Senate File 335 - Introduced SENATE FILE 335 BY HOGG A BILL FOR An Act relating to the consumer credit code and actions by a 1 creditor against a consumer arising from a consumer credit 2 transaction. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 1595SS (3) 84 rh/nh

S.F. 335 Section 1. Section 537.5114, Code 2011, is amended to read 1 as follows: 2 537.5114 Complaint —— proof —— default judgment . 3 1. In an action brought by a creditor against a consumer 4 arising from a consumer credit transaction, the complaint shall 5 allege the facts of the consumer’s default, the amount to which 6 the creditor is entitled, and an indication of how that amount 7 was determined. 8 2. No Except as provided in subsection 3, a default judgment 9 shall not be entered in the action in favor of the creditor 10 unless the complaint is verified by the creditor, or unless 11 sworn testimony, by affidavit or otherwise, is adduced showing 12 that the creditor is entitled to the relief demanded. 13 3. a. In an action based on an express or implied promise 14 to pay a definite sum and claiming only liquidated damages 15 which may include interest and reasonable attorney fees, if 16 the consumer has not filed an answer by the answer date, the 17 court shall render judgment in favor of the creditor without 18 requiring the presence of the creditor or the creditor’s 19 representative before the court, provided the creditor has 20 complied with the provisions of this section. 21 b. In order for the court to render any judgment pursuant to 22 this section at the time set for entering a judgment whether 23 by default, stipulation, or other method, an affidavit of 24 debt signed by the creditor or the creditor’s representative 25 who is not the creditor’s attorney, as well as any supporting 26 documentation, must have been filed by the creditor. 27 (1) If the instrument on which the contract is based is 28 a negotiable instrument or assigned contract, the affidavit 29 shall state that the instrument or contract is now owned by 30 the creditor and a copy of the executed instrument shall be 31 attached to the affidavit. If the creditor is not the original 32 party with whom the instrument or contract was made, the 33 creditor shall do one of the following: 34 (a) Attach all bills of sale back to the original creditor 35 -1- LSB 1595SS (3) 84 rh/nh 1/ 4

S.F. 335 and swear to its purchase of the debt from the last owner in its 1 affidavit of debt while also referencing the attached chain of 2 title in the affidavit of debt. 3 (b) In the affidavit of debt, recite the names of all prior 4 owners of the debt with the date of each prior sale, and also 5 include the most recent bill of sale from the creditor’s seller 6 and swear to its purchase of the debt from its seller in the 7 affidavit of debt. 8 (2) The affidavit shall state the basis upon which the 9 creditor claims the statute of limitations has not expired. 10 (3) If the creditor has claimed any lawful fees or charges 11 based on a provision of the contract, including reasonable 12 attorney fees, the creditor shall attach to the affidavit of 13 debt a copy of a portion of the contract containing the terms 14 of the contract providing for such fees or charges and the 15 amount claimed. 16 (4) If a claim for attorney fees is made, the creditor shall 17 include in the affidavit the reasons for the specific amount 18 requested. Any claim for reasonable attorney fees shall be 19 referred to the court for approval prior to its inclusion in 20 any default judgment. 21 (5) If the basis for the claim is a credit card account, 22 the creditor shall include the final statement which supports 23 the balance demanded and if the statement does not support 24 the balance demanded, the creditor shall provide a statement 25 explaining in sufficient detail why the statement is not 26 available or why the balance differs. 27 c. This subsection is intended to supersede all previous 28 case law on the requirements for a default judgment to 29 the extent of any conflict between the provisions of this 30 subsection and the provisions of any other law. 31 EXPLANATION 32 This bill relates to the consumer credit code and actions by 33 a creditor against a consumer arising from a consumer credit 34 transaction. 35 -2- LSB 1595SS (3) 84 rh/nh 2/ 4

S.F. 335 The bill provides that in an action based on an express 1 or implied promise to pay a definite sum and claiming only 2 liquidated damages which may include interest and reasonable 3 attorney fees, if a consumer has not filed an answer by the 4 answer date, the court shall render judgment in favor of the 5 creditor without requiring the presence of the creditor or 6 the creditor’s representative before the court, provided the 7 creditor has complied with the provisions of the bill which 8 require the creditor to provide a signed affidavit of debt as 9 well as any supporting documentation. 10 The bill provides that if the instrument on which the 11 contract is based is a negotiable instrument or assigned 12 contract, the affidavit shall state that the instrument 13 or contract is now owned by the creditor and a copy of the 14 executed instrument shall be attached to the affidavit. If the 15 creditor is not the original party with whom the instrument or 16 contract was made, the creditor shall either attach all bills 17 of sale back to the original creditor and swear to its purchase 18 of the debt from the last owner in its affidavit of debt while 19 also referencing the attached chain of title in the affidavit 20 of debt or, in the affidavit of debt, recite the names of all 21 prior owners of the debt with the date of each prior sale, and 22 also include the most recent bill of sale from the creditor’s 23 seller and swear to its purchase of the debt from its seller in 24 the affidavit of debt. 25 The affidavit shall also state the basis upon which the 26 creditor claims the statute of limitations has not expired, 27 and include a copy of a portion of the contract containing the 28 terms of the contract providing for attorney fees or charges 29 and the amount claimed as well as the reasons for the specific 30 amount requested, if applicable. 31 The bill provides if the basis for the claim is a credit card 32 account, the creditor shall also include the final statement 33 which supports the balance demanded and if the statement does 34 not support the balance demanded, the creditor shall provide a 35 -3- LSB 1595SS (3) 84 rh/nh 3/ 4

S.F. 335 statement explaining in sufficient detail why the statement is 1 not available or why the balance differs. 2 The bill provides that the bill is intended to supersede all 3 previous case law on the requirements for a default judgment to 4 the extent of any conflict between the provisions of the bill 5 and the provisions of any other law. 6 -4- LSB 1595SS (3) 84 rh/nh 4/ 4