S.F. _____ Section 1. Section 535.2, subsection 2, paragraph a, 1 subparagraph (5), Code 2014, is amended to read as follows: 2 (5) A person borrowing money or obtaining credit for 3 business or agricultural purposes, or a person borrowing money 4 or obtaining credit in an amount which exceeds twenty-five 5 thousand dollars for personal, family, or household purposes , 6 unless the rate of interest is otherwise stated or regulated 7 for those loans subject to chapters 536, 536A, and 537 . As 8 used in this paragraph, “agricultural purpose” means as defined 9 in section 535.13 , and “business purpose” includes but is not 10 limited to a commercial, service, or industrial enterprise 11 carried on for profit and an investment activity. 12 Sec. 2. Section 535.8, subsection 1, Code 2014, is amended 13 by adding the following new paragraph: 14 NEW PARAGRAPH . c. “Points and fees” means the fees and 15 charges that are included in the definition of points and fees 16 in 12 C.F.R. §1026.32(b)(1). 17 Sec. 3. Section 535.8, Code 2014, is amended by adding the 18 following new subsections: 19 NEW SUBSECTION . 1A. If a lender makes a loan in which 20 the points and fees the borrower is charged by all lenders in 21 connection with the loan does not exceed the amounts specified 22 in 12 C.F.R. §1026.43(e)(3), the loan shall not be subject to 23 the provisions of subsection 2, paragraphs “a” , “b” , and “d” , or 24 subsection 3. 25 NEW SUBSECTION . 1B. This section shall not be construed to 26 change the prohibition against the sale of title insurance or 27 sale of insurance against loss or damage by reason of defective 28 title or encumbrances as provided in section 515.48, subsection 29 10. 30 Sec. 4. Section 535.8, subsection 2, paragraph b, 31 subparagraph (4), Code 2014, is amended by striking the 32 subparagraph. 33 Sec. 5. Section 535.8, subsection 6, Code 2014, is amended 34 to read as follows: 35 -1- LSB 5560XC (3) 85 rn/sc 1/ 8

S.F. _____ 6. a. The provisions of this section shall not apply to 1 any loan which is subject to the provisions of section 636.46 , 2 nor shall it apply to origination fees, administrative fees, 3 commitment fees or similar charges paid by one lender to 4 another lender if these fees are not ultimately paid either 5 directly or indirectly by the borrower who occupies or will 6 occupy the dwelling or by the seller of the dwelling. 7 b. A lender shall not use an appraisal for any purpose 8 in connection with making a loan under this section if the 9 appraisal is performed by a person who is employed by or 10 affiliated with any person receiving a commission or fee 11 from the seller of the property. If a lender violates this 12 paragraph subsection the borrower is entitled to recover 13 any actual damages plus the costs paid by the borrower, 14 plus attorney fees incurred in an action necessary to effect 15 recovery. 16 Sec. 6. Section 535.10, subsections 2 and 3, Code 2014, are 17 amended to read as follows: 18 2. Except as provided in this section , a A home equity line 19 of credit is not subject to chapter 537 . However, sections 20 537.2307 , 537.2402 , and 537.2510 do not apply. 21 3. a. (1) A lender may collect in connection with 22 establishing or renewing a home equity line of credit the costs 23 listed in section 535.8, subsection 2 , paragraph “b” , charges 24 for insurance as described in section 537.2501, subsection 2 , 25 and a loan processing fee as agreed between the borrower and 26 the lender, and annually shall comply with the provisions of 27 section 535.8. 28 (2) A lender may collect an annual account maintenance fee 29 of not more than fifteen dollars. 30 (3) Fees collected under this subsection shall be 31 disregarded for purposes of determining the maximum charge 32 permitted by subsection 4 . 33 b. The parties to a home equity line of credit which is 34 not a consumer credit transaction, as defined in section 35 -2- LSB 5560XC (3) 85 rn/sc 2/ 8

