1. No industrial loan company licensed under the provisions of this chapter shall have the
power and authority to:
a.
(1)Charge, receive, or collect interest at a rate exceeding ten cents on the hundred
by the year, except that the interest may be computed when the note is made on the
full amount of the cash advanced on the loan from the date of the note to the date of
the final installment thereof, and the interest so computed may be included in the note,
notwithstanding any agreement to pay the entire amount in installments; or the interest
may be computed on the amount of the note and discounted or collected in advance when
the loan is made, notwithstanding any agreement to pay the entire amount in installments.
If the note is repayable in other than equal monthly installments, the int
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1. No industrial loan company licensed under the provisions of this chapter shall have the
power and authority to:
a. (1) Charge, receive, or collect interest at a rate exceeding ten cents on the hundred
by the year, except that the interest may be computed when the note is made on the
full amount of the cash advanced on the loan from the date of the note to the date of
the final installment thereof, and the interest so computed may be included in the note,
notwithstanding any agreement to pay the entire amount in installments; or the interest
may be computed on the amount of the note and discounted or collected in advance when
the loan is made, notwithstanding any agreement to pay the entire amount in installments.
If the note is repayable in other than equal monthly installments, the interest may be an
amount computed on the basis of the effective rates permitted as provided above; provided,
however, there shall be no compounding of interest and when an interest rate as authorized
herein is advertised, or negotiated for with a prospective borrower, with intent that it be
computed by either of the two methods authorized herein, they being the “add on” method
or the “discount” method, in such case such rate shall be further described as to the method
of computation to be used, but interest computed by either method shall be stated to the
borrower as provided in section 537.3210.
(2) If a borrower elects to repay a loan secured by a mortgage or deed of trust upon real
property which is a single-family or two-family dwelling or agricultural land at a date earlier
than is required by the terms of the loan, the licensee shall be governed by section 535.9.
(3) The limitation on interest rate which is contained in this paragraph “a” shall not apply
to any loan in which the borrower is a corporation or investment trust or any other person
who is referred to in section 535.2, subsection 2.
b. Charge, receive, or collect in advance, a service charge in excess of one dollar for each
fifty dollars of the amount of the note, not to exceed a total of one hundred twenty dollars.
c. Require any borrower to purchase insurance from the lender as a condition for
obtaining a loan. However, an industrial loan company may collect from the borrower, at
the option of the borrower, and transmit the premiums charged for insuring real or personal
property used by the borrower as security for a loan and provided that such insurance
is obtained from a licensed insurance producer for an insurance company authorized to
do business in Iowa; and the premiums charged for insuring the life of one party on the
loan in an amount not to exceed the total amount of the note or contract, including cash
advance, interest and service charge, provided that no licensee shall require that the contract
of life insurance be outstanding for more than the unpaid balance of the indebtedness
and provided that such insurance is obtained from a licensed insurance producer for an
insurance company authorized to do business in Iowa; and an industrial loan company
may receive and transmit the premiums charged for accident and health insurance on the
borrower, provided such insurance bears a reasonable relationship to the existing hazards or
risk of loss, and the aggregate benefits of which shall not exceed the approximate amount of
the contractual payments on the loan outstanding at the time of loss, and provided that such
insurance is obtained from a licensed producer for an insurance company authorized to do
business in Iowa. However, all life insurance rates in connection with industrial loans shall
be subject to the rules and regulations of the insurance commissioner of the state of Iowa.
d. Engage in commercial activities or have an affiliate that engages in commercial
activities. This paragraph shall not apply to an industrial loan company with an affiliate
that is engaged in commercial activities prior to January 1, 2006, if control of the industrial
loan company is not thereafter transferred to an entity that engages in commercial activities
directly or through an affiliate.
e. Obtain or arrange a residential mortgage loan for a potential borrower from a third
11 INDUSTRIAL LOANS, §536A.25
person, unless the industrial loan company also has a mortgage broker license and complies
with all provisions of chapter 535B.
2. Industrial loan companies licensed under the provisions of this chapter may purchase
notes, contracts, mortgages, accounts, receivables, leases and securities of a type and kind
authorized by the superintendent.
3. In addition to the other charges authorized by this chapter, industrial loan companies
licensed under this chapter may collect an appraisal fee on a loan secured by a mortgage or
deed of trust upon real property, if the appraisal fee is bona fide, reasonable in amount, and
not for purposes of circumvention or evasion of this chapter.