpaid balance of the 1 23amount financedprincipal amount of the loan on consumer loans 1 24 if authorized by other provisions of the law. 1 25 2. This section does not limit or restrict the manner of 1 26 calculating the finance charge, whether by way of add-on, 1 27 discount, or otherwise, so long as the rate of the finance 1 28 charge does not exceed that permitted by this section or the 1 29 laws of this state or of the United States. The finance 1 30 charge permitted by this section or the laws of this state or 1 31 of the United States may be calculated by determining the 1 32 single annual percentage rate as required to be disclosed to 1 33 the consumer pursuant to section 537.3201 which, when applied 1 34 according to the actuarial method to the unpaid balances of 1 35 theamount financedprincipal amount of the loan, will yield 2 1 the finance charge for that transaction which would result 2 2 from applying any graduated rates permitted by this section or 2 3 the laws of this state or of the United States to the 2 4 transaction on the assumption that all scheduled payments will 2 5 be made when due. If the loan is a precomputed consumer 2 6 credit transaction, the finance charge may be calculated on 2 7 the assumption that all scheduled payments will be made when 2 8 due, and the effect of prepayment is governed by section 2 9 537.2510. 2 10 Sec. 3. Section 537.2401, Code 1995, is amended by adding 2 11 the following new subsection: 2 12 NEW SUBSECTION. 6. a. In addition to the finance charge 2 13 permitted in this section, the lender may contract for and 2 14 receive the following: 2 15 (1) With respect to a consumer loan that is not secured by 2 16 an interest in land, a loan administration fee not to exceed 2 17 twenty-five dollars. 2 18 (2) With respect to a consumer loan that is secured by an 2 19 interest in land, a loan origination fee of not more than five 2 20 percent of the principal amount of the loan. 2 21 b. The fees provided for under paragraph "a" are deemed to 2 22 be completely earned on the date of the issuance of the loan 2 23 and are not subject to rebate pursuant to section 537.2510. 2 24 Sec. 4. Section 537.2402, Code 1995, is amended by adding 2 25 the following new subsection: 2 26 NEW SUBSECTION. 7. In addition to the finance charge 2 27 permitted by this section, a creditor, with respect to a loan 2 28 pursuant to an open-end credit, may contract for and receive a 2 29 nonrefundable loan origination fee of not more than five 2 30 percent of the initial line of credit. The loan origination 2 31 fee may be added to the unpaid balance and is deemed to be 2 32 completely earned on the date of the issuance of the loan. 2 33 Sec. 5. Section 537.2501, subsection 1, paragraphs g and 2 34 h, Code Supplement 1995, are amended to read as follows: 2 35 g. A surcharge of not more than five percent of the amount 3 1 of the face value of the payment instrument or twenty dollars, 3 2 whichever is greater, for each dishonored payment instrument 3 3 provided that the fee is clearly and conspicuously disclosed 3 4 in thecardholder agreementcontract. However, the amount of 3 5 the surcharge shall not exceed twenty dollars unless the 3 6 check, draft, or order was presented twice or the maker does 3 7 not have an account with the drawee. If the check, draft, or 3 8 order was presented twice or the maker does not have an 3 9 account with the drawee, the amount of the surcharge shall not 3 10 exceed fifty dollars. The surcharge shall not be assessed 3 11 against the maker if the reason for the dishonor of the 3 12 instrument is that the maker has stopped payment pursuant to 3 13 section 554.4403. 3 14 h. Charges for other benefits, including insurance, 3 15 conferred on the consumer, if the benefits are of value to the 3 16 consumer and if the charges are reasonable in relation to the 3 17 benefits, and are of a type which is not for credit, and are3 18authorized as permissible additional charges by rule adopted3 19by the administrator. 3 20 EXPLANATION 3 21 This bill amends provisions of the consumer credit code 3 22 relating to permissible finance charges and other fees which 3 23 may be charged to a consumer by the lender. 3 24 Section 537.1301 is amended by adding a new definition of 3 25 "principal amount of the loan". That amount is to include the 3 26 amount financed plus any administrative or loan origination 3 27 fee permitted under section 537.2401, subsection 6, created in 3 28 this bill. 3 29 Section 537.2401, subsections 1 and 2, are amended by 3 30 striking the words "amount financed" and replacing them with 3 31 "principal amount of the loan". These subsections relate to 3 32 the maximum finance charge which may be contracted for and 3 33 received for loans pursuant to open-end credit. The section 3 34 is also amended to provide that in addition to the finance 3 35 charge permitted under this section, the lender may contract 4 1 for and receive a loan administration fee not to exceed $25 4 2 with respect to a consumer loan that is not secured by an 4 3 interest in land, and a loan origination fee of not more than 4 4 5 percent of the principal amount of the loan with respect to 4 5 a consumer loan that is secured by an interest in land. The 4 6 bill provides that the loan administration and loan 4 7 origination fees created in this section are to be deemed 4 8 completely earned on the date of the issuance of the loan and 4 9 not subject to rebate. 4 10 Section 537.2402 is amended to provide that a creditor, 4 11 with respect to a loan pursuant to open-end credit, may 4 12 contract for and receive a nonrefundable loan origination fee 4 13 of not more than 5 percent of the initial line of credit, in 4 14 addition to any other permissible finance charge. The bill 4 15 provides that the loan origination fee may be added to the 4 16 unpaid balance of the loan and is deemed to be completely 4 17 earned on the date of the issuance of the loan. 4 18 Section 537.2501 is amended by striking language which 4 19 currently provides that charges related to consumer credit 4 20 transactions for other benefits, including insurance, which 4 21 are conferred on the consumer, must be approved by rule 4 22 adopted by the administrator (attorney general). These 4 23 charges must be of value to the consumer, reasonable in 4 24 relation to the benefits, and of a type which is not for 4 25 credit. The section is also amended by replacing the term 4 26 "cardholder agreement" with "contract". 4 27 LSB 4284HC 76 4 28 mj/cf/24
Text: HSB00697 Text: HSB00699 Text: HSB00600 - HSB00699 Text: HSB Index Bills and Amendments: General Index Bill History: General Index
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