1.In addition to the finance charge permitted by parts 2 and 4, a creditor may contract
for and receive the following additional charges:
a.Official fees and taxes.
b.Charges for insurance as described in subsection 2.
c.Amounts actually paid or to be paid by the creditor for registration, certificate of title,
or license fees.
d.Annual charges, payable in advance, for the privilege of using a credit card which
entitles the cardholder to purchase or lease goods or services from at least one hundred
persons not related to the card issuer, under an arrangement pursuant to which the debts
resulting from the purchases or leases are payable to the card issuer.
e.With respect to a debt secured by an interest in land, the following “closing costs”,
provided they are bona fide, reasonable in
Free access — add to your briefcase to read the full text and ask questions with AI
1. In addition to the finance charge permitted by parts 2 and 4, a creditor may contract
for and receive the following additional charges:
a. Official fees and taxes.
b. Charges for insurance as described in subsection 2.
c. Amounts actually paid or to be paid by the creditor for registration, certificate of title,
or license fees.
d. Annual charges, payable in advance, for the privilege of using a credit card which
entitles the cardholder to purchase or lease goods or services from at least one hundred
persons not related to the card issuer, under an arrangement pursuant to which the debts
resulting from the purchases or leases are payable to the card issuer.
e. With respect to a debt secured by an interest in land, the following “closing costs”,
provided they are bona fide, reasonable in amount, and not for the purpose of circumvention
or evasion of this chapter:
(1) Fees or premiums for title examination, abstract of title, title insurance, or similar
purposes including surveys.
(2) Fees for preparation of a deed, settlement statement, or other documents, if not paid
to the creditor or a person related to the creditor.
(3) Escrows for future payments of taxes, including assessments for improvements,
insurance, and water, sewer, and land rents.
(4) Fees for notarizing deeds and other documents, if not paid to the creditor or a person
related to the creditor.
(5) Fees or charges listed in section 535.8, subsection 4, paragraphs “a” and “b”.
(6) Discount points for the purpose of reducing, and that result in a bona fide reduction
of, the interest rate applicable to the debt, or points, agreed upon by the creditor and the
consumertosecureagiveninterestrate,providedthepointsandfeestheconsumerischarged
by all lenders in connection with the consumer loan do not exceed the amounts specified in
12 C.F.R. §1026.43(e)(3).
f. (1) With respect to open-end credit pursuant to a credit card issued by the creditor
whichentitlesthecardholdertopurchaseorleasegoodsorservicesfromatleastonehundred
persons not related to the card issuer, the parties may contract for an over-limit charge in
accordance with 12 C.F.R. §1026.52(b) if the balance of the account exceeds the credit limit
established pursuant to the agreement. The over-limit charge under this paragraph shall not
beassessedagaininasubsequentbillingcycleunlessinasubsequentbillingcycletheaccount
balance has been reduced below the credit limit.
(2) If the differential treatment of this subsection based on the number of persons
honoring a credit card is found to be unconstitutional, the parties may contract for the
over-limit charge as described in this paragraph in any consumer credit transaction pursuant
to open-end credit, and the other conditions relating to the over-limit charge shall remain
in effect.
g. A surcharge as provided for in section 554.3512 for a dishonored check, draft, or order
that was accepted as payment for a consumer credit transaction payment. The surcharge
shall not be assessed against the maker if the reason for the dishonor of the instrument is
that the maker has stopped payment pursuant to section 554.4403.
h. Charges for other benefits, including insurance, conferred on the consumer, if the
benefits are of value to the consumer and if the charges are reasonable in relation to the
benefits, are of a type which is not for credit, and are authorized as permissible additional
charges by rule adopted by the administrator.
i. A reasonable annual account maintenance fee, payable in advance, for the privilege
of maintaining a demand deposit account with a line of credit that may be accessed by the
account holder writing a check.
j. Foraconsumerloanwheretheamountfinanceddoesnotexceedthreethousanddollars
and the term of the loan does not exceed twelve months, a bank, credit union incorporated
pursuant to state or federal law, or a federally chartered or out-of-state chartered savings
bank or savings and loan association may charge an additional application fee not to exceed
the lesser of ten percent of the amount financed or thirty dollars. The fee permitted pursuant
to this paragraph may be charged solely to applicants who are approved or to all applicants.