S.F. _____ 537.1301 , may contract for a delinquency charge under terms no 1 more favorable than those permitted for open-end credit under 2 section 537.2502 . 3 Sec. 7. Section 535.10, subsection 5, Code 2014, is amended 4 to read as follows: 5 5. Real estate which that is the consumer’s principal 6 dwelling shall not be subject to foreclosure when the balance 7 secured is two five thousand dollars or less. 8 Sec. 8. Section 536A.23, subsection 1, paragraph a, 9 subparagraph (3), Code 2014, is amended by striking the 10 subparagraph. 11 Sec. 9. Section 537.1301, subsection 13, paragraph a, 12 subparagraph (5), Code 2014, is amended to read as follows: 13 (5) With respect to a sale of goods or services, the amount 14 financed does not exceed twenty-five thousand dollars the 15 threshold amount . 16 Sec. 10. Section 537.1301, subsection 14, paragraph a, 17 subparagraph (4), Code 2014, is amended to read as follows: 18 (4) The amount payable under the lease does not exceed 19 twenty-five thousand dollars the threshold amount . 20 Sec. 11. Section 537.1301, subsection 15, paragraph a, 21 subparagraph (5), Code 2014, is amended to read as follows: 22 (5) The amount financed does not exceed twenty-five 23 thousand dollars the threshold amount . 24 Sec. 12. Section 537.1301, subsection 15, paragraph b, 25 subparagraph (2), Code 2014, is amended to read as follows: 26 (2) A debt which is secured by a first lien on real property 27 and which is incurred primarily for the purpose of acquiring 28 that real property, or refinancing a contract for deed to that 29 real property, or constructing on that real property a building 30 containing one or more dwelling units . 31 Sec. 13. Section 537.1301, subsection 29, Code 2014, is 32 amended by striking the subsection. 33 Sec. 14. Section 537.1301, Code 2014, is amended by adding 34 the following new subsection: 35 -3- LSB 5560XC (3) 85 rn/sc 3/ 8

S.F. _____ NEW SUBSECTION . 46. “Threshold amount” means the threshold 1 amount, as determined by 12 C.F.R. §226.3(b), in effect during 2 the period the consumer credit transaction was entered into. 3 Sec. 15. Section 537.1303, subsection 1, Code 2014, is 4 amended by striking the subsection. 5 Sec. 16. Section 537.2307, Code 2014, is amended to read as 6 follows: 7 537.2307 Restrictions on interest in land as security. 8 With respect to a supervised loan in which the rate of 9 finance charge is in excess of fifteen percent computed 10 according to the actuarial method, and the amount financed is 11 two five thousand dollars or less, a lender may not contract 12 for a security interest in real property used as a residence 13 for the consumer or the consumer’s dependents. A security 14 interest taken in violation of this section is void. 15 Sec. 17. Section 537.2401, subsection 1, Code 2014, is 16 amended to read as follows: 17 1. Except as provided with respect to a finance charge for 18 loans pursuant to open-end credit under section 537.2402 and 19 loans secured by a certificate of title of a motor vehicle 20 under section 537.2403 , a lender may contract for and receive 21 a finance charge not exceeding the maximum charge permitted 22 by the laws of this state or of the United States for similar 23 lenders, and, in addition, with respect to a consumer loan, 24 a supervised financial organization or a mortgage lender may 25 contract for and receive a finance charge, calculated according 26 to the actuarial method, not exceeding twenty-one percent per 27 year on the unpaid balance of the amount financed. Except as 28 provided in section 537.2403 , this subsection does not prohibit 29 a lender from contracting for and receiving a finance charge 30 exceeding twenty-one percent per year on the unpaid balance of 31 the amount financed on consumer loans if authorized by other 32 provisions of the law. 33 Sec. 18. Section 537.2501, subsection 1, paragraph e, Code 34 2014, is amended by striking the paragraph. 35 -4- LSB 5560XC (3) 85 rn/sc 4/ 8

S.F. _____ Sec. 19. Section 537.3102, Code 2014, is amended to read as 1 follows: 2 537.3102 Scope. 3 Part 2 applies to disclosure with respect to consumer credit 4 transactions, other than consumer rental purchase agreements, 5 and the provision in section 537.3201 applies to a sale of an 6 interest in land or a loan secured by an interest in land , 7 without regard to the rate of finance charge, if the sale or 8 loan is otherwise a consumer credit sale or consumer loan . 9 Parts 3 and 4 apply, respectively, to disclosure, limitations 10 on agreements and practices, and limitations on consumer’s 11 liability with respect to certain consumer credit transactions. 12 Part 5 applies to home solicitation sales. Part 6 applies to 13 consumer rental purchase agreements. 14 Sec. 20. Section 537.3308, subsection 2, paragraph e, Code 15 2014, is amended by striking the paragraph. 16 Sec. 21. Section 537.6102, subsection 3, Code 2014, is 17 amended to read as follows: 18 3. Enter into or modify a sale of an interest in land or a 19 loan secured by an interest in land, if, but for the rate of the 20 finance charge, the sale , loan or modification would involve 21 a consumer credit sale or consumer loan , but applies only for 22 the purpose of authorizing the administrator to enforce the 23 provisions on compliance with the Truth in Lending Act. 24 EXPLANATION 25 The inclusion of this explanation does not constitute agreement with 26 the explanation’s substance by the members of the general assembly. 27 This bill makes changes related to consumer lending 28 transactions by modifying provisions applicable to residential 29 real estate loan charges and monetary limits specified in the 30 consumer credit code. 31 Code section 535.2 provides that a person borrowing money 32 or obtaining credit in an amount which exceeds $25,000 for 33 personal, family, or household purposes may agree to the 34 payment of any mutually agreeable rate of interest. The bill 35 -5- LSB 5560XC (3) 85 rn/sc 5/ 8

