House File 500 - Introduced



                                       HOUSE FILE       
                                       BY  COMMITTEE ON COMMERCE

                                       (SUCCESSOR TO HSB 77)


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

                                      A BILL FOR

  1 An Act relating to the authority of creditors and credit unions
  2    in consumer credit or credit union transactions.
  3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
  4 TLSB 1693HV 82
  5 rn/gg/14

PAG LIN



  1  1    Section 1.  Section 533.4, Code 2007, is amended by adding
  1  2 the following new subsections:
  1  3    NEW SUBSECTION.  29.  Sell, to persons in the field of
  1  4 membership, negotiable checks, including traveler's checks;
  1  5 money orders; and other similar money transfer instruments
  1  6 including international and domestic electronic fund
  1  7 transfers.
  1  8    NEW SUBSECTION.  30.  Cash checks and money orders, and
  1  9 receive international and domestic electronic fund transfers,
  1 10 for persons in the field of membership.
  1 11    Sec. 2.  Section 537.2501, subsection 1, Code 2007, is
  1 12 amended by adding the following new paragraph:
  1 13    NEW PARAGRAPH.  j.  For a consumer loan where the amount
  1 14 financed does not exceed three thousand dollars and the term
  1 15 of the loan does not exceed twelve months, a bank, savings
  1 16 bank, saving and loan association, or credit union
  1 17 incorporated pursuant to state or federal law may charge an
  1 18 additional application fee not to exceed the lesser of ten
  1 19 percent of the amount financed or thirty dollars.  If the loan
  1 20 is not approved, the application fee shall not exceed the
  1 21 lesser of ten percent of the amount applied for by the
  1 22 applicant or thirty dollars.  The fee permitted pursuant to
  1 23 this paragraph shall not be charged in connection with a loan
  1 24 used for the purchase of a motor vehicle, or for a loan where
  1 25 the borrower's dwelling is used as security.
  1 26                           EXPLANATION
  1 27    This bill provides that a bank, savings bank, savings and
  1 28 loan association, or credit union incorporated pursuant to
  1 29 state or federal law can charge an additional application fee
  1 30 not to exceed the lesser of 10 percent of the amount financed
  1 31 or $30 in the event of an approved application.  In the event
  1 32 an application is denied, the bill provides that an additional
  1 33 application fee not to exceed the lesser of 10 percent of the
  1 34 amount applied for by the applicant, or $30, may be charged.
  1 35 The additional application fees are not applicable for loans
  2  1 for the purchase of a motor vehicle or loans where the
  2  2 borrower's dwelling is used as security.
  2  3    The bill also expands the list of powers specified in Code
  2  4 section 533.4 applicable to credit unions.  The bill provides
  2  5 that a credit union may sell to persons in the field of
  2  6 membership negotiable checks, including traveler's checks;
  2  7 money orders; and other similar money transfer instruments
  2  8 including international and domestic electronic fund
  2  9 transfers.  A credit union is also authorized to cash checks
  2 10 and money orders, and to receive international and domestic
  2 11 electronic fund transfers, for persons in the field of
  2 12 membership.
  2 13 LSB 1693HV 82
  2 14 rn:rj/gg/14