House File 288 - Introduced
HOUSE FILE
BY SMITH
Passed House, Date Passed Senate, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act modifying provisions applicable to the regulation of
2 delayed deposit services businesses and providing a penalty.
3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
4 TLSB 1931HH 83
5 rn/sc/5
PAG LIN
1 1 Section 1. Section 533D.9, subsections 1 and 2, Code 2009,
1 2 are amended to read as follows:
1 3 1. A licensee shall not charge a fee in excess of fifteen
1 4 dollars on the first one hundred dollars on the face amount of
1 5 a check or more than ten dollars on subsequent one hundred
1 6 dollar increments on the face amount of the check for services
1 7 provided by the licensee, or pro rata for any portion of one
1 8 hundred dollars face value any interest, penalties, fees, or
1 9 other charges which when combined exceed an annual percentage
1 10 rate of thirty=six percent of the amount loaned, as computed
1 11 pursuant to the federal Truth in Lending Act.
1 12 2. A licensee shall give to the maker of the check, at the
1 13 time any delayed deposit service transaction is made, or if
1 14 there are two or more makers, to one of them, notice written
1 15 in clear, understandable language disclosing all of the
1 16 following:
1 17 a. The fee to be charged for the transaction.
1 18 b. The annual percentage rate of the sum of any interest,
1 19 penalties, fees, or other charges, as computed pursuant to the
1 20 federal Truth in Lending Act.
1 21 c. The date on which the check will be deposited or
1 22 presented for negotiation.
1 23 d. Any penalty, not to exceed fifteen dollars, which the
1 24 licensee will charge if the check is not negotiable on the
1 25 date agreed upon. A penalty to be charged pursuant to this
1 26 section shall only be collected by the licensee once on a
1 27 check no matter how long the check remains unpaid. A penalty
1 28 to be charged pursuant to this section is a licensee's
1 29 exclusive remedy and if a licensee charges a penalty pursuant
1 30 to this section no other penalties under this chapter or any
1 31 other provision apply.
1 32 Sec. 2. Section 533D.10, subsection 1, Code 2009, is
1 33 amended to read as follows:
1 34 1. A licensee shall not do any of the following:
1 35 a. Hold from any one maker more than two checks at any one
2 1 time.
2 2 b. Hold from any one maker a check or checks in an
2 3 aggregate face amount of more than five hundred dollars at any
2 4 one time.
2 5 c. Hold or agree to hold a check for more than thirty=one
2 6 days.
2 7 d. c. Require the maker to receive payment by a method
2 8 which causes the maker to pay additional or further fees and
2 9 charges to the licensee or another person.
2 10 e. d. Repay, refinance, or otherwise consolidate a
2 11 postdated check transaction with the proceeds of another
2 12 postdated check transaction made by the same licensee.
2 13 f. e. Receive any other charges or fees in addition to
2 14 the fees listed in section 533D.9, subsections 1 and 2
2 15 subsection 1.
2 16 Sec. 3. Section 533D.15, Code 2009, is amended to read as
2 17 follows:
2 18 533D.15 CRIMINAL VIOLATION == OPERATION OF BUSINESS
2 19 WITHOUT LICENSE == INJUNCTION.
2 20 A person required to be licensed under this chapter who
2 21 operates a delayed deposit services business in this state
2 22 without first obtaining a license under this chapter or while
2 23 such license is suspended or revoked by the superintendent, or
2 24 who otherwise violates any provision of this chapter, is
2 25 guilty of a serious misdemeanor. In addition to the criminal
2 26 penalty provided for in this section, the superintendent may
2 27 also commence an action to enjoin the operation of the
2 28 business.
2 29 EXPLANATION
2 30 This bill modifies provisions applicable to the regulation
2 31 of delayed deposit services businesses licensed pursuant to
2 32 Code chapter 533D.
2 33 The bill provides that the combined interest, penalties,
2 34 fees, or other charges imposed by a licensee upon a maker of a
2 35 check shall not exceed an annual percentage rate of 36 percent
3 1 as computed pursuant to the federal Truth in Lending Act. The
3 2 bill modifies a provision requiring disclosure of the annual
3 3 percentage rate to specify that it is based on the sum of
3 4 interest, penalties, fees, or other charges. The bill deletes
3 5 current restrictions on the amount of fees which may be
3 6 charged per $100 loan increment by a licensee and deletes a
3 7 provision establishing a penalty not to exceed $15 which may
3 8 be imposed upon the maker of a check if the check proves not
3 9 negotiable, to correspond with the inclusion of any interest,
3 10 fees, charges, and penalties within the 36 percent annual
3 11 percentage rate maximum.
3 12 The bill additionally deletes a current provision that
3 13 prohibits a licensee from holding or agreeing to hold a check
3 14 for longer than 31 days. The bill also modifies a restriction
3 15 that prohibits the repayment, refinancing, or consolidation of
3 16 a postdated check transaction with the proceeds of another
3 17 postdated check transaction made by the same licensee to
3 18 provide that repayment, refinancing, or consolidation of a
3 19 postdated check transaction with the proceeds of another
3 20 postdated check transaction made by any licensee would
3 21 constitute a prohibited act.
3 22 The bill expands the current criminal penalty of a serious
3 23 misdemeanor for operation of a delayed deposit services
3 24 business without a license to apply to any violation of Code
3 25 chapter 533D. A serious misdemeanor is punishable by
3 26 confinement for no more than one year and a fine of at least
3 27 $315 but not more than $1,875. The bill also expands
3 28 injunction from operation of a business to be applicable to
3 29 any violation of the Code chapter.
3 30 LSB 1931HH 83
3 31 rn/sc/5