House File 2749 - Introduced
HOUSE FILE
BY COMMITTEE ON WAYS AND MEANS
(SUCCESSOR TO HF 2606)
(SUCCESSOR TO HSB 671)
Passed House, Date Passed Senate, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act relating to debt management, mortgage bankers and brokers,
2 delayed deposit services, regulated loans, and industrial
3 loans, and providing for fees and penalties.
4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
5 TLSB 5324HZ 81
6 eg/je/5
PAG LIN
1 1 DIVISION I
1 2 DEBT MANAGEMENT
1 3 Section 1. Section 533A.1, Code 2005, is amended to read
1 4 as follows:
1 5 533A.1 DEFINITIONS.
1 6 As used in this chapter:
1 7 1. "Allowable cost" means an actual, identifiable third=
1 8 party expense incurred by the licensee on behalf of a specific
1 9 debtor, such as postage and long distance telephone charges,
1 10 that may be itemized and charged against the debtor for
1 11 payment.
1 12 2. "Creditor" means a person for whose benefit moneys are
1 13 being collected and distributed by licensees.
1 14 2. 3. "Debt management" means the planning and management
1 15 of the financial affairs of a debtor and the receiving
1 16 therefrom of money or evidences thereof for the purpose of
1 17 distributing the same to the debtor's creditors in payment or
1 18 partial payment of the debtor's obligations for a fee.
1 19 3. 4. "Debtor" means any natural person.
1 20 5. "Donation" means money given by the debtor to a
1 21 licensee as a gift for debt management and outside of the debt
1 22 management contract.
1 23 6. "Fee" means the moneys paid by the debtor to the
1 24 licensee as payment for debt management and shall not include
1 25 money paid to the licensee or held by the licensee for
1 26 distribution to a creditor, allowable costs, a distribution to
1 27 the debtor as a refund, or a donation.
1 28 7. "Gratuitous debt=management service" means debt
1 29 management without charging a fee.
1 30 4. 8. "Licensee" means any individual, partnership,
1 31 unincorporated association, agency or corporation person
1 32 licensed under this chapter.
1 33 9. "Natural person" means an individual who is not an
1 34 association, joint venture, or joint stock company,
1 35 partnership, limited partnership, business corporation,
2 1 nonprofit corporation, other business entity, or any group of
2 2 individuals or business entities, however organized.
2 3 5. 10. "Office" means each location by street number,
2 4 building number, city, and state where any person engages in
2 5 debt management.
2 6 11. "Person" means an individual, an association, joint
2 7 venture or joint stock company, partnership, limited
2 8 partnership, business corporation, nonprofit corporation, or
2 9 any other group of individuals however organized.
2 10 6. 12. "Superintendent" means the superintendent of
2 11 banking.
2 12 Sec. 2. Section 533A.2, Code 2005, is amended to read as
2 13 follows:
2 14 533A.2 LICENSES REQUIRED == EXCEPTIONS.
2 15 1. No individual, partnership, unincorporated association,
2 16 agency or corporation A person shall not engage in the
2 17 business of debt management in this state without a license
2 18 therefor as provided for in this chapter, except that the
2 19 unless exempt under subsection 2. A person engages in the
2 20 business of debt management in this state if the person
2 21 solicits to provide, or enters into a contract with one or
2 22 more debtors to provide debt management to a debtor who
2 23 resides in this state.
2 24 2. The following persons, including employees of such
2 25 persons, shall not be required to be licensed when engaged in
2 26 the regular course of their respective businesses and
2 27 professions:
2 28 a. Attorneys at law.
2 29 b. Banks, savings and loan associations, credit unions,
2 30 mortgage bankers and mortgage brokers licensed or registered
2 31 under chapter 535B, insurance companies and similar
2 32 fiduciaries, regulated loan companies licensed under chapter
2 33 536, and industrial loan companies licensed under chapter
2 34 536A, authorized and admitted to transact business in this
2 35 state and performing credit and financial adjusting in the
3 1 regular course of their principal business, or while
3 2 performing an escrow function.
3 3 c. Abstract companies, while performing an escrow
3 4 function.
3 5 d. Employees of licensees under this chapter.
3 6 e. Judicial officers or others acting under court orders.
3 7 f. Nonprofit religious, fraternal or co=operative
3 8 cooperative organizations, including credit unions, offering
3 9 to debtors gratuitous debt=management service.
3 10 g. Those persons, associations, or corporations whose
3 11 principal business is the origination of first mortgage loans
3 12 on real estate for their own portfolios or for sale to
3 13 institutional investors.
3 14 2. 3. The application for such a license shall be in
3 15 writing, under oath, and in the form prescribed by the
3 16 superintendent. The application shall contain all of the
3 17 following:
3 18 a. The name of the applicant; date of incorporation, if
3 19 incorporated, and the.
3 20 b. If the applicant is not a natural person, the type of
3 21 business entity of the applicant and the date the entity was
3 22 organized.
3 23 c. The address where the business is to be conducted; and
3 24 similar, including information as to any branch office of the
3 25 applicant; the.
3 26 d. The name and resident address of the applicant's owner
3 27 or partners, or, if a corporation, association, or agency, of
3 28 the members, shareholders, directors, trustees, principal
3 29 officers, managers, and agents, and such other pertinent
3 30 information as the superintendent may require. If the
3 31 applicant is a partnership, a copy of the certificate of
3 32 assumed name or articles of partnership shall be filed with
3 33 the application. If the applicant is not a corporation
3 34 natural person, a copy of the articles of incorporation legal
3 35 documents creating the applicant shall be filed with the
4 1 application.
4 2 e. Other pertinent information as the superintendent may
4 3 require, including a credit report.
4 4 3. 4. Each application shall be accompanied by a bond to
4 5 be approved by the superintendent to in favor of the people of
4 6 the state of Iowa in the penal sum of ten twenty=five thousand
4 7 dollars for each office, providing, however, the
4 8 superintendent may require such bond to be raised to a maximum
4 9 sum of twenty=five thousand dollars, and conditioned that the
4 10 obligor will not violate any law pertaining to such business
4 11 and upon the faithful accounting of all moneys collected upon
4 12 accounts entrusted to such person engaged in debt management,
4 13 and their employees and agents for the purpose of indemnifying
4 14 debtors for loss resulting from conduct prohibited by this
4 15 chapter. The aggregate liability of the surety to all debtors
4 16 doing business with the office for which the bond is filed
4 17 shall, in no event, exceed the penal sum of such bond. The
4 18 surety on the bond shall have the right to cancel such bond
4 19 upon giving thirty days' notice to the superintendent and
4 20 thereafter shall be relieved of liability for any breach of
4 21 condition occurring after the effective date of said the
4 22 cancellation. No individual, partnership, unincorporated
4 23 association, agency or corporation A person shall not engage
4 24 in the business of debt management until a good and sufficient
4 25 bond is filed in accordance with the provisions of this
4 26 chapter.
4 27 4. 5. Each applicant shall furnish with the application a
4 28 copy of the contract the applicant proposes to use between the
4 29 applicant and the debtor, which shall contain a schedule of
4 30 fees to be charged the debtor for the applicant's services.
4 31 5. 6. At the time of making such the application the
4 32 applicant shall pay to the superintendent the sum of two
4 33 hundred fifty dollars as a license fee for each of the
4 34 applicant's offices and an investigation fee in the sum of one
4 35 hundred dollars. A separate application shall be made for
5 1 each office maintained by the applicant.
5 2 Sec. 3. Section 533A.3, Code 2005, is amended to read as
5 3 follows:
5 4 533A.3 INVESTIGATION == HEARING.
5 5 1. Upon the filing of each application and the payment of
5 6 such the fees, the superintendent shall fix a date and a time
5 7 for a hearing upon such application, and shall make conduct an
5 8 investigation of the facts concerning the application and the
5 9 requirements provided for in subsection 3 of this section.
5 10 2. The superintendent shall grant or deny each application
5 11 for a license within sixty days from the filing thereof with
5 12 date that the application and the required fee are filed and
5 13 paid, unless the period is extended by written agreement
5 14 between the applicant and the superintendent.
5 15 3. a. If the The superintendent shall find the enter an
5 16 order granting the application, and issue and deliver a
5 17 license to the applicant if the superintendent finds that both
5 18 of the following are satisfied:
5 19 a. The experience, financial responsibility, character,
5 20 and general fitness of the applicant is such sufficient as to
5 21 command the confidence of the public and to warrant belief
5 22 that the business will be operated lawfully, honestly, fairly,
5 23 and efficiently within the purposes of this chapter, and that
5 24 the.
