Senate
File
2148
-
Introduced
SENATE
FILE
2148
BY
ZAUN
A
BILL
FOR
An
Act
relating
to
interest
rate
limitations
applicable
to
1
specified
postsecondary
educational
loans,
and
making
civil
2
penalties
applicable.
3
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
4
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2148
Section
1.
NEW
SECTION
.
261F.5A
Interest
rates
——
1
limitation.
2
1.
For
purposes
of
this
section,
“federal
prime
rate”
means
3
the
interest
rate
charged
by
banks
on
short-term
business
4
loans,
as
determined
by
the
board
of
governors
of
the
federal
5
reserve
system
and
published
in
the
federal
reserve
bulletin.
6
2.
Notwithstanding
any
provision
to
the
contrary,
the
7
interest
rate
collected
or
imposed
by
a
lender
or
lending
8
institution
on
a
private
educational
loan
in
this
state
shall
9
not
be
more
than
three
percentage
points
over
the
federal
prime
10
rate
for
the
life
of
the
loan.
11
3.
This
section
shall
not
be
interpreted
to
supersede,
12
conflict
with,
or
apply
to
any
interest
rate
specifications
or
13
requirements
applicable
to
a
loan
that
is
made,
insured,
or
14
guaranteed
under
Tit.
IV
of
the
federal
Higher
Education
Act
of
15
1965,
as
amended,
directly
to
a
borrower
solely
for
educational
16
purposes
or
to
any
other
loan
providing
for
postsecondary
17
educational
expenses
pursuant
to
a
federal
program.
18
EXPLANATION
19
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
20
the
explanation’s
substance
by
the
members
of
the
general
assembly.
21
This
bill
puts
a
limit
on
the
interest
rates
of
private
22
educational
loans
provided
to
borrowers
in
the
state.
23
The
bill
limits
the
interest
rate
imposed
by
a
lender
on
24
a
private
educational
loan
to
no
more
than
three
percentage
25
points
over
the
federal
prime
rate
for
the
life
of
the
loan.
26
The
bill
defines
“federal
prime
rate”
as
the
rate
of
interest
27
charged
by
banks
on
short-term
business
loans,
as
determined
28
by
the
board
of
governors
of
the
federal
reserve
system
and
29
published
in
the
federal
reserve
bulletin.
30
The
bill
provides
that
the
interest
rate
limitation
shall
31
not
be
interpreted
to
apply
to
educational
loans
made,
insured,
32
or
guaranteed
by
the
federal
government.
33
Pursuant
to
current
Code
section
261F.8,
a
lender
or
lending
34
institution
that
violates
a
provision
of
Code
chapter
261F
is
35
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2148
subject
to
a
civil
penalty
of
$5,000
per
violation,
in
addition
1
to
other
specified
sanctions.
2
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