Bill Text: IA HSB628 | 2015-2016 | 86th General Assembly | Introduced
Bill Title: A study bill for requiring the licensure of flexible credit lenders, and making civil penalties applicable.
Spectrum: Unknown
Status: (Introduced - Dead) 2016-02-17 - 9:30AM; House Lounge Commerce. [HSB628 Detail]
Download: Iowa-2015-HSB628-Introduced.html
House
Study
Bill
628
-
Introduced
HOUSE
FILE
_____
BY
(PROPOSED
COMMITTEE
ON
COMMERCE
BILL
BY
CHAIRPERSON
COWNIE)
A
BILL
FOR
An
Act
requiring
the
licensure
of
flexible
credit
lenders,
and
1
making
civil
penalties
applicable.
2
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
3
TLSB
5673YC
(4)
86
gh/sc
H.F.
_____
Section
1.
NEW
SECTION
.
536B.1
Title.
1
This
chapter
shall
be
known
and
may
be
cited
as
the
“Iowa
2
Flexible
Loan
Act”
.
3
Sec.
2.
NEW
SECTION
.
536B.2
Definitions.
4
As
used
in
this
chapter,
unless
the
context
otherwise
5
requires:
6
1.
“Annual
percentage
rate”
means
the
measure
of
the
cost
7
of
credit,
expressed
as
a
yearly
rate,
that
relates
the
amount
8
extended
to
a
consumer
on
a
flexible
credit
loan
to
the
amount
9
and
timing
of
payments
made,
as
computed
under
the
federal
10
Truth
in
Lending
Act.
11
2.
“Consumer”
means
an
individual
who
obtains
a
flexible
12
credit
loan.
13
3.
“Federal
Truth
in
Lending
Act”
means
as
defined
in
14
section
537.1302.
15
4.
“Finance
charge”
means
the
amount
payable
by
a
consumer
16
incident
to
or
as
a
condition
of
the
extension
of
a
flexible
17
credit
loan
but
excluding
other
fees
allowed
under
section
18
536B.18.
19
5.
“Flexible
credit
lender”
means
a
person
who
advertises
to
20
make,
solicit,
or
hold
the
person
out
to
make
a
flexible
credit
21
loan
to
a
consumer
in
this
state.
22
6.
“Flexible
credit
loan”
is
a
loan
in
which
all
of
the
23
following
are
applicable:
24
a.
The
debt
is
incurred
for
a
personal,
family,
or
household
25
purpose.
26
b.
The
debt
is
not
less
than
five
hundred
dollars
and
not
27
more
than
five
thousand
dollars.
28
c.
The
debt
is
unsecured.
29
d.
The
debt
is
payable
in
substantially
equal
installment
30
payments
of
principal
and
interest
for
the
term
of
the
loan.
31
e.
The
debt
is
subject
to
prepayment
in
whole
or
in
part
at
32
any
time
without
penalty.
33
f.
The
term
length
of
the
loan
is
for
a
minimum
of
six
34
months
and
a
maximum
of
twenty-four
months.
35
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_____
7.
“Licensee”
means
a
person
licensed
pursuant
to
this
1
chapter.
2
8.
“Regularly
engaged
in
the
business”
means
any
of
the
3
following:
4
a.
Advertising
to
or
making
any
other
solicitation
to
a
5
resident
of
this
state
to
offer
a
flexible
credit
loan
within
6
this
state.
7
b.
Making
three
or
more
flexible
credit
loans
within
a
8
calendar
year
to
residents
of
this
state.
9
9.
“Superintendent”
means
the
superintendent
of
banking
10
within
the
banking
division
of
the
department
of
commerce.
11
Sec.
3.
NEW
SECTION
.
536B.3
Exemptions.
12
This
chapter
shall
not
apply
to
any
of
the
following:
13
1.
A
person
who
does
business
under
the
authority
of
a
14
law
of
this
state,
or
any
other
state
while
regulated
by
a
15
state
agency
of
that
other
state,
or
of
the
United
States,
16
relating
to
banks,
savings
banks,
trust
companies,
savings
and
17
loan
associations,
profit
sharing
and
pension
trusts,
credit
18
unions,
insurance
companies,
or
receiverships
if
the
person
19
is
regulated
by
the
other
law
or
under
the
jurisdiction
of
a
20
court.
21
2.
A
person
who
is
not
regularly
engaged
in
the
business
of
22
making
a
flexible
credit
loan.
23
3.
A
person
who
is
licensed
pursuant
to
another
law
of
this
24
state
to
the
extent
that
the
person’s
activities
are
governed
25
by
that
law.
26
4.