5 25 b. The applicant, or if the applicant is an unincorporated
5 26 association, agency or partnership, then the individuals
5 27 involved, or if the applicant is a corporation then the
5 28 officers and directors thereof, have has not been convicted of
5 29 or pled guilty to a felony or a an indictable misdemeanor
5 30 involving moral turpitude for financial gain, or have has not
5 31 had a record of having defaulted in payment of money collected
5 32 for others, including the discharge of such debts through
5 33 bankruptcy proceedings, the superintendent shall thereupon
5 34 enter an order granting such application and forthwith issue
5 35 and deliver a license to the applicant. The superintendent
6 1 may require as part of the application a credit report and
6 2 other information.
6 3 If the applicant is not a natural person, this subsection
6 4 shall apply to the owners, partners, members, shareholders,
6 5 officers, directors, and managers of the applicant.
6 6 b. 4. If the applicant has, at the time of the
6 7 application, a license for an office located within ten
6 8 statute miles of the location of the office named in the
6 9 application, no a license shall not be issued unless the
6 10 superintendent finds that public convenience will be served by
6 11 the issuance of such the license.
6 12 c. 5. No A license shall not be transferable or
6 13 assignable.
6 14 4. 6. If the superintendent finds the applicant not
6 15 qualified by under subsection 3 of this section, the
6 16 superintendent shall enter an order denying such the
6 17 application and forthwith notify the applicant of the denial,
6 18 returning the license fee. Within fifteen days after the
6 19 entry of such order, the superintendent shall prepare written
6 20 findings and shall forthwith deliver a copy thereof to the
6 21 applicant.
6 22 Sec. 4. Section 533A.5, Code 2005, is amended to read as
6 23 follows:
6 24 533A.5 RENEWAL.
6 25 1. Each To continue in the business of debt management,
6 26 each licensee shall apply on or before July June 1 may make
6 27 application to the superintendent for renewal of its license.
6 28 The superintendent may assess a late fee of ten dollars per
6 29 day for applications submitted and accepted for processing
6 30 after June 1.
6 31 2. The renewal application shall be on the form prescribed
6 32 by the superintendent and shall be accompanied by a fee of one
6 33 two hundred fifty dollars, together with a bond as in the case
6 34 of an original application. A separate renewal application
6 35 shall be made for each office maintained by the applicant.
7 1 Sec. 5. NEW SECTION. 533A.5A CHANGE IN CONTROL == NAME
7 2 OR ADDRESS.
7 3 1. The prior written approval of the superintendent is
7 4 required whenever a change in the control of a licensee is
7 5 proposed. For purposes of this section, "control" in the case
7 6 of a corporation means direct or indirect ownership, or the
7 7 right to control, ten percent or more of the voting shares of
7 8 the corporation, or the ability of a person to elect a
7 9 majority of the directors or otherwise effect a change in
7 10 policy. "Control" in the case of any other entity means the
7 11 principals of the organization whether active or passive. The
7 12 superintendent may require information deemed necessary to
7 13 determine whether a new application is required. When
7 14 requesting approval, the person shall submit a fee of one
7 15 hundred dollars to the superintendent.
7 16 2. A licensee shall notify the superintendent and submit a
7 17 fee of twenty=five dollars per license to the superintendent
7 18 thirty days in advance of the effective date of any of the
7 19 following:
7 20 a. A change in the name of the licensee.
7 21 b. A change in the address where the business is
7 22 conducted.
7 23 Sec. 6. Section 533A.7, subsection 1, paragraph a, Code
7 24 2005, is amended to read as follows:
7 25 a. Conviction of a felony or of a an indictable
7 26 misdemeanor involving moral turpitude for financial gain.
7 27 Sec. 7. Section 533A.9, Code 2005, is amended to read as
7 28 follows:
7 29 533A.9 FEE AGREED IN ADVANCE.
7 30 The fee of the licensee charged to the debtor shall be
7 31 agreed upon in advance and stated in the contract and
7 32 provision for settlement in case of cancellation or prepayment
7 33 shall also be clearly stated herein in the contract. The fee
7 34 of the licensee charged to the debtor shall not exceed fifteen
7 35 percent of any payment made by the debtor and distributed to
8 1 the creditors pursuant to the contract. In case of total
8 2 payment of the contract before the contract period has
8 3 expired, the licensee shall be entitled only to a fee of no
8 4 more than three percent of such the final payment.
8 5 Sec. 8. NEW SECTION. 533A.9A DONATIONS.
8 6 A donation shall not be charged to a debtor or creditor,
8 7 deducted from a payment to a creditor, deducted from the
8 8 debtor's account, or from payments made to the licensee
8 9 pursuant to the debt management contract. If a licensee
8 10 requests a donation from a debtor, the licensee must clearly
8 11 indicate that any donation is voluntary and not a condition or
8 12 requirement for providing debt management.
8 13 Sec. 9. Section 533A.10, Code 2005, is amended to read as
8 14 follows:
8 15 533A.10 EXAMINATION OF LICENSEE.
8 16 1. The superintendent may examine the condition and
8 17 affairs of said a licensee. In connection with any
8 18 examination, the superintendent may examine on oath any
8 19 licensee, and any director, officer, employee, customer,
8 20 creditor, or stockholder of a licensee concerning the affairs
8 21 and business of the licensee. The superintendent shall
8 22 ascertain whether the licensee transacts its business in the
8 23 manner prescribed by the law and the applicable rules and
8 24 regulations issued thereunder. The licensee shall pay the
8 25 cost of the examination as determined by the superintendent,
8 26 which fee shall not exceed the sum of one hundred dollars per
8 27 day of examination based on the actual cost of the operation
8 28 of the finance bureau of the banking division of the
8 29 department of commerce, including the proportionate share of
8 30 the administrative expenses in the operation of the banking
8 31 division attributable to the finance bureau, as determined by
8 32 the superintendent, incurred in the discharge of duties
8 33 imposed upon the superintendent by this chapter. Failure to
8 34 pay the examination fee within thirty days of receipt of
8 35 demand from the superintendent shall automatically suspend the
9 1 license until the fee is paid subject the licensee to a late
9 2 fee of up to five percent per day of the amount of the
9 3 examination fee for each day the payment is delinquent.
9 4 2. In the investigation of alleged violations of this
9 5 chapter, the superintendent may compel the attendance of any
9 6 person or the production of any books, accounts, records and
9 7 files used therein, and may examine under oath all persons in
9 8 attendance pursuant thereto.
9 9 The superintendent is authorized to make and promulgate as
9 10 prescribed by law regulations necessary to carry out the
9 11 purposes of this chapter.
9 12 Sec. 10. NEW SECTION. 533A.12 RULES.
9 13 The superintendent may adopt administrative rules pursuant
9 14 to chapter 17A to administer and enforce the provisions of
9 15 this chapter.
9 16 Sec. 11. Section 533A.13, Code 2005, is amended to read as
9 17 follows:
9 18 533A.13 LICENSE MANDATORY TO BUSINESS.
9 19 It shall be unlawful for an individual, partnership,
9 20 unincorporated association, agency or corporation a person to
9 21 engage in the business of debt management without first
9 22 obtaining a license as required by this chapter. Any
9 23 individual, partnership, unincorporated association, agency,
9 24 corporation or any other group of individuals, however
9 25 organized, person or any owner, partner, member, officer,
9 26 director, employee, agent, or representative thereof who shall
9 27 willfully or knowingly engage in the business of debt
9 28 management without the license required by this chapter, shall
9 29 be guilty of a serious misdemeanor.
9 30 DIVISION II
9 31 MORTGAGE BANKERS AND BROKERS
9 32 Sec. 12. Section 535B.1, subsection 2, Code Supplement
9 33 2005, is amended to read as follows:
9 34 2. 5A. "First mortgage "Mortgage loan" means a loan of
9 35 money secured by a first lien on residential real property and
10 1 includes a refinancing of a contract of sale, an assumption of
10 2 a prior mortgage loan, and a refinancing of a prior mortgage
10 3 loan.
10 4 Sec. 13. Section 535B.1, subsection 4, Code Supplement
10 5 2005, as amended by 2005 Iowa Acts, chapter 83, section 2, is
10 6 amended to read as follows:
10 7 4. "Mortgage banker" means a person who does one or more
10 8 of the following:
10 9 a. Makes at least four first mortgage loans on residential
10 10 real property located in this state in a calendar year.
