Senate File 106 - IntroducedA Bill ForAn Act 1relating to delayed deposit services by limiting the
2annual percentage rate for fees and requiring a delayed
3deposit repayment option in certain circumstances and making
4penalties applicable.
5BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1   Section 1.  Section 533D.9, subsection 2, paragraph b, Code
22019, is amended to read as follows:
   3b.  The annual percentage rate as computed pursuant to the
4federal Truth in Lending Act. The annual percentage rate shall
5not exceed thirty-six percent.

6   Sec. 2.  Section 533D.9, subsection 2, Code 2019, is amended
7by adding the following new paragraph:
8   NEW PARAGRAPH.  e.  That a maker obtaining more than four
9delayed deposit service loans from one licensee in a two-month
10period shall have the option to enter into an extended
11repayment plan agreement with the licensee pursuant to section
12533D.9A upon the maker’s request and prior to the date the last
13check accepted by the licensee is to be negotiable.
14   Sec. 3.  NEW SECTION.  533D.9A  Extended repayment plan.
   151.  Any maker obtaining more than four delayed deposit
16service loans from one licensee in a two-month period shall
17enter into an extended repayment plan agreement with the
18licensee if the maker requests to enter into such agreement
19prior to the date upon which the last check accepted by the
20licensee is to be negotiable. Except as provided in this
21section, the licensee shall not initiate debt collection,
22as defined by section 537.7102, civil court proceedings, or
23arbitration to collect on any unpaid checks during the term of
24the extended repayment plan agreement.
   252.  A licensee is required to enter into only one extended
26repayment plan agreement with a maker in a twelve-month period,
27measured from the commencement date of the first extended
28repayment plan agreement until the commencement date of the
29second extended repayment plan agreement.
   303.  A licensee shall not assess any other fee, interest
31charge, or other fee or charge on the maker as a result of
32entering into an extended repayment plan agreement concerning
33any unpaid check obligations.
   344.  a.  The maker shall be allowed to pay the total unpaid
35check obligations to be charged in at least four substantially
-1-1equal installments due on dates or soon after dates when the
2maker will receive regular income, or on dates as mutually
3agreed upon by the maker and the licensee. The extended
4repayment plan agreement shall contain a schedule for the
5payment of the total unpaid check obligations.
   6b.  The extended repayment plan agreement shall be in writing
7and signed by both the maker and the licensee.
   85.  Upon entering into an extended repayment plan agreement,
9the licensee shall return any postdated checks that the maker
10has given to the licensee for the original delayed deposit
11services transactions and shall do one of the following:
   12a.  The licensee shall require the maker at the time of
13entering into an extended repayment plan agreement to make
14a new check for the balance on any unpaid checks and upon
15each payment by the maker under the extended repayment plan
16agreement, the licensee shall require a new check for the
17remaining balance and return any previous check to the maker.
   18b.  The licensee shall require the maker at the time of
19entering into the extended repayment plan agreement to provide
20multiple checks, one for each of the scheduled payments under
21the extended repayment plan agreement.
   226.  During the duration of the extended repayment plan
23agreement, the obligations the maker owes on any unpaid checks
24are not delinquent and the licensee shall not charge a penalty
25pursuant to section 533D.9, subsection 2.
   267.  Upon the maker’s failure to make a scheduled payment
27pursuant to the extended repayment plan agreement, the licensee
28may charge a penalty pursuant to section 533D.9, subsection
292, and may initiate debt collection as defined in section
30537.7102, civil court proceedings, or arbitration to collect on
31any unpaid checks.
32EXPLANATION
33The inclusion of this explanation does not constitute agreement with
34the explanation’s substance by the members of the general assembly.
   35This bill modifies provisions applicable to delayed deposit
-2-1services.
   2The bill limits the annual percentage rate applicable to a
3delayed deposit services transaction to 36 percent, as computed
4pursuant to the federal Truth in Lending Act.
   5The bill requires a licensee holding multiple checks from
6one maker at any one time to enter into an extended repayment
7plan agreement if the maker of the multiple checks requests
8to enter into such agreement prior to the date upon which the
9checks are to be negotiable. The licensee may not initiate
10debt collection, civil court proceedings, or arbitration to
11collect on the unpaid checks during the term of the extended
12repayment plan agreement. A licensee need only enter into one
13extended repayment plan agreement with a maker of multiple
14checks in a 12-month period. A licensee cannot charge a fee,
15interest charge, or other charge as a result of entering into
16an extended repayment plan agreement. During the duration
17of the agreement, the obligations that the maker owes on the
18unpaid checks are not delinquent and the licensee cannot charge
19penalties for a delinquent obligation.
   20The bill allows a maker obtaining more than four delayed
21deposit service loans from one licensee in a two-month period
22to enter into an extended repayment plan agreement with the
23licensee if the maker requests to enter into such an agreement
24prior to the date upon which the last check accepted by the
25licensee is to be negotiable. The licensee may not initiate
26debt collection, civil court proceedings, or arbitration to
27collect on any unpaid checks during the term of the extended
28repayment plan agreement. A licensee need only enter into one
29extended repayment plan agreement with a maker in a 12-month
30period. A licensee cannot charge a fee, interest charge, or
31other charge as a result of entering into an extended repayment
32plan agreement. During the duration of the agreement, the
33obligations that the maker owes on any unpaid checks are not
34delinquent and the licensee cannot charge penalties for a
35delinquent obligation.
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   1The bill requires the extended repayment plan agreement
2to be in writing, signed by the maker and the licensee, and
3contain the schedule for payment of the total unpaid check
4obligations. The schedule must allow the maker to pay the
5checks in at least four substantially equal installments.
   6The bill requires the licensee to return any postdated
7checks that the maker has given to the licensee for the
8original transactions. The licensee may then either require
9the maker to provide a new check for the balance on the unpaid
10checks or provide multiple checks for each scheduled payment
11under the agreement.
   12The bill states that upon the maker’s failure to make a
13scheduled payment, the licensee may charge a penalty pursuant
14to Code section 533D.9(2), and may initiate debt collection,
15civil court proceedings, or arbitration to collect on the
16unpaid checks.
   17A violation of the bill may result in an administrative fine
18of not more than $5,000 for each violation and the cost of
19investigation.
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