House File 321 H-8242 Amend House File 321 as follows: 1 1. By striking everything after the enacting clause and 2 inserting: 3 < Section 1. Section 533A.1, subsection 2, Code 2019, is 4 amended by adding the following new paragraph: 5 NEW PARAGRAPH . e. Serving as an intermediary between a 6 debtor and one or more creditors or loan servicers of the 7 debtor for the purpose of seeking modification of the terms of 8 an educational loan. 9 Sec. 2. Section 533A.1, Code 2019, is amended by adding the 10 following new subsections: 11 NEW SUBSECTION . 5A. “Educational loan” means the same as 12 defined in section 261F.1. 13 NEW SUBSECTION . 8A. “Loan servicer” means a person who is 14 engaged in the direct collection of payments on a loan from 15 the debtor or holds the right to undertake direct collection 16 of payments on a loan from the debtor, including but not 17 limited to receiving scheduled periodic payments from the 18 debtor pursuant to the terms of the loan or holding the right 19 to service the loan, such as by contracting with or otherwise 20 arranging for another person to service the loan. 21 Sec. 3. NEW SECTION . 533A.8A Educational loan debt 22 management services —— contract requirements —— prohibitions —— 23 remedies. 24 1. In addition to any other requirements applicable to a 25 licensee pursuant to this chapter, a licensee who is engaged 26 primarily in the business of debt management in connection with 27 educational loans, as described in section 533A.1, subsection 28 2, paragraph “e” , shall do so in accordance with this section. 29 The provisions of this section are not exclusive and do not 30 relieve persons or a contract from compliance with other 31 applicable law. 32 2. A licensee shall not receive any compensation for 33 providing educational loan debt management services until after 34 the licensee has fully performed all services that the licensee 35 -1- HF321.4209 (1) 88 (amending this HF 321 to CONFORM to SF 272) ja/rn 1/ 6 #1.

contracted to perform or represented the licensee would 1 perform, and shall not request any payment from the debtor or 2 require the debtor to provide payment to any third party prior 3 to fully performing all services. 4 3. a. A debtor has an unconditional right to cancel a 5 contract with a licensee for educational loan debt management 6 services at any time prior to midnight of the third business 7 day following the date a contract which complies with this 8 section is signed and executed. 9 b. Cancellation of a contract occurs when the debtor 10 delivers, by any means, written notice of cancellation to the 11 address specified in the contract. Notice of cancellation, 12 if delivered by mail, is effective when deposited in the 13 mail properly addressed with postage prepaid. Notice of 14 cancellation delivered by electronic mail is effective upon 15 transmission. Notice of cancellation delivered personally is 16 effective upon delivery. Notice of cancellation given by the 17 debtor need not take the particular form as provided in the 18 contract and, however expressed, is effective if the notice of 19 cancellation indicates the intention of the debtor not to be 20 bound by the contract. 21 4. A contract to provide debt management services in 22 connection with an educational loan shall be written in clear, 23 understandable language, shall clearly and conspicuously set 24 forth any and all terms, restrictions, and conditions governing 25 the contract, and shall describe fully and in detail all 26 services that the licensee contracts to perform for the debtor. 27 The contract shall be dated and signed by the debtor. The 28 contract shall set forth information required in this section 29 in at least ten point type. The following shall be included in 30 the contract: 31 a. The licensee’s name, the licensee’s electronic mail 32 address, and the physical address of the licensee’s place of 33 business to which the notice of cancellation is to be mailed 34 or otherwise delivered. A post office box does not constitute 35 -2- HF321.4209 (1) 88 (amending this HF 321 to CONFORM to SF 272) ja/rn 2/ 6

