H.F. _____ Section 1. Section 535.2, subsection 2, paragraph a, 1 subparagraph (2), Code 2014, is amended to read as follows: 2 (2) A person borrowing money or obtaining credit in an 3 amount which exceeds twenty-five thousand dollars the threshold 4 amount as defined in section 537.1301 , exclusive of interest, 5 for the purpose of constructing improvements on real property, 6 whether or not the real property is owned by the person. 7 Sec. 2. Section 535.2, subsection 2, paragraph a, 8 subparagraph (5), Code 2014, is amended to read as follows: 9 (5) A person borrowing money or obtaining credit for 10 business or agricultural purposes, or a person borrowing money 11 or obtaining credit in an amount which exceeds twenty-five 12 thousand dollars the threshold amount, as defined in section 13 537.1301, for personal, family, or household purposes. As 14 used in this paragraph, “agricultural purpose” means as defined 15 in section 535.13 , and “business purpose” includes but is not 16 limited to a commercial, service, or industrial enterprise 17 carried on for profit and an investment activity. 18 Sec. 3. Section 535.8, subsection 1, Code 2014, is amended 19 by adding the following new paragraph: 20 NEW PARAGRAPH . c. “Points and fees” means the fees and 21 charges that are included in the definition of points and fees 22 in 12 C.F.R. §1026.32(b)(1). 23 Sec. 4. Section 535.8, Code 2014, is amended by adding the 24 following new subsections: 25 NEW SUBSECTION . 1A. If a lender makes a loan in which 26 the points and fees the borrower is charged by all lenders in 27 connection with the loan does not exceed the amounts specified 28 in 12 C.F.R. §1026.43(e)(3), the loan shall not be subject to 29 the provisions of subsection 2, paragraphs “a” , “b” , and “d” , or 30 subsection 3. 31 NEW SUBSECTION . 1B. This section shall not be construed to 32 change the prohibition against the sale of title insurance or 33 sale of insurance against loss or damage by reason of defective 34 title or encumbrances as provided in section 515.48, subsection 35 -1- LSB 5560YC (20) 85 rn/sc 1/ 9

H.F. _____ 10. 1 Sec. 5. Section 535.8, subsection 2, paragraph b, 2 subparagraph (4), Code 2014, is amended by striking the 3 subparagraph. 4 Sec. 6. Section 535.8, subsection 6, Code 2014, is amended 5 to read as follows: 6 6. a. The provisions of this section shall not apply to 7 any loan which is subject to the provisions of section 636.46 , 8 nor shall it apply to origination fees, administrative fees, 9 commitment fees or similar charges paid by one lender to 10 another lender if these fees are not ultimately paid either 11 directly or indirectly by the borrower who occupies or will 12 occupy the dwelling or by the seller of the dwelling. 13 b. A lender shall not use an appraisal for any purpose 14 in connection with making a loan under this section if the 15 appraisal is performed by a person who is employed by or 16 affiliated with any person receiving a commission or fee 17 from the seller of the property. If a lender violates this 18 paragraph subsection the borrower is entitled to recover 19 any actual damages plus the costs paid by the borrower, 20 plus attorney fees incurred in an action necessary to effect 21 recovery. 22 Sec. 7. Section 535.10, subsection 3, paragraph a, Code 23 2014, is amended to read as follows: 24 a. A lender may collect in connection with establishing 25 or renewing a home equity line of credit the costs listed 26 in section 535.8, subsection 2 , paragraph paragraphs “a” or 27 “b” , charges for insurance as described in section 537.2501, 28 subsection 2 , and a loan processing fee as agreed between 29 the borrower and the lender, and annually may collect an 30 account maintenance fee of not more than fifteen dollars. 31 Fees collected under this subsection shall be disregarded 32 for purposes of determining the maximum charge permitted by 33 subsection 4 . 34 Sec. 8. Section 536.1, Code 2014, is amended to read as 35 -2- LSB 5560YC (20) 85 rn/sc 2/ 9

