H.F. 2111 Section 1. Section 535.2, Code 2014, is amended by adding 1 the following new subsection: 2 NEW SUBSECTION . 8. a. This section does not apply to 3 pawnbroking transactions made by a pawnbroker in a pawn store. 4 b. For the purposes of this subsection: 5 (1) “Pawnbroker” means any person authorized by law to 6 engage in the business of conducting pawnbroking transactions. 7 “Pawnbroker” does not include any bank regulated by this state, 8 the comptroller of the currency of the United States, the 9 federal deposit insurance corporation, the board of governors 10 of the federal reserve system, or any other federal or state 11 authority or their affiliates; any bank or savings association 12 whose deposits or accounts are eligible for insurance by the 13 federal deposit insurance corporation or any successor thereto 14 or an affiliate of such bank or savings association; any state 15 or federally chartered credit union; or any industrial loan or 16 thrift company or regulated lender subject to licensing and 17 regulation by the department of commerce. 18 (2) “Pawnbroking transaction” means any loan on the security 19 of pledged goods or any purchase of pledged goods on the 20 condition that the pledged goods are left with the pawnbroker 21 and may be redeemed or repurchased by the seller for a fixed 22 price within a fixed period of time. 23 (3) “Pawn store” means the location at which or premises on 24 which a pawnbroker regularly conducts pawnbroking transactions. 25 (4) “Person” means an individual, partnership, corporation, 26 limited liability company, joint venture, trust, association, 27 or any other legal entity, however organized. 28 (5) “Pledged goods” means tangible personal property 29 other than securities, bank drafts, or printed evidence 30 of indebtedness, that are purchased by, deposited with, 31 or otherwise actually delivered into the possession of a 32 pawnbroker in connection with a pawnbroking transaction. 33 EXPLANATION 34 The inclusion of this explanation does not constitute agreement with 35 -1- LSB 5200YH (3) 85 rn/nh 1/ 2

H.F. 2111 the explanation’s substance by the members of the general assembly. 1 This bill provides an exemption from usury provisions for 2 pawnbrokers. 3 Currently, Code section 535.2 specifies that the maximum 4 lawful rate of interest which may be provided for in any 5 written agreement for the payment of interest is limited to two 6 percentage points above the monthly average 10-year constant 7 maturity interest rate of United States government notes and 8 bonds as published by the board of governors of the federal 9 reserve system for the calendar month second preceding the 10 month during which the maximum rate based thereon will be 11 effective, rounded to the nearest one-fourth of one percent 12 per year. The bill exempts pawnbroking transactions made by a 13 pawnbroker in a pawn store from this limitation. 14 The bill provides several definitions relating to this 15 exemption. The bill defines a “pawnbroker” to mean any 16 person who engages in the business of conducting pawnbroking 17 transactions. The bill specifies a list of entities which 18 are not included in the definition of “pawnbroker”. The 19 bill defines “pawn store” to mean the location at which or 20 premises on which a pawnbroker regularly conducts pawnbroking 21 transactions. The bill defines a “pawnbroking transaction” 22 to mean any loan on the security of pledged goods or any 23 purchase of pledged goods on the condition that the pledged 24 goods are left with the pawnbroker and may be redeemed or 25 repurchased by the seller for a fixed price within a fixed 26 period of time. Finally, the bill defines “pledged goods” to 27 mean tangible personal property other than securities, bank 28 drafts, or printed evidence of indebtedness, that are purchased 29 by, deposited with, or otherwise actually delivered into the 30 possession of a pawnbroker in connection with a pawnbroking 31 transaction. 32 -2- LSB 5200YH (3) 85 rn/nh 2/ 2