credit code applicability.
1.The superintendent may investigate the conditions and find the facts with reference
to the business of making regulated loans, as described in section 536.1, and after making
the investigation, report in writing any findings to the next regular session of the general
assembly, and upon the basis of the facts:
a.Classify regulated loans by a rule according to a system of differentiation which will
reasonably distinguish the classes of loans for the purposes of this chapter.
b.Determine and fix by a rule the maximum rate of interest or charges upon each class
of regulated loans which will induce efficiently managed commercial capital to enter the
business in sufficient amounts to make available adequate credit facilities to individuals.
The maximum rate of int
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credit code applicability.
1. The superintendent may investigate the conditions and find the facts with reference
to the business of making regulated loans, as described in section 536.1, and after making
the investigation, report in writing any findings to the next regular session of the general
assembly, and upon the basis of the facts:
a. Classify regulated loans by a rule according to a system of differentiation which will
reasonably distinguish the classes of loans for the purposes of this chapter.
b. Determine and fix by a rule the maximum rate of interest or charges upon each class
of regulated loans which will induce efficiently managed commercial capital to enter the
business in sufficient amounts to make available adequate credit facilities to individuals.
The maximum rate of interest or charge shall be stated by the superintendent as an annual
percentage rate calculated according to the actuarial method and applied to the unpaid
balances of the amount financed.
2. Except as provided in subsection 7, the superintendent may redetermine and refix by
rule, in accordance with subsection 1, any maximum rate of interest or charges previously
fixedbyit, butthechangedmaximumratesshallnotaffectpreexistingloancontractslawfully
entered into between a licensee and a borrower. All rules which the superintendent may
make respecting rates of interest or charges shall state the effective date of the rules, which
shall not be earlier than thirty days after notice to each licensee by mailing the notice to each
licensed place of business.
3. Before fixing any classification of regulated loans or any maximum rate of interest
or charges, or changing a classification or rate under authority of this section, the
superintendent shall give reasonable notice of the superintendent’s intention to consider
doing so to all licensees and a reasonable opportunity to be heard and to introduce evidence
with respect to the change or classification.
4. Beginning July 4, 1965, and until such time as a different rate is fixed by the
superintendent, the maximum rate of interest or charges upon the class or classes of
regulated loans is as follows:
a. Three percent per month on any part of the unpaid principal balance of the loan not
exceeding one hundred fifty dollars.
b. Two percent per month on any part of the loan in excess of one hundred fifty dollars,
but not exceeding three hundred dollars.
c. One and one-half percent per month on any part of the unpaid principal balance of the
loan in excess of three hundred dollars, but not exceeding seven hundred dollars.
d. Onepercentpermonthonanypartoftheunpaidprincipalbalanceoftheloaninexcess
of seven hundred dollars.
5. A licensee under this chapter may lend any sum of money not exceeding the threshold
amountasdefinedinsection537.1301inamountandmaycharge, contractfor, andreceiveon
the loan interest or charges at a rate not exceeding the maximum rate of interest or charges
determined and fixed by the superintendent under authority of this section or pursuant to
subsection 7 for those amounts in excess of ten thousand dollars.
6. Ifanyinterestorchargeonaloanregulatedbythischapterinexcessofthosepermitted
bythischapterischarged, contractedfor, orreceived, thecontractofloanisvoidastointerest
and charges and the licensee has no right to collect or receive any interest or charges. In
addition, the licensee shall forfeit the right to collect the lesser of two thousand dollars of
principal of the loan or the total amount of the principal of the loan.
7. a. The superintendent may establish the maximum rate of interest or charges as
permitted under this chapter for those loans with an unpaid principal balance of thirty
thousand dollars or less. For those loans with an unpaid principal balance of over thirty
thousand dollars, the maximum rate of interest or charges which a licensee may charge shall
be the greater of the rate permitted by chapter 535 or the rate authorized for supervised
financial organizations by chapter 537.
b. The Iowa consumer credit code, chapter 537, applies to a consumer loan in which the
licensee participates or engages, and a violation of the Iowa consumer credit code, chapter
537, is a violation of this chapter.
c. Chapter 537, article 2, parts 3, 5, and 6, chapter 537, article 3, and sections 537.3203,
537.3206, 537.3209, 537.3304, 537.3305, and 537.3306 apply to any credit transaction, as
defined in section 537.1301, in which a licensee participates or engages, and any violation
of those parts or sections is a violation of this chapter. For the purpose of applying the Iowa
consumer credit code, chapter 537, to those credit transactions, “consumer loan” includes a
loan for a business purpose.
d. Except as provided in this subsection, the provisions of the Iowa consumer credit code,
chapter 537, apply to loans regulated by this chapter and supersede conflicting provisions
of this chapter. Section 537.2402, subsection 1, does not apply to loans regulated by this
chapter.