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House Study Bill 126 - IntroducedA Bill ForAn Act 1relating to certain charges for consumer credit
2transactions.
3BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. Section 537.2501, subsection 1, Code 2017, is
2amended by adding the following new paragraph:
3 NEW PARAGRAPH. k. Credit reporting charges and charges for
4a dishonored consumer credit transaction payment as provided in
5section 554.3512.
6 Sec. 2. Section 537.2502, subsection 1, paragraphs a and b,
7Code 2017, are amended to read as follows:
8a. For a precomputed transaction, an amount not exceeding
9the greater of either of the following:
10(1) Five Ten percent of the unpaid amount of the
11installment, or a maximum of twenty thirty dollars.
12(2) The deferral charge that would be permitted to defer
13the unpaid amount of the installment for the period that it is
14delinquent.
15b. For an interest-bearing transaction, an amount not
16exceeding five ten percent of the unpaid amount of the
17installment, or a maximum of fifteen thirty dollars.
18 Sec. 3. Section 537.2502, subsection 4, Code 2017, is
19amended to read as follows:
204. With respect to open-end credit, the parties may contract
21for a delinquency charge on any payment not paid in full when
22due, as originally scheduled or as deferred, in an amount up to
23fifteen thirty dollars.
24 Sec. 4. Section 537.2502, Code 2017, is amended by adding
25the following new subsection:
26 NEW SUBSECTION. 7. With respect to an interest-bearing
27consumer credit transaction, the parties may contract for
28a post-maturity interest rate at a rate not exceeding that
29permitted for a finance charge under section 535.10, 537.2401,
30537.2402, or 537.2403.
31 Sec. 5. Section 537.2510, subsection 3, unnumbered
32paragraph 1, Code 2017, is amended to read as follows:
33Upon prepayment, but not otherwise, of a consumer credit
34transaction whether or not precomputed, of a precomputed
35consumer credit transaction other than a consumer lease, a
-1-1consumer rental purchase agreement, or a transaction pursuant
2to open-end credit:
3 Sec. 6. Section 537.2510, Code 2017, is amended by adding
4the following new subsection:
5 NEW SUBSECTION. 8. This section does not apply to an
6interest-bearing consumer credit transaction.
7EXPLANATION
8The inclusion of this explanation does not constitute agreement with
9the explanation’s substance by the members of the general assembly.
10This bill modifies provisions relating to certain charges
11for consumer credit transactions.
12Code section 537.2501 sets forth the charges that a creditor
13may receive pursuant to a consumer credit transaction in
14addition to a finance charge. The bill provides that in
15addition to the charges provided in current Code section
16537.2501, a creditor may receive credit reporting charges and
17charges for dishonored checks as provided in Code section
18554.3512.
19Current Code section 537.2502 allows the parties in certain
20consumer credit transactions to contract for delinquency
21charges. For a precomputed consumer credit transaction, the
22maximum delinquency charge is increased from the greater of 5
23percent of the unpaid installment or $20, to the greater of
2410 percent of the unpaid installment or $30, or the deferral
25charge amount. For an interest-bearing consumer credit
26transaction, the maximum delinquency charge is increased from 5
27percent of the unpaid installment or $15, to 10 percent of the
28unpaid installment or $30. For an open-end credit arrangement,
29the maximum delinquency charge is increased from $15 to $30.
30The bill also provides that with respect to an interest-bearing
31transaction, the parties may contract for a post-maturity
32interest rate at a rate not exceeding a finance charge that
33is permitted under Code section 535.10 (home equity line of
34credit), 537.2401 (consumer loans not pursuant to open-end
35credit), 537.2402 (consumer loans pursuant to open-end credit),
-2-1or 537.2403 (consumer loans secured by a motor vehicle).
2Current Code section 537.2510 requires creditors to rebate
3certain amounts to consumers upon the prepayment of precomputed
4consumer credit transactions. The bill limits the charges
5allowed in Code section 537.2510(3) to be applicable only upon
6the prepayment of precomputed consumer credit transactions.
