H.F. 263 Section 1. Section 537.2501, subsection 1, paragraph j, 1 Code 2019, is amended to read as follows: 2 j. For a consumer loan where the amount financed does not 3 exceed three thousand dollars and the term of the loan does 4 not exceed twelve months, a bank, credit union incorporated 5 pursuant to state or federal law, or a federally chartered 6 or out-of-state chartered savings bank or savings and loan 7 association may charge an additional application fee not to 8 exceed the lesser of ten percent of the amount financed or 9 thirty dollars. If the loan is not approved, the application 10 fee shall not exceed the lesser of ten percent of the amount 11 applied for by the applicant or thirty dollars The fee 12 permitted pursuant to this paragraph may be charged solely to 13 applicants who are approved or to all applicants . The fee 14 permitted pursuant to this paragraph shall not be charged 15 in connection with a loan used for the purchase of a motor 16 vehicle, or for a loan where the borrower’s dwelling is used 17 as security. 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 Code section 537.2501(1)(j) allows a creditor to charge an 22 application fee for consumer loans where the amount financed 23 does not exceed $3,000 and the term of the loan does not exceed 24 12 months, in addition to a finance charge. The specified 25 application fee is the same for loans that are approved and 26 loans that are not approved. This bill modifies that Code 27 section by providing that application fees may be charged 28 solely to applicants who are approved or to all applicants, and 29 by removing duplicative language regarding application fees for 30 loans that are not approved. 31 -1- LSB 1786HV (1) 88 gh/rn 1/ 1