A
consumer
loan
to
the
extent
provided
under
chapters
27
533D,
536,
536A,
536C,
or
537.
28
Sec.
4.
NEW
SECTION
.
536B.4
License
——
application
——
fees.
29
1.
Unless
exempt
under
section
536B.3,
a
person
shall
not
30
engage
in
the
business
of
making
a
flexible
credit
loan
to
a
31
resident
of
this
state
without
first
having
obtained
a
license
32
as
a
flexible
credit
lender
from
the
superintendent.
33
2.
An
applicant
for
a
license
shall
submit
an
application
34
in
writing,
under
oath,
and
in
the
form
as
prescribed
by
the
35
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_____
superintendent.
The
application
shall
require
any
information
1
that
the
superintendent
determines
is
necessary.
2
3.
At
the
time
of
making
the
application,
the
applicant
3
shall
pay
to
the
superintendent
a
fee
of
one
hundred
dollars.
4
Sec.
5.
NEW
SECTION
.
536B.5
Grounds
for
denial
of
license.
5
The
superintendent
may
deny
a
license
for
any
of
the
6
following:
7
1.
The
person
is
insolvent.
8
2.
The
person
has
failed
to
demonstrate
the
financial
9
responsibility,
experience,
character,
and
general
fitness
to
10
command
the
confidence
of
the
community
and
to
warrant
the
11
belief
that
the
business
of
the
proposed
flexible
credit
lender
12
will
be
honestly
and
efficiently
conducted.
13
3.
The
person
has
failed
to
pay
the
fee
required
under
14
section
536B.4.
15
4.
The
person
has
failed
to
demonstrate
that
the
person
16
maintains
at
least
twenty-five
thousand
dollars
in
assets
17
readily
available
for
use
in
the
conduct
of
the
business
for
18
the
licensed
office
and
each
licensed
branch
office.
19
5.
The
person
has,
either
knowingly
or
without
the
exercise
20
of
due
care
to
prevent
a
violation,
violated
any
provision
of
21
this
Title
XIII
of
the
Code
or
any
rule
or
order
adopted
or
made
22
pursuant
to
this
Title
XIII.
23
Sec.
6.
NEW
SECTION
.
536B.6
Issuance
of
license
——
form
——
24
posting.
25
1.
The
superintendent
shall
issue
a
license
to
an
applicant
26
within
one
hundred
twenty
days
after
receiving
a
complete
27
application
unless
the
superintendent
finds
grounds
for
denying
28
the
license.
29
2.
A
license
issued
under
this
chapter
shall
be
valid
for
a
30
term
of
one
year,
beginning
on
January
1
and
ending
on
December
31
31.
32
3.
A
license
issued
under
this
chapter
shall
remain
in
full
33
force
until
surrendered,
revoked,
or
suspended.
34
4.
A
license
issued
under
this
chapter
shall
not
be
35
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H.F.
_____
transferable
or
assignable.
1
5.
A
license
issued
under
this
chapter
shall
remain
the
2
property
of
this
state.
Upon
the
voluntary
surrender
of
the
3
license
by
the
licensee
or
the
revocation
of
the
license
by
4
the
superintendent,
the
licensee
shall
immediately
deliver
the
5
license
to
the
superintendent.
Surrender
or
revocation
of
the
6
license
shall
not
affect
any
other
liability
of
the
licensee.
7
6.
A
license
issued
pursuant
to
this
chapter
shall
be
kept
8
conspicuously
posted
at
the
office
of
the
licensee
and
any
9
licensed
branch
office
where
flexible
credit
loan
transactions
10
are
conducted.
11
Sec.
7.
NEW
SECTION
.
536B.7
License
location.
12
1.
A
licensee
shall
designate
the
principal
place
of
13
business
where
the
licensee
shall
conduct
flexible
credit
loan
14
transactions
pursuant
to
this
chapter,
which
shall
be
indicated
15
on
the
license
as
the
licensed
office
location.
16
2.
a.
A
licensee
may
obtain
a
branch
office
license
from
17
the
superintendent
for
each
branch
office
if
the
licensee
wants
18
to
maintain
more
than
one
license
location.
19
b.
A
licensee
may
obtain
a
branch
office
license
by
20
submitting
an
application
in
the
form
as
prescribed
by
the
21
superintendent
and
paying
a
fee
of
two
hundred
fifty
dollars
22
for
each
branch
office
license.
23
c.
The
superintendent
shall
issue
a
branch
office
24
license
indicating
the
address
of
the
branch
office
if
the
25
superintendent
determines
that
the
applicant
is
qualified
for
26
the
license.
27
3.
