House Study Bill 156 - Introduced HOUSE FILE _____ BY (PROPOSED COMMITTEE ON COMMERCE BILL BY CHAIRPERSON SODERBERG) A BILL FOR An Act limiting the number of transactions entered into in 1 connection with a delayed deposit services business, 2 creating a statewide database, and providing for a fee. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 2646YC (6) 84 rn/nh

H.F. _____ Section 1. Section 533D.10, subsection 1, Code 2011, is 1 amended to read as follows: 2 1. A licensee shall not do any of the following: 3 a. Hold from any one maker more than two checks one check at 4 any one time. 5 b. Hold from any one maker a check or checks in an aggregate 6 a face amount of more than five hundred dollars at any one 7 time. 8 c. Hold or agree to hold a check for more than thirty-one 9 days. 10 d. Require the maker to receive payment by a method which 11 causes the maker to pay additional or further fees and charges 12 to the licensee or another person. 13 e. Repay, refinance, or otherwise consolidate a postdated 14 check delayed deposit services transaction with the proceeds of 15 another postdated check delayed deposit services transaction 16 made by the same licensee. 17 f. Receive any other charges or fees in addition to the fees 18 listed in section 533D.9 , subsections 1 and 2 . 19 g. Enter into another delayed deposit services transaction 20 with the maker of a check if the licensee presently has 21 a delayed deposit services transaction outstanding with 22 the maker, or if the maker has a delayed deposit services 23 transaction outstanding with another licensee in this state. 24 Sec. 2. NEW SECTION . 533D.10A Statewide database. 25 1. The superintendent shall, by contract with a vendor 26 or service provider or otherwise, develop and administer a 27 statewide system by which a licensee may determine whether a 28 maker of a check has an outstanding delayed deposit services 29 transaction, the number of transactions the maker has 30 outstanding, the date on which a transaction concluded, and 31 any other information necessary to comply with the provisions 32 of this chapter. The superintendent may by rule specify 33 the form and content of the system and shall ensure, at a 34 minimum, that the information entered into or stored by the 35 -1- LSB 2646YC (6) 84 rn/nh 1/ 3

H.F. _____ system is accessible to and usable by licensees, and secured 1 against public disclosure, tampering, theft, or unauthorized 2 acquisition or use. 3 2. Licensees shall be required to enter the information 4 specified in subsection 1 at the time a delayed deposit 5 services transaction is entered into, and update the 6 information on a weekly basis up to and including when the 7 transaction is concluded. The requirements of this section 8 shall continue to apply to a licensee who discontinues 9 operation of a delayed deposit services transaction business 10 until all transactions entered into while the business was in 11 operation have been concluded. 12 3. A vendor or service provider operating or administering 13 the system may charge licensees a fee for access to or use of 14 the system in an amount as determined by the superintendent by 15 rule, not to exceed one dollar per delayed deposit services 16 transaction. 17 4. a. A licensee, vendor, or service provider shall ensure 18 that the information contained in the system is not subject to 19 public inspection or disclosure, and such information shall not 20 be subject to discovery, subpoena, or other compulsory process 21 except in an action brought under this chapter. 22 b. The superintendent shall establish by rule requirements 23 for the retention, archiving, and deletion of information 24 entered into or stored by the system. 25 EXPLANATION 26 This bill modifies provisions applicable to delayed deposit 27 services businesses. 28 The bill changes the number of checks which a delayed deposit 29 services business licensee can hold from any one maker from two 30 checks to one check, and prohibits a licensee from entering 31 into another delayed deposit services transaction with the 32 maker of the check if the licensee presently has a delayed 33 deposit services transaction outstanding with the maker, 34 or if the maker has a delayed deposit services transaction 35 -2- LSB 2646YC (6) 84 rn/nh 2/ 3

H.F. _____ outstanding with another licensee in Iowa. 1 For purposes of compliance with the one transaction 2 limitation, the bill directs the superintendent of banking 3 to develop and implement a statewide system by which a 4 licensee may determine whether a maker of a check has an 5 outstanding delayed deposit services transaction, the number 6 of transactions the maker has outstanding, the date on which 7 a transaction concluded, and any other information necessary 8 to comply with the provisions of Code chapter 533D. The 9 bill states that the superintendent may by rule specify the 10 form and content of the system, which at a minimum shall 11 ensure that the information entered into or stored by the 12 system is accessible to and usable by licensees, and secured 13 against public disclosure, tampering, theft, or unauthorized 14 acquisition or use. The bill requires licensees to enter the 15 information at the time a delayed deposit services transaction 16 is entered into, and update the information on a weekly 17 basis up to and including when the transaction is concluded. 18 These requirements shall continue to apply to a licensee 19 who discontinues operation of a delayed deposit services 20 transaction business until all transactions entered into while 21 the business was in operation have been concluded. 22 The bill permits the superintendent to enter into a 23 contract with a vendor or service provider for development 24 and administration of the system, and authorizes that vendor 25 or service provider to charge licensees a fee for access to 26 or use of the system in an amount to be determined by the 27 superintendent by rule, subject to a $1 maximum. 28 The bill provides that information contained in the system 29 shall not be subject to public inspection or disclosure and is 30 not subject to discovery, subpoena, or other compulsory process 31 except in an action brought under Code chapter 533D. The bill 32 directs the superintendent to establish by rule requirements 33 for the retention, archiving, and deletion of information 34 entered into or stored by the system. 35 -3- LSB 2646YC (6) 84 rn/nh 3/ 3