10 11 b. Originates at least four first mortgage loans on
10 12 residential real property located in this state in a calendar
10 13 year and sells four or more such loans in the secondary
10 14 market.
10 15 c. Services at least four first mortgage loans on
10 16 residential real property located in this state. However, a
10 17 natural person, who services less than fifteen first mortgage
10 18 loans on residential real estate within the state and who does
10 19 not sell or transfer first mortgage loans, is exempt from this
10 20 paragraph if that person is otherwise exempt from the
10 21 provisions of this chapter.
10 22 "Mortgage banker" does not include a person whose job
10 23 responsibilities on behalf of a licensee or individual
10 24 registrant are to process mortgage loans, are solely clerical
10 25 in nature, or otherwise do not involve direct contact with
10 26 loan applicants.
10 27 Sec. 14. Section 535B.1, subsection 5, Code Supplement
10 28 2005, as amended by 2005 Iowa Acts, chapter 83, section 3, is
10 29 amended to read as follows:
10 30 5. "Mortgage broker" means a person who arranges or
10 31 negotiates, or attempts to arrange or negotiate, at least four
10 32 first mortgage loans or commitments for four or more such
10 33 loans on residential real property located in this state in a
10 34 calendar year. "Mortgage broker" does not include a person
10 35 whose job responsibilities on behalf of a licensee or
11 1 individual registrant are to process mortgage loans, are
11 2 solely clerical in nature, or otherwise do not involve direct
11 3 contact with loan applicants.
11 4 Sec. 15. Section 535B.4, subsection 7, Code 2005, is
11 5 amended to read as follows:
11 6 7. Applications for renewals of licenses and individual
11 7 registrations under this chapter must be filed with the
11 8 administrator before June 1 of the year of expiration and on
11 9 forms prescribed by the administrator. A renewal application
11 10 must be accompanied by a fee of two hundred dollars for a
11 11 license to transact business solely as a mortgage broker, and
11 12 four hundred dollars for a license to transact business as a
11 13 mortgage banker. The fee to renew an individual registration
11 14 shall be the fee determined pursuant to 2005 Iowa Acts,
11 15 chapter 83, section 6. The administrator may assess a late
11 16 fee of ten dollars per day for applications or registrations
11 17 accepted for processing after June 1.
11 18 Sec. 16. Section 535B.4, Code 2005, is amended by adding
11 19 the following new subsection:
11 20 NEW SUBSECTION. 8. A licensee shall not conduct business
11 21 under any other name than that given in the license. A
11 22 fictitious name may be used, but a licensee shall conduct
11 23 business only under one name at a time. However, the
11 24 administrator may issue more than one license to the same
11 25 person to conduct business under different names at the same
11 26 time upon compliance for each such additional license with all
11 27 of the provisions of this chapter governing an original
11 28 issuance of a license.
11 29 Sec. 17. Section 535B.4A, subsection 2, as enacted by 2005
11 30 Iowa Acts, chapter 83, section 6, is amended to read as
11 31 follows:
11 32 2. An individual registrant who registers pursuant to this
11 33 section for the first time shall submit to a national criminal
11 34 background history check through the federal bureau of
11 35 investigation prior to being registered. The administrator
12 1 may submit the registrant's fingerprints to the federal bureau
12 2 of investigation by the department of public safety through
12 3 the state criminal history repository for the purpose of a
12 4 national criminal history check. The results of a criminal
12 5 history check conducted pursuant to this subsection shall not
12 6 be considered a public record under chapter 22. The
12 7 administrator shall collect fees necessary to cover the costs
12 8 associated with criminal background history checks conducted
12 9 pursuant to this section.
12 10 Sec. 18. NEW SECTION. 535B.6A NOTICE AND APPROVAL
12 11 REQUIRED.
12 12 1. A licensee shall submit a notice of name change and a
12 13 twenty=five dollar fee for each license to the administrator
12 14 thirty days prior to changing the name of the licensee.
12 15 2. The prior written approval is required whenever a
12 16 change in control of a licensee or registrant is proposed.
12 17 For purposes of this section, "control" means as defined in
12 18 section 524.103. The administrator may require the licensee
12 19 to provide any information deemed necessary by the
12 20 administrator to determine whether a new application is
12 21 required. At the time of requesting the approval, the
12 22 licensee or registrant requesting the change of control shall
12 23 pay to the administrator a fee of one hundred dollars.
12 24 Sec. 19. Section 535B.7, Code 2005, is amended to read as
12 25 follows:
12 26 535B.7 SUSPENSION OR REVOCATION OF LICENSE DISCIPLINARY
12 27 ACTION.
12 28 1. The administrator may, pursuant to chapter 17A, suspend
12 29 or revoke any license issued pursuant to this chapter take
12 30 disciplinary action against a licensee or individual
12 31 registrant if the administrator finds any of the following:
12 32 a. The licensee or individual registrant has violated a
12 33 provision of this chapter or a rule adopted under this chapter
12 34 or any other state or federal law applicable to the conduct of
12 35 its business including but not limited to chapters 535 and
13 1 535A.
13 2 b. A fact or condition exists which, if it had existed at
13 3 the time of the original application for the license or
13 4 individual registration, would have warranted the
13 5 administrator to refuse originally to issue the license or
13 6 individual registration.
13 7 c. The licensee is found upon investigation to be
13 8 insolvent, in which case the license shall be revoked
13 9 immediately.
13 10 d. The licensee or individual registrant has violated an
13 11 order of the administrator.
13 12 2. The administrator may impose one or more of the
13 13 following disciplinary actions against a licensee or
13 14 individual registrant:
13 15 a. Revoke a license or individual registration.
13 16 b. Suspend a license or individual registration until
13 17 further order of the administrator or for a specified period
13 18 of time.
13 19 c. Impose a period of probation under specified
13 20 conditions.
13 21 d. Impose civil penalties in an amount not to exceed five
13 22 thousand dollars for each violation.
13 23 e. Issue a citation and warning respecting licensee or
13 24 individual registrant behavior.
13 25 2. 3. The administrator may order an emergency suspension
13 26 of a licensee's license or an individual's registration
13 27 pursuant to section 17A.18A. A written order containing the
13 28 facts or conduct which warrants the emergency action shall be
13 29 timely sent to the licensee or individual registrant by
13 30 restricted certified mail. Upon issuance of the suspension
13 31 order, the licensee or individual registrant must also be
13 32 notified of the right to an evidentiary hearing. A suspension
13 33 proceeding shall be promptly instituted and determined.
13 34 Except as provided in this section, a license or individual
13 35 registration shall not be revoked or suspended except after
14 1 notice and a hearing thereon in accordance with chapter 17A.
14 2 3. 4. A licensee may surrender a license and an
14 3 individual registrant may surrender an individual registration
14 4 by delivering to the administrator written notice of
14 5 surrender, but a surrender does not affect the licensee's or
14 6 individual registrant's civil or criminal liability for acts
14 7 committed before the surrender.
14 8 4. 5. A revocation, suspension, or surrender of a license
14 9 or individual registration does not impair or affect the
14 10 obligation of a preexisting lawful contract between the
14 11 licensee or individual registrant and any person, including a
14 12 mortgagor.
14 13 Sec. 20. Section 535B.9, subsection 1, Code 2005, as
14 14 amended by 2005 Iowa Acts, chapter 83, section 7, is amended
14 15 to read as follows:
14 16 1. An applicant for a license shall file with the
14 17 administrator a bond furnished by a surety company authorized
14 18 to do business in this state. The bond shall be in the amount
14 19 of twenty=five fifty thousand dollars for an applicant seeking
14 20 to transact business solely as a mortgage broker, or fifty
14 21 thousand dollars for an applicant seeking to transact business
14 22 as a mortgage banker. The bond shall be continuous in nature
14 23 until canceled by the surety with not less than thirty days'
14 24 notice in writing to the mortgage broker or mortgage banker
14 25 and to the administrator indicating the surety's intention to
14 26 cancel the bond on a specific date. The bond shall be for the
14 27 use of the state and any persons who may have causes of action
14 28 against the applicant. The bond shall be conditioned upon the
14 29 applicant's faithfully conforming to and abiding by this
14 30 chapter and any rules adopted under this chapter and shall
14 31 require that the surety pay to the state and to any persons
14 32 all moneys that become due or owing to the state and to the
14 33 persons from the applicant by virtue of this chapter.