The fee permitted pursuant to this paragraph shall not be charged in connection with a loan
used for the purchase of a motor vehicle, or for a loan where the borrower’s dwelling is used
as security.
k. Credit reporting charges.
l. Foraconsumercredittransaction,aservicechargeinanamountnottoexceedthelesser
of ten percent of the amount financed or thirty dollars.
2. An additional charge may be made for insurance written in connection with the
transaction, as follows:
a. With respect to insurance against loss of or damage to property, or against liability
arising out of the ownership or use of property, if the creditor furnishes a clear, conspicuous,
and specific statement in writing to the consumer setting forth the cost of the insurance if
obtained from or through the creditor and stating that the consumer may choose the person
through whom the insurance is to be obtained.
b. With respect to consumer credit insurance providing life, accident, health, or
unemployment coverage, if the insurance coverage is not required by the creditor, and this
fact is clearly and conspicuously disclosed in writing to the consumer, and if, in order to
obtain the insurance in connection with the extension of credit, the consumer gives specific
dated and separately signed affirmative written indication of the consumer’s desire to do
so after written disclosure to the consumer of the cost. However, credit unemployment
insurance shall be permitted under this paragraph if all of the following conditions have
been met:
(1) The insurance provides coverage beginning with the first day of unemployment.
However, the policy may include a waiting period before the consumer may file a claim.
(2) The insurance shall be sold separately and shall be separately priced from any other
insurance offered or sold at the same time. The credit unemployment insurance need not be
sold separately or separately priced from other insurance offered if it is included as part of
an insurance offering by a credit card issuer to its credit cardholders.
(3) The premium rates have been affirmatively approved by the insurance division of
the department of insurance and financial services. In approving or establishing the rates,
the division shall review the insurance company’s actuarial data to assure that the rates
are fair and reasonable. The insurance commissioner shall either hire or contract with a
qualified actuary to review the data. The insurance division shall obtain reimbursement
from the insurance company for the cost of the actuarial review prior to approving the rates.
In addition, the rates shall be made in accordance with the following provisions:
(a) Rates shall not be excessive, inadequate, or unfairly discriminatory.
(b) Dueconsiderationshallbegiventoallrelevantfactorswithinandoutsidethisstatebut
rates shall be deemed to be reasonable under this section if they reasonably may be expected
to produce a ratio of fifty percent by dividing claims incurred by premiums earned.
3. Withrespecttoopen-endcreditobtainedpursuanttoacreditcardissuedbythecreditor
whichentitlesthecardholdertopurchaseorleasegoodsorservicesfromatleastonehundred
persons not related to the card issuer, the creditor may contract for and receive any charge
lawfully contained in a prior agreement between the consumer and a prior creditor from
whom the creditor currently issuing the credit card acquired the credit card account, if the
account was acquired in an arm’s-length for-value sale from a nonrelated or nonaffiliated
creditor. The creditor may charge any charge on new open-end credit accounts lawfully
permitted in a prior agreement between a consumer and a prior creditor from whom the
creditor currently issuing the credit card acquired the credit card accounts.
4. For a consumer loan secured by an interest in land, if a creditor that is a mortgage
banker licensed under section 535B.5 or registered under section 535B.3 originates such
consumer loan in which the annual percentage rate, points, and fees the consumer is charged
by all lenders in connection with the consumer loan do not exceed the amounts specified
in 12 C.F.R. §1026.43(e)(2)(vi) and 12 C.F.R. §1026.43(e)(3), the consumer loan shall not be
subject to the limitations on fees specified in section 535.8, subsection 4, paragraph “a”, or
section 535.8, subsection 5.