S-5198

   Amend Senate File 2298 as follows:
   1.  By striking everything after the enacting clause and inserting: 
   <Section 1.  Section 533A.8, subsection 5, paragraph a, Code 2026, is amended to read as follows:
   a.  Maintain a separate bank trust account or dedicated account in which all payments received from debtors for the benefit of creditors shall be deposited and in which all payments shall remain until a remittance is made to either the debtor or the creditor.
   Sec. 2.  Section 533A.8, subsection 5, paragraph d, Code 2026, is amended by striking the paragraph.
   Sec. 3.  Section 533A.8, subsection 6, Code 2026, is amended to read as follows:
   6.  If the debt management program is not based on a model which requires the licensee or any licensee to receive money or evidences thereof from the debtor to distribute to the debtor’s creditors, both of the following shall apply:
   a.  The the debtor shall maintain full control of and access to any moneys set aside for payment to creditors.
   b.  The licensee may not receive consideration from any third party in connection with services rendered to a debtor.
   Sec. 4.  Section 533A.8, Code 2026, is amended by adding the following new subsection:
   NEW SUBSECTION.  10A.  If a debtor who has contracted with a licensee to settle a debt has executed a debt settlement agreement with a creditor to settle such debt and has made at least one payment pursuant to that agreement, and the debtor subsequently fails to complete the payment terms required under that debt settlement agreement, the licensee shall attempt to renegotiate, resolve, reduce, or otherwise alter the terms of the debt with the creditor and shall not request or receive an additional fee from the debtor for any additional debt management service provided by the licensee for that debt. This subsection does not prohibit a licensee from requesting or receiving payment of any outstanding balance of the fee required by the contract between the licensee and debtor for that debt.
   Sec. 5.  Section 533A.9, subsection 4, Code 2026, is amended by striking the subsection and inserting in lieu thereof the following:
   4.  If a debt management program is not based on a model that requires the licensee or another licensee to receive money or evidences thereof from the debtor to distribute to the debtor’s creditors, a licensee may not request or receive payment of any fee or consideration for debt management services provided under a debt management program unless all of the following are true:
   a.  The licensee has renegotiated, resolved, reduced, or otherwise altered the terms of at least one debt pursuant to a resolution agreement or other contractual agreement executed by the debtor and the creditor.
   b.  The debtor has made at least one payment pursuant to the resolution agreement or other contractual agreement entered into under paragraph “a”.
   c.  To the extent that debts enrolled in the debt management program are renegotiated, resolved, reduced, or otherwise altered individually, the fee or consideration for the debt management service bears the same proportional relationship to the total fee or consideration for renegotiating, resolving, reducing, or otherwise altering the terms of the entire debt balance as the individual debt amount bears to the entire debt amount, not to exceed thirty percent of the total amount of debt enrolled by the debtor at the time of enrollment in the debt management program. The individual debt amount and the entire debt amount are those owed at the time the debt was enrolled in the debt management program. The percent charged is the same for each individual debt enrolled in the debt management program.
   Sec. 6.  Section 533A.9, subsection 5, Code 2026, is amended by striking the subsection and inserting in lieu thereof the following:
   5.  a.  Notwithstanding any provision of this section to the contrary, the total aggregate fee or consideration charged by a licensee for all debt management services provided by the licensee to a debtor shall not exceed thirty percent of the total amount of debt enrolled by the debtor at the time of enrollment in the debt management program.
   b.  A licensee may assess and collect the fee for debt management services on a per-debt basis as a debt is renegotiated, settled, reduced, or otherwise altered in a manner consistent with this section and applicable federal law.
   Sec. 7.  Section 533A.9, Code 2026, is amended by adding the following new subsection:
   NEW SUBSECTION.  6.  If a debt settlement agreement between a debtor and a creditor to settle a debt provides for the debtor to make more than one payment to the creditor, the licensee shall request or receive payment from the debtor of any fee for debt management services provided with respect to that debt incrementally over not less than one quarter of the length of the debtor’s period of repayment to such creditor.
   Sec. 8.  Section 538A.2, subsection 2, Code 2026, is amended by adding the following new paragraph:
   NEW PARAGRAPH.  i.  A person licensed to engage in the business of debt management under section 533A.2, when acting within the course and scope of that license.>

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JEFF REICHMAN