Iowa Amends Provisions Regarding Permissible Interest Rates and Charges
Iowa has modified provisions relating to permissible interest rates and charges for certain loans. These changes are effective as of July 1, 2019.
Interest Rate and Charges
Under the previous provision, the superintendent was permitted to establish the maximum rate of interest or charges on loans with an unpaid principal balance of ten thousand dollars or less. The revised provision changes this amount to thirty thousand dollars or less. Loans with an unpaid balance of over thirty thousand dollars will have a maximum rate of interest or charges the greater of the rate authorized for supervised financial organizations or the rate permitted under Iowa Code chapter 535.
Service Charges
A new provision regarding service charges adds that, if a creditor has collected a service charge related to an interest-bearing consumer credit transaction, the creditor may not collect a minimum charge upon prepayment.
For the full text of House File 260, please refer to https://www.legis.iowa.gov/docs/publications/LGE/88/HF260.pdf
Elizabeth Dailey, JD, is a Regulatory Compliance Director with CLA. She is a graduate of the University of New Hampshire and earned her juris doctor at New England Law. She is admitted to the Massachusetts Bar.
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