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Senate File 502 - IntroducedA Bill ForAn Act 1relating to banks, credit unions, and certain consumer
2credit transactions.
3BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. Section 524.213, Code 2017, is amended to read
2as follows:
3524.213 Duties and powers of superintendent.
4The superintendent shall have general control, supervision
5and regulation of all state banks and shall be charged with
6the administration, interpretation, and execution of the laws,
7rules, and regulations of this state and any other state or
8federal law or regulation relating to banks and banking and
9with such other duties and responsibilities as are imposed
10upon the superintendent by the laws of this state. The
11superintendent shall have power to adopt and promulgate such
12rules and regulations as necessary to carry out and enforce,
13properly and effectively, the provisions of this chapter and
14chapter 12C applicable to banks.
15 Sec. 2. Section 524.612, subsections 1, 2, and 5, Code 2017,
16are amended by striking the subsections.
17 Sec. 3. Section 524.612, subsection 3, Code 2017, is amended
18to read as follows:
193. A director shall not receive terms or be paid a rate
20of interest on deposits, by a state bank of which the person
21is a director, which are more favorable than that provided to
22any other customer under similar circumstances. Any waiver of
23ordinary or customary charges related to deposit accounts shall
24not violate this subsection.
25 Sec. 4. Section 524.613, subsection 2, Code 2017, is amended
26by striking the subsection.
27 Sec. 5. Section 524.706, subsection 1, Code 2017, is amended
28by striking the subsection.
29 Sec. 6. Section 524.706, subsection 2, Code 2017, is amended
30to read as follows:
312. Section 524.612, subsection 2, applies to executive
32officers, and section 524.612, subsections 3 and 4, apply to
33all officers and employees.
34 Sec. 7. Section 524.710, subsection 2, Code 2017, is amended
35by striking the subsection.
-1-1 Sec. 8. Section 524.1601, subsection 1, paragraph b, Code
22017, is amended to read as follows:
3b. The amount by which the director’s, or executive
4 officer’s, or employee’s deposit account in the state bank
5or bank holding company is overdrawn, upon conviction of a
6 in violation of section 524.613, subsection 2, or of section
7524.710, subsection 2 12 C.F.R.§215.4(e).
8 Sec. 9. Section 524.1601, subsection 2, Code 2017, is
9amended to read as follows:
102. A director or officer who willfully makes or receives a
11loan in violation of section 524.612, subsection 1, or section
12524.706, subsection 1 12 C.F.R. §215.4 or 215.5, shall be
13guilty of a serious misdemeanor and shall be subject to an
14additional fine equal to that amount of the loan in excess
15of the limitation imposed by such subsections regulations,
16and shall be forever disqualified from acting as a director
17or officer of any state bank or bank holding company. For
18the purpose of this subsection, amounts which are treated as
19obligations of an officer or director pursuant to section
20524.612, subsection 5, shall be considered in determining
21whether the loan or extension of credit is in violation of
22 section 524.612, subsection 1, and section 524.706, subsection
231.
24 Sec. 10. Section 524.1806, Code 2017, is amended to read as
25follows:
26524.1806 Banks owned or controlled — officers and directors.
27An individual who is a director or an officer of a bank
28holding company, as specified by section 524.1801, is deemed
29to be a director or an officer, or both, as the case may be, of
30each bank so owned or controlled by that bank holding company,
31for the purposes of sections 524.612, 524.613 and 524.706, and
32for the purposes of 12 C.F.R. pt.215.
33 Sec. 11. Section 533.205, subsection 7, Code 2017, is
34amended to read as follows:
357. A state credit union shall not may pay an overdraft of a
-2-1director, officer, or employee of the state credit union on an
2account at the state credit union, unless subject to the rules
3of the superintendent, when the payment of funds is made in
4accordance with either any of the following:
5a. A written, preauthorized, interest-bearing extension of
6credit plan that specifies a method of repayment.
7b. A written, preauthorized transfer of collected funds
8from another account of the account holder at the state credit
9union.
10c. The overdraft is paid pursuant to an overdraft protection
11plan or courtesy pay program.