14 34 Sec. 21. Section 535B.10, Code Supplement 2005, is amended
14 35 to read as follows:
15 1 535B.10 INVESTIGATIONS AND EXAMINATIONS.
15 2 1. Within one hundred twenty days after the end of a
15 3 mortgage banker licensee's fiscal year, the mortgage banker
15 4 licensee shall file financial statements which are certified
15 5 audited by an independent certified public accounting firm.
15 6 2. For the purposes of discovering violations of this
15 7 chapter or any related rules adopted under this chapter or for
15 8 securing information lawfully required under this chapter, the
15 9 administrator may at any time and as often as the
15 10 administrator deems necessary, investigate the business and
15 11 examine the books, accounts, records, and files used by a
15 12 licensee or individual registrant. However, if the financial
15 13 statement required by subsection 1 shows that the licensee
15 14 satisfies the minimum net worth requirement necessary to be an
15 15 approved mortgagee by the United States department of housing
15 16 and urban development pursuant to its guidelines, as amended,
15 17 the licensee is not subject to an investigation or examination
15 18 as described in this subsection.
15 19 3. Notwithstanding subsection 2, all licensees are subject
15 20 to limited examination by the administrator to investigate
15 21 complaints or alleged violations about the licensee made to
15 22 the administrator. Such investigation or examination by the
15 23 administrator shall be restricted to acquiring information
15 24 from the licensee relevant to the alleged violations.
15 25 4. 3. In conducting any examination under this section,
15 26 the administrator may rely on current reports made by the
15 27 licensee which have been prepared for the following federal
15 28 agencies or federally related entities:
15 29 a. United States department of housing and urban
15 30 development.
15 31 b. Federal housing administration.
15 32 c. Federal national mortgage association.
15 33 d. Government national mortgage association.
15 34 e. Federal home loan mortgage corporation.
15 35 f. Veterans administration.
16 1 5. 4. With respect to mortgage lenders or mortgage
16 2 bankers who are specifically exempted from this chapter but
16 3 are subject to sections 535B.11, 535B.12, and 535B.13, the
16 4 powers of examination and investigation concerning compliance
16 5 with sections 535B.11, 535B.12, and 535B.13 shall be exercised
16 6 by the official or agency to whose supervision the exempted
16 7 person is subject. If the administrator receives a complaint
16 8 or other information concerning noncompliance with this
16 9 chapter by an exempted person, the administrator shall inform
16 10 the official or agency having supervisory authority over that
16 11 person.
16 12 6. 5. a. The licensee shall pay the cost of the
16 13 examination or investigation as determined by the
16 14 administrator based on the actual cost of the operation of the
16 15 finance bureau of the banking division of the department of
16 16 commerce, including the proportionate share of administrative
16 17 expenses in the operation of the banking division attributable
16 18 to the finance bureau as determined by the administrator,
16 19 incurred in the discharge of duties imposed upon the
16 20 administrator by this chapter.
16 21 b. The total charge for an examination or investigation
16 22 shall be paid by the licensee to the administrator within
16 23 thirty days after the administrator has requested payment.
16 24 The administrator may by rule provide for a charge for late
16 25 payment of the fee. The amount of the fee shall be based on
16 26 the actual costs of the examination as determined by the
16 27 administrator. Examination reports and correspondence
16 28 regarding these reports Failure to pay the charge within
16 29 thirty days shall subject the licensee to a late fee of up to
16 30 five percent of the amount of the examination or investigation
16 31 charge for each day the payment is delinquent.
16 32 6. a. All papers, documents, examination reports, and
16 33 other writings relating to the supervision of licensees and
16 34 registrants shall be kept confidential except as provided in
16 35 this subsection, notwithstanding chapter 22.
17 1 b. The administrator may furnish information relating to
17 2 the supervision of licensees and registrants to the federal
17 3 agencies or federally related entities listed in subsection 3,
17 4 the federal deposit insurance corporation, the federal reserve
17 5 system, the office of the comptroller of the currency, the
17 6 office of thrift supervision, the national credit union
17 7 administration, the federal home loan bank, and financial
17 8 institution regulatory authorities of other states, or to any
17 9 official or supervising examiner of such regulatory
17 10 authorities.
17 11 c. The administrator may release summary complaint
17 12 information regarding a particular licensee so long as the
17 13 information does not specifically identify the complainant.
17 14 d. The administrator may prepare and circulate reports
17 15 reflecting financial information and examination results for
17 16 all licensees on an aggregate basis, including other
17 17 information considered pertinent to the purpose of each report
17 18 for general statistical information.
17 19 e. The administrator may prepare and circulate reports
17 20 provided by law.
17 21 f. The administrator may release the reports and
17 22 correspondence in the course of an enforcement proceeding or a
17 23 hearing held by the administrator.
17 24 g. The administrator may also provide this information to
17 25 the attorney general for purposes of enforcing this chapter or
17 26 the consumer fraud Act, section 714.16.
17 27 Sec. 22. Section 535B.11, subsection 6, Code 2005, is
17 28 amended to read as follows:
17 29 6. If a person in connection with a first mortgage loan
17 30 has possession of an abstract of title and fails to deliver
17 31 the abstract to the borrower within twenty calendar days of
17 32 the borrower's request made by certified mail return receipt
17 33 requested in connection with a proposed sale of the property,
17 34 then the borrower may authorize the preparation of a new
17 35 abstract of title to the property and the person failing to
18 1 deliver the original abstract shall pay to the borrower the
18 2 reasonable costs of preparation. If the borrower brings an
18 3 action against the person failing to deliver to recover such
18 4 the payment and in the action recovers the payment, then the
18 5 borrower shall also be entitled to recover attorney fees and
18 6 court costs incurred in the action.
18 7 Sec. 23. Section 535B.11, subsection 7, unnumbered
18 8 paragraph 1, Code 2005, is amended to read as follows:
18 9 When the servicing of a first mortgage loan is transferred,
18 10 sold, purchased, or accepted by a licensee or registrant, the
18 11 licensee or registrant who is transferring or selling the
18 12 servicing shall issue to the mortgagor, within five business
18 13 fifteen calendar days prior to the effective date of the
18 14 transfer, a notice which shall include at a minimum:
18 15 Sec. 24. NEW SECTION. 535B.17 POWERS AND DUTIES OF THE
18 16 ADMINISTRATOR == WAIVER AUTHORITY.
18 17 In addition to any other duties imposed upon the
18 18 administrator by law, the administrator may participate in a
18 19 multistate automated licensing system for mortgage bankers,
18 20 mortgage brokers, and individual registrants. For this
18 21 purpose, the administrator may establish by rule or order new
18 22 requirements as necessary, including but not limited to
18 23 requirements that license applicants and individual
18 24 registrants submit to fingerprinting, criminal history checks,
18 25 and pay fees therefor.
18 26 DIVISION III
18 27 DELAYED DEPOSIT SERVICES
18 28 Sec. 25. Section 533D.3, subsection 2, Code 2005, is
18 29 amended to read as follows:
18 30 2. An applicant for a license shall submit an application,
18 31 under oath, to the superintendent on forms prescribed by the
18 32 superintendent. The forms shall contain such information as
18 33 the superintendent may prescribe.
18 34 Sec. 26. Section 533D.3, subsection 3, paragraph a, Code
18 35 2005, is amended to read as follows:
19 1 a. An application fee in an amount prescribed by rule
19 2 adopted by the superintendent of one hundred dollars.
19 3 Sec. 27. Section 533D.3, subsection 6, Code 2005, is
19 4 amended to read as follows:
19 5 6. a. A license issued pursuant to this chapter shall be
19 6 conspicuously posted at the licensee's place of business. A
19 7 license shall remain in effect until the next succeeding May
19 8 1, unless earlier suspended or revoked by the superintendent.
19 9 b. A license shall be renewed annually by filing with the
19 10 superintendent on or before April 1 an application for renewal
19 11 containing such information as the superintendent may require
19 12 to indicate any material change in the information contained
19 13 in the original application or succeeding renewal applications
19 14 and a renewal fee of one two hundred fifty dollars.
19 15 c. The superintendent may assess a late fee of ten dollars
19 16 per day for applications submitted and accepted for processing
19 17 after April 1.
