Print
House File 263 - IntroducedA Bill ForAn Act 1relating to application fees for certain consumer loans.
2BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. Section 537.2501, subsection 1, paragraph j,
2Code 2019, is amended to read as follows:
3j. For a consumer loan where the amount financed does not
4exceed three thousand dollars and the term of the loan does
5not exceed twelve months, a bank, credit union incorporated
6pursuant to state or federal law, or a federally chartered
7or out-of-state chartered savings bank or savings and loan
8association may charge an additional application fee not to
9exceed the lesser of ten percent of the amount financed or
10thirty dollars. If the loan is not approved, the application
11fee shall not exceed the lesser of ten percent of the amount
12applied for by the applicant or thirty dollars The fee
13permitted pursuant to this paragraph may be charged solely to
14applicants who are approved or to all applicants. The fee
15permitted pursuant to this paragraph shall not be charged
16in connection with a loan used for the purchase of a motor
17vehicle, or for a loan where the borrower’s dwelling is used
18as security.
19EXPLANATION
20The inclusion of this explanation does not constitute agreement with
21the explanation’s substance by the members of the general assembly.
22Code section 537.2501(1)(j) allows a creditor to charge an
23application fee for consumer loans where the amount financed
24does not exceed $3,000 and the term of the loan does not exceed
2512 months, in addition to a finance charge. The specified
26application fee is the same for loans that are approved and
27loans that are not approved. This bill modifies that Code
28section by providing that application fees may be charged
29solely to applicants who are approved or to all applicants, and
30by removing duplicative language regarding application fees for
31loans that are not approved.
-1-gh/rn
2BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. Section 537.2501, subsection 1, paragraph j,
2Code 2019, is amended to read as follows:
3j. For a consumer loan where the amount financed does not
4exceed three thousand dollars and the term of the loan does
5not exceed twelve months, a bank, credit union incorporated
6pursuant to state or federal law, or a federally chartered
7or out-of-state chartered savings bank or savings and loan
8association may charge an additional application fee not to
9exceed the lesser of ten percent of the amount financed or
10thirty dollars. If the loan is not approved, the application
11fee shall not exceed the lesser of ten percent of the amount
12applied for by the applicant or thirty dollars The fee
13permitted pursuant to this paragraph may be charged solely to
14applicants who are approved or to all applicants. The fee
15permitted pursuant to this paragraph shall not be charged
16in connection with a loan used for the purchase of a motor
17vehicle, or for a loan where the borrower’s dwelling is used
18as security.
19EXPLANATION
20The inclusion of this explanation does not constitute agreement with
21the explanation’s substance by the members of the general assembly.
22Code section 537.2501(1)(j) allows a creditor to charge an
23application fee for consumer loans where the amount financed
24does not exceed $3,000 and the term of the loan does not exceed
2512 months, in addition to a finance charge. The specified
26application fee is the same for loans that are approved and
27loans that are not approved. This bill modifies that Code
28section by providing that application fees may be charged
29solely to applicants who are approved or to all applicants, and
30by removing duplicative language regarding application fees for
31loans that are not approved.
-1-gh/rn