S.F. _____ Section 1. Section 537.2501, subsection 1, paragraph l, 1 Code 2021, is amended to read as follows: 2 l. For an interest-bearing a consumer credit transaction, 3 a service charge in an amount not to exceed the lesser of ten 4 percent of the amount financed or thirty dollars. 5 Sec. 2. Section 537.2510, subsection 3, paragraph a, Code 6 2021, is amended to read as follows: 7 a. If the prepayment is in full, the creditor may collect 8 or retain a minimum charge not exceeding five dollars in a 9 transaction which had an amount financed of seventy-five 10 dollars or less, or not exceeding seven dollars and fifty cents 11 in a transaction which had an amount financed of more than 12 seventy-five dollars, if the minimum charge was contracted 13 for, and the finance charge earned at the time of prepayment 14 is less than the minimum charge contracted for. If, however, 15 a creditor has collected a service charge in association with 16 an interest-bearing a consumer credit transaction pursuant to 17 section 537.2501, subsection 1 , paragraph “l” , the creditor 18 shall not collect or retain a minimum charge upon prepayment 19 pursuant to this subsection . 20 EXPLANATION 21 The inclusion of this explanation does not constitute agreement with 22 the explanation’s substance by the members of the general assembly. 23 This bill relates to service charges on consumer credit 24 transactions. 25 Current law authorizes a creditor to contract for and 26 receive a service charge in an amount not to exceed the 27 lesser of 10 percent of the amount financed or $30 for an 28 interest-bearing consumer credit transaction. Additionally, 29 current law prohibits a creditor from collecting a minimum 30 charge upon prepayment of a consumer credit transaction if the 31 creditor collected a service charge in association with an 32 interest-bearing consumer credit transaction. The bill strikes 33 from both of these provisions the requirement that the consumer 34 credit transaction bear interest. 35 -1- LSB 1783XC (1) 89 jda/rn 1/ 1