12 Sec. 12. Section 537.2301, Code 2017, is amended by adding
13the following new subsection:
14 NEW SUBSECTION. 2A. A supervised loan made by a person in
15violation of subsection 2 shall be void and the consumer is
16not obligated to pay either the amount financed or the finance
17charge. If the consumer has paid any part of the amount
18financed or the finance charge, the consumer has a right to
19recover the payment from the person in violation of subsection
202 or from an assignee of that person’s rights who undertakes
21direct collection of payments or enforcement of rights arising
22from the debt. With respect to violations arising from
23loans made pursuant to open-end credit, no action pursuant
24to this subsection may be brought more than two years after
25the violation occurred. With respect to violations arising
26from other loans, no action pursuant to this subsection may
27be brought more than one year after the due date of the last
28scheduled payment of the agreement pursuant to which the charge
29was paid.
30 Sec. 13. Section 537.2501, subsection 1, paragraph f,
31subparagraph (1), Code 2017, is amended to read as follows:
32(1) With respect to open-end credit pursuant to a credit
33card issued by the creditor which entitles the cardholder
34to purchase or lease goods or services from at least one
35hundred persons not related to the card issuer, the parties
-3-1may contract for an over-limit charge up to fifteen dollars in
2accordance with 12 C.F.R.§1026.52(b) if the balance of the
3account exceeds the credit limit established pursuant to the
4agreement. The over-limit charge under this paragraph shall
5not be assessed again in a subsequent billing cycle unless in a
6subsequent billing cycle the account balance has been reduced
7below the credit limit.
8 Sec. 14. Section 537.2501, subsection 1, paragraph g, Code
92017, is amended to read as follows:
10g. A surcharge of not more than five percent of the amount
11of the face value of the payment instrument or twenty dollars,
12whichever is greater, for each dishonored payment instrument
13provided that the fee is clearly and conspicuously disclosed
14in the cardholder agreement. However, the amount of the
15surcharge shall not exceed twenty dollars unless the check,
16draft, or order was presented twice or the maker does not have
17an account with the drawee. If the check, draft, or order was
18presented twice or the maker does not have an account with the
19drawee, the amount of the surcharge shall not exceed fifty
20dollars as provided for in section 554.3512 for a dishonored
21check, draft, or order that was accepted as payment for a
22consumer credit transaction payment. The surcharge shall not
23be assessed against the maker if the reason for the dishonor of
24the instrument is that the maker has stopped payment pursuant
25to section 554.4403.
26 Sec. 15. Section 537.2501, subsection 1, Code 2017, is
27amended by adding the following new paragraph:
28 NEW PARAGRAPH. k. Credit reporting charges.
29 Sec. 16. Section 537.2502, subsection 1, paragraph a,
30subparagraph (1), Code 2017, is amended to read as follows:
31(1) Five percent of the unpaid amount of the installment, or
32a maximum of twenty thirty dollars.
33 Sec. 17. Section 537.2502, subsection 1, paragraph b, Code
342017, is amended to read as follows:
35b. For an interest-bearing transaction, an amount not
-4-1exceeding five percent of the unpaid amount of the installment,
2or a maximum of fifteen thirty dollars.
3 Sec. 18. Section 537.2502, subsection 4, Code 2017, is
4amended to read as follows:
54. With respect to open-end credit, the parties may contract
6for a delinquency charge on any payment not paid in full when
7due, as originally scheduled or as deferred, in an amount up to
8fifteen thirty dollars.
9 Sec. 19. Section 537.2510, Code 2017, is amended by adding
10the following new subsection:
11 NEW SUBSECTION. 8. This section does not apply to a
12financial institution as defined in section 537.1301.
13 Sec. 20. Section 537.5201, subsection 3, Code 2017, is
14amended to read as follows:
153. If a creditor has contracted for or received a charge
16in excess of that allowed by this chapter, or if a consumer
17is entitled to a refund and a person liable to the consumer
18refuses to make a refund within a reasonable time after demand,
19the consumer may recover from the creditor or the person
20liable, in an action other than a class action, the excess
21charge or refund and a penalty in an amount determined by the
22court not less than one two hundred dollars or more than one
23 two thousand dollars. With respect to excess charges arising
24from sales or loans made pursuant to open-end credit, no action
25pursuant to this subsection may be brought more than two years
26after the time the excess charge was made. With respect to
27excess charges arising from other consumer credit transactions
28no action pursuant to this subsection may be brought more than
29one year after the due date of the last scheduled payment of
30the agreement pursuant to which the charge was made. For
31purposes of this subsection, a reasonable time is presumed to
32be thirty days.