A
licensee
shall
not
conduct
flexible
credit
loan
28
transactions
under
any
name
or
at
any
place
of
business
other
29
than
the
name
and
location
indicated
on
the
license.
However,
30
a
licensee
may
do
any
of
the
following:
31
a.
Provide
a
flexible
credit
loan
by
mail
or
electronic
32
means.
33
b.
Make
an
accommodation
to
a
consumer
at
any
location
upon
34
a
request
by
the
consumer.
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c.
Conduct
an
administrative,
loan
servicing,
or
1
recordkeeping
activity
at
any
other
location
not
open
to
the
2
public
provided
that
the
superintendent
is
notified
in
advance
3
of
that
activity.
4
4.
A
licensee
may
change
the
licensed
office
location
or
5
licensed
branch
office
location
by
providing
the
superintendent
6
with
written
notice,
and
the
superintendent
shall
amend
the
7
license
accordingly.
8
5.
a.
A
licensee
shall
not
conduct
flexible
credit
loan
9
transactions
from
within
any
licensed
office
location
or
10
licensed
branch
office
location
in
which
any
other
business
not
11
licensed
pursuant
to
this
Title
XIII
of
the
Code
is
solicited
12
or
engaged
in,
or
in
conjunction
with
any
other
business
not
13
licensed
pursuant
to
this
Title
XIII,
without
providing
notice
14
to
the
superintendent.
15
b.
If
the
superintendent
determines
that
the
other
business
16
is
of
such
a
nature
or
is
being
conducted
in
such
a
manner
17
as
to
conceal
an
evasion
or
violation
of
this
Title
XIII
of
18
the
Code
or
any
rules
adopted
pursuant
to
this
Title
XIII,
19
or
is
otherwise
being
conducted
in
an
unlawful
manner,
the
20
superintendent
may
restrict
the
licensee
from
conducting
its
21
business
as
a
flexible
credit
lender
in
conjunction
with
that
22
other
business.
23
Sec.
8.
NEW
SECTION
.
536B.8
Renewal
of
license.
24
1.
A
license
issued
pursuant
to
this
chapter
shall
be
25
renewed
annually.
A
licensee
may
renew
a
license
by
submitting
26
an
application
in
the
form
as
prescribed
by
the
superintendent
27
no
later
than
December
1
and
paying
a
renewal
fee
of
two
28
hundred
fifty
dollars.
29
2.
The
superintendent
may
assess
a
late
fee
of
ten
dollars
30
per
day
for
applications
submitted
and
accepted
for
processing
31
after
December
1.
32
3.
The
license
of
a
licensee
who
has
not
filed
a
renewal
33
application
or
paid
the
renewal
fee
by
December
31
shall
34
expire
and
the
licensee
shall
not
act
as
a
flexible
credit
35
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H.F.
_____
lender
until
the
license
is
renewed
or
a
new
license
is
issued
1
pursuant
to
this
chapter.
2
Sec.
9.
NEW
SECTION
.
536B.9
Grounds
for
denial
of
license
3
renewal
——
suspension
——
revocation.
4
1.
The
superintendent
may
deny
the
renewal
of
a
license
or
5
suspend
or
revoke
a
license
if
the
superintendent
determines
6
any
of
the
following:
7
a.
The
licensee
is
insolvent.
8
b.
The
licensee
is
not
a
person
of
honesty,
truthfulness,
9
and
good
character,
as
determined
by
rule.
10
c.
The
licensee
has
failed
to
pay
the
annual
renewal
fees.
11
d.
The
licensee
has
failed
to
file
an
annual
report
as
12
required
by
this
chapter
when
the
report
was
due
or
within
13
any
extension
of
time
provided
by
the
superintendent
for
good
14
cause.
15
e.
The
licensee
has
failed
to
demonstrate
that
the
licensee
16
maintains
at
least
twenty-five
thousand
dollars
in
assets
17
readily
available
for
use
in
the
conduct
of
the
business
for
18
the
licensed
office
and
each
licensed
branch
office.
19
f.
The
licensee
has
violated
a
provision
of
this
Title
XIII
20
of
the
Code
or
any
rule
made
pursuant
to
this
Title
XIII
either
21
knowingly
or
without
the
exercise
of
due
care
to
prevent
the
22
violation.
23
2.
The
superintendent
may
also
deny
the
renewal
of
a
license
24
or
suspend
or
revoke
a
license
if
the
superintendent
determines
25
a
fact
or
condition
exists
which
would
have
warranted
the
26
superintendent
to
refuse
to
originally
issue
the
license.
27
Sec.
10.
NEW
SECTION
.
536B.10
Records.
28
1.
