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House Study Bill 69 - IntroducedA Bill ForAn Act 1relating to service charges on consumer credit
2transactions.
3BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. Section 537.2501, subsection 1, paragraph l,
2Code 2021, is amended to read as follows:
3l. For an interest-bearing a consumer credit transaction,
4a service charge in an amount not to exceed the lesser of ten
5percent of the amount financed or thirty dollars.
6 Sec. 2. Section 537.2510, subsection 3, paragraph a, Code
72021, is amended to read as follows:
8a. If the prepayment is in full, the creditor may collect
9or retain a minimum charge not exceeding five dollars in a
10transaction which had an amount financed of seventy-five
11dollars or less, or not exceeding seven dollars and fifty cents
12in a transaction which had an amount financed of more than
13seventy-five dollars, if the minimum charge was contracted
14for, and the finance charge earned at the time of prepayment
15is less than the minimum charge contracted for. If, however,
16a creditor has collected a service charge in association with
17an interest-bearing a consumer credit transaction pursuant to
18section 537.2501, subsection 1, paragraph “l”, the creditor
19shall not collect or retain a minimum charge upon prepayment
20pursuant to this subsection.
21EXPLANATION
22The inclusion of this explanation does not constitute agreement with
23the explanation’s substance by the members of the general assembly.
24This bill relates to service charges on consumer credit
25transactions.
26Current law authorizes a creditor to contract for and
27receive a service charge in an amount not to exceed the
28lesser of 10 percent of the amount financed or $30 for an
29interest-bearing consumer credit transaction. Additionally,
30current law prohibits a creditor from collecting a minimum
31charge upon prepayment of a consumer credit transaction if the
32creditor collected a service charge in association with an
33interest-bearing consumer credit transaction. The bill strikes
34from both of these provisions the requirement that the consumer
35credit transaction bear interest.
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2transactions.
3BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. Section 537.2501, subsection 1, paragraph l,
2Code 2021, is amended to read as follows:
3l. For an interest-bearing a consumer credit transaction,
4a service charge in an amount not to exceed the lesser of ten
5percent of the amount financed or thirty dollars.
6 Sec. 2. Section 537.2510, subsection 3, paragraph a, Code
72021, is amended to read as follows:
8a. If the prepayment is in full, the creditor may collect
9or retain a minimum charge not exceeding five dollars in a
10transaction which had an amount financed of seventy-five
11dollars or less, or not exceeding seven dollars and fifty cents
12in a transaction which had an amount financed of more than
13seventy-five dollars, if the minimum charge was contracted
14for, and the finance charge earned at the time of prepayment
15is less than the minimum charge contracted for. If, however,
16a creditor has collected a service charge in association with
17an interest-bearing a consumer credit transaction pursuant to
18section 537.2501, subsection 1, paragraph “l”, the creditor
19shall not collect or retain a minimum charge upon prepayment
20pursuant to this subsection.
21EXPLANATION
22The inclusion of this explanation does not constitute agreement with
23the explanation’s substance by the members of the general assembly.
24This bill relates to service charges on consumer credit
25transactions.
26Current law authorizes a creditor to contract for and
27receive a service charge in an amount not to exceed the
28lesser of 10 percent of the amount financed or $30 for an
29interest-bearing consumer credit transaction. Additionally,
30current law prohibits a creditor from collecting a minimum
31charge upon prepayment of a consumer credit transaction if the
32creditor collected a service charge in association with an
33interest-bearing consumer credit transaction. The bill strikes
34from both of these provisions the requirement that the consumer
35credit transaction bear interest.
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