33 Sec. 21. Section 537.5203, subsection 1, paragraph a, Code
342017, is amended to read as follows:
35a. Twice the amount of the finance charge in connection with
-5-1the transaction, but the liability pursuant to this paragraph
2shall be not less than one two hundred dollars or more than one
3 two thousand dollars.
4 Sec. 22. Section 537.6113, subsection 2, Code 2017, is
5amended to read as follows:
62. The administrator may bring a civil action against a
7person to recover a civil penalty of no more than five ten
8 thousand dollars for repeatedly and intentionally violating
9this chapter. No civil penalty pursuant to this subsection
10may be imposed for violations of this chapter occurring more
11than two years before the action is brought or for making
12unconscionable agreements or engaging in a course of fraudulent
13or unconscionable conduct.
14 Sec. 23. Section 537.6203, subsections 1 and 4, Code 2017,
15are amended to read as follows:
161. A person required to file notification shall pay to the
17administrator an annual fee of ten fifty dollars. The fee
18shall be paid with the filing of the first notification and on
19or before January 31 of each succeeding year.
204. In addition to the penalties provided by section
21537.6113, subsection 3, the administrator may collect a charge,
22established by rule, not exceeding twenty-five seventy-five
23 dollars from each person required to pay fees under this
24section who fails to pay the fees in full within thirty days
25after they are due.
26EXPLANATION
27The inclusion of this explanation does not constitute agreement with
28the explanation’s substance by the members of the general assembly.
29This bill relates to banks, credit unions, and certain
30consumer credit transactions.
31The bill modifies several provisions relating to state
32banks in Code chapter 524. The bill specifies that the
33superintendent of banking is charged with the administration,
34interpretation, and execution of the laws, rules, and
35regulations of any state or federal law or regulation relating
-6-1to banking. The bill eliminates various provisions applicable
2to the directors and officers of state banks, including
3limitations on the receipt of loans and extensions of credit
4by such persons. However, the bill adds several references to
5federal law regulating loans to directors and officers in Code
6chapter 524.
7Current Code section 533.205(7) provides that a state credit
8union shall not pay an overdraft of a director, officer, or
9employee, unless the payment is made in accordance with an
10extension of credit plan or transfer of funds from another
11account at the state credit union. The bill modifies this
12Code section by providing that a state credit union may pay
13an overdraft of a director, officer, or employee, subject to
14the rules of the superintendent, when the payment is made in
15accordance with an extension of credit plan, transfer of funds
16from another account at the state credit union, or pursuant to
17an overdraft protection plan or courtesy pay program.
18Current Code section 537.2301 authorizes certain persons to
19make supervised loans. The bill provides that a supervised
20loan made by a person in violation of Code section 537.2301(2)
21is void and the consumer is not obligated to pay the amount
22financed or the finance charge. A consumer who has already
23paid any part of such amount or charge may recover the payment.
24With respect to violations arising from loans made pursuant
25to open-end credit, no action may be brought pursuant to the
26bill more than two years after the violation occurred. With
27respect to violations arising from other loans, no action may
28be brought pursuant to the bill more than one year after the
29due date of the last scheduled payment of the agreement for
30which the charge was paid.
31Current Code section 537.2501 sets forth the charges that
32a creditor may receive in addition to a finance charge. The
33bill modifies the over-limit charge the parties to an open-end
34credit pursuant to a credit card transaction may contract for
35from up to $15 to a charge in accordance with federal law. The
-7-1bill modifies the surcharge in Code section 537.2501(1)(g) to
2authorize a surcharge for a dishonored check, draft, or order
3not to exceed $30 as provided for in Code section 554.3512.
4The bill also provides that a creditor may receive credit
5reporting charges.
