Bill Text: IA SF388 | 2011-2012 | 84th General Assembly | Introduced
Bill Title: A bill for an act modifying provisions relating to the regulation of delayed deposit services businesses, providing penalties, and including effective date provisions. (Formerly SF 113.)
Spectrum: Committee Bill
Status: (Introduced - Dead) 2012-01-19 - Subcommittee, Bolkcom, Anderson, and McCoy. S.J. 97. [SF388 Detail]
Download: Iowa-2011-SF388-Introduced.html
Senate
File
388
-
Introduced
SENATE
FILE
388
BY
COMMITTEE
ON
HUMAN
RESOURCES
(SUCCESSOR
TO
SF
113)
A
BILL
FOR
An
Act
modifying
provisions
relating
to
the
regulation
of
1
delayed
deposit
services
businesses,
providing
penalties,
2
and
including
effective
date
provisions.
3
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
4
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388
Section
1.
Section
533D.2,
subsection
2,
unnumbered
1
paragraph
1,
Code
2011,
is
amended
to
read
as
follows:
2
“Delayed
deposit
services
business”
means
a
person
who
for
a
3
fee
finance
charge
does
either
of
the
following:
4
Sec.
2.
Section
533D.2,
Code
2011,
is
amended
by
adding
the
5
following
new
subsection:
6
NEW
SUBSECTION
.
2A.
“Finance
charge”
means
all
charges
7
payable
directly
or
indirectly
as
a
condition
of
a
delayed
8
deposit
service
transaction,
including
interest,
fees,
service
9
charges,
renewal
charges,
credit
insurance
premiums,
and
any
10
ancillary
product
sold
in
connection
with
a
delayed
deposit
11
service
transaction.
12
Sec.
3.
Section
533D.9,
Code
2011,
is
amended
to
read
as
13
follows:
14
533D.9
Fee
Finance
charge
restriction
——
required
disclosure.
15
1.
A
licensee
shall
not
charge
a
fee
in
excess
of
fifteen
16
dollars
on
the
first
one
hundred
dollars
on
the
face
amount
17
of
a
check
or
more
than
ten
dollars
on
subsequent
one
hundred
18
dollar
increments
on
the
face
amount
of
the
check
for
services
19
provided
by
the
licensee,
or
pro
rata
for
any
portion
of
one
20
hundred
dollars
face
value
apply
a
finance
charge
in
excess
of
21
an
amount
equal
to
thirty-six
percent
per
annum,
as
computed
22
pursuant
to
the
federal
Truth
in
Lending
Act
.
23
2.
A
licensee
shall
give
to
the
maker
of
the
check,
at
the
24
time
any
delayed
deposit
service
transaction
is
made,
or
if
25
there
are
two
or
more
makers,
to
one
of
them,
notice
written
in
26
clear,
understandable
language
disclosing
all
of
the
following:
27
a.
The
fee
finance
charge
to
be
charged
imposed
for
the
28
transaction.
29
b.
The
annual
percentage
rate
as
computed
pursuant
to
the
30
federal
Truth
in
Lending
Act.
31
c.
The
date
on
which
the
check
will
be
deposited
or
32
presented
for
negotiation.
33
d.
Any
penalty,
not
to
exceed
fifteen
dollars,
which
the
34
licensee
will
charge
if
the
check
is
not
negotiable
on
the
35
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388
date
agreed
upon.
A
penalty
to
be
charged
pursuant
to
this
1
section
shall
only
be
collected
by
the
licensee
once
on
a
check
2
no
matter
how
long
the
check
remains
unpaid.
A
penalty
to
be
3
charged
pursuant
to
this
section
is
a
licensee’s
exclusive
4
remedy
and
if
a
licensee
charges
a
penalty
pursuant
to
this
5
section
no
other
penalties
under
this
chapter
or
any
other
6
provision
apply.
7
3.
In
addition
to
the
notice
required
by
subsection
2
,
every
8
licensee
shall
conspicuously
display
a
schedule
of
all
fees,
9
finance
charges,
and
penalties
for
all
services
provided
by
10
the
licensee
authorized
by
this
section
.
The
notice
shall
be
11
posted
at
the
office
and
every
branch
office
of
the
licensee.
12
Sec.
4.
Section
533D.10,
subsection
1,
paragraphs
d
and
f,
13
Code
2011,
are
amended
to
read
as
follows:
14
d.
Require
the
maker
to
receive
payment
by
a
method
which
15
causes
the
maker
to
pay
additional
or
further
fees
and
finance
16
charges
to
the
licensee
or
another
person.
17
f.
Receive
or
apply
any
other
finance
charges
or
fees
18
penalties
in
addition
to
the
fees
those
listed
in
section
19
533D.9
,
subsections
1
and
2
.
20
Sec.
5.
Section
533D.10,
subsection
1,
Code
2011,
is
amended
21
by
adding
the
following
new
paragraph:
22
NEW
PARAGRAPH
.
g.
Engage
in
any
device
or
subterfuge
23
intended
to
evade
the
requirements
of
this
chapter,
including
24
but
not
limited
to
assisting
a
maker
of
a
check
in
entering
25
into
a
delayed
deposit
service
transaction
at
a
rate
of
26
interest
prohibited
pursuant
to
the
laws
of
this
state,
27
entering
into
transactions
disguised
as
personal
property
sales
28
and
leaseback
transactions,
or
disguising
amounts
received
29
pursuant
to
a
transaction
as
cash
rebates
for
the
pretextual
30
installment
sale
of
goods
or
services,
or
assisting
a
maker
31
of
a
check
in
entering
into
a
transaction
through
the
mail,
32
telephone,
internet,
or
any
other
electronic
means,
regardless
33
of
whether
the
licensee
has
a
physical
location
in
this
state.