H.F. _____ follows: 1 536.1 Title —— license required. 2 1. This chapter may be referred to as the “Iowa Regulated 3 Loan Act”. 4 2. With respect to a loan other than a consumer loan, a 5 person shall not engage in the business of making loans of 6 money, credit, goods, or things in action in the amount or of 7 the value of twenty-five thousand dollars the threshold amount 8 or less and charge, contract for, or receive on the loan a 9 greater rate of interest or consideration for the loan than 10 the lender would be permitted by law to charge if the lender 11 were not a licensee under this chapter except as authorized by 12 this chapter and without first obtaining a license from the 13 superintendent of banking. 14 3. With respect to a consumer loan, a person required by 15 section 537.2301 to have a license shall not engage in the 16 business of making loans of money, credit, goods or things 17 in action in the amount or value of twenty-five thousand 18 dollars the threshold amount or less and charge, contract 19 for, or receive on the loan a greater rate of interest or 20 consideration for the loan than the lender would be permitted 21 by law to charge if the lender were not a licensee under this 22 chapter , except as authorized by this chapter and without first 23 obtaining a license from the superintendent. 24 4. A person who enters into less than ten supervised loans 25 per year in this state and who neither has an office physically 26 located in this state nor engages in face-to-face solicitation 27 in this state may contract for and receive the rate of interest 28 permitted in this chapter for licensees under this chapter . A 29 “consumer loan” means the same as defined in section 537.1301 . 30 5. For the purposes of this section, “threshold amount” 31 means the same as defined in section 537.1301. 32 Sec. 9. Section 536.13, subsection 5, Code 2014, is amended 33 to read as follows: 34 5. A licensee under this chapter may lend any sum of money 35 -3- LSB 5560YC (20) 85 rn/sc 3/ 9

H.F. _____ not exceeding twenty-five thousand dollars the threshold amount 1 as defined in section 537.1301 in amount and may charge, 2 contract for, and receive on the loan interest or charges at 3 a rate not exceeding the maximum rate of interest or charges 4 determined and fixed by the superintendent under authority of 5 this section or pursuant to subsection 7 for those amounts in 6 excess of ten thousand dollars. 7 Sec. 10. Section 536.15, Code 2014, is amended to read as 8 follows: 9 536.15 Limitation on principal amount over twenty-five 10 thousand dollars . 11 A licensee shall not directly or indirectly charge, contract 12 for, or receive any interest or consideration greater than the 13 lender would be permitted by law to charge if the lender were 14 not a licensee upon the loan, use, or forbearance of money, 15 goods, or things in action, or upon the loan, use, or sale 16 of credit, of the amount or value of more than twenty-five 17 thousand dollars the threshold amount . This section also 18 applies to a licensee who permits a person, as borrower or as 19 endorser, guarantor, or surety for a borrower, or otherwise, 20 to owe directly or contingently or both to the licensee at 21 any time the sum of more than twenty-five thousand dollars 22 the threshold amount for principal. For the purposes of this 23 section, “threshold amount” means the same as defined in section 24 537.1301. 25 Sec. 11. Section 537.1301, subsection 13, paragraph a, 26 subparagraph (5), Code 2014, is amended to read as follows: 27 (5) With respect to a sale of goods or services, the amount 28 financed does not exceed twenty-five thousand dollars the 29 threshold amount . 30 Sec. 12. Section 537.1301, subsection 14, paragraph a, 31 subparagraph (4), Code 2014, is amended to read as follows: 32 (4) The amount payable under the lease does not exceed 33 twenty-five thousand dollars the threshold amount . 34 Sec. 13. Section 537.1301, subsection 15, paragraph a, 35 -4- LSB 5560YC (20) 85 rn/sc 4/ 9

