Senate Study Bill 1016 - Introduced SENATE FILE _____ BY (PROPOSED COMMITTEE ON COMMERCE BILL BY CHAIRPERSON ANDERSON) A BILL FOR An Act providing for the deferral of unpaid installments and 1 deferral charges for certain interest-bearing consumer 2 credit transactions. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 1656XC (2) 87 gh/rn/nh

S.F. _____ Section 1. Section 537.2503, subsection 1, Code 2017, is 1 amended to read as follows: 2 1. a. Before or after default in payment of a scheduled 3 installment of a precomputed consumer credit transaction, the 4 parties to the transaction may agree in writing to a deferral 5 of all or part of one or more unpaid installments and the 6 creditor may make at the time of deferral and receive at that 7 time or at any time thereafter a deferral charge which is 8 not in excess of one and one-half percent per month for the 9 period of time for which it is deferred, but not to exceed the 10 rate of finance charge which was required to be disclosed in 11 the transaction to the consumer pursuant to section 537.3201 12 applied to each amount deferred for the period for which it 13 is deferred. In computing a deferral charge for one or more 14 months, any month may be counted as one-twelfth of a year and 15 in computing a deferral charge for part of a month, a day shall 16 be counted as one three hundred sixty-fifth of a year. 17 b. With respect to an interest-bearing consumer credit 18 transaction not pursuant to an open-end credit arrangement 19 and other than a consumer lease or consumer rental purchase 20 agreement, the parties to the transaction may agree in writing 21 to a deferral of all or part of one or more unpaid installments 22 in addition to any interest accrued pursuant to the terms of 23 the consumer credit transaction. The creditor may make at 24 the time of deferral and receive at that time or at any time 25 thereafter a deferral charge which shall not exceed twenty 26 dollars per month for the period of time for which the payment 27 is deferred. 28 Sec. 2. Section 537.2503, subsection 3, Code 2017, is 29 amended to read as follows: 30 3. The parties may agree in writing at the time of a 31 precomputed consumer credit transaction or an interest-bearing 32 consumer credit transaction not pursuant to an open-end credit 33 arrangement and other than a consumer lease or consumer rental 34 purchase agreement that if an installment is not paid within 35 -1- LSB 1656XC (2) 87 gh/rn/nh 1/ 2

S.F. _____ ten days after its due date, the creditor may unilaterally 1 grant a deferral and make charges as provided in this section . 2 No deferral charge may be made for a period after the date 3 that the creditor elects to accelerate the maturity of the 4 transaction. 5 EXPLANATION 6 The inclusion of this explanation does not constitute agreement with 7 the explanation’s substance by the members of the general assembly. 8 This bill authorizes the deferral of unpaid installments and 9 deferral charges for certain interest-bearing consumer credit 10 transactions. 11 Under Code section 537.2503(1), the parties to a precomputed 12 consumer credit transaction may agree in writing to a partial 13 or full deferral of any unpaid installments and the creditor 14 may receive a deferral charge. The bill amends Code section 15 537.2503(1) by providing for such a deferral with respect to 16 interest-bearing consumer credit transactions not pursuant to 17 open-end credit arrangements and other than consumer lease 18 or consumer rental purchase agreements. The parties to this 19 type of transaction may agree in writing to a partial or full 20 deferral of any unpaid installments in addition to any interest 21 accrued pursuant to the terms of the transaction. The creditor 22 may receive a deferral charge not to exceed $20 per month for 23 the period of time that payment is deferred. 24 The bill also includes interest-bearing consumer credit 25 transactions not pursuant to open-end credit arrangements 26 and other than consumer lease or consumer rental purchase 27 agreements in the types of transactions in which the parties 28 may agree in writing to a unilateral deferral under Code 29 section 537.2503(3). 30 -2- LSB 1656XC (2) 87 gh/rn/nh 2/ 2