Senate Study Bill 1269
SENATE FILE
BY (PROPOSED COMMITTEE ON
COMMERCE BILL BY
CHAIRPERSON WARNSTADT)
Passed Senate, Date Passed House, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act relating to the regulation of delayed deposit service
2 businesses.
3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
4 TLSB 2326XC 83
5 rn/nh/24
PAG LIN
1 1 Section 1. Section 533D.9, subsection 1, Code 2009, is
1 2 amended to read as follows:
1 3 1. A licensee shall not charge a fee in excess of fifteen
1 4 seven dollars and fifty cents on the first one hundred dollars
1 5 on the face amount of a check or more than ten five dollars on
1 6 subsequent one hundred dollar increments on the face amount of
1 7 the check for services provided by the licensee, or pro rata
1 8 for any portion of one hundred dollars face value.
1 9 Sec. 2. Section 533D.9, subsection 2, Code 2009, is
1 10 amended by adding the following new paragraph:
1 11 NEW PARAGRAPH. e. That the licensee cannot initiate
1 12 either civil court proceedings or arbitration to collect an
1 13 unpaid check unless the licensee has provided the maker of the
1 14 check the opportunity to repay the obligation, without any
1 15 additional charges other than the fee and penalty as provided
1 16 in this section, in biweekly payments of not more than ten
1 17 percent of the face of the check until the debt is paid in
1 18 full. Additionally, that during this repayment period the
1 19 licensee may not transfer or sell the debt owing on the unpaid
1 20 check and may not report on the account or borrower to any
1 21 credit reporting agency, that the maker's failure to make any
1 22 biweekly payment shall place the loan in default, and that the
1 23 licensee may, after proper notice, exercise rights against the
1 24 borrower for collection of the unpaid balance.
1 25 Sec. 3. Section 533D.10, subsection 1, Code 2009, is
1 26 amended by adding the following new paragraph:
1 27 NEW PARAGRAPH. g. Initiate either civil court proceedings
1 28 or arbitration to collect an unpaid check except as provided
1 29 in section 533D.9 in the event of loan default after failure
1 30 to make biweekly payments, or transfer or sell debt or report
1 31 to a credit reporting agency during the biweekly payment
1 32 period as specified in section 533D.9.
1 33 EXPLANATION
1 34 This bill relates to specified aspects of the regulation of
1 35 delayed deposit services businesses.
2 1 The bill lowers the amount of fees which may be charged by
2 2 a delayed deposit service business licensee from the current
2 3 level of $15 on the first $100 loaned and $10 on subsequent
2 4 $100 increments loaned to $7.50 and $5, respectively.
2 5 The bill also provides that a licensee must disclose to the
2 6 maker of a check that the licensee cannot initiate civil court
2 7 proceedings or arbitration to collect an unpaid check unless
2 8 they have provided the maker the opportunity to repay the
2 9 obligation in biweekly payments of not more than 10 percent of
2 10 the face of the check until the debt is paid in full. The
2 11 bill adds that during the repayment period the licensee cannot
2 12 transfer or sell the debt nor report to any credit reporting
2 13 agency, and that the maker's failure to make the biweekly
2 14 payment places the loan in default at which time, after
2 15 notice, the licensee may proceed with collection efforts. The
2 16 bill additionally makes the failure to conform with these
2 17 provisions a prohibited act on the part of the licensee, which
2 18 could subject the licensee to disciplinary action as specified
2 19 in Code section 533D.12.
2 20 LSB 2326XC 83
2 21 rn/nh/24