6Current Code section 537.2502 allows the parties in certain
7consumer credit transactions to contract for delinquency
8charges. For a precomputed consumer credit transaction, the
9maximum delinquency charge is increased from the greater of 5
10percent of the unpaid installment or $20, to the greater of
115 percent of the unpaid installment or $30, or the deferral
12charge amount. For an interest-bearing consumer credit
13transaction, the maximum delinquency charge is increased from 5
14percent of the unpaid installment or $15, to 5 percent of the
15unpaid installment or $30. For an open-credit arrangement, the
16maximum delinquency charge is increased from $15 to $30.
17Current Code section 537.2510 requires creditors to rebate
18certain amounts to consumers upon the prepayment of precomputed
19consumer credit transactions. The bill provides that Code
20section 537.2510 does not apply to financial institutions as
21defined in Code section 537.1301. This would include banks,
22savings and loan associations, or state banks incorporated
23under state or federal law, and credit unions organized under
24state or federal law.
25Current Code section 537.5201 sets forth the remedies
26available to consumers for violations of Code chapter 537. The
27bill increases the penalty a creditor must pay for contracting
28for or receiving a charge in excess of that allowed by Code
29chapter 537 from not less than $100 or more than $1,000, to not
30less than $200 or more than $2,000.
31Current Code section 537.5203 sets forth the civil liability
32of a creditor who fails to disclose information to a person
33entitled to the information under Code chapter 537. The bill
34increases the amount a creditor is liable to such person from
35not less than $100 or more than $1,000 to not less than $200 or
-8-1more than $2,000.
2Current Code section 537.6113 allows the attorney general to
3bring civil actions to recover moneys under Code chapter 537.
4The bill increases the civil penalty the attorney general may
5recover from a person for repeated and intentional violations
6of Code chapter 537 from no more than $5,000 to no more than
7$10,000.
8Current Code section 537.6203 sets forth various fees and
9charges for persons required to file notification pursuant to
10Code chapter 537. The bill increases the annual fee for a
11person required to file notification from $10 to $50. The bill
12also increases the late charge for failure to pay a fee within
1330 days that it is due from no more than $25 per person to no
14more than $75 per person.
-9-gh/rn/rj
2credit transactions.
3BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. Section 524.213, Code 2017, is amended to read
2as follows:
3524.213 Duties and powers of superintendent.
4The superintendent shall have general control, supervision
5and regulation of all state banks and shall be charged with
6the administration, interpretation, and execution of the laws,
7rules, and regulations of this state and any other state or
8federal law or regulation relating to banks and banking and
9with such other duties and responsibilities as are imposed
10upon the superintendent by the laws of this state. The
11superintendent shall have power to adopt and promulgate such
12rules and regulations as necessary to carry out and enforce,
13properly and effectively, the provisions of this chapter and
14chapter 12C applicable to banks.
15 Sec. 2. Section 524.612, subsections 1, 2, and 5, Code 2017,
16are amended by striking the subsections.
17 Sec. 3. Section 524.612, subsection 3, Code 2017, is amended
18to read as follows:
193. A director shall not receive terms or be paid a rate
20of interest on deposits, by a state bank of which the person
21is a director, which are more favorable than that provided to
22any other customer under similar circumstances. Any waiver of
23ordinary or customary charges related to deposit accounts shall
24not violate this subsection.
25 Sec. 4. Section 524.613, subsection 2, Code 2017, is amended
26by striking the subsection.
27 Sec. 5. Section 524.706, subsection 1, Code 2017, is amended
28by striking the subsection.
29 Sec. 6. Section 524.706, subsection 2, Code 2017, is amended
30to read as follows:
312. Section 524.612, subsection 2, applies to executive
32officers, and section 524.612, subsections 3 and 4, apply to
33all officers and employees.
34 Sec. 7. Section 524.710, subsection 2, Code 2017, is amended
35by striking the subsection.
-1-1 Sec. 8. Section 524.1601, subsection 1, paragraph b, Code
22017, is amended to read as follows:
3b. The amount by which the director’s, or executive
4 officer’s, or employee’s deposit account in the state bank
5or bank holding company is overdrawn, upon conviction of a
6 in violation of section 524.613, subsection 2, or of section
7524.710, subsection 2 12 C.F.R.§215.4(e).
