S.F. 418 Section 1. Section 537.2301, Code 2017, is amended by adding 1 the following new subsection: 2 NEW SUBSECTION . 2A. A supervised loan made by a person in 3 violation of subsection 2 shall be void and the consumer is 4 not obligated to pay either the amount financed or the finance 5 charge. If the consumer has paid any part of the amount 6 financed or the finance charge, the consumer has a right to 7 recover the payment from the person in violation of subsection 8 2 or from an assignee of that person’s rights who undertakes 9 direct collection of payments or enforcement of rights arising 10 from the debt. With respect to violations arising from 11 loans made pursuant to open-end credit, no action pursuant 12 to this subsection may be brought more than two years after 13 the violation occurred. With respect to violations arising 14 from other loans, no action pursuant to this subsection may 15 be brought more than one year after the due date of the last 16 scheduled payment of the agreement pursuant to which the charge 17 was paid. 18 Sec. 2. Section 537.2501, subsection 1, paragraph f, 19 subparagraph (1), Code 2017, is amended to read as follows: 20 (1) With respect to open-end credit pursuant to a credit 21 card issued by the creditor which entitles the cardholder 22 to purchase or lease goods or services from at least one 23 hundred persons not related to the card issuer, the parties 24 may contract for an over-limit charge up to fifteen thirty 25 dollars if the balance of the account exceeds the credit 26 limit established pursuant to the agreement. The over-limit 27 charge under this paragraph shall not be assessed again in a 28 subsequent billing cycle unless in a subsequent billing cycle 29 the account balance has been reduced below the credit limit. 30 Sec. 3. Section 537.2501, subsection 1, paragraph g, Code 31 2017, is amended to read as follows: 32 g. A surcharge of not more than five percent of the amount 33 of the face value of the payment instrument or twenty dollars, 34 whichever is greater, for each dishonored payment instrument 35 -1- LSB 2322SV (3) 87 gh/rn/rj 1/ 6

S.F. 418 provided that the fee is clearly and conspicuously disclosed 1 in the cardholder agreement. However, the amount of the 2 surcharge shall not exceed twenty dollars unless the check, 3 draft, or order was presented twice or the maker does not have 4 an account with the drawee. If the check, draft, or order was 5 presented twice or the maker does not have an account with the 6 drawee, the amount of the surcharge shall not exceed fifty 7 dollars as provided for in section 554.3512 for a dishonored 8 check, draft, or order that was accepted as payment for a 9 consumer credit transaction payment . The surcharge shall not 10 be assessed against the maker if the reason for the dishonor of 11 the instrument is that the maker has stopped payment pursuant 12 to section 554.4403 . 13 Sec. 4. Section 537.2501, subsection 1, Code 2017, is 14 amended by adding the following new paragraph: 15 NEW PARAGRAPH . k. Credit reporting charges. 16 Sec. 5. Section 537.2502, subsection 1, paragraph a, 17 subparagraph (1), Code 2017, is amended to read as follows: 18 (1) Five percent of the unpaid amount of the installment, or 19 a maximum of twenty thirty dollars. 20 Sec. 6. Section 537.2502, subsection 1, paragraph b, Code 21 2017, is amended to read as follows: 22 b. For an interest-bearing transaction, an amount not 23 exceeding five percent of the unpaid amount of the installment, 24 or a maximum of fifteen thirty dollars. 25 Sec. 7. Section 537.2502, subsection 4, Code 2017, is 26 amended to read as follows: 27 4. With respect to open-end credit, the parties may contract 28 for a delinquency charge on any payment not paid in full when 29 due, as originally scheduled or as deferred, in an amount up to 30 fifteen thirty dollars. 31 Sec. 8. Section 537.2510, Code 2017, is amended by adding 32 the following new subsection: 33 NEW SUBSECTION . 8. This section does not apply to a 34 financial institution as defined in section 537.1301. 35 -2- LSB 2322SV (3) 87 gh/rn/rj 2/ 6

S.F. 418 Sec. 9. Section 537.5201, subsection 3, Code 2017, is 1 amended to read as follows: 2 3. If a creditor has contracted for or received a charge 3 in excess of that allowed by this chapter , or if a consumer 4 is entitled to a refund and a person liable to the consumer 5 refuses to make a refund within a reasonable time after demand, 6 the consumer may recover from the creditor or the person 7 liable, in an action other than a class action, the excess 8 charge or refund and a penalty in an amount determined by the 9 court not less than one two hundred dollars or more than one 10 two thousand dollars. With respect to excess charges arising 11 from sales or loans made pursuant to open-end credit, no action 12 pursuant to this subsection may be brought more than two years 13 after the time the excess charge was made. With respect to 14 excess charges arising from other consumer credit transactions 15 no action pursuant to this subsection may be brought more than 16 one year after the due date of the last scheduled payment of 17 the agreement pursuant to which the charge was made. For 18 purposes of this subsection , a reasonable time is presumed to 19 be thirty days. 20 Sec. 10. Section 537.5203, subsection 1, paragraph a, Code 21 2017, is amended to read as follows: 22 a. Twice the amount of the finance charge in connection with 23 the transaction, but the liability pursuant to this paragraph 24 shall be not less than one two hundred dollars or more than one 25 two thousand dollars. 26 Sec. 11. Section 537.6113, subsection 2, Code 2017, is 27 amended to read as follows: 28 2. The administrator may bring a civil action against a 29 person to recover a civil penalty of no more than five ten 30 thousand dollars for repeatedly and intentionally violating 31 this chapter . No civil penalty pursuant to this subsection 32 may be imposed for violations of this chapter occurring more 33 than two years before the action is brought or for making 34 unconscionable agreements or engaging in a course of fraudulent 35 -3- LSB 2322SV (3) 87 gh/rn/rj 3/ 6

