SF 2216 (LSB 5403SV (3) 91)

SENATE FILE 2216

BY  COMMITTEE ON COMMERCE

(SUCCESSOR TO SSB 3065)

A BILL FOR

An Act relating to interest rates and charges on regulated loans, and consumer credit transaction service charges.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 536.13, subsections 1, 2, and 3, Code 2026, are amended by striking the subsections.
    Sec. 2.  Section 536.13, subsections 4 and 5, Code 2026, are amended to read as follows:
   4.  Beginning July 4, 1965, and until such time as a different rate is fixed by the superintendent, the The maximum rate of interest or charges upon the class or classes of regulated loans is as follows: shall be three percent per month.
   a.  Three percent per month on any part of the unpaid principal balance of the loan not exceeding one hundred fifty dollars.
   b.  Two percent per month on any part of the loan in excess of one hundred fifty dollars, but not exceeding three hundred dollars.
   c.  One and one-half percent per month on any part of the unpaid principal balance of the loan in excess of three hundred dollars, but not exceeding seven hundred dollars.
   d.  One percent per month on any part of the unpaid principal balance of the loan in excess of seven hundred dollars.
   5.  A licensee under this chapter may lend any sum of money not exceeding the threshold amount as defined in section 537.1301 in amount and may charge, contract for, and receive on the loan interest or charges at a rate not exceeding the maximum rate of interest or charges determined and fixed by the superintendent under authority of this section or pursuant to subsection 7 for those amounts in excess of ten thousand dollars 4.
    Sec. 3.  Section 536.13, subsection 7, paragraph a, Code 2026, is amended by striking the paragraph.
    Sec. 4.  Section 537.2501, subsection 1, paragraph l, Code 2026, is amended to read as follows:
   l.  For a consumer credit transaction, a service charge in an amount not to exceed the lesser of ten either three percent of the amount financed or thirty one hundred dollars.
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 interest rates and charges on regulated loans, and consumer credit transaction service charges.
   The bill eliminates provisions under current law relating to the superintendent of banking’s investigations of the conditions of regulated loans, and authority to redetermine and refix the maximum rate of interest or charges on regulated loans.
   The bill eliminates provisions under current law establishing the rate of interest or charges upon the class or classes of regulated loans, and instead sets the rate of interest or charges for all regulated loans at 3 percent per month.
   Under current law, for a consumer credit transaction, in addition to finance charges, a creditor may contract for and receive a service charge in an amount not to exceed the lesser of 10 percent of the amount financed or $30. Under the bill, such service charge shall not exceed the lesser of 3 percent of the amount financed or $100.