8 Sec. 9. Section 524.1601, subsection 2, Code 2017, is
9amended to read as follows:
102. A director or officer who willfully makes or receives a
11loan in violation of section 524.612, subsection 1, or section
12524.706, subsection 1 12 C.F.R. §215.4 or 215.5, shall be
13guilty of a serious misdemeanor and shall be subject to an
14additional fine equal to that amount of the loan in excess
15of the limitation imposed by such subsections regulations,
16and shall be forever disqualified from acting as a director
17or officer of any state bank or bank holding company. For
18the purpose of this subsection, amounts which are treated as
19obligations of an officer or director pursuant to section
20524.612, subsection 5, shall be considered in determining
21whether the loan or extension of credit is in violation of
22 section 524.612, subsection 1, and section 524.706, subsection
231.
24 Sec. 10. Section 524.1806, Code 2017, is amended to read as
25follows:
26524.1806 Banks owned or controlled — officers and directors.
27An individual who is a director or an officer of a bank
28holding company, as specified by section 524.1801, is deemed
29to be a director or an officer, or both, as the case may be, of
30each bank so owned or controlled by that bank holding company,
31for the purposes of sections 524.612, 524.613 and 524.706, and
32for the purposes of 12 C.F.R. pt.215.
33 Sec. 11. Section 533.205, subsection 7, Code 2017, is
34amended to read as follows:
357. A state credit union shall not may pay an overdraft of a
-2-1director, officer, or employee of the state credit union on an
2account at the state credit union, unless subject to the rules
3of the superintendent, when the payment of funds is made in
4accordance with either any of the following:
5a. A written, preauthorized, interest-bearing extension of
6credit plan that specifies a method of repayment.
7b. A written, preauthorized transfer of collected funds
8from another account of the account holder at the state credit
9union.
10c. The overdraft is paid pursuant to an overdraft protection
11plan or courtesy pay program.
12 Sec. 12. Section 537.2301, Code 2017, is amended by adding
13the following new subsection:
14 NEW SUBSECTION. 2A. A supervised loan made by a person in
15violation of subsection 2 shall be void and the consumer is
16not obligated to pay either the amount financed or the finance
17charge. If the consumer has paid any part of the amount
18financed or the finance charge, the consumer has a right to
19recover the payment from the person in violation of subsection
202 or from an assignee of that person’s rights who undertakes
21direct collection of payments or enforcement of rights arising
22from the debt. With respect to violations arising from
23loans made pursuant to open-end credit, no action pursuant
24to this subsection may be brought more than two years after
25the violation occurred. With respect to violations arising
26from other loans, no action pursuant to this subsection may
27be brought more than one year after the due date of the last
28scheduled payment of the agreement pursuant to which the charge
29was paid.
30 Sec. 13. Section 537.2501, subsection 1, paragraph f,
31subparagraph (1), Code 2017, is amended to read as follows:
32(1) With respect to open-end credit pursuant to a credit
33card issued by the creditor which entitles the cardholder
34to purchase or lease goods or services from at least one
35hundred persons not related to the card issuer, the parties
-3-1may contract for an over-limit charge up to fifteen dollars in
2accordance with 12 C.F.R.§1026.52(b) if the balance of the
3account exceeds the credit limit established pursuant to the
4agreement. The over-limit charge under this paragraph shall
5not be assessed again in a subsequent billing cycle unless in a
6subsequent billing cycle the account balance has been reduced
7below the credit limit.
8 Sec. 14. Section 537.2501, subsection 1, paragraph g, Code
92017, is amended to read as follows:
10g. A surcharge of not more than five percent of the amount
11of the face value of the payment instrument or twenty dollars,
12whichever is greater, for each dishonored payment instrument
13provided that the fee is clearly and conspicuously disclosed
14in the cardholder agreement. However, the amount of the
15surcharge shall not exceed twenty dollars unless the check,
16draft, or order was presented twice or the maker does not have
17an account with the drawee. If the check, draft, or order was
18presented twice or the maker does not have an account with the
19drawee, the amount of the surcharge shall not exceed fifty
20dollars as provided for in section 554.3512 for a dishonored
21check, draft, or order that was accepted as payment for a
22consumer credit transaction payment. The surcharge shall not
23be assessed against the maker if the reason for the dishonor of
24the instrument is that the maker has stopped payment pursuant
25to section 554.4403.