A
licensee
shall
keep
such
books,
accounts,
and
records
29
as
the
superintendent
may
require
in
order
to
determine
whether
30
the
licensee
is
complying
with
the
provisions
of
this
chapter
31
and
with
the
rules
adopted
by
the
superintendent
under
this
32
chapter.
33
2.
A
licensee
shall
preserve
for
at
least
two
years
after
34
making
the
last
entry
on
any
flexible
credit
loan
all
books,
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_____
accounts,
and
records
pertaining
to
the
loan.
A
licensee
who
1
uses
an
electronic
recordkeeping
system
shall
not
be
required
2
to
keep
a
written
copy
of
the
books,
accounts,
and
records
3
provided
that
the
licensee
is
able
to
generate
all
of
the
4
information
required
under
this
section
in
a
timely
manner
for
5
examination
or
other
purposes.
6
3.
A
licensee
shall
make
any
books,
accounts,
and
records
7
kept
outside
of
this
state
available
to
the
superintendent
8
within
three
business
days
upon
request
by
the
superintendent.
9
The
superintendent
may
examine
such
books,
accounts,
and
10
records
at
the
office
of
the
licensee
located
outside
of
this
11
state.
12
4.
A
licensee
shall
provide
to
the
superintendent
or
the
13
superintendent’s
duly
authorized
representative
access,
during
14
normal
business
hours,
to
the
licensee’s
offices,
files,
safes,
15
and
vaults
regarding
the
flexible
credit
lending
business
or
16
regarding
the
subject
matter
of
any
examination,
investigation,
17
or
hearing
regarding
the
licensee.
18
Sec.
11.
NEW
SECTION
.
536B.11
Annual
report
by
licensee.
19
1.
A
licensee
shall
annually
on
or
before
April
1
file
a
20
report
with
the
superintendent
giving
such
relevant
information
21
as
the
superintendent
reasonably
may
require
concerning
22
the
business
and
operations
during
the
twelve-month
period
23
ending
the
preceding
December
31.
Upon
good
cause
shown
by
a
24
licensee,
the
superintendent
may
extend
the
time
for
filing
the
25
report
for
a
period
not
to
exceed
sixty
days.
26
2.
a.
The
annual
report
shall
include
a
licensee’s
average
27
annual
percentage
rate
and
average
loan
amount
during
the
28
twelve-month
period
ending
the
preceding
December
1.
29
b.
On
at
least
an
annual
basis
the
superintendent
shall
30
compile
a
report
of
the
average
annual
percentage
rate
and
31
average
loan
amount
of
each
licensee
as
submitted
pursuant
32
to
paragraph
“a”
.
The
superintendent
shall
disseminate
the
33
report
in
a
manner
deemed
appropriate
and
shall
make
the
report
34
available
to
the
public
for
inspection
and
copying.
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3.
The
annual
report
shall
include
the
total
number
of
1
flexible
credit
loan
transactions
that
the
licensee
completed
2
in
the
prior
two
years.
3
4.
a.
If
a
licensee
fails
to
file
an
annual
report
under
4
this
section,
the
superintendent
or
any
person
designated
5
by
the
superintendent
may
examine
the
books,
accounts,
and
6
records
of
the
licensee,
prepare
the
annual
report,
and
charge
7
the
licensee
an
examination
fee
as
established
by
rule.
The
8
fee
shall
be
based
on
the
actual
cost
of
the
examination
or
9
investigation.
10
b.
If
a
licensee
fails
to
file
an
annual
report
within
the
11
specified
time
and
has
not
received
an
extension,
the
licensee
12
shall
be
subject
to
a
civil
penalty
not
to
exceed
five
dollars
13
per
day
until
the
licensee
has
filed
the
annual
report.
The
14
licensee
shall
pay
the
penalty
to
the
superintendent
within
15
thirty
days
after
the
penalty
is
levied.
16
Sec.
12.
NEW
SECTION
.
536B.12
Surrender
of
license.
17
A
licensee
may
surrender
a
flexible
credit
loan
license
18
by
delivering
to
the
superintendent
written
notice
that
the
19
license
is
surrendered.
The
surrender
does
not
affect
the
20
licensee’s
civil
or
criminal
liability
for
acts
committed
21
prior
to
such
surrender
or
entitle
such
licensee
to
a
return
22
of
any
part
of
the
annual
license
fee.
The
superintendent
23
may
establish
procedures
for
the
disposition
of
the
books,
24
accounts,
and
records
of
the
licensee
and
may
require
such
25
action
as
deemed
necessary
for
the
protection
of
consumers
that
26
have
flexible
credit
loans
that
are
outstanding
at
the
time
of
27
surrender
of
the
license.
28
Sec.
13.