19 18 Sec. 28. Section 533D.6, subsection 1, Code 2005, is
19 19 amended to read as follows:
19 20 1. The prior written approval of the superintendent is
19 21 required for the continued operation of a delayed deposit
19 22 services business whenever a change in control of a licensee
19 23 is proposed. The person requesting such approval shall pay to
19 24 the superintendent a fee of one hundred dollars. Control in
19 25 the case of a corporation means direct or indirect ownership,
19 26 or the right to control, ten percent or more of the voting
19 27 shares of the corporation, or the ability of a person to elect
19 28 a majority of the directors or otherwise effect a change in
19 29 policy. Control in the case of any other entity means any
19 30 change in the principals of the organization, whether active
19 31 or passive. The superintendent may require information deemed
19 32 necessary to determine whether a new application is required.
19 33 Costs incurred by the superintendent in investigating a change
19 34 of control request shall be paid by the person requesting such
19 35 approval.
20 1 Sec. 29. Section 533D.7, subsection 3, Code 2005, is
20 2 amended to read as follows:
20 3 3. A fee of one hundred fifty twenty=five dollars shall be
20 4 paid to the superintendent for each request made pursuant to
20 5 subsection 1 or 2 for a change of location. For each new
20 6 branch office established, a fee of two hundred fifty dollars
20 7 shall be paid to the superintendent.
20 8 Sec. 30. NEW SECTION. 533D.7A NOTICE OF NAME CHANGE.
20 9 A licensee shall notify the superintendent thirty days in
20 10 advance of the effective date of a change in the name of the
20 11 licensee. With the notice of change, the licensee shall
20 12 submit a fee of twenty=five dollars per license to the
20 13 superintendent.
20 14 Sec. 31. Section 533D.9, subsection 2, Code 2005, is
20 15 amended to read as follows:
20 16 2. A licensee shall give to the maker of the check, at the
20 17 time any delayed deposit service transaction is made, or if
20 18 there are two or more makers, to one of them, notice written
20 19 in clear, understandable language disclosing all of the
20 20 following:
20 21 a. The fee to be charged for the transaction.
20 22 b. The annual percentage rate on the first hundred dollars
20 23 on the face amount of the check which the fee represents, and
20 24 the annual percentage rate on subsequent one hundred dollar
20 25 increments which the fee represents, if different as computed
20 26 pursuant to the federal Truth in Lending Act.
20 27 c. The date on which the check will be deposited or
20 28 presented for negotiation.
20 29 d. Any penalty, not to exceed fifteen dollars, which the
20 30 licensee will charge if the check is not negotiable on the
20 31 date agreed upon. A penalty to be charged pursuant to this
20 32 section shall only be collected by the licensee once on a
20 33 check no matter how long the check remains unpaid. A penalty
20 34 to be charged pursuant to this section is a licensee's
20 35 exclusive remedy and if a licensee charges a penalty pursuant
21 1 to this section no other penalties under this chapter or any
21 2 other provision apply.
21 3 Sec. 32. Section 533D.11, Code 2005, is amended to read as
21 4 follows:
21 5 533D.11 EXAMINATION OF RECORDS BY SUPERINTENDENT.
21 6 1. The superintendent shall examine the books, accounts,
21 7 and records of each licensee annually. The costs of the
21 8 superintendent incurred in an examination shall be paid by the
21 9 licensee at least once a year and as needed to secure
21 10 information required pursuant to this chapter and to determine
21 11 whether any violations of this chapter have occurred. The
21 12 licensee shall pay the cost of the examination.
21 13 2. The superintendent may examine or investigate
21 14 complaints or reports concerning alleged violations of this
21 15 chapter or any rule adopted or order issued by the
21 16 superintendent. The superintendent may order the actual cost
21 17 of the examination or investigation to be paid by the person
21 18 who is the subject of the examination or investigation,
21 19 whether or not the alleged violator is licensed.
21 20 3. The superintendent shall determine the cost of the
21 21 examination or investigation based upon the actual cost of the
21 22 operation of the finance bureau of the banking division of the
21 23 department of commerce, including the proportionate share of
21 24 administrative expenses in the operation of the banking
21 25 division attributable to the finance bureau as determined by
21 26 the superintendent, incurred in the discharge of duties
21 27 imposed upon the superintendent by this chapter.
21 28 4. Failure to pay the examination or investigation fee
21 29 within thirty days of receipt of demand from the
21 30 superintendent shall subject the licensee to a late fee of up
21 31 to five percent of the amount of the examination or
21 32 investigation fee for each day the payment is delinquent.
21 33 5. Except as otherwise provided by this chapter, all
21 34 papers, documents, examination reports, and other writing
21 35 relating to the supervision of licensees are not public
22 1 records and are not subject to disclosure under chapter 22.
22 2 The superintendent may disclose information to representatives
22 3 of other state or federal regulatory authorities. The
22 4 superintendent may release summary complaint information so
22 5 long as the information does not specifically identify the
22 6 complainant. The superintendent may prepare and circulate
22 7 reports reflecting financial information and examination
22 8 results for all licensees on an aggregate basis, including
22 9 other information considered pertinent to the purpose of each
22 10 report for general statistical information. The
22 11 superintendent may prepare and circulate reports provided by
22 12 law. The superintendent may release the reports and
22 13 correspondence in the course of an enforcement proceeding or a
22 14 hearing held by the superintendent. The superintendent may
22 15 also provide this information to the attorney general for
22 16 purposes of enforcing this chapter or the consumer fraud Act,
22 17 section 714.16.
22 18 DIVISION IV
22 19 REGULATED LOANS
22 20 Sec. 33. Section 536.2, Code 2005, is amended to read as
22 21 follows:
22 22 536.2 APPLICATION == FEES.
22 23 1. Application An application for such a license shall be
22 24 in writing, under oath, and in the form prescribed by the
22 25 superintendent, and shall contain the all of the following:
22 26 a. The name and the address, (both of the residence and
22 27 place of business), of the applicant, and if. If the
22 28 applicant is not a copartnership or association natural
22 29 person, the application shall include the name and address of
22 30 every member thereof, and if a corporation, of each officer
22 31 and director thereof; also the, director, officer, manager,
22 32 and trustee of the applicant.
22 33 b. The county and municipality with street and number, if
22 34 any, of the place where the business of making loans under the
22 35 provisions of this chapter is to be conducted. and such
23 1 further
23 2 c. Other relevant information as the superintendent may
23 3 require.
23 4 2. Such The applicant at the time of making such the
23 5 application shall pay to the superintendent the sum of fifty
23 6 one hundred dollars if the liquid assets of the applicant are
23 7 not in excess of twenty thousand dollars, and the sum of one
23 8 hundred dollars if the liquid assets of the applicant are in
23 9 excess of twenty thousand dollars, as a fee for investigating
23 10 the application and the additional sum of one hundred twenty=
23 11 five dollars if the liquid assets of the applicant are not in
23 12 excess of twenty thousand dollars, and two hundred fifty
23 13 dollars if the liquid assets of the applicant are in excess of
23 14 twenty thousand dollars, as an annual license fee.
23 15 3. Every applicant shall also prove, in form satisfactory
23 16 to the superintendent, that the applicant has available for
23 17 the operation of such business at the place of business
23 18 specified in the application, liquid assets of at least five
23 19 thousand dollars, or that the applicant has at least the said
23 20 amount actually in use in the conduct of such business at such
23 21 place of business.
23 22 Sec. 34. Section 536.7, Code 2005, is amended to read as
23 23 follows:
23 24 536.7 SEPARATE LICENSE == CHANGE OF NAME OR PLACE OF
23 25 BUSINESS.
23 26 1. Not more than Only one place of business where such
23 27 loans are made shall be maintained under the same a license,
23 28 but. However, the superintendent may issue more than one
23 29 license to the same licensee upon compliance, for each such
23 30 additional license, with all the provisions of this chapter
23 31 governing an original issuance of a license.
23 32 Whenever a licensee shall change such place of business to
23 33 another location the licensee shall at once give written
23 34 notice thereof to the superintendent who shall attach to the
23 35 license in writing the superintendent's record of the change
24 1 and the date thereof, which shall be authority for the
24 2 operation of such business under such license at such new
24 3 place of business.
24 4 2. A licensee shall notify the superintendent and submit a
24 5 fee of twenty=five dollars per license to the superintendent
24 6 thirty days in advance of the effective date of any of the
24 7 following:
24 8 a. A change in the name of the licensee.
24 9 b. A change in the address of the location where the
24 10 business is conducted.
