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