NEW
SECTION
.
536B.13
Impairment
of
preexisting
29
loan.
30
1.
The
revocation,
suspension,
surrender,
expiration,
or
31
alteration
of
a
license
provided
under
this
chapter
shall
not
32
impair
or
affect
any
of
the
following:
33
a.
The
obligation
of
a
preexisting
flexible
credit
loan
34
between
a
flexible
credit
lender
and
a
consumer.
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b.
The
ability
or
right
of
a
flexible
credit
lender
to
1
service
a
preexisting
flexible
credit
loan
from
outside
this
2
state.
3
2.
If
this
chapter
or
any
part
of
this
chapter
is
modified,
4
amended,
or
repealed,
resulting
in
a
cancellation
or
alteration
5
of
any
flexible
credit
lender
license
or
right
of
a
licensee
6
under
this
chapter,
that
cancellation
or
alteration
shall
not
7
impair
or
affect
the
obligation
of
any
preexisting
contract
8
between
a
flexible
credit
lender
and
any
consumer.
9
Sec.
14.
NEW
SECTION
.
536B.14
Restrictions.
10
1.
A
licensee
shall
not
knowingly
advertise,
display,
11
distribute,
broadcast,
or
televise,
or
cause
or
allow
to
be
12
advertised,
displayed,
distributed,
broadcast,
or
televised,
in
13
any
manner,
any
false,
misleading,
or
deceptive
statement
or
14
representation
with
regard
to
the
rates,
terms,
or
conditions
15
of
a
flexible
credit
loan.
To
the
extent
applicable,
all
16
advertising
shall
comply
with
the
advertising
requirements
17
specified
in
the
federal
Truth
in
Lending
Act.
18
2.
A
licensee
shall
not
provide
a
flexible
credit
loan
19
to
a
consumer
with
more
than
one
outstanding
flexible
credit
20
loan
provided
under
this
chapter
at
any
one
time.
A
licensee
21
shall
inquire
of
any
consumer
seeking
a
flexible
credit
loan
22
regarding
whether
the
consumer
has
any
outstanding
flexible
23
credit
loans.
A
licensee
may
only
offer
a
consumer
a
flexible
24
credit
loan
if
the
consumer
represents
in
writing
that
the
25
consumer
has
no
outstanding
flexible
credit
loans.
26
3.
a.
A
licensee
shall
not
provide
a
flexible
credit
loan
27
with
an
annual
percentage
rate
greater
than
that
provided
in
10
28
U.S.C.
§987(b),
to
any
of
the
following:
29
(1)
A
member
of
the
United
States
armed
forces
who
is
on
30
active
duty
under
a
call
or
order
that
does
not
specify
a
31
period
of
thirty
days
or
less.
32
(2)
A
person
on
active
national
guard
and
reserve
duty.
33
(3)
A
dependent
as
defined
in
10
U.S.C.
§987(i).
34
b.
A
licensee
shall
not
provide
a
flexible
credit
loan
35
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_____
to
a
consumer
unless
the
consumer
has
signed
a
statement,
to
1
be
included
as
part
of
the
loan,
attesting
to
whether
or
not
2
the
consumer
is
a
military
member
or
a
dependent
as
defined
3
in
10
U.S.C.
§987(i).
The
statement
shall
be
in
the
form
as
4
prescribed
by
the
superintendent
by
rule.
5
c.
A
flexible
credit
loan
made
in
violation
of
10
U.S.C.
6
§987
is
void
and
its
terms
and
conditions
unenforceable.
7
4.
A
licensee
shall
not
condition
a
flexible
credit
loan
8
upon
a
consumer’s
agreement
to
repay
the
loan
by
recurring
9
automatic
electronic
fund
transfers
from
the
consumer’s
bank
10
account.
However,
this
shall
not
preclude
the
consumer
from
11
providing
written
authorization
to
repay
a
loan
by
recurring
12
automatic
electronic
fund
transfers
from
the
consumer’s
bank
13
account
if
the
licensee
offers
a
repayment
option.
14
Sec.
15.
NEW
SECTION
.
536B.15
Rules.
15
The
superintendent
may
adopt
rules
to
administer
this
16
chapter.
17
Sec.
16.
NEW
SECTION
.
536B.16
Noncompliance.
18
1.
A
flexible
credit
loan
that
is
provided
by
a
person
who
19
is
required
to
be
licensed
under
this
chapter
but
who
is
not
20
licensed
is
void
and
its
terms
and
conditions
unenforceable.
21
2.
Except
as
provided
in
subsection
1
and
section
536B.14,
22
subsection
3,
failure
to
comply
with
this
chapter
shall
not
23
affect
the
validity
or
enforceability
of
a
flexible
credit
24
loan.