24 11 Sec. 35. NEW SECTION. 536.7A CHANGE IN CONTROL ==
24 12 APPROVAL.
24 13 The prior written approval of the superintendent is
24 14 required whenever a change in control of the licensee is
24 15 proposed. For purposes of this section, "control" means
24 16 control as defined in section 524.103. The superintendent may
24 17 require information deemed necessary to determine whether a
24 18 new application is required. When requesting approval, the
24 19 person shall submit a fee of one hundred dollars to the
24 20 superintendent.
24 21 Sec. 36. Section 536.8, Code 2005, is amended to read as
24 22 follows:
24 23 536.8 ANNUAL FEE == PAYMENT == NEW BOND.
24 24 Every licensee shall annually, on or before the fifteenth
24 25 day of each December 1, submit a renewal application on forms
24 26 prescribed by the superintendent and pay to the superintendent
24 27 the sum as provided in section 536.2 as an annual license fee
24 28 for the next succeeding calendar year and shall at the same
24 29 time file with the superintendent a new bond or renewal of the
24 30 old bond in the same amount and of the same character as
24 31 required by section 536.3. The superintendent may assess a
24 32 late fee of ten dollars per day, per license for renewal
24 33 applications received after December 1.
24 34 Sec. 37. Section 536.10, Code 2005, is amended to read as
24 35 follows:
25 1 536.10 EXAMINATION OF BUSINESS == FEE.
25 2 1. For the purpose of discovering violations of this
25 3 chapter or securing information lawfully required by the
25 4 superintendent hereunder, the superintendent may at any time,
25 5 either personally or by an individual or individuals duly
25 6 designated by the superintendent designee, investigate the
25 7 loans and business and examine the books, accounts, records,
25 8 and files used therein, of every licensee and of every person
25 9 engaged in the business described in section 536.1, whether
25 10 such person shall act or claim to act as principal or agent,
25 11 or under or without the authority of this chapter. For that
25 12 purpose the
25 13 a. The superintendent and the superintendent's duly
25 14 designated representatives designee shall have and be given
25 15 free access to the place of business, books, accounts, papers,
25 16 records, files, safes, and vaults of all such persons
25 17 examined.
25 18 b. The superintendent and all individuals duly designated
25 19 by the superintendent the designee shall have authority to
25 20 require the attendance of and to examine under oath all
25 21 individuals whomsoever whose testimony the superintendent may
25 22 require relative to such the loans or such the business.
25 23 2. The superintendent shall make an examination of the
25 24 affairs, place of business, and records of each licensed place
25 25 of business at least once each year.
25 26 3. A licensee subject to examination, supervision, and
25 27 regulation by the superintendent, shall pay to the
25 28 superintendent an examination fee, based on the actual cost of
25 29 the operation of the regulated loan bureau of the banking
25 30 division of the department of commerce, and the proportionate
25 31 share of administrative expenses in the operation of the
25 32 banking division attributable to the regulated loan bureau as
25 33 determined by the superintendent of banking. The fee shall
25 34 apply equally to all licenses and shall not be changed more
25 35 frequently than annually and when changed,. A fee change
26 1 shall be effective on January 1 of the year following the year
26 2 in which the change is approved.
26 3 4. Upon completion of each examination required or allowed
26 4 by this chapter, the examiner shall render a bill for such
26 5 fee, in triplicate, and shall deliver one copy of the bill for
26 6 the examination to the licensee and two copies to the
26 7 superintendent. Failure to pay the fee to the superintendent
26 8 within ten thirty days after the date of the close of each
26 9 such the examination shall subject the licensee to an
26 10 additional fee of five percent of the amount of such the fee
26 11 for each day the payment is delinquent.
26 12 5. Except as otherwise provided by this chapter, all
26 13 papers, documents, examination reports, and other writing
26 14 relating to the supervision of licensees are not public
26 15 records and are not subject to disclosure under chapter 22.
26 16 The superintendent may disclose information to representatives
26 17 of other state or federal regulatory authorities. The
26 18 superintendent may release summary complaint information so
26 19 long as the information does not specifically identify the
26 20 complainant. The superintendent may prepare and circulate
26 21 reports reflecting financial information and examination
26 22 results for all licensees on an aggregate basis, including
26 23 other information considered pertinent to the purpose of each
26 24 report for general statistical information. The
26 25 superintendent may prepare and circulate reports provided by
26 26 law. The superintendent may release the reports and
26 27 correspondence in the course of an enforcement proceeding or a
26 28 hearing held by the superintendent. The superintendent may
26 29 also provide this information to the attorney general for
26 30 purposes of enforcing this chapter or the consumer fraud Act,
26 31 section 714.16.
26 32 Sec. 38. Section 536.13, Code Supplement 2005, is amended
26 33 to read as follows:
26 34 536.13 BANKING COUNCIL SUPERINTENDENT == REPORT ==
26 35 CLASSIFICATION == RULES == PENALTY == CONSUMER CREDIT CODE.
27 1 1. The state banking council superintendent may
27 2 investigate the conditions and find the facts with reference
27 3 to the business of making regulated loans, as described in
27 4 section 536.1 and after making the investigation, report in
27 5 writing its findings to the next regular session of the
27 6 general assembly, and upon the basis of the facts:
27 7 a. Classify regulated loans by a rule according to a
27 8 system of differentiation which will reasonably distinguish
27 9 the classes of loans for the purposes of this chapter.
27 10 b. Determine and fix by a rule the maximum rate of
27 11 interest or charges upon each class of regulated loans which
27 12 will induce efficiently managed commercial capital to enter
27 13 the business in sufficient amounts to make available adequate
27 14 credit facilities to individuals. The maximum rate of
27 15 interest or charge shall be stated by the council
27 16 superintendent as an annual percentage rate calculated
27 17 according to the actuarial method and applied to the unpaid
27 18 balances of the amount financed.
27 19 2. Except as provided in subsection 7, the council
27 20 superintendent may redetermine and refix by rule, in
27 21 accordance with subsection 1, any maximum rate of interest or
27 22 charges previously fixed by it, but the changed maximum rates
27 23 shall not affect pre=existing loan contracts lawfully entered
27 24 into between a licensee and a borrower. All rules which the
27 25 council superintendent may make respecting rates of interest
27 26 or charges shall state the effective date of the rules, which
27 27 shall not be earlier than thirty days after notice to each
27 28 licensee by mailing the notice to each licensed place of
27 29 business.
27 30 3. Before fixing any classification of regulated loans or
27 31 any maximum rate of interest or charges, or changing a
27 32 classification or rate under authority of this section, the
27 33 council superintendent shall give reasonable notice of its the
27 34 superintendent's intention to consider doing so to all
27 35 licensees and a reasonable opportunity to be heard and to
28 1 introduce evidence with respect to the change or
28 2 classification.
28 3 4. Beginning July 4, 1965, and until such time as a
28 4 different rate is fixed by the council superintendent, the
28 5 maximum rate of interest or charges upon the class or classes
28 6 of regulated loans is three as follows:
28 7 a. Three percent per month on any part of the unpaid
28 8 principal balance of the loan not exceeding one hundred fifty
28 9 dollars and two.
28 10 b. Two percent per month on any part of the loan in excess
28 11 of one hundred fifty dollars, but not exceeding three hundred
28 12 dollars, and one.
28 13 c. One and one=half percent per month on any part of the
28 14 unpaid principal balance of the loan in excess of three
28 15 hundred dollars, but not exceeding seven hundred dollars, and
28 16 one.
28 17 d. One percent per month on any part of the unpaid
28 18 principal balance of the loan in excess of seven hundred
28 19 dollars.
28 20 5. A licensee under this chapter may lend any sum of money
28 21 not exceeding twenty=five thousand dollars in amount and may
28 22 charge, contract for, and receive on the loan interest or
28 23 charges at a rate not exceeding the maximum rate of interest
28 24 or charges determined and fixed by the council superintendent
28 25 under authority of this section or pursuant to subsection 7
28 26 for those amounts in excess of ten thousand dollars.
28 27 6. If any interest or charge on a loan regulated by this
28 28 chapter in excess of those permitted by this chapter is
28 29 charged, contracted for, or received, the contract of loan is
28 30 void as to interest and charges and the licensee has no right
28 31 to collect or receive any interest or charges. In addition,
28 32 the licensee shall forfeit the right to collect the lesser of
28 33 two thousand dollars of principal of the loan or the total
28 34 amount of the principal of the loan.
