House File 5 - Enrolled

PAG LIN

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1	HOUSE FILE 5	
1	2	
1	3	AN ACT	
1	4 RELATING TO THE MAXIMUM FINANCE CHARGE ALLOWED FOR CONSUMER	
1	5	LOANS SECURED BY A CERTIFICATE OF TITLE TO A MOTOR VEHICLE	
1	6	AND MAKING PENALTIES APPLICABLE.	
1	7		
1	8 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:	
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1 10	Section 1.	Section 537.2401, subsection 1, Code 2007, is
1 11 amended to read as follows:
1 12	1.	Except as provided with respect to a finance charge for
1 13 loans pursuant to open end credit under section 537.2402 and
  1 14 loans secured by a certificate of title of a motor vehicle
  1 15 under section 537.2403, a lender may contract for and receive
1 16 a finance charge not exceeding the maximum charge permitted by
1 17 the laws of this state or of the United States for similar
1 18 lenders, and, in addition, with respect to a consumer loan, a
1 19 supervised financial organization or a mortgage lender may
1 20 contract for and receive a finance charge, calculated
1 21 according to the actuarial method, not exceeding twenty=one
1 22 percent per year on the unpaid balance of the amount financed.
1 23 This Except as provided in section 537.2403, this subsection
1 24 does not prohibit a lender from contracting for and receiving
1 25 a finance charge exceeding twenty=one percent per year on the
1 26 unpaid balance of the amount financed on consumer loans if
1 27 authorized by other provisions of the law.
1 28	Sec. 2.	Section 537.2402, subsection 1, Code 2007, is
1 29 amended to read as follows:
1 30	1.	If authorized to make supervised loans, a creditor may
1 31 contract for and receive a finance charge without limitation
1 32 as to amount or rate with respect to a loan pursuant to
1 33 open=end credit as permitted in this section except as
  1 34 provided in section 537.2403.
35	Sec. 3.	NEW SECTION.	537.2403	FINANCE CHARGE FOR
1 CONSUMER LOANS SECURED BY A MOTOR VEHICLE.
2	2	1.	A lender shall not contract for or receive a finance
2	3 charge exceeding twenty=one percent per year on the unpaid
2	4 balance of the amount financed for a loan of money secured by
2	5 a certificate of title to a motor vehicle used for personal,
2	6 family, or household purpose except as authorized under
2	7 chapter 536 or 536A.	A consumer who is charged a finance
2	8 charge in excess of the limitation in this section may seek
2	9 any remedies available pursuant to this chapter for an excess
2 10 charge.
2 11	2.	It shall be a violation of this section and an unlawful
2 12 practice under section 714.16 to attempt to avoid application
2 13 of this section by structuring a loan of money secured by a
2 14 certificate of title to a motor vehicle as a sale, sale and
2 15 repurchase, sale and lease, pawn, rental purchase, lease, or
2 16 other type of transaction with the intent to avoid application
2 17 of this section or any other applicable provision of this
2 18 chapter.
2 19
2 20
2 21	PATRICK J. MURPHY
2 22	Speaker of the House
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2 24
2 25
2 26	JOHN P. KIBBIE
2 27	President of the Senate
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2 29	I hereby certify that this bill originated in the House and
2 30 is known as House File 5, Eighty=second General Assembly. 2 31
2 32
2 33
2 34	MARK BRANDSGARD
35	Chief Clerk of the House
1 Approved	, 2007
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3	4  	
3	5 CHESTER J. CULVER
3	6 Governor