25
Sec.
17.
NEW
SECTION
.
536B.17
Disclosures.
26
1.
To
the
extent
applicable,
a
licensee
shall
comply
with
27
the
disclosure
requirements
as
set
forth
in
the
federal
Truth
28
in
Lending
Act.
29
2.
A
licensee
shall
conspicuously
display
a
sign
printed
30
in
at
least
twelve-point
bold
font
type
at
each
desk
in
the
31
licensed
office
and
licensed
branch
office
where
flexible
32
credit
loan
transactions
are
conducted
with
the
following
33
disclosure:
34
Notice:
Before
signing
any
loan
documents
or
otherwise
35
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_____
committing
to
a
loan,
you
may
take
copies
of
those
documents
1
away
from
the
flexible
credit
lender’s
place
of
business
for
2
review.
3
3.
A
licensee
providing
electronic
flexible
credit
loans
4
shall
conspicuously
display
the
following
disclosure
on
the
5
licensee’s
internet
site:
6
Notice:
Before
signing
any
loan
documents
or
otherwise
7
committing
to
a
loan,
please
read
our
terms
and
conditions
8
carefully.
9
4.
A
licensee
who
fails
to
provide
disclosures
as
required
10
under
this
section
shall
be
subject
to
a
civil
penalty
not
to
11
exceed
three
hundred
dollars
for
each
violation.
12
Sec.
18.
NEW
SECTION
.
536B.18
Finance
charge.
13
1.
A
licensee
may
charge
a
finance
charge
on
a
flexible
14
credit
loan
at
a
rate
not
to
exceed
twenty-four
percent
per
15
month.
16
2.
This
section
does
not
authorize
the
compounding
of
a
17
finance
charge.
18
Sec.
19.
NEW
SECTION
.
536B.19
Other
fees
and
charges.
19
1.
In
addition
to
a
finance
charge
authorized
under
section
20
536B.18,
a
licensee
may
collect
any
of
the
following
fees
or
21
charges:
22
a.
A
delinquency
charge
if
an
installment
is
not
paid
in
23
full
within
seven
days,
equal
to
five
percent
of
the
amount
of
24
the
installment.
25
b.
Court
costs
and
reasonable
attorney
fees
if
the
flexible
26
credit
loan
is
referred
for
collection
to
an
attorney
other
27
than
an
employee
of
the
licensee.
28
c.
A
dishonored
check
service
fee
if
a
licensee
receives
29
a
check,
draft,
negotiable
order
of
withdrawal,
or
similar
30
instrument
that
is
not
paid
or
is
not
honored
by
a
depository
31
institution,
equal
to
the
actual
charges
assessed
by
the
32
depository
institution.
33
2.
A
licensee
shall
not
directly
or
indirectly
charge,
34
contract
for,
or
receive
any
other
amount
in
connection
with
a
35
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_____
flexible
credit
loan
except
as
provided
in
this
chapter.
1
EXPLANATION
2
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
3
the
explanation’s
substance
by
the
members
of
the
general
assembly.
4
This
bill
creates
new
Code
chapter
536B
to
require
licensure
5
of
persons
who
wish
to
provide
flexible
credit
loans
to
6
residents
of
the
state.
7
The
bill
defines
“flexible
credit
loan”
to
mean
a
loan
that
8
is
incurred
for
a
personal,
family,
or
household
purpose,
is
9
not
less
than
$500
and
not
more
than
$5,000,
is
unsecured,
10
is
payable
in
substantially
equal
installment
payments
of
11
principal
and
interest
for
the
term
of
the
loan,
is
subject
to
12
prepayment
in
whole
or
in
part
at
any
time
without
penalty,
and
13
is
for
a
term
length
of
a
minimum
of
6
months
and
a
maximum
of
14
24
months.
15
The
bill
exempts
the
following
persons
from
the
requirements
16
of
the
bill:
a
person
who
does
business
under
any
law
relating
17
to
banks,
savings
banks,
trusts,
savings
and
loan
associations,
18
profit
sharing
and
pension
trusts,
credit
unions,
insurance
19
companies,
or
receiverships,
a
person
who
is
not
regularly
20
engaged
in
the
business
of
making
flexible
credit
loans,
as
21
defined
in
the
bill,
a
person
who
is
licensed
pursuant
to
22
another
Iowa
Code
chapter
to
the
extent
that
the
person’s
23
activities
are
governed
by
that
Code
chapter,
or
a
consumer
24
loan
provided
under
Code
chapters
533D,
536,
536A,
536C,
or
25
537.
