Senate
File
418
-
Introduced
SENATE
FILE
418
BY
COMMITTEE
ON
COMMERCE
(SUCCESSOR
TO
SSB
1118)
(COMPANION
TO
LSB
2322HV)
A
BILL
FOR
An
Act
relating
to
consumer
credit
transactions
establishing
1
and
increasing
specified
charges
and
penalties.
2
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
3
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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
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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.
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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
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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
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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
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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.
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