Senate Study Bill 3175





                                  SENATE FILE       
                                  BY  (PROPOSED COMMITTEE ON
                                       COMMERCE BILL BY
                                       CO=CHAIRPERSONS BEHN AND
                                       WARNSTADT)


    Passed Senate, Date               Passed House,  Date             
    Vote:  Ayes        Nays           Vote:  Ayes        Nays         
                 Approved                            

                                      A BILL FOR

  1 An Act relating to debt cancellation coverage offered by banks
  2    and credit unions.
  3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
  4 TLSB 6413XC 81
  5 eg/cf/24

PAG LIN



  1  1    Section 1.  Section 524.913, Code 2005, is amended by
  1  2 adding the following new subsection:
  1  3    NEW SUBSECTION.  3.  A state bank may offer voluntary debt
  1  4 cancellation coverage, whether insurance or debt waiver, to
  1  5 consumers.  The amount charged for the coverage shall be
  1  6 included in the amount financed, as defined in section
  1  7 537.1301.  However, notwithstanding subsection 1, the charge
  1  8 for such coverage may be excluded from the finance charge, as
  1  9 defined in section 537.1301.
  1 10    Sec. 2.  Section 533.16, subsection 9, Code 2005, is
  1 11 amended to read as follows:
  1 12    9.  a.  The provisions of the Iowa consumer credit code,
  1 13 chapter 537, shall apply to consumer loans made by a credit
  1 14 union, and a provision of that code shall supersede any
  1 15 conflicting provision of this chapter with respect to a
  1 16 consumer loan.
  1 17    b.  A credit union may offer voluntary debt cancellation
  1 18 coverage, whether insurance or debt waiver, to consumers.  The
  1 19 amount charged for the coverage shall be included in the
  1 20 amount financed, as defined in section 537.1301.  However,
  1 21 notwithstanding paragraph "a", the charge for such coverage
  1 22 may be excluded from the finance charge, as defined in section
  1 23 537.1301.
  1 24                           EXPLANATION
  1 25    This bill allows a state bank or credit union to offer
  1 26 voluntary debt cancellation coverage, whether insurance or
  1 27 debt waiver, to consumers.  The amount charged for the
  1 28 coverage is required to be included in the amount financed, as
  1 29 defined in Code section 537.1301.  However, contrary to the
  1 30 Iowa consumer credit code, the charge for coverage may be
  1 31 excluded from the finance charge, as defined in Code section
  1 32 537.1301.
  1 33 LSB 6413XC 81
  1 34 eg:rj/cf/24