26
The
bill
prohibits
a
person
from
engaging
in
the
business
27
of
making
flexible
credit
loans
to
a
resident
in
this
state
28
without
first
obtaining
a
license
from
the
superintendent
29
of
the
banking
division
in
the
department
of
commerce.
An
30
applicant
for
a
license
must
submit
an
application
in
the
form
31
prescribed
by
the
superintendent
and
pay
a
fee
of
$100.
32
The
bill
allows
the
superintendent
to
deny
a
license
if
the
33
applicant
is
insolvent,
has
failed
to
demonstrate
the
financial
34
responsibility,
experience,
character,
and
general
fitness
35
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_____
required,
as
determined
by
rule,
has
failed
to
pay
the
$100
1
fee,
or
has
failed
to
demonstrate
the
availability
of
at
least
2
$25,000
in
assets
for
use
in
the
conduct
of
the
business
for
3
the
licensed
office
and
each
licensed
branch
office.
4
The
bill
requires
the
superintendent
to
issue
a
license
5
within
120
days
of
receiving
an
application
unless
grounds
6
exist
for
denying
it.
A
license
is
valid
for
one
year,
7
from
January
1
to
December
31,
remains
in
full
force
until
8
surrendered,
revoked,
or
suspended,
and
is
not
transferable.
9
A
license
remains
the
property
of
the
state
and
must
be
10
immediately
returned
to
the
superintendent
if
a
licensee
11
voluntarily
surrenders
it.
A
license
must
be
posted
12
conspicuously
in
the
office
of
the
licensee
and
any
licensed
13
branch
offices.
14
The
bill
requires
a
licensee
to
designate
the
principal
15
place
of
business
to
be
indicated
on
the
license.
A
licensee
16
wishing
to
maintain
more
than
one
place
of
business
may
17
obtain
a
branch
office
license
by
submitting
an
application
18
as
prescribed
by
the
superintendent
and
paying
a
$250
fee.
19
A
licensee
is
prohibited
from
conducting
flexible
credit
20
loan
transactions
under
any
name
or
location
different
than
21
what
is
indicated
on
the
license,
provided,
however,
that
22
a
licensee
may
provide
loans
by
mail
or
electronic
means,
23
make
an
accommodation
to
a
consumer
at
any
location
upon
24
the
consumer’s
request,
or
conduct
an
administrative,
loan
25
servicing,
or
recordkeeping
activity
at
any
other
location
if
26
the
superintendent
is
notified.
A
licensee
can
change
the
27
license
location
by
giving
the
superintendent
written
notice
to
28
amend
the
license.
29
The
bill
prohibits
a
licensee
from
conducting
flexible
30
credit
loan
transactions
from
any
licensed
office
location
31
where
other
business
activities
unrelated
to
flexible
credit
32
lending
occur
without
giving
notice
to
the
superintendent.
The
33
superintendent
may
prohibit
a
licensee
from
conducting
business
34
as
a
flexible
credit
lender
in
conjunction
with,
or
at
the
35
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H.F.
_____
location
of,
such
other
business.
1
The
bill
allows
a
licensee
to
obtain
a
renewal
license
by
2
submitting
an
application
as
prescribed
by
the
superintendent
3
no
later
than
December
1
and
paying
a
$250
fee.
A
renewal
4
application
submitted
after
December
1
is
subject
to
a
$10
late
5
fee
for
each
day
it
is
late.
A
license
of
a
licensee
who
has
6
not
filed
a
renewal
or
paid
the
fee
by
December
31
expires.
7
The
bill
allows
the
superintendent
to
deny
a
renewal
license
8
or
suspend
or
revoke
a
license
if
the
licensee
is
insolvent,
9
is
not
a
person
of
honesty,
truthfulness,
and
good
character,
10
as
determined
by
rule,
has
failed
to
pay
the
renewal
fee,
has
11
failed
to
file
an
annual
report,
has
failed
to
demonstrate
12
the
availability
of
at
least
$25,000
in
assets
for
use
in
the
13
conduct
of
the
business
for
each
office,
or
has
violated
a
14
provision
of
the
bill
either
knowingly
or
negligently.
The
15
superintendent
may
deny
a
renewal
license
or
suspend
or
revoke
16
a
license
if
a
fact
or
condition
exists
to
have
warranted
the
17
superintendent
to
refuse
to
originally
issue
the
license.
18
The
bill
requires
a
licensee
to
keep
records
for
the
19
superintendent
to
determine
whether
the
licensee
is
complying
20
with
the
bill
for
at
least
two
years.
A
licensee
must
make
21
all
records
kept
outside
of
the
state
available
to
the
22
superintendent
within
three
business
days
upon
request.
