Bill Text: IA SSB3158 | 2017-2018 | 87th General Assembly | Introduced
Bill Title: A bill for an act relating to permissible interest rates and finance charges for certain loans.
Spectrum: Committee Bill
Status: (N/A - Dead) 2018-02-13 - Subcommittee recommends passage. [SSB3158 Detail]
Download: Iowa-2017-SSB3158-Introduced.html
Senate
Study
Bill
3158
-
Introduced
SENATE
FILE
_____
BY
(PROPOSED
COMMITTEE
ON
COMMERCE
BILL
BY
CHAIRPERSON
CHAPMAN)
A
BILL
FOR
An
Act
relating
to
permissible
interest
rates
and
finance
1
charges
for
certain
loans.
2
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
3
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Section
1.
Section
536.13,
subsection
7,
paragraph
a,
Code
1
2018,
is
amended
to
read
as
follows:
2
a.
The
superintendent
may
establish
the
maximum
rate
of
3
interest
or
charges
as
permitted
under
this
chapter
for
those
4
loans
with
an
unpaid
principal
balance
of
ten
thirty
thousand
5
dollars
or
less.
For
those
loans
with
an
unpaid
principal
6
balance
of
over
ten
thirty
thousand
dollars,
the
maximum
rate
7
of
interest
or
charges
which
a
licensee
may
charge
shall
be
8
the
greater
of
the
rate
permitted
by
chapter
535
or
the
rate
9
authorized
for
supervised
financial
organizations
by
chapter
10
537
.
11
Sec.
2.
Section
537.2401,
subsection
1,
Code
2018,
is
12
amended
to
read
as
follows:
13
1.
Except
as
provided
with
respect
to
a
finance
charge
for
14
loans
pursuant
to
open-end
credit
under
section
537.2402
and
15
loans
secured
by
a
certificate
of
title
of
a
motor
vehicle
16
under
section
537.2403
,
a
lender
may
contract
for
and
receive
17
a
finance
charge
not
exceeding
the
maximum
charge
permitted
18
by
the
laws
of
this
state
or
of
the
United
States
for
similar
19
lenders,
and,
in
addition,
with
respect
to
a
consumer
loan,
20
a
supervised
financial
organization
or
a
mortgage
lender
may
21
contract
for
and
receive
a
finance
charge,
calculated
according
22
to
the
actuarial
method,
not
exceeding
the
sum
of
a
service
23
charge,
collected
in
advance
and
equal
to
the
lesser
of
two
24
percent
of
the
amount
financed
or
one
hundred
twenty
dollars,
25
and
twenty-one
percent
per
year
on
the
unpaid
balance
of
the
26
amount
financed.
Except
as
provided
in
section
537.2403
,
this
27
subsection
does
not
prohibit
a
lender
from
contracting
for
and
28
receiving
a
finance
charge
exceeding
the
sum
of
the
authorized
29
service
charge
and
twenty-one
percent
per
year
on
the
unpaid
30
balance
of
the
amount
financed
on
consumer
loans
if
authorized
31
by
other
provisions
of
the
law.
32
Sec.
3.
Section
537.2403,
subsection
1,
Code
2018,
is
33
amended
to
read
as
follows:
34
1.
A
lender
shall
not
contract
for
or
receive
a
finance
35
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charge
exceeding
twenty-one
percent
per
year
on
the
unpaid
1
balance
of
the
amount
financed
for
For
a
loan
of
money
secured
2
by
a
certificate
of
title
to
a
motor
vehicle
used
for
personal,
3
family,
or
household
purpose
except
as
authorized
under
chapter
4
536
or
536A
,
a
lender
shall
not
contract
for
or
receive
a
5
finance
charge
exceeding
the
sum
of
a
service
charge,
collected
6
in
advance
and
equal
to
the
lesser
of
two
percent
of
the
amount
7
financed
or
one
hundred
twenty
dollars,
and
twenty-one
percent
8
per
year
on
the
unpaid
balance
of
the
amount
financed
.
A
9
consumer
who
is
charged
a
finance
charge
in
excess
of
the
10
limitation
in
this
section
may
seek
any
remedies
available
11
pursuant
to
this
chapter
for
an
excess
charge.
12
EXPLANATION
13
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
14
the
explanation’s
substance
by
the
members
of
the
general
assembly.
15
This
bill
relates
to
permissible
interest
rates
and
finance
16
charges
for
certain
loans.
17
Current
law
allows
the
superintendent
of
banking
to
18
establish
the
maximum
rate
of
interest
or
charges
for
regulated
19
loans
subject
to
Code
chapter
536
with
unpaid
principal
20
balances
of
$10,000
or
less.
The
bill
increases
this
amount
to
21
$30,000.
For
loans
with
unpaid
principal
balances
in
excess
22
of
$30,000
(formerly
$10,000),
the
maximum
interest
rate
or
23
charges
a
lender
may
charge
remains
the
greater
of
the
rate
24
permitted
in
Code
chapter
535
or
the
rate
authorized
for
25
supervised
financial
organizations
in
Code
chapter
537.
26
Current
law
allows
a
supervised
financial
organization
or
27
mortgage
lender
to
contract
for
and
receive
a
finance
charge
28
not
exceeding
21
percent
per
year
on
the
unpaid
balance
of
the
29
amount
financed
for
a
consumer
loan
subject
to
Code
chapter
537
30
that
is
not
pursuant
to
open-end
credit.
The
bill
provides
31
that
such
finance
charge
may
also
include
a
service
charge,
32
collected
in
advance
and
equal
to
the
lesser
of
2
percent
of
33
the
amount
financed
or
$120,
in
addition
to
21
percent
per
34
year
on
the
unpaid
balance
of
the
consumer
loan.
A
lender
may
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contract
for
and
receive
a
finance
charge
in
excess
of
this
1
amount
if
authorized
by
other
provisions
of
the
law.
Under
2
current
law,
the
maximum
finance
charge
amount
for
a
consumer
3
loan
as
provided
in
the
bill
also
serves
as
the
maximum
amount
4
for
interest
rates
on
certain
consumer
loans
made
by
state
5
credit
unions
(Code
section
533.316),
the
maximum
finance
6
charge
amount
applicable
to
certain
supervised
loans
(Code
7
section
537.2308),
and
the
maximum
finance
charge
applicable
8
to
certain
consumer
credit
transactions
on
refinancing
(Code
9
section
537.2504)
and
consolidation
(Code
section
537.2505).
10
Additionally,
current
law
allows
a
lender
to
contract
for
11
and
receive
a
finance
charge
not
exceeding
21
percent
per
12
year
on
the
unpaid
balance
of
the
amount
financed
for
a
loan
13
secured
by
a
certificate
of
title
to
certain
motor
vehicles.
14
The
bill
provides
that
such
finance
charge
may
also
include
a
15
service
charge,
collected
in
advance
and
equal
to
the
lesser
16
of
2
percent
of
the
amount
financed
or
$120,
in
addition
to
21
17
percent
per
year
on
the
unpaid
balance
of
the
consumer
loan.
18
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