House File 346 - Introduced
HOUSE FILE
BY BERRY
(COMPANION TO 2157SS BY BOLKCOM)
Passed House, Date Passed Senate, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act relating to delayed deposit services including fees,
2 notices, transaction amounts, and reporting requirements.
3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
4 TLSB 2157HH 81
5 kk/gg/14
PAG LIN
1 1 Section 1. Section 533D.9, Code 2005, is amended to read
1 2 as follows:
1 3 533D.9 FEE RESTRICTION == REQUIRED DISCLOSURE.
1 4 1. a. A licensee shall not charge a transaction fee in
1 5 excess of fifteen five dollars on the first per one hundred
1 6 dollars on the face amount of a check or more than ten dollars
1 7 on subsequent one hundred dollar increments on the face amount
1 8 of the check of the amount financed for services provided by
1 9 the licensee, or pro rata for any portion of one hundred
1 10 dollars face value.
1 11 b. If the check is not negotiable on the date agreed upon,
1 12 a licensee may charge a default fee, not to exceed fifteen
1 13 dollars. Only one such fee may be collected with respect to a
1 14 check even if the check has been redeposited and returned more
1 15 than once, regardless of how long the check remains unpaid. A
1 16 fee charged pursuant to this subsection is a licensee's
1 17 exclusive remedy and charge for late payment or nonpayment.
1 18 2. A licensee shall give to the maker of the check, at the
1 19 time any delayed deposit service transaction is made, or if
1 20 there are two or more makers, to one of them, notice written
1 21 in clear, understandable language disclosing all of the
1 22 following:
1 23 a. The transaction fee to be charged for the transaction.
1 24 b. The annual percentage rate on the first hundred dollars
1 25 on the face amount of the check which the fee represents, and
1 26 the annual percentage rate on subsequent one hundred dollar
1 27 increments which the fee represents, if different transaction.
1 28 c. The date on which the check will be deposited or
1 29 presented for negotiation.
1 30 d. Any penalty The default fee, not to exceed fifteen
1 31 dollars, which that the licensee will charge if the check is
1 32 not negotiable on the date agreed upon. A penalty The notice
1 33 shall state that the default fee to be charged pursuant to
1 34 this section shall only be collected by the licensee once on a
1 35 check no matter regardless of how long the check remains
2 1 unpaid. A penalty; and that a default fee to be charged
2 2 pursuant to this section is a licensee's exclusive remedy and
2 3 if a licensee charges a penalty default fee pursuant to this
2 4 section no other penalties under this chapter or any other
2 5 provision apply.
2 6 3. In addition to the notice required by subsection 2,
2 7 every licensee shall conspicuously display a schedule of all
2 8 fees, charges, and penalties for all services provided by the
2 9 licensee authorized by this section. The notice shall be
2 10 posted at the office and every branch office of the licensee.
2 11 The licensee shall provide a written schedule of the fees,
2 12 charges, interest rates, and penalties upon request.
2 13 4. The licensee shall make all notices and disclosures
2 14 required under this section available in the languages spoken
2 15 by consumers who frequent that location.
2 16 Sec. 2. Section 533D.10, subsection 1, Code 2005, is
2 17 amended to read as follows:
2 18 1. A licensee shall not do any of the following:
2 19 a. Hold from any one maker more than two checks one check
2 20 at any one time.
2 21 b. Hold from any one maker a check or checks in an
2 22 aggregate face amount of more than five three hundred dollars
2 23 at any one time.
2 24 c. Hold or agree to hold a check for more than thirty=one
2 25 days.
2 26 d. Require the maker to receive payment by a method which
2 27 that causes the maker to pay additional or further fees and
2 28 charges to the licensee or another person, or otherwise charge
2 29 to cash a check representing the proceeds of the transaction.
2 30 e. Repay, refinance, or otherwise consolidate a postdated
2 31 check transaction with the proceeds of another postdated check
2 32 transaction made by the same licensee. Upon payment of the
2 33 maker's check by the drawee bank, the return of a check to a
2 34 maker who redeems it for consideration, or any other method of
2 35 termination of the delayed deposit transaction, the licensee
3 1 shall not enter into another delayed deposit transaction with
3 2 the same maker for at least two days thereafter provided,
3 3 however, that a licensee may extend the delay of the deposit
3 4 of the check without charge.
3 5 f. Receive any other charges or fees in addition to the
3 6 fees listed in section 533D.9, subsections 1 and 2.
3 7 Sec. 3. NEW SECTION. 533D.17 REPORTING.
3 8 1. The superintendent shall annually collect, and
3 9 licensees shall provide, information regarding at least all of
3 10 the following:
3 11 a. The total number of delayed deposit transactions made
3 12 at each location.
3 13 b. The total amount of money subject to delayed deposit
3 14 transactions at each location.
3 15 c. The total amount of bad debt incurred at each location.
3 16 d. Affiliate relationships, if any, of each licensee with
3 17 any financial institutions.
3 18 e. The age, ethnicity, and annual income of each consumer
3 19 of the licensee's delayed deposit services business.
3 20 2. The superintendent may adopt rules pursuant to chapter
3 21 17A related to these reporting requirements.
3 22 EXPLANATION
3 23 This bill makes amendments to Code chapter 533D, delayed
3 24 deposit services, more commonly known as payday loans.
3 25 The bill amends Code section 533.9 to provide that a
3 26 licensee may charge a transaction fee of $5 per $100 of the
3 27 amount financed, rather than the current fee maximum of $15 on
3 28 the first $100 financed, and $10 for subsequent $100
3 29 increments.
3 30 The bill also amends Code section 533.9 to require
3 31 licensees to make written information regarding charges, fees,
3 32 penalties, and interest rates available upon request, and to
3 33 provide that notices and disclosures be provided in languages
3 34 spoken by the consumers who frequent that location.
3 35 The bill amends Code section 533.10 to provide that the
4 1 licensee shall not enter into more than one transaction with a
4 2 maker at one time, and that the licensee must wait two days
4 3 after termination of a transaction through cashing the maker's
4 4 check before entering into another delayed deposit transaction
4 5 with the same maker. The bill also changes the maximum amount
4 6 of the transaction to $300, rather than $500.
4 7 The bill creates new Code section 533D.17, which requires
4 8 licensees to report, and the superintendent to collect,
4 9 information regarding delayed deposit transactions made,
4 10 affiliate relationships with other financial institutions, and
4 11 information regarding the age, ethnicity, and annual income of
4 12 each consumer of the licensee's delayed deposit services.
4 13 LSB 2157HH 81
4 14 kk:nh/gg/14