Senate File 2094 - Introduced SENATE FILE 2094 BY QUIRMBACH A BILL FOR An Act modifying provisions relating to the regulation of 1 delayed deposit services businesses, providing penalties, 2 and including effective date provisions. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 5541XS (3) 85 rn/nh

S.F. 2094 Section 1. Section 533D.2, Code 2014, is amended by adding 1 the following new subsection: 2 NEW SUBSECTION . 2A. “Finance charge” means all charges 3 payable directly or indirectly as a condition of a delayed 4 deposit service transaction, including interest, fees, service 5 charges, renewal charges, credit insurance premiums, and 6 charges payable for any ancillary product sold in connection 7 with a delayed deposit service transaction. 8 Sec. 2. Section 533D.9, Code 2014, is amended to read as 9 follows: 10 533D.9 Fee Finance charge restriction —— required disclosure. 11 1. A licensee shall not charge a fee in excess of fifteen 12 dollars on the first one hundred dollars on the face amount 13 of a check or more than ten dollars on subsequent one hundred 14 dollar increments on apply a finance charge in excess of an 15 amount equal to thirty-six percent per annum, as computed 16 pursuant to the federal Truth in Lending Act as defined in 17 section 537.1302, times the face amount of the check for 18 services provided by the licensee , or pro rata for any portion 19 of one hundred dollars face value . 20 2. A licensee shall give to the maker of the check, at the 21 time any delayed deposit service transaction is made, or if 22 there are two or more makers, to one of them, notice written in 23 clear, understandable language disclosing all of the following: 24 a. The fee finance charge to be charged imposed for the 25 transaction. 26 b. The annual percentage rate as computed pursuant to the 27 federal Truth in Lending Act as defined in section 537.1302 . 28 c. The date on which the check will be deposited or 29 presented for negotiation. 30 d. Any penalty, not to exceed fifteen dollars, which the 31 licensee will charge if the check is not negotiable on the 32 date agreed upon. A penalty to be charged pursuant to this 33 section shall only be collected by the licensee once on a check 34 no matter how long the check remains unpaid. A penalty to be 35 -1- LSB 5541XS (3) 85 rn/nh 1/ 3

S.F. 2094 charged pursuant to this section is a licensee’s exclusive 1 remedy and if a licensee charges a penalty pursuant to this 2 section no other penalties under this chapter or any other 3 provision apply. 4 3. In addition to the notice required by subsection 2 , every 5 licensee shall conspicuously display a schedule of all fees, 6 finance charges , and penalties for all services provided by 7 the licensee authorized by this section . The notice shall be 8 posted at the office and every branch office of the licensee. 9 Sec. 3. Section 533D.10, subsection 1, paragraphs d and f, 10 Code 2014, are amended to read as follows: 11 d. Require the maker to receive payment by a method which 12 causes the maker to pay additional or further fees and finance 13 charges to the licensee or another person. 14 f. Receive or apply any other finance charges or fees 15 penalties in addition to the fees those listed in section 16 533D.9, subsections 1 and 2 . 17 Sec. 4. Section 533D.12, Code 2014, is amended by adding the 18 following new subsection: 19 NEW SUBSECTION . 7. A violation of this chapter is a 20 violation of section 714.16, subsection 2, paragraph “a” . The 21 provisions of section 714.16, including but not limited to 22 provisions relating to investigation, injunctive relief, and 23 penalties, shall apply to this chapter unless more prescriptive 24 and stringent provisions are otherwise specified in this 25 chapter. 26 Sec. 5. EFFECTIVE UPON ENACTMENT. This Act, being deemed of 27 immediate importance, takes effect upon enactment. 28 EXPLANATION 29 The inclusion of this explanation does not constitute agreement with 30 the explanation’s substance by the members of the general assembly. 31 This bill modifies provisions relating to the regulation of 32 delayed deposit services businesses in Code chapter 533D. 33 The bill deletes current provisions prohibiting delayed 34 deposit services licensees from charging a fee in excess of $15 35 -2- LSB 5541XS (3) 85 rn/nh 2/ 3

S.F. 2094 on the first $100 on the face amount of a check or more than $10 1 on subsequent $100 increments on the face amount of the check 2 for services provided by the licensee. The bill substitutes a 3 provision prohibiting imposition of a finance charge in excess 4 of 36 percent per annum as computed pursuant to the federal 5 Truth in Lending Act, times the face amount of the check. The 6 bill defines “finance charge” to mean all charges payable 7 directly or indirectly as a condition of a delayed deposit 8 service transaction, including interest, fees, service charges, 9 renewal charges, credit insurance premiums, and charges for any 10 ancillary product sold in connection with a delayed deposit 11 service transaction. 12 The bill adds to existing penalty provisions authorizing 13 the superintendent of banking to impose a civil penalty not 14 to exceed $5,000 per violation. The bill provides that a 15 violation of the Code chapter constitutes a consumer fraud 16 pursuant to the provisions of Code section 714.16, and that the 17 applicable provisions relating to investigation, injunctive 18 relief, and penalties shall apply to Code chapter 533D unless 19 more prescriptive and stringent provisions are otherwise 20 specified in the Code chapter. Violations would accordingly 21 be subject to a civil penalty pursuant to Code section 714.16, 22 subsection 7, in an amount not to exceed $40,000 per violation, 23 and in addition a civil penalty of not more than $5,000 for 24 each day of intentional violation of a temporary restraining 25 order, preliminary injunction, or permanent injunction. 26 The bill takes effect upon enactment. 27 -3- LSB 5541XS (3) 85 rn/nh 3/ 3