26 Sec. 15. Section 537.2501, subsection 1, Code 2017, is
27amended by adding the following new paragraph:
28 NEW PARAGRAPH. k. Credit reporting charges.
29 Sec. 16. Section 537.2502, subsection 1, paragraph a,
30subparagraph (1), Code 2017, is amended to read as follows:
31(1) Five percent of the unpaid amount of the installment, or
32a maximum of twenty thirty dollars.
33 Sec. 17. Section 537.2502, subsection 1, paragraph b, Code
342017, is amended to read as follows:
35b. For an interest-bearing transaction, an amount not
-4-1exceeding five percent of the unpaid amount of the installment,
2or a maximum of fifteen thirty dollars.
3 Sec. 18. Section 537.2502, subsection 4, Code 2017, is
4amended to read as follows:
54. With respect to open-end credit, the parties may contract
6for a delinquency charge on any payment not paid in full when
7due, as originally scheduled or as deferred, in an amount up to
8fifteen thirty dollars.
9 Sec. 19. Section 537.2510, Code 2017, is amended by adding
10the following new subsection:
11 NEW SUBSECTION. 8. This section does not apply to a
12financial institution as defined in section 537.1301.
13 Sec. 20. Section 537.5201, subsection 3, Code 2017, is
14amended to read as follows:
153. If a creditor has contracted for or received a charge
16in excess of that allowed by this chapter, or if a consumer
17is entitled to a refund and a person liable to the consumer
18refuses to make a refund within a reasonable time after demand,
19the consumer may recover from the creditor or the person
20liable, in an action other than a class action, the excess
21charge or refund and a penalty in an amount determined by the
22court not less than one two hundred dollars or more than one
23 two thousand dollars. With respect to excess charges arising
24from sales or loans made pursuant to open-end credit, no action
25pursuant to this subsection may be brought more than two years
26after the time the excess charge was made. With respect to
27excess charges arising from other consumer credit transactions
28no action pursuant to this subsection may be brought more than
29one year after the due date of the last scheduled payment of
30the agreement pursuant to which the charge was made. For
31purposes of this subsection, a reasonable time is presumed to
32be thirty days.
33 Sec. 21. Section 537.5203, subsection 1, paragraph a, Code
342017, is amended to read as follows:
35a. Twice the amount of the finance charge in connection with
-5-1the transaction, but the liability pursuant to this paragraph
2shall be not less than one two hundred dollars or more than one
3 two thousand dollars.
4 Sec. 22. Section 537.6113, subsection 2, Code 2017, is
5amended to read as follows:
62. The administrator may bring a civil action against a
7person to recover a civil penalty of no more than five ten
8 thousand dollars for repeatedly and intentionally violating
9this chapter. No civil penalty pursuant to this subsection
10may be imposed for violations of this chapter occurring more
11than two years before the action is brought or for making
12unconscionable agreements or engaging in a course of fraudulent
13or unconscionable conduct.
14 Sec. 23. Section 537.6203, subsections 1 and 4, Code 2017,
15are amended to read as follows:
161. A person required to file notification shall pay to the
17administrator an annual fee of ten fifty dollars. The fee
18shall be paid with the filing of the first notification and on
19or before January 31 of each succeeding year.
204. In addition to the penalties provided by section
21537.6113, subsection 3, the administrator may collect a charge,
22established by rule, not exceeding twenty-five seventy-five
23 dollars from each person required to pay fees under this
24section who fails to pay the fees in full within thirty days
25after they are due.
26EXPLANATION
27The inclusion of this explanation does not constitute agreement with
28the explanation’s substance by the members of the general assembly.
29This bill relates to banks, credit unions, and certain
30consumer credit transactions.