28 35 7. a. The council superintendent may establish the
29 1 maximum rate of interest or charges as permitted under this
29 2 chapter for those loans whose with an unpaid principal balance
29 3 is of ten thousand dollars or less. For those loans whose
29 4 with an unpaid principal balance is of over ten thousand
29 5 dollars, the maximum rate of interest or charges which a
29 6 licensee may charge shall be the greater of the rate permitted
29 7 by chapter 535 or the rate authorized for supervised financial
29 8 organizations by chapter 537.
29 9 b. The Iowa consumer credit code, chapter 537, applies to
29 10 a consumer loan in which the licensee participates or engages,
29 11 and a violation of the Iowa consumer credit code, chapter 537,
29 12 is a violation of this chapter.
29 13 c. Article 2, parts 3, 5, and 6 of chapter 537, and
29 14 article 3 of chapter 537, sections 537.3203, 537.3206,
29 15 537.3209, 537.3304, 537.3305, and 537.3306 apply to any credit
29 16 transaction, as defined in section 537.1301 in which a
29 17 licensee participates or engages, and any violation of those
29 18 parts or sections is a violation of this chapter. For the
29 19 purpose of applying the Iowa consumer credit code, chapter
29 20 537, to those credit transactions, "consumer loan" includes a
29 21 loan for a business purpose.
29 22 d. A provision of the Iowa consumer credit code, chapter
29 23 537, applicable to loans regulated by this chapter supersedes
29 24 a conflicting provision of this chapter.
29 25 Sec. 39. Section 536.16, subsection 1, Code 2005, is
29 26 amended to read as follows:
29 27 1. Section 536.2 to the extent it requires payment of an
29 28 annual license fee in excess of two hundred fifty dollars and
29 29 requires a person to prove the person has any dollar amount of
29 30 liquid assets or the use of any dollar amount in the conduct
29 31 of the person's business at the licensed place of business.
29 32 Sec. 40. Section 536.23, Code 2005, is amended to read as
29 33 follows:
29 34 536.23 JUDICIAL REVIEW.
29 35 Judicial review of the actions of the superintendent or the
30 1 state banking council may be sought in accordance with the
30 2 terms of the Iowa administrative procedure Act, chapter 17A.
30 3 Sec. 41. Section 536.28, subsection 3, Code Supplement
30 4 2005, is amended by striking the subsection.
30 5 Sec. 42. Section 536.25, Code 2005, is repealed.
30 6 DIVISION V
30 7 INDUSTRIAL LOANS
30 8 Sec. 43. Section 536A.7, Code 2005, is amended to read as
30 9 follows:
30 10 536A.7 APPLICATION FOR LICENSE.
30 11 1. Applications The application for licenses a license to
30 12 engage in the business of operating an industrial loan
30 13 companies company shall be in writing on such forms in the
30 14 form as may be prescribed by the superintendent. The
30 15 application shall give all of the following information:
30 16 a. The name of the corporation, the.
30 17 b. The location where the business is to be conducted,
30 18 including the street address of the place of business, the.
30 19 c. The names and addresses of the officers and directors
30 20 of the corporation and such other.
30 21 d. Other relevant information as the superintendent shall
30 22 require.
30 23 2. At the time of making such the application the
30 24 applicant shall pay to the superintendent the sum of fifty one
30 25 hundred dollars to cover the cost of the investigation of the
30 26 applicant. The applicant shall also pay to the superintendent
30 27 the sum of two hundred fifty dollars as an annual license fee
30 28 for the period ending December 31 next following the
30 29 application; provided that if the license is granted after
30 30 June 30 in any year, the license fee for the remainder of that
30 31 year shall be one hundred twenty=five dollars and any license
30 32 fee paid by the applicant in excess of that amount shall be
30 33 refunded by the superintendent.
30 34 Sec. 44. Section 536A.12, Code 2005, is amended to read as
30 35 follows:
31 1 536A.12 CONTINUING LICENSE == ANNUAL FEE == CHANGE OF
31 2 LOCATION == CHANGE OF CONTROL.
31 3 1. Each such license remains in full force and effect
31 4 until surrendered, revoked, or suspended, or until there is a
31 5 change of control on or after January 1, 1996.
31 6 2. A licensee, on or before the second day of January
31 7 December 1, shall pay to the superintendent the sum of two
31 8 hundred fifty dollars as an annual license fee for the
31 9 succeeding calendar year. The licensee shall submit the
31 10 annual license fee with a renewal application in the form
31 11 prescribed by the superintendent. The superintendent may
31 12 assess a late fee of ten dollars per day per license for
31 13 applications received after December 1.
31 14 3. When a licensee changes its name or place of business
31 15 from one location to another in the same city, it shall at
31 16 once give written notice to the superintendent who shall
31 17 attach to the license in writing the superintendent's record
31 18 of the change and the date of the change, which is authority
31 19 for the operation of the business under that license at the
31 20 new place of business the licensee shall notify the
31 21 superintendent thirty days in advance of the effective date of
31 22 the change. A licensee shall pay a fee of twenty=five dollars
31 23 per license to the superintendent with the notification of
31 24 change.
31 25 2. 4. a. A person who proposes to purchase or otherwise
31 26 acquire, directly or indirectly, any of the outstanding shares
31 27 of an industrial loan company which would result in a change
31 28 of control of the industrial loan company, shall first apply
31 29 in writing to the superintendent for a certificate of approval
31 30 for the proposed change of control.
31 31 b. At the time of making the application, the applicant
31 32 shall pay to the superintendent one hundred dollars to cover
31 33 the cost of the investigation of the applicant.
31 34 c. The superintendent shall grant the certificate if the
31 35 superintendent is satisfied that of both of the following:
32 1 (1) The person who proposes to obtain control of the
32 2 industrial loan company is qualified by character, experience,
32 3 and financial responsibility to control and operate the
32 4 industrial loan company in a sound and legal manner, and that
32 5 the.
32 6 (2) The interests of the thrift certificate holders,
32 7 creditors, and shareholders of the industrial loan company,
32 8 and of the public generally, shall will not be jeopardized by
32 9 the proposed change of control.
32 10 d. If a board member of the industrial loan company has
32 11 reason to believe any of the requirements of this subsection
32 12 have not been complied with met, the board member shall
32 13 promptly report the facts in writing such facts to the
32 14 superintendent.
32 15 e. If there is any doubt as to whether a change in the
32 16 ownership of the outstanding shares is sufficient to result in
32 17 control of the industrial loan company, or to effect a change
32 18 in the control of the industrial loan company, such the doubt
32 19 shall be resolved in favor of reporting the facts to the
32 20 superintendent.
32 21 3. 5. a. For purposes of this section, "control" means
32 22 control as defined in section 524.103. However, a change of
32 23 control does not occur when a majority shareholder of an
32 24 industrial loan company transfers the shareholder's shares of
32 25 the industrial loan company to a revocable trust, so long as
32 26 the transferor retains the power to revoke the trust and take
32 27 possession of such the shares.
32 28 b. Notwithstanding the provisions of paragraph "a", a
32 29 change of control is deemed to occur two years after the death
32 30 of the majority shareholder, whether the shareholder's shares
32 31 of the industrial loan company are held in a revocable trust
32 32 or otherwise.
32 33 Sec. 45. Section 536A.15, Code 2005, is amended to read as
32 34 follows:
32 35 536A.15 EXAMINATION OF LICENSEES.
33 1 1. The superintendent or the superintendent's duly
33 2 authorized representative designee shall, at least once each
33 3 year without previous notice, examine the books, accounts, and
33 4 records of each licensee engaged in the industrial loan
33 5 business as defined by this chapter. A licensee issuing
33 6 senior debt to the general public shall be audited at the
33 7 expense of the licensee by a certified public accountant
33 8 licensed to practice in the state of Iowa. A licensee not
33 9 issuing senior debt to the general public may provide an
33 10 audited statement of the licensee's parent corporation which
33 11 includes the Iowa licensee. After receiving such an audit or
33 12 audited statement, the superintendent may make further
33 13 examination of the licensee as the superintendent deems
33 14 necessary. A record of each examination shall be kept in the
33 15 superintendent's office. The examinations and reports, and
33 16 other information connected with them, shall be kept
33 17 confidential in the office of the superintendent and shall not
33 18 be subject to publication or disclosure to others except as in
33 19 this chapter provided.