34
Sec.
6.
Section
533D.10,
Code
2011,
is
amended
by
adding
the
35
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388
following
new
subsection:
1
NEW
SUBSECTION
.
3.
A
delayed
deposit
service
transaction
2
made
in
violation
of
this
chapter
may
not
be
enforced
against
a
3
maker
of
a
check.
A
delayed
deposit
service
transaction
made
4
in
violation
of
this
chapter
is
void,
and
the
licensee
does
not
5
have
the
right
to
collect,
receive,
or
retain
any
payments,
6
interest,
or
finance
charges
from
the
maker
of
the
check.
7
Sec.
7.
Section
533D.12,
subsection
2,
paragraph
d,
Code
8
2011,
is
amended
by
striking
the
paragraph.
9
Sec.
8.
Section
533D.12,
Code
2011,
is
amended
by
adding
the
10
following
new
subsection:
11
NEW
SUBSECTION
.
7.
A
violation
of
this
chapter
is
a
12
violation
of
section
714.16,
subsection
2,
paragraph
“a”
.
The
13
provisions
of
section
714.16,
including
but
not
limited
to
14
provisions
relating
to
investigation,
injunctive
relief,
and
15
penalties,
shall
apply
to
this
chapter
unless
more
prescriptive
16
and
stringent
provisions
are
otherwise
specified
in
this
17
chapter.
18
Sec.
9.
EFFECTIVE
UPON
ENACTMENT.
This
Act,
being
deemed
of
19
immediate
importance,
takes
effect
upon
enactment.
20
EXPLANATION
21
This
bill
modifies
provisions
relating
to
the
regulation
of
22
delayed
deposit
services
businesses.
23
The
bill
deletes
current
provisions
prohibiting
delayed
24
deposit
services
licensees
from
charging
a
fee
in
excess
of
$15
25
on
the
first
$100
on
the
face
amount
of
a
check
or
more
than
$10
26
on
subsequent
$100
increments
on
the
face
amount
of
the
check
27
for
services
provided
by
the
licensee.
The
bill
substitutes
a
28
provision
prohibiting
imposition
of
a
finance
charge
in
excess
29
of
an
amount
equal
to
36
percent
per
annum
as
computed
pursuant
30
to
the
federal
Truth
in
Lending
Act.
The
bill
defines
“finance
31
charge”
to
mean
all
charges
payable
directly
or
indirectly
32
as
a
condition
of
a
delayed
deposit
service
transaction,
33
including
interest,
fees,
service
charges,
renewal
charges,
34
credit
insurance
premiums,
and
any
ancillary
product
sold
in
35
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388
connection
with
a
delayed
deposit
service
transaction.
1
The
bill
provides,
with
respect
to
prohibited
acts
by
a
2
licensee,
that
a
licensee
may
not
engage
in
any
device
or
3
subterfuge
intended
to
evade
the
requirements
of
Code
chapter
4
533D,
including
but
not
limited
to
assisting
a
maker
of
a
check
5
in
entering
into
a
delayed
deposit
service
transaction
at
a
6
rate
of
interest
prohibited
pursuant
to
Iowa
law,
entering
into
7
transactions
disguised
as
personal
property
sales
and
leaseback
8
transactions,
or
disguising
amounts
received
pursuant
to
a
9
transaction
as
cash
rebates
for
the
pretextual
installment
10
sale
of
goods
or
services,
or
assisting
a
maker
of
a
check
11
in
entering
into
a
transaction
through
the
mail,
telephone,
12
internet,
or
any
other
electronic
means,
regardless
of
whether
13
the
licensee
has
a
physical
location
in
this
state.
The
14
bill
additionally
provides
that
a
delayed
deposit
service
15
transaction
entered
into
which
violates
the
Code
chapter
may
16
not
be
enforced
with
respect
to
a
maker
of
a
check,
that
any
17
payment
made
or
collected
in
connection
therewith
is
void,
and
18
that
the
licensee
does
not
have
the
right
to
collect,
receive,
19
or
retain
any
payments,
interest,
or
finance
charges.
20
Further,
the
bill
deletes
a
penalty
provision
authorizing
21
the
superintendent
of
banking
to
impose
a
civil
penalty
not
to
22
exceed
$5,000
per
violation.
The
bill
states
that
a
violation
23
of
the
Code
chapter
constitutes
a
consumer
fraud
pursuant
to
24
the
provisions
of
Code
section
714.16,
and
that
the
applicable
25
provisions
relating
to
investigation,
injunctive
relief,
26
and
penalties
shall
apply
to
Code
chapter
533D
unless
more
27
prescriptive
and
stringent
provisions
are
otherwise
specified
28
in
the
Code
chapter.
The
primary
effect
of
this
change
is
29
to
make
violations
subject
to
a
civil
penalty
pursuant
to
30
Code
section
714.16,
subsection
7,
in
an
amount
not
to
exceed
31
$40,000
per
violation,
and
in
addition
a
civil
penalty
of
32
not
more
than
$5,000
for
each
day
of
intentional
violation
33
of
a
temporary
restraining
order,
preliminary
injunction,
or
34
permanent
injunction.
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