a physical address. A post office box may be designated for 1 delivery by mail only if it is accompanied by a physical 2 address at which the notice could be delivered by a method 3 other than mail. 4 b. A disclosure statement in substantially the following 5 form shall appear in at least fourteen point boldface type 6 immediately above the place where the debtor is to sign: 7 You, the debtor, may cancel this contract at any time prior 8 to midnight of the third business day after the contract is 9 signed and executed. See the attached notice of cancellation 10 form for an explanation of this right. 11 c. A completed, easily detachable form in duplicate, 12 captioned “notice of cancellation”, as an attachment, in at 13 least fourteen point boldface type, containing the following 14 statement in substantially the following form and language: 15 NOTICE OF CANCELLATION 16 ........ 17 (date contract is signed and executed) 18 You, the debtor, may cancel this contract without any 19 penalty or obligation, within three business days from the 20 above date. 21 To cancel this contract, you may use any of the following 22 methods: (1) send by postal mail or otherwise deliver a 23 signed and dated copy of this cancellation notice, or any 24 other written notice of cancellation, to (physical address of 25 licensee’s place of business); or (2) send by electronic mail a 26 notice of cancellation to (licensee’s electronic mail address). 27 No later than midnight of (date). 28 I hereby cancel this contract. 29 ...... 30 (date) 31 ............ 32 (debtor’s signature) 33 d. A disclosure statement in substantially the following 34 form shall appear in at least fourteen point boldface type 35 -3- HF321.4209 (1) 88 (amending this HF 321 to CONFORM to SF 272) ja/rn 3/ 6

immediately above the “Notice of Cancellation” form described 1 in paragraph “c” : 2 NOTICE REQUIRED BY IOWA LAW 3 (Insert name of licensee) or anyone working for (insert name 4 of licensee) CANNOT take payment directly from you or require 5 you to pay for or finance its services through a third party 6 until (insert name of licensee) has fully performed each and 7 every service that (insert name of licensee) contracted to 8 perform or represented that (insert name of licensee) would 9 perform. 10 5. A licensee who is engaged primarily in the business of 11 debt management in connection with educational loans shall not 12 do any of the following: 13 a. Claim, demand, charge, collect, or receive compensation 14 until after the licensee has fully performed each and every 15 service the licensee contracted to perform or represented the 16 licensee would perform. 17 b. Execute a contract with a debtor for educational loan 18 debt management services in violation of this section. 19 c. Receive consideration from any third party in connection 20 with services rendered to a debtor unless the consideration is 21 first fully disclosed to the debtor. 22 d. Prohibit or impede a debtor from contacting any creditor, 23 lender, loan servicer, government entity, attorney, counselor, 24 individual, or company that may seek to help the debtor. Any 25 such provision is void and unenforceable. 26 e. Access or obtain a debtor’s federal student aid 27 information in violation of federal law. 28 f. Compensate employees, including independent contractors, 29 based on the number of debtors recruited by the employees or 30 enrolled in particular programs, or provide compensation to 31 employees on any other commission-based system. 32 g. Pay or offer to pay any compensation, bonus, gift, 33 commission, or other consideration to any person for the 34 referral of a debtor to the licensee’s business. 35 -4- HF321.4209 (1) 88 (amending this HF 321 to CONFORM to SF 272) ja/rn 4/ 6

h. Accept or receive any compensation, bonus, gift, 1 commission, or other consideration for service to the 2 debtor from any person other than the debtor, the debtor’s 3 representative, or any third party providing financing that is 4 otherwise in compliance with the requirements of this section. 5 i. Disclose any information regarding a debtor to anyone 6 other than law enforcement, government entities, loan 7 servicers, creditors of the debtor, or as required by law. 8 j. Disclose any information regarding the creditor of 9 a debtor to anyone other than the debtor, the debtor’s 10 representative, or as required by law. 11 6. a. A violation of this section is an unlawful practice 12 pursuant to section 714.16, and all remedies of section 13 714.16 are available for such an action. A private cause of 14 action brought under this section by a debtor is in the public 15 interest. A debtor may bring an action against a licensee 16 for a violation of this section. If the court finds that the 17 licensee violated this section, the court shall award the 18 debtor actual damages, appropriate equitable relief, and the 19 costs of the action, and shall award reasonable fees to the 20 debtor’s attorney. 21 b. The rights and remedies provided in paragraph “a” are 22 cumulative to, and not a limitation of, any other rights and 23 remedies provided by law. Any action brought by a person other 24 than the attorney general or the superintendent pursuant to 25 this section must be commenced within four years from the date 26 of the alleged violation. 27 c. Notwithstanding any other provision of this section, 28 an action shall not be brought on the basis of a violation of 29 this section, except by a debtor against whom the violation was 30 committed or by the attorney general or superintendent. This 31 limitation does not apply to administrative action by either 32 the attorney general or the superintendent. > 33 -5- HF321.4209 (1) 88 (amending this HF 321 to CONFORM to SF 272) ja/rn 5/ 6