H.F. _____ subparagraph (5), Code 2014, is amended to read as follows: 1 (5) The amount financed does not exceed twenty-five 2 thousand dollars the threshold amount . 3 Sec. 14. Section 537.1301, subsection 15, paragraph b, 4 subparagraph (2), Code 2014, is amended to read as follows: 5 (2) A debt which is secured by a first lien on real property 6 and which is incurred primarily for the purpose of acquiring 7 that real property, or refinancing a contract for deed to that 8 real property, or constructing on that real property a building 9 containing one or more dwelling units . 10 Sec. 15. Section 537.1301, subsection 21, paragraph b, Code 11 2014, is amended by adding the following new subparagraph: 12 NEW SUBPARAGRAPH . (5) An initial charge imposed by a 13 financial institution for returning an item presented against 14 non-sufficient funds or for paying an item that overdraws 15 an account. For the purposes of this subparagraph, “item” 16 includes any form of authorization or order for withdrawal of 17 funds from an account such as a check, automated teller machine 18 card, debit card, automated clearinghouse or other means. 19 Sec. 16. Section 537.1301, Code 2014, is amended by adding 20 the following new subsection: 21 NEW SUBSECTION . 21A. “Financial institution” means and 22 includes any bank incorporated under the provisions of any 23 state or federal law, any savings and loan association or 24 savings bank incorporated under the provisions of state or 25 federal law, or any credit union organized under the provisions 26 of any state or federal law. 27 Sec. 17. Section 537.1301, Code 2014, is amended by adding 28 the following new subsection: 29 NEW SUBSECTION . 46. “Threshold amount” means the threshold 30 amount, as determined by 12 C.F.R. §226.3(b), in effect during 31 the period the consumer credit transaction was entered into. 32 Sec. 18. Section 537.2501, subsection 1, paragraph e, Code 33 2014, is amended by adding the following new subparagraph: 34 NEW SUBPARAGRAPH . (5) Fees or charges listed in section 35 -5- LSB 5560YC (20) 85 rn/sc 5/ 9

H.F. _____ 535.8, subsection 2, paragraphs “a” and “b” . 1 Sec. 19. Section 537.2507, Code 2014, is amended to read as 2 follows: 3 537.2507 Attorney fee. 4 With respect to a consumer credit transaction, the agreement 5 may not provide for the payment by the consumer of attorney 6 fees. However, in a consumer credit transaction with an amount 7 financed exceeding twenty-five thousand dollars secured by an 8 interest in land, the agreement may provide for the payment 9 by the consumer of reasonable attorney fees. A provision in 10 violation of this subsection section is unenforceable. 11 Sec. 20. Section 537.3604, subsection 8, paragraph e, Code 12 2014, is amended to read as follows: 13 e. The amount payable under the consumer rental purchase 14 agreement does not exceed twenty-five thousand dollars the 15 threshold amount . 16 Sec. 21. Section 537.6201, subsection 2, Code 2014, is 17 amended to read as follows: 18 2. Debt collectors, as defined in section 537.7102, 19 subsection 5 , to whose acts, practices, or conduct this 20 chapter applies pursuant to section 537.1201 if the total debt 21 collected by a debt collector in the preceding calendar year 22 exceeds twenty-five thousand dollars the threshold amount , or 23 if not, if the total debt collected during the current calendar 24 year exceeds twenty-five thousand dollars, but this part does 25 not apply to those licensed, certified, or otherwise authorized 26 to engage in business under chapter 524 , 533 , 536 , or 536A . 27 EXPLANATION 28 The inclusion of this explanation does not constitute agreement with 29 the explanation’s substance by the members of the general assembly. 30 This bill makes changes related to consumer lending 31 transactions by modifying provisions applicable to residential 32 real estate loan charges and monetary limits specified in the 33 consumer credit code. 34 The bill modifies several provisions contained in Code 35 -6- LSB 5560YC (20) 85 rn/sc 6/ 9

