HF 2141 (LSB 5529YH (3) 83)

HOUSE FILE 2141

BY  PETTENGILL

A BILL FOR

An Act requiring state credit unions to make available loans subject to a gradually reduced rate of interest under specified circumstances.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 533.316, Code 2009, is amended by adding the following new subsection:
   NEW SUBSECTION.  2A.  A state credit union which charges a rate of interest on a consumer loan, as defined in section 537.1301, subsection 15, that is calculated at different interest rates depending on a member’s credit history or credit rating shall make available to members paying proportionately higher interest rates based on their credit history or credit rating the option of reducing the rate of interest applicable to the loan at designated intervals and in specified amounts if all scheduled payments are being made when due under the terms of the loan.
EXPLANATION
   This bill provides that if a state credit union charges an interest rate on consumer loans which varies depending on a credit union member’s credit history or credit rating, the state credit union shall make available to members paying proportionately higher interest rates based on that history or rating the option of reducing the interest rate at designated intervals and in specified amounts if the member is making all scheduled payments when due. The bill references the definition of “consumer loan” contained in Code section 537.1301, subsection 15, which refers to a debt incurred primarily for a personal, family, or household purpose where the amount financed does not exceed $25,000.