33 20 2. Except as otherwise provided by this chapter, all
33 21 papers, documents, examination reports, and other writing
33 22 relating to the supervision of licensees are not public
33 23 records and are not subject to disclosure under chapter 22.
33 24 The superintendent may disclose information to representatives
33 25 of other state or federal regulatory authorities. The
33 26 superintendent may release summary complaint information so
33 27 long as the information does not specifically identify the
33 28 complainant. The superintendent may prepare and circulate
33 29 reports reflecting financial information and examination
33 30 results for all licensees on an aggregate basis, including
33 31 other information considered pertinent to the purpose of each
33 32 report for general statistical information. The
33 33 superintendent may prepare and circulate reports provided by
33 34 law. The superintendent may release the reports and
33 35 correspondence in the course of an enforcement proceeding or a
34 1 hearing held by the superintendent. The superintendent may
34 2 also provide this information to the attorney general for
34 3 purposes of enforcing this chapter or the consumer fraud Act,
34 4 section 714.16.
34 5 3. Any evidence of criminal acts committed by officers,
34 6 directors, or employees of an industrial loan company shall be
34 7 reported by the superintendent to the proper authorities.
34 8 4. The licensee shall be charged and shall pay the actual
34 9 costs of the examination as determined by the superintendent
34 10 based on the actual cost of the operation of the finance
34 11 bureau of the banking division of the department of commerce
34 12 including the proportionate share of administrative expenses
34 13 in the operation of the banking division attributable to the
34 14 finance bureau as determined by the superintendent incurred in
34 15 the discharge of the duties imposed upon the superintendent by
34 16 this chapter. Failure to pay the examination fee within
34 17 thirty days of receipt of demand from the superintendent shall
34 18 subject the licensee to a late fee of five percent of the
34 19 amount of the examination fee for each day the payment is
34 20 delinquent.
34 21 Sec. 46. Section 536A.25, subsections 1 and 3, Code 2005,
34 22 are amended to read as follows:
34 23 1. a. An industrial loan company licensed under this
34 24 chapter that sells debt instruments to the general public in
34 25 the form of thrift certificates, installment thrift
34 26 certificates, certificates of indebtedness, promissory notes,
34 27 or similar evidences of indebtedness shall not make a loan of
34 28 money or property to or guarantee the obligations of its
34 29 directors or officers; or loan to any borrower, other than a
34 30 subsidiary or affiliated corporation, more than twenty percent
34 31 of its total capital, surplus, and undivided profits.
34 32 b. A licensee shall not make a loan under any other name
34 33 or at any other place of business than that named in the
34 34 license.
34 35 3. Investments by an industrial loan company licensed
35 1 under this chapter that sells debt instruments to the general
35 2 public in the form of thrift certificates, installment thrift
35 3 certificates, certificates of indebtedness, promissory notes,
35 4 or similar evidences of indebtedness are subject to the
35 5 provisions of section 524.901 as applied to state banks.
35 6 Sec. 47. Section 536A.30, Code 2005, is amended to read as
35 7 follows:
35 8 536A.30 NONRESIDENT LICENSEES == FACE=TO=FACE
35 9 SOLICITATION.
35 10 Notwithstanding other provisions of this chapter to the
35 11 contrary, a person which that neither has an office physically
35 12 located in this state nor engages in face=to=face solicitation
35 13 in this state, if authorized by another state to make loans in
35 14 that state at a rate of finance charge in excess of the rate
35 15 provided in chapter 535, shall not be subject to the following
35 16 provisions of this chapter:
35 17 1. Section 536A.7, to the extent it requires payment of an
35 18 annual license fee in excess of two hundred fifty dollars.
35 19 2. Section 536A.8.
35 20 3. 2. Section 536A.10, subsections 2, 3, and 4.
35 21 4. Section 536A.12, to the extent it requires a licensee
35 22 to pay an annual license fee which, when combined with that
35 23 required in section 536A.7, is in excess of two hundred fifty
35 24 dollars.
35 25 5. 3. Section 536A.15, to the extent it requires the
35 26 superintendent to make an examination and audit of the books,
35 27 accounts and records of the licensee on a periodic basis.
35 28 EXPLANATION
35 29 This bill amends and updates five different Code chapters,
35 30 the provisions of which are administered by the superintendent
35 31 of banking, as follows:
35 32 Chapter 533A Debt management.
35 33 Chapter 535B Mortgage bankers and brokers.
35 34 Chapter 533D Delayed deposit services.
35 35 Chapter 536 Regulated loans.
36 1 Chapter 536A Industrial loans.
36 2 The bill makes similar amendments to the various chapter
36 3 provisions, including the following:
36 4 1. Licensure requirements. The bill deletes the writing
36 5 requirement for applications, addresses what persons are
36 6 required to apply for a license and pay an annual fee, and the
36 7 basis upon which the superintendent grants a license and
36 8 conducts investigations.
36 9 2. Renewal of license. The bill provides for an annual
36 10 renewal application, and adjusts the due dates for
36 11 applications. The bill also provides for annual fees and late
36 12 fees.
36 13 3. Change in control, name or address provisions; fee
36 14 required. Prior to a change in control, as defined, the
36 15 superintendent must approve the change and may require
36 16 information to determine whether a new application must be
36 17 filed. A $100 fee is required for approval. Likewise, the
36 18 licensee must notify the superintendent of a proposed change
36 19 in the name or address. A $25 fee is required for each
36 20 license affected by the change in name or address.
36 21 4. Cost of examination. The superintendent is required to
36 22 determine the cost of examination based upon the actual cost
36 23 of operation of the finance bureau of the banking division,
36 24 including the proportionate share of administrative expenses.
36 25 The licensee must pay a fee for late payment of the
36 26 examination fee.
36 27 5. Release of information. All documents relating to the
36 28 superintendent's supervision of licensees are confidential;
36 29 however, the superintendent is authorized to disclose
36 30 information to state or federal regulatory authorities and
36 31 also under circumstances that do not disclose the identity of
36 32 the licensee, i.e., aggregate reporting. The superintendent
36 33 may provide information to the attorney general as well for
36 34 purposes of enforcing the law.
36 35 In Code chapter 533A, the bill defines "allowable cost",
37 1 "donation", and "gratuitous debt=management service" and other
37 2 terms. A donation is an amount of money paid by the debtor to
37 3 the licensee as a gift outside the debt management service.
37 4 If a licensee requests a donation, the licensee must make it
37 5 clear to the debtor that the donation is not a condition or
37 6 requirement for debt management services. A donation is not a
37 7 fee. For the licensing, the bill increases the bond amount
37 8 from $10,000 to $25,000. And, the renewal license fee is
37 9 raised from $100 to $250.
37 10 Code chapter 535B currently applies to first mortgage
37 11 loans. The bill strikes the word "first" so that the chapter
37 12 provisions now apply to any loan secured by residential real
37 13 property. The bill requires the licensee to conduct business
37 14 under the name named in the license; however, the
37 15 administrator may issue more than one license upon compliance
37 16 with the chapter. The bill also adds an enforcement
37 17 provision. The administrator may impose disciplinary actions
37 18 against a licensee or an individual registrant that violates
37 19 an order of the administrator, including revocation or
37 20 suspension of the license or individual registration,
37 21 probation, or civil penalties. The bill also increases the
37 22 amount of the bond to be filed by a license applicant to
37 23 $50,000. Finally, the bill provides that the administrator
37 24 may participate in a multistate automated licensing system for
37 25 mortgage bankers, mortgage brokers, and individual
37 26 registrants. For purposes of such a multistate automated
37 27 licensing system, the administrator may create by rule or
37 28 order new requirements for applicants, such as fingerprinting
37 29 and criminal history checks and related fees.
37 30 In Code chapter 533D, the bill requires that the licensee
37 31 disclose to the maker of the check the annual percentage rate
37 32 as computed pursuant to the federal Truth In Lending Act.
37 33 In Code chapter 536, the bill strikes and replaces "state
37 34 banking council" with "superintendent" to reflect that certain
37 35 duties have been transferred to the superintendent. The bill
38 1 repeals Code section 536.25 that requires the licensee when
38 2 making a loan to obtain a written statement of the borrower's
38 3 installment indebtedness.
38 4 In Code chapter 536A the bill applies restrictions to an
38 5 industrial loan company that sells debt instruments to the
38 6 general public.
38 7 LSB 5324HZ 81
38 8 eg:rj/je/5