31The bill modifies several provisions relating to state
32banks in Code chapter 524. The bill specifies that the
33superintendent of banking is charged with the administration,
34interpretation, and execution of the laws, rules, and
35regulations of any state or federal law or regulation relating
-6-1to banking. The bill eliminates various provisions applicable
2to the directors and officers of state banks, including
3limitations on the receipt of loans and extensions of credit
4by such persons. However, the bill adds several references to
5federal law regulating loans to directors and officers in Code
6chapter 524.
7Current Code section 533.205(7) provides that a state credit
8union shall not pay an overdraft of a director, officer, or
9employee, unless the payment is made in accordance with an
10extension of credit plan or transfer of funds from another
11account at the state credit union. The bill modifies this
12Code section by providing that a state credit union may pay
13an overdraft of a director, officer, or employee, subject to
14the rules of the superintendent, when the payment is made in
15accordance with an extension of credit plan, transfer of funds
16from another account at the state credit union, or pursuant to
17an overdraft protection plan or courtesy pay program.
18Current Code section 537.2301 authorizes certain persons to
19make supervised loans. The bill provides that a supervised
20loan made by a person in violation of Code section 537.2301(2)
21is void and the consumer is not obligated to pay the amount
22financed or the finance charge. A consumer who has already
23paid any part of such amount or charge may recover the payment.
24With respect to violations arising from loans made pursuant
25to open-end credit, no action may be brought pursuant to the
26bill more than two years after the violation occurred. With
27respect to violations arising from other loans, no action may
28be brought pursuant to the bill more than one year after the
29due date of the last scheduled payment of the agreement for
30which the charge was paid.
31Current Code section 537.2501 sets forth the charges that
32a creditor may receive in addition to a finance charge. The
33bill modifies the over-limit charge the parties to an open-end
34credit pursuant to a credit card transaction may contract for
35from up to $15 to a charge in accordance with federal law. The
-7-1bill modifies the surcharge in Code section 537.2501(1)(g) to
2authorize a surcharge for a dishonored check, draft, or order
3not to exceed $30 as provided for in Code section 554.3512.
4The bill also provides that a creditor may receive credit
5reporting charges.
6Current Code section 537.2502 allows the parties in certain
7consumer credit transactions to contract for delinquency
8charges. For a precomputed consumer credit transaction, the
9maximum delinquency charge is increased from the greater of 5
10percent of the unpaid installment or $20, to the greater of
115 percent of the unpaid installment or $30, or the deferral
12charge amount. For an interest-bearing consumer credit
13transaction, the maximum delinquency charge is increased from 5
14percent of the unpaid installment or $15, to 5 percent of the
15unpaid installment or $30. For an open-credit arrangement, the
16maximum delinquency charge is increased from $15 to $30.
17Current Code section 537.2510 requires creditors to rebate
18certain amounts to consumers upon the prepayment of precomputed
19consumer credit transactions. The bill provides that Code
20section 537.2510 does not apply to financial institutions as
21defined in Code section 537.1301. This would include banks,
22savings and loan associations, or state banks incorporated
23under state or federal law, and credit unions organized under
24state or federal law.
25Current Code section 537.5201 sets forth the remedies
26available to consumers for violations of Code chapter 537. The
27bill increases the penalty a creditor must pay for contracting
28for or receiving a charge in excess of that allowed by Code
29chapter 537 from not less than $100 or more than $1,000, to not
30less than $200 or more than $2,000.
31Current Code section 537.5203 sets forth the civil liability
32of a creditor who fails to disclose information to a person
33entitled to the information under Code chapter 537. The bill
34increases the amount a creditor is liable to such person from
35not less than $100 or more than $1,000 to not less than $200 or
-8-1more than $2,000.
2Current Code section 537.6113 allows the attorney general to
3bring civil actions to recover moneys under Code chapter 537.
4The bill increases the civil penalty the attorney general may
5recover from a person for repeated and intentional violations
6of Code chapter 537 from no more than $5,000 to no more than
7$10,000.
8Current Code section 537.6203 sets forth various fees and
9charges for persons required to file notification pursuant to
10Code chapter 537. The bill increases the annual fee for a
11person required to file notification from $10 to $50. The bill
12also increases the late charge for failure to pay a fee within
1330 days that it is due from no more than $25 per person to no
14more than $75 per person.
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