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Bill > HF627
IA HF627
IA HF627A bill for an act relating to annual percentage rates for delayed deposit service transactions.(See HF 878.)
summary
Introduced
02/28/2025
02/28/2025
In Committee
02/28/2025
02/28/2025
Crossed Over
Passed
Dead
Introduced Session
91st General Assembly
Bill Summary
This bill relates to annual percentage rates for delayed deposit service transactions. Under the bill, a person licensed under Code chapter 533D (licensee) shall not impose an annual percentage rate greater than 36 percent in connection with a delayed deposit service transaction. A delayed deposit service transaction made in violation of the bill shall be void, and the licensee shall not collect, receive, or retain any principal, interest, fees, or other charges in connection with the delayed deposit service transaction. For an individual on active military duty, or their spouse or dependent, a licensee shall not impose an annual percentage rate greater than allowable under 10 U.S.C. §987 in connection with a delayed deposit service transaction.
AI Summary
This bill addresses annual percentage rates (APRs) for delayed deposit service transactions, which are commonly known as payday loans. Under the proposed legislation, payday loan providers (referred to as "licensees") would be prohibited from charging an annual percentage rate higher than 36 percent for these types of short-term, high-interest loans. If a payday loan is made in violation of this rate cap, the transaction would be considered void, meaning the lender cannot collect any principal, interest, fees, or other charges. The bill provides an additional protection for active military personnel, their spouses, and dependents by ensuring that their payday loans are subject to the rates specified in a federal statute (10 U.S.C. §987), which typically provides even more stringent lending protections for military members. This proposed law aims to prevent predatory lending practices by limiting the maximum interest rates that can be charged on these short-term, high-risk loans, with a particular focus on protecting vulnerable populations like military service members and their families.
Committee Categories
Business and Industry
Sponsors (1)
Last Action
Committee report approving bill, renumbered as HF 878. (on 03/07/2025)
Official Document
bill text
bill summary
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bill summary
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bill summary
| Document Type | Source Location |
|---|---|
| State Bill Page | https://www.legis.iowa.gov/legislation/BillBook?ga=91&ba=HF627 |
| BillText | https://www.legis.iowa.gov/docs/publications/LGI/91/attachments/HF627.html |
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