Bill > HF727

This bill modifies Iowa's consumer credit laws by reducing the maximum allowable finance charge from 21% to 10% per year on both open-end and closed-end credit transactions. Specifically, the bill amends two sections of the Iowa Code (537.2201 and 537.2202) to cap the finance charge at 10% annually, calculated using the actuarial method, which is a standard accounting technique for computing interest over time. The bill applies this 10% limit to the unpaid balance of the amount financed across different types of consumer credit sales, effectively lowering the maximum interest rate that creditors can charge consumers. This change could potentially reduce the cost of borrowing for consumers by limiting the amount of interest that can be applied to credit transactions, which may provide financial relief to borrowers but could also impact the lending practices of credit providers in the state.

Business and Industry

https://www.legis.iowa.gov/legislation/BillBook?ga=91&ba=HF727