S.F. 418 or unconscionable conduct. 1 Sec. 12. Section 537.6203, subsections 1 and 4, Code 2017, 2 are amended to read as follows: 3 1. A person required to file notification shall pay to the 4 administrator an annual fee of ten fifty dollars. The fee 5 shall be paid with the filing of the first notification and on 6 or before January 31 of each succeeding year. 7 4. In addition to the penalties provided by section 8 537.6113, subsection 3 , the administrator may collect a charge, 9 established by rule, not exceeding twenty-five seventy-five 10 dollars from each person required to pay fees under this 11 section who fails to pay the fees in full within thirty days 12 after they are due. 13 EXPLANATION 14 The inclusion of this explanation does not constitute agreement with 15 the explanation’s substance by the members of the general assembly. 16 This bill establishes and increases specified charges and 17 penalties relating to consumer credit transactions. 18 Current Code section 537.2301 authorizes certain persons to 19 make supervised loans. The bill provides that a supervised 20 loan made by a person in violation of Code section 537.2301(2) 21 is void and the consumer is not obligated to pay the amount 22 financed or the finance charge. A consumer who has already 23 paid any part of such amount or charge may recover the payment. 24 With respect to violations arising from loans made pursuant 25 to open-end credit, no action may be brought pursuant to the 26 bill more than two years after the violation occurred. With 27 respect to violations arising from other loans, no action may 28 be brought pursuant to the bill more than one year after the 29 due date of the last scheduled payment of the agreement for 30 which the charge was paid. 31 Current Code section 537.2501 sets forth the charges that 32 a creditor may receive in addition to a finance charge. The 33 bill increases the over-limit charge the parties to an open-end 34 credit pursuant to a credit card transaction may contract 35 -4- LSB 2322SV (3) 87 gh/rn/rj 4/ 6

S.F. 418 for from up to $15 to a maximum of $30. The bill modifies 1 the surcharge in Code section 537.2501(1)(g) to authorize a 2 surcharge for a dishonored check, draft, or order not to exceed 3 $30 as provided for in Code section 554.3512. The bill also 4 provides that a creditor may receive credit reporting charges. 5 Current Code section 537.2502 allows the parties in certain 6 consumer credit transactions to contract for delinquency 7 charges. For a precomputed consumer credit transaction, the 8 maximum delinquency charge is increased from the greater of 5 9 percent of the unpaid installment or $20, to the greater of 10 5 percent of the unpaid installment or $30, or the deferral 11 charge amount. For an interest-bearing consumer credit 12 transaction, the maximum delinquency charge is increased from 5 13 percent of the unpaid installment or $15, to 5 percent of the 14 unpaid installment or $30. For an open-credit arrangement, the 15 maximum delinquency charge is increased from $15 to $30. 16 Current Code section 537.2510 requires creditors to rebate 17 certain amounts to consumers upon the prepayment of precomputed 18 consumer credit transactions. The bill provides that Code 19 section 537.2510 does not apply to financial institutions as 20 defined in Code section 537.1301. This would include banks, 21 savings and loan associations, or state banks incorporated 22 under state or federal law, and credit unions organized under 23 state or federal law. 24 Current Code section 537.5201 sets forth the remedies 25 available to consumers for violations of Code chapter 537. The 26 bill increases the penalty a creditor must pay for contracting 27 for or receiving a charge in excess of that allowed by Code 28 chapter 537 from not less than $100 or more than $1,000, to not 29 less than $200 or more than $2,000. 30 Current Code section 537.5203 sets forth the civil liability 31 of a creditor who fails to disclose information to a person 32 entitled to the information under Code chapter 537. The bill 33 increases the amount a creditor is liable to such person from 34 not less than $100 or more than $1,000 to not less than $200 or 35 -5- LSB 2322SV (3) 87 gh/rn/rj 5/ 6

S.F. 418 more than $2,000. 1 Current Code section 537.6113 allows the attorney general to 2 bring civil actions to recover moneys under Code chapter 537. 3 The bill increases the civil penalty the attorney general may 4 recover from a person for repeated and intentional violations 5 of Code chapter 537 from no more than $5,000 to no more than 6 $10,000. 7 Current Code section 537.6203 sets forth various fees and 8 charges for persons required to file notification pursuant to 9 Code chapter 537. The bill increases the annual fee for a 10 person required to file notification from $10 to $50. The bill 11 also increases the late charge for failure to pay a fee within 12 30 days that it is due from no more than $25 per person to no 13 more than $75 per person. 14 -6- LSB 2322SV (3) 87 gh/rn/rj 6/ 6