S.F. _____ removes the $25,000 limitation and provides that a person 1 borrowing money or obtaining credit of any amount for personal, 2 family, or household purposes may mutually agree on a rate of 3 interest, unless a rate of interest is otherwise stated or 4 regulated for loans subject to Code chapters 536, 536A, and 5 537, relating to regulated loans, industrial loans, and the 6 consumer credit code, respectively. 7 The bill modifies several provisions contained in Code 8 section 535.8, relating to loan charge limitations applicable 9 to loans of money which are wholly or in part to be used for the 10 purpose of purchasing real property that is a single-family or 11 two-family dwelling occupied or to be occupied by the borrower. 12 The bill defines “points and fees” by referencing an existing 13 definition in the Code of Federal Regulations relating to the 14 Truth in Lending Act. The bill provides that if a lender makes 15 a loan in which the points and fees charged by all lenders in 16 connection with the loan does not exceed amounts specified in a 17 referenced section of the Code of Federal Regulations, the loan 18 will not be subject to the monetary limits on loan origination 19 or processing fees and broker fees, the limits on the types of 20 permissible lender charges, and relating to payment of interest 21 reduction fees in exchange for a lower rate of interest. The 22 bill transfers a provision in Code section 535.8, subsection 23 2, relating to the prohibition against the sale of title 24 insurance or sale of insurance against loss or damage by reason 25 of defective title or encumbrances to Code section 535.8, new 26 subsection 1B. 27 The bill deletes a provision in Code section 535.8 that 28 exempted certain federally secured loans and certain fees and 29 charges from the provisions of Code section 535.8. 30 The bill makes Code chapter 537, the consumer credit code, 31 inapplicable to home equity lines of credit, and requires 32 lenders of home equity lines of credit to comply with the loan 33 charge limitation provisions of Code section 535.8. Also with 34 reference to home equity lines of credit, the bill increases 35 -6- LSB 5560XC (3) 85 rn/sc 6/ 8

S.F. _____ the dollar amount below which real estate that is a consumer’s 1 principal dwelling shall not be subject to foreclosure from 2 $2,000 to $5,000. 3 The bill increases monetary limits applicable to certain 4 consumer credit transactions specified in Code chapter 537. 5 Currently, the definitions of consumer credit sale, consumer 6 lease, and consumer loan provide that the amount financed or 7 payable shall not exceed $25,000. The bill deletes references 8 to this monetary amount, and provides instead that the amount 9 financed or payable shall not exceed a “threshold amount”. 10 The term “threshold amount” is defined in the bill as the 11 applicable threshold amount in effect during the period a 12 consumer credit transaction was entered into, as determined 13 pursuant to a provision of the federal Truth in Lending Act 14 relating to the calculation of a threshold amount in connection 15 with extensions of credit which are exempt from regulation 16 under the federal Act. 17 Currently, the definition of “consumer loan” in Code chapter 18 537 does not include a debt that is secured by a first lien on 19 real property and that is incurred primarily for the purpose of 20 acquiring that real property or refinancing a contract for deed 21 to that real property or constructing on that real property 22 a building containing one or more dwelling units. The bill 23 modifies this provision to state that a consumer loan does not 24 include a debt that is secured by a lien on real property. The 25 bill also deletes a definition of “mortgage lender” in Code 26 chapter 537 and makes conforming changes. 27 Currently, with respect to a supervised loan in which the 28 rate of finance charge is in excess of 15 percent, computed 29 according to the actuarial method, and the amount financed 30 is $2,000 or less, a lender may not contract for a security 31 interest in real property used as a residence by the consumer 32 or the consumer’s dependents. The bill increases the amount 33 financed to $5,000 or less. 34 The bill amends Code section 537.2501 to delete a list of 35 -7- LSB 5560XC (3) 85 rn/sc 7/ 8

S.F. _____ closing costs authorized for imposition with respect to debts 1 secured by an interest in land and makes a corresponding change 2 to Code section 537.1303. The bill removes references to loans 3 or consumer loans from provisions of Code chapter 537 relating 4 to required disclosures to consumers and relating to the powers 5 of the attorney general or the attorney general’s designee 6 acting as an administrator. 7 Code section 537.3308, relating to balloon payments, 8 provides that if any scheduled payment of a consumer credit 9 transaction is more than twice as large as the average of 10 earlier scheduled payments, the consumer has the right to 11 refinance the amount of that payment at the time it is due 12 without penalty, and the terms of the refinancing shall be no 13 less favorable to the consumer than the terms of the original 14 transaction. Currently, this provision does not apply to a 15 consumer loan in which the amount financed exceeds $5,000 and 16 is secured by an interest in land. The bill provides that the 17 limitation on the amount of a balloon payment applies to such 18 loans. 19 -8- LSB 5560XC (3) 85 rn/sc 8/ 8