A
23
licensee
must
provide
the
superintendent
with
access
to
their
24
records
during
normal
business
hours.
25
The
bill
requires
a
licensee
to
provide
the
superintendent
26
with
an
annual
report
on
or
before
April
1,
which
may
be
27
extended
for
no
more
than
60
days
upon
showing
good
cause.
The
28
report
must
include
the
licensee’s
average
annual
percentage
29
rate,
as
defined
in
the
bill,
average
loan
amount
during
the
30
12-month
period
ending
the
preceding
December
1,
and
the
31
total
number
of
flexible
credit
loan
transactions
completed
32
in
the
prior
two
years.
The
superintendent
must
compile
a
33
report
of
such
information
on
at
least
an
annual
basis
and
34
make
the
report
available
to
the
public.
The
superintendent
35
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may
prepare
the
annual
report
of
a
licensee
who
has
failed
to
1
file
their
annual
report
and
charge
a
fee
based
on
the
cost
of
2
preparation.
A
licensee
who
has
failed
to
file
their
annual
3
report
without
an
extension
is
also
subject
to
a
civil
penalty
4
not
to
exceed
$5
for
each
day
until
their
report
is
filed,
5
which
must
be
paid
within
30
days
of
being
charged.
6
The
bill
provides
that
the
revocation,
suspension,
7
surrender,
cancellation,
or
alteration
of
a
license
will
not
8
impair
or
affect
the
validity
of
a
preexisting
flexible
credit
9
loan
or
the
ability
of
a
lender
to
service
a
preexisting
loan
10
outside
of
this
state.
11
The
bill
restricts
a
licensee
from
advertising
in
any
false
12
or
misleading
manner
with
regards
to
the
rates
or
terms
of
a
13
flexible
credit
loan
and
requires
a
licensee
to
comply
with
the
14
advertising
requirements
in
the
federal
Truth
in
Lending
Act.
15
A
licensee
cannot
provide
a
flexible
credit
loan
to
a
consumer
16
with
more
than
one
outstanding
flexible
credit
loan,
and
the
17
consumer
must
represent
in
writing
that
the
consumer
has
no
18
outstanding
loans.
A
licensee
cannot
provide
a
flexible
credit
19
loan
to
a
military
member
or
dependent,
as
defined
in
10
U.S.C.
20
§987(i),
with
an
annual
percentage
rate
greater
than
that
21
provided
in
10
U.S.C.
§987(b).
Before
a
licensee
may
provide
22
a
flexible
credit
loan,
the
consumer
must
sign
a
statement
23
attesting
to
whether
or
not
the
consumer
is
a
military
member
24
or
dependent.
A
loan
made
in
violation
of
10
U.S.C.
§987
is
25
void
and
its
terms
and
conditions
unenforceable.
A
licensee
is
26
prohibited
from
conditioning
a
loan
on
a
consumer’s
agreement
27
to
repay
by
recurring
automatic
electronic
fund
transfers.
28
The
bill
provides
that
a
flexible
credit
loan
provided
29
by
a
person
who
is
required
to
be
licensed
under
new
Code
30
chapter
536B
but
who
is
not
licensed
is
void
and
its
terms
and
31
conditions
unenforceable.
However,
any
other
noncompliance
32
with
new
Code
chapter
536B,
except
pertaining
to
military
33
members
and
their
dependents,
will
not
affect
the
validity
of
34
a
flexible
credit
loan.
35
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The
bill
requires
a
licensee
to
comply
with
the
disclosure
1
requirements
in
the
federal
Truth
in
Lending
Act.
A
licensee
2
must
display
a
disclosure
sign,
as
described
in
the
bill,
at
3
each
desk
in
the
licensed
office
and
each
licensed
branch
4
office
and
on
the
licensee’s
internet
site
if
the
licensee
5
provides
electronic
flexible
credit
loans.
A
licensee
who
6
fails
to
do
so
is
subject
to
a
civil
penalty
not
to
exceed
$300
7
for
each
violation.
8
The
bill
allows
a
licensee
to
charge
a
finance
charge,
9
as
defined
in
the
bill,
on
a
flexible
credit
loan
at
a
rate
10
not
to
exceed
24
percent
per
month.
However,
a
licensee
is
11
not
permitted
to
compound
a
finance
charge.
In
addition
to
12
this,
a
licensee
may
collect
a
delinquency
charge,
court
costs
13
and
reasonable
attorney
fees,
and
a
dishonored
check
service
14
fee,
as
described
in
the
bill.
A
licensee
is
prohibited
15
from
collecting
any
other
charges
or
fees
in
connection
with
16
conducting
flexible
credit
loan
transactions.
17
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