7The bill specifically provides that Code section 537.2510 does
8not apply to interest-bearing consumer credit transactions.
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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, Code 2017, is
2amended by adding the following new paragraph:
3 NEW PARAGRAPH. k. Credit reporting charges and charges for
4a dishonored consumer credit transaction payment as provided in
5section 554.3512.
6 Sec. 2. Section 537.2502, subsection 1, paragraphs a and b,
7Code 2017, are amended to read as follows:
8a. For a precomputed transaction, an amount not exceeding
9the greater of either of the following:
10(1) Five Ten percent of the unpaid amount of the
11installment, or a maximum of twenty thirty dollars.
12(2) The deferral charge that would be permitted to defer
13the unpaid amount of the installment for the period that it is
14delinquent.
15b. For an interest-bearing transaction, an amount not
16exceeding five ten percent of the unpaid amount of the
17installment, or a maximum of fifteen thirty dollars.
18 Sec. 3. Section 537.2502, subsection 4, Code 2017, is
19amended to read as follows:
204. With respect to open-end credit, the parties may contract
21for a delinquency charge on any payment not paid in full when
22due, as originally scheduled or as deferred, in an amount up to
23fifteen thirty dollars.
24 Sec. 4. Section 537.2502, Code 2017, is amended by adding
25the following new subsection:
26 NEW SUBSECTION. 7. With respect to an interest-bearing
27consumer credit transaction, the parties may contract for
28a post-maturity interest rate at a rate not exceeding that
29permitted for a finance charge under section 535.10, 537.2401,
30537.2402, or 537.2403.
31 Sec. 5. Section 537.2510, subsection 3, unnumbered
32paragraph 1, Code 2017, is amended to read as follows:
33Upon prepayment, but not otherwise, of a consumer credit
34transaction whether or not precomputed, of a precomputed
35consumer credit transaction other than a consumer lease, a
-1-1consumer rental purchase agreement, or a transaction pursuant
2to open-end credit:
3 Sec. 6. Section 537.2510, Code 2017, is amended by adding
4the following new subsection:
5 NEW SUBSECTION. 8. This section does not apply to an
6interest-bearing consumer credit transaction.
7EXPLANATION
8The inclusion of this explanation does not constitute agreement with
9the explanation’s substance by the members of the general assembly.
10This bill modifies provisions relating to certain charges
11for consumer credit transactions.
12Code section 537.2501 sets forth the charges that a creditor
13may receive pursuant to a consumer credit transaction in
14addition to a finance charge. The bill provides that in
15addition to the charges provided in current Code section
16537.2501, a creditor may receive credit reporting charges and
17charges for dishonored checks as provided in Code section
18554.3512.
19Current Code section 537.2502 allows the parties in certain
20consumer credit transactions to contract for delinquency
21charges. For a precomputed consumer credit transaction, the
22maximum delinquency charge is increased from the greater of 5
23percent of the unpaid installment or $20, to the greater of
2410 percent of the unpaid installment or $30, or the deferral
25charge amount. For an interest-bearing consumer credit
26transaction, the maximum delinquency charge is increased from 5
27percent of the unpaid installment or $15, to 10 percent of the
28unpaid installment or $30. For an open-end credit arrangement,
29the maximum delinquency charge is increased from $15 to $30.
30The bill also provides that with respect to an interest-bearing
31transaction, the parties may contract for a post-maturity
32interest rate at a rate not exceeding a finance charge that
33is permitted under Code section 535.10 (home equity line of
34credit), 537.2401 (consumer loans not pursuant to open-end
35credit), 537.2402 (consumer loans pursuant to open-end credit),
-2-1or 537.2403 (consumer loans secured by a motor vehicle).
2Current Code section 537.2510 requires creditors to rebate
3certain amounts to consumers upon the prepayment of precomputed
4consumer credit transactions. The bill limits the charges
5allowed in Code section 537.2510(3) to be applicable only upon
6the prepayment of precomputed consumer credit transactions.
7The bill specifically provides that Code section 537.2510 does
8not apply to interest-bearing consumer credit transactions.
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