H.F. _____ section 535.8, relating to loan charge limitations applicable 1 to loans of money which are wholly or in part to be used for the 2 purpose of purchasing real property that is a single-family or 3 two-family dwelling occupied or to be occupied by the borrower. 4 The bill defines “points and fees” by referencing an existing 5 definition in the Code of Federal Regulations relating to the 6 Truth in Lending Act. The bill provides that if a lender makes 7 a loan in which the points and fees charged by all lenders in 8 connection with the loan does not exceed amounts specified in a 9 referenced section of the Code of Federal Regulations, the loan 10 will not be subject to the monetary limits on loan origination 11 or processing fees and broker fees, the limits on the types of 12 permissible lender charges, and relating to payment of interest 13 reduction fees in exchange for a lower rate of interest. The 14 bill transfers a provision in Code section 535.8, subsection 15 2, relating to the prohibition against the sale of title 16 insurance or sale of insurance against loss or damage by reason 17 of defective title or encumbrances to Code section 535.8, new 18 subsection 1B. 19 The bill modifies monetary limits applicable to certain 20 consumer credit transactions specified in Code chapter 537. 21 Currently, the definitions of consumer credit sale, consumer 22 lease, consumer loan, and consumer rental purchase agreement, 23 provide that the amount financed or payable shall not exceed 24 $25,000. The bill deletes references to this monetary amount, 25 and provides instead that the amount financed or payable shall 26 not exceed a “threshold amount”. The term “threshold amount” 27 is defined in the bill as the applicable threshold amount in 28 effect during the period a consumer credit transaction was 29 entered into, as determined pursuant to a provision of the 30 federal Truth in Lending Act relating to the calculation of a 31 threshold amount in connection with extensions of credit which 32 are exempt from regulation under the federal Act. A similar 33 change is made regarding the applicability of notification and 34 fee provisions in the Code chapter to debt collectors. 35 -7- LSB 5560YC (20) 85 rn/sc 7/ 9

H.F. _____ The bill deletes similar references to the monetary amount 1 of $25,000, and substitutes the term “threshold amount”, with 2 reference to determining rates of interest in connection 3 with borrowing money or obtaining credit for the purpose of 4 constructing improvements on real property, for business or 5 agricultural purposes, or for personal, family, or household 6 purposes. The term “threshold amount” is also substituted for 7 the monetary amount of $25,000 with respect to regulated loan 8 licensing and lending requirements imposed pursuant to Code 9 chapter 536. 10 The bill provides that a lender in a home equity line of 11 credit transaction may impose loan origination or processing 12 fees or broker fees authorized for single-family or two-family 13 real property loans in Code section 535.8. The bill also 14 authorizes these fees, and additional costs in connection with 15 originating a loan, to be charged in connection with consumer 16 credit transactions involving a debt secured by an interest in 17 land. 18 Currently, the definition of “consumer loan” in Code chapter 19 537 does not include a debt that is secured by a first lien on 20 real property and that is incurred primarily for the purpose of 21 acquiring that real property or refinancing a contract for deed 22 to that real property or constructing on that real property 23 a building containing one or more dwelling units. The bill 24 modifies this provision to state that a consumer loan does 25 not include a debt that is secured by a first lien on real 26 property. 27 The bill provides, with reference to the definition 28 of “finance charge” contained in Code chapter 537, that a 29 “finance charge” does not include an initial charge imposed 30 by a financial institution for returning an item presented 31 against non-sufficient funds or for paying an item that 32 overdraws an account. For the purposes of this subparagraph, 33 the bill defines “item” to include any form of authorization 34 or order for withdrawal of funds from an account such as a 35 -8- LSB 5560YC (20) 85 rn/sc 8/ 9

H.F. _____ check, automated teller machine card, debit card, automated 1 clearing house or other means. The bill defines a “financial 2 institution” in the Code chapter to mean and include any bank 3 incorporated under the provisions of any state or federal law, 4 any savings and loan association or savings bank incorporated 5 under the provisions of state or federal law, or any credit 6 union organized under the provisions of any state or federal 7 law. 8 The bill further provides that in connection with a consumer 9 credit transaction, reasonable attorney fees may be charged 10 when the amount financed exceeds $25,000 secured by an interest 11 in land. 12 -9- LSB 5560YC (20) 85 rn/sc 9/ 9