Senate
Study
Bill
1193
-
Introduced
SENATE
FILE
_____
BY
(PROPOSED
COMMITTEE
ON
JUDICIARY
BILL
BY
CHAIRPERSON
HOGG)
A
BILL
FOR
An
Act
relating
to
right
to
cure
provisions
applicable
to
a
1
closed
credit
card
account.
2
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
3
TLSB
2186XC
(5)
85
rn/sc
S.F.
_____
Section
1.
Section
537.5110,
subsection
4,
paragraph
c,
1
Code
2013,
is
amended
to
read
as
follows:
2
c.
Until
the
expiration
of
the
minimum
applicable
period
3
after
the
notice
is
given,
the
consumer
may
cure
the
default
by
4
tendering
either
the
amount
of
all
unpaid
installments
due
at
5
the
time
of
the
tender,
without
acceleration,
plus
any
unpaid
6
delinquency
or
deferral
charges,
or
the
amount
stated
in
the
7
notice
of
right
to
cure,
whichever
is
less,
or
by
tendering
any
8
performance
necessary
to
cure
any
default
other
than
nonpayment
9
of
amounts
due,
which
is
described
in
the
notice
of
right
to
10
cure.
The
act
of
curing
a
default
restores
to
the
consumer
11
the
consumer’s
rights
under
the
agreement
as
though
no
default
12
had
occurred,
except
as
provided
in
subsection
3
.
However,
13
where
the
obligation
in
default
is
a
credit
card
account
that
14
has
been
closed,
the
act
of
curing
a
default
does
not
restore
15
to
the
consumer
the
consumer’s
rights
under
the
agreement
as
16
though
no
default
had
occurred.
17
Sec.
2.
Section
537.5111,
Code
2013,
is
amended
by
adding
18
the
following
new
subsection:
19
NEW
SUBSECTION
.
4A.
If
the
consumer
credit
transaction
is
20
a
credit
card
account
that
has
been
closed,
the
notice
shall
21
conform
to
the
requirements
of
subsection
2,
and
a
notice
in
22
substantially
the
form
specified
in
that
subsection
complies
23
with
this
subsection
except
that
the
statement
relating
to
24
continuation
of
the
contract
upon
correction
of
the
default
as
25
though
the
consumer
did
not
default
shall
not
be
contained
in
26
the
notice.
27
EXPLANATION
28
This
bill
relates
to
right
to
cure
provisions
applicable
to
a
29
credit
card
account
that
has
been
closed.
30
The
bill
states
that
provisions
applicable
to
restoring
31
a
consumer’s
rights
under
an
agreement
after
a
default
is
32
cured
as
though
no
default
had
occurred
do
not
apply
to
33
situations
where
the
account
in
question
is
a
closed
credit
34
card
account.
Similarly,
the
bill
also
states,
with
reference
35
-1-
LSB
2186XC
(5)
85
rn/sc
1/
2
S.F.
_____
to
the
notice
of
right
to
cure
sample
form
contained
in
Code
1
section
537.5111,
that
a
notice
substantially
complying
with
2
the
form
suffices
for
closed
credit
card
accounts,
except
that
3
a
statement
contained
in
the
form
relating
to
continuation
4
of
the
contract
upon
correction
of
the
default
as
though
the
5
consumer
did
not
default
shall
not
be
contained
in
the
notice.
6
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2186XC
(5)
85
rn/sc
2/
2