SF 131 (LSB 1091SV (1) 90)

SENATE FILE 131

BY  COMMITTEE ON COMMERCE

(SUCCESSOR TO SSB 1020)

A BILL FOR

An Act relating to refund payments made in connection with motor vehicle debt cancellation coverage.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 537.2510, Code 2023, is amended by adding the following new subsection:
   NEW SUBSECTION.  10.  Notwithstanding any provision of this chapter to the contrary or an agreement between a motor vehicle dealer licensed pursuant to section 322.4 and the consumer, if the creditor is a financial institution as defined in the Iowa consumer credit code, chapter 537, or the federal Gramm-Leach-Bliley Act of 1999, 15 U.S.C. §6801 et seq., who has purchased a retail installment contract as defined in section 322.2, subsection 22, with voluntary debt cancellation coverage, the only obligation of the creditor upon prepayment in full shall be to notify the motor vehicle dealer within thirty days of the prepayment. The motor vehicle dealer shall promptly determine whether the consumer is eligible for a refund of any voluntary debt cancellation coverage and shall issue any refund required directly to the consumer within sixty days of the dealer’s receipt of notice of the prepayment from the creditor.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill relates to motor vehicle debt cancellation coverage refunds.
   The bill provides that the only obligation that a financial institution which purchases retail installment contracts with voluntary debt cancellation coverage has upon prepayment in full is to notify the relevant motor vehicle dealer within 30 days of a payment in full of an installment contract. The dealer shall determine whether the consumer is entitled to a refund of voluntary debt cancellation coverage and issue the refund within 60 days of notice.