House File 592 - Introduced HOUSE FILE BY LUKAN Passed House, Date Passed Senate, Date Vote: Ayes Nays Vote: Ayes Nays Approved A BILL FOR 1 An Act relating to consumer credit, by updating references in the 2 consumer credit code, changing specified dollar amounts and 3 fee levels, providing for a method of periodic dollar amount 4 increases, specifying a valuation increase method applicable 5 to certain provisions, and prohibiting rent=to=own car 6 transactions. 7 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 8 TLSB 2653HH 82 9 rn/je/5 PAG LIN 1 1 Section 1. NEW SECTION. 537.1204 CHANGE OF 1 2 JURISDICTIONAL AMOUNTS == CONSUMER PRICE INDEX. 1 3 1. For purposes of this section, unless the context 1 4 otherwise requires: 1 5 a. "Index" means the consumer price index for all urban 1 6 consumers, United States city average, as published in the 1 7 federal register by the federal department of labor, bureau of 1 8 labor statistics. 1 9 b. "Reference base index" means the index for December, 1 10 1976. 1 11 c. "Specified dollar amounts" means the dollar amounts 1 12 contained in section 537.1301, subsection 13, paragraph "a", 1 13 subparagraph (5); section 537.1301, subsection 14, paragraph 1 14 "a", subparagraph (4); section 537.1301, subsection 15, 1 15 paragraph "a", subparagraph (5); and section 537.3604, 1 16 subsection 8, paragraph "e". 1 17 2. Specified dollar amounts in this chapter referencing 1 18 this section shall be subject to periodic increase as provided 1 19 in this section. 1 20 3. The specified dollar amounts shall change on July 1 of 1 21 each even=numbered year if the percentage change, calculated 1 22 to the nearest whole percentage point, between the index at 1 23 the end of the preceding year and the reference base index is 1 24 ten percent or more, but the portion of the percentage change 1 25 in the index in excess of a multiple of ten percent shall be 1 26 disregarded and the dollar amount shall change only in 1 27 multiples of ten percent of the specified dollar amounts. 1 28 4. If the index is revised, the percentage change shall be 1 29 calculated on the basis of the revised index. If a revision 1 30 of the index changes the reference base index, a revised 1 31 reference base index shall be determined by multiplying the 1 32 reference base index then applicable by the rebasing factor 1 33 furnished by the bureau of labor statistics. If the index is 1 34 superseded, the index referred to in this section is the one 1 35 represented by the bureau of labor statistics as reflecting 2 1 most accurately changes in the purchasing power of the dollar 2 2 for consumers. 2 3 5. The administrator, as defined in section 537.6103, 2 4 shall cause to be published in the administrative bulletin: 2 5 a. On or before April 30 of each year in which dollar 2 6 amounts are to change, notice of the changes made pursuant to 2 7 subsection 3. 2 8 b. Promptly after a change occurs, notice of the changes 2 9 in the index required pursuant to subsection 4, including, if 2 10 applicable, the numerical equivalent of the reference base 2 11 index under a revised reference base index and the designation 2 12 or title of any superseding index. 2 13 Sec. 2. Section 537.1301, subsection 13, paragraph a, 2 14 subparagraph (5), Code 2007, is amended to read as follows: 2 15 (5) With respect to a sale of goods or services, the 2 16 amount financed does not exceedtwenty=fiveseventy=five 2 17 thousand dollars, which amount shall be subject to section 2 18 537.1204. 2 19 Sec. 3. Section 537.1301, subsection 14, paragraph a, 2 20 subparagraph (4), Code 2007, is amended to read as follows: 2 21 (4) The amount payable under the lease does not exceed 2 22twenty=fiveseventy=five thousand dollars, which amount shall 2 23 be subject to section 537.1204. 2 24 Sec. 4. Section 537.1301, subsection 15, paragraph a, 2 25 subparagraph (5), Code 2007, is amended to read as follows: 2 26 (5) The amount financed does not exceedtwenty=five2 27 seventy=five thousand dollars, which amount shall be subject 2 28 to section 537.1204, or the debt is secured by an interest in 2 29 land. 2 30 Sec. 5. Section 537.1302, Code 2007, is amended to read as 2 31 follows: 2 32 537.1302 DEFINITION == TRUTH IN LENDING ACT. 2 33 As used in this chapter, "Truth in Lending Act" means Title 2 34 1 of the Consumer Credit Protection Act, in subchapter 1 of 15 2 35 U.S.C. ch. 41, as amended to and including January 1,19983 1 2007, and includes regulations issued pursuant to that Act 3 2 prior to January 1,19982007. 3 3 Sec. 6. NEW SECTION. 537.3603A RENTAL PURCHASE 3 4 AGREEMENTS INVOLVING MOTOR VEHICLES PROHIBITED. 3 5 Rental purchase agreements involving motor vehicles as 3 6 defined in section 321.1, subsection 42, paragraph "a", are 3 7 prohibited under this part. 3 8 Sec. 7. Section 537.3604, subsection 8, paragraph e, Code 3 9 2007, is amended to read as follows: 3 10 e. The amount payable under the consumer rental purchase 3 11 agreement does not exceedtwenty=fiveseventy=five thousand 3 12 dollars, which amount shall be subject to section 537.1204. 3 13 Sec. 8. Section 537.6203, subsection 1, Code 2007, is 3 14 amended to read as follows: 3 15 1. A person required to file notification shall pay to the 3 16 administrator an annual fee oftentwo hundred dollars. The 3 17 fee shall be paid with the filing of the first notification 3 18 and on or before January 31 of each succeeding year. 3 19 EXPLANATION 3 20 This bill makes changes to several provisions included 3 21 within Code chapter 537, the consumer credit code. 3 22 The bill changes current dollar amounts of $25,000 to the 3 23 amount of $75,000 contained in specified Code provisions 3 24 defining a consumer sale, a consumer lease, a consumer loan, 3 25 and a consumer rental purchase agreement, for purposes of the 3 26 scope of the consumer credit code. The bill makes these 3 27 dollar amounts subject to periodic increases pursuant to a 3 28 formula specified in the bill tied to increases in the 3 29 consumer price index, as defined in the bill. 3 30 The bill updates references to the "truth in lending Act" 3 31 in Code section 537.1302 to include amendments to the Act as 3 32 of January 1, 2007, and provides that rental purchase 3 33 agreements involving motor vehicles are prohibited under the 3 34 provisions of the consumer rental purchase agreement act 3 35 contained in part 6 of the consumer credit code. 4 1 Additionally, the bill changes a notification fee contained in 4 2 Code section 537.6203 applicable to creditors and debt 4 3 collectors from the current amount of $10 to $200. 4 4 LSB 2653HH 82 4 5 rn:nh/je/5